Why Santi Is Launching An L1 | Weekly Roundup

My intent for this project is to build the best customer acquisition funnel for this industry, one where we never lead with speculative energy. We don't lead with this is a crypto product. It's like, no, it's just a great product. I'll onboard that user. It's a user. It's a high LTV user that has never existed on-chain. And you best believe, like, if we pull this off well, success for me is onboarding 100, 200, 500 million users on-chain. And then at that point you're just going to route like that user might start in my chain. He might then venture out in other places. He might not even care or know the names of all these other different chains, but the aggregated wallet level, if they're going to want to use a service that doesn't exist in the Inversion chain, it will be routed to another chain.

Today's episode is brought to you by Geodnet. Discover how the network's native token, G-E-O-D, is powering the next wave of the robotics revolution by hitting the link in the description of today's episode. Hey guys, just wanted to take a moment to tell you about our upcoming conference, the Digital Asset Summit New York. Join us in March where we'll be hosting some of the largest allocators, institutions, and asset managers in crypto. You'll be hearing from guests including Michael Saylor, Mike Novogratz, Cathie Wood, Anatoly, and of course me and Santi. Themes of the conference will include the macro case for digital assets, ETF demand and institutional investment, US and global digital asset policy, the case for tokenization and real-world assets, the rise of stablecoins, global payments, and much more. Hit the link in the show notes and use code EMPIRE10 for 10% off.

All right, everybody, what's going on? Welcome back.

Santi, what's up?

Hey, Yano, it's good to be here.

Got a big old grin on your face. We'll get to that in a second. How's the week?

Busy. Very busy, I guess.

Yeah.

But yeah, no, it's— what do we want to talk about today?

So, I mean, look, there's a chain that everyone's talking about on the timeline, and I just wanted to, you know, everyone's talking about this chain and I think a lot of people were DMing me about this chain. So we should talk about the chain. So let's talk about Unichain. So big congrats to the Uniswap team for— I'm kidding. I'm I am kind of sick, so if you hear me coughing into this mic, I apologize.

But we do this podcast for, for over 4 years, and this is the treatment that I get.

The smile on your face just got wiped. It just, it just got— in all—

in your defense, I'm not wearing the Blockworks hoodie, so probably that was, you know, the source of grief.

But man, you're like a little influencer over here. We got— people are asking us if we have a Shopify store set up. After you wore that thing. I was like, I've been wearing this hoodie for like 6 months, day in and day out. I've never had one request to buy the hoodie. I'll just say that.

You mean like— I mean, I'd be lying if I didn't tell you that like it's a nice sweater, it's a good quality. I think I did a good job of like the unveiling, the sticker peel.

That was a good unveiling. It was a good unveiling. Unboxing room. No, so I was messing around on the chain, but there is, um, So congrats. I mean, you shared that Inversion, what was originally Inversion Capital, is now Inversion. And you— I'll read, I'll read your tweet for anyone who missed it. It said, you said, I'm building a chain. I like that. Don't bury the lead. I'm building a chain. Inversion. Instead of differentiating on consensus mechanisms or the nth technical improvement, we are inverting and differentiating on solving crypto's biggest problem: go-to-market. And, you know, I'm sure you'll talk about the rest of the tweet because it's kind of a longer tweet. But maybe my first question here that I think everyone was wondering was like, just tell me about this journey from— you originally want to start a private equity fund to buy companies and move them on-chain. How did you go from this into, I'm launching a chain?

Well, I'll invert and say, why wouldn't you need a chain?

Well, I think the I can answer. What everyone would say is, aren't there already enough chains? Like, I think it was, I think it was Jonah maybe commented on this and said he asked the question I think everyone was wondering, which is why launch a chain when you can just as easily deploy your portfolio companies into any number of existing ones? Yeah.

And you could just as easily spin up your own chain. A lot of the tech is out of the box. I think, I think there's a couple of ideas here. One is blockchains are like infinite economic games. We can design and tweak them for different purposes. And I think that's the opportunity here. Having our own chain lets us really purposefully build, build infrastructure that is purpose-built for our strategy on the customization side and how we, you know, the, the, the businesses that we acquire and the resources that we will use as a chain are very intentional for this type of strategy. The idea is to build Berkshire on-chain.

What kind of optimizations do you need there?

Well, I think one, being an L1 gives us far more flexibility on a number of fronts. Being able to set parameters and recruit validator set and then create— there's a great post by Morgan at Avalanche that talks about If the US government were to deploy on-chain, why would they do it? How would they do it? So I would encourage people to go read that. But fundamentally, I think it, it exists as an L1 and the parameters that you're able to set are, are important here. I think there's some value leakage as an L2. You are still beholden to some sort of constraint at that level. Um, but yeah, in this journey, I mean, look, I talked to a lot of different chains, a lot of different infrastructure providers. Um, and, um, but yeah, the— before that journey, the whole idea of initially, like, um, it's like, why would we need a chain? Um, my biggest concern was interoperability. You know, if we onboard 20, 30, 40, 100 million users, my belief is you want to use a lot of different applications that may sit— you know, a lot of what you heard me talk about in this pod is using something like Helium. Helium exists in Solana. Okay, well, can you easily do that? And from an interop standpoint, you know, talking to LayerZero guys was very instructive and saying, what is that possible today? What does that look like? Uh, what are the technical kind of, um, resources required to be able to do that? And I think, you know, interoperability has come a long way. Launching your own chain. I'm not trying to be dismissive of the, like, pretty Herculean effort that it will take, but it has become far, far easier and out of the box. And I think at that point it becomes having the ability to bootstrap the chain, capture a lot of that economic value without leakage, and then using that treasury in a very strategic and aggressive way to go and acquire more users. And I think that flywheel is a big insight that I had to launch our own chain.

Do you think it's a— because I know you originally talked to some— I think actually you talked to all the chains and all the ecosystems and when you were raising, right? Because they also invest in stuff like that. And do you think— how big of a missed opportunity is it for them? And what— like, would you have gone with one of them if they had given you— let's say Solana. Let's say you went to Solana or Optimism or Polygon or Aptos or someone and said, hey, I'll come, I'll do this on your chain if you give me, you know, $100 million or something like that. Do you— would you have done it on Aptos or Polygon or, you know, I don't know, Solana if they had done that?

It had to be a high throughput chain. It's an excellent question because I did go through that journey. I like the idea of, look, there's a lot of excitement about what's going on in Solana or some of these other high-throughput chains like Avalanche or Aptos. And I think in those conversations, there's a lot of desire. And the question was, we only want you to work with us, with our chain. There's some tension between what— if you want to work with another chain, you know, how would that work? And we're investors, and it was just— I don't believe in technology lock-in. I think that, um, my response to that has always been like, there might be businesses that you run a proper RFP and you at that point determine which business, like which chain is most best suited for that type of business. And so that was probably one of the more important elements as to why I want to purposely build and design a chain that fits the strategy more holistically. And, and so from that perspective, obviously very encouraged by what has been going on in, in these high throughput chains. Like you do see a line of path like towards mainstream adoption there. But working with them initially was very interesting to me. Eventually less so because of this desire to just be locked into a particular vendor. And I don't think that that is the right approach. I'd rather say, listen, I'll hover on top. My intent for this project is to build the best customer acquisition funnel for this industry. One where we never lead with speculative energy. We don't lead with this is a crypto product. It's like, no, it's just a great product. I'll onboard that user. It's a user. It's a high LTV user that has never existed on chain. And you best believe, like, if we pull this off well, success for me is onboarding 100, 200, 500 million users on chain. And then at that point, you're just going to route. Like, that user might start in my chain, he might then venture out in other places. Um, he might not even care or know the names of all these other different chains. Um, but the aggregator wallet level, if they're going to want to use a service that doesn't exist in the Inversion chain, it will be routed to another chain. Yeah. And so that's sort of the, the angle that I'm taking.

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Can you say more about what you mean by value leaking? Because it's a nice— I think it's a nice thing that people say, like, I see it on the timeline and it actually was my response to Jonah. I was like, yeah, he doesn't want the value to leak to another L1. He wants to capture the value. But what does that really mean?

Well, the primary focus for us is can we build a permanent capital vehicle on-chain?

Yeah.

And I think if you look at the different proof points, on the valuations of L1s versus other projects. It's just very— the data is very compelling at that point.

So it comes down to the, to the fact that you get to have an L1 and a token. And actually, L1 token is probably a better form of permanent capital than raising like a private equity fund or something like that.

Correct. Because a private equity fund needs to eventually dispose, sell those assets. I never want to sell the businesses that we acquire. On second point, I think the rent that you're paying to an L1, so if you're sitting on top of another L1, there is just value because you're beholden to other activity in that chain. So for instance, if you're deploying on Solana, there's a lot of activity happening in Solana. You're competing for block space that, mind you, you could fit into that. There's a possibility to do it. I mean, there's parallelization, there's local fee markets. There's a lot of things that will allow you to perhaps absorb all of that activity. But you're still— it's noisy. You're competing against other stuff that is happening on that chain. Um, from first principle, I want this chain to be very focused, very specific on delivering core services to the user. Deep— a lot of that is just deep in stablecoins. Will there be other activity on chain? Absolutely. But it's just that focus that I think is very important. Um, and I've been excited about, for instance, the initial conception of Cosmos. You look at what Avalanche has done and it allows you to create and bootstrap what feels like a very purposefully built chain. People should go listen to the episode of Godzilla Off the Grid because they went through this journey as well and it was very instructive. It's very similar to how I think about building a purposefully built chain. Is that chain going to have a lot of the same applications and activity that you see in other chains? Absolutely. But it is very intentional and purposefully built for this type of strategy. Over time, of course, you have other economic thriving activity, but I think there is something about sitting as an L1 running this playbook in a very intentional, specific manner. Whereas if you deploy in another chain as an L2 or as in another high throughput chain, you're competing against other activity there that already exists. And there is a— for me, it's more interesting and appealing to just run it from scratch.

All right. So I get at this point why it needs to be a chain. Tell me about just like the process of going about that and like, yeah, how you selected how to do that.

Yeah, definitely. Look, I, through my network and connectivity as an investor in many of these projects, I was— I ran a proper RFP over the last 2 months and I really wanted to identify a very clear what I was optimizing for. This needs to be a high performance, high throughput chain that can support hundreds of millions of users. And we're all going to stress that because there's no chain that kind of has that, but it had to be high performant. And I was optimizing for a couple of things as I think about acquiring businesses, bringing them on my chain. What really resonated in this process was having the ability to customize the chain as much as possible. Without compromising performance. Not building stuff from scratch was important. Like, could I take something out of the box? EVM compatibility was important. You know, there's a lot of projects that are deployed in Ethereum that I want to exist in my chain natively. And so I did a bunch of calls. You know, I called the top DeFi founders in my network. Called a lot of the best builders that I knew to really validate a lot of the assumptions in this criteria. And in sort of that matrix, I landed on a tech provider. The other perhaps really important component was, you know, of course, I've seen on the timeline, like, I think it was Jonah and a few others, like, why does this have to be its own chain? Why wouldn't you deploy natively on an existing chain, like call it Solana, Aptos, some of the other high— Sui, say, what have you, or Ethereum L2. And I think there's a very specific reason, two very specific reasons for that. But the first one is perhaps most important, and that is having sovereignty over block space is very important. Certainly, like when you think about it's permissionless, so there's a whole suite of apps that can natively deploy, especially if it's EVM compatible. But I don't want to necessarily be competing with other stuff that is just noisy. And having a sovereign block space just became very, very important. And that, I think, when you think about having sovereign block space, sometimes it can come with a trade-off where you might not have native integrations. You have to think about Is it EVM compatible or not? What is a bridge? How does bridging work? Recruiting validators, all these different things obviously come at a higher cost. And, you know, a lot of the criticism I faced here was, you know, it's going to take a lot of time. It's, it's like a Herculean effort. I spoke with folks that had been involved in some of the larger projects like 0 to 1, and they're like, man, this is going to be a very hard thing to pull off. Like, why are you introducing more noise? But I do think that I come back to the second point, which is really important, which is getting to a permanent capital vehicle that I think is, is essential. And so in throughout all of that process, it became very clear that it needed to be an L1 for sovereign block space, for the customization, but also having a lot of integrations like EVM compatibility and tapping into crypto-native applications, and the EVM compatibility was very essential for that. So there's always trade-offs. We've talked about it in this podcast as we bring on many of the best founders in the space. But what helped was having very clear what the mission was, what the end state had to be. Performance was a big component. And really just candidly, the level of support, there's a very big distinction between when you go and talk, and I think we talked about in the last episode, like this Ethereum restructuring, like who are you going to call if you're, if you're a large enterprise, you want to think about deploying on-chain. You teased about something last night about like a really, a really high-profile person in a company that wants to build something in crypto. I'll tell you from my perspective over the last 2 months, there has been a dramatic difference in the level of support just hands-on approach of some of these foundations that really want to win a deal. Of course, the tech has to be there, uh, and that is obviously the most important thing, but it does matter, especially now when I don't have a CTO, right? Yeah, I need to get a ton of support for that. So all of that factored in in my decision, and I feel really comfortable about it. I'm very excited. Also validated with two— I think it's three to four portfolio companies now that, um, deploying and using the same framework and their decision to deploy as I will be doing was certainly like instructive in the process.

So, so will you share where you are building?

I might get shot for doing this. But yeah, I mean, obviously, as you, as you hear all this, it's Avalanche. It will be an Avalanche L1 for the reasons that I articulated. And candidly, like, if you were to ask me a year ago, uh, it, you know, it wasn't even my predictions, right?

Yeah.

Um, they were far and away the best team that I interacted with, top to bottom, and that's very important. But, you know, I think it's, um, I think it's, uh, perhaps on the, on the trade-off standpoint, it just became essential to have sovereign block space. And be able to customize a chain. There's a whole set of features. There's privacy, there's EVM compatibility, there's a lot of interoperability. So, and it's high performing, high throughput. So one of a lot of these things, like every chain claims the highest throughput, you know what I mean? But like until we have 100 million users active on chain, we're never going to like, you know, like that to me is the most important, but I feel very comfortable with that. And so yeah, that's, that's where we'll be building.

Nice. This feels like, uh, you know, when, you know, like the high school athletes are like picking the— you know, they've got the 4 hats in front of them. It's like, Alabama, will it be like Michigan? Yeah, the hats are— you got to get the Avalanche hat, put it on the sorting—

the crypto sorting hat, you know.

Yeah, of course.

Yeah, yeah, look, that's awesome, man.

Congrats. And I mean, shout out to the Avalanche, like, you know, Luigi and John and Morgan and the whole team over there. That's exciting. They're great teams.

We'll be talking more about her. That's— I think there is— it's probably worthwhile to have them on at some point talking about it. Look, I'll just reference it. I believe I spoke about it on a prior episode, so maybe this is not all that surprising for people. Morgan had— has a great blog post. She talked about in the context of Doge, like the US Treasury, like Deploying on-chain and why it could work as an Avalanche L1. I would encourage people to go read that because I think a lot of what I'm talking about here is discussed in further detail in that, in that episode. So yeah, you know, that's that.

Okay. Going back to the permanent capital aspect of this, what is the size of a lot of these treasuries? Can you give us like a Yeah, just like the scale of what the treasury could be.

If you look at the tokenomics that are in the early kind of posts of these projects, you could probably think that most treasuries own— putting aside Ethereum, most of these treasuries own anywhere between 5% and 10% of the token supply. So if you take a $10 billion market cap project and they own roughly 10% of the supply, that's $1 billion.

Yeah. So your thesis, your thesis here is, look, if you had $1 billion in the traditional world, you're not just sitting on that thing, maybe staking it. You're buying businesses, you're investing it, you're— and that's, and that's what you want to do, right?

What did AOL do at the peak of the dot-com bubble? Their stock was wildly inflated. What was it? They went and acquired a real business called Time Warner.

Yeah.

You know, I mean, like, we haven't earned the valuation of these networks. We just haven't. And so I think I feel a sense of urgency to do that. Um, and said differently, if I were in their position, I'd be running a far, far more aggressive playbook. And that was a big part of what I decided to launch my own chain. I said, if I could only be in that position to manage 1, 2, 5, 10, 30 billion, boy, I'd be doing this like, oh, I'd be running vastly different. Um, I think the way we thought about airdrops, the way we thought about allocating those resources, is, is very skewed towards just unclear ROI for these programs. Uh, unclear retention. Uh, it probably goes down as one of the more expensive customer acquisition strategies ever. Um, the data is not very compelling. And mind you, I'm— my singular focus is I want to solve the biggest problem that this industry has, which is go-to-market. Focusing on like delivering core services And if— and you need to focus on retention, you need to focus on like, what is that user doing? I get that you activated 500K or close to a million users to come to buy a particular meme coin. What's happening after that? Yeah, you need to— you need to like make sure that journey is far stronger than what it is today.

Yeah. Have you— are you finished? Okay, so you've got— you've got the— you're building on Avalanche. You announced the chain. By the way, I like that you're building in public. It's— yeah, always opens eyes. We've done that a lot with Blockworks and it is— it actually is really helpful because people give you— tell you exactly why you're wrong in the moment and it actually makes you better. But it can be— it can cause actually some competition because people see that you're doing well and, and it's just, you know, you always get a bunch of angry people telling you why you're wrong in the replies, which you just have to get over. So I like that you're doing that. So you got the chain, you're building on Avalanche. Have you started building yet? I saw you're hiring a CTO.

Yeah, the first two hires, CTO, chief of staff, and I've gotten a lot of really good inbounds. That's really the primary reason why I want to build in public, right? To really get the word out of who I'm looking to hire. This is a Herculean task. I need to find the best talent out there. And build, um, build the best organization to really pull this off. And so that's been very encouraging over the last 24 hours. You know, I've had a ton of inbounds, really high quality ones. And so, um, yeah, that's been very encouraging.

Yeah. Uh, people are saying his DMs are closed and the DMs of, uh, the, the account are closed. And I was saying, I think if I know Santi, the reason he's doing that is because if you can't get an intro to him, then, uh, that's— I mean, that's the application's dead on arrival.

So that's the whole point. Yeah.

Yeah. Okay. So there are some questions from the Empire Telegram. How do you think about valuing something like this? Right. Foundation-only token versus like it's private company with shareholders. Like it's kind of like Uniswap plus a token or token holder versus shareholder splitting the profits of a given project like Uniswap. Like, how do you think of this from the investment? If you were putting on your investor hat, not the founder of this hat, how do you think about that?

Look, it's a great question. Like, there's a, there's a flywheel here of what makes, um, any infrastructure project valuable or not. It's, um, is there economic activity and there is there fees that are happening on chain? And then what are those fees? Where is that? How is that? What is the composition of that fee stream? And, and that's where, um, I'm very focused on act, you know, There's two components here. One is the inversion chain that any business that gets brought on chain will translate into more economic activity in that chain. So at a minimum, if you go buy through a separate vehicle initially, you run like a big SPV to buy a telco company. You, through that wallet, you offer on and off ramp to stablecoins. You use a network like Helium on the backend. There's settlement happening on the chain. A subset of that user base ends up using stablecoins that gets settled on the chain. They may do other things, you know, use the DEX, use a money market, use other different products and services that exist in the chain. And so that just translates into more economic activity. And that's value accrual at the chain. That is no different than any other chain like Solana, Base, Arbitrum. Um, um, you know, there's no difference there. I think the more interesting thing is, um, what is like— you need to believe that the, the fee stream is sustainable, that it is enduring. Um, you know, we all know that where fees dry up, if it's pure speculation, that is very tied to just where we are in the cycle. Um, the goal here is if you're If a lot of the fee stream comes from core services like mobile, I mean, that's just a core service. And if you're retaining that, then you really transcend this sort of cycle, right? And so that's the exciting part here is, which is, you know, I think if you look at the fee stream of a lot of these projects, it's very cyclical. And leading with a core service allows you to build a very sustainable And you see a path towards that feed stream growing as more businesses get acquired, more businesses get brought on chain. And so that flywheel is just, yeah, keeps going, right? It'll be very interesting. Like I've thought a lot about things of like, when you run Berkshire on chain, like can you do acquisition financing on chain? Because a lot of it is, you want to use some leverage.

I was thinking about this too, right? If a private equity— you were saying, you know, L1 has a billion in the treasury, private equity firm had a billion in cash. They're not just going to use a billion in cash to go buy a company, right? They're levering up, they're using a bunch of financing. So that was actually— it was going to be a question I had for you.

Yeah. So in this journey, like, I've looked at a lot of businesses. There's a very actionable business out there that I'm looking closely at that fits very nicely with the strategy of acquiring distribution, at a cheap price.

Is this the mobile, mobile network carrier?

Yeah, that's been one of perhaps the biggest insight, putting aside the kind of the, this has to be a chain for permanent capital reasons, but from what is the best business to acquire, I think that is probably one of the most, the biggest insights I've had, which is I don't think there's a better distribution business to transform with crypto rails and then activate that user base to use crypto services than a mobile network carrier, particularly.

Why is that?

Well, a couple of reasons. You live with a customer 24/7, um, that you're offering them a core service like mobile. And structurally, that business— so like an MVNO, uh, it's a fancy term for a network, a mobile service that doesn't own the infrastructure— that business is meaningfully transformed with something like Helium. Because their, their main costs are data costs, um, and customer acquisition. So if you're not Ryan Reynolds, you know, you're really struggling to acquire customers. Um, you really can't really change that much, but what you can really transform is the price per gigabyte by which you're paying on the wholesale side. And that's largely the biggest cost for these companies. They have terrible margins, like less than 10% EBITDA margins. So that's why when I say you can buy it at the right price, the multiple on these businesses is an interesting one. So you can end up buying a service that has 10, 20, 30 million, 50 million subscribers at a very compelling price. And that user, once you— again, it really starts with once you own that user, like you're living with that user 24/7. They're going through an app to top up data, to pay their subscription. That's where you, that's where you insert yourself in the flow and say, hey, you can stablecoin, you offer them an MVNO.

MVNOs, Satya, is like, like Metro or like, like Mint or Boost or something like that.

Mint is Ryan Reynolds' one, which I like to use as an example because what made Mint Mint? Honestly, Ryan Reynolds' figure. Like, they were able—

customer acquisition was cheaper because— yeah, yeah.

But they're all staying, you know, as you get more volume, more customers, you might be able to negotiate a better price per gigabyte on and that ends up being—

I'm looking at a list of MVNOs so that you'll buy like maybe the 20th biggest one that's like crappy and like not really doing well and move.

Yeah, I mean, all of them provide basically the same service.

Like, is it—

and you'll be competing with Helium in a sense here?

Not— I don't intend to do it in the US. So Helium, when I say Helium has two components, one, Helium the network, which is this network of hotspots that exist in the US. Um, and that network supports the Helium MVNO, which is Helium Mobile. So when you as a user go Helium plan, there's the two components, right? You're, you're buying the plan. I think it's $20 unlimited data. So no different than like perhaps a plan that AT&T, like T-Mobile or Sprint or Verizon might be able to offer you. Um, and then like then they're using the Helium network to offload some of that data. Uh, initially, of course, they worked with T-Mobile because you need to buy that data. Like, if your users are in, you know, going anywhere in the US, like initially Helium the network didn't have hotspots everywhere in the US. And by the way, no telco has like full coverage of a particular territory. They'll rely on other infrastructure providers to buy data. So like, if you, Jason Yanowitz, are like traveling from like, imagine you're crossing the US from like LA all the way to New York. As you're driving, you don't lose cell phone coverage most of the time. You have a contract with, I don't know, AT&T or Verizon. That doesn't mean that AT&T and Verizon, as you roam or as you go through that journey, that they'll have like, you know, cellular towers there to like support, you know, your coverage. They'll use partners then and there to offload that data to like, you know, be able to service you, the customer. You never see that happening on the backend. But that's what's exciting here, which is Helium now, the network has got to a point where it has a lot of coverage in the US and density of these hotspots. And that has allowed it to offload more and more data to the network, like the MVNO offloading data to the network. Um, and there's a big difference in the price. Uh, if you're an MVNO like Mint or Boost, you're probably paying $1.50 or $2 per gigabyte. If you're offloading to Helium, the network, you're paying $0.50. It's fixed. And so that's a big spread, right?

Yeah. Yeah.

That's what makes Helium Helium, by the way.

100%.

Yeah.

Sorry, I got a little distracted. I actually am looking at the top, top 20 MVNOs by revenue and by valuation. Yeah, yeah, it's interesting. So you'll need— I mean, you'll need even the 15th biggest one, Ultra Mobile or US Mobile or Ting Mobile. These things are doing like $300, $400, $500 million of revenue. And what's the valuation, like 2 times revenue, maybe 1 for a crappy one?

Well, let's do the math. If it's doing $100 million of revenue and they have, you know, a 10 million— like it's a 10 roughly 10% EBITDA margin business. And I think it— you can think of it per subscriber, um, or EBITDA multiple basis. But yeah, that's like a $40 million deal, call it $50 million.

Hmm.

So I'd say like, like a little under 1, maybe between— depends on a few things, but it's roughly like one-time revenue probably is maybe correct. A lot of the comps I've seen are, I think, like 100.

Let's say here, Mint Mobile estimated revenue $1.8 And they just sold for 1.4, it looks like.

Yeah. So I have this comp set here. I'll tell you, I'm opening the model here.

Do you have bankers you're working with?

I did. No, we're doing diligence, but we— there's a sell side, like there are bankers on the other side that are selling this business. But yeah, the— for instance, Mint Mobile, if you look at all the transactions here, it's roughly like, uh, like I'm looking at Boost that got acquired in 2020. They had like 8 million subscribers. That was like a $1.3 billion acquisition. Uh, Verizon bought another, um, MVNO for like $6.5 billion. They had 21 million subs. Um, the, the In the US, it's a bit different than in Latin America, but like in the US, those comps are like per subscriber anywhere between $100 to $300 per subscriber. So you can think of it as like, how much am I paying per subscriber?

Oh, I see.

Yeah. Yeah.

But, but the, the, the caveat there is a lot of these MVNOs in the US, they're subscribers. In a place like Mexico, Brazil, Argentina, they're not subscribers. They are—

you, you will buy an MVNO that is not, or that is not US focused.

No, absolutely not. No, no, no, no, no. That's, that's Helium territory. That's fine. I'm not interested in doing in the US. I'm more interested in a different market, like in Latin America. The multiple is lower in those businesses because there's not subscribers. They are technically users. The ARPU of that user is lower because a lot of them can't afford a subscription. They rather do pay as you go. So they will top up data, they'll pay, you know, they'll consume some data and they have to pay an installment. So like, they're not subscribers. The multiple on a subscriber is higher because it's predictable revenue. Um, it's like recurring versus recurring. So that's what makes it exciting because you can buy that business for a lower multiple per user. Um, these businesses in, in these places trade at a lower multiple and let me walk through the exercise quickly here, which is say that the ARPU of a user in an MVNO in the US is like $20, $25 per month because that's what the data plan costs. In a place like Mexico, it's like $4 because it's on a blended basis right now. Yeah, uh, where do you think that ARPU goes when you offer that customer not just mobile plan, but the ability to basically turn their phone into a bank, meaning a checking and money market account with stablecoins.

Yeah.

And then everything else.

Yeah. So you're buying them, you're buying them at a valuation based on the $4 ARPU, and you're bringing the ARPU up to maybe not 20, but 8 or 10 or 12 or 15.

Yeah, because you're their mobile provider and bank. At the same time.

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So, okay, a bunch of questions off of this. How do you think about the, um, like, it's not— upsell is not the right word, but it's, um, like the things that you can provide based on the businesses that you buy and bring on-chain. Like, let's say, okay, so you're going to buy an MVNO, it sounds like. So you buy that, then you're— then your second thing is, you know, insert company XYZ. And can you give the MVNO subscriber benefits to company XYZ's thing because they're on the same chain?

100%.

Yeah.

I mean, the— a lot of this activity is Um, if there's a core service that every business that we will look to acquire, uh, the common denominator is all of them can be offered tokenized dollars, at least at minimum. Like, they will all want access to tokenized dollars. They just don't have the ability to do it easily yet. So if we nail, like, the, the core infra here is a seamless on and off ramp and a seamless experience to get on and and be offered, um, and be their bank essentially. And then what happens after that is, you know, of course there's a native set of apps that are deployed on the chain. There's a whole set of services that are offered. Um, yeah, that's really the playbook. Like, uh, there's many other businesses that I've looked at that are interesting. Um, but I think the focus for now is doing it extremely right. Be a massive success for this first MVNO, prove out that story, and then nothing stops you from then going and buying that list that you saw. It's very fragmented. Many more MVNOs. So even if I just stop there, you can become the largest telecom and fintech in Latin America or in the world. Then you're powering, settling, and you're All right.

So what do you think the cost of this MVNO will be? What's the enterprise value here?

Well, I would be in the couple hundred million dollars.

So do you have to raise— let's call it $250 million. Do you have to go raise $250 million or can you raise less and maybe hope that the token goes up and you're using that or you raise way more? Or how do you think about the funding to support this?

Yeah, totally funded off-chain for now in this first transaction.

Totally funded off-chain?

Yeah, it's a separate SPV.

Oh, interesting. Okay. Why is that?

With Chicken and Air, like, you don't have treasury, you know? Yeah, I don't have the ability to just, you know, manufacture out of thin air.

So will you do just a— I guess actually that structure could make sense, not even for just the first one, but maybe the first couple.

Yeah, yeah, yeah, yeah. Like, there's a lot of economic interest, um, you can think of if you have, um, like, the chain itself, no different than any other L1 or L2 that exists out there, from a native deployment of apps, economic activity, crypto-native activity, all of that. Services that exist in pretty much any chain at this point will have— will exist in the Inversion Chain. But Acquiring these businesses is separate for now at least. It has to. You don't have permanent—

Are you doing that all with your own money or are you raising for each SPV?

No, raising for that SPV for sure.

Nice. Nice. Okay.

So, okay. That deal on a standalone basis is very compelling, I think. A lot of the data I've looked at and the playbook, is quite compelling, I think. Um, so I'm investing my own money.

This was the original business. This was the original idea, was just go buy these businesses and do these kind of things. Yeah, yeah.

That, that deal, like, if I go pitch it to a large private equity fund that has vastly more resources, which is the intent here, is like leverage, partner with a large private equity fund that has an interest in crypto but also really specialized, has looked at telecom like there's a number of private equity firms that have acquired MVNOs. You go and talk to one of them, you say, listen, let's do this. This is the added playbook that you might have not considered, this whole trans— like helium hotspots kind of thing. And they're like, some of them are like skeptical, dubious, don't really— but I walk them through it and they're like, okay, this could be really interesting. And so I'm in discussions with a number of those funds. Why? Because I'd rather leverage their internal research. Like, I'd rather partner with them. A, they have vastly more capital, and B, they have like ops teams, organizations that we can really leverage to go to market faster. Like, just do this acquisition, um, us focusing really on the crypto playbook, they focusing on some of the other stuff. Um, and once you do that, um, then, then yeah, you know, I think for them that type of transaction is actually quite small. Billion-dollar funds. So, and you, for them, is of course then saying, well, at that point, that conversation goes like, well, can we kind of invest in the chain if we're gonna, you know, anchor that inversion chain? Is there a possibility to invest in, in, in that? And then that's how producing a very strong alignment between the inversion chain and whoever is helping me acquire these businesses is important. Of course.

Yeah. You have a lead for Inversion Chain yet?

Yes.

You got the lead, right? Yeah. Okay.

Are you—

how much? I don't know how much you can tell us, but how much are you going to raise and what, like, what's the valuation? Will you, will you open— will you do something on Echo? Like, will it be open to everyone? Will it be selective? Like, I don't know how much you can share.

I won't share yet who the lead is. I will tell you, um, and I hope people can reference what I'm saying now when we announce, um, it's been very rewarding, uh, being on the other side and going through the journey of talking to many funds. Uh, very different actually, like this particular fund, I've had a long stand— like I know them very well.

What, what's very different?

Just the— they truly, like, they felt like truly like a partner. They made me feel like they will leverage, like, a lot of the resources they're bringing to the table. Like, I need partners. I don't need the capital. You know, there's a lot of people that can provide you the capital. It's really—

they're—

they were the most thoughtful in terms of the questions that they were asking me. And at some point I said, guys, I don't know the answer to like 9 out of 10 of these questions. Um, if I were in your shoes, you either believe in the strategy that I just described in the grant, in, in the, in how we're going to do it. Um, but they were very thoughtful in their questions and their diligence process, and they made me feel like they could really enhance the areas that I'm not good at. You know, I need help on hiring. I need help. Um, it was a good sounding board on both the allocating of resources, but also technical components of going through an RFP, of selecting the best infra provider, They're very thoughtful. So like they have those two sides of the house very, very well. It's hard to find that in a crypto fund. And they're very aggressive. Like they're like in their— like I sent them the material, said, hey, I've known you for a long time, take a look, let me know if it's interesting. Within 24 hours, I was talking to 3 members of their investment team and I talked to them like constantly. Other funds, I would send them that and they're just more followers. They want to see other people, how they respond. Like, yeah, who's the lead? And they were just like, that was not even in their— it didn't even compute and probably how they thought about it. And they were very— so it's been very rewarding. There's of course—

how much did you guys raise, Santi?

I'd rather not disclose for now.

All right, that's fine.

I'm very focused on bringing very strategic capital, um, to that raise. Um, I've of course paying attention to what is happening in Echo, um, and I like what's going on there. I like— I'm an investor in MegaETH. I saw how they did that. I think it's very encouraging. Um, so I'll just leave it at that.

Cool. Nice. Yeah, we need an Echo, an Empire Group on Echo. That's what we need. Yeah, actually, you need to start a syndicate and then your first deal needs to be for inversion.

It can't be in my syndicate.

But yeah, of course, I've got this great deal to show you all that I found.

Yeah, but no, look, it's been a good journey. I'm very excited. Obviously, I I spoke with the lead and said, hey, should we— should I be more public about the fact that it's going to be a chain? Like, I really— my main priority is building an organization. They're like, yeah, just get it out. Like, yeah, it's a chain. You're looking for a CTO, chief of staff. There are other roles, by the way, that I'm looking to hire. These are the first two most important. Um, so I— that was just good. Um, so very excited. I mean, I think, um, seeing the response and the reception to it was very encouraging. Like, I'm incredibly fired up.

Yeah. Last two questions and we can move on is I know you spent a lot of time on tokenomics stuff when you were at ParaFi. How do you— is there anything interesting that you're thinking about with the tokenomics here?

Yeah, not a fixed supply. I think it's just based on demand and like, if you really want it, like, I want to become the largest chain, full stop. And I think that requires not a fixed supply. Um, you know, and, and, uh, if you truly see a path towards onboarding a billion users plus, like, there, there will— the token is very essential here to, um, you know, reward maybe capital providers that are acquiring businesses and bringing them on-chain. Um, like, like basically industrial yield, like yield farming at an industrial scale. Um, and yeah, I think the fixed supply is sort of a, a utility drives value, not scarcity. And the scar— I understand why Bitcoin has a fixed cap of 21 million, but that should not apply to other businesses, and it should be like elastic. It should be based on supply and demand, and that's very much top of mind. Um, and how we reward, you know, the users that— and the investors, like, in, in these bit— in these SPVs, for instance, um, is important. I've thought a lot about governance. I've thought a lot about what has not worked in crypto and sort of the DAO structure. And, you know, it's not necessarily tokenomics per se, but, but yeah, I think the direction and from a product standpoint needs to be quite opinionated, quite focused.

Yeah. When you were just doing a fund, you were— you got an office in New York. Now that you're doing a chain, can you still do this out of the US and New York, or what are the— how do you think about that?

Great question. I don't have a perfect answer to that yet. Yeah, but I'm very focused on finding the best talent wherever they may be. And if they— I suspect that there will be clusters of people And that New York is, you know, and there's still the BitLicense, right? That has not gone away. Um, so can you build there? In a perfect world, ideal world, that there's a lot of talent in New York, um, that I'd love to tap into. Uh, there's a lot of talent in San Francisco, as there is talent in London and other places. My philosophy is I want to hire the best, and I care about output. I think it's important to have, like, you guys have an office. I think it's important to have, if you're not going to have like an office out of the gate, at least if people are distributed, at least bring the team together constantly to really build the right organization. I think that's necessary. But I do appreciate, you know, there's a lot of talent that exists in other places. And so, but yeah, over time I would love to, love to have an office. I mean, in in many different places, including New York.

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All right. Last question for you, then we can move on. Is— so I think everyone who listens to Empire saw you get very— I, I now know you well enough. You're a very obsessive person when you see something like you get, you get very like hooked on something. And I think we saw you get pretty— I mean, for the right reason in hindsight, get pretty hooked on Solana, right? And be, you know, you're really shouting louder than most felt comfortable shouting about Solana. And, you know, in hindsight, you were right about it. Will Avalanche be the new thing that you're shouting about? I guess it's actually probably Inversion is the new thing you're shouting about. But does, does Avalanche kind of take away some of the mindshare from Solana in your, in your mind?

Well, they're coming from far behind. Far behind. I'd be lying. I mean, we could still listen to that episode we recorded on predictions. I didn't have Avalanche in my radar. You did. Will it steal mindshare? I don't like to think in these terms. I think it's very much a win-win. Like, there's a place, time to— like, what's happening in Solana is incredibly encouraging. And what happened with Trump over the weekend, we've talked about at length here. It's— I don't want to ever subtract from what is happening in that ecosystem. Like, there's a lot of really good stuff happening there and Ethereum and other places. On a relative basis, the mindshare in crypto is this size. You know, there's only so many active users on-chain. It's a very small community. Still, I'm just focused on building the best BD muscle to get to the next 100, 200, 500 million users on chain. I think if we do that, that question becomes irrelevant because everyone wins, some more than others. I would, I, I, again, in the same way that I think of why is Solana trading at a third of Ethereum's valuation? It didn't make sense. Still doesn't make sense, right? Similarly, I think you can, because everything is on a relative basis. I would, I would concede, and I definitely believe that from my perspective, thinking about where I want to build, thinking about what Avalanche offers is very compelling. I think ultimately every application that gets mainstream success will want its own chain. As is every private equity fund eventually wants permanent capital. They don't want to be tied to having to tap into and raise funds constantly. You saw this, I saw it firsthand. KKR, Apollo, the largest private equity funds are public because the dream and end state is becoming a permanent capital vehicle. And so, um, way back in the day, I was very interested in Cosmos. I think that architecture, that setup was very interesting. It had its issues. I think of Avalanche as a better architecture and implementation of that with a very strong BD team. And so I think it's overlooked for sure. Yeah. But I think what's been most— I'd say like, of course I'm going to be evangelizing. Of course my role is to make sure that Inversion— like I want to become the largest chain, full stop. So are you going to perceive me as a threat? I don't know. My focus here is I'll bring in more users than we've seen ever and a user that has never existed on-chain. I think if I do that well, if you've built a good product, if you've built a good service, it will be discovered. You know what I mean? And so that for me is just— I don't like to think in scarcity terms. And so I think there is— I've always believed in a multi-chain world.

Yeah. Sweet, man. I love it. Let me just say that I love it. I actually, I think Hasib quote tweeted and said something along, something along the lines of like, we need the ambition back in this industry, or like, we need the hope, like, and that, that was it. That's when I saw you tweet this, like, and just, you know, I've been, you've been kind enough to like, share all of this with me over the, like, since you've kind of started it. And like, the thing that is that I love is it's just bringing a very renewed sense of optimism and vision and ambition to the industry.

And I like it. And I think the space needs it right now.

And, you know, if you remember last week, I was like, yeah, you know, I went to this hockey game with Jan and he was asking me what's interesting. And I was like, I don't really know. I mean, like, that was a horrible take. That was just a— I was like, that was just maybe I was feeling a little gray that day. But like, You know, since we actually recorded that podcast last week, like, this is probably my, like, very renewed sense of, like, optimism and, like, dream and ambition. And I really think that— I mean, there's other things that I want to talk about in this episode, too, but we, you know, we can either cut it or keep talking about it. But like, there's so much that's interesting. Like, Olaf had such a good thread, I think, on tokens and actually like social media algorithms kind of becoming like capital markets. I think Vance had a great thread on like internet capital markets and what's about to happen. I had this dinner last night with this guy, ex-Goldman Web2 giant. He's launching a company. It's like, and he's doing— it's not a crypto company, but he's doing it all on chain.

But he does.

But he's not— but it's not a crypto company. And so I'm like, wow, like we are on the precipice of everything we've been building for. And anyways, I'm just— I'm rooting for you. So it's cool to see.

Thank you, man. Look, look, I'm, uh, this is, this is a forever project for me. Like, there is, there is just— it's— there are infinite possibilities here if done correctly. You never stop. But yeah, it's, it's, it's so encouraging. Like, uh, there was, um, like, Robinhood— Vlad had a very interesting— in their earnings call, I think he talked a lot about— continues to talk more and more about crypto and the efficiency that he's been able to capture in his business you see Nubank in the transcript and how they're talking about crypto and leveraging that. That's the end state of this technology. It's like we don't lead with— it's like the dot-com. It's like, no, like that went away and every business just used the internet. Like crypto is like, it just becomes that technology that is so embedded in these businesses. And that's the most exciting thing. Like 4 years ago, I couldn't have told you that, but you're already seeing it with with other businesses that are waking up to this. And did the regulatory 180 have to do— played a part in that? Absolutely. But then the great part about all of this is that, you know, for the better part of a decade, there has been very, very good infrastructure and rails that have been set in place to support the next wave of user adoption. And that's very encouraging across multiple fronts, across many different teams. And chains. And so that's, um, that's really probably the most encouraging thing that we are as an industry. Like, it's a pivotal moment. But I do think that there is a sense of urgency that I have.

Yeah.

Uh, and, and that's really what is very, um, in this process. Like, I don't think many people appreciate that because, you know, token goes up and you're like, you know, like kind of become a bit more complacent. Yeah, but, you know, I think everyone in their crypto journey eventually opens the door and sees the future. And you can't— it's like you use a stablecoin, use a— and you send money via stablecoins. You're like, yeah, I never want to do a wire transfer.

Yeah, yeah. That's it. Anyway, I'm rooting for you. There was actually an interesting thing that happened this week that there's this idea that I'm like starting to get pretty obsessed with, which was the idea at the beginning of the year One of my predictions was all these companies that are just like normal equity companies are going to launch tokens. You remember that? And I think you're just starting to see the writing on the wall that this is going to happen. It's like, okay, Schwab— this might not seem related to the prediction, but Schwab is— here's the news. Schwab is expanding retail trading on stocks and ETFs to 24 hours, 5 days a week. Right. So instead of being 9 to 5 or 9 to 4, 24 hours, 5 days a week. TradFi is slowly moving towards DeFi hours. This is Nate from— he's president of ETF Store. He said, you may not like it, but TradFi is slowly moving towards DeFi hours. Full securities tokenization, the longer term end state. And I just think that like every week I just see things that show me that equity is going to eventually just get tokenized. And if you think about actually the public markets as a product, they're pretty good product, right? But they haven't really been innovated upon in years. And like doing what Schwab is doing is like, you know, moving them to all day is good. But I think the 10x improvement here is just moving it on-chain. And I think it was Alex from Nansen who I think he had just a good one-liner, summarized it pretty nicely, said it seems within reach that we could see tokenized IPOs within the next few years, company shares will live on-chain. And I'm not sure if I'm supposed to share this, but I will. But you have all these like VCs trying to get Blockworks to go raise a Series B and, you know, trying to get us to raise and stuff like that. We don't really need to because we're profitable. But, you know, we've been having some of those conversations, not actually trying to raise. I just want to be very clear about that. But just seeing like what's out there in the market and talking to some of these folks and they just, you know, it's like when I think about it, it's like, does an equity raise— would an equity raise make sense? Would a token raise make sense? It's like what actually makes sense here is to tokenize the equity and, and like, I don't know, I just think like the on-chain tokens, it's more liquid. It's more frictionless, or, you know, less frictionless, then, uh, less fric— uh, more frictionless venues to trade. It just makes a lot of sense when you think. Now, I don't think the industry is actually fully ready for it because, like, security tokens are a meme, all this stuff. Like, someone's got to be early and someone's just got to take the risk. And, um, you remember that?

You remember that friction slide in my, in my deck?

Yeah, yeah, good slide.

There's one piece, say left side, right side, like what does crypto solve? You have for your business, and I remember the first conversation we had when I had the opportunity to invest in that raise, in that round you did with 10T. And I think it was 10T, the Framework guys, and like we're sitting here, right? So I wanna prove it's more aligned. And it's like you have now social media and just media companies, the percentage of user-generated content has gone up dramatically, but the ownership and the monetization of, of that is— hasn't reflected the importance of user-generated content. Um, and I think that will change. Um, in the same way, like, once you have the possibility to— like, community ownership, I know, is— may sound like a fluffy term, but it's very real. Like creators, and if a user is generating valuable content, that percentage that is shared back to that creator is disproportionately small and I think will change dramatically over time, whether that's YouTube.

100%.

Even journalists, right? Like when you think about like what is maybe thinking out loud, but I do go back to that first conversation we had is like, You guys have branched out as a— what it feels like the core principles of what a media company should be, which is intel— like journalist independence and reporting in an industry, and then captured others. Then you, like, once you have that, then you've expanded in the data and you can really continue to build on that moat. But like thinking here, well, you know, I don't know what your cap table looks like, but if you have a token, you perhaps may allow journalists to have greater skin in the game.

Well, so this is, you know, I sent this tweet out in December and I said my dream is to make Blockworks a talent destination, find talent early, build brands around them, and create incentives to retain them. Right. And talent for us is anyone who creates content. It's podcasters, newsletter writers, It's out, it's external hosts, right? Like you and Mert and Jonah and Avi. It's reporters, it's researchers. And I said, like the Barstool of crypto, right? Not easy, but insanely valuable if you pull it off, because this is, this is what the future of media looks like. It's, it's— there's no space in the market anymore for one single brand. Like if Blockworks just tried to scale as just Blockworks, like there's just one brand, we would fail. But that's why we have Lightspeed. It's based around the Solana community, like 0xResearch, the research community, like Empire. I think this is kind of for like builders and like your everyday crypto person. And so all of our content is based around these, yeah, these like strong niche kind of cult following communities. And if you can think about better ways to incentivize the creators of those things.

Yeah, it's interesting.

Yeah, absolutely. It's like no different than it's just you want to build the best organization with the best talent. You never want to give that talent a reason to leave. And by creating more skin in the game, then you just, you just focus on building the best organization. And I think you can do that with token, like you can do that with a token better than any other type of structure, I think. And the value cap for them and for you is higher. And that's why going back to this discussion of, I think you want to own that as much as possible. And I'm of the mind that breakout applications and breakout products will have their own chain.

Oh, so I forgot to ask this. Someone, a few people, someone in the Empire Telegram and then Jonah was asking on Twitter, it's like, okay, if you need your own chain, who, who else then needs their own chain? Is it that it does everyone get their own chain? Is it if you get big enough, you want your own chain? I'm curious how you think about that.

Eventually, if you get big enough, you want your own chain. Now, I think that building a chain from scratch is um, not something that I think people will do. But I do think that like the offering of Avalanche is kind of very out of the box, and you can like— it's a difference between fully like from the ground up to just customizing things out of the box. And the customization elements that Avalanche provides are interesting enough because what you want to do is go to market faster. You don't want to build from scratch. I appreciate like the era of like prior cycle, it's like the zero to one, like of Solana, that was very much zero to one. And you had these other high throughput chains, zero to one. But then the architecture of something like Avalanche is very much like, let's have your— you can have your own chain, but rely on a lot of infrastructure on the main chain. And it's like that web of chains, uh, sort of like concentric, like just a network of chains, um, versus like a stack of L1, L2, L3, L4. And that I think is fundamentally a better architecture. Um, but yeah, I, I do think that every major breakthrough application has their own chain. And then of course what's really encouraging is the interop component is, um, essential. Um, it kind of depends on the use case. Um, I, I don't think that like there, there, I could see some areas where you might just want to deploy on a chain where it has a lot of applications and services. But if you want to offer perhaps a very robust offering, I think you have your own chain, like, like Off the Grid, for instance.

Yeah. Going back to the equity and token conversation, we— so the way that it exists in the industry right now is that you actually raise with an equity round, but all the investors are kind of like, yeah, the equity doesn't really matter. And then there's also a token, right? You've got this, like, I don't know, there's a ratio of the FDV to the to the equity. Do you think eventually we'll just like— not do you think, because I feel pretty strongly this will eventually happen, but when do you think we'll just get one raise and there will— okay, so here, let me put real things around this. So Blockworks, right? Blockworks has equity. We've got a cap table, right? You're an equity holder. If I'm not— makes it sound like we're launching a token. We're not launching a token. But if we launched a token, would you convert the equity? The thing that actually makes sense is to convert the equity into the token, but I don't think anyone's had the balls in the industry to do that yet. So they end up just launching a token and they keep their current equity stack. I'm curious just how you think about that.

Yeah, I've always felt that the value accrues to the token. Um, now in the case of like, like Uniswap is a good example, right? They had, they have the UNI token But then that Labs entity, like the, the organization, the engineering organization that built and the protocol, now has the chain and has spun up other product projects. And so, you know, if you're a Uni token holder, do you— you're not necessarily benefiting from that, right? But I think a lot of projects have like, what is it, like Pengu like that entity that you have equity in. And I'm not an investor, but I'm just— I think Luca mentioned it, but like, if you're an investor in that company, you had— you were kind of— you had exposure to the Pengu airdrop. You maybe had exposure to the treasury that they had. Like, they might own a bunch of NFTs, right? Uh, Pudgy Penguins. Um, as a token holder, you didn't have like all the, all the, all the like, uh, stuff that is sold. I got the Pudgy Penguins, the fluffy animals that are sold in Walmart, for instance. All that revenue is coming into the equity, right? That the, the traditional company, so to speak. The token holder has not benefited from that directly. But I think your point's a good one, which is in a world where we, we've just been constrained in how we can design and think about token design. And that's perhaps one of the more exciting things, to your point, will probably open up as we get more clarity, right? That we are able to just collapse that. Because the question when you have like different tokens or different structures, it's like, let's make sure there's strong economic alignment between the company that is developing the protocol and the token that the protocol eventually has. And then what happens if that entity ends up doing other projects like there's always this, like, I think, inefficiency in trying to make sure that there's a strong alignment of interest. But if you just— like, you don't think of Google— like, Google, for instance, is a good example. Google has so many different units and is exploring so many different projects. You just have one thing. Like, if you want to get exposure to that, you buy Google stock. I think that's the way it should be.

Yeah, I agree with that. I agree. So anyways, that— I'm excited for that. And I think all that you're going to see, like, Coinbase and BlackRock and Robinhood and all these folks to bring equities on-chain. You're going to see equities launch tokens.

So, so, so Coinbase, they have Base, they have Coinbase stock. I've read it through the analysts, like analysts of course are paying attention to Base, but like, do you think, do you think Base ever has a token? And what is that? Is there a—

I think, I think Brian, I think they eventually tokenize Coinbase equity and move it onto Base.

And BASE never has a token? Has a token?

And BASE, I actually don't know. I don't know. I think, I think, I think BASE, I actually don't know. I think BASE will eventually get a token. It's interesting because you don't want too many things that represent the value of your thing, right? It's what happened. It's like one of Ethereum's downfalls. It used to be like I'm bullish Ethereum, boom, I buy ETH. Now it's like, oh, I'm bullish Ethereum. Okay, do I buy Optimism or Arbitrum or Ethereum? Or like, do I spread that? So you don't want to be like, I'm bullish Coinbase, do I buy Coin or Base? Or right. So I think, yeah, I don't know. Here's what I do think. Everyone's like all excited for these IPOs. I don't think we're going to get as— I don't think the IPO market will be as hot as people think this year. For crypto companies, and it's going to force late-stage private crypto companies to launch tokens. And so I got— I mean, I just think this prediction I had, I think it's going to be my prediction of the year. I got dinner with one of the— with the CEO of one of the, you know, raised at a— I don't want to give it between $3 to $10 billion last cycle, like, like, you know, kind of private SaaS crypto companies. No, no, you know, no chain, nothing like no need for it. And they're probably going to launch a token. And the reason he's like, you just— he's like, that's just the exit in crypto. Like, you're not— all these companies, he's like, I don't think any of, any of us are going public. And I tend to agree with that, actually.

Well, I mean, I think it's not just going to apply to crypto companies. I think it's just like the IPO market.

Yeah, just a lot, a lot are not going to get out.

Yeah, but look, I think it's the same reason why, like, I wasn't there, but I was in New York while it was happening, the Securitize Day, or like it was not Securitize, it was the Ondo conference. And I think I've been hearing it from like, why does Apollo, a lot of these credit funds, a lot of these institutions like BlackRock want to become come on-chain is because it was just like a capital markets on steroids, 24/7, 365. Global and frictionless as much as possible, right? I was opening a bank account yesterday and it took me, I don't know, under an hour, which is very impressive. But then it was like, no, wait a minute, it takes zero to do it in crypto. It's a wallet. And I think a lot of these traditional companies get— once they realize, wow, we can not only all the benefits of tokenizing stuff and the free movement of these and tracking and settlement and a lot of efficiency case. I was just talking to a really sharp team that is looking to tap into and streamline credit facilities. They're very sharp, very sophisticated. I think came from BlackRock and Blackstone. And they said, yeah, if we're able to prove this out, not only does it streamline all the back office, all the compliance, all the settlement stuff that has a ton of cost, but then the free flowing of these things in capital markets worldwide. I mean, it's just you're tapping into an audience that has not— wants to invest in these products but hasn't historically. And I think it's just, uh, there's just so much pent-up demand that exists in, in crypto, um, to buy these products. So yeah, like, if you're a crypto company, or maybe just a company in general, like, how far away are we from just skip the IPO, just do an IPO on-chain?

That's right. Yeah, exactly.

So I think what is needed is the same data, the same SEC, kind of like EDGAR, SEC disclosures, the prospectus stuff. We need to standardize that, uh, in the same way that you have it in traditional—

working on it, my guy, working on it.

Can we have Blockworks be that place where you capture all that info, you register it, and you— in order to create a market, you need to have, um, fairness and disclosures and market integrity. Like, you need to have the same information accessible to people. Like right now, what company— crypto companies make announcements in Discord and Twitter, and it's very convoluted. Like, can we have one place, one register, like one registry or register, one place of where it is just the home of public announcements? And then it gets picked up by all the media companies and whatever. But you need to have one venue where you submit, this is the tokenomics, this is the project, this is the ownership for every one source of truth. And I think if we pull that off, I think we could see a line of sight into just this becoming quite literally the next NASDAQ, the main capital markets for, for, yeah, for everything. Agreed.

Good. I think that's the pod.

That's about—

that's the pod.

Appreciate you guys listening.

Hope you guys have a good Friday, good Saturday, good Sunday, good weekend. Got some good apps coming up.

All right, thanks everyone for listening.

Cheers, folks.

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