Can MetaDAO Reinvent Crypto Capital Formation?

Transcript

Nothing said on Xerox Research is a recommendation to buy or sell securities or tokens. Hey y'all, welcome back to another episode of Zerx Research. Join joined today by Carlos from the Blockworks Research team and Michael Rinko from Coliseum. Uh, welcome to the show, Michael. Would you like to open up with a brief intro, your background and what you're working on at Coliseum? >> Sure. Yeah, thanks for having me, guys. Excited for the conversation. Um, I'm an associate at Coliseum. Uh, for those that aren't familiar with what we do.

Uh, we're a venture fund. Uh, but we also run the largest, uh, hackathons in the world. We use that as a way to meet talented founders and we'll typically invest in the best 10 or 20 teams that we see out of each hackathon. Um, bring those teams out to San Francisco, which is where I am. We've got a a big co-working space out here. And then we run an eight-week accelerator program um similar to to YC. Um and the idea is that uh you know we help teams go from kind of hackathon stage project uh to raising a proper seed round. Um and up until now we've been exclusively focused on the Salana um ecosystem. Uh so prior to coliseum I I've been in crypto my

entire professional life which which hasn't been that long but I guess the past uh five years graduated school um I was kind of on the investment banking like traditional finance route and found all of my uh internships to be completely miserable. Um so uh decided to to go down the crypto uh path and kind of see what happened. Um, I found my first job actually on Twitter uh from a Ralph Paul retweet. This was back in 2021. Uh, so I worked at a small macro hedge fund. I was like the weird crypto guy in the corner there. Um, so spent about a year there. Really uh got like a first class kind of education on on

macro and how traditional markets work. Um, and was just given like a ton of space to kind of explore my interest in crypto. Um that was actually the first time that I that I kind of encountered Salana um and started to uh to explore the ecosystem. Um but from there I worked at a centralized exchange uh then I was at Deli uh doing research for a couple years and I joined uh Coliseum uh as an investor uh almost two years ago. So um been working here ever since. That's crazy because I also got my first job in crypto from a tweet.

>> Oh [laughter] yeah. >> Yeah. Yeah. But that's that's great. And like within the Salena ecosystem, I guess you're also like you have a lot of personal branding as well like because of your like u because you're early supporter of metadal I guess and that's been one of like your core bets not only a coliseum but like also some of your early writings have been about Metadau. I'm just curious like how you first became involved with like uh Metavalo and like what do you see that perhaps others were missing?

>> Yeah, so I joined Deli uh in early 2023 like the very beginning of 2023 and so at at that point I had like rode Salana all the way up and then most of the way back down so I was like a proper uh community uh uh member. Um, but I joined Deli and like a lot of the guys internally at the time were still bullish on kind of Cosmos and the Ethereum ecosystem. So I was one of the few and lonely Salana bulls at the time. Um, but I just thought as like you know one I I like Salana, I was bullish on it, knew a lot of people from the ecosystem and kind of had a feeling that like Salana wasn't going to go away. Uh,

I had no idea that, you know, a couple years later it would kind of be what it is today. Um, but just decided at the time as like a young researcher to double down on Salana and try and like, you know, be different and write about something or cover something that that other people weren't at the time. Um, so 2023 was at least then was like preje um and then pre kind of like first wave of uh Salana D5's resurgence. So there's a lot to write about when I first joined like I I I wrote about Jetto. wrote about some of like the other potential DeFi airdrops at the time. Um the ecosystem was kind of like you know inching its way back from FTX. Um so it

was like a very interesting time to be like looking at the Salana uh ecosystem more broadly. Um at some point though that changed once all the DeFi air drops like came and went. it became like memecoin season and as a researcher as you guys probably know it's really hard to write about memecoins like you're supposed to write these research reports that are like intellectual and have analysis and are serious and obviously like you know you can't really do that on a memecoin. So, there was a period I was sitting at my desk and I was like trying to figure out what to write about because the only thing that the only things that were like pumping that people were paying attention to and talking about were memecoins and you know that it's it's a weird situation because the market's

going up, everybody's making money, but like you're I was kind of sitting there feeling frustrated and jaded as like a you know, as a researcher looking just for you know cool technology stuff to write about. Um, and I felt like I wasn't seeing a whole lot of innovation on Solana or like more broadly in crypto. It just kind of felt like a bit of a stagnation. Um, and it was around that time that metad kind of crossed my radar. Uh, and my first like thought about it was like, ah, this is new. I didn't really I'd never heard of Futarchy before. Actually, I hadn't ever come across Robin Hansen's writings. Had never heard of it. Um, but I was like, this is new. Never seen this before. I

don't think it exists on Ethereum or anywhere else. And that was the kind of initial thing that drew me in was just the novelty of it. Um over time I got to know uh Profit and Colin, the two co-founders uh better. Um started to spend more time in the Discord, realized that like some of the smartest people in the Salana uh ecosystem were just like hanging out that Discord talking. Um we're also excited about Metadow. Um and yeah, from there kind of just like explored, you know, uh explored my curiosity and um really fell down the rabbit hole on on futarch and metad.

>> Yeah, the block works research team has been following metadata from it's pretty pretty early days. I think we quickly saw it to be, you know, a really exciting experiment in decision- making and how you can allocate capital in in like an onchain system. um and a very interesting contra to kind of the the misallocation of capital we've seen with a lot of Dow proposals historically. Um but from its early days it's kind of pivoted from uh what would be a tool for a DA or protocol or business to engage in futarchy for decision- making to something broader and certainly bigger

which is the the capital formation platform. Um, so I'm curious how how your thesis has evolved throughout that history and how much of the opportunity is about decision markets as opposed to the capital formation angle. >> Yeah. So at the very beginning like the first week or month whatever it was of my you know metad journey I the only thing I was bullish on was like this is new and the market rewards things that are new because it's rare to find new things in crypto. Um that was the extent of my understanding and thesis on metadata.

From there it kind of you know quickly evolved to maybe a more fundamental thesis uh around decision markets which I'm still super bullish on. Um but the thinking there was like you know Dowo 1.0 uh Dows 1.0 I guess if you could call it that uh with token voting have just totally failed. uh to me like it's just not worth running the experiment anymore um because it doesn't work. Um so I was just like I I was kind of of the opinion that we should be like trying other ideas and like uh versions of of governance and this was kind of the first um kind of plausible one that I had come across. Um, so yeah, I thought

decision markets made a lot of sense for uh making decisions and and governing uh crypto protocols and companies. Then I saw proposal 6. I don't know if you guys are familiar with with proposal 6. It's it's kind of like a part of the metadalore at this point, but um this guy named Ben Hawings Hawkins who at the time maybe he's still there, but at the time he was working at the Salana Foundation. Um he was like an early uh Metadav utard. Um and I think like Medadav's market cap was like a couple million maybe like 2 million or something like it was super small.

Really nobody was paying attention to it outside of like 12 people on Salana. Um but you know Metadow needed uh USDC to bootstrap its AMM liquidity. Um, so they raised a proposal to sell some Meta uh in an OTC deal with this guy Ben. So Ben was gonna, you know, give his USDC to Metadau and Metad was going to give him some Meta in return. Pretty simple deal. Um, and when they struck the deal, I don't remember the exact numbers, but basically the price Ben was paying was like slightly above uh the the market uh price for Meta at the time.

Uh for whatever reason after that proposal came out, Meta started to pump. So it went up like 200 or something percent. Uh dur during just the proposal trading window of like three or four days. Um so very quickly the price Ben was getting went from being like somewhat fair to like just a incredible deal. Like he was he was buying Meta like significantly below market. Um so the community started to kind of uh you know uh push back against the proposal and was like you know this is a really bad deal for the DAO. It's also a really bad deal for like other Metadow holders because they're getting diluted and this this guy is getting like a sweetheart deal. Um so people started to

trade against the proposal and try and fail it. Um, and I think for mainly to kind of um, test the system, but also perhaps for some um, personal gain, Ben decided to like use some c some of his capital to try and force through this decision. So, he ended up spending, I think, a couple hundred,000 trying to trying to uh, pass this this decision. Um, and you know, a couple hundred thousand dollars now maybe doesn't seem like a lot of money, but like at the time, Meta was like a couple million dollar market cap. So, this was a significant fraction of its market cap just being applied to to trying to pass this one governance proposal. So, this is this was like a a classic example of

like a whale trying to force through a decision, right? Which is something that that we've seen um across a lot of other Dows and ultimately the decision failed. So like a bunch of like random Meta holders like kind of um small traders all banded together and traded against Ben and essentially bled him dry. He ran out of money, capitulated and the market uh ended up failing and the deal did not go through. So the you know holders were saved from dilution and the meta Dow was um saved from what what now was uh or at the time was a really bad deal. Um so anyways when I saw that and I saw that it was basically possible for uh uh

decision markets to prevent uh whales from um uh overpowering small holders and forcing through their favored decisions just with like kind of sheer capital. Um I was like okay this is like a this is a a like real improvement over token voting. I have no idea how it's going to get adopted or how quickly it's going to get adopted, but I do think over like some long-term period that like decision markets futarchy is probably how all crypto companies will be governed. Um, so that was kind of long-winded way of saying that was like my initial thesis for metadata was like this is the next generation of like governance on Salana and probably all of crypto. Um, so in

those early days like they were essentially selling like a SAS product to other Dows. So they went to like Jetto and Drift and some of the other big DeFi protocols at the time and were basically like hey you know you guys are using realms you're you're kind of your governance is running on token voting how about you shift that over from you know token voting to this thing called futurearchy and like use our platform and I mean a couple teams ran pilots but like the experiment basically like totally failed um and there's you know a number of reasons we can get into for why but like people just like weren't interested. People don't really care about governance, I don't think.

Um, and like most of these big teams like just do governance to like shut up their holders, but they really just want to like make all the decisions and don't want to deal with like any annoy annoyance. Um, which is totally fair. Um, so like nobody really like wanted to use the metadow governance SAS product I would say. Um so then there was a period where they were kind of like walking stranded in the you know um desert it felt like where they were like damn like we have this really cool idea this kind of new technology called decision markets that like obviously are going to be the future but we just have no idea how to kind of productize this and like find our initial wedge into the market.

Um, and I think it was kind of like a confluence of factors, but I would definitely uh point out Felipe uh Montilgro from Thea as being like really really I think influential and kind of pointing this technology primitive decision markets towards capital formation. Um and the idea being that like uh futarchy decision markets are like uh at kind of uh at some very basic level just like rug protection. Kind of like the Ben Hawkings example. Like that's maybe not like a classic rug, but like you could call that kind of a rug. If you if that proposal was allowed to pass it would have been like a really bad deal. Um but

there are obviously like more egregious forms of rugs that markets protect against. Um, and I think like capital formation in crypto has been just plagued by rugs. So if you could solve rugs, you kind of just like 10x like capital formation in crypto. Um, so Metadow decided to create uh, you know, some people call it a launchpad, other people call it a fundraising platform, crowd source uh, crowdfunding, but a website where people can go to and raise money from the internet basically. And obviously this is not a new idea. It's been tried like a million times over the past like decade or so, but like really none have worked, which is kind of crazy to think about. Um, and the main reason that they haven't worked is like, you know, you go to this website, you click

a button, you deposit your money, and then the money disappears into a black hole and whoever is on the other side takes the money and and goes to Bali and like buys themselves a nice vacation, right? Like that's kind of the fundamental problem with like all of these like crowdfunding platforms. Um, and metadata literally just like solves that. Like one shot solves it with decision markets. Um, and like there's a lot of other problems that you kind of have to solve, but like just solving that dumb simple one I think is like a 10x improvement over kind of what we've had up to this point. Um, so yeah, that I think I'd say that's basically where we're at right now is Metadow is like applying decision markets to to capital formation to raising money on the internet. Um, and I'd say they're at like the very beginning of that journey.

Um, I don't know how many teams have like launched on their platform, but I'd guess it's like somewhere on the order of like 20 30 something like that across permissioned and permissionless. Um, and I think there we're we're and we could talk about it, but they're kind of starting to see a little bit of momentum. I think um, yeah, I think kind of the the the formula has been been set at this point. It's really just a matter of like scaling it up um and then adding in some you know other uh other stuff on the side but kind of I think the core primitive is set which is pretty exciting because it obviously took um a long time and and kind of iteration to get to this point.

>> Yeah, I mean that's a great overview of you basically gave us a history lesson for metad uh like five minutes. So that's great. Um yeah like regarding the last thing you were mentioning like I do think metadata is like the most credible attempt at like realizing the internet capital markets vision. Uh and when you think about the early companies that raised on metadata, like you had like things like Omniper, things like Mountain Capital, then you have like the second wave of applications, maybe like the Aichi, the Ombres of the world, and now mo most recently, you even have companies that already have a lot of traction and already have like an investor table and are deciding to launch on Metadow anyway. Uh I'm

thinking about like maybe lasso finance, credible. So you you get like a lot of like varied like types of founders I guess and different stages of development when it comes to the company even though they're maybe early stage is like the common denominator but I'm curious like from your point of view also because you're in a privileged position at Colosseum like what types of companies do you do you see as best suited I guess to launching through Metadow and which are better served by traditional venture funding still because I guess some companies like are still better served like by by the traditional PC model as opposed to just launching on Metadow and having a token live uh from day one.

>> Yeah, I think maybe it'd be helpful to start with like the pros and cons of um not just Metad, but like I what Metad's asking teams to do at like a fund at a very basic level is like launch a token like do a token instead of equity. And I think there's a set of trade-offs that come with doing a token instead of equity. Um the obvious downside with doing a token um is that there is now a public price on your company. Um which I think can be um distracting, confusing, demoralizing, scary, uh a lot of other negative things especially for early stage teams. Um,

you know, a lot of the teams that we work with at Coliseum are like pre-product pre-users pre-revenue. Like it's a very very delicate kind of stage of the company. Um, where like you're not really sure what this business what this company's going to be. You don't know who your users are. You don't know how you're going to make money. Like you're kind of figuring that all out. and launching a token and having a public price on your company on your head um perhaps isn't you know the most useful thing to do. Um so I think that would be like the steelman um against launching a token.

Maybe the steelman for launching a token um is that you get like an army of supporters. So like a token is essentially I think going to be uh like a new distribution funnel. Um, so there's a couple like classic examples of this, but like Bitcoin is obviously the first one. Uh, if Bitcoin didn't have a token and I don't know, it's just like a a PFP or something like it obviously wouldn't be nearly as big as it is right now. Um, uh, Ethereum Salana used tokens incredibly well to their advantage. And then perhaps the best like recent example is Hyperlid. Uh, you can just see in the chart like when Hype uh launched the token. And I think the thing that I think about with Hyperlid is there are now these large traders,

these whales that trade on Hyperlid with size. You know, they're trading millions of dollars a day. Um, and they got a fat hype airdrop that, you know, maybe they're holding all of it or some of it, but they they've got hype bags, right? And because of the hype token, it's against their economic interest to go and trade on another platform. So if they go trade on another platform, that platform is going to get their fees, which means that Hyperlid is going to get less fees, less burn, and the hype token is going to do relatively not as well, right? So I think like the the presence of the hype token actually creates this moat uh around the business

that wouldn't otherwise be there. Um so anyways, I think you know maybe pro number one of a token is that it gives you distribution. Um the second one is uh it creates um more certainty around uh liquidity for founders. So if you're you know a private uh crypto startup your path to liquidity is like extremely uncertain. Basically like either the business gets so big that you can sell secondaries um to in venture funds um but you need to get to like a certain scale before that's even possible. you get acquired, which is like really unlikely, or you IPO and go public on the New York Stock Exchange or whatever.

And you can count on like one hand the amount of crypto companies that have ever gone public. So like that's also unlikely. Um, so how do you make money as a crypto founder? How do you have like your liquidity event if you stay private? It's really hard and extremely uncertain. If you launch on Metadow, it's it's much easier to reason about like how you get liquidity as a founder. you just have to hit those performance thresh thresholds. So if you launch your token at a 10 million market cap, uh you get an unlock at 2x, 4x, 8x, and and maybe one more after that. Um but it's like more kind of programmatic and and um more certain about um kind of the liquidity that that you'll receive if you execute well and you know the business is is successful. Um

that's the second one. And then the third one is maybe just speed. I would say um you can raise a whole lot faster on metadow than you can in like uh the traditional way. Um so like you know we see it all the time at Coliseum but we invest 250K in each of our teams and the idea is like that's just enough to get them through our accelerator program and then they go and raise um you know a proper seed round. Um and at least right now you know the market is pretty chilly in terms of seed funding in crypto. Um and it's, you know, not uncommon for, uh, you know, fundraising talks to like stretch well beyond a month. Um, which means that like a month at one of, you know, a super critical time for a

startup is like to not spent on building a great product, not spent talking to users, not spent solving your users problems. It's spent in Telegram chats going back and forth with VCs who might or might not ghost you, who are like leading you on to nowhere, who are giving you mixed signals. It's like flirting with a toxic girl, right? Um it's like kind of just a weird messy long and drawn out annoying process. And on Metadata, you can raise in 4 days, right? You just like click a couple buttons, the the raise goes live and you can raise from the internet from people all over the world. Um and you just save a bunch of time and you get your get get the capital and you can go execute on that capital. Um so I think those are

kind of the the three pros. Um now I guess to directly answer your question like which businesses are better suited for metadata versus others I would say like you know businesses uh who on the net benefit from the pros uh more than they kind of are impacted by the cons. So I kind of think about it in like concentric circles. Um like the the the the the circle that makes the most sense where I think metadata has like the most amount of PMF is like DeFi protocols. So like a hyperlquid um a borrow lend protocol a dex um something that's onchain that people are like already kind of linking their wallets to where most of the users are cryptonative where

their users are comfortable hold it holding tokens that business I think can really benefit from attaching a token to it because you create kind of like that hyperlquid style um moat and and uh flywheel of sorts with the token attached to the business. Um, so I think it's, you know, it's not surprising to me that like if you just look at, you know, the, um, first cohort of like Metadel launches, most of them were were D5 protocols. I think, you know, expanding beyond DeFi, I would say the next concentric circle is probably like consumer applications. And you could maybe group some like crypto protocols into this as well. Like I wouldn't be surprised to see Metadel launch more TCG

kind of gotcha style machines. Those obviously have a crypto aspect, but they're really just like pure play consumer um apps. Uh I think those are really interesting for Metadow. I think attaching a token to those could be quite um kind of valuable for the business. Um but beyond that, I think like anything that's like consumer that users are touching that would benefit from this kind of viral coefficient of a token um is is quite interesting. Um what else? And then probably like the furthest concentric circle, like the businesses that make like the least sense from metadata, at least right now, are like the businesses with like incredibly long kind of u build times.

So like I don't know, maybe SpaceX is like a dumb example of this. Like, you know, SpaceX, you know, took a bunch of capital and then spent like a decade trying to build its first rocket, right? Like that probably is not the best fit for Metadow right now. um some of these other like hard tech companies probably also not like the best fit for Metadau right now. I think um Metadow internet uh you know uh capital formation is much better suited for like short capital cycles um kind of software consumer apps you know stuff that benefits from uh virality and attention. Um maybe that changes at some point but that's that's kind of just my my current thinking.

Uh we also know you recently helped organize Metadow's first owners meeting uh which seemed like really stacked lineup of both founders, investors, and owners. Uh I know Blockwork's own Robert Burkart was there evangelizing the TTF. So yeah, curious to hear your context for um launching this first owners meeting and what were some of the the key takeaways you got from that event? Yeah, I mean the the idea kind of just came out of like a simple observation that I that I've had. Um, people talk a lot about like ecosystems or communities in crypto. I feel like the only like tokens or or like projects

or companies, whatever you want to call them, that like have actual ecosystems and communities or like L1's. Um like you know Breakpoint every year is like a really big deal because all of the startups that are building on Salana go to Breakpoint. All of the you know people that hold sold the asset go to Breakpoint. The validators of Salana the network go to Breakpoint. So kind of like this conference pulls all of these people who contribute to Salana the network in like different ways together.

>> [clears throat] >> Um, but like your random like I don't know like borrow lend protocol or like you know pick your favorite DeFi uh project like they don't really have a an ecosystem around them. Like maybe there's like a couple guys in the Discord or Telegram talking but like it's not an actual ecosystem. Um and for whatever reason Metadow seems like it's been able to build this like ecosystem around it. Um, you have people who like actively trade these decision markets. You have investors in Metadow raises and ICOs, you know, Coliseum, FYA, DBA, some of the other funds that that have been active in these raises. Um, then you have the founders who have launched

their businesses on Metadow. And then you've got this like weird group of people that call themselves futards who bull post Metadow every day on Twitter. So there's like all these random people who are like all contributing to the metadata ecosystem in different ways. Um and I kind of just thought like well it's pretty unique that like Metadau has this. I feel like we should bring everybody together. Um and it does feel like you know the Metadau business is kind of like inflecting right now. Like they finally have some kind of semblance of PMF. Um so it felt like you know now is the right time to to kind of do something like this. Um, and the really cool thing was like, you know, we gave people like I forget what it was, maybe like a three-month notice that this

thing was happening in San Francisco. So, like not a lot of time at all. You know, Breakpoint announces what they're going to do a year in advance. We did three months. Um, so I was we, you know, we weren't really expecting much, like kind of low expectations on who would show up. Um, but it was very cool to see, you know, people like drop what they're doing, changed their plans, people cancelled vacations, flew from all over the world. We had people from Bali, from the Middle East, from all across Europe, US. Um, yeah, it it was very cool to to kind of see the the poll that Metadow has and just how passionate people in the ecosystem are about this project and this idea that they're, you know, they're willing to to, you know, move

around their their lives to to be here for one day. It was a one-day conference. So, um, very appreciative that everybody showed up and I I think it's just a testament to to what Metadau has built. >> Great stuff. Like maybe like those zooming out and talking more about like what you guys have been up to at Colosseum and like the hackathons that you guys have hosted like Frontier received like almost 2,900 submissions. like I I cannot think of a most a more bullish chart in crypto than just the Colosseum hackathon product submissions is basically up only. Uh I think you guys do like two or three per year but uh the last one was won by a company

called Crowdbrain uh and 21 teams entered the latest accelerator cohort. So, I'm just curious like from your point of view like what recent winners are you most excited about personally and like what made them uh stand out? >> Yeah, we're bullish on that chart as well. I hope it I hope it keeps going up only. I mean, no no no promises, but uh yeah, it's pretty cool to see uh the hackathons get bigger and bigger over time. Um hopefully, you know, as they get bigger, it it only draws, you know, better builders because they become more competitive. And um one of our like core thesis is like you know the best builders are super competitive and want to go toe-to-toe with you know um kind of the the the sharpest minds and emerge

victorious at the top. Um so that that's the uh the ethos that we kind of lean into with with our hackathons. Um but yeah I mean I'd say like the the high level thing that that makes me excited about this batch is just the diversity that we've seen across like what teams are building. Um, our last hackathon, um, we were super excited. Uh, we came up with this name, Cippher Punk. Um, and like we felt like, you know, it would be like cool and cryptonative and edgy. And we had this Cippher punk name that we were sitting on. We we usually like only announce it a couple of weeks before the hackathon goes live. This was uh last year. Um, and then like, you know, two weeks before we're set to announce, Mert

starts bull posting Zcash. he starts putting like the letter Z in front of every word that he tweets. Um, and like Z obviously like Zcash went on that crazy run and it it was just like a huge like privacy meta in crypto and then our cippher punk hackathon launched. So great timing. Um, we didn't plan it like that at all but the result was that like half of you know I don't know what it was like 2500 projects submissions that we got like half of all submissions were privacy focused. Um, and like, you know, I like privacy. It's cool, but like not every one of those teams is going to like build a great startup. You know what I mean? Um, so it was nice this time around for uh Frontier, our latest hackathon, that we just saw like a

broadening of what people were building. Like yes, we saw some privacy, yes, prediction markets, yes, stable coins, like all of the kind of hot topics that you see on crypto Twitter. Um, but we also saw onchain gaming. We saw Crowd Brain to your point which is a um which is a data labeling company for robotics. Um what else? I mean a little bit of RWAS. Uh we we actually invested in kind of like a uh store of value uh perpetual motion machine on Salana which is interesting. Um but I was I was mostly just excited that we saw like a little bit of diversity in terms of like use cases and projects that people were building. um which is always nice when

you know when uh when people aren't all chasing the same thing. we've seen some some early examples of um perhaps that hackathon winner then you know move through the accelerator then ultimately form capital through metadow um yeah I'm curious >> how you think about this pipeline more broadly and if it's you know the logical outcome for for many of your accelerator projects to then pursue the subsequent capital through the metadow model. >> Yeah, I think you know Metadata has been derisked significantly. I think there's kind of still more room to go there in terms of derisking it. Um, but like you know the

first team that launched a metad Omnipair took like a massive amount of risk because like nobody knew what the hell this thing was or how it worked or if it even did work. Um, and now we've seen you know 20 plus teams launch through this mechanism. we've kind of discovered some edge cases along the way. Um, and all of that is, you know, I think from like a tech perspective, like derisking it and then also from like this like weird almost like case law perspective in decision markets, like also derisking it or removing ambiguity or, you know, ironing out edge cases, all of that, all of that stuff. Um, and then I think just like Medad's ability to um to gather capital and bring bring um link capital and and projects is is

kind of um helpful in in attracting high quality projects. So yeah, I wouldn't be surprised to see more coliseum teams um raise on metadata in the future. I think like that that is one of the reasons that we um that we worked on uh stamp which is like an alternative to the safe contract. Um so stamp just stands for simple token agreement market protected. Um and it's basically a way to raise uh private capital from a fund like Coliseum. So you could take in our our 250k um and join the accelerator but never have any equity attached to your to your company. Um, so the idea is like we'll give you the money and then you essentially give us like a promise that you're going to launch a token on

Metadow. Um, and it's a way to kind of bridge the that gap. Um, and it just removes a lot of the messiness around like converting an equity entity and structure to to a token only business on metadata. Um, so we've seen one team uh do stamp and then raise on metadata. was credible. One of the recent uh Metadel launches which which is actually doing really well right now. Um they just passed I believe a billion dollars in uh total um payments processed uh which is pretty cool. Um, but yeah, I mean I I I think Stamp is like a really interesting kind of um opportunity for teams because just what we were talking about earlier, like if you're super early stage, you're

still figuring out your product, you're still figuring out your users, you're trying to make your first dollar of revenue. Uh, you know, you raise a little bit of money from Coliseum, come hang out in San Francisco with us. We're not going to be in your Discord like screaming at you every day. You'll you'll kind of be in like this nice like builder bubble here and you build your thing over the accelerator period. Hopefully by the end you've got some users, you've got, you know, some semblance of PMF, your your direction is kind of more clear and maybe at that point instead of raising, you know, a private seed round, you go launch on Metadow and that can kind of power your your your next leg of uh of growth. Um that's the idea behind Stamp. Um I think we're, you know, kind of still still

iterating on it, but um yeah, >> cool. Um I guess I don't know if we want to talk a bit about uh or which is one of the assets that uh Luke has personally been bullish on uh in the past but and and I want to talk about this because Colosseum has been a big supporter of or historically uh and or began like as the grand champions of Colosseum's Renaissance hackathon and subsequently like Colosseum backed it. So, and I guess like the original thesis back then was really different to what ORE is today, right? So, I'm curious, Michael, can you walk us like through the original investment thesis because I'm sure it

wasn't like uh the product they have today, but it obviously turned out to be a great team. Yeah, Ore in some ways is is quite similar to Metadau in that there there's this core idea that they're kind of building um and they haven't strayed from the idea but the execution of the idea has been iterated on and has been like extremely flexible I would say. So just like metadal as we talked about started as this like B2B governed SAS product and is now a consumer launchpad you know I don't like the word launchpad but we can call it that. um like totally different products for totally different people.

But like what it kind of underlies all of that is this decision markets idea and like technology and I think for or uh or wants to build uh a um uh a store of value uh which we could get into. I I also don't love that word. Um but at first the way that they tried to build a store of value was like kind of similar to Bitcoin. They used a a a proof of mining a proof of work system where a bunch of miners um throw compute at a math problem and try and solve it. Um and they you know thought that they had a better um kind of uh way to mine than Bitcoin, a more fair uh way that you know normal people could participate in.

Um that didn't work for a variety of reasons. And now they're doing uh they totally nixed the um uh the proofof work system. And now they're essentially uh using like some form of speculation or gambling to create uh a burn on the token um [clears throat] and essentially create some sort of deflation that you know makes the token rise and and you could pay out a yield. Um but they're still kind of building towards this um uh this uh store of value vision um despite you know the product changing significantly over

time. I think my like highle view on it is that like you either believe that bitcoin is kind of the only store of value or you think that there's like uh room for multiple. I fall into the latter camp. Like obviously Bitcoin's going to be king I think unless some something random like takes it down um like quantum or you know whatever else people fud it for. Um, but I I think that like there will be like a long tale of probably smaller store values. And I don't necessarily have a better word than store of value, but I think what I mean when I say store of value is like a token that is uh built to like go up basically. So like Bitcoin was like designed to rise

in value. Obviously they did the they were like innovated on having like a hard cap on 21 million tokens. They have these programmatic happenings. All of this was basically designed to like make the price of BTC rise over time. And I think there have been other attempts to like create tokens that like basically go up only. And I know that sounds ridiculous because no no token goes up only. But I think you you can create mechanisms such that like over time that the the token value should rise. Um Luna was kind of an attempt at this. I would say Olympus DA was a super famous attempt. I think ore is kind of another attempt at this idea that you can like create a token um that is in some way like designed to rise in value over time

and I think that idea is like super cryptonative and is quite a big idea um if you could pull it off. Um, and there's like a question of how much of that is an engineering problem versus like kind of a mimemetic problem because a lot of these assets tend to be like belief assets where you buy it not because of the future cash flows of the business that you're discounting in your DCF formula, but you buy it because you think it's going to like go up over time, right? Um, Bitcoin is certainly that. I think ore is probably that as well despite like having kind of this like um you know economy of sorts built around it to like help the price go up.

It's still a belief asset. And then we we invested in a project actually in this last um cohort that is that is kind of building something similar called Fraudsworth. Um and they've taken like the ore idea a step further and they're building like an entire economy around their token to create a burn and to create a yield that they could pay out to the token holders. And the the core idea is basically just to make the token go up over time, which is like a really dumb and simple idea, but like quite hard in practice to like make a token that only goes up. Um, so that's that's why I'm bullish on or that's why I'm bullish on like a lot of these experiments. I don't know if all of them will work, but I think like building an asset that goes up over time is like

perhaps one of the biggest ideas in crypto and like just it's, you know, broadly uh kind of interesting to the world. Everybody wants to hold something that goes up. Um, so I think like the design space here is like quite vast and I'm I'm excited to see, you know, more and more experimentation. >> Yeah. I mean, um, maybe I'll just give like quick thoughts and I'll let Luke who's the expert on or just give his thoughts, but I've also I've also found like the store of value topic really interesting. like I'm more in the camp like perhaps to push back a bit that there's only room for so many store of value assets and like you know Bitcoin took like 15 years to just consolidate

like as a store of value asset and maybe now you have things like uh Ccash like to your point you were talking about Mer like previously like uh that have like kind of risen to that category perhaps not yet to the scale of Bitcoin but Uh the broader point that I was trying to make is that when you think about like historical store value assets, you usually have like an overlap with uh commodities in the sense that for instance think about gold, right? Like gold doesn't generate like any source of value or income like it doesn't have cash flows or like uh utility like aides from like uh jewelry or whatnot. And it is also considered like a store of value

asset. If you think about Bitcoin, it doesn't generate like any yield uh for token holders. Uh yet it is considered like a store of value asset and it resembles a commodity in the sense that you know you have like proof of work, people work for it, people mine it and more bitcoin comes into circulation with ore. It is interesting because it also generates income, right? It also generates revenue for token holders in a way uh due to this onchain kind of casino game. So to me it's like yeah like maybe you could frame it as a store of value asset but in my opinion it's probably the wrong framing for or in the sense that they actually have a business

that generates a lot of fees uh and and a lot of revenue to token holders. So if you wanted to, you could also value the business I guess fundamentally. Uh but the problem with that is there's also obviously a speculative element with it, right? Like it is only valuable like the game is only valuable if you think like the underlying ore that you're uh winning in the casino is valuable as well. So it kind of becomes uh circular. Uh but I do agree like it's a it's a really interesting experiment and I'm and I'm and I was just uh I'm just curious to see where they go.

>> Yeah, I was I've been following or since they launched on uh Salana mainet and my memecoin trading execution degraded notably. Um, I sized in prior to the V2 launch and it went from one of my my best uh positions to the worst round trip I've held. Um, and then was sidelined for the runup after the uh casino tile game launched. But ultimately I'm I'm particularly constructive on the um the amount of experimentation they're running and if they can execute on on the balance between both the mometics and engineering side of store value you know

take that label with a grain of salt for the points you both mentioned then um I I think there's certainly an angle there um perhaps stepping back from or uh Michael we are depth of a bear. Uh at the same time, you probably have a really good finger on the pulse at um the the very like ground floor seed, preede um stage of of builders within crypto right now. So, I'm curious like which angles, which verticals are you most optimistic on and um which of those angles would you be recommending people build towards?

>> Yeah. Uh I think maybe there's a couple like macro themes that make me bullish and then then we could drill down into um whatever's most interesting. Uh I think the the the biggest one to me is like AI. Um the overlap between crypto and AI uh is like very uh kind of small right now. I would say the main way that AI is being applied to crypto is just through like engineering. Um and I think you know we see that uh at Coliseum. Um the just like average quality of project submissions that we got had like went up dramatically from this past hackathon

frontier to the one we ran last year. Um and that was probably all you know opus 4.5 um and codecs um just like you know uh pitch decks got way better, sharper, no you know grammar errors like the lines were clean. Um, but like probably the more exciting thing is that we saw a ton of uh non-technical people building pretty sophisticated crypto projects like doing hardcore like engineering on chain. Uh and we actually invested in two um that are in this batch, you know, founders that are not software engineers by training, but have like shipped smart

contracts on Salana and built like uh an entire uh company product uh just with cloud code and and codecs. Um so that I think is like quite remarkable and the thing that I try and remind myself is like today is the dumbest that the models will ever be. like it's we're this is quite literally like an up only trend. Um, so just from the perspective of like being an early stage investor that runs these, you know, global massive hackathons, like it's quite an exciting time, uh, because it just feels like we're in like a a rising tide lifts all ships kind of moment with AI. Um, where like the the the tooling and technology will allow anybody to build

whatever they want. And I think, you know, crypto at some very basic level is just like a new software um system that is, you know, kind of rough around the edges and and hard to understand and like, you know, it's not as easy to build a crypto app as it is to build like an iOS app. Um but like AI will, you know, is making that easier now and will probably just like totally solve that at some point in the future. Uh so I think that's very exciting and I would expect that like hopefully our hackathon numbers to continue to go up and I think the thing that we obviously care about is like the quality is also going up. Um so yeah AI is one that you know despite the bear despite prices like keeps me incredibly optimistic on the world technology but also like crypto building

and startups. Um the other thing that I've you know been super excited about is uh tokenized equities. I see you guys, you know, Block Works has been all over this. You guys have great charts and data on this and like um I think, you know, you're rightfully, you know, sharing them on Twitter. I for for whatever reason, I think despite you guys, you know, posting the tokenized equity chart every day, it's like a fresh all-time high every week, right? People still don't get how big this is. I don't think like this is I like a huge deal for crypto. Um, I think up until now we've just been like punting, you know, junk back and forth between each other. You know what I mean? Like, you know, I buy a coin and then I try and

get you to buy it for higher. I sell it to you, then you try try and get someone else. It's just this circular game of like cryptonative assets. Um, a lot of them that don't have real businesses attached to them that aren't cash flowing. And it felt very insular. Uh, and now we're bringing external assets onchain. the external assets are real companies that are building real products in the real world with real cash flows and now they're on chain, you know, and not only are they all on chain, but like anybody in the world can flip open their phone, download Phantom and buy a share of SpaceX and then deposit that share of SpaceX into DeFi and borrow against it or loop it or trade it or you know collect yield on backpack, right? Um, I think that is so

cool and in 20 years, uh, I think every stock will be on chain. Anyone in the world will be able to flip open an app on their phone and buy any US equity or maybe any equity in the world for that matter. Um, and I think this is kind of the moment that like crypto uh escapes this like circle jerk of like memes and like that we've been like trading around for the past decade. Um, and I think kind of the question on my mind as an investor is like how do you make money from this like big trend, right? Like what what are the second and third order um kind of impacts of this?

Um, I think one is like DeFi gets a lot more interesting. We're kind of going through this like valley of death for DeFi right now. Like yields are down. Nobody like TVL's down. Um, there have been some notable uh tax recently. I think this like there's it feels like there's an asymmetry right now with the AI tooling where like a attackers are far more kind of like a new model comes out and like the first people the most motivated people to use the model are like hackers and attackers who are trying to steal people's money essentially. Um so it feels very scary to like deposit into DeFi and like trust any of these smart contracts. Um I'm not smart enough to know like when when the

value of death will be over, but I do think at some point the asymmetry will flip such that like actually you can just like formally verify all of these smart contracts and you could like run uh incredibly intensive like security and defensive testing against all of the you know contracts that are that are uh holding real capital in DeFi. and you could be far more certain that your money is like safe and protected in DeFi. Um, so I think you know some combination of like AI helping with defense and then like um tokenized equities coming on chain will lead to like a huge DeFi resurgence. I don't don't know when that's going to happen, but um yeah, I think that's pretty

interesting. Um yeah, those are those are kind of the two macro trends that I've been thinking about a lot. Um in terms of like what people should build, um I think now is like a really interesting time to build consumer apps in crypto. Um like Anza has done an absolutely incredible uh job on kind of the core engineering on Salana. They're shipping some like really major upgrades to the chain over the next couple of months. um it's going to get faster, cheaper, snappier, all the good stuff. Um the kind of broader tooling in the ecosystem is is really top tier. Um, so you could come in as like a pretty, you

know, um, unexperienced developer, engineer, use cloud code, use use codeex, build, you know, a lightweight onchain business and like go get users and make money basically and like run your business offchain and just use crypto for like the boring back end, right? Um, I think there's like a lot of really interesting consumer apps to be built. Uh I think the the gotcha machines are quite interesting in and in in in kind of um that p in that direction. Um so yeah curious to kind of see where that goes. Uh but yeah those are kind of some high level thoughts.

>> Totally agree on the on the consumer side. By the way, I think like the infrastructure is now like fast enough where teams should just focusing should just focus on packaging like that experience into like something the consumer just loves. And I think FOMO is probably a great example of this. Like uh they just surpassed like 60,000 daily active traders on Solana. They're ranked fifth in the US app store. Um, and in my opinion, like they they just gone mainstream to be honest and they're all they're built primarily on Sena. So, it's just a great example of just taking uh the building blocks that ANSA, the Salana Foundation, and everyone else has just built around for years and just

turning that into just a seamless user experience. >> Totally. >> Yeah, Michael, you you did a really good job painting the future world if meme. Um, plenty of things to be optimistic about. uh particularly with AI resources like collapsing the the cost and barrier to to ship and build products. Um Carlos and I this morning were talking about deep research when it came back and when it came out a year ago and reflecting on it now. >> It seems like a brain deadad model compared to uh what we have access to these days. Um and certainly the the tokenized equities theme um you know there you take things with investor protections, registered securities, real

businesses um they're pretty good investable assets and uh a lot of people want access to that which they can get on chain and that's what we're seeing in the numbers. So yeah, particularly optimistic on that as well. Beyond that, uh any any closing thoughts? Where where can people find your work? Yeah, I'm pretty active on Twitter. Um I like to tweet maybe too much. Um but you could you could you could find me there. Um and uh yeah, I'd encourage any builders that um that hear this or or encounter this podcast to uh check out Coliseum. Um, I think we do a good job at uh at uh

creating really fun and engaging competitions and a good pathway to to build a startup uh on Salana or in crypto. Um, so our next hackathon actually goes live uh September 12th. Um, we've got some some pretty big announcements coming down the pike um on that front. So yeah, stay stay tuned. >> Fantastic. Thanks, Michael. appreciate you coming on and thanks to Carlos as well. >> Thanks guys, this was fun. >> Nothing said on Xerox Research is a recommendation to buy or sell securities or tokens. This podcast is forformational purposes only and any views expressed by anyone on the show are solely our opinions, not financial

advice. Luke and our guests may hold positions in the companies, funds, or projects discussed.