CZ Steps Down from Binance and a Blast L2 Debate | Roundup

Transcript

that's not the case for other l2s like optimism doesn't have fraud proofs that's not an L2 like if you don't have fraud proofs you're not an L2 full stop all right before we jump in we have a quick deal on D tickets it is Black Friday AKA Black Rock Friday we are running a promo2 200 off of a four pack of tickets today the price is about 1,800 final price after this discount Black Rock Empire is the code Black Rock Empire gets you 200 pound off which to 160000 lb also if you book your ticket using Black Rock Empire you get a free blockworks t-shirt that's right a free blockworks t-shirt for the first 24 people who use the promo code so get it

fast Black Rock Friday you can go to blockworks site blockworks docomo protocol a cost-efficient transparent and decentralized Oracle Chronicle has developed a Next Generation Oracle primitive called scribe which reduces Oracle gas fees on l1s and l2s by over 60% you'll hear more about Chronicle later in the show this episode is brought to you by North stake the secure and compliant staking platform for institutional investors North Stakes e staking service lets institutions earn staking rewards while maintaining maximum flexibility on all of their Capital you can learn more about North Stakes institutional staking

Services by clicking the link in the show notes or that Q code that is on your screen right now if you're on YouTube now let's get into the show are you your parents now am I my no I'm at my in-laws today there's a chance they can hear us recording so we will uh say only fantastic obviously they know you're in crypto right it's not gonna be a weird Thanksgiving where like people I was here I spent Co here which was uh I will tell you co 2020 for Block Works we're uh some dark days our Revenue fell we're in events business right so our Revenue fell 80% literally overnight when the New York shut down conferences or and then the world shut down and they saw they saw all that go down so yeah they've uh they know they know I'm in

know very good it's good to know that at least there's no surprises you seem like you're in a good mood I mean like who what's what's not the like I mean it would be dis jous for me to say that like you know bull markets are always way more fun I don't understand these people that say like we well let's go back to a bare Market I'm like no you clearly don't understand how bare markets feel and they make you question Your Existence and you know it's uh it's good you know there's some really positive developments that we're going to talk about here Beyond price you know the the binance action um some developments with coinbase um some new project launching you know again you know we we've been

doing this consistently every week uh at least once a week and you know it's always a bit more fun when you're not questioning everything is better when number go up so absolutely here here's what I want to talk about the two big things are blast and binance blast is the L2 that Pacman the founder of blur launched um and that I I'm not even really sure if it's a spin out or a separate company but we can talk about that separate company separate company uh and then binance um you know one of the biggest actually news announcement I would say of the year in crypto it doesn't feel like maybe that big of a deal because I think a lot of people who are native to like crypto native kind of saw this coming potentially um or knew something was happening here over the

last couple of months but nonetheless still huge news for the industry um and has a lot of second order implications so binance and bullish or binance and uh blast are the two big things there's some other stuff like Kraken SEC sued Kraken again uh pith launched their token I think pith um is a really interesting project we're actually gonna have the founder of pith on the show coindesk got acquired so that was also uh an interesting thing but I think those three things pale in comparison to both binance and blast so you want to start with binance uh sure yeah take it away yeah let's start there so um so this week uh binance agree uh two big things with binance one is that uh binance agreed to uh plead guilty in a criminal charge

related to knowingly violating the bank secrecy act uh they're paying more than $4.3 billion dollar as part of the settlement agreement this is the largest uh penalty in US Treasury history if you break that down I tried to find like how that $4.3 billion do breaks down the only thing I could find was 3.4 billion of it is a civil monetary penalty to finsen which is the financial crimes uh Bureau within the treasury and that agreement comes with a five-year monitorship which I think actually is important uh fiveyear monitorship and various agreements to kind of like bone up their compliance and ensure that the company completely exits the US the reason I say that part's important is I think what that

five-year monitoring means is that they actually are going to get for five years like logs to everything that binance does and all that kind of stuff which uh that's I do wonder if this will have some second order implications for companies who have done business with binance in the past and then the other part of the fine is they're paying us $968 million fine to ofac the office of foreign assets control so that's the one big bucket is this billion doll fine it entails no involvement of in binance operations for this is for cc CC needs to step down he has already um is paying a $50 million personal fine um and then there's a sentencing date in March I think February or March but he effectively pleaded guilty as

part of that he's stepping down and paying 50 million he can't be involved in binance for three years the question now remains is it going to serve some like jail time or is it gonna be like Arthur right where it's just like like house arrest for like 18 months or so right I would think it's more like Arthur's type of sentencing um because again they they also face like these very similar kind of uh issues right like anti-money laundering and ofac and whatnot yeah um binance uh you're talking about the 1.8 the 1.8 and the 2.5 numbers yeah yeah binance was finded 1.8 um that was a discount for partial cooperation um and that is paid over 15

months and then the other component of the 4.3 is a 2.5 billion for sanctions like like I think they just facilitated like money flowing into certain you know sanction Iran I think was the Iran yeah Iran was the biggest one which by the way um Arthur what was it uh uh uh also fa a similar issue with Iran right yeah so I think there's a couple angles that are interesting here so 4.3 billion um that they that they owe that's a that's the biggest penalty in US Treasury history CZ steps down um and then also CZ got hit with $50 million in personal fines credited to the cftc couple interesting maybe ways that we could go with this which is one um conversation about the markets is this good or bad

for crypto um so that's maybe where we could start other things are just like second order implications uh also what like maybe what this does for coinbase and other exchanges um but maybe we can start with the markets like what do you think when you saw this happen um what do you think in terms of like bullish bearish neutral was kind of priced in like how do you think about this in relationship to uh kind of this cycle that's kicking off and is this good or bad for for the industry my first reaction was immensely bullish like you just climb a huge wall of worry like there were people that speculating binance like it was just unclear right um the impact that it would have I mean binance is the most important company in crypto it has been like it served a huge

impact for retail adoption for projects listing like the liquidity like it was just they started remember the market they I mean the TW the fall 2019 Market which was a bull there was that mini bull market inside the bear that was a bull market specifically uh on the back of the binance io program they literally had the ability to to move a whole Market there yeah like I went to the binance conference one of their first in Singapore met CC he's super approachable like this was pre iio my big thesis then was like longing Exchange coins was a great bet in a market that is volatile but choppy because exchange is profit in that type of environment um but anyways the news I think is immensely positive

for a couple of reasons of course there's this wall of worry that we constantly have in crypto and now there's a lot of clarity uh 4.3 billion is not um you know it is a large sum of money I think it's the seventh largest fine ever paid to the US government I think I think it's the largest to the doj I believe so they like in context like there's like the other people like in this category in this league table are like City group and HSBC like the major Banks effectively and then there's binance as number seven which is super impressive like this I mean there's speculation of how profitable binance has been but like in the order of like hundreds of billions or so like like 100

billion or so and so anyways there was a couple of immediately the market reacted negatively now today 24 hours later the market is actually uh you know in the green and pumping pretty hard um there was some outflow of binance I think it was like one north of a billion of outflows 1.4 billion as a as you know a couple hours into the announcement you know naturally some people worried or whatnot um and so I think it's it's very positive uh for the space that it also is positive because immediately after like there was Brian arstor went on Bloomberg and also had a good tweet of like hey we've Ser like

like we've we've taken the long road approach here like it was been very difficult at times because we were in the US we tried like we've complied we haven't taken the you know fast route like as the doj kind of press release um said you know we haven't gone through this approach of you know move fast like ask for forgiveness instead of permission which was the kind of the binance approach as they framed it and coinbase was like we've always asked for permission first and um you know full disclosure I'm very long coin coinbase um stock did you buy more coinbase after after you saw what happened to binance yeah yesterday and today um I've just been very uh like I woke up today to to an

announcement of coinbase that they were launching loans for institutional clients and I tweeted about it today I just think think that coinbase sees this incredible opportunity to be really the dominant player um not just in the US but like in crypto full stop and take a lot of the market share from Fallen Angels you know from you know Genesis no no longer around so now they've stepped in and I think they're going to fill that gap of like facilitating a lot of loans and Market making um along with Galaxy but I think coinbase in particular is oh yeah they're launching International perss too they they launch International pers so I was a big Revenue driver for for coinbase and sorry for binance and other

exchanges they've um expanded internationally you know they've gone they've been very vocal in their presence in the UK and other jurisdictions uh and they've gotten licenses to op you know serve these jurisdictions um more easily they've also obviously launched their L2 which is kind of the curated experience for users 100 million plus to enter into web 3 and I think if if they're ever going to do that they're probably going to end it through coinbase and I don't think the market fully appreciates the revenue potential and opportunities not only from a customer retention and acquisition standpoint because all of a sudden your product the suite of products that you offer just becomes more compelling but

also the monetization of set customers just has increased pretty dramatically and I think the market is very critical of the stock and continues to be critical in the sense of hey spreads are going down right Revenue fees are going down obviously in a bare market trading volume goes down but also the percentage fee that b the coinbase has taken historically has been pretty fat pretty high and that over time goes down right with through competition no different than like the stock brokerage um firms went through this kind of transition too you know you remember when like Robin Hood and wealthfront launch they were saying like zero commission trades everyone freaked out because like oh my God you know the Schwabs of the world are going to go out of business they

didn't they just found other ways to monetize um and I think that's a similar transition the marcet is going to wake up to um in coinbase's incredible Revenue generation and not to mention usdc for the first time ever they broke down the profitability of you know how much they're making actually on you know a lot a lot of customers hold the stable coin called usdc they're buying treasuries they're earning some net interest um on that which they're sharing some to customers but they're taking some as well and so that I all that combined is just um anyways my thesis for coin I mean none of this is financial yeah yeah all right so so takeaway number one like by the way I agree with you uh long long coinbase um

that's takeaway number one takeway and by the way coinbase I was looking at the revenue numbers 2018 520 million 2019 roughly the same I think it was like 480 2020 1.1 billion past a billion of revenue for the first time fast forward two years 2022 three billion of Revenue this year it's expected they'll do around the same probably a little less than three billion I think it's a coiled spring but we'll see I don't want to just come on here and pump coinbase so that's the first thing take takeaway is good for coinbase second takeaway I would have is when you talk to people about the last remaining buckets of fud in the industry it was bance and tether those were the two things and I think it's like you've basically heard this for you've been in crypto for a while a little longer than I have like you've

heard this story before which is crypto can't survive without insert thing right whether it's Mount gaau or bitmex or FTX or binance and uh I think Matt Hogan said it well he's like what people Miss is that crypto is incredibly antifragile right and it's much bigger than any one trading venue so um I'm looking at the numbers here uh binance has is has roughly 60% of the total liquidity in crypto and I don't know I I I just I I think it's crypto is much more antifragile than any I mean to be fair binance will continue to operate yeah I saw people making comparisons to FTX by the way and I

think it's just good to these are two completely different situations here I mean one of them didn't misappropriate customer funds AR these aren't even comparable yeah like like yeah let's be very clear here the issues and the fines are related to uh binance's um fac binance facilitating trade and Flows In and Out of sanctioned countries in the same way the bitmex like did right um it was not related to you know man like being insolvent or any of that nature which is what FTX did right that's fraudulent activity cz's bleeding guilty to that you know he said look we're a young

company whatever like we should have done better we had should have had better compliance policies in place y y y there are some implications to that um but it's it's night and day right um it would way way worse yeah if there was ins Sol the biggest concern was and look binance like the biggest was like proof of reserves like two things it was it was that that was the the absolute worst was proof of reserves the second worst was a full binance shutdown there was basically four things that I think people were considering slap on the risk uh on the wrist kind of like this like neutral thing where nothing really happens a binance shutdown and then lack of proof of reserves like an FTX situation and this basically just uh I think the the last one would have been

catastrophic to crypto the full binance shutdown probably would have been Market nukes by like 40 50% this kind of like limbo phase would have been I don't know just kind of like where we're at right now and what we just got was I think it was uh Jonah from Cumberland or ex Cumberland said he's like look this is a slap on the wrist slap on the wrist is a is a buy everything type of moment um so people outside the industry I think were I got email from my uncle saying see this guy's going to jail what's probably horrible for crypto um and I think that's kind of the take from Outsiders that cryp this is another FTX moment another criminal running a big thing and to people inside of the industry uh it's it's very exciting it's a big drisking

moment I think and for context binance has been producing proof of reserves for quite a while now you know of course they you during like I think it was the proof of reserves of binance went live in November of 2022 people took object in the way they were managing that and whatnot but they were producing proof of reserves for a while now and that's not the case for what certainly wasn't the case for FTX um and so you know there have been limitations they've been improving the proof of reserves the way they reported that you know in February 2023 for Contex they did a major upgrade they the the developers implemented CK snark protocols um on top of the core Merle I

don't want to get into all the mechanics but it's like an audit right there are a lot of components to a proof of res like yeah the wallet control you can see the wallets control about $65 billion worth of funds I think this is a non a non-c conversation even I I don't even yeah like in and the issue was of course during these moments of like walls of worry not just in crypto Panic as Howard marks likes to say pendulums like swing to extremes whereas the the actual reality of things they're never that extreme uh of course there's like fat tale events that can be catastrophic and destabilizing like a global financial crisis or whatever where where the wisdom of the crowd like just gets

it wrong like a hurricane something like that but for the most part like I think the market went from Total Euphoria to Total skepticism and everything is FTX and a lot of people Adams of the world just went on this ramp like just went on this like they were traumatized by FTX because they were super bullish FTX and they were like caught up like oh [ __ ] you know like maybe I should have like been a little bit more cautious and then everything looks like FTX and that's like we should just kind of be more yeah calm and objective yeah um and was it priced in I no there was there's always in crypto some like crippling fear right because

trauma is real for crypto ogs or anyone that's been here for a while like it's it's very hard to work through trauma and like move past it it will be very paralyzing yeah you know there are so many things that are overlooked in bare markets as they are in Bull markets because of these traumatic moments you're just like you're in fear or you're operating from a place of you of course don't want to make the same mistakes but I think that could be a bit paralyzing um now that's a topic for a totally separate podcast which sort of dovetails into what we were talking about in the prior episode of like how we position our portfolio how you think about narratives that are being overlooked I think there's so many of

them we're gonna have Robbie from immutable to talk about gaming which I've talked about extensively here but stuff like that you know you had play to earn people you know axi and so many other projects went through that kind of hype cycle they're now despair people are totally discrediting gaming it's like it's not going to work guys I'm like okay is it really not going to work like so anyways that that's just a market in in total trauma mode and it has been for quite some months and so this this news announcement I think is really impactful to kind of move past that trauma and more importantly one of the things that Brian said in the in his interview I think it was on Bloomberg he said it it

now places a lot of emphasis on rule making you know let's actually have Clarity and I think there's been yeah a lot of progress during the past year and a half or so but now there's now that we have these big fine events it's like all right let's actually go back to the more important matter at hand and craft rules very clear rules and regulations so that it allows you know folks like coinbase and binance to operate you know within the law and and I think that's going to be the major theme over the next year or so right right of course there's elections coming up but I think that's really now

I think now Regulators they Brad enforcement action against Kraken which is a bit of noise and they keep punting and delaying resolution on the coinbase front and on the ETF stuff but they're kind of running out of like excuses not to provide Clarity to an industry that time and time again it's like okay maybe we didn't operate within the lines we paid this huge fines okay but like the intent is very positive even from from players like binance it's like all right you know we want to do right we believe in the technology let's just like get to a place where we have clear rules right yeah now um the only downside that I could see from from a lot of this is that uh so SEC is clearly getting weaker and weaker

they keep losing these cases they kind of went after this like what I would say foolish Kraken case after they already settled with Kraken earlier in the year um however the I I think it was Yellen said or the the other person who spoke the doj guy I forget I forget who that was but said if if you are operating a defi company in I don't know if you watched that talk but it feels like they're kind of signaling what they're coming after next and it it does feel like as the SEC gets weaker potentially the doj is getting stronger here or Andor coming after crypto a bit more and I would have to imagine that um so they've gained access to a lot of the code from binance and a lot of the messages and 100% of the logs uh the only explanation for for for that and if

you what you said in the very beginning of the show which is he complied so the dollar value was dollar amount was lower CZ negotiated this treaty I would say it's probably pretty likely the doj this is the first of a couple of doj things that they start bringing companies and that's probably the downside of this yeah like any sort of type of Bad actors that have sent funds to binance or whatever and maybe that allows intelligence units to you know or or like doj to to work on probably enforcement actions or cases they have open but they haven't really gotten full resolution but now that you know a lot of Flo has gone through binance and so now it's you know folks like even like Zach right he Flags hey like these

addresses people buy these addresses and kyc addresses and then you know sometimes you know I think that now that they have this data historically I think may be easier for them to to build the cases uh which I think is a good thing like you know if you've been doing Shady or fraudulent stuff and you've been working with an exchange good luck like those are the I have no problem about it that's very positive for the space I don't fully appreciate the defi stuff I I want I'm I'm refreshing my memory on the Pod that um latest regulatory pod with Rebecca and Jake and I saw Rebecca recently in person um there have been proposed pieces of legislation that are could be

very damning for defi like the traveling Rule and some of this stuff that would make it almost impossible to interact in defi in pools of liquidity if not everyone's kyc and whatever like I just want to remind people like we hear this but like an agency my understanding is an agency might have an opinion a particular but that doesn't mean it's law and it unless and until it's law and passation it could be like there's a heavy commenting period for a lot of these new bills that that are you know crafting regulation for the different pieces of crypto of course defi is important in some of these bills but these bills haven't been like passed and

there's a there's a people should go listen to that episode because it is super important if if you're listening if you're running defi protocol if you're a fan of defi interestingly CZ said that he wants to spend more time like looking at def great and if if you're wondering like there is um there's a great way to get involved right and comment on these bills because they're not perfect by any stretch of the imagination like they they missed the mark on so many things like the stable coin Bill and some of these other bills so yeah like time and time again they bring defi into the Limelight of like hey you know especially like the cfdc or the SEC right because you know

it's uh they're trading on like closer to the reg there's clear regulations for like Financial firms right right but the biggest thing like for instance when FDX went down everyone was like you know this is why we we need to shut down defi I'm like well no like I think they peeled it back a bit and the rhetoric was peeled back as well in the sense that like defi is not FTX in fact if FTX were operating as a true defi protocol it would never happen you know a hasn't been insolvent like there's you know Insurance funds that may be impacted if there's bad debt but it's all on chain it's all transparent so anyways uh a long ramble but uh I'm not surprised

that they make those comments um you know we have to also appreciate it's an PE we're going into an election year and during election years politicians always want to you know they're looking out for themselves right and they want to make headlines and crypto is a great opportunity and has been for people to make headlines y that doesn't mean it's the law that doesn't mean it's the interpretation of the court and that doesn't mean it's a sentiment of the overall government so I'm I'm just G to say that because it's important right when we hear these headlines like the New York Times of the world is always going to report and always take the most negative spin as they have been doing on things that's what myc myc read the New

York Times things criminals going to jail uh and by the way what is a crypto exchange so yeah meanwhile they're taking the the softest stance on the whole Israel Gaza situation no yeah no no let's not like Report with the true veracity you know there right it's just a bunch of idiots um speaking of uh I I was gonna try to use a bunch of idiots and pivot into blast oh yeah yeah but um Joseph told me I have to read a I have to I messed up our ad read for for digital asset Summit so I have to do it live which is that um it's Black Friday when you're listening to this and we have Black Rock Friday at blockworks here instead of Black Friday

we got Black Rock Friday so uh you can get 20% off four packs of D tickets uh people were reaching out to us saying hey we want to buy tickets for our whole team uh so we launched these things called four packs and if you go I think the code is Black Rock Empire on the Das page so if you enter Black Rock Empire you will get 20% off is that because black rock is sponsor it or we got an announcement coming soon you'll see I mean I guess it's related to Black Rock I on that one I just I just read what Joseph tells me to read man I don't was our producer he's a great guy everything you do um all right yeah London uh it's gonna

be great yeah I'm planning there it is it's gonna be great um let's talk about blast why don't I tea up the blast conversation um please do and I'm just going to say I'm I'm biased here folks I'm an investor I was was an early seed investor in blur I also invested in blast so everything that I say here website and your face is on the homepage I can tell this I can tell the story how this came together and um and we're gonna have uh Pac-Man we had him very early on with his building blur we're gonna have him on again um he is catching up on sleep but he's he'll come on soon yeah great um all right why

don't I why don't I te up this conversation from from an Outsiders point of view and just what I saw on Twitter and stuff like that and then and then I'd love to hear the backstory of this so blast is an L2 created by uh blur and by Pacman who who's also the founder of blur if you guys remember blur was a nft Marketplace that um challenged some of the ideas of what it looks like to trade nfts took on openc gained a lot of volume and market share relative to openc maybe a year ago a little more than a year ago so Pacman said I came out with this tweet the other day said look um I can just read it directly it says uh basically blur wanted to build on L2 there wasn't a good L2 that they could find that had some of the things that

they wanted specifically that thing was native yield on on the Chain so he said look if if it doesn't exist I can go build it so the basic premise behind blast is that they're offering native yield on assets like eth and stable coins and um I think what this means is they're basically doing two things one is they're participating in E staking any assets any eth that's been bridged over to to blast uh uh basically gets a yield uh and they're part doing this in two ways they participate in eth staking and two they're sending stable coins to protocols uh like like maker right to bring uh that t- bill yield on chain again via folks like maker which is then passed through to uh to users of um to to users of uh of the blast L2 and for

folks who really criticize this on on Twitter um this idea of like an L2 with Native yield um I think it's important to just look at the amount of capital that's sitting on l2s without any yield right so if you look at something like so when you bridge eth for example um to another L2 you send eth to a bridging contract and uh kind of mins eth kind of like a receipt token on the L2 however all that eth is typically not staked right for example the arbit arbitrum bridge has about last time I looked two or two two and a half or three billion dollars of eth sitting there um so if you let's say let's say we use that2 and a half billion dollar number if all that eth were staked earning 4% that means

that arbitrum could arbitrum and or arbitrum users depending on how they want to allocate it would be earning an extra hundred million do an eth per year um so I think I think that's basically the thesis is that um and we've seen this before too with with nosis so nosis launch their own chain they stake all of the die um and that earns 5% and as a result like die stakers on nosis earn this like five or six or seven perc yield so if you assume that maybe a hundred million do of stables are bridged over to blast let's call it 50 million gets staked the rest is s sitting in wallets or maybe used in defi if 100 million is is earning 5% um or let's say 50 million is earning earning 5% you're you're looking at a a

you know $2 and5 million dollars that's going back to either the blast protocol or to user so that's the that's the highle overview um that I would say but maybe give me the give me the and we can talk about the the reaction which was both i' saw some very positive reactions very negative reactions as well um been about 40 or50 million dollars of liquidity that's been bridged over already but what what what's the backstory here how did Pac-Man approach investors like as much as you're open to sharing here Santi yeah so for context my first interaction with uh the blast team was like I didn't know it was Pac-Man it was sort of I was introduced by a good friend of mine um who actually brought me blur um and so

again she has a good relationship with Pac-Man and so she's like hey you ought to talk to you know I know you invest in infrastructure you just got to take a look at this L2 my first reaction was do we need another L2 and I had a long discussion with Pac-Man at the like I didn't know it was him on the other side then of course I knew later on but you had a call with someone and there were it was like he was went by pseudo I was like okay well fine I'm going to take the call so I took the call and I was like my first question like I'm just gonna stop you why do we need another L2 and you know I'm G to Vestor others l1's and L2 and so he's like well because none of them have like native yield and I said like

can you unpack that no pun intended and and and um and you know he wents through like what you just referenced right I was like well how easy like one why have current l2s not done this and how easy is it would be for them to kind of just adopt this standard and they're like well they kind of have to re architect it because a lot of these el2 have been in development for a long time it's like all right Fair um and and so of course then and we'll reference the Tweet you know the the idea to do blast really starts to make sense when you understand that they've you know they face these challenges when building blur um and again for context like a lot of people deposit eth into

these pools um you know kind of waiting for some sort of event where they can at some point swap for nfts but they're earning some yield they're earning some they're earning some points they're they're it's an incentivized pool if you will these kind of blur Seasons but they're not earning like native eth yield by staking it on Lio for instance or some other you know um lstd and they're not earning yield on stable coins and so I I think that alone is a very compelling value prop and one of the things that I've always been impressed by Pac-Man is he's one of the those Founders that like every good founder has very oneliner to crystallize exactly why they're doing

when we had him on early on he said Traders need a dedicated venue to like active Traders need a dedicated venue to trade nfts and that's not open C and I'm going to build that for them and he was just very focused on that right which I think is is is a Hallmark of a great founder and in in this case I think this L2 is directly informed by the experience that they've had and the challenges that they faced and the feedback that they've gotten from the customers which by the way they've gotten a lot of traction um and you know blur in my opinion and I'm biased of course because I'm also an investor it is the dominant nft like Marketplace um and venue especially for Traders like um and so um yeah you know

I think they're so so that I don't know if you want to dig more into that um I participate in the round you know I plan to help them as much as I can you know I have a question I have a question on the round here so when I was reading it it said um I originally thought that they raised $20 million from like Paradigm and standard but then it said they raised 20 M uh contributors of blast have raised 20 million from and it seemed like they were kind of wording that carefully to say like it doesn't really mean blast but the contributors of the contributors of blast and like I think a lot a lot of invest early investors in blur ended up participating in the round of course it was it was led by Paradigm and standard was this a separate was this actually a separate

round or was this the money that Pac-Man raised for blur also got included in Blast no my understanding is this is no so this is a separate like round for blast and it has a lot of the same investors in blur but also new investors um of course Paradigm was an early backer of blur and now uh I think through their relationship with Pacman led the round standard I understand was not involved in blur early on maybe they have they've like but anyways um it was those two fonts and then a whole host of like the blur like the blur round was a lot of people active in nft trading in

the community and in a similar matter I think they he took a lot of the same Playbook and invited a lot of uh you know people that participated in this round were people that have have known him he liked the very native crypto the very it was you know Haka and eirl and I saw you know folks like Lesner were tweeting out what is the how did that go down was he was there a telegram chat with just all the you know blast investors and he's like all right like 2 pm on a Monday we're ripping this tweet out or I committed um before um and then yeah now joined like a a group of all the investors just to coordinate you know and you know stay on top of announcements and developments uh

and it's a lot of people I know um and so um yeah all right everyone so we talk a lot about the institutions coming into crypto on Empire Santi and I are both headed out to London March 18th to 20th for blockworks is 8th ever digital asset Summit Das this is an Institutional buttoned up conference that we've hosted since 2019 I like to joke that it is probably the last remaining kind of suit and tie event in crypto people are still wearing suit and tie it's pretty funny you'll actually hear from a lot of the largest institutions in the world coming from Standard Charter FIS JP Morgan framework folks coming out winner mute Vanek Goldman Sachs there are a couple big themes of this conference one

Bitcoin Catalyst the having and the spot ETF two A View From the buy side three rw's tokenization and stable coins four Global regulatory framework Works five institutional infrastructure including Banking and payments and six the macro case for crypto if you have anything to do with the institutional side of crypto you have to be there Santi and I got you back we hooked you up with a 20% off code it is Empire 20 there is a little competition running internally at blockworks to see who can drive the most number of tickets so help Santi and I out register with our code and you get 20% off that is Empire 20 this episode is brought to you by the chronicle protocol a cost-efficient transparent and decentralized Oracle that gives

protocols verifiable onchain data for the frequent listeners of Empire you know that we talk a lot about maker da well Chronicle protocol is a novel Oracle solution that has exclusively secured over 10 billion in assets for maker da and its ecosystem since 2017 and for the first time ever Chronicles Oracle services are now publicly available why should you use Chronicle it's simple Chronicle offers a 60% reduction ction in gas fees versus all of their leading counterparts also super cool they have unparalleled transparency when it comes to oracles Chronicle offers a dashboard that allows anyone to track the Genesis and trajectory of the data it provides this is the first time ever that an oracle has made all of its data verifiable setting a new standard

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institutions easy low-risk crypto yield opportunities complies with both AML and M regulations making it possible for institutions to tap into ethereum's growth and earn staking rewards even through these pretty turbulent regulatory times in crypto if you are an Institutional Investor seeking compliant crypto exposure and yield North stake streamlines that all for you to get started head over to nor stake. DK tokenized hyen ehen staking I know you're probably not going to go to that long URL so just click the link in the description of the episode that'll take you right to North Stak site or if you're on YouTube scan the QR code on your screen right now now let's get back to the episode all right can I run some of the

push back by you and you tell all right it wasn't a perfect launch I you know and we can dissect that as much as I would actually argue it was a phenomenal launch um well not perfect I said yeah nothing really is ever but for all there there's some reasons why it went very well and there's some things that I think could have been improved there was there was a messaging problem I think I'm just going to read one of this one of these users's tweets they're very clearly aware of that I.E compare how they talked about eth eth itself is natively rebasing vers Stables usdb blast Auto rebasing stable Con on their website from the website users transact in eth daps are built around eth blast was designed from the ground up so that

eth itself is natively rebasing on the L too this is simply false it is not eth itself it is something similar to steth um and not making the distinction is reckless so what do you think about that idea that they were they're basically saying eth is rebasing but really it's not it's not actually eth here um yeah look they're working with Lio on the back end right like there the way it works is it's a one-way bridge at the moment you deposit Smith into the contract and I think they very clearly said you're not going to have this eth available until we launch uh like in February uh so that I think was clear it was really the messaging that was where people took object and you know it's

fair criticism the risk the risk-free messaging or it was really that it was really that that I think you know I just don't think you should ever use that word in crypto the word risk-free rate yeah yeah just the I mean I will say it was good to see like people calling out that was one of the things that hopefully one of the learnings as as an industry of calling out what people perceive to be bad actors and I'd rather have people perceive that something like this is bad and then have them execute and show them show them that they're that they're not a bad actor um I think what people were really panicked about was um like the what it sounds like is they're taking user funds and investing them right they're doing they're working with Lio

on staking but they're like taking basically user assets investing them into t- bills and that's they're calling it risk-free so that's not like T bills are very low risk but like there's still smart contract risk there's a bunch of other risks so it's not it's not really honest to to call it a risk-free rate yeah maybe look wave of w do this again you say hey guys look this is the mechanism by which we're gonna earn your yield yeah and here are the risks here's the how it works and we're going to build and uh you know here's you know like just you could have been a bit more up front and and this is M for any protocol right um you know I think uh more emphasis on that would have been appreciated and I think that would have gone a long way so you know I think that

the team realizes that and and you know one of the things that like with blur you know you never get these things 100% right but uh you know I would have emphasized that a bit more versus like how the mechanism for earning points Works which to look at things important like incentivizing people to to do that and whatnot um people are very quick to um call it like a Ponzi pyramid scheme I'm like look there's a difference between Aon like a Ponzi like there's a difference between a pyramid scheme and a multi and multi-level marketing and this goes back to a fight uh that has happened not only in crypto but like you know Herbal Life as an example like AC and I and the difference and I don't think so so you know what the difference

between MLM multi-level marketing and a pyramid scheme is I I actually I have a lot of experience with this yes I do I remember watching the so for another day my friend story for another day there I'm I'm gonna bookmark there's actually a technical definition of it um which is that yeah a CT for a pyramid scheme to be for something like Herbal Life and Amway to be legal a certain number of investors or a certain number of people actually have to be using the product um actually have to use the product instead of just buying it to then flip on someone else so the reason why Amway is able to still exist is and Herbal Life and all these folks is uh enough enough people actually buy the

product real product's Point like you maybe would have said these vitamins don't work it's expensive piss y y y but it's a product that people use and as long as it's that and you're selling that it's a multi-level marketing and it's okay um now you might have disagreements with that and how people are pushy and who's being targeted but if you're selling a real product that's multi-level marketing it's not a pyramid scheme a pyramid scheme is when someone sells you stuff that is vaporware like there's no product behind it right yeah and so yeah in this case you could argue look they're building a real product they're going to deliver on that in February if they never deliver a product that's the issue that every crypto protocol faces right but this is a team

that's actually like they're they're phenomenal Builders and so um I that's where I predicated my thesis um and you could see that in the work that they've done with blur like it's just a phenomenal product and so again um you know we can talk about issues with l2s and you know modular monolithic like all that stuff is an interesting discussion that we it's it's it's very relevant um and the construction of the L2 and you know the important things that one should look at when you're deciding whether interact in an execution environment like what are the things that matter the most which mean so that's like the more interesting

Nuance discussion that should happen absolutely all the time not just with blast but like with optimism with arbitrum with every other L2 with other any L1 like and I think people get kind of caught up in the drama and the noise and I'm happy to go through it now I I tweeted about this today and the most important thing for an L2 in my opinion is like that you can verify and like validity and verification of of an execution of a block if you can't do that run away like it's an issue well let me ask you this then why didn't blast just do the harder thing in waight like they basically deployed as an as an L as an L like they just they're just a deposit

with a multisig corre yeah that's what it is at the moment yeah it's just a deposit with a multisig and the idea is like Hey we're we're gonna obviously build this down the road um why did they actually just wait and deploy as as a as a as an L2 that's a great question I mean I think it's again like they could have done that I think I didn't directly ask the question yeah but um this is something should definitely discuss when he comes on Pac-Man yeah my intuition is that you know you just sort of um like a lot of projects too you know you you want to attract liquidity and and lock it and S from day one you want to have all these kind of users yeah um because that's really the

the most important thing like a lot of if you look at other launches cross ecosystems like there's this idea of an incentivized test net you get all these builders you know it from a BD perspective let me ask you a question if you're because now Blast has over 100 million in TBL deposits they're there so if you're working a b blast and you go to teams and you say hey guys we're building this L2 we're the team from blur we have a lot of experience trust us we're gonna build it do you want to deploy on us they're like you know what call me when you actually launch and you have a test net because we have the ability to do other stuff right now you can go on some

of the other l2s but now the discussion is much more it's different when you say hey guys we have all this interest and it's there and people are taking this and willing to lock up their Capital because they're excited about who's behind it and who's building it do you want to come and build in tandem with how we like build this L2 and I think that's really the more important thing is you know the worst thing is having a product you know from day one like you bootstrap these networks you want to have supply and demand right and a lot of that hinges on having stuff to do on the L2 yeah like some of the more successful launches like arbitrum did it exceptionally well where they just really did a great test net where they had a lot of developers

open like any developer could come and build um and I think now that that's a you know blast is in an interesting situation where I think their ability the bottom line is I think that the ability for them to attract Builders which is fundamental for this to be competitive and you know actually yeah be very differentiated um is the reason why I think they launched it in this manner where they opened a gate to have open interest and Signal their intent to kind of interact into C2 and look you know we talk about like you can stake eth you can stake uh staes but also you can lock your blur um as well and so season two of

blur just ended and a lot of people got the air drop you know price action today blurs up like over 40% and I think a lot of the there's a lot of interest in in people that you know are very active in blur to now participate in the sell too and look of course it's incentivized like you know like that's like the nature of crypto you incentivize test Nets and you have incentivized you know air and you have aird drops like you know so anyone that's kind of critical of that like okay well you know we are in a space of incentives and you have to incentivize people to come over you know and and I don't see a problem with that I think this a very

creative way of doing it um you know the narrative was not perfect for sure the language was not perfect for sure um and that's I think something that could definitely be improved yeah like it's not RIS I you're really close with yeah I know you're really close with the arbitrum guys and like Stephen and stuff it's it's uh yeah and Stephen came out with great tweets I mean and again time and time again he's been saying guys like there are issues his point is you have to be very honest and have a very open conversation about what is an L2 and what is actually secured by ethereum and I think um look I I've had private discussions with Stephen and he's now he's more open about it but for a long time he was like

imagine the frustration of a team that's been building since you know quietly since the early days of ethereum from you know in Princeton and no one kind of really knew arbitrum when I left the round when I was a Pary and then priv like as personally invested it was not very well known it was like why have you guys taken all these years to build this L2 like this was like 2015 2016 and the reality is it's like incredibly difficult to get it all right like to build fraud proofs like and and okay there are people take issues like oh you know your sequencer is not decentralized yeah but you're in L2 like you don't need a decentralized sequencer to have like decentralizing the

sequencer is something that people like look at and say oh there's just one entity running the sequencing but that doesn't compromise like that has issues with censorship of transactions but if you have fraud proofs you can very clearly contest that and go back to the L1 and settle that right now that's not the case for other l2s like optimism doesn't have fraud proof that's incredibly diff like that that is that's not an L2 like if you don't have fraud proofs you're not an L2 full stop like and I don't know how else to say it like but then why but then why like why is it okay that for like why why support blast but not

support optimism well because you're going to build it yeah like this is something that I will push all day long if I don't see fraud proofs in L2 I just can't rally behind it now they're in development right um I had other kind of concerns around um uh blast like how scalable is this earning yield what are the dependencies when you're earning yield and there are some right you have to and but maybe longterm this is really good because if you just have maybe that this allows for other you know um validators or like ls's to gain more traction if you inen right and and and pull away from a lot of the dominance of

Lio and maybe this attracts other you know real world assd protocols to gain much more like Ando and some of these others that are so that I think is positive of course the the strategy has some capacity constraints of earning yield or like maybe there's a degradation in yield because again a lot of a lot of this Capital that is in l2s is not earning any yield and has this con tradeoff now you theoretically remove that tradeoff you allow native yield in L2 of course has an implication on the amount of eth that is staked and where it's staked and where it's earning yield and I think that's positive uh but it also impacts you know the aggregate

yield of the network right because if more eth is being staked well then by default the staking yield goes down right but then there's always this tradeoff um of at some point the yield the native eth yield goes to a point where the relative attractiveness is going farther out in the r spectrum of buying treasuries through maker or some other protocol that is facilitating that becomes better but becomes greater and so naturally there's this kind of fluctuation in the risk-free rate which is again I'm going to use that term to talk about the The Benchmark rate is probably the better terminology here The Benchmark rate is the east taking yield and that's going to always be the

opportunity cost that you're going to take relative to doing other stuff that is farther on the RIS spectrum because theoretically staking eth um is this that yield is like the lowest risk so let me tell you why let me just tell you why this scares me Santi a little bit just I know I'm just to play devil's advocate here the reason this scares me is because um all right so if you look at all the Innovations with l2s they've either been technical or um or like so Technical Innovations or like I guess I'd call them social Innovations or like industry Focus Innovations so you could either add differentiators in the way that you're adding like fraud proofs or ZK Tech or something like that or you could focus on maybe a privacy first L2 or gaming F first L2 and what this is doing and I

think the reason it got a lot of push back is this isn't saying hey we're going to build an L2 with better Tech or with a focus on gaming or anything like that we're making actually uh uh cryptoeconomic adjustments instead of technical adjustments and social adjustments for making cryptoeconomic adjustments and I actually think Pacman is one of the best Founders in all of crypto and I think he'll do I think blast specifically like blast itself probably will be one of the most uh I think probably talked about l2s in 20124 however what this does and I think the like I think what this does is it forces all the other l2s to start making cryptoeconomic tweaks and adjustments and what that reminds me of is what

ended up blowing up the 21 cycle which was you had like really legitimate lenders like take blockfi blockfi was a really legitimate company but they started they had to compete with someone like Celsius and Celsius was not legitimate and so they like Celsius started having these like essentially what we now know of uh were were fake yields they were artificially inflated yields so you had like 9% yield on Celsius and then if you're blockfi your Venture back company you need to get more users your real yield should be like three and a half let's call it but you had to pull it up to six a half or seven and a half percent and that ended up blowing up an entire to to be fair that that um risk-seeking Behavior was I think the issue was in

this connectivity between trafi applications and Defi and the carry trade that a lot of people depositing institutions were doing they were promising a particular yield to their customers the blockfi Voyager um Gemini n um and who else like you name it but let's just stop there sure and the issue was that they didn't know their counterparty well enough they didn't do enough risk uh and due diligence risk assessment and due diligence to understand where that yield was coming from and as I will always say and I think I coined this phrase was if you don't understand where the yield is coming from you are the yield and I think they didn't properly understand where the yield was coming from and

they're earning their to your point they did get caught up in this competitiveness and I want to you know they're always looking at oh if Voyager is offering 4% on eth I need to offer 4.1 and then you know at some point that that music stops because there's right so much this is gonna happen in l2s like l2s L2 competition was not that intense a year ago now it's super but it's a different I I agree it's different type of I think the the Nuance here is like you understand where the yield is coming from in this case like it's all on chain and well well it cannot well it can it's all in chain in the sense of

like like if allelu is telling you this going to give you 15% on your Stak teeth you're like uh like no I don't think users care where their eth is coming from is the problem the Yi is coming from so where their yield is coming from and that's the problem and it was the same problem like right now the yield for blast comes from eth staking and IES like those are very legit and won't blow anything up but in a super competitive let's fast forward 18 months ripping bull market hundreds of millions being pump billions being pumped into l2s and Venture money um uh L2 space is the most competitive space in all of crypto the yield then goes from like Hey we're offering 4% yield to hey we're offering 12% yield and like 5% of that is real

it's coming from treasuries or staking but the other 7% is made up of maybe their yield farming with your with your eth maybe they're using Venture dollars to fund it and like that's I think the the important thing to understand right now is yeah yeah they're they're they're earning and the deposited eth is being converted to St eth and potentially going to go through maker as well so yeah you're absolutely right you have I'm talking about like what I'm scared of for the other l2s but it well it's gonna be an issue for blast and will be for any like even maker right you have to understand where that yield comes from from and as a rule of thumb if all of a sudden you're being promised a yield that is material

from anything else you're doing like if you're staking your wreath and Li is giving you four% and someone comes in and gives you eight well you need to pause there and like understand like what's the spread and where it's where it's coming from uh and maybe it's part of it is incentivized by the native L2 token maybe whatever right and you have to have a view on that um but yeah like naturally anything that has a higher yield has higher risk and you need to understand that that that the risk that you're taking so I agree with you uh where where I think it's going to be interesting and look maker went through this kind of existential crisis where the early early maker

Community was like super OG very dieh hard in terms of principles there was a contingent within the maker community that was like this is pretty D5 sum there was just like keep it pristine Dy should be only collateralized by the more the most pristine acid and that's etherum like just don't introduce other types of collateral but then you have a capacity right constraint um as you think about like d and and its stability and its growth uh it was capped by the amount of eth right and the market cap of eth and so as soon as you start introducing other forms of collateral you migrate to multic Collateral die and you introduce usdc again totally different type of

collateral some of it is more censorship resistant than others some of it is riskier than others I think where people miss the point is often time like so many times in this in this discussion when it comes to crypto like people think of it in binary terms like decentralization is a spectrum um censorship and lack their offers it's a spectrum like and I think people we need to think more like that to really understand the relative riskiness obviously the absolute risk but also the relative risk uh and the rationale for introducing like our argument for proposing multic collateral die as a

tangent but I'll be quick is it's a matter of risk parameters and setting the right risk parameters um because on one hand if you just are backed by eth die is not going to go anywhere the peg is probably going to like like dpeg and the maker goes to zero because no cares about this protocol if you really want to grow and get more demand or get more loans and like cdps open like you have to allow people to like mint die with other collateral types that are important people use like you might have a very strong opinion about usdc but let me break it folks it is the most widely used stable coin with tether there's always a choice that's that's the point that I'm trying to make there's always the nice thing about crypto there's always a choice of what you use um but

when it comes to like protocol economics I think yeah we're we're going to see more creativeness and like how this yield is being passed through over to users um and we made a lot there was a lot of mistakes were made like in D5 summer like again it was like a lot of yield farming activity but like you're depositing in a protocol is not delivering a product yeah well that yield is really not sustainable um so you always have to think about that right like treasuries 5% is that sustainable interest expense for the US government is going to amount to 20% of GDP is that sustainable like I mean we can go on this path and again it's like

turtles all the way [ __ ] down you know yeah uh I have one more question on blast it'll be fun to see how this plays out and I'm excited to chat with pack Pac-Man on the Pod um what is it about Paradigm that I feel like a lot of these experiments on the fringes whether it's blast or friend Tech a lot of these I think they did blur um what is it about parad that like enables them to to why are they behind what what feels like most of these type of things in crypto from what you know about Paradigm we should have Matt and Fred and stuff on the Pod but what what is it about them from maybe having worked with them over the years I think they're the best stacked team in crypto like a fund in crypto think yeah yeah like like the

proof isn't like look at what they've did with Unis swap I think that was I always thought that they were my biggest competitor when I was a Pary M now I like to invest with himh but when you're like of course Matt takes a SEO Playbook and a lot of these rounds like he just cuts everyone out right it's like them and no one else yeah he won't last other other folks involved like standard in this case was an interesting one because I I that was my biggest objection I love what they do I have immense respect like when you see the work that Georgio and Sam which I wanted to hire like they have Sam they have Georgio they have Dan like like and a bunch of I spoke with another guy

called Aaron like they they have when people think about like if you're a founder and the amount of resources that you're going to get I think they have the best the best most Diversified competent like researchers and they may not be an a16z that has like a hundred like team of operating and PR and all that but I think when it comes to like really really like getting deep into helping a project design cryptoeconomic incentives protocol design and research and security it's just like they have Sam like that's it like that's your secret nuclear like weapon like there's no better person in

the ecosyst than Sam like he's he's the god like uh he detects every bug and so that alone like is is just a reason why you would pick Paradigm over anyone else candidly if if I'm a Founder I would take their money over anyone else who would who are the second and third best in your opinion well you know I'm biased but uh outside of perfi um well it depends what type of protocol you are right I think I think some funds are like like like pair five say super like if your D5 D5 yeah but there there's other great funds like if you're in Asia like obviously you know dragonfly folas you know f is an exceptional work like you know step in and scroll and uh I

think they're really plugged in they do great research and and really help their portfolio companies but it depends on the stage too it's such a difficult question right but but like categorically I have an immense respect for Paradigm um because they theyve contributed a lot to the space no you know people may not like them they might think that they're making Investments they they you know are questionable I'll just say like uh I'll just remind people because you know a lot of people think it's like oh you know like this is just you know a lot of people had very visceral and have very visceral reactions especially when they don't participate in rounds and then when they have and when they the new Inc like when a new company comes in and is perhaps challenging the value of

their bags it's look it's okay it's a normal reaction I get it but I would encourage people to take time to learn and also like I'm just gonna say salana for a long time was not very uh not very popular people very critical of it and this was like not even most hated in crypto tend to do I'm saying and now of course salana is like all the rage and for rightfully so like there's just a lot of stuff that had you been paying attention you know you would have liked the team you would have like what they're doing and I think the most important thing is like focus on Founders and and the team and their intent to build yeah and if how long they've been here like God I mean the

salana team has been kicked in the nuts like time and time again again but they they keep coming back they keep improving the protocol like I look at that and I have an immense respect for for these Builders because building as Kane uh and every other Builder that's been that I I've heard it from a lot of them it's just like it's super difficult to build especially in bare markets like you get crucified always constantly things go right people like obviously that's your job people go like but but even when things are going right people like have opinions of like oh you know all of a sudden this community model like folks not because just because you have a token doesn't mean you can all of a sudden barge into board meetings or whatever or like you know like no like absolutely not stay away um all right

last piece of news from this week that I think is uh my computer's about to computer's about to die there's uh there was pith but we'll we'll have Mike on from pith to talk about pth so we can do a separate PO on that Kraken got sued by the SEC but binance was the bigger news um coindesk got acquired so coindesk um and I actually just I'm so biased about this that I'd love to hear your take on if I'm overreacting or not but the Reas so I posted this Twitter Thread about it let me let me give you the story so basically um uh when co uh when dcg had problems with their balance sheet because of Genesis Barry put a couple of uh uh dcg owned companies on on the market and one of them was was coindesk and they ended up so they in July they

had an acquis had an acquisition or a deal with this guy m rosac to buy the company for 125 million um as the market kind of stayed flat and and and actually fell in the end of the summer and like early fall um rosac pulled out and uh that deal went back on the market and this company bullish um ended up just buying them uh it got announced this week on Monday that that this company bullish is buying coindesk and I posted this Twitter thread which was kind of not classy I would say but I just wanted to to kind of call out my my thoughts on it so I think it's pretty bad can you show it now how yeah I'll just read it I'll say here's I'll just reread it I said the coindesk bullish acquisition is

bad for the industry uh F first off bullish is owned by block one so for those who don't remember block one created the EOS blockchain it was supposed to be a faster ethereum right it was part of that original group of eth competitors who raised during the Ico era and in May I'm sure you remember this Santi uh in May 2018 EOS raised $44 billion dollar in the largest Ico ever and they're now the largest one of the largest uh Bitcoin holders by the way they took that four billion they let it ride in Bitcoin they're now one of the largest Bitcoin holders in the world they own more than micro strategy um and in July what a lot more yeah yeah they own more than more Bitcoin than micro strategy um and in July 2021 so they've been launching new companies they they

bought a domain name for $30 million actually from micro strategy and from Sailor called voice.com put 150 million bucks into that company killed it a year later uh July 2021 uh block one launched a new crypto exchange called bullish with 10 billion in funding that is billion with a B what yeah crypto exchange called bullish with 10 billion in funding uh it was backed by folks like Peter teal leis bacon Richard Lee uh novogratz Christian anger me and today bullish announced that they're buying coindesk and the reason I think it's so for us is block works is someone who competes against them amazing news for us like we we love to see that but if someone who loves crypto and genuinely believes that uh we need like

now more than ever we need unbiased media to move the industry forward in a responsible way this is not good this would be this is no different than binance buying coindesk or the na or NASDAQ buying the Wall Street Journal or Black Rock buying Bloomberg it crushes I think the editorial Integrity of the brand and the reason this kind of hit a I don't know hit a nerve with me was this comes a couple days after 4 Ventures who owns bitg get also another crypto exchange bought the block and I would consider 80% of the block bought 80% of block consider the if you look like the three I think the three best media companies today in crypto are probably

uh coindesk block works and the block I would put those as like the kind of trifa of crypto media and it's a bummer to have two of those pre-owned by crypto exchanges I hear you loud and clear now let me ask you a question we've also seen a host of billionaires like Jeff basers of the world go out and buy like the Washington Post I think he bought and like look there's a reason you could try to you know when people buy you know news outlets or obviously presents a conflict of interest because Bezos has an like people that are behind it in the board obviously have stakes in companies

they have interests in other things in this case I think your point is a very good one which is obviously there's bias but there's always bias it's how much bias is too much bias and do you have the proper controls in place to preserve the Integrity of the journalists that are reporting and how involved are you in what gets pushed and what what makes a story and what doesn't make a story I think that's the issue that was the issue with the block right the block one of the the former I think it was a president that got alad was CEO he took loans from SPF and well he didn't disclose that and I think it's a matter of dis proper disclosure of conflict of interest like look you've done it's like

I'm in this podcast I have an opinion on things I have have a lot of investments in the space it's no surprise and when I talk when I talk about coinbase I'm long coin when I'm talking about um blur and blast I have exposure to that of course it be stupid and disingenuous for me one to not disclose it and two to not appreciate that like it's not going to influence my opinion and I hope listeners appreciate that I think when it comes to like I'm just a guy that sits on a chair to talk about and Ramble On [ __ ] it's different if like I don't own I'm an investor in blockworks too but it's a very minor stake I don't go to you and say hey you

need to publish this now like but like what's the worst casee scenario in your mind like they just skew they all of a sudden now start like pumping eo's bags and I don't know like what's what's the issue because what I'm saying is there's always a right billionaires like billionaires buying billionaires buying companies is that John Henry right John Henry the Boston Globe Bezos the post um Glenn Taylor right the Star Tribune the Sheldon Edon the Las Vegas he he bought the Las Vegas Review secretly after they were uh covering him negatively and he bought it like the the list goes on and on Mark Ben off time Twitter the taii the Thai

billionaire guy shot I don't know how you pronounced his name but he bought Fortune like the list goes on and on the difference there I think is that the they're they're not they're not buying companies in Industries where they necessarily operate so like it's it's different to buy like uh someone like the Wall Street Journal where you or maybe the New York Times or something where you're covering everything where when you we are B2B media companies we are like trade Publications essentially where the only thing that we do is cover crypto so every single day coindesk is either making a decision to cover bullish or not to cover them and they're making a decision to on how to cover a crypto any of any crypto exchange which

are all bullish as competitors so um I think I think Barry did a phenomenal job with this uh like Barry actually did well early on maybe not as much but later in the last couple years Barry did a great job with with coindesk um they had very good like ethics and policies and real Church like real church and state and he genuinely believed uh that good media is good for the industry and what's good for the industry ends up in in improving his company I don't see this as that type of acquisition I don't think the Brendan Bloomer of EOS is like what's good for media is good for the industry and what's good for the industry is good for Block one like this feels like a yeah absolutely no I hear

your point I'm just kind of like I'm raising up a point where I'm I'm as biased as you can get with this I actually wanted to hear opinion no like I think it's a very valid concern I think look at the end of the day you have to think about okay the aggregate purchase price of this is probably di Minimus relative to their Bitcoin Holdings and so the question is you know if you're a venture fund investing in and buying a controlling stake in a media publication are you going to you know money on fire because at the end of the day like if you're reporting really poorly I think the chance like your investment is gonna probably go to zero in the long term right if if you're a shitty media you know what I mean like if you're comp if your integrity is compromised if you're

so bias like people gonna wake up to that and and I think you're just going to dominate it's it's maybe a great position for you guys to just plow ahead and be the most independent on you know there's always some bias but independent um media outlet for crypto and then you just win that game because I'm a big believer at the end of the day truth prevails and people appreciate good editorial content like um it it is obviously more sensitive like the ability to influence narratives is um probably easier in crypto of course right because it's an emerging asset class you know we're also by the way facing challenges when the New York Times and traditional media like also

carry a narrative and portray this industry to make headlines that time and time again they've obviously not portrayed him you know in a more in the most favorable way right um like over the last 12 months like over the history of crypto it's always been the negative headlines that negative headlines sell more than positive headlines and that's always been the more like demoralizing piece of media because the monetization model is clicks and Views and like that just sucks right and I think I think this is why when I when I interviewed you um and uh Mayo uh Mike with Vance I think it was Vance or uh or Michael it was really this opportunity I think that you guys have

to embed a lot of like a different monetization model where you don't have to you rely on clicks and sensationalism to make a living like and to make it a profitable Enterprise I think you can really embed nfts you can have greater ownership you can like there's just a lot of things that with micro payments I think think you can roll out more interesting creative subscription models I don't know right but yeah yeah that that was my I think that's the opportunity you guys have and if all of these new if if the block and coindesk are going to fade into a relevance because they don't have proper Independence as you say between the board and the owners and the journalists

that's going to show up and they're going to go to zero because over time these things take care of themselves you have to do anything like if they're so willing to become a very biased media Outlet well guess what I'm not going to read it and then over time people are not gonna read it right so they're just their their market share and their mind share in the space goes to zero I think the real problem is the New York Times of the world that I think is a bigger problem um especially at a time where you're gonna have an ETF approval you know Bloomberg has a segment every day an hour segment of Bloomberg crypto that may or may not continue to exist but that's just been incredible to see right I mean what I'm trying to say is there's growing interest for people to learn

about this space it's the only reason why I show up and sit on this chair because I was just frustrated with yeah people of the pops of the world was just like God damn it if that's your first interaction in this space like no wonder we haven't gotten mainstream adoption I don't care how good the product is if people come in here and the first thing that you see are popup ads and buy this like token like no like no let's let's approach this from first principles and have an honest discussion and a balanced one like we tend to overpromise like guys like tone it down a bit like Tech is really good like we're here our bags are packed our net worth is tied to that's a that's like we're putting ourselves in line but

that doesn't give you like I think it's not a good strategy to go out and say and sell pump your bags like no like let's yeah let's be objective and police ourselves and look I think this is again just to tie out when I see the coinbase team and their discussion and the way that like Brian goes on TV like that's I think that's a good like if I were to pick a marketing person for our industry like it's not sailor it's probably someone like Brian it's not perfect but you know guess is closer to someone that just like so anyways I think it's encouraging for you guys it's motivating for me because yeah like the challenge is I think everyone here if you have an audience no how matter how big I think you have a responsibility to

stay balanced and Vigilant um and push like as pristine of Education as you can raise awareness you has a bias I have a bias of course on my portfolio of course yeah it's impossible to eliminate like this it's just who we are it's just by nature of being an investor but you know yeah good pod man my uh my computer's on 2% so I'm uh all right well that does that mean that you're gonna shut down for the rest of Thanksgiving anyway super if you celebrate Thanksgiving I think it's the best holiday it's my favorite holiday I'll be celebrating I sure as know Yano and our producer uh is also gonna do it so anyways for everyone that's been

listening thank you uh for listening it's very encouraging when we uh hear the good and the bad what people like and don't like so really thank you uh everyone it's uh one of the more fun things that I do weekly basis enjoy Thanksgiving folks see you next week Friday hey everyone thank you so much for watching today's episode really hope you enjoyed it we wanted to take a second to just remind you about our upcoming digital asset Summit in London March 18th to 20th Santi and I got your back seats are limited and we hooked you up with a 20% off discount code it is Empire 20 if you heard it earlier in the podcast there's a little competition running at blockworks to see who can drive the most number of tickets so when you register for the digital asset Summit make sure you use our code Empire

20 see you in [Music] London