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[Music] [Applause] [Music] You're watching You're watching TVN.

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Today is Wednesday, May 28th, 2025. We are live from the TV.

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But today is the trenches of technology, the doicile of DeFi, the mansion of meme coins, the capital of crypto. It's crypto day on TVPN. We started early.

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We're talking to people from all over the globe.

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We just talked to Bology.

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We talked actually we've been podcasting for hours. We cut it down for you.

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We have our first three interviews.

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They're going to play over the next hour.

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Then we're going to hop back on and do a whole bunch more live interviews. So stay tuned.

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But the but we're kicking it off with Bology. Let's go. Let's go. [Music] Big news.

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We have Bology in the studio.

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Uh we're going to bring him in.

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talk to him about for about 45 minutes.

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Uh take his temperature on what's going on in crypto.

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Uh I want the update on what he's up to and really just take us on the whirlwind tour.

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We're gonna get to the bottom of what happened in 1971.

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We're gonna get the final answer. It's been hotly debated.

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We're going to figure it out right now. Let's bring in Bology. How you doing? Good to see you. Welcome to the show. See you guys. Hey.

4:19

Uh it's amazing having you on the show.

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Um can you give us just the update on uh what is your dayto-day like?

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I'm familiar with some of the prehistory, but what are you working on?

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What are you most excited about right now? Sure.

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So, I actually Can I project here? Yeah, please. Is it possible?

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Yeah, you can share your screen. All right.

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So, uh uh about in Q4, we just opened something I'm calling network school. Yeah.

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Can you guys see the opening day shot there? Yep.

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So, that was the kind of ribbon cutting. Cool.

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And uh this is something that combines a bunch of things I care about.

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Here's like uh the site is atns.

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com and actually great domain by the way. A fantastic domain. Thank you. Thank you. I appreciate that.

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You guys are connoisseurs also.

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Yeah, we have a fourletter domain.

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You're kind of destroying us at the twolet domain. You mogged us.

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Well uh I we will uh you know I I I still two you know you're in the uh the poor commas club or something. I guess I don't know.

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The poor car actors club, right? Okay. So So break it down. I saw a 100k fellowship.

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I also see a school uh typically I have to pay for school. Are you paying me? How does this all work? Right.

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So this is essentially there's several things that are happening at the same time. Sure.

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Like obviously traditional academia is basically over as we know it.

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It's about 10 different things hitting it at the same time.

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Um and uh it's you know lost trust and credibility and so on.

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And uh you know what we've got here is we're doing global meritocracy. anybody from anywhere.

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Obviously, Americans are welcome, but anybody who's what I call internet first is welcome, right?

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So, if you're, you know, pro Bitcoin, if you're pro cryptocurrency, smart contracts and so on, you're pro AI, you're pro biotech, pro- nuclear and whatnot.

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And that those kinds of people exist all over the world and uh and so we're bringing them here and so global meritocracy basically.

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And uh there's there's Vitalic, there's Brian Johnson. Can you see the video? Yeah.

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So this is it basically we're actually doing the startup society.

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So that's what that's what network school is.

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There's much more I can say about it but that's that's the uh that's the idea. Okay.

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So uh walk me through the actual experience of joining is this cohort-based a lot of these new education initiatives.

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Very few of them have just jumped straight to we're going to replace a four-year experience.

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And I don't know if that's because the four-year experience is fundamentally broken.

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There's a lot of things that are potentially broken about higher ed.

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Um, but what is your view on just the length of time that it takes to get whatever you need to out of academ academia or schooling generally? That's right.

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So, uh, well, very good question.

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This is a long long topic, but just to to to level set, you know, I actually spent, you know, 10 years at at Stanford.

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I was I was an undergraduate graduate.

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Uh, got my MS in chemical engineering, BS, MMS, PhD, electrical engineering.

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I taught computer science and stats there.

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I I'm a research scientist.

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I have 5,000 plus citations.

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I blah blah did genomics, taught, you know, computer science and so on at Stanford.

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So, I know academia fairly well.

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And in fact, I thought for the first, you know, I don't know, 10 years or so of my adult life that I was actually going to be a professor and then I, you know, started a genomics company and, you know, basically became, you know, got into tech.

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Um and my view is there's many things I could say about the four-year uh you know college education but uh one issue is it's like front-loading all the cost to the beginning and then there's zero budgeted for maintenance over somebody's life.

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So it's as if you paid $200,000 for a car and then zero for oil or gas or you know wheel changes or so on for the rest of their life.

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And so people get this expensive education and they forget all of it just a few years later.

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Um I'm sure if you gave test retest you know stats and looked at what percentage they actually retained.

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We know all the stuff about space repetition.

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Um we know forgetting curves and so on.

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So basically the education is gone and what you really want is something that's like continuous education over the course of your life where you know then like for example VO comes out or um some new API comes out.

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What you want is to be able to quickly load that into your brain, be productive, and to have some budget every year in a continuous sense as opposed to um you know like a like a upfront forget everything sense.

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That doesn't even get into the fact that you know unless you've been in the world of work, you don't actually appreciate how amazing it is to have just time to purely study.

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You have to learn everything on the job.

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Um it also is something like frontloading the vacation and getting all these kids at age 18 into like a lifetime of student loan debt.

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debt. There's many many things wrong with it but that error is ending and then what's next like my view you know why why am I doing this in part because you know how well actually we get right into it you know how America started loosely party it was actually America

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was started by the tech and the bro forming the techro let me explain okay so amazing okay here's why Massachusetts Massachusetts was the tech and Virginia was the bro okay there we go there we go So for those who don't know like Massachusetts the Massachusetts Bay

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Colony was the Puritans they founded Harvard in the 1600s when you know it was actually just a one room schoolhouse basically a one room one room place right it was a very very small thing very modest at the beginning the Massachusetts Institute of Technology was founded about 200 something years

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later but basically Massachusetts always being the center of like higher learning education and so on in the US in Virginia the Cavaliers you know they were the they were the bro they were muscular they were on horseback and you know they like to shoot things and so on. And actually Virginia was maybe the

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And actually Virginia was maybe the most important state during the American Revolution.

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And a lot of the early American leaders came from Virginia.

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That was like the founder CEO archetype, right?

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And um both of these were actually different factions that at different times won and lost in the English Civil War like you know 100 something years earlier.

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The Roundheads went to Massachusetts.

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I was like the left of of uh England and the Cavaliers were like the right and they went to to Virginia.

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Anyway, so they basically when when the right and left were working together, that was the tech and the bro, right?

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And that's what made America really great when they were working together.

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Now, of course, not as much.

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Let's say you have a husband and wife and they have kids and they have and one of one of the adults, you know, wants to participate in the network state and the other parent is like, well, sorry, the kids are in preschool and ripping them, you know, that that feels like um a large part of the people that you would want to recruit over time.

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Uh and I and I can imagine exactly what your kind of answers to that would be, but I'd love to hear it from you. Sure.

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So, so first of all, um, you know, like my vision that we're see is definitely familyfriendly.

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Um, with that said, you know, who who moves and who moves at what times, right?

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So, typically people move for education or employment and they usually move in their 20s and so on and so forth.

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and so forth. And once they're anchored in territory, they tend to only move if there's like a, you know, a job for both husband and wife, for example, uh, or if they're like refugees, like things get blown up like in Ukraine or or in, you

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know, Middle East or what have you, or if they're like refugees from, for example, blue states where the policy gets so bad that people just uproot and move and there's like muggings or, you know, something like that, syringes, etc. like a lot of people left blue

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etc. like a lot of people left blue states over the last you know five years as you're aware because of that in part and I know some people say things are getting better or whatever but like you know at least in some places but I think in general that that exodus is still there um that's also actually how the US itself was populated at the beginning

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there's two different forms ways of founding startup societies and they're complimentary the first is the wild west frontier kind of thing where you have single men coming out but the second actually the Puritans had quite a few married couples coming out but because because they had an ideological or religious motivation and then you also had waves of refugees from Europe. There's all kinds of crazy wars in

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There's all kinds of crazy wars in Europe like the revolutions of 1848 or you know famine in Europe like the Irish potato famine and that also brings you know like like people out right but uh so so the answer is like um there's only so much you can do at the beginning in a sense you know how Dropbox started as an individual product and then it became a product for small teams and then for enterprise. Yeah. Yeah. Yeah. Right.

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So in the same way like you first kind of have to build a product that works for like the individual remote worker then maybe the couple where it's a two-body problem then like you know the early family then the scaled up family then like the whole community of people who are moving together or the whole startup that's moving together and so it's just like think of it as kind of going from individual to SMB up the ladder like that.

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So you definitely want families and we actually have a lot of people who brought families.

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Um, but the the product for families is itself a product just like Apple has a family plan for example.

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There's new permission structures and so on, account structures and stuff you need for families.

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So it's I like how you explain this in productled SAS terms. That's great. That's great.

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And I think we're on the Techros podcast, so I'm speaking.

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No, and I and I totally buy that.

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it's okay for these to be initially be frontiers and sort of kind of establish um base camp effectively and then then bring more people in over time. Yeah.

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On on the Bitcoin uh thing, I I I imagine that Bitcoin could be kind of the gold standard for many network states if they opt in.

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Um the interesting story that I've been toying with with Bitcoin is that uh that the narratives have shifted.

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Bitcoin promised a few things.

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It didn't deliver entirely on all of those.

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It wasn't entirely anonymous.

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Uh it wasn't entirely used for transactions, but it's become a fantastic store of value and that's kind of where it landed.

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Do you think that that that that that's the correct story of Bitcoin?

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And do you think that crypto projects is there a pattern of this like shoot for the moon, you'll land amongst the stars, it's okay to kind of build towards like a threepronged amorphous future because if one of them hits, you could still wind up with with a fantastic power law outcome. Oh yeah.

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I mean like I think I think it's the only way of doing things.

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Um in the sense of it's kind of like people who there's some people there's one guy who remain named who like critiques like Elon's self-driving schedule.

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He's like he promised it an X date and it only arrived like like a year later. He sucks so much.

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And and I'm like you know like I think uh Elon is saying like Tesla or you know SpaceX they turn impossible into late. Yeah. That's a good one. Yeah.

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you'll take that every single day obvious in my view obviously, right?

14:39

Uh the um I want to answer two to two to two to two to two to two to two to two to two to two to two to your point.

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So the way I the way I think about Bitcoin is maybe the obvious way, but it's digital gold, right?

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That is to say, it is infrequently moved onchain.

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Um it stores large amounts of value and it actually serves some of the purpose of gold reserves where like you sort of want to show on chain that you have it.

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It's almost like meant to be public in some ways, right?

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and then the various kinds of features that people have wanted to add over time to Bitcoin.

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wanted to add over time to Bitcoin. The problem is that like gold should be as immutable as possible and mutability is in conflict with I mean programmability is a good value and immutable is a good value but those are like uh you know fire and water they don't mix right there's there's you know you want a drink of water and sometimes you want a

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hot fire to keep you warm but you don't want them in the same thing then you get nothing right so immutability Bitcoin's immutability its stability and it's predictability think of it as locked right and then what happened was privacy went to like Zcash and zero knowledge uh you know tornado cashache which is now legal again and and so on and and zero knowledge is booming. Zero knowledge is

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Zero knowledge is one of the big things that people are underpricing I think cool bitech arguably another and so on.

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Um then uh number two is uh programmability but smart contracts that went to Ethereum and Salana and whatnot.

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Number three, transactions um you know as digital cash that went to stable coins USDC, USDT uh and then other kinds of things like storing data on chain and you know like like uh using as an oracle that went to other stuff like chain link and and other kinds of things and then uh you know basically other other functions like uh onchain data is NFTs just like onchain code of smart contracts that that went to NFTs.

16:25

So all of these things that were initially contemplated did happen just happened on other chains that could tolerate the risk because you know you have success and failures then and Bitcoin couldn't tolerate that risk. Bitcoin was locked. Yeah. Yeah.

16:37

Well uh with the zero knowledge stuff I I haven't been tracking it as closely most recently.

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Uh are you waiting for uh engineering challenges to be hurdled?

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Are you waiting for uh just more code to be written?

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I understand that it's incredibly complex code, some of the hardest programming software to write or is it more on the customer adoption side.

17:01

We're ready for on-ramps of kind of the masses, but it's just going to take time for people to build the the bridges to actually make these new ZK products uh just lovable and like you know.

17:14

Well, first just to explain what zero knowledge is.

17:16

Zero knowledge arguably is and Vitalics also made this analogy.

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analogy. ZK arguably is to crypto what the transformer is to AI in the sense of it takes a bunch of things that were previously special case stuff and it puts it into kind of a common framework where um you can like lots of special case subutines

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um can now be general case to to very to oversimplify and um what that means is you can develop ZK protocols that uh for example you know ZKYC where they just prove what is necessary for a government to be satisfied that this is a real human being and nothing else

17:56

right um and that's necessary because look at these you know these KYC attacks on like you know Raj of Salon and other kinds of people right like the modern form of KYC is where governments force companies to store giant honeypotss full

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of sensitive information and then the governments themselves are often hacked like the OPM hack and so forth so that's one aspect of where ZK can come in and be the solution Um, another thing is that ZK is actually used uh as a compression technology. So, for example,

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So, for example, ZK roll-ups um not just a privacy technology.

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And so, this stuff is actually already there and it's being deployed and it's working.

18:31

There's ZK chains and so on.

18:32

Um, it's it's one of those things where is it consumer visible?

18:38

Maybe not, but I think um I think it's just a really important technology.

18:42

It might never need to be consumer visible is what you're saying. I mean, that's right.

18:45

But, but what it does basically mean is there can be sort of magical things where Um, you can prove what you need to prove. Yeah.

18:53

Without giving up anything else. Yeah. Right.

18:55

You can prove that's way a lot of KY KYC stuff works right now. I scanned my ID.

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Most people don't know that there is a machine learning algorithm with computer vision in there that's reading the ID and checking it with a database.

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Uh, people just know, hey, I scanned my ID and I got KYC.

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It could be a lot easier and it could be more resistant to hacks and leaks. Right.

19:14

What you want what you want is something like Sing Pass or Estonia's digital ID where it's like an app on your phone and that's your ID card and then that can do a zero knowledge handshake with something else, right?

19:26

As opposed to like a piece of paper like physical card, you know.

19:27

How are you feeling about coins these days?

19:31

Uh how are you feeling about stable coins these days?

19:33

I feel like there's an immense amount of energy and excitement.

19:38

Um but it's but they always feel a little bit misaligned with the folks who are like let's get off the dollar.

19:42

Let's you know you know we don't we we we wanted to move away from that system and we're kind of maybe rebuilding it.

19:49

Um how how are you feeling about stable coins? Are you optimistic?

19:53

Is there is do they play an important role in your vision of the future? Uh yes.

19:57

Um though uh I think well so let me actually show you guys something. Ready? Here is a fun video. Okay.

20:08

Can you see the screen there?

20:08

The stable coin video is dropping right now. Let's see.

20:12

Uh oh, Coinbase and Circle announced launch of USDC digital dollar. Yes. October 23rd, 2018.

20:16

And so, guess who's there? Were you behind this? That's amazing. Lore. This is great. There he is. I remember this video. Yeah.

20:27

I remember thinking like, oh, I don't really understand this, but now I do.

20:32

So, you were So, you're This is a long way of saying you were early and right.

20:35

you were super long stable coins, but I've heard it's hard to make money.

20:37

Let me just show you just to underline here is the market cap of USDC, which is now $60 billion. Wow.

20:45

And on October 3rd, let's see if I can get the cursor. Bang. What's it What's it say? October, 2018. Can you see that? Zero.

20:52

Uh I can't see that, but um I I can see the broad chart, but uh congratulations for being early. You're always early.

20:59

Uh where are we going in the future with stable coins?

21:03

uh how important are they going to be?

21:05

Because it still feels like there's a little bit of tug-of-war with like we're staying on the dollar.

21:08

We're not really moving to new legacy financial institutions seeing that we're in a friendlier regulatory environment seeing the product market fit of stable coins now wanting a piece of the action like when people when the Wall Street Journal reports like the dollar fell in value like the stable coins also fell in value, right?

21:27

And so it solves some problems but not all of them.

21:28

So what what's your take? Right.

21:30

So, well, the term stable coin obviously is historical because it was stable relative to Bitcoin. Sure.

21:35

Um, I think you could sort of separate that out into two things, like a fiat coin and a flatcoin. Totally.

21:41

Like a fiat coin is something that's a onchain mirror of fiat offchain. Yep.

21:44

And a flat coin would be something that actually retained its purchasing power over time. Yep.

21:48

And that's much harder to do because you'd have to maintain its stability against bread and PlayStations and whatever.

21:53

And if there's an actual shortage of those things, then price might increase for no reason other than than uh you know other than actual physical shortage.

22:02

So but keeping the historical name uh stable coins are so first why are they useful?

22:11

Well, at a minimum they're better international wire transfers.

22:12

Yeah, that alone justifies their market cap. Totally.

22:16

Um that's like tens of billions of dollars in Marquette because they just save you from $25 and more importantly, you know, banks are only open like 9 to5 weekday, right?

22:24

So like from 40 hours a week uptime to 168 hours a week, which is 247 uptime, that's worth a lot.

22:33

Imagine if websites were only up 40 hours a week, right?

22:35

Um so just that alone, the ubiquity internationalization, then you add programmability and so on.

22:41

When people say, "Oh, why just put a dollar on chain? That's why, right?

22:44

That's why they're they're valuable, right?

22:46

And the space is partitioned in an interesting way and I think many other things will partition this way into like a US and a global, right?

22:53

Like the USDC coin or the USDC asset is like US regulated and then USDT is like intentionally non- US regulated, right?

23:01

So like there's like Coinbase and there's like global exchanges and so I think that'll be a common partitioning of of of many kinds of markets.

23:10

Um and so uh so that's that's a justification for why I'm bullish.

23:12

But now on to your specific questions.

23:15

Uh I think that one of the things once you've got something on chain, it can just be easily swapped, right?

23:22

And so now that USDC is there, you're going to have probably every other fiat currency up there and what have you because it's become so mainstream and whatnot.

23:31

Uh but when that happens, you get an interesting thing which is similar to launch of Google News in the mid200s.

23:36

As you may recall, all these newspapers put their newspapers online in the late 90s and early 2000s.

23:44

Then when Google News launched, it suddenly showed that the Desmo's Herald and the San Francisco Chronicle and NYT WPO, you know, Miami Miami Tribune, whatever, were all basically printing the same stuff.

23:56

There was some custom stuff that they had in their own markets, but most was just reprinting the AP, the newswire. Yeah. Newswire.

24:03

And you could see this on Google News.

24:04

It's like 173 other outlets printed the story.

24:06

It's all the same story every time. Yeah. Yeah.

24:08

And that's because those newspapers, they had trucks and they had, you know, used to say, "Never argue with a man who buys ink by the barrel."

24:16

Now, never listen to a man who still buys ink by the barrel. Lol. Right.

24:19

Because, you know, I love it.

24:21

You know, are you buying any ink?

24:23

You know, I mean, I actually like pencil and paper to write, but not to print. Right.

24:26

That's certainly not news. Early days.

24:28

We went through early days.

24:28

Never fight with a podcaster who live streams for 20 hours a week. Something like that. Exactly.

24:34

He'll beat you on Exactly. Yeah. the modern version. That's right.

24:37

That's right. So, so point point being though that they had these geographical monopolies that suddenly they put their stuff online and there's a delayed reaction and suddenly they realized wait a second every newspaper in competition

24:48

with every other newspaper and so of course all the local ones have any brand basically just all died and only the national ones survived and they became much more ideological and the new partitioning of information space was on the base of ideology not geography. So

24:58

So you've got the, you know, Jim Bros and you've got like people are interested in, I don't know, um, various political causes, you've got crypto causes.

25:09

You've got things sectioned by vertical rather than geographic horizontal ideology rather than geography. Okay.

25:14

So the same thing is going to happen with assets.

25:18

And the reason is first you've got these um fiat currencies that are put on chain.

25:24

And then we're we're we're nearing something which I call the DeFi matrix.

25:29

The DeFi matrix starts with the observation that fiat fiat can be swapped like forex but fiat crypto can also be swapped like USD BTC and cryptocrypto can be swapped like BTC ETH and of course crypto can be swapped for NFTs and all kinds of this crazy manager of digital assets is now out there.

25:43

So you visualize this giant square of every asset that can be traded for every other asset.

25:49

And there's amazing numbers of crazy financial machinery out there now that will basically do the complexity of finding buy and seller pairs, you know, like unis swap and market makers and so on behind the scenes for this swap.

25:59

What that means is that whatever asset you have, you have less need to get into a fiat currency.

26:06

You can just hold that asset and then when you want to, you just liquidate it for whatever other asset you want at some fee. Mhm. Okay.

26:14

What I mean by that is what what do people call it?

26:16

What's what's a hybrid way of saying when you sell your company, you get a liquidity liquidity? Liquidity event. That's right.

26:22

That's a that's another term of talking about cash. Cash is liquidity.

26:24

Cash is universal barter.

26:26

Cash can be traded for anything. Yep.

26:27

But now anything can be traded for anything. Mhm.

26:29

Which means there's less need for cash, right?

26:31

there's less need for cash, right? Y and so all these countries will wake up one day and they'll find a second just like the newspapers we had a geographical monopoly on our fiat currencies but now we don't and we're competing in this global marketplace of all these other

26:47

cryptocurrencies as well as really big fiat currencies right and uh then they're going to have to compete just like you know the information environment you compete on ideology rather than geography then the in the transaction environment you have to compete on features not um places, right? So, for example,

27:03

So, for example, privacy coins or smart contract coins and so and so forth.

27:08

You you compete on the vertical as opposed to the horizontal of Francecoin, which is a franc, and Japancoin, which is JPY, right?

27:16

And it's a funny way of putting it, but that's that's like what they are, right? Yeah.

27:18

So, I'm not saying there isn't any utility to geography, but especially given that so many of these things, what have people done?

27:24

All these countries have gone cashless, right?

27:26

cash, physical cash was actually something that tethered people to a geographical area because you needed to actually hold it and it was issued there and redeemed there and so on and so forth.

27:35

Once you go digital, you don't have to use cash anymore and many people have for example crypto cards where they can hold in one currency and spend in another and it just Apple pay or whatever just works, you know, that people don't know, right?

27:47

So stable coins are an intermediate form that facilitates this transition from the, you know, fiat world to the pure crypto world.

27:55

Kind of like putting newspapers online was an intermediate form.

27:56

And just like there was a whole battle in the 2010s where newspapers at one point felt threatened. Oh my god.

28:02

I mean, not at one point.

28:04

They still feel threatened, but they fought this whole battle of the bulge counterattack on social media.

28:08

Tried to take away your voice, my voice, everybody's voice, but they lost.

28:11

You know what ex you know, you know what I call when Elon took over X? You know what I call it? What do you call it? X day. It's like D-Day, right?

28:19

All the good guys amassed $44 billion for like the Normandy landing boom, right?

28:26

Like this, you know, because all it was still technically illegal.

28:28

They were like, if you want your own company, why not build one or whatever to get free speech back?

28:33

Remember those kinds of lines of argument prior to right2?

28:37

And then Elon basically gathered the forces and every tech guy like some Marvel movie, you know, put in a mill, a bill, five mil, whatever they could afford. Pass the hat around.

28:47

I mean, $44 billion in cash is like a non Go ahead. Yeah. No, no.

28:52

It's just funny passing the hat around and Morgan Stanley puts in 13 billion in debt. It's kind of classic. Yes.

28:56

classic. Yes. So every every center right centrist center left in some cases person who right just just piled it because Elon obviously was the man but so many people backed him right and this was something where like you know Thor

29:12

landing with a hammer boom like this right all of these communists just fly back against you know the walls all these wolkes just defeated like this and X day right now what that actually also meant was a Tower of Babel kind of moment because Twitter no longer exists. There's X, there's Truth Social and Gab

29:29

There's X, there's Truth Social and Gab and whatever all all on the right and there's now there's Blue Sky and Massedon and Threads and Tik Tok on the left and there's the crypto networks like Noster and Lens and Farcaster and so on. Right.

29:41

So, you have a Tower of Bal moment where Twitter has been shattered.

29:45

Anyway, this has been fantastic.

29:47

Biology, thank you so much for stopping by.

29:48

You're welcome to come on and screen share with us anytime. Yeah, this is great. Awesome. Great.

29:53

Maybe I can be your Kramer special guest.

29:55

And thank you for kicking off.

29:55

We have we have uh I think 10 plus other, you know, exciting uh crypto entrepreneurs.

30:02

Should be a big day once. Welcome. How are you? There he is. What's going on?

30:07

Hey, how's it going guys?

30:10

A pleasure to to be here.

30:10

Welcome to the Temple of Technology.

30:13

Uh can you kick us off with a quick introduction on yourself and the company for this and your and your PFP too?

30:19

What is got to get the backstory there. Absolutely.

30:21

I think not too many people are already familiar with the PFP.

30:26

But to start with myself, I'm Allan.

30:27

I'm one of the co-founders of Pump Fun. Cool.

30:28

Uh Pump Fund is a is a launchpad where anyone can create their own coin.

30:34

Um and it's based on the Salana blockchain.

30:36

Uh and my my PFP is Ramilio.

30:38

Um it is a is a an NFT based on Ethereum. Very cool. A little crossover. Yeah.

30:48

over some theory, not pure salon.

30:48

Uh why don't we start with uh we have a primarily sort of traditional tech audience.

30:55

Why don't we start with the origin story of pump?

30:57

I know you have had a crazy time even even fundraising went through a couple um pivots to get to the launchpad that is today.

31:05

So I think it'd be great to to hear the backstory. Yeah, absolutely.

31:11

Uh so my background, I mean I've been in crypto for a while.

31:13

Um before we built Pump Fund and myself and my two co-founders were building a bunch of different ideas in um in crypto consumer crypto you know in NFTTS and social fi and a bunch of different random corners of the space. Um nothing really stuck.

31:30

I mean I think we built for around a year or so before we got any semblance of traction.

31:33

Um, ultimately we weren't really building for ourselves.

31:38

And I think once people started trading meme coins on Salana is when we first saw that there was a problem or a few problems that we can solve that would actually be addressing some of our issues because we were, you know, trading on the side.

31:49

We've always been trading meme coins and NFTs and all that different stuff on chain.

31:52

And we noticed that um there's a whole bunch of different problems that we we could solve by by building a a launchpad where anyone could um create their own coin, standardizing the way people launch these things in a in a more secure and safe manner um as well as uh in a way that is more user friendly for people.

32:12

So anyone can get involved and you don't need to be highly technical to launch your own asset.

32:16

Uh so pump fun I would say was the first product that really allowed for mass tokenization and it's something that we um that we're going to continue doing.

32:25

So uh I want to give a little bit of backstory.

32:27

Uh I'm sure you can't you know talk about uh numbers but uh Pump is one of the fastest growing companies in history.

32:35

It's why we're you know one of the reasons we were interested in having you on the show.

32:39

Uh, I believe I we'll have to make some type of chart at some point, but I believe we'll probably be one of the fastest companies ever to a billion dollars in revenue.

32:46

How quickly when you guys started the launchpad did you feel like you were did you kind of realize that you were on to something?

32:55

Was it kind of immediate PMF or did you even have to iterate from that initial uh launch of the launchpad?

33:04

Yeah, when we first came up with the idea, we were pretty confident that it was going to work, especially compared to some of the other stuff that we were building.

33:10

Um, on our launch day, we got quite a bit of buzz around it.

33:13

I mean, the MVP that we shipped was so incredibly shitty that everyone came and then they they had to leave because it just wasn't working.

33:20

But that initial buzz and the feedback that we got, you know, make us made us realize that we were on to something for sure.

33:27

It was only a matter of iteration.

33:29

It was a matter of finding distribution because ultimately what we offer is a marketplace.

33:34

It's a launchpad where you're connecting people that are creating these assets and people that are potentially interested in buying and selling them and trading them.

33:41

Um so it was a matter of distribution.

33:43

It was a matter of iteration and m and polishing the products.

33:46

Um it took us around two months uh after launch to actually get it off the ground.

33:51

there's a lot of, you know, make it work, but eventually it uh it played out and obviously, you know, we were confident that it was going to work, but we had no idea that it could blow up and then actually generate so much revenue and become this great business. Um, money. Yeah.

34:09

So, um, two different two main well, it's it's all really the same, uh, model.

34:15

It's a small, uh, fee on each trade.

34:18

So whenever a coin launches uh the platform takes a 1% trading fee and each time uh the coin is traded once it graduates I mean a graduation is basically when a coin gets to a certain market cap it grows in size and so on.

34:34

Once it graduates there's uh it's the same fee basically but just a smaller one that that the platform charges.

34:41

And is that by design so that you don't get disintermediated or you don't get out competed by other platforms?

34:46

Like are you thinking about that?

34:48

And and because I feel like there's this narrative in crypto where like somebody builds something amazing, has a great business and then there's like an open- source fork of it or something like that.

34:55

Is that is that a risk that you're thinking of and like planning against?

35:00

I mean of course you know when you build something successful I think in any industry you're going to expect some copycats.

35:05

Um I mean something that we've been expecting is something that we saw historically. We saw it a year ago.

35:09

We saw it six months ago and we're continuing to see it.

35:11

Um I mean obviously we continue to monitor the markets and and kind of see what user feedback is on on different approaches and models but ultimately uh we have our own solutions.

35:21

We speak to to our own users um and you know we we we kind of stay in our own lane in that regard. Yeah.

35:27

Uh talk about the branding. It's extremely chaotic.

35:29

It feels extremely internet native.

35:32

Uh and but but I'm curious what your kind of like framework to making decisions around everything kind of design brand. Yeah, absolutely.

35:42

I mean I think when we first started we pump actually wasn't the the name that we came up for this product specifically.

35:47

It existed for like a few different products that we launched because we honestly thought it was like all the products we were building were for for people in the trenches so to speak.

35:57

So people that were trading on chain and so on.

35:58

And we felt like that whole ethos, that whole branding just kind of aligned with um I guess with what with the culture like of of people trading on chain and and and really this deeply internet native crowd that we were addressing.

36:15

Um I think definitely contributes to how we think about it today.

36:19

We the way we think about it is we don't necessarily want to um I guess we want to pay respect to to kind of where we came from and we want to grow our community rather than removing and and making our brand like I mean there's a big difference between making your brand more accessible or your product more accessible and kind of moving away from the brand that you've built, right?

36:45

Um, so I think a big part of why Pomp has succeeded is that it has really built a community of people that are, you know, that are trading and hopping on every single day and and so on.

36:55

And a part of that is being in touch with them and and continuing to to to to interact.

36:59

And that also reflects in the design.

37:02

Like if we changed everything all of a sudden and it was extremely I guess you know looked like your average product and AI or something like that then I think there would be a lot of eyebrows that that would be raised by by our user base. Yeah.

37:18

Uh can you talk to us about uh VC?

37:21

Uh I mean have you raised any I'm sure people growing fast.

37:25

They're beating down your I think the story is is you raised from Sixman, right? Is that correct? Dudes's fund. That's correct.

37:36

I can't give too many details on the whole I guess life cycle. Yeah.

37:40

But but I I have a question that that would be fun to answer.

37:42

What's the craziest thing a VC's ever done to try to win allocation pump?

37:46

Because I know you guys anonymous revenue has just rocketed to such an extreme degree.

37:53

you guys, you know, for every dollar of venture capital, I'm sure you've generated, you know, at this point, um, an an obscene amount of of profit.

38:00

Uh, but but do you have any funny stories there?

38:05

I'm not sure if there's anything in particular there, but definitely there's so many stories where um not just for VCs, but like you know I guess influencers in the space and stuff as well where we DM' them multiple times and got received introductions and didn't get any responses um only for the exact opposite to take place once once the platform has gained traction and yeah this has happened many times.

38:28

Can you talk to us about the live streaming product that you guys have?

38:32

I mean, we're we're live streamers ourselves and so super interested in what's Yeah, you recently brought it back and made a number of changes to it.

38:39

So, I'm curious, you know, how it how it's evolving. Yeah, absolutely.

38:42

So, the live streaming feature is pretty simple.

38:45

When you launch your own coin, you can also launch a live stream alongside it to, you know, engage with your community, talk to them, do a whole bunch of different things.

38:52

Obviously, I think a lot of your viewers are going to be familiar with the previous live stream product that we had, which kind of, you know, I mean, it it gained a lot of mind share late last year and and ultimately needed to to shut that down for a variety of reasons.

39:04

Um, but we we decided to bring it back with, you know, much much better moderation as well as uh I guess an improved product overall.

39:13

and and what the reason why we think that our live streaming product can genuinely change the whole creator landscape and and actually compete with some of the biggest live streaming platforms out there is that it completely flips the incentives uh that creators are currently facing.

39:25

As a creator, I mean, I'm I'm already seeing this uh with with relatively few users compared to the biggest platforms.

39:31

As a creator, when you're starting out, it's Pump Fun live streaming is the easiest place in the world to get your first 50 to 100 viewers. Why is that?

39:39

The reason is because users are directly incentivized to find people early because, you know, if they find your live stream early, they see that you're you're interesting, you're entertaining, you're funny, etc.

39:51

, and they uh, you know, they buy into your coin.

39:52

If you get if your your coin gets more attention, then that presumably can uh can yield, you know, can yield profits.

39:59

Obviously, not not financial advice, etc. , etc.

40:01

, but that's often times what ends up happening.

40:02

And because of that incentive structure, it makes it so much easier for for um for, you know, creators to get traction.

40:09

And that's the the biggest problem that creators usually face when they start out. That's the first thing.

40:14

The second thing is that, you know, with a few recent changes that that we've made, creators don't necessarily even have to sell their tokens to to make money.

40:21

They can monetize instantly with no middleman uh through creator revenue sharing.

40:26

So, whenever someone makes a trade, a small percentage of that goes directly to the creator.

40:31

So, they monetize immediately.

40:33

We there's no approvals that that they have to go through.

40:35

They don't need to reach any milestones.

40:37

they interact directly with their audience and they don't necessarily need to appeal to any advertisers and so on.

40:45

As long as they their content um is within, you know, respects the terms of service of the site, they're going to be able to monetize.

40:54

Talk about uh why you chose Salana early on and why you're continuing to double down there and if you're looking at opportunities on on other chains at all. Yeah, so we love Salana.

41:06

I mean we I mentioned Ethereum earlier on with my with my PFP.

41:10

So that's I guess kind of where we where our background is.

41:12

We built on Ethereum for many years in in that ecosystem.

41:15

Um eventually you know because we were building products and we're getting I guess like increasingly desperate to get users.

41:20

Um we saw that especially for this for for for memecoins people were starting to trade them on other uh on other blockchains specifically Salana and that was gaining a lot of traction back then.

41:31

Um so we um we start you know we wanted to go to where where all the users were right because that would maximize our uh our chances of succeeding.

41:40

Um so we went to Salana um obviously after we we gained success we got a ton of inbound from uh other blockchains and and so on and people were asking to get their you know favorite blockchain added but you know ultimately our goal is to bring tokenization to the masses.

41:56

our goal is to kind of expand this this universe and and and really break into the mainstream.

42:02

And I I don't necessarily um I don't necessarily believe that going onto any other chain would you know would contribute to that.

42:09

know would contribute to that. Salana as infrastructure has improved so significantly over the past year year and a half since pump uh pump fun has been live that we're very confident that you know once I guess that critical mass is reached the infrastructure will be able to to support um you know to

42:27

support the uh the activity on on the platform and and more than just that there's so many ecosystem applications that utilizes pumps in you know marketplace infrastructure and so on that actually contribute to you know, not not just to to the bottom line, but contributes to the overall, you know, user experience. Like people can use

42:45

Like people can use whatever interfaces they like to get the, you know, the best experience possible.

42:49

So, all in all, um couldn't be happier being on Salana and we're not considering leaving anytime soon. Very cool. Fantastic.

42:56

Thank you for jumping on.

42:57

I know you don't do a lot of uh interviews, do a lot of media in general, so appreciate you coming and uh telling the story.

43:04

It will I I I legitimately think they will there will eventually be a Harvard, you know, business school case study on what you're building because it's completely unprecedented the growth.

43:15

Um uh I think uh we're we'll probably just start to see this year people realizing how big a business, you know, Pump has become in in such an incredibly short period of time.

43:27

So, thank you for jumping on and and sharing and uh we'll uh we'll talk to you soon. Absolutely. Appreciate it, guys. Cheers.

43:38

And that Harvard business case study will be tokenized on chain.

43:40

I'm sure it will have a meme. I'm sure it will.

43:42

I'm sure we'll get 20 meme coins per case study.

43:47

A memecoin for every paragraph.

43:49

Class should just be live streamed on Pump Fund.

43:51

They could fractionalize the case study.

43:53

Every every word you can just get a word. Um yeah. Uh well, next.

44:00

interesting that the the I think memecoins were working on Ethereum, but the the gas fees on Ethereum were so high or something, you know, you couldn't make a trade for $100 because, you know, somebody would be like, am I are they going to pay $50 in in gas to make a trade like that?

44:18

And price you drop like you increase the speed, you drop the price, like you always just see more activity. And so, um yeah. Yeah. Fascinating.

44:27

Um that $1 billion revenue number is that something that you can just inspect on the blockchain if you just add up a lot of transactions like is that possible? Yeah, it's it's visible.

44:38

Um I had seen a post as of maybe last week that they had passed $750 million in revenue. Wow.

44:42

And uh when did they actually launch?

44:46

It seems like it was like a year ago.

44:47

Is it like roughly a year ago? Wow. Impressive.

44:50

So a one year to $750 million in in like real and it's not marketplace like that's like their Yeah. Yeah. That's not GMV.

45:00

That's actually their their takevenue revenue.

45:02

Anyway, uh next we have Katie Han from Han Ventures in the studio.

45:07

Welcome to the show, Katie.

45:10

Thanks so much for hopping on.

45:10

Um we're excited to talk to her. Welcome. Welcome. Hey. Hey guys. Good morning. Good morning. How are you? Wherever you may be.

45:20

I think you're at the conference. Uh, no we are not. We're in Los Angeles. We're in Hollywood. The future of media. Good morning.

45:25

Bringing media back to Hollywood.

45:27

Um, but thanks so much for joining.

45:30

Would you mind uh kicking us off with just a little bit of an introduction and uh how are you spending your dayto-day these days? Oh my gosh.

45:37

A little bit of an introduction.

45:38

Well, my name is Katie Han.

45:39

I founded Han Ventures, which is um we're investing in blockchain technology through an early stage fund and a later stage fund.

45:46

Um, and we're about three and a half years old as a company and as a fund.

45:50

And you do liquids or How many how many decades has the last three and a half years felt like? Oh my gosh.

45:56

Well, you know what, guys?

45:56

I've actually been in the space over a decade. Yeah. Over a decade.

46:00

So, how how many years has that felt like?

46:02

Um, but the last three years have been wild.

46:04

Um, but I'm really excited.

46:07

Um, you asked about how I'm spending my days.

46:08

I'm really excited about this particular moment in crypto because we have a lot of the fundamentals coming together and I', as I said, I've been in the space a long time and we've had different fundamentals working at different points, but it finally feels like all these fundamentals are working all at once.

46:24

And break down break down those fundamentals.

46:26

I imagine it's regulatory, it's community, it's collective, scale of the actual chains, maturity of the code.

46:33

How do you think about it?

46:33

What are you thinking about?

46:34

Well, you here you guys do it. I can question you. Great job. Uh, no.

46:37

So the first thing is institutions like you said um institutions the institutional story has been around before in crypto and different cycles.

46:45

Um, and we had some early adopters for institutions, right? We had Fidelity.

46:49

If you think about folks like Abby Johnson, she's been in the space for as long as I have, maybe even longer.

46:54

Um, we had folks like Meta.

46:56

I mean, I was on Zuck's original DM project board.

46:58

Um, he saw stable coins coming years ago.

47:01

Uh, so we had Meta leaned in as an institution kind of early.

47:05

And then we had other institutions, folks like BlackRock.

47:07

I think Larry Frink is actually a great exhibit A for someone who really changed their mind on crypto. Totally.

47:13

You know, Larry was against uh crypto, not against, but he was certainly not a fan of blockchain technology.

47:18

And a few years ago, he he said he had really changed his mind.

47:22

And now you have Black Rockck running a tokenized money market fund called Fiddle.

47:26

So that's some of the earlier institutional adopters, but now we have some of the later institutional adopters, uh folks like JP Morgan, Charles Schwab, and others.

47:35

And you'll see other announcements coming out soon from other institutions.

47:38

So the institutional story is one fundamental, but I want to talk about three others.

47:44

Please, you you mentioned one uh regulatory, but before I get to regulatory because uh it's not the most exciting um is the technological progress.

47:51

You we've had different kinds of levels of technological progress over the cycles um that that make up the crypto industry, you know, cycles.

47:59

We always talk about the bear and the bull cycles.

48:02

Um and really kind of the last bare market when folks were really declaring the space dead, as they do, by the way, every single cycle.

48:09

It really felt I I remember when Ethereum was touching $800 after the FTX crisis and I was like I don't know where the bottom is here.

48:20

This feels like the most toxic asset and that was like I basically a great time to start a fund, right?

48:27

That's what I was I had just started our fund.

48:29

No, and in hindsight and in hindsight I was like the moment that I thought this was over it was completely over was like a perfect bottom tip. Perfect bottom, guys.

48:38

Another time, another story for another day.

48:40

Remind me to tell you my Salana buying story in New Year's.

48:44

And when I thought it couldn't go any lower, it even went lower.

48:46

Although, we got in, we got in when it was pretty, pretty darn low. And and a lot of assets.

48:51

You asked if we do liquids. Absolutely we do.

48:52

We believe hugely in tokens.

48:54

We believe hugely in equity.

48:56

But let me get back to the fundamentals first because this is where we're spending our day.

48:58

Um, thinking about stuff like the technological progress.

49:02

If you think about post FTX, that era you're talking about, ETH is at or thereabouts.

49:09

Um, you know, Salana got down to like what $9.

49:11

Bitcoin's hitting like what 17 16 $18,000 levels.

49:13

People were declaring the space dead.

49:18

Pundits, sorry, I know you're not pundits, but everyone was saying, "God, terrible idea.

49:25

You started a crypto fund."

49:25

And uh here we were, 10 of us like, "No, this is a great time um in the space."

49:29

And I think one of the things we saw is there's a market story to crypto and there's a technology story to crypto.

49:37

And what we saw on the technical progress, and by the way, Fred Wilson and I authored a blog post probably about a week after FTX saying, "Hey, the technical story here has not changed, folks."

49:46

And instead, it's it's only changing for the better.

49:49

We had things like the Ethereum merge, the largest software upgrade in history.

49:52

Um, you know, Tully, the founder of Salana, recently said that we're no longer talking about blockspace for one of the first times in this industry.

49:59

stuff is scalable, stuff is cheaper.

50:01

Instead of um paying, you know, multiple dollars for a stable coin transfer or an NFT transaction, it's sub one cent.

50:09

And that's due in large part to the builders that were building through these bare cycles, including the last painful bare cycle.

50:18

So that's the second fundamental.

50:20

And I think the third fundamental, as I think about it, is product market fit.

50:24

Um you know, you talk about things like product market fit. Bitcoin, hello.

50:28

product market fit exhibit A.

50:28

I debated Paul Krugman uh in was it 2018 or 2017 and he told me Bitcoin has zero use.

50:34

I debated him and I said it will find product market fit.

50:38

Um at that time I think Bitcoin was trading around three four $5,000.

50:45

Um and lo and behold fast forward these years later I think it's clear it has found product market fit as a digital store of value but also we have things like stable coins have found clear product market fit.

50:56

And I hope we can talk about stables.

50:57

We'll dive deeper later in in today's session because um stable coins are the story of the day that folks in the mainstream are now talking about.

51:05

So we have product market fit and others other product market fit kind of I say we're on the precipice of we can talk about that.

51:11

But then you mentioned the fourth fundamental which is regulatory.

51:15

And I think the thing I heard for the last decade from builders, by the way, from enterprises, from institutions, from LPs when I was uh at my prior fund, is regulators aren't going to allow this though, right?

51:26

Like this this is all going to get shut down.

51:30

What was your answer then?

51:30

Was it like you're the the obvious rebuttal is regulators are going to make code illegal?

51:38

Like it's pretty hard to to ban code, right?

51:41

Anybody can kind of create it and put it out on the internet.

51:43

I'm sure you were always confident that it wouldn't be made illegal, but at the same time, the sort of US regulatory regime was making it pretty difficult to exist as a crypto founder in the US, which um had the same, you know, sort of effect in some ways. Yeah.

52:01

You know, fun fact, uh, since there's the conference going on today, I don't know if you if you guys are aware of this, I was asked probably around 2012, 2013 to help shut down Bitcoin for the US government when I was a federal prosecutor.

52:14

Um, so it's just crazy to think about.

52:17

I mean, hey Katie, little project.

52:19

I don't know if you have time this weekend to look into it. Can you shut down? Open the case.

52:26

Fenu Lenu, first name unknown, last name unknown. Wow.

52:28

unknown. Wow. you know somewhere in the tenderloin uh San Francisco 450 Golden Gate said file of fenu lenu but look I realized early on that this was a really powerful technology and regulators by the way and we've been saying this for the last decade regulators should love

52:44

this technology I mean um for its kind of permanence right um all of the things that make a blockchain great for a lot of things also by the way make it make look as I always said when I was a criminal I hoped that uh criminals would use this instead cash or wires, which I don't know how many banks anyone has ever subpoenaed. I've subpoenaed a lot

53:02

I've subpoenaed a lot of them.

53:03

Good luck getting compliance with a subpoena.

53:04

Um, but at the same time, uh, I really do worry about the erosion of financial privacy and not just now that I'm in the crypto industry 10 years later.

53:13

I talked about this when I was a prosecutor and the kind of reach of the bank secrecy act.

53:17

And we can go really deep on that.

53:19

I think um there are parts now under the third party doctrine that if it went back to the Supreme Court today, I think you might have a very different result than the last time the Bank Secrecy Act was challenged was in the 1970s.

53:30

And of course, the velocity of payments has just skyrocketed since then.

53:34

And now, unlike in 1970 where I couldn't glean too much information about you from your maybe couple payments or people writing out checks back in those days, now if you think about if I have all access to all of your payment information, I could probably like predict where you're going to go every day just about, right?

53:52

I mean, it's a really great almost in that way. And this is not crypto.

53:57

This is just all financial data, right?

53:59

Every time you use your Apple Pay, you're using a credit card, you're using stable coins.

54:05

I mean this is something that we should talk about at another time.

54:06

Talk about talk about your kind of early stage investment framework philosophy.

54:15

What are you I imagine there's investments that you get the opportunity to make that you believe will be uh successful but maybe aren't the best use of your capital if you have this sort of broader vision of of where the the asset class can and the technology can go.

54:30

But I'm curious how you think about opportunities and and even kind of your moral framework uh for investments.

54:37

I've never heard it described as a moral framework, but that's an interesting framing.

54:43

I mean, I think first of all, we start with the founders.

54:44

Like any other venture investor, it's all about the founders and the market opportunity, right?

54:50

Um and if you think about founders that I've previously kind of known in my gut, this is an amazing founder, an exceptional person who's going to build an amazing business.

54:58

I mean, the first instance of that, as far as I was concerned, coming into crypto is Brian Armstrong, um, and Coinbase, right?

55:08

And I think one of the things that makes Brian so remarkable is he had a huge business going just spot trading Bitcoin and then Ethereum and adding all of these other assets, but he was never content to just rest on those laurels as an exchange.

55:21

It was always about diversifying the business and the the web 3 economy.

55:24

Um and he was thinking about things like stable coins many many years ago.

55:29

Obviously uh USDC was a partnership between Coinbase and uh yeah we had we had we had Bology on earlier and he showed a video of the launch the web the the webs page for the launch video and he's like in the first five seconds in that video. I remember that. I remember that.

55:44

Did he have a bowl of cereal with cream or something in that dating?

55:48

Um, I remember those days with Bology.

55:50

Well, um, you know, with with the USDC launch happening and I think again he I remember being in the Coinbase office, by the way, the day um the day that Bitcoin first hit $10,000 for the first time.

56:03

Imagine, by the way, if we were having this conversation, you know, now we would be like, "Oh my god, $10,000 market correction."

56:08

Well, just a few short years ago, that was like cause for celebration.

56:14

People couldn't believe it was $10,000. I was in the office.

56:15

The euphoria was kind of everywhere except Brian had his eyes on what's happening next.

56:23

We're not going to get comfortable with this.

56:24

We're building an open global financial system for the world.

56:26

Um where are we taking our revenue lines next?

56:31

You know, he's been thinking about that day the S1, you know, day the direct listing happened in April of 2021 at Coinbase.

56:38

So, um I was so excited to be a director of that company for almost eight years and see that company through a remarkable series of events and I still am so excited watching from the sidelines about what they're doing.

56:50

Um, so I think the first thing we look for is we look for an amazing exceptional founder.

56:56

Um, and and that, you know, Brian's a great example, right?

56:59

So we're just trying to find the next the next Brian's.

57:02

Um, but also the market opportunities and the space, as I said, the asset class is so broad.

57:06

So it really we're talking about what are we talking about?

57:09

Are we talking about prediction markets?

57:10

One thing that's an area we're very excited about, but we kind of think about it as where will this evolve?

57:17

this evolve? not the current state of innovation but more the end state of innovation or the midpoint state of innovation and in the case of prediction markets I'll tell you one of the things we think about is um think about like

57:31

Netflix did um was very centralized it curated content and then all of a sudden YouTube came along and then unleashed even more content globally at scale I mean exceptionally so so for prediction markets when are we going to get that usergenerated equip ent the YouTube moment. I think that's really

57:49

I think that's really interesting and I think what makes crypto special in that story is the programmability um that people around the world 247, you know, the inter internet operates 247 and anyone with a smartphone can access that.

58:03

So, we think that's exciting. Yeah.

58:05

So, we're looking for, you know, we're looking for exceptional founders. Sounds like an easy job.

58:10

Just find 10 more Brian Armstrongs and you're great. So, 10 more. Sounds like an easy job. I believe it. I believe in you.

58:18

I Yeah, I I think you can do it.

58:20

Thank you for doing the work to surface the Brian for the world.

58:24

Yeah, we're talking to him later today. We're very excited. Oh, great.

58:27

Well, I I I'll tune in for that.

58:29

Also, I think though you mentioned moral.

58:31

I think one of the things we've done, well, I just I like the context the context there is like certain VCs will have a you know, traditional VCs will have a vice clause, right, where they say we don't do defense, we don't do uh recreational cannabis, we don't do this.

58:46

And I could imagine crypto funds bifurcating to some degree where some of them say we're going to do these types of deals and we're not going to do those types of deals.

58:55

But maybe that's that happens already, right?

58:57

Like you saw this during the last runup, the last bull run in 2021.

59:00

We had many folks, traditional VCs, many of whom are friends of mine, decided they were going to get into crypto, but they weren't going to touch tokens.

59:09

They were only going to do equity businesses.

59:11

And although we love crypto equity businesses, they missed out on a lot of tremendous opportunities.

59:17

Like imagine if you said we're not touching Salana, I mean Salana is a huge market opportunity.

59:24

Ethereum, huge market opportunity.

59:26

I mean, Bitcoin, huge market opportunity, right?

59:28

These are just some blue chips I'm naming.

59:29

Of course, there are plenty of others.

59:30

We said we are cryptomaxis.

59:32

We're not uh you know, we're not going to be religious zealots about any particular token, but nor are we going to write off entire segments.

59:41

entire segments. rather we're going to focus on the founder uh the bonafidees of the project the metrics of the project and we really want to know here um by the way do they have a plan for regulatory compliance realizing uh the times were uncertain um in those moments

59:59

but do they have a plan for it or is there plan to launch a token and then uh we say leave the US that's got to be the most that's got to be the most nervous meeting a founder has in in in their round is pitching you on their regulatory plan because like a lot of other VCs are like, "Yeah, great. He's

1:00:14

He's got a regulatory plan."

1:00:16

You're like, "Well, here's like the 10 reasons why that is not going to work." Yeah. But you know what?

1:00:22

I think that actually we like to think that we can be helpful in that way even with clarity.

1:00:25

I was talking to probably one of the most legendary biotech investors in the world um a couple months ago and he told a group of our founders, he said, "You know, I'm in a regulated space.

1:00:34

We've got plenty of regulatory clarity and believe me, we still need to kind of uh navigate like this doesn't it doesn't just go away just because we have legislation passed which we think is really important and clarity.

1:00:46

You still got to comply with it and we always said I always said look you got to have like kind of a plan for it.

1:00:52

You don't have to figure have it all figured out when you're raising a seed round when you're raising your series A.

1:00:56

Um, Coinbase was great in this regard, but look, they did not they've obviously made a lot of progress as a company on that front across the different iterations of their company like one would expect like is reasonable.

1:01:07

So my touchstone is what's reasonable and you got to build a business too, right?

1:01:11

And and I think we realize that and we're pragmatic partners and we like to work with founders.

1:01:17

Um, tell me a founder who says, "I have no idea what to do here.

1:01:19

I don't want to break the law.

1:01:22

I don't know what the law is, but like we'd love your help.

1:01:25

We'd love your thought partnership and we love those kind of founders. It's amazing.

1:01:27

Well, thank you so much for stopping by.

1:01:30

This was a fantastic conversation. Come back on again. Thank you guys. Thank you for having me.

1:01:33

We'd love to go way deeper.

1:01:35

I'm sure we're going to learn a lot today. This is good. Okay. Now, talk to you soon. Thanks for coming on.

1:01:37

Up next, we have Chris Dixon from Andre and Horowits.

1:01:42

But first, let me tell you about Ramp. Time is money. Save both.

1:01:45

Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place. Go to ramp. com to get started. Ramp.

1:01:51

Um, and uh very excited to talk to Chris.

1:01:54

uh obviously extremely storied investor, top of the Midas list, uh early Coinbase investor, continual Coinbase investor.

1:02:01

We got Brian Armstrong coming on later to tell his side, the founder journey of Coinbase.

1:02:06

But, uh, Chris has been all over the place in crypto for a decade, 15 years, 20 years.

1:02:11

I think he invested in Bitcoin back in 1994. And right. Yeah.

1:02:16

A lot of the people that we're having on today were early and right. Yep. Yep. Good thing to be.

1:02:18

Chris, welcome to the show. How are you doing? I'm great, John. Good to see you. Good to see you.

1:02:24

Also an early surveillance investor. Yes.

1:02:26

Um, good to see you guys.

1:02:29

Congratulations on all the success with the show. Thank you. Thank you.

1:02:30

Yeah, it's been a lot of fun.

1:02:32

Um, where should we start?

1:02:35

Can you give us a temperature on the crypto markets?

1:02:37

It's been um up and down. Let them take a victory. Take a victory lap.

1:02:43

Let them take a victory lap.

1:02:44

I feel like you get I know the job's not finished, but they they always twist you and twist your arm into doing podcasts when the market's down and saying, "Oh, you got to hold you accountable and then and then and then where is Cara Swisser calling you when the market's up, you know?" That's a good point. That's a good point.

1:02:58

By the way, can you guys hear can you guys hear me? Okay. Yeah. Yeah, you sound great. Okay, great. Um yeah, good.

1:03:01

I mean, it's uh it's yeah, it's been a it's been a long uh journey as you guys uh pointed out.

1:03:08

Um I think that uh you know, we had a lot of challenges the last uh four years.

1:03:12

years. uh regulatory challenges with the last administration and that looks like it's trending much better now with the new administration is sort of more pro tech and I think we have a lot of momentum in Congress um and that's a big deal because that created a lot of headwinds um so that's great and uh and then also like the kind of core

1:03:30

infrastructure and we can I don't if you guys want to talk more about it but like you know the like so for example one of the things happening right now are stable coins are really taking off so like last month it was something like two trillion in stable coin volume which is more than trill trillion with a T which is more than Visa. Um and so you

1:03:43

Um and so you know quite a lot of volume and that a lot of that's due to the fact that the infrastructure so Salana, Ethereum and so forth has gotten really good. Yeah.

1:03:53

Um so you can now send an arbitrary amount of money anywhere in the world for under one penny in one second.

1:03:56

But that took years and years of work investment uh you know founders technical folks doing a lot of work. So that's great.

1:04:04

Um and so there's a lot of good things.

1:04:06

I think that um you know there's there's a lot of challenges too but but uh but overall it's been uh it's been fun.

1:04:13

Do you think that the narrative around stable coins is still going to morph into micro payments for the internet?

1:04:20

Ben Thompson was talking about this with MCP.

1:04:22

It's not in the standard but you could easily imagine that getting worked into the second version of the standard.

1:04:27

At the same time obviously just global remittances has always been a huge category.

1:04:31

has always been a huge category. it is the one category that I used stable coins for years ago and it it felt very real in that moment even while people were were saying oh this is useless it's it felt like okay this is the value um but I'm interested in like kind of the next application of stable coins and then the one after that yeah great um so I think just maybe briefly to the way to

1:04:50

think about stable coins is today we don't really have a global payment system or global financial system we have you know 195 countries each one has many different banking systems when you send money uh to another country like let's say you wire money Like actually we've had this experience at the firm where we wire uh investment and it ends up going through like a bunch of humans and paperwork. It's really just a mish

1:05:08

It's really just a mish mash of systems.

1:05:10

And so the way to think about stable coins is similar to how for those who are old enough to remember text messaging was like this at one like in the 2000s.

1:05:17

You would send a text message and it would say you don't have a plan to send to Canada.

1:05:19

You got to sign up and it was all these different systems.

1:05:22

And then WhatsApp and FaceTime came along and they built this sort of what they call over the top global network, right?

1:05:27

So think of sort of stable coins and blockchains as an over-the-top network.

1:05:30

It's a it's from day one global um low fee credibly neutral programmable uh payment system that just sort of works everywhere that that's kind of the simple way to think of it.

1:05:41

Um and so as you mentioned um you know one of the obvious benefits is just crossber and that's where a lot of the uses are right now and so for example like SpaceX has a program where they move you know they'll sell a Starlink in I think it's like some south like Brazil or something and then they'll immediately you know use stable coins for so-called treasury management.

1:05:56

This is one of the kind of growing use cases that that folks like Stripe will talk about.

1:06:01

Uh remittances, you're sending money back home um uh you know from from the US to you know whatever some developing country um countries where the currency is volatile and they want access to dollars or euros.

1:06:12

Um and then as you mentioned John the the idea that because and actually I encourage those who are interested to go listen to the Collisons.

1:06:19

They were an all-in podcast a few weeks ago talking about this.

1:06:21

what they're actually say they're really excited about is less the low fees and more the programmability as you just described.

1:06:27

Um and so you can do so this is like one obvious thing is you know invoice fraud.

1:06:31

So people will send you know these these faxes type things that's really oldfashioned where they'll say like here's my wiring instruction and if you guys if you've done this you'll say like please make sure you call first but of course calling doesn't work in an age of AI because it could be a fake voice.

1:06:44

Um, and so you know what what Stripe was excited about is because blockchains are programmable, they can have a full kind of reputation system on top.

1:06:52

So they know like this is a valid place to send money to for your invoicing system, right?

1:06:56

So you can program it as you mentioned microp payments, right?

1:06:58

Now that you can send money for one penny, that unlocks a whole bunch of use cases.

1:07:02

So machine to machine payments every time you're doing an AI API request, as you mentioned, MCP, right?

1:07:07

So like why should MCP I would expect would have down the road a payment standard, right? And AI agents.

1:07:13

So you imagine a world which I think we're headed to pretty soon in a couple of years where you have all these different AI agents running around.

1:07:18

I'm hey I'm advertising I can program I can I can write your essay for you.

1:07:22

I can you know do your homework whatever and they're all sort of advertising their services.

1:07:27

And then you sort of imagine other agents coming along and negotiating and and you know pennies getting transferred back and forth and this big kind of you know economic um uh you know kind of mishm like kind of collection you know uh on top.

1:07:39

So the web moves from like these kind of sign up forms to agents sending money automatically and we think that would be powered by most naturally powered by a global uh you know uh low fee uh programmable system like blockchains. Yeah. Yeah.

1:07:54

How has I'm super curious to understand how uh your guys's lobbying efforts have evolved over the past six to 12 months.

1:08:05

We went from, you know, uh, a sort of, um, coal, a a large coalition of people trying to basically, you know, block crypto from getting real adoption and traction in the US to suddenly ETFs being approved and things like that.

1:08:19

And I imagine that's kind of changed your guys' strategy on the hill.

1:08:22

So, I'm interested to hear how that's evolved. Yeah.

1:08:26

So, that's a So, I' I've been doing uh, you know, we sort of I I saw Mark Mark Andre on on you guys.

1:08:31

I think it was a week or two ago.

1:08:33

I watched that and um nice he was talking about a little bit.

1:08:36

Mark and I have been very involved in this and and by necessity originally like four or five years ago um and then and then over time realized just how important it is to engage.

1:08:43

They say in in Washington they like to say if you are not at the table you're on the menu. Yeah.

1:08:48

So so you you don't want to be on the menu.

1:08:52

So, uh, you know, I've been going sort of like once a month and Mark has too and and just and really just kind of trying to explain our our perspective because we feel like, um, the the interests of startup like so start most startups don't have the resources to go to DC, right?

1:09:05

And of course big tech companies do and big banks do and all sorts of other big entities do.

1:09:10

And so our kind of logic was um that we're one of the few entity you know kind of organizations that has enough scale to have a government affairs team um who represents the interested of interest of startups.

1:09:22

And so we go and we say look we represent small companies and here's what they're interested in.

1:09:25

So for example they they want to have clear guard rails and rules around blockchains.

1:09:29

They want to have uh they want to have open source AI.

1:09:31

That's another really important issue to us.

1:09:35

Clear rules on like AI and copyright.

1:09:37

There's a series of things.

1:09:37

There's a series of things. um you know having a single federal framework and not a 50 state laws on a lot of these things and so forth right and so we go and we kind of advocate for that um we've taken a bipartisan approach from the beginning um we think that's very important I mean look just one is to get

1:09:51

we think the way you really build industries is legislation if you think back to the internet that was built on really on the 96 telecom act if you know and had things like section 230 which you know you may know is now a contentious issue had section two I like to say section 230 had been uh you know administrative guidance instead of legislation. It would have been a

1:10:08

It would have been a political football every four years.

1:10:09

It was built into legislation.

1:10:11

And so you could section 230 is what enabled marketplaces, social networks, and so forth to build reliably on the internet.

1:10:17

So we've always felt that both for AI and for crypto, we want legislation that provides clear rules, pass for innovation and and uh and really eliminates or mitigates or eliminates, you know, all all the kind of bad use cases and bad actors.

1:10:30

And so that's always been our approach. It's been bipartisan. That's for legislation.

1:10:32

You need bipartisan first of all.

1:10:34

And secondly, you look like the Democratic party has like most people sort of think, you know, Republicans are pro crypto, Democrats are anti. That's not really true.

1:10:40

Like we just had a uh last week a Senate sort of it was a procedural vote on this stablecoin bill and I believe there were 17 Democrats who voted for it.

1:10:48

Um you know, which is significant and I think you know our view has been we want to kind of you know shift the Democratic party back to the values of Obama and Bill Clinton when they were prot Democrat thing that happened the last years.

1:11:02

I mean, the interesting thing about the lobbying is that I looked at the I looked at the donation dollars that were coming from crypto aligned people and crypto funds and it was split almost exactly 50/50.

1:11:12

Like the entire crypto community really did go super bipartisan with the spend and obviously the Republicans won.

1:11:19

So, it feels like a Republican issue like right now, but I it doesn't feel like it's going to remain that way.

1:11:24

Um, on the issue of government, I'm interested to know uh maybe stable coins are a good example, but just general crypto adoption.

1:11:31

adoption. um how do you bucket how do you think about the adoption uh across government B2B or just direct to consumer because when I think about stable coins for example there's people that want to pay people individually but there's so many ways that you can just

1:11:47

tuck stable coins under some business like with the AI thing if you get anthropic open AAI Google Microsoft using stable coins in an agentic application the user might never know that I'm paying a fraction of a cent to access a Wall Street Journal article it just happens and I'm not even aware. So

1:12:02

So what are the key drivers for the different uh the different constituencies and then the different applications and how do they fit together?

1:12:10

No, that's a great question and like I have a broader kind of framework I like to talk about. Yeah.

1:12:15

Which is sort of I I sort of like to distinguish technologies between what I call inside out and outside in.

1:12:18

And so inside out of things that sort of start with established institutions like AI to some extent is like that you know the iPhone was like this.

1:12:24

It came out of Apple a very established institution.

1:12:26

AI came out of you know Stanford and so forth.

1:12:29

forth. Um whereas crypto very much you know bitcoin started at the fringes right and sort of like open source software and there's you know other kind of tech movements have started at the fringes and it sort of worked its way in right so stablecoin started for the main use case was settling you know crypto trades you know seven years ago or

1:12:44

something and then over time you started to see more and more like you know payment providers in Argentina for example and that you know sort of more more kind of moving to the center now stripe you know I think of stripe is is very much probably I think the smartest a lot of people think the smartest one of the if not the smartest fintech company is all in on it. You know, they

1:12:59

You know, they did a billion dollar acquisition bridge to to get, you know, to ramp up their efforts.

1:13:04

Um, I think the main gaining factor like I speak to a lot of like what I would love to see is a world where you have banks and, you know, asset management firms and every payment provider as you described, John, like behind the scenes.

1:13:15

It's just sort of it's the substrate.

1:13:16

It's the infrastructure, right? It's like HTTP or SMTP.

1:13:19

It's just this thing that exists.

1:13:21

Um, a they also regulatory clarity piece, right?

1:13:26

because they want that assurance because they're look they're riskaverse.

1:13:28

We just had four years of kind of lawfare against the industry.

1:13:31

Um so that that's why I think that's really like honestly like I probably spend more than half my time on that now.

1:13:37

Like that that's just kind of the key.

1:13:39

There's two just say there's two big kind of bills that we're that we're advocating for. There's stable coins.

1:13:43

There's one called market structure that's just coming forward in the house now which is also to kind of clarify more broadly on tokens.

1:13:48

But I think that's the main thing right now.

1:13:50

I think and I but to your point exactly I don't think most people ultimately will will think of even the word stable coin.

1:13:55

And I think it'll be like digital dollars um you know that like for the for the average person right develop an industry term like ERP people interface that they don't know and like actually but we'll see like like we have a fintech group at the firm that's not crypto I don't if you know the folks like I think you've interviewed Anish

1:14:11

and you know all those folks um and you know they like crypto but they're not like crypto and they'll tell me now like it's become pretty standard in the stable in the fintech stack that people will use stable yeah you're sorry one you're like a three person startup and like boom you push a button and you 190 countries. That's very different than

1:14:26

That's very different than the old days. Sorry.

1:14:27

I want to get your point of view on the competitive forces and dynamics right now because we have startups which there's entire subcategories.

1:14:35

You have hyper decentralized, you know, crypto companies.

1:14:39

You have sort of hybrid companies like maybe bridge that are kind of sitting in between fintech and uh and crypto rails.

1:14:46

And then you now have big institutional players that are coming in.

1:14:50

maybe they brought ETFs to market to start and then now they're thinking about, you know, stable coin applications as well.

1:14:57

How do you look at the market and and what kind of advice do you give to portfolio companies that are trying to figure out who they are, whether that's fully decentralized or some type of hybrid uh or or or so on? Yeah. Yeah.

1:15:11

I think that that's a great question.

1:15:12

And I think that I mean the the the you know the the point is not for like decentralization and kind of this new architecture of blockchains for its own sake.

1:15:20

The point is they have specific benefits.

1:15:22

So like why why would one build on a blockchain like Ethereum or Salana as opposed to a traditional you know um on AWS like a traditional architecture and the answer is by build you know when you build the way I like to describe it uh most simply is blockchains allow you to build digital services that remove the intermediaries.

1:15:39

So you remove so for example stable coins you have no intermediaries that are taking fees.

1:15:42

You don't have the banks and the payment providers and the payment networks right that take the all the different layers of fees.

1:15:47

So that's an important benefit is you're building these you know you can build social networks without fees.

1:15:51

You can build games without fees.

1:15:52

You can build AI systems without fees right without fees.

1:15:56

It's like very low like sub like couple basis points.

1:15:59

basis points. I actually have it if for those interested I wrote a book read right Own and I have a chapter on take rates where I go through this in detail but it's essentially you're going from like 30% in the app store you know 100% in Facebook and 50% on YouTube to like five basis points or something right so um or you know two and a half% for

1:16:15

payments and so forth so um so so the first question is why would you want to build on them the other one we mentioned before is programmability you know you can do all sorts of cool stuff on top um and so I think it to your question I think it depends like like ultimately I think of startups is you want to work backwards you want to say what do you want to do for the world. What kind of

1:16:29

What kind of service you want to provide and then you work backwards and you say how do you want to build that? Right.

1:16:33

In some cases that means you want to build something on a blockchain like a pure service like a protocol we call it with a token and so forth.

1:16:39

In other cases you want to build more traditional software that may be like for example like you mentioned that that bridges between a bank and an asset manager and a and a blockchain system. Right.

1:16:48

system. Right. So I think it ultimately we think of it through that lens as kind of now as an investor I I skew towards things I like things with for example network effects because it's just they can be very I' my career I found that network effects can be very powerful right you yeah invest in something it grows it kind of has a natural kind of

1:17:04

defensibility and kind of gets better as more people use it um so there's just kind of different lenses you can look at it I would the last thing I would say is to your to your listeners I know you have a broad audience I think that the crypto space right now the real shortage we have is startup talent um in that there's a lot of obvious good ideas where there just aren't many people pursuing it. Um, so I think it's

1:17:22

pursuing it. Um, so I think it's actually the opposite problem than most like then you might have an AI right now where I imagine an AI it's an amazing technology and and deservingly people are excited as they should be excited about it but you probably for every idea have I don't know 50 good startups pursuing it in crypto I think we're undercompeted like we have under too too

1:17:39

little competition honestly like so I would say to your listeners if you're a smart person thinking about doing a startup I think there's a lot of white space right now if you're in AI pivot to crypto we heard it here first or do both we love AI it is my how how um are are you sure you're perpetually going to be unsatisfied with the technological progress because you understand the full potential, right? Where where are you at

1:18:02

Where where are you at right now?

1:18:04

You know, we had Bology on earlier.

1:18:06

He's, you know, was was very bullish on ZK proofs and and what's coming down the pipeline there.

1:18:10

And there's obviously Yeah.

1:18:12

prediction markets during the election.

1:18:13

It was like, wow, this is a completely no one was talking about this during the Bitcoin white paper and yet crypto has created something that everyone gets value out of in one way or another. Yeah. Yeah.

1:18:24

I think I I think we are still, you know, I think of these these technology things always go in S-curves.

1:18:31

We're clearly still at the sort, you know, somewhere in the bottom of the S-curve.

1:18:34

S-curve. Like I think there's just a lot more growth and just like user base there's something on the order there's tens most of these applications I'm describing have you know up to 50 at the highest end probably 50 million users which is 1% of the internet so it it's still very early in you know poly market is doing incredibly well but I assume

1:18:51

it's still in that kind of sub 1% of the internet it's not the internet has you know five billion people now right so we have a long way to go I think a lot of the kind of core infrastructure is now as of a year and a half ago kind of good enough you know I think a lot of these technologies have that characteristic

1:19:05

where you have kind of in you know whether like neural networks only got good enough I don't know whatever circa let's call it you know something the 2010s because of the you know the Moors law and GPUs right and so you know iPhones once you had capacitive screens and semi whatever processors and so forth um I think blockchains I think we

1:19:22

no longer have infrastructure as an excuse anymore like now it's about building applications about getting regulatory clarity and I think we're pretty far along there I think we have a long way to go fully exploring kind of the IDMAS and all the different cool things you can do um and and you know and then bringing it to billions of people is the goal. How have you been

1:19:37

How have you been advising uh crypto emerging managers?

1:19:39

My my one of my favorite I'm I'm going to kind of butcher the stat but uh apparently like the the sort of median crypto fund massively outperformed like the median venture fund for most of the last decade.

1:19:54

And so I thought that that was this beautiful narrative violation because you know people traditional venture would love to poke fun at crypto VCs yet they were sort of like systemically outperforming uh the other party.

1:20:06

But but what what kind of um general guidance are you giving to uh somebody that maybe was an active trader and wants to get more into the actual you know kind of venture side of the game?

1:20:19

I I look I've been so you know I've I've invest so I've been investing in in venture funds and crypto funds for a long time.

1:20:25

just sort of after I sold my first company.

1:20:27

In fact, Mark Mark Andre and I have done it together for a long time.

1:20:30

Um, and have been doing crypto funds since gosh probably 10 years and just consistently and I'm still very bullish and to your point I think that's probably correct like on the on the, you know, the data like they've just they've done and I think it's just it's just traditional finance in the sense of you have to, you know, non-conensus, right? Right.

1:20:46

Like as much as we hear about crypto, it's still very non-conensus.

1:20:50

still very non-conensus. a lot of a lot a lot of venture funds just simply maybe they'll have a little bit of Bitcoin but they'll otherwise they'll rule it out if there's tokens and things um you talk to fund to funds um they a lot of them will say we have a no crypto rule you know sovereign wealth fund so all the kind of

1:21:05

giant pools of capital that fund the venture world and so it's still kind of this considered this kind of weird sideshow um obviously the past doesn't predict the future and so forth and we don't know how things will play out but it's still very non-conensus I think from a from an financial investing point of view the broader crypto world. So I I

1:21:20

So I I look I believe that's where the opportunities are in in in venture investing.

1:21:26

Um obviously you have to also be right and time will tell but it's I think it's still much more non it's surprisingly non-conensus in the investing world I I think to to this day despite the performance.

1:21:38

Can you explain a little bit of the dynamic of how venture fits into the life cycle of a new crypto company these days?

1:21:45

Because there's liquidity available from retail in some cases.

1:21:50

Um there's some companies that are going to be profitable very early because of their you know uh insane product.

1:21:57

We had a lawn from from pump on earlier and that's classic example able to be very efficient and I think we've seen uh on the other side you have companies like hyperlquid that got out and and have a token very early.

1:22:13

So I'm curious yeah how how you think of the capital life cycle. Yeah. Yeah.

1:22:15

So we I mean let's see if I can answer that.

1:22:19

So like one reason we started a separate crypto fund originally like I guess 2018 was so that we could um before that I was doing like crypto investing. Yeah.

1:22:28

But it would always get these questions from the LPS and like what is this? Is it equity? Is it tokens?

1:22:32

And so create a separate crypto fund with the basic idea was we have maximum flexibility.

1:22:35

Um and and we went to the LPs and we said look this is going to be different and here's the idea and here's and a lot of them opted out. Some of them opted in.

1:22:41

Um but we were very clear upfront what it was.

1:22:43

And so what we what we think of it is we can do everything from we can buy bit buy bitcoin or something just directly which we do.

1:22:51

Um people see our funds and they assume it's all ventures not like we do a lot of you know just buying like tokens that we think have have um upside.

1:22:59

Um we also do a lot of we can do equity investments like a coinbase.

1:23:01

It's just a classic equity investment.

1:23:03

We have a bunch of those that you know the goal would be to someday IPO.

1:23:06

Um they could be cash flowheavy ones that that do dividends like the ones you're describing Jordy.

1:23:12

describing Jordy. Maybe some of those or maybe I don't know what their plans are at pump maybe they IPO maybe they dividend maybe they buybacks right if you have cash flows you have a lot of options and then the third one which is actually you know one of our core ones is you'll you'll do an equity um a project will start as a as an equity

1:23:27

investment but then over time we'll launch a token and the equity investors get sort of praa uh rights to those tokens and that actually that's kind of that was sort of the new thing that we really wanted to lean into back in when we started the crypto fund that was a new idea um that you know we helped kind of pioneer that I think um and that was like the warrant structure you guys Yeah. Yeah. It's very simple. It's a Yeah. It's very simple.

1:23:49

It's a term sheet with two extra things that has essentially token rights. Yeah.

1:23:52

And it can be a warrant and there's different ways to structure it.

1:23:55

Um and what's nice about that is it you know one of the reasons startups work so well is that they're max like when they work is that the investors and the founders are fully aligned.

1:24:04

So before that structure existed, I don't know how deep you guys want to go on this, there were these things called sa saffs and like these kinds of things where you do token purchases and the problem is it created all these weird incentives where the founder would try to create a token just to do something.

1:24:16

What we what we believe very strongly is alignment between the investors and the founders.

1:24:19

investors and the founders. And so there's sort of this this equity structure with token rights or token warrants is one where if they decide to they can stay an equity company and they can do you know just do traditional kind of go for profits and things or they can

1:24:30

create a token or they can create two tokens or whatever is best for that service they're trying to create and in in in whatever way that they eventually um decide to you know whatever business model they pursue they the investor will participate kind of prood alongside the founders. What happens to the corp in

1:24:45

What happens to the corp in that scenario where they launch a token, the token grows and the community is and like the like the asset is now controlled by the token and the cororp still exists.

1:24:54

Are there roles for foundations and nonprofits and and and different transitions that could happen?

1:25:00

Yeah, it's a great question.

1:25:00

A lot of times they'll become um they'll just become like kind of one software provider in the network. Oh, sure.

1:25:06

Like um you know they're so so for example um you know think of the Ethereum Foundation.

1:25:12

I don't know if you guys know the relationship between Ethereum Foundation and Ethereum. Ethereum is a network.

1:25:16

Ethereum Foundation, you know, they help make a little bit of software.

1:25:19

They give some research guidance, but they don't control the network.

1:25:21

They don't, you know, it's just like kind of in the same way this is sort of a foundation that has some kind of a bully pulpit.

1:25:27

Um, sometimes they can have a separate business model.

1:25:29

Um, you know, so like unis swap is a is a decentralized protocol that we're investors in sort of a a think of it as a decentralized New York Stock Exchange or something.

1:25:40

Um, that's doing very well.

1:25:42

well. multiple trillions and trillions in volume traded and they separately so they spun off this protocol and then they separately have a website that they operate which is what the company does and the website is now I believe it's sub 5% of the volume on the protocol but

1:25:56

it's still 5% right and so they're just one front end to it and so that I think that's probably one maybe one of the best examples of what you're asking John that makes a ton of sense Jord where what are you expecting to see out of the kind of c real world asset category over the next couple years. It feels like

1:26:12

It feels like it's it this year, at least to me, it's felt like we're days or weeks away from some pretty highprofile assets coming on chain.

1:26:23

Uh I'm curious how you think about the category broadly. Yeah.

1:26:26

Um I mean, I think of stable coins as sort of the initial real world asset, right?

1:26:31

the initial real world asset, right? So you have dollars in the bank account and then the next and then and then the great thing about that the kind of adoption there and hopefully all the regulatory clarity we're getting is that

1:26:39

will be a natural stepping stone to you know you have Robin Hood talking about stocks you have Black Rockck talking about you know treasury bills um would I think it would be nice if anyone in the world I think it'd be good for the US

1:26:51

and I think it'd be good for the world if anyone in the world could buy you know four and a half% treasury you know interest treasury bill right and have it secure and easy and permissionless and low fee uh I think it's you know good

1:27:02

for our you know the US the popularity of the dollar and I think it's you know it'd be nice for somebody who has a volatile currency to have access to those um um so you know stocks stocks bonds and then you can imagine you know um all these sorts of so-called dark

1:27:17

pools so you know still a large part of finance is people using Bloomberg and calling each other and a lot of that you know like trading bonds and uni bonds and corporate bonds and things like that there's a lot of interest from the banks

1:27:28

to think about ways to use blockchains uh to create essentially marketplaces there you know maybe permissioned marketplaces where only kind of certain participants can participate for them the benefit is you know why haven't they created a network like a marketplace

1:27:41

before because um they you know they they don't trust each other they don't want like who's going to create it is Goldman going to create it and JP Morgan's going to use it they don't trust each other you know they don't trust startups to do it because then the

1:27:51

startup will start taking big fees they've just sort of kept it informal and and by phone um and so in a way a blockchain kind of solves a political problem of getting these 20 entities or 100 entities who previously wouldn't kind of coordinate together. I think

1:28:02

I think that's one broader way to think of blockchains is like it's it's like if AI, you know, is solving all the problems in the world that that they need more intelligence, right?

1:28:12

Blockchains try to solve the problems in the world that need more coordination, right?

1:28:15

Or more, you know, kind of collective um uh collective action getting a bunch of, you know, blockchains are fundamentally social technologies and it's about getting a bunch, you know, that's what money is ultimately social, right?

1:28:25

getting a lot of people to agree on a standard and to and to use the the same the same systems and tools.

1:28:31

Um, and so similarly with real world assets like that.

1:28:34

And then there's other interesting ones to your question like we have one called Story Protocol, a project we're investors in that's putting intellectual property on blockchains, um, and letting people, you know, do capital formation and licensing and so forth around, you know, so you create a new, you know, superhero theme thing and someone wants to make an AI remix of it and like how do they AI really important, right?

1:28:54

So we think a lot about like in an AI world like how will you know creators get paid, how will IP work, how will how how will money flow on the internet in a world with abundant content, right?

1:29:04

Um and and I think we think blockchains have an important role to play in that.

1:29:07

How would you like to see the industry and kind of the world collectively try to solve social engineering hacks?

1:29:15

Feels like Worldcoin is is one yeah potential solution there but I imagine there's a bunch of other sort of businesses that you could fund and then the whole regulatory piece as well which is we sort of force these large companies now.

1:29:31

Bology described it as like you know to to basically hold these you know honeypotss of of of data and there's probably got to be a better a better way. Yeah, great question.

1:29:40

So you mentioned whirlcoin I'll just say briefly.

1:29:44

So what worldcoin does is is what we call proof of humanity.

1:29:46

So, it's a way for you to get a cryptographic key that proves you're a human.

1:29:49

And the idea is in a world, you know, as we're moving too quickly with AI bots and deep fakes and so forth, it was useful to be able to say, "Hey, I'm truly a human."

1:29:55

And, you know, I can get a imagine a blue check on Twitter that actually lit, you know, cryptographically means you're human and not just that you paid $10.

1:30:04

Um, and we think that would be useful.

1:30:06

Um, it's sort of a missing, you know, kind of building block, so to speak, for the, you know, for the internet that I think we all want.

1:30:11

And so, one thing we think about is like what are those missing building blocks?

1:30:14

You mentioned zero knowledge proof.

1:30:15

Zon knowledge proofs are I think a really interesting cryptographic breakthrough that I think people underestimate in the broader world how important they are.

1:30:22

Um what they let you do is um is essentially um uh prove things.

1:30:28

So I can prove you know like a bank needs to know I'm a US citizen let's say or I'm you know have a certain income or certain profile of you know health data or so forth.

1:30:36

know health data or so forth. What zero knowledge proofs let you do is I can prove that to the system without revealing any of that like my actual you know where I can it can basically send me a a a cryptographic kind of a game that says prove that you're a US citizen and I can prove it back without

1:30:53

revealing all you know my name and all the other kind of stuff that might that might dox me right I mean I just you know we just saw like you know day after day we see these giant hacks KYC hacks so like at this point you should just assume all of information has sadly has been hacked many times and I you know having social

1:31:11

security as like your unique ID and password is just like a ridiculous system in this era right so we and meanwhile we have these you know we carry around these these supercomputers with with you know biometrics and advanced cryptography like why aren't we using it right the problem is not the is not the the the tech the core tech the

1:31:29

problem is coordination again like it's how do you get everyone to agree on what the standards are right and that's why I think blockchains can be important because it's really the the all the pieces are there, but how do you kind of put them all together in a in a broad kind of, you know, standard or coordinated system? Amazing. That's great. Thank you so much Amazing. That's great.

1:31:44

Thank you so much for coming.

1:31:46

Love to continue for Yeah, we could go way longer.

1:31:47

We need to have you back. Appreciate it.

1:31:48

Congratul It's great to see somebody at contrarian idea that a tech show that actually likes tech. What a concept. I'm very bullish on it. So, thank you. Thank you so much.

1:31:59

Uh we'll talk to you soon on Chris. Have a good one. Bye. Bye. Bye.

1:32:00

Uh next up, we have Kyle coming on. Yeah, play on board.

1:32:04

You know the we're talking to some big people.

1:32:06

Just because he's the number one guy on the mightest list doesn't mean you can't hit him with the ash in a hall.

1:32:09

You can't hit him with some sound effects. I should have.

1:32:11

But we have Kyle Smani coming on.

1:32:13

Let's bring him in the studio. How are you doing, Kyle? Welcome to the stream. Good. What's up, John? What's up, Jordy? Pleasure to be here. It's great to see you. What's happening, dude? I'm doing great, guys.

1:32:25

Uh actually in Vegas right now.

1:32:27

I'm actually looking at the sphere out my window in my hotel.

1:32:28

It's Bitcoin Vegas going on. It's a fun time.

1:32:30

crypto company sponsoring the sphere right now or or maybe we TVPN should buy the inventory this very moment.

1:32:36

I think I think y'all's faces would look really good at 400 ft wide and tall.

1:32:41

I think that we should just be live broadcasting this there.

1:32:45

That's the that's the real alpha.

1:32:47

Um it's great it's great to have you on.

1:32:49

Um what uh bunch of places so I I don't even have context.

1:32:53

What what event is happening in Vegas?

1:32:54

I think Katie Han is there as well. Is that correct? Bitcoin conference. Bitcoin conference. Can you break it down? What are you expecting?

1:33:00

what's happening on the ground.

1:33:02

Yeah, it's Bitcoin Vegas is going on.

1:33:04

Largest crypto conference ever.

1:33:06

More than 30,000 people at Venetian Palazzo.

1:33:08

Uh Vance either just spoke or speaking shortly. Um David Sax is here. Bo Hines is here. Ross Albert is here.

1:33:16

David Bailey, Michael Sailor, tons of tons of folks uh are all here.

1:33:20

Senators here, Lumis Hagerty, a whole bunch of other folks.

1:33:22

So, uh politics is here, Wall Street is here, industry is here. Yeah.

1:33:26

Uh very very exciting time in crypto.

1:33:28

And what are the key indications or news items that people are looking for?

1:33:33

Are there people still hunting for uh different companies to establish Bitcoin reserves or news from the government?

1:33:38

Like what are the unanswered questions that people are looking for hints as to which way they'll break?

1:33:44

Um I think probably the biggest questions are how is the Bitcoin strategic reserve going to be funded?

1:33:52

Um, you know, Senator Lumis has proposed uh the Bitcoin bill, which would which proposes open market purchases authorized by Congress.

1:33:59

Um, that hasn't made it very far in Congress, but it's at least in the public domain.

1:34:03

Um, you know, when the executive order was signed by President Trump a few weeks ago, um, it said that they can kind of fund the strategic reserve using revenue neutral mechanisms.

1:34:13

And so, there's a lot of discussion today about what exactly does that mean? Mhm.

1:34:17

Um folks like Bohe and David Saxs and the administration are are certainly working on figuring all that out.

1:34:22

They haven't shared anything publicly yet, but there's a lot of discussion about that.

1:34:27

There's a lot of discussion around Bitcoin L2s.

1:34:29

These are kind of ways to bring DeFi to Bitcoin um with like two or three or four asterisks after that end of that statement, but like a lot of people are trying to figure that out.

1:34:38

Uh and then obviously the kind of hot subject of the moment is these Bitcoin treasury companies.

1:34:43

Uh the most recent of which I believe is DJT.

1:34:46

um which is I think it just announced a two and a half billion dollar offering. Yeah.

1:34:49

Wait, is that Truth Social? Yeah. Yeah.

1:34:51

Truth Social has GameStop announced today GameStop announced large purchase. Yeah.

1:34:58

In some ways all the regulatory stuff happening right now feels like the kid who didn't do his homework until two minute or two minutes before the exam or something and is just cramming because crypto has been an important industry for a decade.

1:35:10

You know, people have been investing in this category for a long time.

1:35:12

But now it's like the government's like, "Okay, let's figure all this out."

1:35:16

Is that just because we've really finally gotten to adoption and breached the technical milestones or or do we and and I guess the question is like do you expect us to get through this regulatory kind of crunch period and then go back into build mode and if so like what are the technical milestones that we're that we're trying to build?

1:35:36

What what's coming on the horizon after we get through the political arc that we're in right now? Yeah.

1:35:41

So I mean the reason we're here where The reason we're kind of in this moment is like a lot of stuff building over the last 10 or 15 years and was really accuated by the Biden administration.

1:35:50

Um I I don't think our industry would be as politically relevant and as politically active uh if it were not for the Biden administration so strongly trying to press on the the scales against against industry and industry really mobilized against the Democratic party in a meaningful way.

1:36:09

And my sense is that most political strategists probably will tell you that like on the margin the thing that moved the election in both Congress and then the presidential in 2024 was the crypto industry in terms of dollars, reach, anger, PR kind of etc.

1:36:27

Um that now has kind of swung from uh very uh frustrating administration to extremely accommodating and welcoming administration that we have today.

1:36:36

the work that Bill Hines and David Tax are doing in the executive branch is phenomenal.

1:36:41

We're seeing awesome stuff out of DOJ, SEC, and CFTC on an almost daily basis now.

1:36:44

Uh and then the other big item is Congress.

1:36:48

Um there's the stable, you know, uh the the Genius Act in the Senate today.

1:36:52

And then there's market structure that that's coming pretty shortly.

1:36:54

Um all that stuff is happening.

1:36:57

Um so I think the reason we are where we are is like uh like the pendulum is like kind of swung from one extreme to the other.

1:37:05

I feel pretty good that we're going to kind of basically get industry is going to get I think most of what it wants in the next few months.

1:37:11

Um and that just then provides the foundation for crypto to really permeate all of software.

1:37:16

Um crypto systems are at their most basic level just systems for moving money around.

1:37:22

Um and they're much more better and efficient and global system uh systems for doing that.

1:37:25

And so my my hope is that once we get these final things done from Congress and then the executive branch, then you see Facebook, Google, Apple, Microsoft, etc. Yeah.

1:37:36

Embed crypto into all of their respective operating systems.

1:37:38

Um you have AI agents, you know, trading with crypto, whatever.

1:37:41

And now crypto financial rails truly permeate global software.

1:37:46

Do you think there'll be a realignment from the left around crypto or do you think like because it did feel like it was bipartisan for a little bit or at least it was just ambiguous on both sides then it kind of broke right but it's such a big industry that it feels like maybe the Democrats might want to say hey like we're it's a it's a big tent we're we're also pro crypto.

1:38:10

Yeah, I mean, um, there's certainly a handful of prominent Democrats who have been pro crypto, folks like Richie Torres, Senator Jillbrand, there's some others.

1:38:18

I'm sure I not remembering their names off the top of my head.

1:38:19

Um, and we've been donor, although we're primarily donors to Republicans, we are selectively donors to to some of those folks that I just mentioned.

1:38:25

Um, the party as a whole, I would say, has not really realigned and embraced crypto.

1:38:34

And I I say I'm fairly surprised by that.

1:38:35

It just seems kind of like a self like an own goal here. Mhm.

1:38:37

Um there's a handful of Democrats who like ideologically hate crypto, most notably Senator Warren.

1:38:43

Um but like the vast majority of Democrats um in in in in Congress kind of like don't care or are like pro crypto. Sure.

1:38:53

Um and so I I've been surprised by the like lack of warm embrace. Makes sense.

1:38:58

Jordy uh uh mutual friend Jared Madfz asked me to ask you what are you excited about in crypto that no one else is talking about yet or very few people are talking about.

1:39:12

Um I am really excited for DPIN and this is a category that's been around in crypto for a few years now and we were very fortunate to help pioneer some of our early investments like helium.

1:39:24

Um but the deepin things are starting to really work.

1:39:27

Helium, I believe yesterday or the day before was their first day ever.

1:39:30

They had a million customers um on the Helium network in one day.

1:39:35

Uh Helium, for those who don't know, is a is a decentralized wireless network.

1:39:38

Anyone can stand up a hot spot in their house and provide wireless coverage and other people can like use your network and pay you for doing so.

1:39:45

Um uh we just invested recently in a very high-profile uh defend project called De0ero which basically is bringing private fiber to uh anyone who wants to pay for private fiber per bite of data and it's going to go live over the summer.

1:39:59

Um and it's going to tra it's going to really change low latency trading on on public blockchains.

1:40:03

Um there's a handful of other kind of major deepen teams like Hivemapp or Pipe Network and a number of others that we're involved in.

1:40:10

And I think these are, you know, crypto is fundamentally financial in nature, but like finance is hard for people to grasp.

1:40:16

And these what's cool about these deep pin use cases is that they are like fairly easy for for people to to understand.

1:40:22

Um and the first handful of those things are really starting to achieve escape velocity. That's great.

1:40:27

How'd you meet the Salana founders?

1:40:32

Um you I met Anatoli first.

1:40:32

I don't actually don't don't know who introduced me to Anatoli, but I was in uh uh San Francisco in April of 2018. Yeah.

1:40:38

And I was at a co-working space and I met Anatoli on a Saturday night.

1:40:41

Um and uh I was sent he had sent me the white paper for the proof of history and salon consensus white paper.

1:40:48

I remember I read it and it was absolute trash.

1:40:50

Um and I I was like I have no idea what this does.

1:40:55

Um but someone told me Anatoli was really smart.

1:40:57

So I met with him and a after meeting with him that the thing that really stood out to me was of all of the L1 f all of the L1 founders were like very academic in background and their pursuit and approach and Anatoli was the opposite.

1:41:09

He was like I hate academia.

1:41:11

I don't ever want to write a paper.

1:41:12

Um I don't ever want to solve an unsolved problem in computer science.

1:41:16

He's like my only job is to like let other people solve problems and then I'm just going to like apply their solutions to making my software go fast.

1:41:24

and his whole career at Qualcomm and Dropbox and other places was just doing that.

1:41:27

And I was like, I like this guy.

1:41:30

This guy does not sound like all of the other L1 founders.

1:41:31

Um, and so we we started to kind of back salon from very early on.

1:41:36

Obviously got to meet Raj shortly thereafter and rest is history. Yeah.

1:41:40

So I mean was was that investment did it feel like it was out of your sweet spot?

1:41:45

like were you stretching in terms of what you were pattern matching against or was it like delightfully contrarian in your mind?

1:41:52

Um I mean look at multifin was very young.

1:41:55

We were six months old at the time we kind of made that first investment and I don't think we had even a sense of like what is our strike zone or not.

1:42:02

We just kind of were like young and running as fast as we could and seeing what happened.

1:42:05

Um in hindsight I would say it like multicoin generally likes to invest in more blue oceans than red oceans.

1:42:13

Um, and investing in an L1 was certainly a red ocean investment.

1:42:17

Um, and so when we invest in in Red Oceans, uh, we just want to be like have a pretty pointed view on why the player we're betting on is is like the standout player.

1:42:30

Um, and as I was just saying like just at the founder level, Totally's background was completely different than than the other L1 founders.

1:42:38

Um there's a number of other things that kind of stood out but but that being the primary one I would say now with seven or eight years of history looking back I I don't think the Salana investment like stood out as being fundamentally like out of strike zone.

1:42:52

We knew we hated Ethereum.

1:42:52

We knew that like there was problems and we were looking for alternatives and lots of people were showing up saying like look I have an alternative and so in that in that sense it was like very kind of shot on goal.

1:43:05

What's been your success rate of identifying new metas like you know uh before other people?

1:43:12

It feels like in crypto if you're if people that are trading are trying to trade, you know, specific metas and then identify new ones, but as as a VC, you really need to identify things two three years sometimes, sometimes even more than that.

1:43:28

Uh otherwise, you're just going to be too late, right?

1:43:30

Once the thing is is already big, you don't necessarily want to invest in the fourth or fifth player in a category. Yeah. I I feel very fortunate.

1:43:39

We've been involved early in in a number of of I guess metas for lack of a better word.

1:43:45

Um first probably being like high performance blockchains being Salana.

1:43:49

Second uh probably being deepen starting with with Helium and Hivemapper.

1:43:51

Uh more recently we've been very uh focused on um privain privacy.

1:43:56

Um most people in crypto have been talking about zero knowledge proofs for god five seven eight years now.

1:44:02

Um we've scrapped all that and we've made big bets in fully homorphic encryption which is a totally different cryptographic approach.

1:44:07

Um, so those are probably the three like I think really big ideas where we were we were pretty early.

1:44:14

Um, and there's a number of other areas that are like smaller where I think we've been early.

1:44:18

Um, in terms of where, you know, the meadows we're like focused on today, um, I'd say it's like it's pretty obvious stuff, but like getting stable coins in the hands of people who want stable coins, we've invested in a number of P2P exchanges that make it possible for people in emerging markets in which have capital controls to get stable coins despite their local governments.

1:44:37

Um, and so that we that's a lot of lot of focus area.

1:44:42

And then we've been thinking about what are as more stable coins come on chain, what are the secondary and tertiary impacts of that?

1:44:49

And then we've been going along a lot of those things in both public and private markets.

1:44:53

The uh helping, you know, people with capital controls um get on chain is interesting.

1:45:00

It's kind of like crypto's outlaw roots in a little bit, but but very missionoriented is saying we believe in economic freedom.

1:45:06

they're, you know, willing to go in into certain markets and deliver that. So, very cool. Very cool.

1:45:13

Well, thank you so much for stopping by.

1:45:14

Uh, hope the conference is great.

1:45:17

Come back on the show anytime. Uh, enjoy.

1:45:19

Jordy John, thanks for having me. Awesome. Be here. Talk to you soon. Cheers. Bye.

1:45:26

Next up, we have Ben Pastnack.

1:45:27

Uh, founder I met years ago because we were both building in consumer packaged goods. He's gone on to crypto. I've gone on to media.

1:45:34

Um, but excited to get the update from him.

1:45:38

Probably has to be the most viral new crypto app. Yeah. In at least a year. At least six months. At least six months.

1:45:47

I'm excited to chat with him.

1:45:47

Uh, so Ben, welcome to the stream. How are you doing? Believe in something. Believe in Ben. Welcome to the show. Thank you. Good to see you guys. How you guys doing? It's good.

1:46:01

We haven't talked in a few years.

1:46:02

Uh, I'd love to just get the update.

1:46:02

I had no idea what a tear you've been on.

1:46:06

Yeah, we uh friend friend of friend of ours Dylan is here at the studio.

1:46:09

He's going to do a live interview later and he brought up he brought you up and John was like Ben Pastron like the we talked a bunch and then and had no idea he's so he's so locked in on on traditional tech that he had no idea what you were up to and then and then we explained of course.

1:46:26

So yeah, why why don't you actually just give me a g catch me up to speed on what you're building? Yeah.

1:46:29

Um well believe is a platform for belief and people empowerment.

1:46:34

So uh if you want to contribute something to the world, if you want to build something, if you want to create art, if you want to create a song, whatever it is, uh you can come to believe and raise the capital you need. Okay.

1:46:44

Break the the how how is this different than uh NFTTS?

1:46:50

What what technologies are we leveraging?

1:46:52

It's obviously somewhat cryptoreated, but then uh comp it to a Patreon for me.

1:46:56

Well, Zo, I'll give you some context.

1:46:57

Luke Metro, friend of the show.

1:47:00

I I believe he used believes that was believes John's familiar.

1:47:03

Yeah, I have I've interacted with this. Cool. Yeah. Yeah.

1:47:07

It's basically um we enable people to launch a coin on Salana super easily.

1:47:11

Uh you know the the tokconomics itself are pretty straightforward.

1:47:14

Uh what we kind of introduced to the space is like a fee uh that's collected uh yeah basically a trading fee and creators are able to raise money through that trading fee.

1:47:24

Um, and yeah, the the product went like super viral this past month.

1:47:28

It's only four weeks old uh because you can launch a coin directly from Twitter.

1:47:32

So, we're kind of tapping into uh the existing trend of builders like building something uh screen recording it, posting it on X and they can just tag Launchcoin to Launchcoin. Oh, yeah. Yeah.

1:47:43

So, you're even removing even more barriers.

1:47:45

You don't even have to go to the different website. No wallet or anything.

1:47:49

But I assume at some point you can interact with uh the blockchain at like a lower level through the actual app.

1:47:55

But the the the initial kickoff and instantiation happens all on X. Is that correct? Exactly. Yeah.

1:47:59

So you you launch an X and uh you know assuming your coin does well you can download our app uh link your X and uh claim your fees, edit your project details and uh we're also building kind of like an ecosystem for people to like integrate their coin into that product.

1:48:14

Um you know engage with different mechanisms and that's all through the app.

1:48:17

So what uh uh sorry what what is kind of like the optimistic use case here for uh someone actually using this to fund kind of a new idea or new concept because that there are places where you can go and get a grant for something but increasingly it's harder and harder to get a grant for for great art or even raise money for the next movie because of Hollywood and all these other dynamics.

1:48:41

So uh what what does a win condition look like for you?

1:48:46

Yeah, I mean I think it's a different depending on the industry you're in.

1:48:48

Um, you know, tech obviously has venture capital which is a pretty good system.

1:48:53

Um, I think it is evolving just because you know I I guess the big trend is you're seeing a lot of ARR MR and people's bios and I think thanks to AI uh you know engineers are way more efficient.

1:49:02

There's like less of a need to raise a huge amount of money up front.

1:49:05

Um so if you can like I guess bootstrapping is kind of in and this is just a great way to get started.

1:49:09

Uh so for tech I think that's uh the use case for other uh you know other industries like there isn't really a great way to fund raise for anything like you could start a gofundme um but those you know generally haven't gone too far uh I guess in you know some cases but pretty pretty mid mid outcome.

1:49:24

Um so this can lead to like massive funding uh you know for for those types of projects. Yeah.

1:49:30

Do you think that uh there should there should be a link between the token and the equity in a company that's eventually created?

1:49:37

I imagine at four weeks old, you probably haven't figured out that interaction because that's probably the most complex legal uh menagery you can imagine.

1:49:45

But uh talk to me about the long-term vision. Yeah.

1:49:49

Well, so when we ship them, we thought they would be purely like attention coins and speculative.

1:49:52

Um but that quickly changed because you know the first launches that did really well started integrating their coins into their product um you know introducing different like burning mechanisms.

1:50:01

So I think that uh the kind of way I view it right now is uh you know they're essentially like utility coins uh and you know depending on how I I consider ourselves to be like the Stripe for coins.

1:50:12

So we give developers the tools to like integrate their coin however they want.

1:50:15

Um but at the end of the day they're really versatile tools and they're going to come up with all different ways that kind of inspire us.

1:50:21

Um long term uh you know yeah the regulatory environment is rapidly shifting.

1:50:25

So I think that uh you know we're planting a lot of seeds today and uh depending on you know what happens here and it's looking pretty good so far.

1:50:31

uh you know you can do a lot more in terms of equity etc. It's very interesting.

1:50:36

Uh what's it been like building in crypto transitioning from uh it feel like to me watching what what you built with simulate from afar you know was always very high-profile always in the news um and more so than I think like a traditional uh CPG company.

1:50:51

So, in that sense, like just being good at thinking different and and capturing attention uh and leveraging that probably set you up pretty well for building in crypto.

1:51:02

What what what have been some of the challenges?

1:51:04

I imagine you're not sleeping a lot because every every time you go to sleep there's something something's breaking or someone's yelling at you or something like that.

1:51:12

But but what's it been like? Yeah.

1:51:14

Well, you know, it's not my first rodeo uh to your point.

1:51:16

And you know, prior to Simulate, I built a a social networking app called Monkey that has tens of millions of users to this day.

1:51:22

So I' I've got, you know, I'm familiar building consumer software.

1:51:24

I think to your point, yeah, the crypto stuff is 247.

1:51:27

So, uh, it's, you know, in most spaces, you have kind of room to iterate and make mistakes.

1:51:32

In crypto, uh, the market is less forgiving.

1:51:34

Um, so it's, you know, it's a tricky balance because you obviously can't be stagnant, but you have to keep evolving and changing things.

1:51:40

Um, so yeah, definitely a pressure cooker environment.

1:51:42

Uh, but you know, the outcomes are really crazy.

1:51:45

And you know, the cool thing about Believe is we have uh you know, dozens, if not hundreds of creatives that have like raised funding.

1:51:51

People have like quit their jobs and gone all in on whatever they're building.

1:51:54

Um, and it's rare you get to ship something and for it to immediately have a positive outcome for these people in a like life-changing way.

1:52:01

So for me, that's like super energizing.

1:52:03

And uh I hope we can continue to do that at scale.

1:52:05

What do how do how do you think this evolves?

1:52:07

Uh right now it feels like Believe is a product for individual creators, entrepreneurs, artists like you're talking about.

1:52:14

Is there a world but but if you guys become you know stripe for coins uh or or however you phrased it is there a world where traditional companies in the future would would use believe to uh get on chain in some capacity.

1:52:29

How do you think about that? For sure.

1:52:31

Yeah, we're already seeing that.

1:52:32

So kind of the biggest case study is uh Dupe which is like a ventureback company.

1:52:35

I can't speak to their exact revenue numbers but very serious company that has you know strong PMF.

1:52:39

Um, and they launched a coin uh, and their coin has like crushed it.

1:52:44

It's brought them like a new revenue stream.

1:52:46

Uh, it's like really activated like this new community for them.

1:52:49

Um, and yeah, Bobby, the founder of Jeep, has just like really leaned into that.

1:52:53

So, I think that is going to definitely uh, keep happening.

1:52:57

And, uh, you know, I I guess like some of these individual builders might like launch a project that later evolves into like an actual company and the coin is like, yeah, could definitely be tied to that.

1:53:07

Um, you know, watching things watching how things unfold.

1:53:09

I want to talk about the line between like good and bad projects essentially.

1:53:14

Like there's two narratives.

1:53:16

One is uh look, it's all a casino. No crying in the casino.

1:53:20

The the the Dgens's love to just do whatever and just like you know like you know what you're getting into.

1:53:25

Um the that the the the the flip side of that is like you know uh they're they're I I guess the question is like there are a lot of people that have launched stuff and it's gone super well and they built really cool things.

1:53:41

There's other stuff where it's clearly just been like a rug and a mess and a disaster and it chases them around the internet for a couple months or even years.

1:53:47

Um where where is the line?

1:53:50

What would you counsel people to uh kind of rules of the road today for getting involved in this and not just frustrating a bunch of people um and actually having like a good experience and and kind of not just obeying the letter of the law but like the spirit of the law on that like decision- making around going you know doing curation versus just creating uh a platform and letting people do kind of whatever they want. Totally. Yeah.

1:54:15

whatever they want. Totally. Yeah. So uh you know I I consider by the I heard Alon on earlier levelon he's great um you know friendly with him and you know also pump is a huge innovator in the space I consider pump to be kind of like the worldwide web and what we're doing to be closer to the app store um you know you can't completely curate for

1:54:33

reasons that I won't go into like we can't say hey this is good um because you know if if we do that we're going to be wrong some of the time but it is quite easy to say hey this is bad and uh when we identify bad actors there's like mechanisms we can uh integrate to kind of like get basically disincentivize them from launching uh with us versus like one of these other platforms. Yeah. Yeah.

1:54:51

Um the I think like the biggest thing for us is you know founder education.

1:54:54

So you know I think most Silicon Valley founders like 99% have like really positive intent uh with you know things they do and uh it's our job to kind of like create harmony between the traders and the founders and we can just do like a way better job at that.

1:55:07

a way better job at that. um similar to like you know if you fund raise with like a safe or even if you do like a priced round um your first time doing it you know there's usually a pretty big education curve like a lawyer is explaining to you what these different mechanisms mean um most people completely make a mess of it but by

1:55:23

their series A they identified the problems they made so there there is uh education with like existing fundraising mechanisms and I think that uh for this to there's an education that uh we need to make like really easy yeah um I'm I'm interested I we we've talked to some founders who have kind of like curious about dipping their toes in the water. And well, I remember it was we we we had

1:55:43

And well, I remember it was we we we had some buddies to talk some people off the ledge. Yeah.

1:55:47

After the Trump, you know, coin happened, why not me?

1:55:49

Uh we had some buddies that that were thinking about it and and ultimately at the time I think they made the right decision not to do something, but things are changing week by week.

1:56:00

And the trick is like it it feels like the the most basic thing would be like don't rug.

1:56:04

Don't don't sell what you own or whatever.

1:56:07

But there's this other dynamic that I learned about and this is probably obvious to everyone who's who's native to crypto, but um I could I could launch a coin um not sell any.

1:56:16

a coin um not sell any. some traders could come and pump up the coin and then people buy when it's at the high and then it and then those traders sell and I didn't rug but like it feels like it rugged and people are like I lost money on your thing and then they're mad at me and so um I guess in terms of like the messaging and the riskreward like how do you think the rule which the rules what

1:56:41

you're describing is there's like a PVP dynamic totally so I'm curious for you at a platform level do you think That do you think that like for example how you know are there things you can do at a product level so that if an artist comes on to believe is like using the mechanism to raise money you prevent it from turning into this like PVP warfare where people are duking it out. I feel

1:57:02

I feel like we're going to reinvent accredited investor laws because because the whole idea is like is like a venture capital firm can lose a hundred million dollars on some crazy biotech startup or some hard tech startup and it really is no crying in the casino you know.

1:57:16

It's like it's like you guys did your due diligence, you signed the documents and you get you gave it a shot and that particular technology didn't work out and so as long as there's no fraud like you move on and you make money on the next thing.

1:57:28

But for you know like like random retail people sometimes they get caught up and they and and bad outcomes happen.

1:57:33

I feel like there's some there's some vibes in in in the ecosystem that can just be enforced loosely. There's also some rules.

1:57:39

There's some platform stuff.

1:57:41

So I'm interested in kind of how you're how you're dealing with that because it's obviously going to evolve a ton over the next few years. years.

1:57:45

I mean, you're going to be running this for a long time. Totally. Yeah. Yeah.

1:57:48

To me, it's uh so, you know, pump being the worldwide web, there's like very small mechanisms that you can integrate that I think just make the whole space a lot safer. Sure.

1:57:57

Um and yeah, to to your point, we the snipers where they like buy a large part of they, you know, kind of dump at the top.

1:58:04

of dump at the top. uh there's like a lot of mechanisms like I'm seeing that I think are really interesting which is basically you know having like uh you know extremely high uh fees for the first you know x amount of seconds at trading so that you know the snipers will still get some ownership but their the ownership is like greatly reduced um

1:58:20

there's rate limiting so there's like a max purchase amount uh you know for the first couple seconds so yeah a lot of these anti- sniper mechanisms are just like kind of evolving right now um and I think they're going to lead to a much healthier ecosystem um and in addition like uh yeah I think it's like the the kind of fe it's it's hard to say what is good but it's much easier to say what is bad. So if we if we do detect bad actors

1:58:39

So if we if we do detect bad actors um it's uh pretty easy for us to kind of disincentivize uh future bad actors. Yeah.

1:58:47

H how much of the viral growth or the growth of the company right now has been would you attribute just to the specific kind of like viral growth hack of like being able to launch a coin directly on Twitter or X?

1:58:58

Yeah, I'd say maybe like 50%.

1:59:01

I think the, you know, the other thing is that, you know, within the the so and so trenches is, uh, you know, they've been trading these kind of like traditional meme coins, uh, forever and there's, uh, it's a really fun game that everyone enjoys, but there is hunger for a new game and I think that, uh, the vision here has really like energized the whole space.

1:59:17

Um, so that narrative alone uh, I think has done a lot of damage in a good way, the opportunity, right? Yep. Yep. Yeah. Anyway, anything else? Very cool. We're good. This is great.

1:59:28

Thank you so much for bringing it down.

1:59:29

I'm sure you have a a bunch of new things to to work on in the in the 15 minutes that you've been on.

1:59:34

So, good luck uh good luck building and uh yeah, excited to follow.

1:59:37

Yeah, thanks for breaking it down.

1:59:39

I actually Yeah, thanks for having me, guys.

1:59:41

It's been cool to see uh everything blow up for you guys in a good way. Yeah. Yeah, we appreciate it. Thanks a lot. We'll talk to you soon. Great to chat. Cheers. Uh fantastic.

1:59:49

Little round of applause to see him winning.

1:59:51

If you're in CPG, private or crypto. Yeah, guess it works. It works. Guess that's the plan.

1:59:57

Uh every once in a while.

1:59:58

Um, next up we have Tom from Dragonfly Capital coming in the studio.

2:00:02

Um, we'll break down some more.

2:00:04

It is, um, interesting to look at funds are working companies like Pump, which was only launched something like a year ago. Yeah.

2:00:12

And now was done close to a billion dollars of revenue.

2:00:15

Then you have believe and and both these businesses look pretty obvious in hindsight, right?

2:00:22

Um, but just required the specific type of founder to to unlock it.

2:00:27

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2:00:35

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Whether you're pursuing your first framework or managing a complex program. That's right. Double kill. Two ads in one go. Let's do it. Nice work, John. Let's bring in Tom. Let's bring in Tom. How you doing, Tom? There he is. Good.

2:01:18

Nice to meet you, Technology Brothers. Good to see you guys. What's happening? How are you? Hey, not a lot. Doing well.

2:01:24

I'm uh I'm loving the suits.

2:01:26

I mean, you guys always bring it, but uh you look great.

2:01:29

Have you watched the stream at all?

2:01:30

Are we asking too normie of questions or are we hitting the right topics?

2:01:34

No, it's the right blend of norminess.

2:01:36

There's a lot of stable coin conversation, but that's to be expected.

2:01:40

You know, people people the stables.

2:01:40

So, no, it was it's it's been good. It's been great.

2:01:43

I mean, my my bare case on stables is I I went super long stable coins and my portfolio is completely flat.

2:01:49

And so, I'm looking for alpha.

2:01:52

Give me some crazy ideas.

2:01:52

What are you excited about right now?

2:01:54

That's not one year out, but 10 years out, a 100red years out.

2:01:59

What's the future look like? Break it down. 100 years out.

2:02:00

Um, I think we're all going to be dead and replaced by a aen. So, it's all good.

2:02:06

I'm not I'm not too concerned about that.

2:02:07

Um, you know, on the stable coin thing, I wouldn't sweat it.

2:02:09

I think you're going to get a little uh, you know, circle equity airdrop um during the IPO.

2:02:14

They're going to just air aird drop some shares to all the USC holders.

2:02:18

We're shilling for the US dollar.

2:02:18

We're sh We're US dollar shills. Yeah.

2:02:20

Anytime anytime anytime a company sells like a a traditional crypto asset and buys USDC, they're defending the dollar.

2:02:28

They're defending the dollar. Yeah, I I agree.

2:02:30

I actually, you know, I think you're talking about um stable coin and people when people talk about stable coins, they talk a lot about flow, right?

2:02:38

They talk about um using stable coins for payments, B2B payments, P2P payments, whatever.

2:02:43

Um I think the stock thing is actually underrated.

2:02:46

And there's a few people in DC who talk about this.

2:02:48

I think Paul Ryan was actually talking about basically stable coins being a way to um you know mitigate a lot of the US debt because now you have all these new treasury holders.

2:02:58

Tether is like the seventh largest Treasury holder at this point.

2:03:01

And I'm like this feels like a very pro- US bipartisan topic of yes, we want people to be buying.

2:03:07

We want more marginal treasury buyers.

2:03:09

Stable coins provide that route.

2:03:11

And it's like a little bit of like a you know saying the quiet part out loud but I don't really care.

2:03:17

I'm you know very pro US and I think like using promoting dollars irony of that digital assets which people saw as alternatives to the dollar are now some of the greatest defenders is kind of to dig into it though is is uh like tether's the seventh largest holder.

2:03:34

Is that because they displace like Fidelity by taking like all of the treasuries and they just move them over or are these can we really think of these as like net new treasuries that are being bought?

2:03:45

these these are incremental, right?

2:03:46

Because these are people who are offshore, people who are in Argentina or Turkey certainly maybe some of it is is cannibalistic, but for the most part from what we've seen from and actually um Rob Hadock, who's one of the GPS with me at at Dragonfly, just had um a great stable coin research piece um come out yesterday talking about who's actually using stable coins.

2:04:04

And it's yes, some people in the US and yes, maybe some people who previously would have purchased treasuries through the broker, but actually it's it's people who are offshore.

2:04:12

And that is actually I think kind of the the killer app.

2:04:14

What is happening in the Asian crypto markets right now?

2:04:19

I know you've spent a ton of time over the years kind of focused in that area.

2:04:24

Uh how is the regulatory environment kind of evolving?

2:04:27

What what does crypto activity look like?

2:04:30

How do we get them to rotate entirely into USDC? Yeah. Yeah, that's part two.

2:04:34

Uh well, they're waiting for the airdrop.

2:04:39

Um no I mean Asia and the US have always um sort of I would say specialized when it comes to crypto.

2:04:46

Like if you look back the past three four years um Asia has really been running laps around the US when it comes to anything CFI.

2:04:53

Um you know we're early investors in Bybit and Bit which are now two of the largest exchanges incredible businesses.

2:04:59

I mean we're talking billions of dollars in in revenue.

2:05:02

um they some of the features and some of the products that they offered um US exchanges are just now sort of catching up to.

2:05:10

sort of catching up to. So I I would cite as one example um a lot of Asian exchanges offered what we now call CD5 of um offering a totally normal centralized exchange experience in the front end but wrapping some sort of D5 protocol on the back end to be able to

2:05:26

offer people you know trading for new assets or be offer you lending and financing opportunities or yield opportunities or whatever is actually available on chain but without all the complexity and yiness of you know having to manage your own keys which is kind of what normies want. Coin Coinbase just

2:05:38

Coin Coinbase just launched um you know Bitcoin backed loans using Morpho which is an onchain lending protocol u maybe a few months ago.

2:05:48

So this is something where the US is now just kind of playing catch-up to what's been happening in Asia for many many years.

2:05:54

Um I think there's also been this trend of more I would say um Chinese um uh previously like OTO founders moving into crypto and frankly also moving offshore because they see hey venture in China is like kind of dead.

2:06:10

Um you know the domestic market is kind of dead but I'm I'm a really great technologist.

2:06:14

I'm a really great builder.

2:06:15

Um building in crypto is a way to access a global user base and a global capital base.

2:06:20

global capital base. um but you know with sort of the skills that I already have and so um you know we're early investors in Kaido um which is sort of this now it's been coined infoi um which I don't I don't quite love but I think it's a cool like concept of sounds um yeah yeah basically scraping uh Twitter

2:06:36

data right now um ingesting that and and then sort of spitting that back out into this sort of gamified clout system um they also do some really cool stuff with like transcribing all all these podcasts and just like giving you sort of like an alpha sense for crypto um but again that's like um a lot of Asian talent now now sort of moving into crypto. Interesting. Uh how are you thinking Interesting.

2:06:53

Uh how are you thinking about the intersection of AI and crypto?

2:06:57

Personally, we've talked with a number of people about the potential of stable coins within agents, but there's a bunch of other How often should you pivot from AI to crypto and back?

2:07:05

Is that every three months, every six months, every two years? What are we thinking?

2:07:08

Um no, but but in all seriousness, how how are you I mean, I imagine you're you're a consumer crypto investor.

2:07:14

You need to get you need to get this bet right.

2:07:19

Otherwise, you're going to look like a fool in 10 years.

2:07:21

So, I imag this this is what I have nightmares about. I um I'm sure you do.

2:07:25

No, I um I think we we've been maybe a little bit contrarian when it comes to AI crypto in being more bearish on this category.

2:07:33

I think a lot of sort of what AI crypto has broken down into is people trying to do decentralized inference.

2:07:40

Um sort of this, you know, GPU marketplace.

2:07:42

Um and this is sort of an again an old idea in crypto.

2:07:46

This was something that um Gollum way back in the day was trying to offer for for video rendering. Now kind of coming back.

2:07:51

Um there's decentralized training, decentralized data marketplaces.

2:07:55

I think for the most part this is just really tricky to build, right?

2:07:59

Like if you think about how you actually train a state-of-the-art model, you don't use you know a million consumer grade GPUs all around the world.

2:08:06

It's like you want one big colloccated A100 cluster like you know that is actually kind of uh uh the thing that you want.

2:08:13

Um and so like a decentralized network actually is just like it doesn't really have the right characteristics of something you would like the type of compute that you want.

2:08:21

Compute is is not a monolith.

2:08:21

Um the areas where I think we've been investing in AI meets crypto in the area that we get really excited about.

2:08:27

Um you mentioned sort of um NPC and agent payments.

2:08:32

Um I I agree this just seems like kind of a no-brainer where you want deterministic final finality.

2:08:37

deterministic final finality. you want um you know microp payments something that just like existing um uh SAS companies existing SAS payment companies just aren't really set up to provide um you want to be able to say hey I want like one simple API call for a fraction

2:08:52

of a penny and they're never going to use the service again that's something where stable coin payments are uniquely enabled um uh are uniquely positioned to be able to do this but it's just not something that you're normally going to see out of out of traditional payment companies. So, um, we're investors in in

2:09:05

So, um, we're investors in in a company called Gold Sky, um, which is which is building in in this in this category.

2:09:10

Um, we're also, I mean, kind of on the cute topic, um, we're investors in in Exo, which is is sort of borderline crypto.

2:09:16

It's, um, I don't know if you you've seen them around Twitter, but basically, um, they allow you to run, um, sort of sharted inference locally on your own network.

2:09:26

So, let's say you have, you know, a couple Mac studios.

2:09:27

Um, they're really sort of specializing Apple Silicon right now.

2:09:31

it will automatically discover and and um execute um let's say something like DeepSec R1 across those different um uh computers on your local network.

2:09:41

So you can run really great models on consumer grade hardware um given sort of the existing um shortage of of of GPUs.

2:09:48

And so you can imagine that hey if you can sort of distribute and shard compute across your local network maybe at some point in the future you can actually do that across a global network.

2:09:55

Um they're building towards that.

2:09:57

I I I don't know if that's exactly the direction that they want to go, but in the interim, you have this really really useful tool um that allows you to actually get access to um local edge compute models, which I I think ultimately is is where that whole industry is going to go um versus, hey, we're all going to be running um our own models on, you know, someone else's cloud.

2:10:18

Uh back to the venture side, how do you see crypto funds evolving?

2:10:21

It seems like there's a number of funds with massive aum and maybe not enough uh places to bet on the equity side.

2:10:31

Do these funds end up having you know you know uh be end up 80% sort of liquid 20% equity uh you know sort of early stage focused or or how do you see that evolving especially um I was talking uh with with Anie uh on your team offline and and he was talking about how uh with AI being so deflationary we just have companies now that have massive potential but just don't really need capital.

2:10:58

So you're sitting in the investor seat being like please take my money versus you know maybe 10 years ago it would have been reversed. Totally.

2:11:06

I think um that is definitely a trend that we see in I don't think it's even necessarily a crypto venture thing specifically but uh I mean you were talking earlier about people throwing you know AR in the bio and it's like yeah that is downstream from just operators having so much leverage now that they didn't have before.

2:11:23

Crypto amplifies that where now you can sort of go public.

2:11:26

um you can access a massive user base, you can be way more sort of revenue positive than you were before.

2:11:32

And so maybe the history of of crypto funds, just to sort of take a step back, um if you think of sort of like 2017 2018, for reference, Dragonfly was was started in in 2018, crypto was was was a monolith.

2:11:43

You give some some some capital to a fund manager and they're going to decide, okay, I'm going to buy some Bitcoin.

2:11:50

Am I going to buy some ETH?

2:11:52

Am I going to invest in a um you know, early stage equity round?

2:11:55

Am I going to buy a Saft?

2:11:55

whatever that sort of blend was, they're going to be managing that for you.

2:11:59

And oftentimes that was in a true closed-ended venture structure, but sometimes it would be in a liquid hedge fund structure with some side pocket.

2:12:06

And it was like the whole thing was was kind of no one really knew what this asset class was going to look like.

2:12:11

And so you give capital to someone else and they figure it out.

2:12:13

Um, that was also obviously a a a byproduct of the fact that even getting access to something like Bitcoin previously was so difficult, right?

2:12:22

like you couldn't buy it through your brokerage, your bank, no ETFs, most like you had to use some wacky custodian.

2:12:27

The whole process was very convoluted and so great, you managed to do it into a fund.

2:12:31

That's something you can underwrite.

2:12:33

Um, and they can actually go and determine how much of the Bitcoin exposure that you want.

2:12:37

You you fast forward several years, um, and now, hey, uh, if you're a reasonably sophisticated LP, you can go and choose how much Bitcoin you want to buy yourself.

2:12:47

We actually don't buy major liquids in in our fund at all.

2:12:50

And it's like I you don't need to I don't need to charge you 2 and 20 to go buy Bitcoin or ETH or Solar, you know, whatever it actually is.

2:12:56

You can go do that for yourself.

2:12:58

And so there's been more specialization in in the crypto fund um um area where now you have true dedicated venture funds like Dragonfly that are kind of doing let's say seed through B um in addition to hey maybe doing some some treasury purchases for some liquid assets that we think have sort of venture upside.

2:13:16

And then you have sort of true dedicated liquid funds.

2:13:20

Um, maybe those are, you know, delta neutral funds or credit funds or actually just sort of long only discretionary funds, but there there's sort of this this true split.

2:13:26

And I would say it's a little bit like the sharks and the jets.

2:13:29

I think the, you know, the liquid funds always talk about the venture funds and the venture funds I I don't really talk about the liquid funds. I think they're great.

2:13:36

Um, but it's it's it's u, you know, there's is sort of the specialization in the strategy.

2:13:40

Maybe to what you know, Anie was was mentioning and what you were mentioning earlier.

2:13:44

were mentioning earlier. Um now the trajectory of fundraising goes hey we're going to raise a preede though maybe we'll raise a seed maybe we'll do an a TBD but generally hey you'll launch a token um token will go public and then maybe you'll do a treasury sale after the fact if you need more capital and so

2:14:02

if you've raised you know north of a billion dollars to your point where do you actually go and deploy that um maybe you there are some equity only companies um and and certainly we we do a number of those where we think hey there's this company's gonna IPO um you know, we don't think there's going to be a token. Um it can be uh

2:14:17

Um it can be uh just just a pure sort of re revenue generating company and I think that's like um actually kind of an underrated area of of the space.

2:14:24

Um but it's sort of unclear where the rest of that capital goes which is why you sometimes see these very wacky rounds where some company raises some insane amount of money and you're like what is going on here?

2:14:35

Um and I think there's just this um lag effect between you know capital raised by VCs and then capital actually you know deployed into startups.

2:14:41

What what keeps you up at night about the industry right now? Potential risks.

2:14:45

It feels like the industry broadly, you know, this year has been up and down, but so has every year in crypto to some degree.

2:14:55

Uh, but generally the industry is sort of like riding on a high, getting more regulatory clarity.

2:14:59

Uh, there hasn't been, you know, a 20 billion hack in a while, but like what what kind of what what kind of risk do you see?

2:15:10

um at a at a high level that that that actually worry you? Yeah.

2:15:14

Um a million things honestly.

2:15:17

Uh it's it's an industry that is always uh changing and and therefore there's always more things to be worried about but also things to be you know excited about at the same time.

2:15:26

Um maybe to your point around um regulatory clarity.

2:15:30

I'm more worried that we we don't get regulatory clarity and we fail to get a stable coin bill passed.

2:15:36

We fail to get a market structure bill passed.

2:15:37

Um, both of those are in the short term not terribly bad.

2:15:42

I mean, I would say it's impressive how well stable coins have have grown in spite of being in this sort of regulatory gray area.

2:15:47

In the long term, the question is, can we get a digital version of cash that is they can be they can have have privacy for peer-to-peer transactions or or do we get true ponopticon status centralized control?

2:16:06

um that's something that is going to be bad on, you know, a 10 to 100y year time horizon.

2:16:10

M maybe not so short-term bad, but we need to sort of lay the foundation for that now so we don't end up in that bad situation.

2:16:16

Um I I'm also frankly maybe a little bit worried about um a lot of these sort of uh Bitcoin treasury structured companies.

2:16:23

I I think there's only so much market demand for these actual convertible assets and I'm like it's great when number go up.

2:16:30

I'm I'm a little bit wor worried about what's happening when when the number goes down.

2:16:39

Let's just give it up for when the number goes up. Yeah. Yeah. Just stop right there.

2:16:42

You don't need to talk about when the number go down.

2:16:43

We want to cut you off right now.

2:16:46

That never even happened.

2:16:47

So, let's let's not worry about that.

2:16:49

But, um overall, I mean, it is a great time in the industry.

2:16:51

It feels like um like you're saying, it just never dies.

2:16:56

Every time someone thinks it's over, that's actually the time that we're so back.

2:16:59

that is that is the exact time to be back and um if it you know it feels like we're we're back now in in a big way.

2:17:05

So um yeah, we're we're really excited about where the future of the industry is going.

2:17:09

Well, thank you for hopping on. This is fantastic. Thank you for coming on. Come back on again soon.

2:17:13

I think you might be a generational yapper. You're one of us.

2:17:17

Um you know, we live to post, we die to post.

2:17:20

It's uh it's all part of the same the same life cycle.

2:17:21

So, thanks for having me on. Thanks for coming on. Good to see you, Tom. Cheers.

2:17:25

Uh in the meantime, let me tell you about Linear.

2:17:27

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2:17:32

John for modern modern software development, streamline issues, projects, and product road maps.

2:17:36

I would bet that every founder that is coming on the show today already uses linear. Don't say that.

2:17:43

They're all about to convert with our coupon code. We don't have a code. We don't have a code.

2:17:49

Linear linear is going to eventually get to 105% market penetration because certain companies will have two instances running. That's ideal. Yeah, that's our goal. Totally dominate.

2:17:57

Yeah, we're trying to capture 110% of the Yeah, we'll go into that more later.

2:18:04

Uh, next up we have Constantine from Block Demon here.

2:18:05

Block Dam, how you doing? Welcome to the stream.

2:18:10

Hey guys, how's it going?

2:18:10

Thanks so much for joining.

2:18:12

Uh, would you mind kicking it off with a little bit of introduction on yourself and the company just to get us started? Yeah. Yeah.

2:18:17

No, listen, it's a it's a great question.

2:18:21

Block demon uh you know the word Damon uh means in computer science and operating system that runs silently in the background and that's really uh what blockdemon is we connect institutions to a blockchain networks and we allow for compliant and secure monetization of the

2:18:35

underlying fee and earn structure right and so uh translated it means we run nodes uh for institutions and so uh we're pure B2B play and uh and so we run core infrastructure we run around 250,000 nodes across 40 different data centers around the world. Uh enabling

2:18:51

Uh enabling basically institutions to purchase and hold uh assets in their respective consumers.

2:18:59

Um that has been the the the large sort of activity over the last 5 years.

2:19:04

Right now we're sort of uh pivoting more into the DeFi area of things where the next few years are really all about allowing people to borrow and lend against the assets that they're now, you know, able to hold and buy a little more easily.

2:19:17

And so Block Demon is an enabler.

2:19:19

Um, uh, we're really purpose-built to meet enterpriseg grade demand for infrastructure.

2:19:24

Um, couple of things that are special, I guess, is that we are doiciled in the US for better or worse.

2:19:32

Um and uh you know we've been um uh able to attract uh very institutional capital and so on our board governance we have people like JP Morgan and Goldman Sachs and City Bank is another uh large institution with major shareholder um uh status and so we've got um a really unique investor and partner group.

2:19:54

I'd say out of the top 500 institutions offering crypto 70% are customers of our infrastructure.

2:19:59

And so, you know, we're we're very foundational to the space.

2:20:03

We've been around for seven and a half years.

2:20:05

Um, we, you know, raised a bunch of money um from, you know, said institutions in order to really, uh, bring institutions to crypto networks and do it in a way that's, as mentioned, secure. Um, I'm from Germany.

2:20:20

Uh, I've come from the cell network world and I always nodes a cell network. Who's that Nokia? Yeah, Nokia.

2:20:28

Deutsche Telecom actually is my uh claim to fame.

2:20:30

is my uh claim to fame. I worked for uh back then a young man called Nika Shaoa who uh you know for a moment was president at SoftBank and now runs Palo Alto Networks and also was chief business officer at Google and so there's been a lot of people who started in cell networks and figuring out how too make that data work one network one type of network to another

2:20:52

well can you give us a temperature check on the enterprise um in the last cycle a lot of the pitches for the enterprise it was a lot of exploratory budgets a lot Oh, maybe we can put our uh our inventory on a blockchain and we'll store the data, you know, and and but now are institutions coming around and are they more up to speed on what crypto can do for them? How are they thinking

2:21:13

How are they thinking about plugging in and what what is what is kind of top of mind for crypto amongst like the Fortune 500 from what you from what you've assessed? Yeah.

2:21:21

Um so I think there's different categories, right?

2:21:26

And so first off, obviously the core financial institutions, the Robin Hoods, the PayPal that enable people to purchase crypto and hold it are now all investigating, you know, how do you earn uh using these assets, right?

2:21:38

And so I think um um you have existing uh uh fintech players that have offered basic crypto services that are now uh feel a lot more empowered in in uh you know what we call staking or um DeFi uh to offer sort of earn adjacent um products to their customer base.

2:21:57

I think you'll see a big trend there.

2:21:59

Uh in the trady world, I think you're going to see um a lot more interest in wallets specifically.

2:22:05

And so they're really at that stage of like figuring out hey um how do we actually what technology do we use in order to custody crypto assets in our own infrastructure.

2:22:14

And so I think um you know in the past basically you didn't really want to touch crypto or if you used a third party uh that you could point to if anything went wrong.

2:22:23

And so now I think in the current iteration all these institutions are really figuring out what their own proprietary uh basic solution setup is in order to custody assets and then also offer um adjacent earn potential here.

2:22:37

Um, and so we see a lot of that and with the sort of more Sony-esque type of companies in the world, you see a lot of interest in building their own version of a blockchain, L2s.

2:22:48

You know, I don't know if you remember the good old days when everybody had a totally permissioned little Hyperledger thing uh going I think uh we've made some progress there. It is a funny thing.

2:22:58

It's like we should we should pay attention to this crypto, you know, thing and then oh, we should just make our own blockchain.

2:23:03

That's that's the that's the way to get involved.

2:23:06

It's it's Yeah, it definitely was a Yeah, we should start our own Visa network competitor. Like, yeah, why not? Why not? What um go for it. Yeah.

2:23:12

And that has changed with like the you know the optimism, the ZK zinc, arbitrums, like you know people being able to easily spin up um a sort of permission chain on a public network, right?

2:23:25

And so there's been some progress there.

2:23:27

Um and uh we see quite a bit there.

2:23:30

And then obviously all the ETF stuff and and and technology that's that you need in order to basically custody these assets and offer yield over time.

2:23:38

offer yield over time. what what legacy you know the we've had a bunch of interesting conversations today and different perspectives and it feels like in many you know the the irony of stable coins is that in many way they actually

2:23:53

sort of expand and support the dollar right so this crypto being this sort of disruptive force is at the same time propping up uh this sort of legacy system what areas of traditional finance do you feel like are are most prone prone to disruption uh over the next decade. Yeah. I mean, Yeah.

2:24:11

I mean, well, because and and the context is like those legacy institutions are coming to you now or they already have and they're saying help us not get disrupted, right?

2:24:22

Like we don't want to be Nokia basically. Yeah. Yeah.

2:24:24

Well, I think interestingly enough, everyone is uh and thank you for pointing that out.

2:24:31

I feel like I joined Nokia in 2005 on top of the world.

2:24:34

I left in 2010 after I ran it into the ground and so lucky, hey, at least you could joke about it now. Yeah, exactly.

2:24:40

Uh, no, I mean I was obviously a, you know, small little figure there, but it was an interesting learning, right?

2:24:46

Because ultimately you had an entity that was very, very good in building really complex technology in thousand different versions, but very very bad in streamlining singular software tools across its platform.

2:24:57

And so I think you'll find that financial institutions have a sim similar risk, right?

2:25:03

like the the IT stack of a large Treadfi is insane.

2:25:05

Um, you know, I mean, it's probably akin to what Elon Musk when he talks about Doge.

2:25:11

Uh, you'd be surprised about how arcaric a lot of these systems actually still are.

2:25:16

I mean, if you look at the structure of the Swift network, um, that obviously is one. Sorry guys.

2:25:22

Um and then you also uh just the ERP systems underneath it are so complex and you know JP Morgan has 100,000 engineers and they keep on building and doing stuff and so pivoting away from that occur infrastructure is really really difficult.

2:25:36

Um and uh you know they're starting to do it.

2:25:39

I think frankly I think we're we're all way behind here, you know, even as institutions because the beauty of AI and blockchain and um uh the opening up of financial systems uh via Bitcoin uh is going to accelerate um the movability of money and so remittance specifically are sort of areas where I think time's running out for institutions.

2:26:02

you know, it's like either you can innovate really really quickly or people are going to find other ways to do it, you know, and let it be a Coinbase issue with stable coin or something like that that uh can actually take care of a lot of these things.

2:26:15

And so it's going to be really really interesting how uh financial institutions hold on to also the custody component, right?

2:26:21

And crypto has a self-custodial cryptographic sort of component.

2:26:26

And if you think about what you pay your bank first and foremost, you pay them so they hold custody of your assets, right?

2:26:31

your assets, right? And so often custody can be fairly acaric but with that custody you also obviously lose a lot of control and um you know you have technology and solutions today that can replicate basically what an institution offers here for zero cost right it's really the the the consumer that is nervous in touching them and and and the infrastructure currently is way way too

2:26:54

complex for anyone to use uh but you're going to see a lot of improvements there uh on the user experience front also with AI I heard You guys mentioned AI and obviously you know you got to pivot into AI every 3 months but um I think one use case that I kind of want to point out that we're working on that I think is really interesting on the wallet layer is using AI to issue very simple commands to crypto networks right

2:27:17

to just say hey I just want to send Ethereum to this address you know like kind of and that can be an I it'd be nice if you could tell a wallet you know an agentic wallet just make me a 10% return daily compounded daily just forever please don't make mistakes just give me a 10 bag 10x this correct um but you know but basically make the interface that simple right hey wire securely $100 uh to France you know I

2:27:42

don't know if they need it but um you know we can uh those type of things I think are going to be real improvements on on how this works how what's happening with emerging markets we've talked about uh with other guests today around the risk that certain governments might not want their citizens to be you know uh uh selling their native currency for something like stables or or other assets. And so how

2:28:05

And so how much attention are you paying to the policy decisions in markets outside of the US or is that not a focus for you right now? No, for sure.

2:28:15

I mean the outside of the US um is still our largest market um because we were in the US and and obviously got clobbered by regulators and and by basically operation chokepoint um 2.

2:28:27

0 0 and so uh we expanded massively into Asia.

2:28:30

Asia is a really exciting market for us.

2:28:32

Um you'll see a you know Asia is lots of things uh lots of different technologies and and standards and and you know you have the full spectrum of really really um dogmatic and and suppressive uh systems and very very open ones technically.

2:28:48

And so yes, we follow this uh uh very closely.

2:28:50

uh uh very closely. I think um if I may age myself again um you know it reminds me a little bit back in the day we were trying to figure out how to distribute music via digital channels on and sell networks right and so once you pixelate stuff in ones and zeros it's just really difficult to contain it right and and

2:29:08

you're going to see that with currencies on a very basic level as well right like it's just like you can try and do the China and ban Bitcoin and things like that but the reality is it's a temporary solution um um people are going to find ways around it and So, I think we we've we've Yeah, like the the p uh piracy, media piracy has not been solved, right? Like at all. Not even close, right? It's Like at all. Not even close, right?

2:29:29

It's probably easier than ever to get movies online that that that uh uh without, you know, paying for them.

2:29:36

So, the idea that you're going to sort of regulate crypto out of existence is is a bit silly.

2:29:40

Uh last question for me, MCP, people have been talking about potentially integrating stable coins into that standard.

2:29:49

where how do you see it evolving?

2:29:51

What are you excited about?

2:29:51

Or do you think it'll just live side by side with crypto rails?

2:29:58

I mean, it's a good question.

2:29:58

I mean, I have a preference, right?

2:29:59

I think um what is your preference?

2:30:01

Well, my preference is that it's all integrated in one, right?

2:30:05

Like I really want to u uh ultimately I'm I'm a old school crypto guy.

2:30:09

I want access and and inclusion via crypto rails for everyone that no single entity can control, right?

2:30:16

And so uh uh my job is to uh bring a substantial amount of uh volume from um hardcoded institutional rails into open-source onchain networks, right?

2:30:27

And so that's my preference.

2:30:27

I think um it's uh going to take a minute uh with regulators um even though we have a much better um administration that's a lot more open to thinking about um how to regulate this and a market structure bill coming that we're working with and and and trying to ensure um that this gets done correctly.

2:30:45

Yeah, I I think um it's going to take a few iterations, you know, like we're going to get something done, some regulation at first and some of it is going to be good, some of it is not going to be so good and then we got to uh see how how how much support the industry can can continue to garner across also the aisle.

2:31:04

Basically, it has to be a bipartisan issue um on the regulatory front as well if we want to real see real real progress.

2:31:10

And so, but you know, obviously we're we're very optimistic here that we can come up with something um that is as open as possible and replaces as many of the legacy rails as possible. Fantastic.

2:31:22

Thank you so much for stopping by.

2:31:24

Hope you have a great rest of your day.

2:31:27

We'd love to get the update from you as as things progress and we get more clarity on the regulatory side, too.

2:31:32

Um but thanks so much for stopping by. We'll talk to you soon. Cheers. How?

2:31:36

Uh, next up I got to tell you about numeral sales tax on autopilot.

2:31:39

Spend less than five minutes per month on sales tax compliance. Benchmark Series A. Benchmark Series A. Yeah. I wonder how sales tax.

2:31:52

Well, you know who has to pay sales tax? Pudgy Penguins.

2:31:53

Because they sell real things in the real world. Oh, yeah. They do. They do. They do.

2:31:57

Uh, and we have Luca from Pudgy Penguins coming on uh the stream next uh talking to us.

2:32:01

You just make the next 20 minutes. Exactly. Exactly.

2:32:05

How you paying sales tax?

2:32:07

Let's get to the really important questions.

2:32:09

We don't want to know about the NFT market. People want to know.

2:32:10

We want to know about your sales tax stack and how numerals fitting in.

2:32:14

Uh Luca, welcome to the stream. We are of course joking. How you doing? What's going on? Welcome.

2:32:22

Hey guys, happy to be here.

2:32:24

Thanks so much for hopping on.

2:32:24

Um, uh, I'd love to start with kind of the a little bit of the history of Pudge Penguins because I know that there's been like a series of eras for the company and you're obviously taking it in somewhat of a new direction or expansion now, but what's the story that you tell about the genesis of the project, your involvement over time, and like where things are going?

2:32:49

So the the 60-cond version is I was a huge collector of Pudgy Penguins when they launched about three and a half years ago.

2:32:56

They were kind of one of the three golden projects of the NFT bull run.

2:33:00

It was really board apes, punks, and penguins.

2:33:02

Unfortunately, Penguins kind of got mismanaged.

2:33:05

They were founded by a bunch of 18-year-olds in their college dorm basement with no operational experience.

2:33:10

So at no fault to them, you know, board apes ended up being a $4 billion business.

2:33:13

Punks became a legacy collection with a multi-billion dollar market cap.

2:33:17

Uh, and Penguins kind of withered withered to the wayside.

2:33:22

But at that time, while I was collecting the NFTts, I was a CMO and co-founder of a company called Gel Blaster, which was North America's fastest growing toy business.

2:33:31

Uh, I was really involved in just IP.

2:33:33

Get those for the studio.

2:33:36

Yeah, I I I see those ads all the time.

2:33:38

I didn't realize you were behind those.

2:33:39

Ben, order some gel blasters right now. Yeah.

2:33:41

I I'll get you guys sent I'll send some to the office.

2:33:46

But that that I was I was really immersed there.

2:33:48

And so when I just closed my eyes and I thought Pudgy Penguins, I just thought this is a multi-billion dollar business.

2:33:52

And so rather than being like a disgruntled holder who was complaining all day, I decided to step step up to the plate.

2:33:58

Uh and I bought the project for about two and a half million bucks three years ago, April 4th.

2:34:03

So we're about three years and three and a half months into this.

2:34:07

I think what we want to be today is I think twofold.

2:34:09

I think on one side of the spectrum, we want to be the face of crypto.

2:34:12

Uh when you think uh crypto today, I think crypto is intimidating. It's taboo.

2:34:17

But I think there's no better way to invade the hearts and minds of everyday consumers and with cute pudgy penguins.

2:34:22

And I think there's no better representative from a mascot perspective for the industry than the pudgy penguin uh you know, the story all-encompassing.

2:34:30

And on the other side of the spectrum, we want to be the face of penguins around the world.

2:34:32

When you think penguins, I want you to think pudgy penguins.

2:34:35

And I just believe that the penguin animal uh is severely underdeveloped.

2:34:39

Do you do you guys give uh do you guys like do any charity things for the actual penguins?

2:34:44

You know, kind of like a royalty little give back for the those the we've done a couple activations.

2:34:50

I think uh children's uh children's health and penguins I think are the two places that we donate and we're charitable. Awesome.

2:34:58

You mentioned that uh the the early Pudgy Penguins community was unhappy with the development of the project.

2:35:02

Uh it sounds like that's in contrast to the other uh NFT projects where people were satisfied.

2:35:10

But from my perspective like a lot of these they the 10k NFTts go out they mint and then I don't really engage with these projects deeply enough to know like what is the community clamoring for?

2:35:22

So what was the community in Pudgy Penguins clamoring for that they weren't receiving?

2:35:27

And then what are you building that actually will satisfy the community or what like like what are they asking for and what what are you trying to give them?

2:35:34

Yeah, I think I think what every community member in crypto wants is productivity and and pushing the boundaries and forward progress within you know both the the internal IP and maybe just for the category in and of itself.

2:35:47

But just to be clear like we bought Pungry Penguins under the guise that the NFT race and the NFT buildout was severely underdeveloped.

2:35:56

underdeveloped. uh and there was a bar still yet to be set and we bought this business to win in this category and ultimately to win in the broader crypto category and so I think from our perspective it's not just winning for our community members within our small

2:36:10

niche and within our you know within within the Pudgy Penguin universe it was really winning for the entirety of NFTTS because prior to us NFTTS stayed in this digital universe in this you know vision that Ready Player 1 was going to come 20 years earlier than it actually was going to come. And I thought, you know, if

2:36:27

And I thought, you know, if this was the next generation brand and all of these companies were raising billions of dollars under this guise, then as a brand builder for the last eight years, I felt like they just weren't doing all of the obvious things that all these brands have to do to win. Are we going digital?

2:36:41

Is everything going to be digital 20 years from now? Sure.

2:36:45

But today, people need physical interactions.

2:36:47

Uh, and I think that's a huge reason why we've won and we've been so successful the last couple of years is we really blended the two worlds, right?

2:36:54

we have, you know, toys in 10,000 retailers.

2:36:56

Every toy is tied in with an NFT and crypto experience.

2:36:58

Uh, and and the whole thing really segus.

2:37:02

You would build this thing the same way you, you know, Hasbro or or Mattel or Disney would build it, but it's cryptonative. It's internet native.

2:37:10

And I think that's the difference.

2:37:11

How do you balance developing the IP in the way that you believe will create the most value long term and and kind of the the desires or or wishes from the the community of initial holders, right?

2:37:27

Because as a business, you constantly need to be evolving, reinventing yourself.

2:37:31

Um, and I imagine there's a bunch of good parts about having this super loyal, dedicated fan base that's, you know, heavily invested in the projects, but then there's also some hard decisions to make at different times.

2:37:44

Yeah, I think the community's bought in under this guise that we are creating the internet's Mickey Mouse and that everything that we do is to support that thesis and they're aligned in that vision.

2:37:53

aligned in that vision. I think the problem or not the problem but I think the hard part about this business and it's and it's relevant for a lot of crypto founders but I coined this like three years ago which is we're basically building a publicly traded startup where I have all of the cons of being publicly traded with none of the pros and I'm a

2:38:10

startup right if I the bed right my pri and price and crypto is the best marketing because it's such a hyper financialized asset class um and and and you know I do something great price goes up you know holders are in the money the more in the money they are, the more they champion, the more they recycle those profits back into the product. Uh,

2:38:26

Uh, and the different the different product lines that we have within the business.

2:38:33

Uh, but then obviously if you the bed, you know, it it the the the financialization to me is is a hyper form of alignment and it can be your greatest superpower, which I think we've been able to harness and galvanize over the last couple of years, or it can be your greatest kryptonite.

2:38:47

And you've seen situations like this with basically 98% of founders in crypto is that ends up biting them in the ass.

2:38:54

They make one wrong step.

2:38:55

They don't have that relationship.

2:38:57

They don't have their rapport with the community and then the whole thing just kind of backfires. Yeah.

2:39:01

Do you think uh if you look back at at the NFT category holistically is o are projects uh is part of that kryptonite just being over capitalized?

2:39:15

capitalized? has that uh how much of a strength have you you know I don't know how how resource constrained you guys have been exactly but I imagine it's quite a bit more constrained than than many other many other projects in the space especially as you know certain

2:39:31

projects got marked you know really really high a bunch of capital flooded in and uh I don't really have a good lens on on how that's worked out yeah I think that's just entrepreneurship 101 I mean crypto in general makes people more money than they're supposed to make. Uh,

2:39:46

Uh, you know, it's kind of like there's an arbitrage that I talk about a lot where, you know, there's a real opportunity for builders in web 2 to come here because the premium on users and success here is probably 10 to 15 to 20x what it be in the what it would be in the real world.

2:40:05

Meaning like the ibida of Pudgy Penguins, you know, might be, you know, we might be a 300 $350 million business today.

2:40:13

You know, we've created, you know, five plus billion dollars in value over the last couple of years.

2:40:17

And, you know, our total ecosystem is north of2 billion dollars.

2:40:21

Um, so I think from our perspective, it's really just a a matter of um, you know, being being resource constraint has been the one of the biggest things for us and probably the thing the lens that I'm most proud about.

2:40:36

I mean, our our next 10 competitors that we've outperformed over the last couple of years have, you know, nine figures in funding, whether it's from venture or community.

2:40:43

Uh, but that's naturally every entrepreneur gets gets into that problem at some point.

2:40:48

uh unless you really, you know, fight tooth and nail uh over the course of a long period of time to earn that capital.

2:40:54

But in crypto, you can make a lot of capital and raise a lot of capital really quickly.

2:41:00

And the NFT cohort of 2020, 2021 is exactly that.

2:41:03

I mean, guys made, you know, 50, 100, a billion dollars, you know, within 12 months of being in business.

2:41:10

Uh you're not going to be a superstar organization, you know, off of that type of growth.

2:41:14

um unless you're just a one ina- million entrepreneur and group.

2:41:19

Uh but that that that wasn't the case here.

2:41:21

And so I think I think us being scrappy has been huge for us.

2:41:22

We raised you know 9 million our seed round and and we haven't raised anything else for Pudgy since then.

2:41:28

Uh and you know this year we'll do $40 million in revenue.

2:41:32

So you know so far so good. That's awesome.

2:41:36

Can you talk about uh the the decision to surface crypto functionality to the user to the customer? Uh the Instagram has 1.

2:41:44

8 million followers, never really mentions mentions crypto.

2:41:49

There's a world where you're communicating to a non-cryptonnative audience.

2:41:52

You have a different group of customers that's very cryptonative.

2:41:55

How do you balance those things out?

2:41:57

Is it all just one on-ramp one direction or the other direction?

2:42:01

How do you think about that that dichotomy? Yeah. So, yeah.

2:42:03

dichotomy? Yeah. So, yeah. So I'm a consumer product guy and and in consumer products conversion is an action in in crypto I and I think with building IP and character and love and affinity I think conversion is a process right and so I think the idea that you know you immediately sell people on something that is still taboo and still intimidating I think is a mistake and so

2:42:25

my my my objective is how do I create love and affinity around this character you know positive impact around this character positive association around this character over the course of time and as they become super fans and participate in the fandom they then go and figure out that this is crypto and go down that rabbit hole and I think that's a really beautiful story. Now on

2:42:43

Now on one side that's epic but I think a lot of people always misinterpreted our strategy which is like oh how do you get the non-crypto user to then go buy our assets whether it's our token or our NFTts and it's actually a misappropriated uh way of how I think people look at the strategy.

2:43:01

Uh, it's more impactful if you're a crypto native.

2:43:05

Let's say you're a crypto whale and your mom or your cousin or your niece or your nephew or your son or your daughter is then participating in a Pudgy Penguin, buys a Pudgy Penguin product at Walmart or shares you with an Instagram piece of Instagram content or a game or something like that.

2:43:19

That aha moment for that crypto whale is then like, "Oh, I've been in crypto for how long?"

2:43:26

You know, nothing has has transcended into my family the way that this has.

2:43:30

this is clearly doing something for the industry that that nobody else is doing.

2:43:33

And that's kind of like our edge is like we believe crypto is for everyone and but right now it's not positioned for that, right?

2:43:38

It's positioned for the finance bro, for the cool guy, but you know, if we really want crypto to succeed, it's got to be for the woman.

2:43:45

It's got to be for the child.

2:43:47

As silly as it sounds, those kids are becoming crypto native.

2:43:49

And an anecdotal story that I think your audience will love is, you know, I started to meet some of the top Salana traders over the last couple of months.

2:43:57

These kids are 16, 17, 18, 19, 20.

2:43:57

Guy, guys who made 20, $30 million in cash, right?

2:44:03

Or 16, 17 years old, couldn't couldn't cook a steak medium rare if they wanted.

2:44:07

Those are the crypto native, right?

2:44:09

And and and that next generation will actually be native, unlike, you know, you or I who maybe saw the world before crypto.

2:44:15

You know, we're crypto adjacent and we're cryptofamiliar, but we're not native.

2:44:20

This next cohort that's coming in the next 5 to 10 years will be crypto native.

2:44:24

And that's the audience that I really want to speak to. That's pretty awesome.

2:44:27

Uh talk to me about the decision to uh tradeoffs between the Ethereum blockchain and Salana.

2:44:31

Uh obviously the project originally launched on Ethereum, but the Pudgy token is on Salana now. What are the trade-offs?

2:44:38

How do you think about those?

2:44:39

Is there one power law winner that's running away with the game or is there a world for both?

2:44:43

Yeah, I think they they they're functionally trying to achieve two different things in my opinion.

2:44:48

I think Ethereum's goal and objective and mission is to be a decentralized network state, which I think is really important for the sake of humanity, right?

2:44:56

Like if you if you weigh a a bunch of different variables, AI and and just everything that might come into the future, like having a decentralized network state is really really important.

2:45:05

U and and I think it plays its role really well doing that.

2:45:08

I think Salana is the first blockchain that I've really interfaced with uh from from an outside org in that I think is really trying to be an organization that's built to win, right?

2:45:20

And they and they and they want to capture as much, you know, value in winning and building the biggest and best blockchain in the world and then all the things that come with that, right?

2:45:32

like low latency, really fast, amazing BD, getting all the top advisers in to come and help, you know, bootstrap and and and help, you know, ecosystem apps.

2:45:40

It's really run like a like a Silicon Valley organization.

2:45:43

And its function, I think, is to win, right?

2:45:45

Uh but there's two different functions.

2:45:48

I think I think building a decentralized network state and building a blockchain to win, right, and to dominate, you know, tech and and to, you know, because blockchains fundamentally are, what are they really, right?

2:45:59

A lot of people tell themselves a lot of different stories.

2:46:00

To me, they're borderless payments, right?

2:46:02

And they're global and they're global.

2:46:05

So, global liquidity and global composability, right?

2:46:09

Like those are its two functions.

2:46:11

And if you actually understand that as like an entrepreneur building in the web, those solve two really big problems, right?

2:46:16

Like like humans problems, right?

2:46:19

Like like Stripe used to, you know, Stripe and PayPal would take your money and shut you down and do the whole nine, you know, like blockchain will remove that edge.

2:46:25

And so I think they're functionally two different organizations.

2:46:29

I think from our perspective, we wanted to launch our token because we wanted everyone to have a piece of our main character, this internet's Mickey Mouse.

2:46:37

We wanted our followers on Instagram and on YouTube and on Tik Tok to be able to participate uh, you know, in purchasing that token.

2:46:46

And today, it's hard to argue that Salana doesn't have the best experience for that person coming from Instagram to then go in and and purchase something quickly, right?

2:46:53

like Ethereum today, even with cheap gas fees, like no one wants to spend a couple bucks, you know, on on some gas fees, even even when that's relatively low for the ecosystem, you know, they they'll want to spend a couple bucks buying the token and that's about it.

2:47:06

Uh so it seemed like a good fit. That's awesome.

2:47:08

Well, thank you so much for stopping by.

2:47:10

This is fantastic conversation.

2:47:12

Yeah, I really appreciated your perspective.

2:47:13

Would love to have you back on again for for a longer interview.

2:47:16

This is great and I'm excited for our GE gel blaster Nerf battle basically.

2:47:21

Yeah, we need to send me an address.

2:47:23

It's going to be pretty obnoxious the packages I'm going to send. So stay tuned. Okay, great. We'll talk to you soon. Amazing. Thanks for coming on. Cheers.

2:47:30

Um, really quickly before our next guest, public investing for those who take it seriously.

2:47:36

Multiasset investing, industryleading yields.

2:47:37

They're trusted by millions. Of course, crypto.

2:47:39

And next up, we have we have an in-person guest in the studio. Take my person. Welcome to the stream.

2:47:46

Do you guys need to swap uh headphones? Talk to you. Okay. Cool. Cool. Cool. Cool.

2:47:50

I should have worn my suit. I know.

2:47:53

You should have worn your suit.

2:47:55

I mean, it's it's it's uh feel so underdressed. Yeah.

2:47:56

Uh well, fitting that you're the first guest.

2:48:01

You've been a close friend and uh advisor to the show here informally. Yeah. For a long time. Happy crypto day. Crypto day.

2:48:09

It's been um it's been very fun.

2:48:11

It's it's such a uh it's amazing to get perspectives from so many different parts of the industry, investors, etc.

2:48:20

And uh there's a lot to be optimistic right now.

2:48:22

A lot more so than when you started Crypto the Game.

2:48:24

Yeah, I feel like we launched season one kind of in the depths of the bare market.

2:48:27

It was uh you know early early 2024.

2:48:30

I was was trying to think about what to do next and and I know we had spoken well you had had this idea for ever years. Yeah.

2:48:39

I can kind of give you the whole the whole backstory which I know you know but could probably be helpful context for the listeners.

2:48:43

But um when I was first started working on it for real everyone was like you're crazy to build in crypto right now.

2:48:48

But in hindsight it was kind of the best time to launch to um but yeah I mean I I kind of grew up an obsessive Survivor fan.

2:48:54

Uh watch every single season.

2:48:57

They just announced the cast for season 50.

2:48:58

I was like off camera uh reading up on that and uh apply every year. Never got a call back.

2:49:05

Um, but kind of played this like CD ROM version of Survivor called Survivor Ultimate with uh my friends growing up and it was like very very rudimentary.

2:49:15

You picked your tribe mate, you you know played tic-tac-toe for immunity and you voted each other off um against the computer.

2:49:22

It was like very very early uh like early 2000s.

2:49:24

Um and I don't know just kind of like always envisioned this world where I could play a version of Survivor online with my friends.

2:49:31

Um, fast forward to my professional life.

2:49:36

Um, I, uh, worked at HQ Trivia for The Rise and Fall, which, uh, if you're listening, uh, you know, you know, might might remember a live interactive, uh, game show and, um, started my career in TV, but, uh, joined HQ for kind of the grand vision of a live interactive TV network.

2:49:54

So, in the same way that HQ took a game show and made it live and mobile and and interactive, the same could have and should have been said for a Shark Tank format or a talent competition or a dating show.

2:50:03

Um, and of course, in my mind, a Survivor show.

2:50:05

So, actually first pitched the idea for what is now CTG internally at HQ probably six or seven years ago now, which is crazy.

2:50:15

Um, and then yes, just one of those ideas that kept coming up.

2:50:17

I think I pitched it as an idea for a party around drop uh y and just kind of like, you know, was was starting to think about what was next a couple years ago.

2:50:24

And well, it's interesting because it it was this uh one of the most complex products that you can build, right?

2:50:32

This like social interactive multiplayer, constantly evolving game that's happening on chain.

2:50:38

Uh, so watching you watching you build it, I mean you and and Tyler and Brian and and the team just uh uh did it very quickly and then got to market and I and I remember uh it very quickly took off and you very quickly were just I I you probably didn't sleep the the first week. No, not at all.

2:50:57

I mean it is uh it kind of ballooned into this 247 game show.

2:50:59

I mean I I kind of assumed you know the way that it's set up it's it's a 10day season.

2:51:06

uh every day kind of follows the same format of uh a daily immunity challenge in the morning.

2:51:12

Think like classic arcade games or crypto puzzles or digital scavenger hunts.

2:51:17

If you win that challenge, you have immunity and you're safe from the vote that night.

2:51:22

Everyone else votes people out.

2:51:24

Basically, last person standing wins the pot.

2:51:25

Uh, and I kind of assumed people would log in in the morning, meet their tribe mates, make an alliance, register a score of a game, um, go back to work, and then kind of come back on that night to vote.

2:51:38

But, uh, it it just was so so so timeconuming for the players, um, and and as a result, it was just 247.

2:51:44

Yeah, I remember, weren't weren't people like basically calling in sick or taking vacation days so that they could just walk in?

2:51:52

most heavily requested uh like question basically from players between seasons is like when's the next uh season so I can request my PTO.

2:51:58

What was that early controversy you you guys had?

2:52:03

I think you navigated it well obviously because it turned into a second season and then an acquisition by unis swap but but I feel like you quickly ran into the nature of crypto is that you're talked I forget who we were talking about this

2:52:17

but uh maybe it was bology but crypto because it's so financialized is effectively incentivizing constant penetration testing and incentivizing the world to basically try to hack your system and I forget the guy's name Anish I'm sure you guys are are buddies now. Yeah. I mean, we we made up in the DMs Yeah.

2:52:34

I mean, we we made up in the DMs for sure. Yeah.

2:52:36

Um yeah, so uh the way that it works uh is is basically you buy your entry for. 1 ETH.

2:52:42

Um that entry goes towards the prize.

2:52:46

Um and the the entire prize pot goes towards the winner at the end.

2:52:50

And I was always kind of concerned that there could be some sort of civil attack.

2:52:54

Someone would try to buy up 51% of the entries um and basically guarantee themselves a victory.

2:52:59

you know, there were a couple things we did uh to to try to prevent that.

2:53:02

Um, and we uh for season one, we kind of kept entries uncapped uh so that people couldn't like necessarily figure out what the 51% mark would be.

2:53:12

Um, but yeah, right before uh the entries locked and the season began, uh, Anish and his army of bots basically bought up most of the slots.

2:53:23

Um, and kind of wearing my like web 2 HQ trivia hat, I was like, "Oh, bots are bad."

2:53:28

Uh, basically like kicked them all out.

2:53:32

Um, and was like, "This is this was built for real people and real players."

2:53:36

And, uh, immediately got the wrath of Crypto Twitter, which, um, somehow happens every season to the point where like a few friends joke and think that like I'll intentionally like drum up some CT controversy so more people talk about CTG. Yeah.

2:53:50

Um but uh I mean I immediately realized that uh you know bots aren't bad in this world and um so yeah we ended up refunding a niche and and you know making things right and he was so nice and and uh you know we we ended on good terms.

2:54:07

Um what was it like bringing uh web 2 or sort of traditional companies into CTG because I I remember you had some pretty high-profile partnerships as well.

2:54:17

Yeah, Adidas uh actually sponsored a challenge during season two, which was our season two controversy. Um wow.

2:54:23

Um but no, it's all good.

2:54:26

But yeah, I mean it was so um so incredibly like humbling and refreshing to see that basically after the virality of season 1, a brand like Adidas kind of saw this this little internet experiment um and decided to reach out and asked to be a part of it.

2:54:40

So um yeah, we had six sponsors for season two, each sponsoring a different challenge.

2:54:45

Um one of which was Adidas.

2:54:47

Uh the rest were all kind of like cryptonnative brands, one of which being Uniswap and that kind of do you expect legacy brands to get more involved with crypto?

2:54:56

We we every once in a while we'll see them dip their toes in whether it's with Adidas and CTG or Nike with uh its artifact, right?

2:55:02

But but it feels like that's died off a little bit, but at the same time traditional institutions are getting more involved with crypto than ever.

2:55:13

Yeah, I think eventually we'll see it.

2:55:13

I still think it's kind of a dirty word with like the big Fortune 500 like non-crypto brands. Yeah.

2:55:19

Um the Artifact example like didn't go well for Nike.

2:55:21

I would say the CTG example probably didn't go well for Adidas, which is like a whole another conversation.

2:55:26

Um but uh I I think uh we as in crypto builders and and pretty much everyone that's been on the show today and that you will speak with has seen some sort of like the wrath of of the trenches and the army.

2:55:40

Uh and it's not a great feeling.

2:55:43

And uh if you are a large like Fortune 500 brand with like a crisis comm's team and you're kind of like seeing all of those replies and you know folks feel like uh basically when the crypto Twitter army like goes after brands I think it's really hard to deal with.

2:55:55

So um having said all of that as you know the experience and the UI and the UX gets better and uh you know things like privy like improve the login flow and wallet creation and kind of abstract away all of um basically all of the crypto from these uh experiences.

2:56:12

I think like big brands won't necessarily know that they're doing quote unquote crypto integrations.

2:56:19

It'll all just feel like the internet. That makes sense.

2:56:21

How how have you seen crypto?

2:56:24

I would put CTG in the category of of crypto entertainment or crypto gaming.

2:56:29

Y uh it's one of the few games that that it feels like crypto Twitter, crypto X like really played and got hyper engaged with even though it was at a small scale.

2:56:43

Have you seen any other games really capture people's attention?

2:56:46

And I know there was a bunch of like openw world games that raised massive amounts of money but then haven't seemingly haven't delivered. Yeah.

2:56:53

Ironically for a crypto game founder, I'm not much of like a gamer myself.

2:56:57

Um I think of CTG as much more of a game show than like a video game, but uh in my mind the closest example is Yapster.

2:57:03

Um which uh is is also very heavily inspired by HQ Trivia.

2:57:10

I don't know if you've played around with Yapster, but um it's an interactive game show where you basically can submit memes.

2:57:15

uh the players can vote on the memes and like the winning meme each show uh is launched as a token.

2:57:20

Uh so it kind of has that and it's 100% live and everyone kind of like votes in real time.

2:57:28

There's a chat functionality.

2:57:28

Um and because of the speculation of like the token that like basically wins at the end, it has that uh feeling of a live show.

2:57:36

So I would put Yapster in my mind as like the only other kind of like live interactive game show that's like really really exciting me right now.

2:57:43

And how how big can something like that get in your mind? I think huge.

2:57:47

I mean, there's like uh the secret sauce at HQ was that you could win real money and like that is the case for like most of these crypto game shows.

2:57:56

I think uh the difference with CTG and Yapster is that uh there's kind of only one winner each time.

2:58:04

Um whereas with something like HQ, uh tons of people could win.

2:58:07

But at the same time, uh, because of that, you had folks basically winning like 25 cents or less than that with HQ because it grew so big.

2:58:16

So, um, yeah, I think like I don't necessarily know that like a live interactive memecoin show is going to onboard the masses, but um, there's like tens of thousands, if not hundreds of thousands of people on crypto Twitter right now.

2:58:29

What What are you seeing right now on uh, because I know you'll end up advising or investing in in other early stage crypto projects.

2:58:35

What are you seeing uh as far uh kind of trends in the early stage?

2:58:41

You clearly made the decision with CTG not to raise money and you had every opportunity to.

2:58:48

I remember in the early days you would ping me and you'd be like, "Oh, this fund, you know, and I would, you know, we we would have I remember having kind of conversations about why it would probably not be good for CTG if you were to raise and then but many people I think wouldn't have made that same decision." Yeah.

2:59:04

No, I think uh with regards to raising, I think like not every single idea has to be a venture scale idea.

2:59:11

I mean, we've spoken a ton about this, you know, offline, but um I you know, I think CTG was uh dreamed up as uh initially a drop, like a personal drop.

2:59:21

Uh I think that uh it's not like HQ in the sense that we really embrace seasonality and try to be very close to a TV show.

2:59:28

Uh and so we technically go off air for like months in between.

2:59:33

And I think uh the players need that because it's so intense and we need that because it's so intense.

2:59:39

And um yeah, I think you know if we had Rays we probably would be on that like hamster wheel of like having to build some sort of scalable platform so communities and people can kind of like spin up their own versions of the game and it was just like a very manual process and I I felt like um it wasn't necessarily the right choice for um CTG. But um I don't know.

2:59:58

I'm I'm excited about uh Pixie Chess, which I know, you know, our friend Josh has started.

3:00:03

Uh and for those listening that aren't familiar, um the way that it's been described to me is is basically like a nounstyle auction for different uh onchain chess pieces that have magical powers.

3:00:17

So you can imagine a queen that goes invisible or a bishop that can go backwards, forward, sideways, etc.

3:00:22

And every single day there's a different auction.

3:00:25

You essentially acquire these pieces, add them to your deck, and the funds from those auctions go towards different Grand Slam tournaments that you can like take um basically take your uh deck with you and and and play against others.

3:00:37

Um really excited about that.

3:00:39

Uh I've been playing around with um Vertigo uh which is a new uh like decentralized exchange on Salana that's like anti- sniper.

3:00:47

So, I know um we you know spoke spoke you guys spoke to to Ben and Alain and and you know a lot of these token launchers and and tokens kind of have a a sniper problem basically where someone will buy up most of the supply and instantly dump it.

3:01:01

So I think like building uh exchanges with like cleaner token protections and and anti- sniping mechanisms is um something that's just going to be net beneficial to to everyone.

3:01:11

So yeah, those are a couple things that come to mind.

3:01:14

Um, and then the last is uh probably Token Works, which is like the closest thing we have to uh crypto mischief.

3:01:21

They do different like token drops.

3:01:24

I think I saw you posting about that. Yeah, really excited.

3:01:27

So, um, it's Brian Armstrong next. I think so. I think we'll see. Check the calendar.

3:01:33

Well, thank you for coming on.

3:01:34

Your first the first official. Oh my god.

3:01:37

Thank you so much for having me.

3:01:39

Not on the set, John, but there you are.

3:01:42

Thanks for coming on, Dylan.

3:01:42

and thanks for all the help on the show.

3:01:48

We got Brian Armstrong next.

3:01:48

The gong is still in the studio. This the gong. The gong.

3:01:52

The real gong rings much longer than the fake gong. Yeah.

3:01:56

Um while we're waiting for Brian, let's tell you about adqu. Adqu. com.

3:01:59

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3:02:02

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3:02:04

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3:02:11

It's out of home built different, John. It is. It is.

3:02:13

Uh, and we have Brian Armstrong here.

3:02:15

Welcome to the stream, Brian. How are you doing today? I'm doing great.

3:02:19

Thanks for having me, guys. Great to have you. Welcome.

3:02:23

Um, I don't even know where to start.

3:02:23

I mean, we were kind of in the Y same YC batch.

3:02:27

My first company was in YC summer 12.

3:02:29

Uh, it's been It was Soilent or Soilent.

3:02:32

I It's a weird story because I joined the company shortly after YC and I was in a different YC company.

3:02:36

So, uh, but that's a story for another day.

3:02:38

Um I I give uh John uh problems all the time for for not you know tapping you on the shoulder and you know demanding that you take an angel check in that era.

3:02:47

But uh anyways well 2020 hindsight I I can assure you we were not like the the hottest startup in that YC batch at the time.

3:02:56

I mean it was hard to actually raise our seed round etc.

3:02:58

But you know obviously it worked out.

3:02:59

It was not not obvious though. Yeah.

3:03:01

Was it was it what was the incentive for joining Coinbase back during the YCD days?

3:03:05

Was it a full Bitcoin as a referral fee?

3:03:07

Yeah, I mean, I was kind of stealing a page out of the PayPal uh book where, you know, everybody would get about I think you could Yeah.

3:03:14

If you invited your friend and they onboarded, they got $10 of Bitcoin and you got $10 of Bitcoin.

3:03:18

And at the time, that was like about one Bitcoin.

3:03:22

So, so crazy to think about. Yeah.

3:03:24

And there was a lot of people.

3:03:24

I went around to like probably th a thousand or more people in the Bay Area at that time.

3:03:28

And anybody I could find, I'd be like, "Hey, do you want some Bitcoin?

3:03:31

Like, I'll send it to you on my phone."

3:03:32

And I'd try to get them onboarded to the Coinbase app.

3:03:34

And yeah, I think when we started out it was like5 or $6 for a bitcoin. Yeah. Yeah. Yeah.

3:03:39

Um so so how do you tell the story of Coinbase now?

3:03:42

I mean it's such a huge story.

3:03:44

Do you think about it in particular eras?

3:03:46

Are is is the going public era a different distinct era or or do you or do you even map it to like the the the bull the bull cycles and the and the bear cycles?

3:03:58

Is that does that have a a tangible feel in the Coinbase story internal to the company? Yeah. Yeah.

3:04:06

Well, I I think of it in different So Fred Wilson had this great thing he told me one time.

3:04:09

He said like companies have multiple founding moments on the way to being a public company. Yeah.

3:04:13

And that was definitely true in our case.

3:04:14

that was definitely true in our case. So the first era was it was like Fred Ersome and myself in an apartment just grinding it out like you know 14-hour days just doing everything ourselves like answering customer support tickets like trying to recruit people trying to

3:04:29

get anybody to join uh writing code this ourselves right and so that was like the pre-product market fit like how do we try to get something moving and then you go through hyperrowth right and your problems totally change which is like how do we get a real set of leaders ers into this company? How do we not get

3:04:46

How do we not get hacked?

3:04:47

How do we go raise more money? Like build a real board?

3:04:49

And so you go through this period of hyperrowth where we were like we'd never managed anybody, but we were suddenly we were managing 25, 50, 100, 500 people.

3:04:57

And we were we were hypers scaling just trying to keep up with all the demand.

3:05:02

And then you know crypto went through ups and downs.

3:05:06

You eventually uh Fred decided to go found his own company which was super successful like paradigm and he's doing another company now.

3:05:11

So I had to bring in an executive team.

3:05:13

That was like its own experience with a bunch of infighting and blowups and drama and I finally got a exec team that worked and then we went public and you know Emily Choy is like our president and COO now.

3:05:25

So she's like you know it's multiple foundings along the way to get to these uh eventual outcomes.

3:05:29

It it takes like 10 years to be an overnight success quote unquote overnight success.

3:05:33

We love overnight we love 10 year overnight success.

3:05:36

We lost the overnight success but we have a soundboard and it plays overnight success.

3:05:39

Every time somebody says it took them 10 years to really be successful, we hit that.

3:05:42

But um uh what what other industries did you look have you looked to for learnings to kind of like build through these boom and bust cycles because it feels like you know you guys are are acclimated to that now.

3:05:56

But I know I know this is you know the case oil and gas is is probably a prominent one.

3:06:00

Did you were you able to pick up anything from outside of crypto to help you steer the ship through cycles? Yeah, a little bit.

3:06:09

I mean, every company has different challenges.

3:06:10

So, I actually don't think ours are that bad, but one of the one of the challenges we had when we were getting ready to go public was like our revenue was super unpredictable and volatile, right?

3:06:18

Like, we'd have a trading quarter where we would just blow it out of the water and we'd be like printing money and then we'd it'd be down like 70% the next quarter or something.

3:06:27

And, you know, in the public markets, investors really love you to have these predictable revenue streams.

3:06:31

I don't I actually don't I still don't to this day know why they're so fixated on that.

3:06:34

It seems like they should be thinking about the growth potential, but they love the predictability of it.

3:06:38

And so, yeah, we had to look at oil and gas.

3:06:40

There's like some energy brokerage like if you know, actually the traditional brokerages like like NASDAQ and NY like they have the same issue.

3:06:47

If they can tell you, one of them told me one time, he's like, "If you can tell me what the S&P 500 is going to do next quarter, I'll tell you what our revenue is going to be."

3:06:52

But of course, like if you can do that, you you've got you got you got like you got it made in other ways.

3:06:56

So, but you know, whenever I'm I feel like we're having a bad time, I always look at like the hard tech companies, right?

3:07:05

Like the biotech companies in the public markets get beat up way more than we do.

3:07:09

Um, they have much less predictable revenue.

3:07:12

Their revenue is pushed out way farther.

3:07:14

All my friends who are working on hardware companies, I'm like, "Wow, they're really doing entrepreneurship."

3:07:18

You know, I'm like, they're they're they're always calling me up and like, "I've got four weeks of cash, you know, we're trying we're trying to raise money."

3:07:25

And I'm like, bail me out.

3:07:27

You've been trying to raise money like every month for the last 18 months, just living like one month to the next month.

3:07:32

And like those guys have true grit.

3:07:34

So in software, our margins are high and it kind of covers up mistakes that we make.

3:07:40

And we actually had revenue relatively early in our journey.

3:07:42

Whereas in like in biotech, you have to invest in it for 10 years to try to get your first dollar of revenue sometimes. Yeah.

3:07:47

Uh there there were a whole bunch of narratives around crypto back in 2012 even before uh decentralization, resistance to government control, an anonymity, uh just faster payments, all these different things.

3:08:02

What's the state of the union from your perspective?

3:08:03

How would you grade the the the different executions across the original goals?

3:08:10

Some of them have just kind of fallen by the wayside as we found different solutions to those problems.

3:08:14

But what are you uh what do you think we've knocked it out of the park on and what do you think we still have a lot more work to do on?

3:08:24

Well, the ultimate vision for crypto was always economic freedom in my mind.

3:08:26

In fact, that's the mission of Coinbase is to increase economic freedom in the world.

3:08:31

So that's like how do we give people more self- sovereignty, more control of their money.

3:08:34

It enables them to not only like live a freer life and have not be have things taken away from them, but it also it's better for society because if we have a society with good property rights and sound money and like rule of law and these things, you can actually try more things.

3:08:49

Like if if people are rewarded with the upside of their labor, they're going to they're going to go try more ambitious things in the world.

3:08:54

ambitious things in the world. So you see that there's actually economists who measure across different countries like how high is economic freedom and you see that in high economic freedom countries there's like higher GDP per capita but there's also like less corruption there's less war there's lower infant you know lower infant mortality like all

3:09:10

these kind of downstream effects so the ultimate potential of crypto is to get more economic freedom in the world and we've been trying to push on that through a variety of ways like one way we've done it is by getting legislation passed in the US or pushing on that we had a big influence in In this last election, uh, the crypto voters showed up in a massive way. We had like 2

3:09:26

We had like 2 million advocates who raised their hand in the US saying they wanted to elect a pro- crypto congress and candidates.

3:09:31

We had like a couple hundred million dollars in the in the fair shake super PAC.

3:09:36

And so we now have the most pro- crypto congress that we've ever seen and we're on the cusp of getting stable coin and fair and uh market structure legislation passed.

3:09:44

The other thing is we've been pushing on our products, right?

3:09:47

They have to be easier to use for the average person.

3:09:49

like the early crypto products were just it felt like some computer scientists came from on high down the mountain and they tried to make this accessible to mere mortals and like that was never going to work.

3:09:57

So the products are slowly getting easier and simpler for average people to use and crypto's growing into these areas like payments and tokenizing securities and it's not just like trading as a as a use case, right?

3:10:10

So we're getting closer and closer, but ultimately I think crypto is going to update the entire financial system globally and like the majority of all payments will run on these crypto rails.

3:10:19

They're just faster, cheaper, more global and that's how we're going to get more economic freedom in the world.

3:10:24

That makes a lot of sense.

3:10:26

Do you think the conversation around economic freedom over the next few years will shift away from the US and more towards emerging markets who are adopting digital assets but uh may face you know push back from from their governments and you know potentially even more aggressive way than we have in the United States over the past four or five years.

3:10:45

Yeah, it's a great point because I think the unmet need is higher in some of these other count emerging markets, right?

3:10:51

where people like in Turkey they're getting like 70% inflation a year or something.

3:10:55

It's just like it's devastating to their entire economy.

3:10:58

People have very high demand for the dollar and then Bitcoin.

3:11:00

Same thing in Nigeria, etc.

3:11:02

Now, some of those markets are going to be very resistant to it.

3:11:07

Like especially if the government is not fully aligned with the people's interests like the government wants to run their fiat currency because then they can kind of print money and abuse it and you know it's um it's one of these kind of original sins of like fiat currency, right?

3:11:19

So or like some of these these markets have capital controls, right? Like in India.

3:11:23

So I I think the governments will be somewhat reluctant to embrace crypto in some of these places, but the the average person will love it.

3:11:32

Like the people are demanding it.

3:11:34

They're rushing toward it.

3:11:36

The governments are a little hesitant.

3:11:37

And so in democratic countries, it'll be an it'll be allowed because more people will vote for it.

3:11:43

But in places like China, they're really cramping down on it.

3:11:46

You know, I don't think North Korea is going to add it anytime soon.

3:11:48

So, it's a little bit like the internet, right?

3:11:51

China has the great firewall of China.

3:11:53

Uh, North Korea has their own private internet.

3:11:55

And so, some of these like really corrupt regimes, I think, will have they'll try to crush crypto.

3:12:02

But in most places in the world, it'll happen.

3:12:03

North Korea even has their own Linux distribution, Red Star Linux. Did they? I didn't know that.

3:12:08

They gave it a cool name.

3:12:09

I mean, you got to admit it's a cool name. It is a cool name.

3:12:11

Um, I want to talk about Bass.

3:12:13

Obviously, it's powering a lot of uh consumer crypto use cases right now.

3:12:17

like what how did that come about?

3:12:19

What has it been like incubating something like that inside Coinbase?

3:12:24

Yeah, a lot of people have asked me about that because they're always surprised that like a relatively big company can still innovate or whatever, but I think the uh the way that you know I can't take too much credit for it.

3:12:34

By the way, the big the biggest thing that I did was I we have we have a very entrepreneurial culture, different people we've brought in and um Jesse Pollock came to me at one point.

3:12:42

He was like, "Hey, I want to work on a new chain."

3:12:45

And I was like, "Cool, like take a small team, go run at it, you know, like two pizza team or whatever, like five people."

3:12:51

And I had no idea if it was going to work, but the the biggest thing I didn't he deserves all the credit to be honest.

3:12:55

The only thing I did was I kind of shielded it from the rest of the organization a little bit and just gave them time to cook.

3:13:01

And he went through like five or six iterations and I I I saw a couple of these along the way and I was like, honestly, I have no idea if this is going to work.

3:13:07

Um, and it turned out to actually really hit.

3:13:10

And so that's that if there is like a secret to this, which I don't I don't know if it's a secret, but it's like you have to allocate some percentage of your budget to these venture bets and toler two, three, four people like working on it.

3:13:25

Kind of like a YC company, not like don't put a hundred people on it or something.

3:13:28

It's going to be like a big bureaucratic thing.

3:13:29

Um, as long as they're small bets, you can tolerate like, you know, 75% of them not working out and once in a while something hits and it pays for all the rest of the bets.

3:13:39

I mean it's just it's kind of like having a venture capital internal at the company.

3:13:41

So we actually set up this thing called um we call it like next bets and twice a year anybody in the company can come pitch um it's like a a group of people we call it like internal venture capital and they're basically the people who run different product groups but there's also some really kind of like smart young engineers etc.

3:13:59

Basically if any one of them raised their hands and said I want to fund that out of their budget then you're green lit to go do it.

3:14:05

You don't have to get a unanimous yes.

3:14:06

you just need one person to say yes.

3:14:08

And there's there's actually some pretty big like USDC.

3:14:12

I will tell you I actually voted no on USDC to like which was a terrible now it's like it's like almost a billion dollars of revenue or something for us.

3:14:21

Um and and I I voted no because I was like a little skeptical.

3:14:24

I didn't think it was like decentralized enough or something.

3:14:28

But luckily somebody else on our team voted yes so it got funded and it turned out to be a massive thing.

3:14:31

So it shows you how much I know. That's incredible.

3:14:35

Uh, I want to talk about, uh, putting stocks on chain.

3:14:37

You go back to that original like Peter Teal lecture in the 90s talking about maybe we could have a digital dollar that's not backed by gold or the treasury, but actually backed by stocks.

3:14:47

Um, is there a world where that happens? What needs to happen?

3:14:52

Is there a world where Coinbase shares are securitized on chain?

3:14:54

And I I know you probably can't give like forward guidance around that, but like walk me through the the the changes that would need to be made.

3:15:03

And is that even a good idea in your mind? Yeah.

3:15:05

Well, well, just starting first with that PayPal uh point that you made.

3:15:09

I mean, there's a great book, I think it's called PayPal Wars.

3:15:13

I believe it's about the founding of PayPal.

3:15:15

And um you know, it really there was a lot of like that libertarian ideology of like economic freedom was in the origin, the founding team.

3:15:23

As you can imagine, they went on to do many other things.

3:15:25

Um and I think like in many ways, crypto is fulfilling the vision that the early PayPal team started with around economic freedom.

3:15:34

And the the the main reason I can think of for that I mean there's a lot of reasons they got acquired by eBay etc.

3:15:38

the the team changed and some of the motivations but like at the end of the day nobody wanted a US company to run the global financial system like if you were the Indian government or random person in some country like you didn't do I really want to put all my money in some US company but if it was a decentralized protocol that nobody controlled like kind of like the internet it's like okay we'll all kind of integrate with that.

3:15:59

And so Bitcoin was like the key innovation I think that unlocked that opportunity.

3:16:03

Um let's you also asked about like kind of tokenizing securities and I I do think that's an exciting area.

3:16:10

We're we're pretty interested in that as well.

3:16:11

Um you know it's like the trading of stocks is just one more area of financial services that could be improved by crypto.

3:16:18

I mean as an example um there's a lot of people around the world who want access to US securities but they don't have a simple way to open a brokerage account and track that.

3:16:27

So it's like the international access would be better.

3:16:30

You could get like perpetual futures markets spun up for these stocks which would give traders more leverage.

3:16:33

You could do 247 trading.

3:16:35

You could do fractional shares.

3:16:37

So I actually think like most traditional securities are going to get tokenized on chain in the next 5 years.

3:16:43

U we we've been working a little bit with like the SEC task force on this and trying to find the right path to do it.

3:16:48

So it's something we're interested in, but yeah, obviously nothing to announce today.

3:16:51

Where are you getting the most leverage from AI internally?

3:16:56

I can think of a bunch of different potential applications, but I haven't seen you do online virtue signaling about it yet like like other certain CEOs have.

3:17:05

Uh but I'm curious, you know, what what you're excited about. Yeah. Okay.

3:17:09

Well, so I think we're doing a lot of the current best practices that most people are doing with well-run companies.

3:17:16

And then there's a couple areas on the horizon that we're that are more cryptosp specific that I'll tell you too.

3:17:20

I mean the basic ones you probably know it's like we got we onboarded all of our engineers to co-pilot and cursor and everything like that.

3:17:27

So we got 100% of them onboarded that was good.

3:17:29

Um our customer support I think like maybe 60% of inquiries are being answered by AI now which is really good.

3:17:36

We also for a long time been building AI models around um fraud prevention and like detecting risky transactions.

3:17:43

Um so but you can yeah obviously like any process within the company that has a clearly defined input and output you can train a model on and like um generating compliance reports like there's so we're trying to integrate it everywhere the ones that are a little more on the frontier or like cryptospecific uh for us.

3:18:04

So, one is that um I guess people are calling it agentic commerce, right?

3:18:08

Which is like, you know, your agent is increasingly kind of like your assistant and it might need to book you a ticket to go somewhere or it might need to get through a payw wall or something like if you're like, "Hey, go read all the research papers from Nature on this topic and give give me a report."

3:18:22

Like, okay, those cost money to ingest it.

3:18:23

And so AI agents are going to need to have a wallet to go pay for stuff.

3:18:28

Um we think that crypto will be the backbone of that.

3:18:32

like USDC on base is um is starting to be adopted by some some of we we actually released this open source thing called agent kit which makes it easy for any LLM to have a wallet and um we're working on a couple of uh checkout type solutions with other players that we'll announce soon where um AI the AI agent can actually get through the checkout flow in many of these e-commerce sites and pay with USDC on base.

3:18:55

So I think agentic commerce will be a big one.

3:18:57

Um, I think it's also we're going to get like AI agents that can be kind of like your RAIA, you're like your registered investment adviser or almost like your your trading bot.

3:19:08

So, imagine like you you you're in the Coinbase app and you kind of tell them, "Hey, I want to put like $1,000 or $10,000 something into this account and you're talking to a trading bot and you're like, just go make me money."

3:19:17

You know, I I don't know like don't make tell it, you know, make me I I joked about this before 10% compounded return daily. Don't make mistakes. make mistakes. Yeah.

3:19:28

And it it may have some questions for you or like it may make mistakes and like there's a lot of details to figure out, but um I think having a trading bot like do a lot of that for you and it's like, hey, make like if I if it goes up a lot, lock in some gains, you know, so I don't regret it later.

3:19:44

You can give it kind of abstract concepts like that and it'll go it knows how to make the limit orders for you or whatever. Yeah.

3:19:49

How how do you think that uh how do you imagine that type of capability really being dispersed?

3:19:56

dispersed? Because I imagine I mean obviously there's people with you know trading bots today and they're actually I imagine some of them are so effective that they just say well we don't actually want to release this because we should just use it ourselves but it it

3:20:11

sort of could potentially tie into this dynamic between closed source AI and and open source AI and is that is do do you think part of Coinbase's opportunity is toffect if you know make sure these types of tools are available to as many people as possible versus just a handful of of traders. Yeah, it's kind I mean so

3:20:27

Yeah, it's kind I mean so we we're not doing prop trading on our own balance sheet.

3:20:32

So we're not like trying to be a hedge fund or something with a proprietary algorithm.

3:20:35

So our goal would be to like make this available to as many consumers as possible.

3:20:39

And yeah, I mean it might it's kind of adjacent to financial literacy, right?

3:20:44

Like many people might come in and be like, "Yeah, I want to make like crazy returns."

3:20:47

And this thing can kind of tell you, well, okay, that's pretty high risk.

3:20:50

high risk. like why don't you like dollar cost average into this um diversified portfolio over time and like that might be more in line with your risk appetite but if you want to take 10% of it and try something more high-risisk like you know so it can it can teach people about these concepts um and while also doing what they

3:21:07

ultimately want to do what they would have done anyway in the app but it's just making it easier for them totally uh can you talk about the extortion attack how you handled it and I'm particularly interested in going forward there's a lot of tools in your toolkit, you can throw more money, more people, more technology at the problem. What's

3:21:23

What's going to what's the next few years look like in terms of beefing up security? Yeah. Yeah.

3:21:31

Well, I I mean, we've had a really good track record on security at Coinbase over the last 12 years.

3:21:35

And even in this attack, you know, we didn't see any private keys or funds accessed directly by the attacker.

3:21:41

So what they unfortunately they were able to do is they were able to bribe some of our customer support agents and to share with them like personal information on on customers like name, address, etc.

3:21:52

And you know they want this information.

3:21:53

Attackers want this information because they want to text people, call people, try to socially engineer them and to get them to send their money.

3:21:58

And so unfortunately they were able to successfully do that with a handful of customers which we've reimbursed 100% at this point. Mhm.

3:22:05

Um and then they sent us this demand once once we were, you know, they realized they had been found out and customers were kind of getting educated about this.

3:22:12

Um they sent us this demand for $20 million or we're going to release all this information and it was an interesting moment.

3:22:18

You know, we came together and thought about it and um you know, on the one hand, we could have paid them the money, right?

3:22:25

But we were we we talked to a bunch of security researchers and people and they were like, you know, there's really what typically happens in these cases is you if you pay the extortion, they're just going to come back in 3 months and extort you again.

3:22:35

And and it's like, do we really want to be in this situation where we're like funding their next attack and like rewarding this kind of behavior or do we want to try to create a deterrent to this kind of behavior?

3:22:47

So, we we decided to flip it and as you probably saw, we put out a $20 million bounty for any information leading to their arrest and conviction.

3:22:53

And that's been kind of a crazy experience.

3:22:56

I mean, just as one data point for comparison, after 9/11, the US government put out a $25 million bounty on Osama bin Laden, and we put out a $20 million bounty on these guys.

3:23:06

So, we had like maybe 5,000 uh in like tips or inquiries like come into the the email that we put out there. Most of it was junk.

3:23:15

and we we kind of wheeled it down.

3:23:17

There's about like 70 or so credible leads, I would say.

3:23:21

Um, and we always have to be a little careful because some, you know, some of these could be like the the uh the threat actor themsself sort of trying to throw us off the trail or run down some wild goose chase.

3:23:29

Um, some of the other people sending in uh tips or leads are like other threat actors who kind of have beef with these guys or like they're um there's kind of like no honor amongst thieves, right?

3:23:40

And uh so, you know, I'm which is fine with me, but it's I I really enjoyed the the you know I saw the video that you put out and I enjoyed imagining the dynamic of the thieves real you know sitting around a table realizing that you know that the sort of game theory of who's going to turn in who you know it was a it was a nice it was a nice visual. Yeah. Yeah.

3:24:04

So that's exactly what we're we wanted to create was a real a real deterrent here.

3:24:08

It's like if you're if you're going to attack our customers, you know, you need to look over your shoulder um and always wonder like who's going to turn me in or who did I interact with in my entire life who might have known about this, who's going to turn me in.

3:24:20

So anyway, I I can't say too much more.

3:24:22

We're working closely with law enforcement, but we're going to run down those leads and and hopefully get a good result.

3:24:27

I mean, you you asked about beefing up security, too, I think.

3:24:29

And uh yeah, just kind of going forward, you can imagine let's Let's hire more people, better people.

3:24:35

Let's throw technology at this.

3:24:37

Let's monitor comms and where data is flowing.

3:24:39

Is this more of a technology issue or a talent issue or an oversight issue or policies? Like what?

3:24:46

Like how do you see investing in the next round?

3:24:48

The thing that popped into my mind the way that you're already leveraging AI is there's a world in the future where a more secure CX function would be entirely code, right?

3:24:57

and and you wouldn't it'd be much you know you could create an environment or at least AI oversight of everything of every interaction but yes I'm interested to hear what your take is. Yeah.

3:25:08

Well, it's a great point.

3:25:10

I mean, the the 60% of inquiries being answered by AI now, I mean, they're they're not going to get bribed.

3:25:15

I mean, there are other threat threat threat vectors with AI, too, right?

3:25:19

Because people are always trying to jailbreak these agents and things.

3:25:22

So, it's not there's not a perfect solution, and I don't think we're going to have we're still going to have like human in the loop on a lot of things for a long time.

3:25:27

Um, but yeah, there, you know, never let a good crisis go to waste.

3:25:31

Like, this was definitely a good moment for us to go implement a bunch of changes.

3:25:35

and we mobilized a team of about three or 400 people like right away that just went into overdrive kind of trying to lock down a lot of these systems.

3:25:42

A lot of it was not just um our own systems.

3:25:45

There's vendors that we work with that you know we needed to push them to hit a higher bar as well.

3:25:51

Um we did relocate some of our uh customer support operations.

3:25:54

Um you know the ones that got targeted the most were these overseas um contractors and things like that.

3:26:01

And you know, you can imagine like some of the money being offered as bribe that would have been like pretty imp impactful even in the United States if people were there.

3:26:09

And we we need to have 247 coverage etc.

3:26:11

So it's not a perfect solution to like just move it all in the US and pay people more.

3:26:15

Like it doesn't 100% solve it, but we are relocating some of those support operations and then essentially just hardening our systems.

3:26:23

Like luckily we had we had some good controls already which limited the scope of it, but we obviously didn't do enough and so we've got to keep investing in that. Yeah.

3:26:30

Do you have any uh advice for younger builders, maybe the the younger version of yourself?

3:26:37

You know, we had Chris Dixon on the show earlier today and he said that crypto, you know, one of crypto's biggest problems now is just a lack of talent.

3:26:47

There is talent here, but uh it's probably, you know, could have 10 times more to create a lot of of great outcomes.

3:26:54

I'm curious if you if you feel the same way around kind of talent in the industry today. Yeah.

3:27:01

Well, I think there's a we we've never been has never had it easier actually recruiting great people into Coinbase.

3:27:06

I I think there's there is like a great partly that's due to our scale, right?

3:27:10