What Makes Crypto Conferences Valuable | Roundup

This episode is brought to you by Sei. Sei's V2 upgrade introduces the first high-performance parallelized EVM, already live on public devnet. Mainnet comes later in Q2. You can follow along with the Sei journey on X @SeiNetwork. Sei is spelled S-E-I. Go follow Sei on X, @SeiNetwork. Hey everyone, the Polygon Community Grants program was launched with 1 billion tokens all for Polygon builders. Really excited to share that on today's episode of Empire. Season 1 of the Polygon Community Grants program is now live. It features $35 million in MATIC to support the next generation of Polygon projects. Join the aggregated future today by applying at polygon.technology/grants. Big thanks to Polygon for sponsoring Empire. You're live. You made it. You survived Brussels.

I survived Brussels, shockingly. You know, like, my spidey senses go up. I grew up, I've traveled a lot. I grew up in Mexico.

And so explain to me, was there only, was there one area of Brussels that people kept going or was it like, because I know there's the Brussels has the highest crime rate in all of Europe. I saw a chart.

Robbery.

Of robbery. So what people were people walking around with like nice watches and they were getting scooped or what was happening?

I don't really know. I mean, I knew of 3 people anecdotally. Look, robberies happen all the time in major cities. They happen all the time. It's just sort of virtue of like law of large numbers. And I don't want to overly extrapolate. I'm not an expert on Brussels or, you know, the demographic changes or immigration policies or whatever. I don't want to get into any of that. I just felt unsafe. London has become also really unsafe. Uh, they're particularly like, like street robberies, like they're stealing phones and watches. Um, but apparently 3 people got robbed. Um, one of them I know was walking in a pretty sketchy ghetto area of Brussels that, um, but you know, I read some of the comments, uh, and appears that like a lot of them were like Brussels or Belgians that were commenting and they're like, yeah, our country is like really taking a toll. I have a few friends that are from Brussels and they no longer live there. But the event was in the main center and there's, you know, a lot of the side events were very nearby. So like MegaETH had an event right next to the venue. I went and was speaking at a Movement Labs panel. And that was a bit farther north in the like Grand Central Station of sorts. It didn't help that it was like also torrentially raining so people couldn't move around. So it's like biblical rain. I don't know what the universe is trying to tell us.

What's going on with Greece crypto events in the rain? Dubai had that too.

I know, I know.

So it seems like the consensus, so I saw, so I was talking to Mike, I'll just read one of Mike's public tweets. So last year's ECC was one of Mike's favorite events he's ever been to in several years of going to crypto events. And he tweeted this thing. July of 2023. He said ETHCC was electric. I've never interacted with so many energized people focused on L2 scaling, account abstraction, MEV, and ZK tech. He wrote this whole thread about why it's so great. And he posted earlier today, he said, last year I left ETHCC enthused. This year I'm struggling to identify a common theme from the conference. The event feels fragmented across many redundant, partially filled side events. And worst of all, no apps. What— I don't know if that's a harsh take, um, but like, what, what did the— what did it feel like on the ground, um, for people who missed—

I really enjoyed it. I mean, I had all my meetings like in my hotel. I had 8 meetings and everyone was there.

Oh, I loved ECC. Yeah, I stayed at the nicest hotel in Brussels and I didn't leave once. Uh, I had people come to me.

Matter of fact, I did. I mean, I'm not gonna lie. I mean, it was, uh, As far as hotels goes, it was like, it wasn't that special, but it was very convenient. I had all my meetings there.

Did you go to the conference? Did anyone go to the actual event?

I don't know. I didn't.

No.

I mean, the point of these conferences are all the people that are there and then I get to meet like all my portfolio companies were there and there was a few events. Like had I stayed, like Barachain was having their a big event. MegaETH had a sequence of days of events. But again, the rain made it really hard to go to these. So I was just able to go to the Movement panel and that was a really good discussion. And the second day I met with, you know, Kain, Casey, who's launching her fund called Topology, and like 8 or 10— Shane, I'm an early investor in Polymarket. And so I caught up with Shane. Like, oh dude, I pinged Shane.

He didn't respond to me. I want to do an episode with Shane and Nick Tamayno.

Shane is, uh, It was like unrec— like he's, he's such a recognizable figure cuz he has this crazy hair. And so I could, I'm terrible with like spotting people, but like kind of autistically just walk and don't see people. But Shane, it's like impossible to, to, to like, you know, miss. And so I saw him like multiple times.

Nice.

No, it was a good event. Look, I, so I, I can't comment on the content and the quality of the ECC itself, but there was a number of side events that were really good. So yeah, I enjoyed it. There was a Vitalik talk that is live and people can go watch. So I don't know if I'm going to watch it. Candidly, I'm not really—

Mike moderated a talk with Vitalik and Anoma, I think, that he said went well. But it seemed like Vitalik was everywhere.

He was hopping around.

Yeah, that's cool.

I didn't see him.

I saw a picture of Vitalik leaving. He like arrived in the rain. It's like people are talking about him like a godlike figure. It's like he arrived in the rain, he like leapt through the crowd, got on stage, spoke, and then left without a bodyguard. Like, who is this man?

Best bodyguards are the ones that you don't notice. Just saying.

It's true.

I would be— I mean, I wouldn't be celebrating the fact I'm actually concerned if he doesn't have a bodyguard.

Yeah, true. So it's interesting. So, you know, we have Permissionless coming up in October and side events are like the side— basically every single— so, you know, like one of the ways that we make money is like sponsorships at conferences. Like people buy like a booth or they buy like an activation or whatever it is.

I mean, a booth or there's going to be full of like, like a waiting room, Peloton treadmill, juice bar and cold brew coffee.

For those who want a little insight into my conversation with Santi, I'm trying to convince Santi to pay like $10K to put his face all over a booth that just has a squat rack and a deadlift.

I'm making progress, but yeah, I might not even go to this conference, but yeah, sure. Yeah.

Anyways, so, so anyways, we— so the conference— so it used to be— here's the history. It's like everyone, like in every industry, people just like, they sponsor like the conference and there's like always like some things around the conference, but like they sponsor the conference and there's thousands of people walking around on this huge show floor and there's like booths and whatever. It's valuable. It's almost like a mini— the way I think about it is like a marketplace gets built in 3 days and then torn down. There's like a marketplace that's an IRL marketplace. And when the money shifted out of the hands of the CeFi companies like Anchorage and Copper and Fireblocks and Coinbase, they're all very used to doing those kind of sponsorships. The money shifted to the protocols. So, and when you go to a protocol like Arbitrum or Movement or like Aptos or Sui or Monad or whoever it is. And you talk about normal sponsorships at some point, I don't know when this happened. It seemed, it started seeming like the uncool thing to sponsor, like just sponsor a booth basically. And what everybody wanted to do was host side events. So in 2021 and 2022, that actually, that actually was a great strategy. Like the side events were like the places to be. You remember like Breakpoint Solana, like those side events were like, they're amazing. 2023, everyone ran out of money. So the side events actually continued to be good because there were so few companies that could host a side event that it felt very exclusive and rare and unique and you couldn't get into them. So they also remained good. 2024, true. I shit you not, Santi, you talk to 100 companies for like about permissionless, 95 want to host a side event. So I think people saw it. Sounds like you had your agenda at ECC, but what I'm hearing from— we had 12 people on the ground at ECC. The side events were so fragmented and all over the place that it really took away from the value of the conference. And I think we've seen, like, I would call ECC— I wasn't there, but like peak, I think we've hit the top on these side events. And I think you'll start seeing people, if you're like a Monad or a Movement or like a hot name, I would say go ahead. Or like Penguin, Pudgies or whatever, like host a side event. But like most people should not be hosting their own side events. Go host a dinner or something. But I'm also very biased because I want you— I know I'm as biased as you can get, truly, because part of our revenue comes from people sponsoring our event and not hosting a side event. But if I were in the shoes of an event marketer, I'm doing 3 things at Permissionless. I'm hosting a dinner, I'm hosting a private dinner, and I'm buying a booth, truly, because I think a booth is like a very is like a very easy way to go talk to like 3,000 to 4,000 of your ideal customers or users. And I'm doing some sort of weird activation. If I have a lot of money and I'm a big brand and I know that everyone wants to be around me, I'll host a party. But if it's not, if I'm not one of those brands, like, don't try to go create your own thing. Like, go to where everyone else is. So that's my take. That's my take.

Well, yeah, you know, I don't like, to be honest, I'm not a big fan of conferences. They like, I like going to them because that is the highest concentration that I can like meet people that I've never met in real life. And I want to kind of just get a feeling for the founder. I was like looking, I'm looking at two deals. They were there. I I want to meet them. I want to see them in the, like, in real life, how they interact. Sometimes I'm there to watch people without just, just observing how they behave. I've learned a lot over the years of just, uh, good and bad, but mostly bad actually.

There's, there's that Santi guy again, sitting in the corner looking at the founders. Yeah, just there, just observing. Why is he taking notes on that guy?

No, uh, No, but it's good to do diligence and just get an understanding of the sentiment, how people are perceiving the number of attendance. I don't really go to the talks themselves. One, it's like impossible to— a lot of times, like, the quality of the audio sucks. Like, ETH conferences are really bad location-wise and organization-wise. And like, the joke at DEF CON in Osaka was like, just to put a perspective, massive venue. 4 different floors, and there was like 2 elevators for the entire conference. I'm like, and this is at a time where there was no L2s, and the joke was, okay, yeah, this is the congestion of the network in real, like, you're seeing it, right? And then like, who in their right mind decided to pick Brussels as a conference spot? But like, practically speaking, no security, by the way. Like, and so like, really guys? Like Bogotá, like, okay, Cancún. There's issues with the Cancún and DEF CON. Um, so I think we ought to be a little bit more thoughtful as an industry of where we organize these things. Um, seriously. Um, and I, uh, I think they, uh, there's, there were a number of incidents, so it's like important to see. Um, but I get it. So anyways, I don't go to these talks. I, I, I bookmark them and I like then listen and then 2x the speed. Because, you know, that's just more efficient. But I'm there just to meet with people and if it's at a side event, then all the better. If it's not, if it's at a hotel room, at a restaurant, great. And a lot of deal-making happens there, I think.

Yeah.

So it's good.

Yeah. Yeah. I mean, my thesis on conferences is just, is very simple. It's as the world gets more digital, the value of IRL connections goes up basically because the frequency of IRL connections will go down, but the value of those connections will go up and there'll be more efficient connections. So instead of going to an office every day, now you're seeing someone only when you are thinking about investing in them, for example.

And to tell you the truth, it doesn't have to just be at a conference, but the conference sort of forces you to mostly talk to builders.

It's just a shelling point for everyone to convene. My vision for permissionless is simply like all the people on crypto Twitter who you think of, bring them together in one place. DAS is different. DAS is more like institutional crowd. That's what I'm trying to do with permissionless.

Yeah, yeah. What I'm trying to say is like, a lot of times, you know, in this market environment, then we can talk about sort of traders take over and they— the timeline, like they're commenting on the charts and 200 moving averages or 200-day moving averages and whatnot. Going to these conferences, for the most part, there's a lot of builders there and I just really, whenever there's moments like these, it's really helpful to just talk to builders because you realize like the building continues to happen. And, you know, a lot of times builders don't even pay attention to price. Some of the best ones are unfazed by the price and just continue building. And so I think going to these conferences really resets that mindset because it could be really easy to get caught up in the sentiment of price and what have you. I generally think conferences are a good reset to, you know, I saw and talked to a number of people that said, yeah, it was like really energizing to go to the conference, to talk to builders, to see the excitement in the room of just all the different things that are being tried. And so, yeah, from that standpoint, I did come back more energized from the conference having met with, it could be like one really good meeting or two really good meetings, or just someone come up to you saying, hey, I really enjoyed the podcast. I was like, Shit, that makes my day more so than a 100x.

Seriously.

Seriously. Not to say like, it's great to get 100x. Don't get me wrong. It only happens so very often.

This is when I see you tweeting about the social layer, not the financial layer. The social layer is compliments.

Well, well, so to put a comment on that, I was talking to Smokey from, from Barachain and they had a big event that I, so I reached out to them and say, I'm leaving, but I can't go to the event. And then I'm like talking to this company called PuffPaw, like Vape to Earn, and the whole idea is to like allow, help people to transition away from smoking to vaping and then eventually habitually to wean off of nicotine and, you know, the bad parts of, of like what caused actually lung cancer and the addiction component of it. And we were talking about like, you know, a lot of, a lot of what is in the narrative right now is talking about airdrops are broken. It's hyper-financialized. We're not building apps. It's just a casino. Like these, it's like a common thing that we hear certainly from the outside world, more so now internally. When price goes up, none of this, you know, none of this gets talked about, but when price doesn't go up, you know, people start being critical of these things. And I don't know, I, in that conversation with Smokey, we were just talking about something like play-to-earn is, was very much like dismissed because the price of Axie went down and the price of STEPN went down. And then everyone is dismissive of a category because the price went down, but doesn't care to like deep down look at, I'm still quite constructive and bullish on this coordination and getting people to do things, not just because it's a financial return. And it's easy to like think about an airdrop, think about like just, the financialization, like the financial component of an incentive, but there's just so many instances and we've talked about it in the social layer, like in the context of Friend.Tech and Time.Fun and all these things, um, that like sometimes humans just want to do things because of their good— because it brings something else other than a monetary reward.

Yeah.

And anyways, I think those are the type of applications that like earned NFTs are really interesting, like badges, PoApps. These are things that are not new.

Yeah.

I just don't think protocols experiment with them enough because the attachment, the emotional attachment that you have to things that you earn, I think is greater than things that you can just buy. Sort of the same. It was like jewelry, like watches, for instance. You can buy one and sure, but it's, there are certain timepieces that remind, they're useful because they remind you of particular moments in time when you get married, when you have your first kid. When your parents gave it to you, when you're at a particular milestone in your life, they're like mementos that like evoke a certain memory. The same way that a song that you haven't listened to in 5 years comes on, you're like, I remember exactly where I was because it conjures up a memory. And so I think like for that reason, I don't think people— I think the design space for like the social layer, not community, that's a generalized term, is very unexplored. And that was a theme that I talked to 3 different founders at the conference.

I agree with that.

They all seem to agree.

Yeah, I was looking at— do you know the app called Gas? Do you know who Nikita Beer is?

Yeah.

So I was looking at Gas by Nikita Beer. Someone posted a product video of Gas, which I think he sold to Discord or Facebook. He's a phenomenal consumer builder, I'd say, which a lot of people are not able to do. Like, there hasn't really been huge consumer hits in a long time. And it got me thinking about actually the same thing, but on a product incentivization level. So the way I've been thinking about this is there's 3 ways to incentivize users. There's financial incentives, product incentives, and social incentives. So a social incentive might be like what you're talking about, Santi, just like getting people on board. And I think a good example of this might be Snapchat streaks. I don't know if you've— I don't use Snapchat, but if you hang out with a 13-year-old, they have like a 2,000 day streak going and like everyone in their, in their like 6th grade class is talking about like how, like how long is your streak? Like that's the social incentive. Product incentive is like building a product that is just very addictive. Like people should look, I'll link in the show notes to Nikita Beer's Gas App. Like it's the, the way that they walk you through making a decision and getting you to click the next thing is very, it's like, it's, it's a product incentive. Like TikTok is another product incentive. Like, they've made the product so good that it's addicting. Um, and everyone in crypto is focused on the, the third bucket, which is the financial incentive. Not enough are focused on the product incentive and the social incentive.

I'll tell you one observation, maybe you agree or disagree with this. Price going down— even when price goes up a lot, I actually get more stressed when price goes up, much more. When price goes down, it's actually like my brain's just sort of wired differently, I guess, after so many years. Um, Humans, I think it's like over 70+ percent of people experience loneliness at some point. And at some point meaning like over the last year or last couple years. That trend is on the rise. If you think that money's going to cover that, you're very wrong. Extremely, extremely wrong. Money does not cover. It certainly can help. Um, the best, and I actually first heard it from Kobe, It's great not to have to think about certain things. Putting food on the table, like if you think about the hierarchy of needs of Maslow, like, okay, that's like, once you break through that, that's amazing. Everyone should hopefully get to that point where you don't have to think about if your coffee costs a dollar or 5 or 10, um, and you stop thinking about those things and it frees up your, uh, you know, memory space to think about other things. That are far perhaps more interesting. But absolutely above that level, wherever that may be and wherever you live, between $100,000 and $200,000 a year or whatever, or maybe even less. When price goes down or price goes up, like people think that like they need more money and they're going to cure loneliness and it's like actually not true at all. And so I think what I'm trying to get at is a crypto. If you argue that crypto's only value is financialization, you're sort of missing the point that crypto is highly entertaining. Yes, it is. It's very engaging because you're transacting value and value takes up different meanings when you can tokenize it and express it in the kind of the crypto context, like digital scarce context of capturing attention, tokenizing it in some way. And so I don't think that to say that everyone is in crypto just because they're fully interested in making money, I think misses the point. That I think crypto is also touching a very powerful nerve here, which is addressing the loneliness problem that people have. Um, and that may or may not be fixed. Um, but I'm, I'm a believer in that. Um, I, I don't get me wrong. I do think there are a lot of people come here because they want to make money. Um, and then at some point end up thinking that making money will fix their loneliness problem. But along the way, it's like that meme, you know, it's the friends that we make along the way. And I think it's part of that is true. You know, it rings true because I think, I don't think anyways, I'll just say that I don't think you, if you agree or disagree that there is far more reasons or there's more reasons why people are here than just making money.

Agree.

I don't, I would argue that it's a vast majority. But we can debate whether it's the primary or secondary reason. I don't really care, but I don't know. I think there's a big opportunity to, to create, like, to tap into that.

Do you think play-to-earn, like, the play-to-earn and move-to-earn things will come back this cycle?

Yeah, 100%. 100%. Yeah.

Yeah.

I like For instance, I've always felt that like Strava should have already done this to some extent, but they haven't. The biggest criticisms of play-to-earn is that like, you know, like it's not sustainable to get paid to, you know, $50 to walk a mile. And then, you know, obviously like these economies are not sustainable in that shape or form. But I think we're going to start seeing it particularly in something like MyShell, you know, where you're, you're basically incentivizing people to do something. They're going to earn some reward. But, but the counteractive, like the network effects that you have in, in, for instance, monetizing your own model, or even being able to use a model that has been trained with human data from, say that you want to learn a language, you're learning Romanian, you know, you're, you're giving feedback to that, to that model. And then I can use that if I want to learn Romanian. By the way, I know you're learning Romanian.

Romanian. Romanian is the lang— Romanian is the language that you chose, sir. I don't know, man.

That's so—

that's so—

language I'm trying to say, like, some sort of—

or whatever.

What I'm trying to say is that, like, yeah, maybe you're, you're, you're earning some tokens, you can monetize that model, but, um, I think that the network effects that you can get, um, in certain verticals are really interesting, and they, they don't require they don't require that much of like ongoing supply sinks to incentivize people to stay in that economy and to transact in that economy. Whereas Axie was difficult because Axie wasn't a game. It was actually not a really fun game. It was difficult. And then, so anyways.

Yeah. Well, I think on the Strava note, like if they imagine you had a Strava, imagine Strava was built as a crypto app. The thing that it would probably get wrong is trying to incentivize users too much financially. And what Strava got right is realizing that it's just like Strava is a social app for runners and bikers and it's like you get leaderboards, you can compete against your friends.

King of the Hill, baby.

King of the Hill.

Yeah, yeah, yeah.

So yeah, absolutely. Speaking of that, I have— I found a good YouTube comment for you.

Oh, here we go.

New Santi looks skinnier than old Santi. Running is starting to kill the Empire Podcast.

Feed me, whoever you are.

Uh, all right, here's one. Funny how Santi is like a Bitcoin maxi but about tennis. He only plays, quote, real sports, not pickleball.

Correct. Very much correct. Wherever you are, true. Excellent observation.

Regarding vampire attacks—

yeah, no, Wimbledon's happening right now.

Ready? Ready? Regarding— yeah, yeah, it is. It's been— Wimbledon's been good.

I've been watching.

Uh, Regarding— and then Olympics coming up. Regarding vampire attacks, you know, you're so pale that the vampire reference seems appropriate for you. Sorry, sorry, dude. Tough, tough. I am trying to get some color here.

I'm out, I'm out in Long Island somewhere. So yeah, yeah, somewhere in Long Island.

Strong Island. Yeah. Getting some color out here.

So By the way, can we, can we address something? Because it is summer in the Northern Hemisphere. There have been increasing number of shark attacks there. I only have one phobia and it's sharks. I watched way too many Jaws growing up. By the way, Lego, Lego just launched a Jaws Lego set, which is both fascinating and horrifying at the same time.

How scared are you of sharks? Like, are you—

I don't do open water triathlons.

Oh yeah, you're scared.

Just don't. Yeah, no, you could, you could start saying, you could scream shark and I'm going to pull, I'll get, I'll get out. It's irrational. I get it. I know, I know.

So you have an irrational— like, there are rational fears. Like, I grew up on the West Coast, like, and you don't really want to go surfing at like Stinson Beach because there might be sharks in the water. And that's a very— I'd call that rational. Like, you have an irrational—

yeah, I mean, probabilistically, yeah. Like, I know the probability is really low. That being said, there have been an increasing number of attacks in a particular places like the Hamptons, uh, South Padre Island is a hotbed, and Texas, which is a popular destination, um, there's like 3— there was like 3— there was 3 shark attacks in a span of an hour. The shark just went crazy. The theory is that sharks are getting hungrier because the temperature of the water is rising, and so their metabolic rate goes up. And so I don't really know.

I think— isn't there a thesis that the water is getting warmer so they can actually come closer into the beach as well?

That may be true as well. I don't know.

Or maybe they would want cold water actually.

Maybe. No, I think I actually, I think, I think the temperature is more so that their metabolic rates, they require more food and yeah, like there's a bunch of humans there. Anyways, watch out folks. Like I signed up for a half Ironman, by the way. So I'm not just going to be like, I'll get skinnier.

But, uh, have you done a full Ironman?

No, no, no. Only halves. I've done like 5 halves at this point.

So where will, where will you swim?

In a lake. In a lake.

See, lakes freak me out. Lakes are filled with like—

Oh, Loch Ness Monster?

No, like those little, uh, you know, I actually watched a movie as a kid of, uh, piranhas.

Uh, yeah, I know piranhas are only in the Amazon, I believe. Yeah, but barracudas are really nasty creatures, but they're like, I think, in saltwater. Yeah, but they get into the lake. The most dangerous, um, place to go swimming is where river meets ocean because there's so much sediment and nutrients in the water. It's full of crocodiles and sharks. It's like, it's particularly in places like where the river just disembarks the riverbank into the ocean, like in the Brazil, whatever.

Good to know.

Good to know that crypto is slow and we're talking about—

honestly, I was prepping for this pod being like, what am I— what are we, what are we talking about? I mean, there's this— so I went, I went on Chopping Block. On the Laurashen's Chopping Block with Hasib and Tom and Robert yesterday. And foolish week to go on because they basically just grilled me for an hour about why media companies should exist and our op-ed and the podcast and tough, tough, tough, tough episode. But yeah, I mean, what happened this week? There was like selling, there was a— there was a couple of things. Mt.

Gox. Mt.

Gox in Germany.

A couple of things. Germany has sized down. They had €3.5 billion Bitcoin. Now they're down to 700 and—

I think 2— they have 50,000 Bitcoin, so like 3-ish billion, however you slice it. So that was from— so my— that was from a— they shut down— it was seized from the operator of Movie2K, right, which is the privacy or the piracy portal.

It was all seized. It was all seized Bitcoin.

Yeah.

Uh, they never acquired it, to my understanding. And then they, um, they've been liquidating it. I think they've liquidated over two-thirds of the position, right, because they had call it $3 billion. They're now down to $700, but they've been like— like, whoever is running this, they've sent like— they've sent Bitcoin mostly to Coinbase, Kraken, and I think Bitstamp, I believe. Uh, it's like unsophisticated.

They— yeah, I was thinking they should have just hired a trader for like $120K, 22-year-old, and just like—

it's just— I mean, obviously it's very telegraphed when they send it to an exchange, but it's, it's like very messy. I mean, you kind of have a fiduciary responsibility to like get best execution. I don't think they are really. Yeah. It doesn't surprise me. I mean, Germany shut down their last remaining nuclear reactor right when the Ukraine war started.

So nice.

It's like someone, a great tweet was like, so let me get this straight. They're selling Bitcoin for euros, which they can print. Got it. Okay.

Makes sense.

Got it. That will age well. Anyways.

There is actually an interesting geopolitical— if you think about— here's an interesting geopolitical thing I was thinking about is if you think about Bitcoin not as Bitcoin the asset, but as a scarce commodity that nation states will want to get their hands on one day, what Germany's doing is basically sending a precious commodity into the market. And El Salvador tweeted that they were buying. So you have— you're essentially sending— like, take out Bitcoin, think of it like oil or whatever. I'm sending precious commodity into the market and sending it to another nation state that is then taking my precious commodity. And I think there's an interesting geopolitical angle that's not really talked about today, but fast forward, probably not this cycle, but probably 5 years, the geopolitical aspects of owning the Bitcoin will, I think, become a popular topic.

Yeah, we'll see. I mean, my— all governments can always continue to print money, right? But it's sort of the market will halt you to your knees if, uh, you know, you're not the de facto reserve currency, i.e., dollar. Other countries don't have that favored status. Uh, yeah, but yeah, I don't know. I mean, it's— I can understand why they're doing it. Uh, you know, $3.5 billion in their grand scheme of things is peanuts for a government, but you know, still, uh, it may not over time. We'll see.

This episode is brought to you by Sei. Sei's belief about the world, I think, is a good one. They believe that the EVM is here to stay. Agree with that. They believe that the EVM is going to look kind of like what JavaScript ended up looking like in the Web2 world. Agree with that. They also believe that the EVM in its current iteration lacks a lot of the performance and scalability that developers need. So what Sei has done with their V2 upgrade is they just introduced the first high-performance parallelized EVM into the market today. They've got lightning-fast block times and finality of just 390 milliseconds. What this does is it unlocks an entirely new design space with 100x the throughput of even some of the fastest EVM L2s on the market today. Sei V2 is now live on public devnet with mainnet scheduled for Q2. You can stay up to date with Sei on X @SeiNetwork, S-E-I Network. Big thanks to Sei. This episode is brought to you by Polygon. Polygon Labs is developing the next generation of open-source zero-knowledge tech to aggregate crypto liquidity and user bases, empowering developers to grow in a unified web of interoperable chains with the AggLayer. That was a big mouthful, so I'm going to tell you what it means in in my, in my words, there's all these things popping up, L2s and L3s, and it's chaos, right? If you are building something, you no longer have to worry about bootstrapping liquidity. You can basically just build in the AggLayer to tap into the liquidity of the AggLayer and the users of the AggLayer. You get the users, you get the liquidity. It's the AggLayer. It's hot. It's by Polygon Labs. They've got the Polygon Community Grants program. It was launched with 1 billion tokens. Just for Polygon builders. Season 1, it's live right now. It features $35 million in MATIC to support the next generation of Polygon builders. Join the aggregated future today by applying at polygon.technology/grants. That's polygon.technology/grants. If you talk to anyone, let them know Blockworks sent you. I have a quiz question for you. What do you think has performed better this year, Nvidia or Coinbase stock?

Coinbase? No, no, actually Coinbase is up 60%.

Interesting question, right?

It's been choppy though. It's $221. It went all the way. It's been actually, let's see.

I actually have here.

I have this, I funny, I have like this chart where it compares Coinbase and Nvidia actually. Coinbase is up 38% this year, right?

So on the 12-month here, here's— I just pulled up the 12-month chart. Uh, sorry, I asked 2024, but look at, look at the 12-month chart. 12-month chart, Coinbase was actually tracking ahead of Nvidia for the last 11 months, and Nvidia just, just overtook Coin.

So it's up, man, seeing, uh, much more. No, so I just looked at it now. Nvidia is up Is this right? 170% year to date and Coinbase is only up 40%.

Yeah. So look at, look at the, look at this chart. Yeah. Coin, Coin is up year over year 180 and Nvidia's up 205.

Oh, I said year to date.

You're saying year over year, like I was saying year over year, 12 months, 12 months.

Okay.

Yeah.

Yeah, that's right. It just flipped, right? It's like today actually.

Yeah.

Is that right? Yeah. Coinbase, they're actually on par. NVIDIA on a 1-year, I'm looking at like trading view right now. 1-year NVIDIA at 195.36%, Coinbase 196.38%. Yeah. That's an interesting chart to follow today, ladies and gentlemen. Yeah.

Yeah.

It was, I mean, there's, there's been a number of, but yeah.

Shout out David Canellas. Go, go subscribe to the Empire newsletter. We were talking about this good, good little piece of it.

What do you make of that, by the way? Okay, so if you fast forward— question, let's make a poly market prediction market here, or just look at options. Um, who, what outperforms over the next 12 months, NVIDIA or Coinbase?

Next 12 months, Coinbase for sure.

Interesting. Yeah.

Okay, what do you think? I'm just trying to think of a scenario because think of like NVIDIA is up over Over the last 2 years, this chart looks very differently. Last 2 years, NVIDIA's up, I mean, what, 1,000% probably?

Well, yeah, not so. Yes. The question though is, do they outperform? Like the second question of that is, is the return positive or are both negative? So they both go down.

Who go—

which goes down more? If you— because if you assume like it's a ma— if it both go down, it's maybe a macro thing. Like macro takes a shit, everything's down. On a relative basis, what has a higher beta? Well, probably Coinbase. And so, but I get your point. Nvidia has rallied quite a bit. And so, yeah, yeah, yeah. It's difficult to say.

Do you own more Coin or more Nvidia?

More Coin. Yeah.

What else?

Actually, I don't know because some of the products may have, definitely have NVIDIA exposure and yeah, it's tricky. I don't, I actually don't have a good answer to that.

I have another, I have another stat for you here.

Okay.

I'll throw it up on the, on the, on the screen. BlackRock's Biddle Fund, their money market, money market tokenized money market fund passed $500 million. In assets. I think it's the first money market tokenized money market fund to pass half a billion.

Yeah. And just for context for people to know, like this Biddle, they're like tokenizing treasuries.

Yeah.

Yeah. That's been one of the hottest narratives this year, right? Like Ondo.

Oh, okay. Here's one for you. And then we might have to call this early. I feel like I'm grasping at straws here. Tell me what you make of this story. CoinDesk reported this story. Hold on, I'll pull this up. Top crypto VC says ex-general partner made undisclosed side deal with portfolio company. Polychain says Niraj broke the fund's policies by secretly accepting advisor tokens from Eclipse. So what—

5% down to 1.36%. It's worth, you know, $13.6 million.

So what I, uh, what I can— what it seems like happened is, uh, Niraj led the Eclipse deal when he was at Polychain. And, um, uh, and, uh, I know actually Neil, the founder of Eclipse, was sleeping on Niraj's couch for a couple months. And maybe there were some side dealings where it says, uh, hey, if you, if you can help—

sentence can be very misconstrued.

Maybe there was something that said, hey, Niraj, If you, if you get Polychain to lead this round, I'll give you some advisor, I'll give you some side tokens. And by the way, thanks for letting me sleep on your couch for a couple of months. And do I mean like, what do you make of this?

Well, obviously it's not about board, right? Yeah. And I mean, it's a good— actually very good reporting. People should go read the article if they're interested. Yeah, it's, I mean, it's not a good look.

I mean, just worth $13 million.

Interesting. Today. Yeah. Yeah. The last round. Yeah. That, that is on the revised allocation that he got. He initially got 5%, which is crazy to give someone 5%.

He gave him 5%. That's crazy.

5% of a company. I mean, unheard of, right? He had more equity.

What is this bizarre ad that is running on CoinDesk?

So this is tough for Razer.

Oh, tough.

Are you, uh, this is some retargeting thing. Uh, anyways, uh, you're, um, so initially the, the initial allocation advisor allocation was 5% and then that was revised down to 1.33%. Wow.

So that would, so they would have given him enough token at the 5%, that's worth like $50 million.

Yeah, pretty much. Well, um, and so I think it got revised down as the company's valuation continued to go up. But yeah, the TL;DR is, you know, it's net— you have to disclose these things. And obviously it's a conflict of interest, right? If you're a partner, you're personally getting allocation before— like, it's sort of like a huge conflict of interest.

He was, uh, spearheaded the pre-seed, uh, he pre— he spearheaded the pre-seed deal. This is very good reporting. He spearheaded the pre-seed deal and a CoinDesk investigation revealed that around the same time, he was allotted about as many Eclipse Crypto tokens as Polychain itself. Yeah, tough.

The rule of thumb here is if, if, uh, you're going to get some sort of advisory tokens or whatever, and you're working at the fund, you're doing the deal, those advisory tokens go into the fund to lower the valuation. Um, is that so?

If you're an employee, you kind of have to send that back.

You, you contribute them into the fund first, you disclose it second, it goes into the fund. There are, so I guess the lawyers can comment on this, but like, take an example, Bain Capital. Bain also has a management consulting arm there, or a private equity fund that has a huge management. They're going to go in and like do some operations work and they're going to get paid some sort of fee to do some management consulting or whatever. It's part of the company that they're investing in. Maybe in that case, like you have like this, like the revenue goes to like the, the operating unit of Blackstone or KKR, this private equity fund, like the operators themselves that are going in and fixing, not to the LPs. But in this case, it was just advisory tokens. Like it just goes to effectively lower the valuation, the entry point, right? Because you're getting more equity for a predetermined price. So yeah, the other thing that we should probably point out is the name of the company. It's the Psychological Operations Company, the PsyOps Company. So it's just simulation as a—

I always love seeing what people name their holding companies. And Niraj named it the SciOps company. Yeah.

Well, it'll be interesting to see, 'cause obviously Niraj has left Polychain. He started Ritual, which is this AI company. Polychain's also an investor in that company. Are you an investor? You gotta wonder— no, you gotta wonder why this came out just now.

It's like, I mean, I would assume it's either because of—

You either pissed someone off at Polychain.

I would assume it's because of the man on the screen here. I would assume I assume Olaf needed a little scapegoat to, to, to, to take the fall for their Eclipse investment. That would be my—

I mean, usually if you're leading around, you're doing diligence, you require to see advisory agreements, cap table, prior cap table. And it would have been, I guess, maybe like the psychological ops company like came out and it was like under that entity and they didn't kind of see who the beneficial owner of that was, like an employee of theirs. The partner was leading the deal. But it was— yeah, I don't know. It's, it's, it's—

oh, this is tough. Niraj's original token allocation is larger than the current CEO.

Yeah, it's kind of wild.

So the current CEO of Eclipse only has less than 2% equity. That doesn't make sense.

Well, not Neil. Maybe they're referencing—

no, the new guy, Vijay, who came over from dYdX, who I actually did— he was the other day in Uniswap.

Right.

Yeah, he's great. I actually caught up with him the other day.

He's great. Yeah. Full disclosure, I'm an investor in Eclipse. I have no knowledge of this. I just read the article. I was like, okay, well, unfortunate. Neil, then—

sorry, not Neil. Third takedown piece coming for you, Santi.

Yeah. I mean, people know that I'm an investor. Like, you know, there's always going to be one commenting, oh, this guy invested in Eclipse. I'm like, yeah, trust me, it's I'm not happy about it. The thing that Vijay was quick to tweet and say, they listen, obviously, you know, we're cleaning up shop. It's to say that it's not ideal situation, I think is an understatement or something to that effect. So yeah, we'll see.

That's all I got this week.

Yeah. Is that it? What do you got? No, just making sure big news items. I mean, obviously ECC, there's not much covering. I didn't go to the panels themselves. We talked about Bitcoin, Germany, kind of Mt. Gox. Okay.

Let me, let me ask you one. I'll ask you one cycle-related question. So the general consensus amongst what I'd call empire guests, when we ask people about like the cycle and where we're at, seems to be something along the lines of there's too much uncertainty in the market. The market doesn't like uncertainty. We're going to chop and consolidate for the next couple of months. And then come October, November, when there's more certainty around who's going to win the election, uh, if it's Trump, the market ends up ripping and we go into a big bull market in 2025. If Biden gets elected, maybe there's a, uh, some sort of mini bear market and then it delays an inevitable bull. That feels like probably 85% of guests who come on Empire say that. How does it like, yeah. How does that line up with how you're thinking about the next several months?

I mean, I don't think on a month's basis, sir, but I think that is probably the prevailing sentiment out there. But also you got to wonder, like, you know, if everyone is thinking that and doing that, then yeah, I don't know. Crypto markets have a way of acting in a way that is very unpredictable. And I just constantly reminded that it's impossible to time markets and So, you know, you can be right one time, you can be right multiple times. Now, you know, I do listen to certain people like Chow. I was like, hey, listen, like, I do pay attention to the 200-day moving average. And, you know, that was a breakdown. You know, you've tested 60-something, whatever, 62, 63 constantly, and it's just not breaking. So, you know, I think these are moments where, like, if you have— if your portfolio construction is off, if your sizing is off, if you have too much leverage, it feels highly, highly uncomfortable in these moments where Yeah, it just feels uncomfortable. Yeah, it's going to be volatile. It will always be volatile. So I think it's more of an inward thing. It's like, okay, I feel comfortable in how I've sized positions. I always carry some cash because I always want to be in a position to bid when others never want and don't want to touch it. Are we there yet? No, absolutely not. Do we have these moments periodically? Yes. And so it's always nice to have some cash on hand. None of this is advice or whatever. I'll leave you this thought. I picked up this great book called The Forgotten Billionaires. Fascinating. This idea that it's easier to make wealth than it is to preserve it, to the point where like none of the descendants of Vanderbilt are billionaires. Few are actually millionaires. Very few billionaires today inherited their wealth. Most of it was created, and it's incredibly hard to retain wealth over generations. And so because people either spend too much, invest in stupid stuff, just don't put it in an index and let it ride. And I think the worst thing that you can do is put yourself in a position where you're going to have to be a forced seller. So you should, I guess the operating assumption is it can be extremely volatile. Like you, you wouldn't, you and I probably won't be surprised if Bitcoin is at $30,000 next week, would you be like super surprised? It's certainly possible. Like, now I, I, I did this like tweet last week of like, what is more probable? And it was like the exact same ratio for SOL, BTC, and ETH of like, and the market is still price skewing. Actually, this would contradict what you're saying, right? I, I, I tweeted July 5th, What has a greater probability of happening in the next 6 months? SOL at $200 or SOL at $66? And at that time it was like up 50, down 50. Similarly for Bitcoin, $112K or $28K, $6,000 for ETH or $1,500. And Bitcoin and Solana were 75% believed that it was the higher number, so it was going to go higher. So SOL at $200, BTC at $112K. 75% people believe that that was, that had a higher probability than the downside case. ETH was slightly lower, two-thirds believe, so 66%, not 75% for BTC and SOL, believe that still ETH, like positive skew over the next 6 months. So I continue to hold my thesis, which is I think at the end of the year we'll see all-time highs for the majors. Meaning Bitcoin, SOL, ETH. I think we end of the year breaking like in higher than where they are now. Prediction markets are telling you that Trump's going to get elected. Everything points to that. It's a pro— that administration probably definitely seems like it's going to be more crypto-friendly. You're going to have the ETF, ETH ETF likely. Yeah. Cranking, probably, maybe, I don't know, Solana ETF surprises people, comes sooner, maybe not, probably not this year, but still, you know, markets are forward-looking. So I don't know, but like, I'm not like, do I feel the need to like go really out on the risk spectrum? And I don't think I'm— the challenge with all of this is that the traditional market is ripping, right? That's the hardest thing right now because you're like, you're definitely taking less risk in traditional markets, presumably. This is higher beta, so i.e., riskier. And so you're not— the question is, are you being comp— so like if you're trafficking in both, like, are you being compensated enough to like go out and bid right now when equities have just been so generous? And that's the challenge, right? Yeah. So what's your book called?

Forgotten Billionaires. Okay. I have a related book that I'm reading right now. It's called, um, it's called Aster. It's, uh, it's written by, uh, Anderson Cooper from CNN. Um, so, so Anderson Cooper is actually Vanderbilt. He's part of the Vanderbilt family. Um, and he has this unique look at— he, he wrote another book called Vanderbilt from a lot of like the private family files that he has and stuff, but this is about Aster. So if anyone— for New Yorkers will be familiar with like Aster Place and there's Aster Street and things like that. Um, it, uh, this guy John Astor was like, or yeah, John Jacob Astor was like your quintessential American dream story. He came to the US in 1783 and they basically, they were one of the wealthiest families in the whole, I think they were the wealthiest family in the US at one point. They were like one generation before the kind of, or two generations before like the Gilded Age group. Um, so like he was friends with like Thomas Jefferson and things like that. Um, but it's a really interesting story just about the, yeah, about the entire Astor family. And from like 1783 to 2009, they were probably a top 10, like, wealthiest American family. Uh, and it just shares the story of like making great wealth, the American dream, and then like the ability of a family generations removed to lose that wealth. So generations.

Yeah. It's, uh, It's difficult. Buffett famously said like, rule number one in investing is don't lose money. Rule number two is don't forget rule number one. You know, it's simple, but you know, I also think, yeah, you're not necessarily losing if you're not selling. Yeah. Paper gains and paper losses. Indeed. Yeah, it's really interesting. I like reading these recent books. Sometimes like I don't finish them all, but like it's constant reminders of things that Howard Marks said something that has really stuck with me over the years, which is he's like, you don't necessarily have to ascribe to so many different concepts in finance or investing. It's like, just hold on to, like, he's like, in my career I've held on to one or two things and I've really harped on them time and time again because constantly people lose sight of them. And I've just stuck to those because I believe it is just fundamentally what drives my process. He's not looking to capture the entire cycle. He's not looking to capture the outperform. He's just looking to dampen vol and like protect capital at all times. Well, obviously that served him well. So anyways, no, it's a good book. It's actually a really good reminder of investing.

Good chat. So glad you made it back from Brussels.

Yeah. Stay safe.

Don't go in there. It's a nice new hoodie you got.

Oh yeah. Shout out to Omar on Second Line, guys. They just gave me this hoodie. He, he actually asked me like, what color do you want? And I was like, navy blue. I only wear navy blue. That's sick.

I want one. Fuck.

It's, it's, it's, it's quite comfy. Like, I don't usually wear merch. I know I'm killing it.

This means I need to get you some Blockworks merch after, uh, I've asked you for, I've got, how many times have I asked you? There's probably 4 years of asking for Blockworks.

The only reason. I'm like, hey, if I invest, can I get a hoodie? This is my only condition. I'm not asking for a board seat. I'm not asking you for information rights. I'm not asking you for a goddamn hoodie. I can't even get that.

All right. I think you've earned it. Fine, fine, fine. I'll bring it to Permissionless. That means you have to not no-show Permissionless where you're—

listen, folks, I got to go pay $10,000 for a hoodie.

All right. By the way, Permissionless, our event, our health chats. That's actually turned into a nice little, like, yeah, we need great coffee, by the way.

Terrible coffee.

Paper straws, no paper straws. I told Coinbase's head of events yesterday, they should really build a, they have these like Coinbase cafes. They should build like a base cafe right next to the show floor. And the only way that you can get, you can get free cold brew, but the only way that you can get the cold brew is have a cold brew with like some stats and regulations. But the only way, here's what, like someone should do this activation is the only, you have a cold brew right next to the show floor. The only way that you can get the— that you can get this free cold, cold brew is you pay with your wallet. And the number of people who will be there and say, fuck, fine, and download the Coinbase wallet, or the— or Uniswap should do this, the Uniswap wallet, like, that is a— that is a no-brainer activation.

100%. We can have even a leaderboard of caffeine consumption. Like, if you disclose your— like, there's just so many things. Why am I telling people to do this? Goddamn it. Like, there are marketers out there. Give me fucking good cold brew at a conference. Otherwise, I'm not going. That's it. If there's no cold brew, I'm not going. Preach. All right, sir. Anyways, guys, thanks for tuning in to Slow Summer. Get your free vitamin D. Don't look like a vampire like Jano. Look like me, you know, nice, perfectly tanned.

All right. That's it. Peace, folks. Thanks for listening. All right. You heard about Say a couple times. Just want to give them one last shout out. Big thanks to Say for sponsoring this episode of Empire. There are a ton of reasons to build on Sei. If you want to get in touch with them, you can reach out to me. I'll put you in touch directly with the team. You can also get in touch with them on Twitter @SeiNetwork. You can follow the journey @SeiNetwork. They are currently live. They've got Sei V2 on public devnet today. Mainnet goes live later in Q2. Really excited to have Sei sponsoring and partnering with us on this episode of Empire.