Was Coinbase's Echo Acquisition a Good Deal? | Weekly Roundup

I think if you want a one-line summary of this deal, it is, it is this: Coinbase needs to become the place for capital formation. Or said, said differently, right? They need to become, they need to control where new tokens are born.

Um, it's not clear to me that like Coinbase, the exchange, needs to own a crowdfunding platform. And maybe I am ad curfying it, but like every time the companies like raise a big round, every time they stall out and don't do well. Like, and so maybe like, you know, now is different. Well, if I take a look at the last 15 years of, of, of investing, like, this is the same thing that has caused people issues and the same trap that people have fallen into for 15 years.

Rob, this time, look at me. This time is different.

Okay? Okay.

This episode is brought to you by Blockdaemon. You'll hear more about them later in today's episode. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed. All right, everyone, welcome back to The Roundup. We have Rob and Santi. Rob, been traveling back to back, looking refreshed. Santi, looking fresh as always. Me, not so much, but Santi, Rob, what's going on, guys?

Excited to be home back in New York.

Yeah, dude, you got to get off the planes, man.

I'm with you. I think everyone agrees.

Santi, how you doing?

Good, man. You know, refreshed too. Busy week last week. Rob and I were in London, as you— as were you. And then I headed off to Amsterdam and back home. It's exciting.

Nice. What's in Amsterdam?

We, there was a, this fund of funds called Theta. You're, oh yeah. Um, you know, I think I talked about in the last pod, but yeah, they, they put together a nice—

Oh, Theta's event. Yeah, of course.

Yeah. Yeah. That was good.

Um, Santi, you guys are hiring like crazy. Can we get a quick Inversion update?

Yes, sir. Biggest priority for me, hiring, um, technical talent, head of engineering. It's, it's been hard to fill, to be honest. Like we have a very good understanding of what we want to build for the Inversion chain. Um, and we're holding the bar high. Look, the reality is we don't, like, we're very focused on acquiring our first business. We've done a lot of work there. We've done, probably looked at 30 companies deep, like with a, with a close look. So we have a really good understanding of what we want to build. So it's the right time to bring engineering leader, uh, and a couple of other folks. Um, what we don't want to do is, I tweeted about this earlier this week, is, you know, we don't need another chain with empty blocks. The whole reason for Inversion exists is to bring quality supply, quality demand for block space. And so now's the right time to go and start building the Inversion chain in parallel, 'cause we do have a lot of line of sight into the companies that we're going to acquire and the core functionality that needs to live on the chain. So we have really good candidates, but of course, if people want to join, you know, go to our website. We have, even on our Twitter X profile, we have all the jobs.

Nice.

So it's head of engineering, a forward deployed engineer is also a role that we're looking for, maybe a little bit different than your typical crypto company. Um, so I quite literally, I'm like spending more time on LinkedIn, just DMing people that I think are like a lot of, like, I think Palantir is a really good company that has FTEs, that type of profile. Because, you know, these guys get deployed in the battlefield and just like work. It's like working with, it's so different from what the crypto industry has done, which is let's build something and hope someone comes. Now it's like, no, let's go go be deployed in the end customer and work backwards and build stuff.

Yeah, it's an extremely sticky, extremely sticky model. It's funny, I've, I've, uh, I've heard Alex talk about, Alex Karp, the CEO of Palantir. So if people don't know, they have this FDE model, forward deployed engineer model, where they actually almost like port their engineers into their customers' companies and the engineers go work at the customer companies. And investors in the early days really didn't like it because it was very service-based business, right? It's very, very human intensive. What investors didn't realize is it makes you much, much, much stickier, um, and you basically make it so you can't rip out the product.

So that's great.

The last two things I was saying, just to be clear, like, like, that's also happening now in stablecoins. It's also happening now in AI, right? Like, corporates and enterprises, they don't really understand, or they don't really have like the talent to figure out how these like new technologies are actually going to disrupt their business and how to really deploy it. And so we're starting to see a lot of like You know, the Palantir model for AI, the Palantir model for stablecoins. It's happening everywhere across all industries now.

Yeah. So again, we've been fortunate. We've hired a couple of, like, we've interviewed a bunch of folks. And a lot of what we hear is folks that have been crypto curious and said, gosh, this actually now fundamentally makes sense because it's a company that, like, you're going to be focused on implementing this technology beyond the casino. And it's like very refreshing. So we keep hearing that over and over. So yeah, if you're like an FTE at some of these companies, um, and have always been crypto curious, like, this is the company for you. So apply. I want to meet you. There you go.

All right, there's your ad for Inversion. Um, thank you. Let's talk about some big acquisitions. So there are two big acquisitions this week. Um, Coinbase bought Echo. We had Sean, the, uh, chief business officer, also runs ventures and M&A at Coinbase, on the podcast. If you guys haven't listened, go listen to that. He talks about the ECHO deal, but I'd love to get your guys' take on that. I'd also love to hear you guys talk about 21Shares and the Falcon X acquisition. I think this one got a lot less, less interest on crypto Twitter because, you know, it wasn't Kobe's company. But 21Shares has been around for a while. They're the first and I think the largest crypto ETP issuer. And they— yeah, Falcon X scooped them up. So Santi, Rob, where do you guys want to start?

Which deal should we start on? The Echo one? Because I think that's probably what more of our listeners—

I'd love to get your take on that.

Yeah, so I'm going to be— my guess is a little more bearish on it than, uh, probably everyone else, right? So like the vast majority of people, you know, or the vast majority of like conversations that I've heard, uh, about it and tweets that I've seen about it, I've been like very excited. Right. And I think I come at it from a perspective of what has happened in crowdfunding over the last 30 years. Right. And we've seen a lot of crowdfunding startups starting, you know, with things like AngelList and with things like Seedrs and with things like Republic. Yeah. And, you know, for a long period of time. And what always happens in these crowdfunding startups is that they get a lot of interest early when they have, um, a niche that they were able to dominate. They're able to offer some sort of, you know, really differentiated access for a couple of deals, right? People get really excited. A lot of these companies have raised a lot of money. The VCs are getting excited, and then they have to scale. They have to scale into VC capital. They have to scale into, you know, a business that can be standalone and not just doing a few deals. And it always becomes adverse selection every single time. And the reason it becomes adverse selection is because while there are always a few deals, there are a few companies, there are a few protocols that want to raise decent amounts of money in these like crowdfunding ways. Mm-hmm. There is not enough of them. The incentives are not there. To raise an amount of capital that makes for a great business otherwise, right? And so what we've seen is a, a, you know, a lot of these businesses, AngelList and Republic, you know, they raise these valuations, you know, a billion-ish dollars and they kind of stall there, right? And there's like, it's really hard for them to make that next step. If you look at Echo, Kobi's done an incredible job, uh, being an evangelist. Obviously there's been a couple of good deals on Echo that people have been very excited about, Maggie being one of them. Uh, Plasma was on, on Sonder as well, right? Which is an Echo brand, right? So there's been a few of those. But if you look at the history of Echo and most of those deals, almost all of them have like lingered out there, have not done particularly well. Like they have been, had a really, really hard time, um, getting the amount of capital. Most people have lost money. A lot of the conversation on Twitter has been like, listen, these aren't, you know, doing particularly well or haven't made money anyways. And it's raised about $200 million for projects and they paid what it was, I think equivalent of like $400 million, you know, if you include the up-only NFT, right? And so it's hard for me to see how Coinbase gets the ROI on that deal based on like going— and Santi, I can see him smiling, so maybe he's going to disagree with me— but how they get the ROI on that deal to like build it into a big business, right? And so I don't know. Yeah, congratulations to Kobe. Like, I— the Coinbase guys have done a lot of M&A this year. I mean, the Deribit deal, you know, there's the rumored BVNK deal if that happens, and they win in that. There's a lot of the, you know, kind of smaller deals that they've done. They're one of the most acquisitive companies in the world. They've been very, very thoughtful about this. But my— the history of how I have seen these types of things happen, and I— history does not repeat, but it rhymes— makes me think that even with the synergy value here and maybe some cross-selling with Base, that this will likely be one of those things we look back on and we'll be kind of like, eh, like, what really happened there?

Rob, I think you're mid-curving it, man. Like, okay, Kobe as a, as a HR currency is probably worth more from a brand perspective than $400 million.

You think that's true?

Yeah, yeah, yeah, for sure. He's like the most, he's the most recog— the most influential person in crypto, bar none.

Yep. How much, how much, how much do you think Kobe as a recognizable person brings? Like, you think he brings new users to Coinbase? You think he brings And volume, everything.

He brings new users. He bring— he clean— like, the perception of Coinbase within the crypto industry is vastly improved. Um, look, I compare it to Binance. Binance has the Binance Launchpad, right? And that's what's made Binance and the demand for BNB so interesting. Um, you could argue that a lot of projects that have gone through Binance Launchpad have initial success and then have tapered off, much like a lot of alts. But, you know, the Launchpad has made Binance, um, the platform that it is today, the largest financial service, you know, fintech company in the world.

But just to be clear about the Launchpad, they take a bunch of free tokens from the, uh, from the, you know, these protocols, and they make everything that wants to be listed on Binance go through Binance Launchpad, right? Coinbase is not going to do that.

But it actually ultimately helps Coinbase a lot. So let's say Echo is real. Okay, so the first thing that this does You could— in the moment, did they overpay? Possibly. Did Stripe overpay for Bridge? A billion dollars, right? Everyone said they overpaid. Actually, Santi, you were one of the few people who were saying at the time they didn't overpay. What it did, if you talk to Stripe people internally, is it told the world that Stripe was into crypto. And what the Echo acquisition does is it tells the world you can go fundraise on Coinbase. You can fundraise on Coinbase. So you maybe you buy the tech for $50 million. You buy, you buy Kobi for $50 million, and then you do a $300 million— this is a $300 million marketing campaign to say, come launch, come fundraise and launch on Coinbase. And then actually what ends up happening here is if you successfully launch a token on Echo or Coinbase's launchpad, you're— Coinbase is way likelier than Binance and Bybit and all these other guys, MEXC, to be the dominant venue for that pair, right? So Santi launches, you know, Inversion Coin, using Echo, the USDC, uh, invert coin pair is way like more likely to be— the volume is going to be generated on Coinbase now. Uh, and you can, you can do things like early incentives and all this kind of stuff.

Let me run through a quick math, okay? Coinbase is an $86 billion company. They paid $400 million for this thing. That is 0.4%, 0.47% of their total, you know, equity value, right? They pay all cash or what have you. The other component, so it's like from an acquisition perspective, small. Now again, you gotta look at it from just pure ROI. Is this actually gonna pay for itself? Jana, what you're saying, if you look at it from a marketing expense standpoint, Kobe being the brand that he is, I think it cleans up a lot. Having Kobe within that organization just immediately lends so much more credibility to Coinbase within the crypto industry on the retail side.

Now, do you think Coinbase needed more credibility in the crypto industry?

It's a glass half full or a glass of empty. It's sort of one of those things where you need it. You either need to maintain market share or you need to maintain relevance. I think they maintain relevance by bringing Kobe, for sure. I mean, Coinbase has spent $250 million in Q1 alone in sales and marketing.

Let me pull up this quote. So there's this tweet by David Rodriguez, EffortCap. Who runs Blockworks advisory business, said this— this was back in May. First time in years I'm unsure about Coinbase's competitive position and growth potential. Robinhood has better distribution among retail traders. Stripe and Meta have better distribution among merchants and normal consumers in terms of stablecoin usage. The bet is on the integrated offering working out or winning out. The bet is largely on CDP plus BASE. Coinbase needs to accelerate the tokenized equities and IPOs, ICOs on BASE. It needs to become the place for capital formation. That should be priority number one. And I think if you want a one-line summary of this deal, it is, it is this: Coinbase needs to become the place for capital formation. Or said, said differently, right? They need to become— they need to control where new tokens are born. And that's—

I listen, I just don't think it changes the way people— like, the incentives are still wrong, right? Like, they're— what we're talking about here is a complete reimagination of the incentives and the way projects think about raising capital, right? If you go look at what has happened on Echo, who raises money on Echo? The people who raised from good VCs, right? Like, those are the people who raise money on Echo, not the other projects, right? If you're a, a new project that wants to really raise capital and you go and put your— that on Echo, that has time and again, those deals have not gotten funded. Right. Do you— what happens every time that somebody goes to any— and this is not an ECHO-specific point, so I don't mean to be— I mean, this is the, the topic, but this is just crowdfunding. Time and again, there's information asymmetry and there is misaligned incentives. The information asymmetry means that the people who buy these things do one of two things. We used to see this on CoinList, uh, and, and Binance Launchpad the same way. They either buy every single offering because they think it's like structurally, like, you know, kind of underpriced, and that, you know, if they buy every single offering, they're buying a lottery ticket and they'll make money over time. Or if it's not that they buy every offering and they think these things are not necessarily— they're just structurally mispriced, then they look for the things that have signals that they are good. And the signals that they are good, really the only thing that, that people are using right now is did the VCs do the deal? Like that, that is the number one correlated thing that is other people doing Echo. So if Coinbase is gonna say, okay, well, like we're gonna take projects and we're gonna do like a pre- listing deal in the same way that Binance Launchpad is going to do it, and we're going to make them do this here. Like, I'm with you. Like, that builds community, right? If this is going to be a standalone, you know, capital formation vehicle on Base that also, that, you know, also includes traditional crowdfunding, it's going to be the same as all the other crowdfunding because you as a, uh, as a founder do not want 400 people on your cap table, okay? So you put them into an SPV, but you also don't want all those people, you know, necessarily tweeting on you, tweeting at you. And maybe you want to go and do, okay, like a, um, you know, a little bit on, on, on the, then the crowdfunding platform, but it's not going to be a real big part of your capital formation over time because you're going to need the bigger checks and you're going to get the bigger checks from, from the people who help you.

You're really making a comment on, uh, on, on, uh, crowdfunding platforms in general, right? Which, which I agree with. You have adverse selection, which is if you go on Republic or, uh, AngelList or any of these, it's the bad deals. It's because Andreessen passed and Sequoia passed and Dragonfly passed. Or like all the Web2 funds passed. So then you have to go to the crowdfunding platforms. It does seem like crypto though has been different. You have good deals on Echo, which you shouldn't see good deals on crowdfunding platforms usually.

You, you have a couple good deals, and, and you see that on— I mean, like Republic has like a SpaceX deal, right? Like there, there are a couple good deals and that those continue to exist. But, um, you know, I, I haven't looked at all of the deals on Echo, but I'm in a number of the groups just to kind monitor what goes on. And like, I would bet you the good deals are 1%, 2%, right? If you look at all the deals that happened, they raised $200 million in total over time. Like, the ones that I know of that have sold out and been exciting are MegaETH, GT, and Plasma, right? I don't know if any else have like sold out quickly. Maybe— I'm sure some have and I'm missing some.

So yeah, Plasma and Mega were the two I was thinking of.

Yeah, yeah, right. Um, and I know GT sold out really quickly too. Um, but like, then you look at—

what do you do then, Rob, if you're Coinbase? Because everyone— so you have Legion, right? Legion's going to horizontally integrate across all the exchanges, right? They've done it with Kraken. You got to imagine they do it with a bunch of other exchanges. Do you just not— and then you've got the launchpads going up, right? You got PumpFund that has PumpSwap. Like, what do you just— if you're Coinbase here, do you just sit out of that game?

I— well, number one, I don't like— like, I, I think to the point around, um, like the tech itself, like, I don't know if you actually need to acquire somebody. They're, they're definitely acquiring Kobe and the brand, right? And I think to Sandy's point, like, that's, that's very clear. Um, they certainly could have built a similar product themselves for less than they spent, uh, on this. But, um, I, I, I don't know if it's clear to me that they need to be in this game, right? Like, I mean, um, Robinhood has democratized access to IPOs. That's interesting, right? So if I— again, if I, if I take traditional, um, sort of a corollary here, like, I think it is interesting to get more people more access to something, but Do you need to go and buy a large launchpad and then try to do crowdfunding to be able to offer people, you know, access for like new listings? Like, kind of not really. They can do the same thing around like community building on Base, and they get— they could do— I mean, they have launchpads on Base today that are like, you know, PumpFun competitors, right? And so, um, it's not clear to me that like Coinbase the exchange needs to own a crowdfunding platform, and if that really offers, uh, much. And, and to me, so I don't know. And maybe I am mid-curving it, but like, I, um, I feel like I, I mean, you guys know, right? I've invested across fintech for a while. And I feel like every 3 years I've seen this like excitement around crowdfunding happen. And every time the companies like raise a big round and every time they stall out and don't do well. Like, and so maybe like, you know, now is different, but if I take a look at the last 15 years of, of, of investing, like this is the same thing that has caused people issues and the same trap that people have fallen into. For 15 years.

Rob, this time, look at me, this time is different, okay?

Okay.

I have no, by the way, I have no skin. Kobe came to me back in the day when he was building it. Look, I love seeing someone that has done so much for space win. I love it.

Of course.

The NFT is something that, God, I immediately sent it to Jan. I was like, what the fuck are we doing here?

Dude, I'm hearing that Rob is against Kobe. Rob doesn't like Kobe.

One time, of course, I like Peter and I'm happy for him.

I'll give you some inside scoop, right? When I was raising for Inversion, obviously Dragonfly is a lead. We talked about Echo, like, because, you know, Rob, like MegaETH, which is relevant for this part. MegaETH did a round. You want to involve the community? I think really good projects like Plasma and MegaETH. MegaETH is now doing an ICO. Like, yo. Let's, uh, let's talk about that. And, uh, you know, it's, it's a good platform. Legion. I don't know if there's like, I would be agreeing with Rob, like I'm bearish on like 10 crowd like platforms. Like it's like, all right, like, yeah, at some point that business does not on its own stand. I think smart of Kobe to sell it because I, I would have struggled to see much more. I think with the good distribution that Coinbase has, you could probably like get more excited about doing something more productive with that asset, with the brand that it is. Created. You're selling it at probably the best time. You just had like, you gave access, people access to the seed round of Plasma. That crowd is really happy. And Sonar is, you know, giving, if the ICOs are going to be back, we should talk about that in this pod. You know, something interesting, right? An asset that probably fits in at Coinbase and becoming more of, bro, the last thing I'll say in this, go look at equity research reports on Coinbase. The biggest concern is fees that they're getting on, on retail are going to get squeezed. Like, it's just going to get more competitive. You have Asian-based exchanges, which your guys are investors in, Rob, coming to the US. So like, it's, you got to defend that position somehow, maintain relevance. So that's what I'm saying. Like, you look at sales and marketing expense at Coinbase, it's spending like $300 million a quarter. God knows where. I don't know. Like maybe some Formula 1 cars. The ROI in that marketing spend, likely higher. Acquiring this asset than spending it in, I don't know, some weird ads.

Yeah, yeah, I guess, I guess my— I listen, I'm happy for Kobe. Um, I also think the fact that he sold probably tells you something about how he thinks about his standalone prospects relative to, uh, the combined prospects, right? Um, I think Coinbase has been a really good acquirer so far. Uh, I do think there's a question around their ability to do all of these integrations. Um, it is hard doing integrated, uh, M&A. And, you know, Deribit, uh, and if the BVNK thing happens, which people have talked— which, you know, obviously has been in the news, um, in this deal and all everything else. Like, it's really, really difficult to do that, um, and so I think there's some question around that. But listen, I don't disagree that something like Echo makes more sense in the, you know, full product offering of, of Coinbase, um, and so maybe the ROI is there from a marketing perspective. I sort of believed that, like, and maybe this is wrong, so you— it sounds like you believe differently, but I sort of believe that for them the goal needs to be competing against Robinhood with non-crypto natives, not winning more crypto natives. Um, though that said, I mean, we obviously, you know, an hour ago we got— CC got pardoned, and we'll probably get, you know, Binance US back. So, uh, maybe it's, you know, defensive against, against that crowd.

So I've had the— I want to make Empire titles just really unhinged because we just have the normal podcast titles of like, you know, roundup. Like we talk about this acquisition. I think the title of this episode should be Rob— Why Rob Hates Kobe. And listen, listen, listen, listen.

Let me tell you something.

Let me tell you something. You can't.

I'm going to defend Rob. I'll always defend Rob because I don't want Rob to be picked apart by Kobe. It's like, it's like, it's like I got into a beef with Kobe about—

please don't.

It will damage the version.

I will never do that again. I can't have Rob out of favor. He's doing such a good job evangelizing stablecoins for all of us.

Yeah, Rob, you're in right now. You've got good favor. Don't change.

I gotta tell you, I gotta tell you, we started the last pod about somebody coming up to me at a conference. Somebody came up to me at the Fed, literally 2 days ago I was at the Fed, came up to me, referenced us having that conversation about somebody coming up to me at a different conference about my time. On this podcast and said, I agree. So listen, I'm, uh, I'm in.

Your takes are good, but your co-hosts are so handsome. I, I'm really loving Empire. I started watching on YouTube.

Yeah, do we want to move off M&A right now? Do we want to keep doing M&A?

Oh yeah, let's talk about 21Shares. Yeah, yeah. So, so, uh, FalconX bought 21 shares. So 21Shares, um, it's funny actually, they were one of the first companies ever to spend money with Blockworks. It's founded by this guy Hany, Hany Rashwan, as well as his co-founder Ophelia Snyder. I think it was built in 2018 or they founded it in 2018. They have over $12 billion of assets. They were the— I think they were the first provider of crypto ETPs, $12 billion of assets, over 50 different crypto ETPs. They have two companies. They have 21Co, which is the holding company. Then they have 21Shares and 21Technologies. Raised a big round a couple of years ago, I think around like $1.5 or $2 or $2.5 billion. 21Shares is the asset management business, right? ETP issuance, investor products. 21 Technologies develops like tokenized products, institutional risk management systems, things like that. So I think Balconyx bought it all, if I, if I got that correctly. Actually, fun story about 21Co. If you guys remember, JPMorgan had Onyx. The Onyx blockchain. Um, they had to change it to, to Connexus. I think that's because 21Co has a— got there first and has an Onyx OS system. But anyways, yeah, big acquisition by Kraken. Um, curious what you guys think of this one.

No, listen, I think, um, for Valkenex, you know, we're shareholders there, and so, um, you know, I didn't know the specific deal was happening, but I know they've been thinking about being acquisitive. Um, they're, you know, they are probably the largest, uh, alongside, you know, a couple of others in terms of like providing like institutional quality, you know, financial services to the crypto space, right? They've, you know, they're the OTC desk, they have, you know, uh, direct market access, they have the, the lending business. Um, they've also been doing— they had acquisition last year on the FX side trying to do like fiat stablecoin FX. This is clearly like another, you know, um, deal where they're trying to provide to their core client base some other type of, you know, financial product. Um, I think, you know, that horizontal expansion for them is really around trying to, you know, kind of open up the aperture so that in any market environment they are able to monetize, they are able to serve their clients. I think it's a good deal for the 21Shares guys at a time when And they were probably losing a little bit of steam on a relative basis. Obviously in Europe they've been dominating, but the US market is getting bigger. We're about to see a lot more ETF issuers here. I don't think they've had the same success in the US in the same way. Um, and so, um, I think it's a, uh, you know, interesting deal for everyone. And, you know, I think, um, for FalconX, as they think about getting bigger and potentially as a, uh, you know, a public company someday, you know, this allows for them to continue to, uh, open up that aperture. So. Makes sense. Um, wasn't surprising to me in so much as this is the type of deal that they would do. And I think, um, you know, I don't know, I don't have a lot more to say about it than that, to be honest.

I think, by the way, I'm reading about it now, they bought just 21Shares, not 21 Technologies. But across 30+ networks and 180 endpoints, Blockdaemon Earn Stack unites staking and DeFi into a single institutional toolkit for crypto rewards. With multi-layered security, full asset control, and 24/7 support, Blockdaemon Earn Stack is built for scale and regulatory clarity. Non-custodial staking and seamless DeFi access, all in one stack. Direct access to DeFi with no intermediate smart contract or vaults. To book a demo, make sure to click the link in the show notes or head over to Blockdaemon Earn Stack to find out more. Thanks to Blockdaemon for making making today's episode possible. The machine economy is here. Devices are monetizing data for their users all over the world. Tokenized robots are generating revenue for token holders. The first machine economy free zone is live in the Emirates, and it's all happening on Peak, the machine economy computer. Head to peak.xyz, that's P-E-A-Q.xyz, to find out how you can benefit from the age of automation, or click the link in the show notes to find out more. As always, investments in blockchain technology involve risk. Terms and conditions apply. Anyways, Rob, tell us about the Fed conference. What was this? Fed Payments, Federal Reserve Payments Innovation Conference. I would love to hear how— first of all, who was there? What were the conversations like and how much— it was a payments conference, right? Not a crypto conference. So how much were payments and stablecoins in the conversation?

Yeah, so, um, and just as we're wrapping up M&A, actually it's going to, it's going to, um, relate a little bit to, uh, to this, to, to the Payments Innovation Conference at the Fed. Um, but one of the guys that was there was the, uh, CEO of Modern Treasury. Um, on the M&A side too, we also saw Modern Treasury buy a stablecoin business yesterday called Beam Cash.

What does Modern Treasury do?

Um, Modern Treasury, I actually don't know the business that well. Um, but it's primarily like SMB, um, the, uh, focus, like, uh, like, I think like bank account, like treasury management services, uh, things like that. Um, but I actually don't, I don't know, Santi, if you're, you're super deep on Modern Treasury.

Is it move money instantly, move fiat and stablecoins with APIs proven on 300 billion of payments? They do payments, ledgers, huh?

Yeah, no, that's cool.

Yeah, I mean, it's, it's really SMB focused. Um, I think it's mostly a domestic product. Um, the, you know, a lot of, you know, APIs for like how to manage your, your, uh, your business here. But they bought a thing called Beam Cash, uh, run by a guy called Dan Monis, uh, who out of Visa, who was doing kind of like stablecoin, uh, orchestration and ramps. Um, so just another, you know, kind of traditional, you know, payments business moving into, into, you know, offering more stablecoins. So I think that that was interesting as well. So I wanted to call that out, and congrats to Dan. Um, but I think, listen, so to provide context on the, uh, on the Fed conference, so it was, they were called, it was called the Payments Innovation Conference. Now that said, it was a, uh, primarily a, call it a stablecoin and AI focused day. So if you looked at most of the, the panels, so there's, but there's 4 panels. There was, uh, opening remarks by Governor Waller. Um, you know, a lot of networking in between. There's probably 50 or 60 of us there that had been invited. A woman, Sunaya, who, who is the Chief Innovation Officer at the Fed, I think helped put it on. And it was really, really focused around what are the things that could happen in emergent technologies that could disrupt payments. And so, you know, you can actually go online right now and you can read Governor Waller's opening statements, and he talked a lot about stablecoins. He talked a lot about AI. He talked about agentic commerce. He talked to, uh, one of the, I think, most interesting things that came out of the day, which didn't actually get a lot of news, or at least I think the appropriate amount of news, was the thing that Governor Waller called the skinny master account. And so it was a talk around, um, actually providing access to the Fed payment rails without having to be a full bank. And so, um, for fintechs, for stablecoin companies, you could actually theoretically access the similar types of payment rails that the Fed has with banks themselves and access the entire, you know, kind of, uh, network without having to go through the full process of being a, you know, regulated, you know, under Fed supervision bank. Um, that is actually an incredibly big deal when we think about the future of fintech and the future of stablecoins.

Big deals, you're saying?

Yeah, exactly. It's an incredibly big deal because right now the entire payments market essentially ends up moving through banks. And so even when you think about like fintechs who allow for, uh, allow for like cross-border payments or domestic payments, usually what they're doing is they're either they're renting a banking license and they're using a federal— a bank that's under federal supervision, or that has an agreement with a bank that's under federal Fed supervision, uh, to go and access federal payment rails. Um, often you— and Governor Waller did talk about this a little bit— you wouldn't have full access to what they call the discount window or borrowing. Um, so you wouldn't have access to credit, but it allows for more innovation to happen outside of banks, disrupting payments at fintech companies, at stablecoin companies specifically. And so that was the whole day of the conversation.

So it was, um, a conversation around how are banks okay with that happening, Rob?

How are banks not up in arms about I'm not sure banks are okay with it happening. Um, now, you know, there was a really interesting— so everything I think was public because it was all, um, it was all live streamed. So there was a couple of interesting panels. There was one with, uh, the president— I believe it was the CEO actually— of Fifth Third Bank, right? And so we also had JP Morgan there. You also had BNY Mellon. You had a number of others. Um, you know, JP Morgan has obviously been very active in thinking through, uh, you know, how they use, you know, stablecoins and, and blockchain rails with Connexus, right? BNY Mellon has been a little less active, but they've been doing some work and they've been public about it. Fifth Third, though, you know, this is a, a mid-sized bank that, you know, I think is probably most under attack by this type of innovation, right? And there was some questions to him specifically around, you know, what does he think they should be doing? Do they have concerns around um, you know, things like this Skinny Master account. And he basically said— and actually, the final question to him was, do you think the incumbents win and they capture all the value and they're able to bring stablecoins into their business, or do you think the innovators are able to out-innovate the incumbents? And the CEO of Fifth Third Bank was like, we understand that we are under attack and we have to innovate to win. And if history repeats itself, the innovators will win, not the incumbents, right? He was very clear about that. And he was very— it was very much saying Fifth Third sees this as imperative to the future of their business. So you're seeing, uh, in Congress right now a lot of banks push back against the Genius Act, push back against regulation, say that they want there to be, you know, they want to basically control their regulatory moat. Where Fifth Third was coming out and saying, we want to try to innovate because we believe that it is happening regardless, right? And I think that that is likely true. And so it was really interesting to see the Fed put some of their weight behind this potentially happening. And, and just to be clear, I think you can read Governor Waller's, uh, statement, and he said this is just an idea right now, it's not something that is put into motion, etc. But it's clear that we're moving into an era where people want to be able to innovate around payments and stablecoins, and the banks need to adapt or they are going to get passed by.

Hmm.

Hmm. What do you— do you guys have an updated view on what happens with the market structure bill?

My opinion, and Santi, I don't know if he has a point of view, um, is it's still a pretty long putt, to be honest. So a lot of the people I was talking to on Tuesday, many of them were sticking around for, um, the few days after, you know, maybe we're still in DC yesterday and today because there was, uh, a lot of— there was basically these roundtables that were happening and these conversations that were happening. Um, with, uh, senators to try to find a middle ground to get market structure passed, um, where there's a lot of conversation back and forth. There's a, you know, the markups that are happening. It strikes me still that it is unlikely, though not impossible, that it gets passed. There is, I think, less political will now than there was 6 months ago to get this passed. It has become more of a fight than we thought it would. It is a bipart— there's bipartisan support and bipartisan against of the current structure of the Clarity Act. And so, you know, really meeting the middle and figuring out exactly how to define what, you know, DeFi is and how it should be regulated has become a really complex problem that I'm not sure people will have the will to try to, you know, uh, get past at a time when we still have a government shutdown.

Yeah. Yeah. Let me, look, I mean, we think that crypto is the center of the universe, but the reality is there's hundreds of bills that want to be passed in the administration, obviously with a shutdown. But who are the, and maybe it's worth bringing on like a Jake or Rebecca who are extensively involved in policy. Who are the main guys that, like, where does this rank in the priorities for people that really matter in Congress to get this passed, right? 'Cause a lot of times, I mean, there's a number of other bills that want to get passed and like there's a pecking order, right? And how important is it, right? We used to talk about like crypto was important for the election. I think it, is that, you know, still the case? How do things get passed, right? 'Cause a lot of times it could be a lot of lobbying and whatnot, but you know, if this is not like super important in the grand scheme of things, it's just going to get delayed. I'm just not privy to— Jason, you're the political expert here. You're muted, sir.

Oh, tough. The longer it gets delayed, the more— I mean, if this flips, if this pushes into 2026, the likelihood that it gets done really drastically goes down, right? Because you start getting the midterms, and then yeah, con— you know, maybe the House start, you know, starts to change, or Senate changes. Like, uh, I think we should really be going all in trying to get this, get this done this year is, is I think the sentiment on the ground. It's also interesting. It's not just this bill. It's like the CFTC chair. So it seems like Selig was the, the lead for the CFTC chair. Now he just got bumped. It sounds like from folks in D.C., it sounds like he just got bumped down to commissioner. People have no clue who's going to take over at the CFTC now. Like, it feels like a lot of the momentum that we had the last couple of months has slowed significantly. I don't know if you—

Are you reading too much, Rob, or in between the lines of like, is it because anything specific that the crypto industry has done, or, you know, are events like the liquidations affecting that? I mean, I was on the panel with Hasib, your partner, and I think it was Matt Hogan who said like, Honestly, guys, like, Black Friday doesn't really compute into the thinking of like doing damage, whether this thing gets passed or not. People are not really focused on that. Do you agree or disagree?

I don't fully disagree. I mean, Matt probably is more plugged in Washington than I am. Um, I, I think, listen, I agree with Ariana that like I think it has to happen now or like this is just gonna get put on the back burner for a long time. There's been a lot of focus on it for the last month specifically. You know, I, I was in, um, I was in Jackson Hole in August, uh, at a, at a fundraiser for Cynthia Loomis, and she specifically mentioned that, you know, this was a— they're going to be her full October focus, trying to get this reconciliation done for a market structure bill. She's obviously been, you know, the biggest champion for the, uh, the industry. And so I think it's, it's very clear that, you know, this— there are groups of people who want this to happen, but at some point, if we can't get to an agreement in the next, I think, like 3 weeks, like before Thanksgiving, I think this goes out. It just gets put on the back burner. And so there are very specific questions that people still have, and I think even within the crypto industry you hear people have around, should there be maybe dual classes of DeFi, right? Should there be KYC AML DeFi versus you know, unregulated DeFi? Should there be— what is a security? What is a commodity? How do we define that? I mean, there's been a lot of conversation back and forth around, um, like, is Andreessen and Paradigm, who both have the biggest, you know, lobbying arms in the space, are they pushing for actually different ways to think about a— the what is a security and what's not? And there's been even within the industry, I think, a lot of debate around how to think about these things. And what the industry has been unable to put together really a consolidated front. That's made it, I think, also hard in DC to hear exactly, you know, what we want as an industry. And, and so then there's, there's all of this— it's basically made it multifaceted in terms of how to reconcile different viewpoints, uh, because it's not just—

that seems to be the biggest issue from what I'm hearing is like, you know, with stablecoins, we all wanted stablecoins. Now there's some beef between like onshore and offshore, and that was the one issue, right? Comes down to Circle versus Tether. But right now there's a— there is no alignment from what I'm hearing. You know, there's, there's two, two strong groups of, of people for this market structure, Bill, and they're, they're debating. Across 30+ networks and 180 endpoints, Blockdaemon Earn Stack unites staking and DeFi into a single institutional toolkit for crypto rewards with multi-layered security, full asset control, and 24/7 support. Support, Blockdaemon Earn Stack is built for scale and regulatory clarity. Non-custodial staking and seamless DeFi access all in one stack. Direct access to DeFi with no intermediate smart contract or vaults. To book a demo, make sure to click the link in the show notes or head over to Blockdaemon Earn Stack to find out more. Thanks to Blockdaemon for making today's episode possible. The machine economy is here. Devices are monetizing data for their users all over the world. Tokenized robots are generating revenue for token holders. The first machine economy free zone is live in the Emirates, and it's all happening on Peak, the machine economy computer. Head to peak.xyz. That's P-E-A-Q.xyz to find out how you can benefit from the age of automation, or click the link in the show notes to find out more. As always, investments in blockchain technology involve risk. Terms and conditions apply. Hey, while we're talking, there's a new acquisition, which is Fireblocks is acquiring Dynamic XYZ. So Dynamic is a Privy competitor, um, lets you build wallets. Deal was done at about $90 million, it looks like. Um, I'd love to actually just hear you guys' thoughts on, uh, Stripe moving in, like maybe updated thoughts. I don't know, Santi, if you guys work with them at all, um, if you guys have started building or if it's too early, but, um, one thing, one deal that we didn't talk about because it was too late in the week last week was Tempo raising at a $500 million at a $5 billion valuation. And now this Dynamic deal gets done. And the Dynamic deal is relevant to Stripe because Stripe owns Privy. Uh, Privy, I think, is Dynamic's main competitor. Maybe if you see that and you're the founders of, uh, Dynamic, you, you know, you got to hit the ask a little bit. Um, curious to just get your guys' updated views on this.

I'll start here. I mean, yeah, obviously we're have talked extensively with the Bridge team and other kind of stablecoin orchestration players as we think about integrating stablecoins, not just in the businesses that we acquire, but in the Inversion ecosystem. Really interesting what they're seeing. We haven't made a decision yet as to who, but we're actively having these conversations. I've also kind of interviewed a number of folks in the Stripe field. It's just been interesting to see like that evolve and just some insight into kind of like the integration of that new team. I think back to your point, like the Bridge acquisition, I think was like, since the Bridge acquisition, you've seen obviously the Privy acquisition and then also the head of crypto at Stripe has left, gone to Polygon. I think there's a lot of movement, especially now with tempo. There's, you know, I think you could probably wonder like how much weight Stripe is putting behind Tempo. I think if I'm reading a little bit between the lines, like their commitment initially, I think they've sort of walked it back a little and Paradigm has really taken more of a front-facing kind of more of a lead. So like, I don't, I'm speculating here. I don't have like, you know, inside look into it, but You know, obviously it's just very interesting. Obviously the, the Ethereum Foundation guy that just kind of resigned went to Tempo. They're making some really high-profile hires, so I think they're serious about it. Um, but yeah, that's it from, from my side.

Rob, what do you make of the $500 million raise at a $5 billion valuation? I think it was Green Oaks and Thrive. By the way, this is Thrive. Thrive does not make crypto investments. I think Thrive has made a few crypto investments. They were all done kind of at the top of the last cycle, right? MoonPay, uh, Bored Apes, right? What do you make of this?

Yeah, so it's pretty much all the Stripe shareholders that did the deal, right? Um, and I mean, Thrive has been— I think they've led the last 3 rounds in Stripe, 2 rounds.

Yeah, Thrive did the big private round for Stripe when they needed to raise that down round because the employee RSUs were coming to the 7-year expiration. I think Thrive— I think Thrive put in a billion and then went and raised like an extra $5 million or something thing for them.

So yeah, so they've been— their eyes have obviously been very active at Stripe. Uh, Green Oaks, I think, is a relatively large Stripe backer as well. Um, so I think the vast majority of the other, uh, investors in there, um, uh, you know, do they need $500 million? Like, uh, you know, pretty clearly no, right? But, you know, it's a, it's a nice number for— and, you know, it's a, it's a war chest. It allows them to do things like acquisitions, allows them to do things like you know, owning the end, you know, consumer interface if they want, owning the application, not just doing the chain itself. My guess is they'll do a lot of, call it like full stack, uh, work to try to like bring people in on the Stripe side as well who like don't have to know that they're on Tempo or they're on any other blockchain. Um, so listen, you know, big deal. Obviously, you know, John and Patrick Collison have made crypto and stablecoins a core part of the future of their business. They've made a big bet on this, and, you know, this is just another, you know, piece. Um, you know, I, I think, well, I'm excited to see what happens over there. They've done a good job hiring. They've, um, you know, I've heard, talked to a few people around also like what they're paying people and like their big salaries. They're like really, they're really happy to pay people for, um, who are, you know, kind of worth it. And so, and then I, you know, I talked to some of the guys at Paradigm, and it, it seems like this is also a lot of what they are spending their time on internally, right? They're very focused on this as well, and they want to get this off the ground. And so, um, you know, I don't— for me, like, Stripe has this aperture, right? Like, they have these customers, these customers— they've continued to add, you know, different horizontal product offerings to serve their customers, get deeper with them, to get stickier, to increase the amount of economics that they can get from people. This is another part of that in my mind, right? And I, um, you know, I'm obviously a big believer in stablecoins, and so my expectation is, is that Stripe can take that aperture that they have, that funnel they have, and they can bring people through. Um, and what probably will be true is that they will probably also utilize stablecoins to get rid of some of the intermediaries they work with now and capture more of that economic value. Right, because stablecoins allow you to do that. You don't necessarily need— you know, the— I wrote an article about this a few months ago, uh, before they did any of these acquisitions, that was, you know, basically theorizing that they would try to eventually, you know, replace the issuer bank and maybe the— maybe the acquiring bank as well. And it seems like that's what's happening, right? And so like, this goes back, I think, to the other conversation about banks, was I think banks are in a lot of the weakest spots here. Um, especially in the types of people who are more digitally native. So retail users, SMBs, um, who are willing to use an alternative payment method. So, um, listen, I, I don't have anything to say beyond that, but I, I think it's, um, exciting for the industry that all of these people are in.

Santi, have you at Inversion thought about, um, I know you, I know you're looking at buying like, uh, cell providers and, you know, phone companies and things like that. Have you ever looked at buying a bank?

Yeah, we, we've looked at it. I would say that there was like one guy that I spoke to who was on the round. He was like, he owned a bank and he didn't disclose that, but he was like, hey, you should own a bank. And I was like, where's these guys coming at? I was like, hey, I came at it and said, okay, I need to buy a bank of decent scale. And the multiple may or may not be as interesting. Just kind of depends on neobank. Multiples are like way outta whack. There's like some neobanks that are like a little bit kind of fallen angel, so to speak. So those could be interesting. A traditional bank. Yeah, we looked at it. The conclusion that we came at it is it's not that we're never going to buy a bank. The issue that I have is that the larger guys have just so much market share and distribution that I don't think I'm going to compete credibly against a JP Morgan. Bank of America once they come at it. I'll tell you when I was actually looking at buying a bank in receivership, like in distress, like this was when the Silvergate went down. I was like, all right, seems to be like a void in the market that could be filled. So I looked at it way before Inversion to kind of like cater more to the crypto industry. And the end of that process, I sort of realized Most of the criticism back then was like, if you're in crypto, you typically don't get banked or like you're getting debanked. And part, some of it was true, but the reality is I think if you furnish all of the documentation, they will bank you. True back then in a different regulatory environment, certainly true now. It's just that I think a lot of the people, I guess for better or for worse, don't furnish all the documents for KYC purposes. And that's why you don't get banked. So I sort of paused. I said, I'm again from, in the businesses that we look at, we want to buy businesses that have a lot of distribution in the buying a bank of like mid-scale is just didn't feel like we would have that much of an edge. Because I do feel maybe you disagree here, but I just think that the larger guys are going to capture most of the value here. Yeah. I don't know, Rob, would you disagree with that?

I, I don't necessarily disagree with it. It sort of feels to me like, like, yeah, like the G-SIB is like, they're gonna do what they're gonna do. Like, they've carved out, you know, a business for them. Maybe their, you know, ROE, you know, gets hurt over time and they are— take too long to digitize as they continue to do, but they'll be fine, right? I do think like it's community banks, it's like the banks, mid-sized banks that are in the most trouble. Right now. So you're going to have— you have all of these new kind of tech-first digital banks that are going to serve the needs of customers better than— and better experience, um, more data, be able to underwrite better. Like, there's still a question around, you know, credit creation, I think, if, if the banks are hurting. But like, that's something for, for we can talk about later. But I think all the midsize banks, the community banks, those are what's in trouble. The G-SIBs are fine. And then all of the digital banks are going to especially if we're going to see more of these digital banks have OCC charters, or like the Coinbases of the world have OCC charters. Like, we're going to see more banking happen at like Robinhood. I mean, I think I saw a tweet, um, that Robinhood's wealth management arm is over a billion of, of AUM. Is that— is— was that the right number? Uh, maybe, maybe I'll go back and look at it. In just 7 months, right? And like, it's growing really, really quickly. Like if they offer more bank banking products, like, it's gonna be the same thing, right? And so I do think that there's— what's happened before, uh, in the banking as a service market is that you've seen, you know, people like LEAD or like some of these other, like, Evolve, these smaller banks grow by renting out their licenses to the fintechs. But now if the fintechs can get a skinny master account, the fintechs can get an OCC charter, they can go direct to getting regulated themselves. And they don't need any of the midsize banks, they'll just take over, I think, a lot of this, you know, mid-tier, right? So you have the G-SIBs, you have the fintechs, um, and like, I think a lot of the other banks are in trouble.

Yeah, yeah, definitely. The only thing, uh, well, we are looking at a payment processor. To me, process— payment processing might be a bit, bit more interesting than just buying an outright bank. Um, so that's like an active deal we're looking at right now.

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Yeah, I mean, that was, um, a little bit of a shitpost, uh, but it was the— so I think you both saw that, um, I don't know if you saw this, but yesterday the NHL announced that they were, yeah, partnering with both Kalshi and with, with Polymarket. But both Kalshi and Polymarket put out a tweet that was like, we are the partner to the NHL. And so then they were like, wait a sec. Um, and so I, uh, And obviously for Kalshi, a big part of their— I mean, basically all of their volume is Robinhood, and it's Robinhood Sports, and it's, it's Robinhood NFL actually specifically. Yeah, yeah.

And so it actually has about 80% of the, uh, the market share in prediction markets if you take out sports, which is a good stat.

Yeah, no, I mean, Polymarket is dominating every market, uh, other than NFL on Sunday through Robinhood. So, um, the, the Cauchy guys obviously have spent, you know, they're— they've taken a different tact, which is that we want to be infrastructure. They, they are, um, you know, they went and got, you know, regulated first before offering like a retail product. Um, they are trying to do more. I think they announced this deal with Jupiter that you can do prediction markets through Jupiter now. Um, so they're trying to do more, I think, crypto-native stuff. Um, but they, um You know, it has been very interesting to see the rate of change and the rate of adoption. I mean, the DraftKings thing, incredible, right? I think DraftKings, on October 7th, there was a headline out that they were— that they had said basically like, we don't think that people will want to use prediction markets instead of, you know, traditional sports gambling. And then literally 3 weeks later or 2 weeks later, they bought, uh, a prediction market platform and they announced that Polymarket was going to be their clearing partner for that, right? Like, you can see everybody understanding that this is taking off. And if these guys are not on the sports side specifically, if it— the government is going to take the perspective that these are, uh, you know, separately regulated than the state gambling commissions are doing with, you know, DraftKings and FanDuel, then every single person who wants to be in sports gambling is going to do it in a prediction market form factor, right? Because it allows for easier access to, uh, the retail customer and allows for quicker go-to-market. You don't have to go state by state. And so if that's the case, DraftKings is going to do it, FanDuel is going to do it, everybody else is going to do it. Um, and it's going to be a huge win for both Polymarket and Kalshi as they become the infrastructure providers to these guys, it's going to immediately 5x these businesses.

Yeah. Yeah.

Did you look at what was the drama with Limitless? So CJ from CJ, the founder of— so there's a new prediction market called Limitless. OneConfirmation just backed the round. They did a direct listing, I think, on Kaito. I didn't follow it super closely, so I'm going to botch some of the information. But did you guys follow this?

And I read the messages.

I do.

Epic. I just, man, I know, I know Rob likes to watch, you know, movies and horror movies and whatnot. And, uh, man, I just, I just tune into crypto Twitter and get all the entertainment I need for the day.

What happens on T?

I have no idea. I think, I think those, like, I actually, um, there's a CIA officer, I think, that like he goes by that. I think he, he has a good tweet about it. I haven't gone to it other than, um, no.

Yeah, I saw some tweets. It was like, you know, this guy CJ's crashing out, but, you know, I'll take the other side of that and just say it's an attention game right now. And it was actually Mike Dudas who taught me this in the early days. We were building Blockworks and he was building The Block and it was like 2018 or 2019. He would just every day someone would be pissed at Dudas and he was— when you're getting a company off the ground, you got to just do some kind of crazy stuff to get attention. And if that's— that's not the way that I would get attention.

But yeah, but you know, but just to be clear, right, like what happened here was that they launched—

I didn't follow this.

So, so they launched the token, um, and you know, they don't do it with, uh, you know, an exchange in the normal way. They launch it on-chain. Um, they— I think it runs up to maybe like a $500-ish million valuation. Correct me if that's wrong. Um, you, you know, they're kind of like the third biggest prediction market at the moment, but obviously significantly smaller than, than the two we've just been talking about, Polymarket and Kalshi. Um, and then people realize that a wallet that is connected to the team and the foundation has been essentially selling into the market. And so, and so they You know, it maybe— I forget how quick it happened, but, you know, kind of within like 2 hours, people realized this was happening. And this wallet that had connected to the team and the foundation had sold like $2.5 million worth into the market. And people start tweeting about it and they're like, oh, like, you know, this is the guy who just talked about how he didn't want to get ripped off by Binance. And now, you know, the team has this unlock, or the team is supposedly locked for some period of time. But now the foundation's selling into the market. Like, are they just dumping on us? Um, immediately when it starts getting talked about online, uh, the wallet starts buying, right? And so then he starts tweeting, oh, this was our, uh, he keeps tweeting like, this was our market-making algorithm, this was our on-chain market-making business. Or, and then, um, I think Evgeny, uh, the, the founder of Wintermute, uh, kind of engaged with him a little bit and he sent out a tweet, was like, Um, I think it was basically like, do you not understand what— he said, have you ever heard of concentrated liquidity, dumbass? To, uh, Evgeny, the founder of Wintermute, right? And it became like pretty clear that he was like— they had gotten caught doing something that like they did not want to get caught doing.

And then he was like, just shut it down for the day, buddy. Like, just, just take it, take it.

Yeah.

Okay, okay.

And listen, like Maybe it was, you know, I don't know what he's gonna do with the money. Um, maybe it's not going to the team. Maybe it was really about providing liquidity. Like, it's, you know, I don't know the intentions of what happened, but what was happening, which you can verify on-chain, was that they were— the foundation or the team, somebody connected to the project was selling into the market, dumping on everybody's heads, and then it started to be talked about, and then they were buying. So like, there were— that was—

mistakes were made, made in a wallet that I controlled. Ladies and gentlemen, this is what I love about crypto, you know, it's— if it's on chain, you can't get away with this stuff, you know. So like, just know that, like, you know.

Yeah, hold on, I gotta see if I can, I can share this. If I've never—

sometimes the loudest critics are just, you know, sometimes, you know, they do it out in the open.

You guys see CZ got? Oh, Rob, what are you pulling up? Oh, look at Rob.

Can you see my screen?

Screen sharing, Mr. Producer.

Yeah, look at this. Oh, wow, wow, wow. First time.

Rob got the training.

Rob, what is this chart? So this is the wallet from the foundation.

No way.

You can see.

Those are sell orders in the red and then the green.

Yeah, so the red are the sells. And then it started getting tweeted about right there. And then the green are the buys. So it's just buys and sells.

For future reference, what we like to do here in the podcast is we draw a line with a tweet. And it would look right around the time where the red turns into green.

So bad.

I'm going to get better at this. This is my first screen share.

So look, it's not bad. It's a good chart.

We appreciate the effort. Yeah.

Yeah.

Analyst Rob. Um, you guys see CZ got pardoned? The man, the myth, legend. I told, I forget if it was last week or the week before, but I think I said it's just CZ's world. We're living in it. It's, uh, yeah, good. I mean, I don't know how you guys feel. I think it's going to be fun to see CZ back at the helm running Binance. Clearly going to push pretty heavily into the US, going to take Binance US back under the, under the empire, get Binance public. It's good competition.

Always has been at the helm, but yes, optically, uh, I guess more public facing. The US Binance, Binance US.

You're telling me Richard was not really running Binance?

Yeah. Shout out to Richard, he was here. Um, I'm curious, Binance US, did they totally shut that down, or is it like just in dormant phase that they could pick it back up?

Dude, we're still looking for Catherine Coley to this day.

Because I guess like, yeah, I mean, I guess FTX Europe was sold to Backpack, right? And so I was just curious what had happened with Binance US.

Rob, do you know?

Uh, I think Binance US, I think technically still exists.

I think they're still going.

There was like this—

yeah, they're still going. There's still some employees there. Um, you know, it's a small business, uh, but it's still there. So, got it.

Yeah.

I mean, it's, it's, it's probably not worth the $4.5 billion valuation it raised at in 2021, but, um, you know, maybe, maybe those investors who waited it out, like, maybe they'll actually, they'll make money.

I mean, Binance gets public. I don't know when, but they get probably '27 or '28, but they're getting public.

But by the way, I was just curious, did you see the tweet by Dudas? I think it's worth calling out the A16C report that we had talked about. I don't think we've covered that, but A16C, there's a good slide in there that Dudas calls out to around the regulatory. Look, as you said, A16C has been extensively involved in policy in line with Paradigm, and they put together this report around saying it's a very good 3 charts that talks about, um, the amount of value is created, uh, by token networks, and then the amount of value has been created, captured by token holders has always been a disconnect. Um, like things like Uni, right? Uni, Uniswap, like Universal Navigation LLC Labs, kind of like equity versus the Uni token holder. Like there's always been that disconnect. Exactly right. And so this is something that Again, we talk about MegaETH doing an ICO. We're obviously thinking about on the inversion side, you know, I think it's just interesting that the design space for tokens is something that everyone's kind of shied away from, but we've all thought about it, right? At the end of the day, these are like super cashflow generative protocols and tying the worthless governance token is maybe not so worthless anymore. But I do think that it leaves you wondering, like, if you're a protocol and you launch with certain codified tokenomics, can you actually, how much can you rework that through governance or some other mechanism to align better the incentives of equity holders, token holders, and just the protocol generating fees? And so I think it's, um, if there's like one slide that I really liked, it was this one. And I think you're going to see a lot of the design space for tokens. I don't know how quickly, but I do think over the next couple years it's something that I'm paying a lot of attention to, obviously from where I sit.

Content of the week.

I'll go first. I said it before, The Gatekeepers, phenomenal book. It's about all the chiefs of staff of all the major US presidents. Just to, I love House of Cards.

The book on chief of staffs.

The book. I think I recommended it to you, Yana. Was asking someone in London about like, hey, I'm looking for a crack chief of staff. I've been a chief of staff before at this aging company. And so I had a good idea of what I wanted, but I just read this book, couldn't put it down. It was just amazing. Like amazing, amazing book. If you like politics or just like you're a builder, it really gave me a lot of really, like I was just writing a bunch of notes. It was a really good book. Great read too. Called The Gatekeepers.

Nice. Mr. Haddock, what do you got for us?

Well, okay, so it's, um, it's October, uh, and I think it is, as you guys know, I'm a big horror fan, so I've gotta give a little bit of a shout out to some of my like classic, my favorite classic horror movies. Right. So there's 3 that I always recommend. I'm gonna, I'm gonna give you all 3. Okay. This is extra bonus right now.

The Hills Have Eyes?

Is it The Shining?

Uh, yeah, exactly. The Hills Have Eyes. No, um, uh, my, my favorite three: Hellraiser, the original one, okay, um, the, uh, Nightmare on Elm Street, but the one Dream Warriors, which I believe is the third one, right? So that, that is the best one. Um, I'm really, really like much better than the first one actually. So like I know people have the first one, but Dream Warriors, that's the one, and The Shining. So, you know, get your Halloween on. So, and, uh, and, you know, enjoy yourself.

So, Rob, let me ask you this. So you watch it, you watch a horror film Thursday and Friday, you know, Friday night, 10, 10 PM to midnight. Do you then fall right asleep, or do you then go watch, like, do you watch like 30 Rock or The Office or something?

Right asleep, right?

Straight to sleep.

Yeah.

Where does that put you in the, uh, like FTMP score.

Yeah.

Like, what's your astro sign, uh, uh, Rob, without disclosing, of course, you know, social security number and date of birth.

What's my, what's my sign?

Yeah.

What's your, uh, I'm a Scorpio. So, you know, birthday's in a few weeks.

So I was gonna say, dude, I don't know. I mean, I, I still, so I was, I hate horror movies. I was forced to go.

I'm gonna get you, Santi.

No way. We're gonna go. You will get me to do all kinds of other shit except watching horror movies. I'm still traumatized. I got— I was forced to go see, like, I was like middle school, went to go see The Exorcism of Emily Rose. I don't think it's like that, like crazy, but to this day, if I wake up at 3 AM, close to 3:33 AM, You best believe I think about The Exorcism of Emily Rose. And if you've seen the movie, you know what I'm talking about. Don't watch the movie.

I, I will tell you, I will tell you, I, um, somebody showed me It with like the clown when I was like 6, and I still don't love clowns. So I don't know who likes them. It's like, yeah, I'm not— it's, it's not my, it's not my favorite. So I, I still think about Pennywise.

Uh, have you read, uh, Stephen Koon's like Velocity and some of those things? Because I thought that like I really enjoyed that read.

I haven't read that one.

No, that's good. Maybe I'll give it to you for your birthday.

I appreciate that. Another content of the week.

My content of the week, um, is not a horror movie. I'm bringing this back to reality here, Rob. No one else likes horror movies.

I'm sorry, nobody likes horror movies. Are you kidding me? Horror movies are the only place where you can get independent film that makes money today.

You know who likes horror movies?

Really a good— is that a real fact?

Oh yeah, that's a real— I mean, it's, it's, it's an opinion, but it's opinion that's widely held, right? Which is that the horror is the only place in Hollywood today where you can get a movie made for sub-$10 million and you can make $120 million. Can't do it anywhere else. And so that's actually why you see a lot of the independent filmmakers today move to horror, because it's the best ROI right now, because people love horror.

Uh, ladies and gentlemen, I'm not a, I'm not a psycho, I'm just doing it for ROI reasons.

Come on. I— listen, like, the Blumhouse is probably one of the greatest businesses of all time, okay? Like, in the media industry, it's probably done a tremendous— like, I'd have to go look and, and figure out what they actually made, but they pump out these movies every year for $10 million, $8 million, $15 million, and every year one of them goes to $120 million, so $150 million at the box office. Like, it's a— it's like a— it's a great business.

Rob, I think you might be in the wrong investing industry, man. Like, why don't we just go, uh, go talk— by the way, go talk to Mark.

You remember Mark?

Morgan Mark, the Republic?

Yeah, man, I, I gotta see Mark.

Yeah, Mark, shout out to you, man.

Go fund some films.

Mark's the one who put me on, uh, that you could pay a million dollars and get a Sam Raimi movie.

So, you know, content of the week, Ribbit Capital wrote a 40-page piece. It was their investor update. It's on DocSend. Um, I will tweet it out or we can put the link in the show notes. We probably won't put the link in the show notes because we never do, but I can tweet it out or something. It's a really, really good piece on what is going to happen with just like tokens in general. It's about the token revolution and the thesis is kind of tokens are everywhere, tokens are everything and tokens are everywhere and what the world will look like. It's somewhere between— it's a mix between A really thoughtful investor update and a Joshua Tree acid trip. And I would highly recommend reading it. And a lot of it seems a little crazy, but I actually think they're really onto something of what the world will look like. So I would recommend it.

By the way, I'm— private guys are smart. Yeah, I'm— I just saw it hit my inbox. JP Morgan initiating coverage on Stripe. They've been doing a lot of this for private companies like OpenAI and They have a whole section on, uh, their acquisition, their Crypto4A. Borderless financial services. Good to see that. Talk about Privy, talk about Tempo. Yeah, potential $350 billion TAM in play by 2030. We talk about it next week.

Nice. All right, folks, thanks for listening. Santi, Rob, good to see you guys. I will see you Monday for our episode. Cheers, folks.

All right, thanks, guys.

Have a good weekend, guys.