Landmark Ripple & SEC Case: XRP Not a Security (maybe) | Roundup

Transcript

this episode of Empire is brought to you by quick node quick node is an end-to-end blockchain development platform that makes building web 3 apps super easy no matter what you want to build you can effortly develop any application by leveraging their elastic apis go to quicknote.com use codeempire you'll get a free month on their feature back build plan that's right go to quicknode.com you'll get a free month to start playing around you'll hear more about quick node later in the show Santi I think this is uh the biggest smile I've ever seen in your face today so uh happy happy Thursday to you why are you feeling so good my friend you know what's not to like it's Thursday we always record on Thursday it's always it's always good

but uh really really uh you know I think you earlier there's not much going on through this Roundup I was like sir there's something else but I was this close to calling off around and then then all of a sudden we we of course the Ripple um case ruling dropped which I think we just just start with that right sir let's start with a great big news today I just dropped about 20 minutes before we started recording this a U.S federal judge has partially sided with ripple labs in an SEC lawsuit alleging that uh that Ripple issued an unregistered security offering with its uh xrp token so basically for the last how long has

this been going on Sunday a couple of years the SEC has has basically had a lawsuit against Ripple saying that they had issued this unregistered security Ripple has been fighting back I know they spent tens of millions of dollars I've heard some people say that they spent hun uh hundreds of millions of dollars fighting this whole bunch of time battling it out in the in the courts um and they got a huge a massive win one of the biggest I think legal wins actually cryptos ever got uh came today uh when they found that um the programmatic sales on the secondary Market were not uh an unregistered Securities offering so huge win for ripple today yeah I mean the the headline of course is and I'll quote directly from an expert in in the kind

of the document that was released xrp as a digital token is not in and of itself a quote-unquote contract transaction or scheme that embodies the Howie requirements of an investment contract rather the court examines the totality of circumstances surrounding defendants different transactions and schemes involving the sale and distribution of xrp this is where of course the headline is super positive right it was like Hey look you know Ripple some headlines went as far as suggesting Ripple is not a security Now the the correct I would say the other headlines that I think are more balanced is Ripple is not an investment contract now the more nuanced stake here is as you said there's a couple of different

types of transactions that happen one you know the really two in my mind or if you look at the talking it was still kind of processing this but the first one is directly to kind of institutions Venture funds or hedge funds or whatnot the other one was more through Distributing through exchanges excuse me and uh that that is where the court I think focused on which meant to say on the second ones that this when they were selling through exchanges as you said programmatically that seemed to be okay because there was not a contract per se and it was really this is there a contract right if you're you're selling to like a a counterparty and there's a contract well obviously like there's a

physical contract that digital whatever right there's no institutional sales or like fundraising deals or those yeah those are securities they said but trading I think they said I think they said yeah it says here let me I'll just read it directly from the stock the court concludes that Ripple's institutional sales of xrp constituted the unregistered offer and sale of investment contracts in violation of section five of the Securities act so the the institutional sales fundraising OTC deals things like that that they did say that as a security uh however the programmatic sale on exchanges did didn't meet third prong of Howie so sales to users via exchanges was fine as long as it was through an order book and

not through some like OTC desk Launchpad Ico ieo et cetera so cute huge first of all yeah I mean this is a well-capitalized player that was able to fight it for a number of years and and you know um so I think it is certainly a win so who are the key ones the first thing to pop in my mind I tweet about this is exchanges think exchange is particularly an exchange like coinbase and look full disclosure I have exposure I've been talking about this a lot in the podcast coinbase um and I mean it it just you could Envision a world where exchanges play the primary role as an investment Bank whenever there's a token

listing they're the ones that are gonna token projects will come will go to an exchange we'll have to submit information I mean a lot of products already do this like if you want to get listed on Exchange you have to provide a lot of information around who are the investors who's a team uh background of the team they do all kinds of information requirements the same with an investment Bank whenever it's taking a company public would require all this information right for the Roadshow um as a kind of like a a lead left book Runner if you will placement agent so a lot of this information has already been recorded by exchanges so I I think if I'm reading here the key winners here

are exchanges also projects that have like done these type of sales through exchanges um and where I'm not as clear maybe you have an opinion on is so where does so if some sales are contracts and others are not then you can't really go as far as saying that Ripple is not a security can you because I don't think we're there yet at least that's my competition so I think the biggest winner so Ripple is a pretty centralized company right or centralized Foundation whatever you want to call it they've got like Brad garlinghouse they've got Chris uh what's his name Chris Larson I think it is um if if Ripple's not a security here then you read the the the extra of course xrp

has a digital content yeah digital token is not in and of itself a contract transaction or scheme which is one of the requirements of the Howie test so if you fail one of the requirements then I guess you can conclude that it is not an investment contract I'm just asking the question can you go as far as saying if you read that line that it's not a security that's all I'm asking no I don't think you can conclude that but I think it's I don't think you can but I think it's one step closer and here here's here's how I'm thinking about it so you said uh exchanges are a big winner completely agree huge exchanges are a huge winner if right these institutional sales and

OTC and direct token sales are securities all selling of these tokens is gonna flow through public order books another big winner I am starting to my mental model for these tokens is infrastructure tokens and uh and app tokens I'm gonna call uh Ripple I'm going to call xrp an infrastructure token so an infrastructure token is uh is a token that basically derives value from selling block space so Solana uh like I think some of the winners here Solana uh Cosmos like polygon basically the L1 the l2s I'm gonna I would bucket all of these as like people whose token is directly linked back to the business model of selling block space which is what the business model of an L1 is there's another bucket that I still

think is TBD which are the app tokens so I I don't know if the SEC sees it this way but like I feel like this is going to be it's not the conversation yet but I think that's where this conversation heads is infrastructure tokens business models block space tokens linked back to the it's a commodity and uh it's a pretty clear commodity then there's these like app tokens where I think jury's still still out on that yeah look I I think I don't want to minimize the impact and I guess it is a very positive news but it's important to like still process this have the right people lawyers which I'm not one uh comment on it and of course we'll have Rebecca maybe Jay come on and really parse us through uh there's gonna

be a lot of threads coming out you know over the next 24 hours and and we'll retweet and you know maybe comment on that next week but so far I think uh I would uh I would be cautious to of course I'm optimistic about this I think the world that I Envision is one where I I remember seeing the SEC create a a website that was like information capture disclosure um group for crypto specifically but I haven't seen like much come out of it but if I'm looking at the chess board and how it's going to move forward I think to your point it looks very much like any token issuer is going to have

to go through an exchange um I don't know how that were the Venture rounds come into this pre-token it gets messy right it gets really messy because you you only have two options to buy a token now you you can't do these right what I'm saying is when you're investing in a early stage company pre-token you know a shaft which is has a warrant for a token I I'm not sure if there's an impact at all to to that ecosystem uh because there's still a place right where you know a company when it's an idea a seed or seed round or series a like you can't just launch a token like

what is this right right I don't think I don't think you just go direct ever to to have a token I think at some point if you're going to launch a token you have to sell it distributed do the proper information disclosures to the public meaning this is customers of an exchange like registered customers of an exchange that have been kyoc AML someone might say wait a minute what happens though to for instance coinbase is not in every country right um so does that mean that any exchange is there going to be a list of exchanges

where this becomes relevant is this finally like U.S persons will be able to participate and invest in these tokens if their customers registered customers of a U.S registered license exchange I think so right so it's a it's a big precedent I think and offers a way forward for a lot of projects I think I might change my mind on this but so far uh a pretty nice path forward for if you're ever thinking of launching a token and you want to be compliant then you go through an exchange in a programmatic sale and a fair Equitable or you do like a right b-filing do you remember uh do you remember Stacks like muniv and

stacks I think you only have two ways like if you're a big Venture fund you only have two ways to buy a token now you either buy it on the open market or you have to basically convince the uh the protocol to do a reg defiling which is very expensive right I remember I think block stack or now it's called Stacks did this reg defiling and they did it in the right way but it cost them a boatload of money um it's really interesting yeah but you but you make you bring up a really good point this might have a weird effect on the market you might um you might see a lot of companies and protocols like racing to actually launch a token it felt like we were in like anti-token days it was like just raise normal money do like a promise to have a

token later and like you weren't I think this is actually going to push a lot of protocols to launch their tokens faster because if you just did like a big OTC deal or uh Venture rate or staffed or something like that that's what the judge here constituted as going as a security so now what you want to do is you want to basically Sprint to get your token out the door I think that could be a weird second order implication here possibly yeah I think then the the second thing on my mind is a lot of these exchanges some have like brokered your licenses other like I'm still kind of thinking through like does that mean that like exchanges now will have to get a broker dealer license

or partner with someone that has a broken deal license um anyways yeah I don't know yeah interesting I mean the other winners the ETFs right like how do you have a case to not get this black rock ETF approved at this point if you're against her you know zooming out you know if we were talking about like at the beginning of the year we always make these predictions and time and time again we we talk about okay we'll be nice to get clarity and it's I mean as you alluded as you mentioned earlier this Ripple case started three two and a half three years ago yeah maybe even more and so this functions just realized like these things take a lot of time and so of course the the other cases might not

take as long because I think they've been moving in a pretty fast pace and maybe this isn't in one of those cases it really sets a nice precedent for other cases to perhaps move in a faster Pace but of course we have the the grayscale lawsuit right alleging that you know around the the you know the the gbtc and Etha kind of products um that seems to be moving a positive direction um you have the coinbase um SCC kind of uh case happening as well um so those two I think are really big and in my estimation the court has been citing favorably both with crypto

companies and not the SEC yeah um so yeah it'll be interesting to see the SEC response I'm sure there will be one but um but yeah overall quite positive for the industry I mean yeah you know that's surprising did you see uh did you see the machinski Celsius well I wanted to get to that after yeah but I was just gonna wrap maybe this conversation up by saying coinbase is now up another 10 on the day of course it rallied a bunch you know it was up I mean my goodness like uh started the start of the year yeah yeah start a year at 35. now it's up 3x um it was a month ago was it sitting at

50. now it's almost doubled it's 94. 95. we're up 100 of the month 80 yeah you ever take um it's 82 on the month uh on the year it's uh 158 and I think that most two positive the biggest Catalyst here of course is before this I think the Market's interpreting this is quite positive for coinbase is the the as we talked about last week the ETF and you know having all these if the ETF gets approved coinbase has all these agreements with the ETF providers for like what is called uh monitoring um you know suspicious monitoring yeah so anyways yeah you can quickly see how this changes right because yeah well

bear bear markets end when things that feel Unthinkable actually happen right and I think the Ripple win is one of those moments BlackRock ETF approval would be another one of those moments um this also maybe coinbase ripping opens the door for more crypto companies to go public do you remember the Krakens and and Circles of the world who had who had talked about going public at the you know kind of fall of 2021 never happened because the market fell out but yeah you're absolutely right I mean I think uh it's it's important to look certain things move really slowly right you know this Ripple case has been going on for four years and then very quickly momentum shifts yeah we could before this earlier this week a lot of people were like sour on the it's like every week it's quite volatile sentiment

um you know shifts and and crypto right when very quickly when the FED stepped in and said oh there might be two more right hikes just before the CPA that the CPI number came in you know people like crypto immediately like went down people like oh you know like it's just interesting because there's so much noise in markets particularly in cryptos because you know never shuts down right um but I do think if you were to zoom out I think these two events the ETF and and these cases are are very strong signals that can shift momentum very quickly putting macro aside and all the things that we can't control but as an industry specific Catalyst these two are are massive I

think yeah yeah tough day for machinsky SCC doj cftc and FTC all sued or charged Celsius in uh all this morning always getting arrested as well yeah it's put into custody as well yeah I think the biggest delegation or one of the biggest allegations wire fraudage is a very broad kind of uh kind of um term is that he manipulated the price of Celsius the token along with like yeah yeah along with selling it and you know not making proper disclosures but um yeah funny I met machinsky he was pitching Celsius in the early days in

New York and my my Spidey senses just went off you know dude so do you know the backstory of block works is Mike and I paid like a hundred bucks to go to an event in 2017 and one of the speakers actually I think the keynote speaker at this event in New York was mashinsky and Mike and I were like oh my God all these people paid money to go see to go here like this scammer speak on because I mean you meet the guy in your Spidey senses if you have any gut feel towards few people your Spidey senses i i i vividly remember him claiming that he was the inventor of vented VoIP right yeah yeah yeah and I was like and I'd done like bondage and a few deals yeah and I'm like

yeah I'm pretty sure you're not yeah like a quick Google search and you're like most definitely not yeah no it is wild though that I mean he ended up raising from like pension like oh yeah Canadian pension I mean mm-hmm folks just uh yeah the manner in which he was I think there are certain traits of people that in crypto I think your radar for this stuff needs to go up if you want to survive and just dodge bullets and land mines but when people make these kind of claims and are very defensive it's just like a you know uh you have to pause and like just like probably not do business with these

people but yeah obviously yeah did you see the uh the exchange between the cro and machinski cro says to machinsky the issue is that people are selling and no one is buying except for us the value was fake and was based on us spending Millions just to keep it where it is machine C responds is Dogecoin value real how about the 5 billion for Solana everyone knows what these tokens are and wants to buy them because they think the price just keeps going up not great the the na remind me here but one of the biggest claims here is that he had used deposit or money to pump the price of Celsius token while he was selling at the same time his personal stack yeah there's a bunch of

claims here right the the SEC claims that uh Celsius and machinsky first off raised billions through these like fraudulent and unregistered sales of what they call crypto asset Securities uh that number two they repeatedly lied to investors about their financials so their cooking the books basically and then three uh they're manipulating the price of Celsius or sell token uh like you like you said which was uh the company's kind of native token so the good news in the SEC case against Celsius is they they only said that cell was was a security they weren't it's not like what they've done in the past couple months where where they named they said cells and security alongside all these other ones alongside all the other tokens that they you know some of the tokens that supported yeah absolutely so

um yeah well there's another um earlier this week I think it was the New York oh sdny yeah southern district yeah I think his name he uh this was the first time that attacking a smart contract um it was deemed like a fraudulent activity right and basically it was a Solana D5 protocol I believe you might know the specifics here but um this particular individual I think manipulated the price of a D5 protocol and like raped a pretty good stack I forget the exact figure

um but anyways I think this is important in the sense that um there's there's been a number of attacks of this nature and D5 protocols through either flash loans manipulating kind of the the Oracle price feed and you wonder hey well you know um this is what has been deemed oh like expl not you know like an inefficiency in an ARP is now potentially could be considered fraudulent activity um so I mean yeah what was he doing it seems it sounds like he was creating fake so this guy uh Fearless name but anyways this guy was creating fake accounts with with fake price data to basically what they say is fraudulently inducing the protocol to

believe that there are real real accounts and then you then use these real account or these excuse me fake accounts to generate millions in inflated fees based on this kind of fake price tick data that he was supplying um and then like you were just talking about like Leverage these flash loans to take out tens of millions in in Flash loans basically provided uh funds as liquidity in a pool use the fake accounts he created to claim an even higher percentage of the lp fees repaid the loans and and you can basically just put that on repeat yeah yeah it doesn't see is that that's funny is that an Arbitrage opportunity or is that fraud that's what I'm that that's my I guess it's broad because he created fake accounts to do it uh and created this like kind of fake

data yeah I mean the obvious question here is then well where do you like what does that mean for instance for airdrops uh you know a lot of people like in crypto you can have multiple accounts right you can have multiple wallets yeah you know like you can civil attack a protocol then is that also open up you know where where do you kind of draw the line between an ARB an inefficiency between two protocols which I I think in that case is not versus you know like exploiting a smart contract um to reap a certain benefits like is this like a very gray area here I think in this one it was we're not probably articulating it very clearly but um but yeah I wouldn't go as far as saying like

all ARB yeah strategies and crypto or did you uh did you see the doj got his Google receipts and they found what he was searching on Google afterwards yeah it was like defy hack pulls up the dex's website then Google's crypto White Collar criminal attorneys then Google's that shows the word embezzles why why are fraud how to prove malicious intent how to stop government from seizing assets across borders with crypto the last one is buying citizenship yeah yeah yeah interesting uh those were I think the biggest regulatory yeah there were two other really interesting things that happened this week I actually before this Ripple thing came uh started when

you were like yeah should we do the Roundup there was actually two really cool product Innovations I saw this week uh one was the uh Patek Philippe nft loan and uh the the other was coinbase wallet toilet messaging um so maybe we could talk about both those I don't know if you you saw either of those yeah but uh let's do Patek Philippe because I know you like your watches um this week uh basically what happened if anyone didn't see it is this week A A lender gave a a total stranger on the internet a 35 000 loan at 12 APR the kicker is that uh This was done in D5 nft land uh basically the uh a Patek Philippe which uh which is a is a watch a nice watch brand was used as collateral here the borrower sent the

watch to an escrow company who then sent back an nft which the nft represents ownership of the watch in this case the borrower then listed the nft on Arcade arcade I think it's arcade.xyz accepted the best loan offer on it and then the nft is transferred to an escrow wallet until the term is up or until the borrower repays and it's really interesting because the only way to get the watch back is by burning the nft so that if the how's this work you have the borrower defaults the lender can then claim the watch um and it's really cool I mean you can see this this is obviously very early days but like you can see a world like the lender doesn't even have to know the borrower's name they just have to know that they're the rightful owner of the

watch which is what the nft does here and obviously you need to trustee escrow agent yeah you I mean I think there's this company 4K protocol that's doing this and up for the naysayers obviously you can go get a loan on your watch at like a local pawn shop or something like that but any time that you kind of tap into Global liquidity versus uh locally you're always going to find the best rates so like 12 APR is pretty high right now but eventually as this becomes a global liquidity Market you you uh rape will be driven down can you be um I guess the way of defaulting is is not paying interest yeah I guess I guess so yeah not like uh because you know

there's a secondary Market on these watches there's fairly fair amount of liquidity if the value of set collateral who's appraising the collateral like is for or is it just like just interest you know as long as you're paying your interest irrespective of the secondary market price of this particular Patek Philippe Watch then um if that doesn't really compute yeah questions like how do you verify the authenticity of the watch well you can you you can ask these houses you can go to the 4K protocol to do it or is 4K protocols probably using someone else on the back end maybe you can send the watch to service to Patek Philippe registered or the or one of the houses themselves or it took it to get it verified yeah I think it's pretty cool

there's some there's some costs of course like you appraise it you verify authenticity and then yeah you probably bake that into the apy though which then gets sent back on the back end a little bit I'm sure you know 4K probably like an origination fee that is being deducted at some point yeah but that this is cool in a nutshell basically 4K protocol is this physical item to NF nft on chain converter and then you can use that physical item in in D5 I don't know it's pretty sweet you can start to see like pieces connecting right like uh you know we did that episode you weren't on it but with with leschner talking about what he's doing with super State like real world assets that awesome episode we did with punk6529 talking about you know nfts like just you can kind of feel

this all coming together and like a little tip of the iceberg for what's uh coming yeah I think so um it is quite interesting I earlier this week I've been thinking a lot about real world Assets in this scenario where I've had like mixed feelings about for wand I I earlier people may have heard me say I'm more interested in digitally native use cases first uh when you think about versus some real world assets it was just I was critical because hey you may have an oracle problem um you obviously have a trusting a custodial problem or uh underwrite or verifier problem right um but I think like

but looking into it I mean and a lot of this was inspired uh two days ago maker um you know was looking at the maker Dao's real world asset portfolio and it's valued at like 2.3 billion die so it's not chump change and importantly like real world assets and it's a combination of like different providers and a lot of it's in treasuries some like headphones like block towers in there they have a lot of it is with um what is called uh you might know this better but like I think they did a huge t-bill buy right through through this like agent uh on the tallest Clydesdale or so 1.1 billion of balance um then they have a bunch of coinbase

custody different strategies but like 78 of all um of all stability fees generated this year have been from Real World assets which is pretty wild right say that Stadium seventy percent of fees have been changed if I'm reading this correctly real world assets make up 79 points I've called 80 of all stability fees generated by the maker protocol where do you see that this was uh oh that's interesting tweet from maker yeah wow in May 80 of all stability fees generated by the protocol world were from Real World assets so huh the real world asset stability

fees for maker Dow have accumulated to 17 million something 17.2 million die a year to date and since Inception that's been 19.5 so that's a lot of fees right a lot of it's just treasuries right um but um yeah it's been pretty interesting to see so all this like we we talk a lot about Catalyst right um and D5 has been percolating of course like the resort people talk about the Resurgence of D5 that's been a narrative that's kind of catching on now I mean D5 has been sort of Left for Dead for two years or more um but yeah so my thinking there like even

Larry Fink uh from BlackRock alluded to this kind of in his fox interview talking about like of course the ETF of course Bitcoin but then he said the tokens Asian Mass it's just a huge market right um and it reminds me of course when we talk about this Patek uh kind of use case it seems it may seem like small quirky and you might not even like like watches or whatever but it's a huge market like yeah secondary Market on watches is not small this company Chrono 24 which is uh yeah exactly kind of like a um a portal where you can see and like look at like all the different like watches that are for sale in the secondary Market and now Cristiano Ronaldo just invested it's valued at like 1 billion like inside Partners an investor um was a media uh was a as a media

company turning group bought them or did a big investment in them they were just a media brand that do like 100 million revenue from their secondary watch Marketplace secondary markets are highly inefficient certain secondary markets right um like companies like stockx and whatnot the verification and all this stuff but I do agree with that like I was just thinking real world assets I think is a percentage of D5 sort of aom TBL is gonna rise considerably okay um here it's probably gonna go to battle dusted D5 protocols right and in l2s where you kind of know the counterparty um so look not all real assets are you know the same some I think are more Well Suited maybe lessner's company allowing you to like directly like tokenize

treasuries is is you know seems pretty useful um but uh in inaccurate I think there's a big option here here's here's uh here's my account argument again uh to Luster's I've been thinking about that podcast a lot to Lester's company is that um new new technology platforms typically gain traction not by bringing on an existing Supply from somewhere but by enabling this like really long tail of Supply that wasn't accessible with the prior platforms so treasuries you can you can go buy treasuries today unlike any platform it's very easy to get treasuries today um the real world assets on-chain real world assets that are going to gain traction and like Drive adoption here are going to be things that are that you can't access today for like like watch like watch liquidity or

something like taking a loan on your watch and if you if you think about examples of this you've got like um I don't know what are some examples Airbnb like Airbnb basically unlocked all these like Mom and Pop people to basically list their homes now that Airbnb is huge you have the traditional supply of like hotels coming onto Airbnb Uber and lip now taxis use Uber and Lyft yeah to find to find demand but like in the early days obviously it wasn't like that YouTube Right YouTube made it possible for anyone with a camera to publish video content now the big brands have come on so it starts with this long tail of supply and then eventually that pulls in the the kind of like existing Supply but it usually doesn't start with the existing Supply because you can

access that already Spotify right primarily like just these small Indie folks then it gets big and then the traditional music record labels come on Spotify so you know you know I I think obviously let's keep it simple folks like time and time again like we try to over complicate and we become defensive just like Finance the key thesis at least verifying were kind of the first like D5 Focus font before default I was even the thing like both Ben and I came from Finance backgrounds and think if you come from Finance you have a deep appreciation for how inefficient it is like you don't even have to come from Finance you just if you compare the types of products and services you have access to in finance like Financial

products through your bank account um feels really really Antiquated inefficient and some folks might not appreciate it right because you're like oh venmo Works fairly well um but then it really it takes a company like even like you know uh Square for instance or a firm to come in and like innovate and people like oh wow like a Robin Hood they're like but really deep deep down I mean Finance is still highly inefficient probably the most inefficient right Industries it hasn't really gone up to the Internet and that's really kind of the use case here of crypto it's like Finance is due for an update and this technology uniquely kind of enables tapping into

and created creating like these more efficient Capital markets where you can tap into Global liquidity yeah like a stable coin or something like a sediment like uh using like the ethereum protocol what not you know and so it's um sometimes just go back to like the simple principles of like why we're kind of building this and and the nice thing is you know mind you defy it's pretty battle tested it's been working in very adversarial conditions like you know time time again we talk about arbs and exploits you know there's been like cryptos are very volatile market and so when you create money markets like compound and Ave and maker like allow people to land and

borrow and to be able to support and create like this network to absorb these like huge constant shocks is fair is super impressive and that gives you confidence to then say okay let's plug in way more liquidity whether it's real world assets or more stable coins like these protocols can you can inject and I think I'd be open to discusses if someone doesn't believe it but you can inject way more liquidity in those protocols and I think you have a fair amount of confidence that you're able to absorb it and like you know um and that I think is is a great setup for the next phase right if you really want to see D5 scale to trillions it most likely will be

um using you know when people when we talk about a permission defy environment like an L2 for instance where you have to kyc right or it's base right we have an episode with the coinbase folks where everyone kind of if you're if you're uh the most simple kind of way that I see D5 scaling over trillion is base or some L2 for instance base all the customers at coinbase have already been kyc'd right you then have access to base to sell to and in that ecosystem you have these apps whether it's compound or Ave like a bunch of default apps and you can even potentially even buy tokens right new token listings right because it's distributed in a programmatic manner um and also have access to all these

different real tokenized real world assets right and then you have Bill you know millions of customers um interacting D5 all right quick break from the show there is this kind of overused cliche saying in crypto but it's true bear markets for building and everyone tells you that and everyone knows it what people don't know is that if you're building apps in crypto and building apps in web3 without using quick node you are building on hard mode so quick note is is this amazing blockchain development platform it reduces costs streamlines the time to market for your app and it offers consistent performance at scale for folks that have built apps you will know that there are a couple key points here one quick node offers

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end-to-end blockchain development platform right out of the box so my message to you get off hard mode let quick note handle the blockchain infrastructure let quick note handle the security let quick note handle the performance while you focus on building beautiful products for your users visit quicknote.com super easy you can use code Empire you'll get a free month on their build plan so don't forget to use codeempire Santi and I gotta get credit for this one so they know that we sent you and you will get a first month free hope you guys enjoy it hey everyone we'll get back to Empire in just a minute but before we do that I want to let you know that we have permissionless coming up permissionless is Big conference that block works and Bank lists put on together it is the

biggest the best defy conference in crypto this year it is in Austin Texas September 11th through 13th if you've been in crypto for a while you know that bear Market conferences are the best kind of conferences we have a phenomenal lineup of speakers a lot of the guests that you hear on Empire are both going to be speaking there you will have the opportunity to meet them there and a lot of the topics that we cover on Empire ZK attack roll ups account abstraction Mev app chain thesis a lot of that kind of stuff that will all be discussed at permissionless this year so because you are a listener of Empire you get a special discount that's right Santi and I negotiated with our marketing team you

get 30 off if you go to blockworks.com forward slash permissionless Empire 30 is going to get you 30 off your ticket today when I'm recording this that's about 300 off your ticket so type in Empire 30 when buying your permissionless ticket you get about 300 bucks off click the link at the bottom of this episode it's in the show notes do it quickly because prices go up all the time and if you are going to permissionless hit me up let me know shoot me a DM on Twitter I would love to meet up with you there let's talk about coinbase coinbase uh we've talked about them before again obviously let's talk about them again um they had a cool second product they had a cool product Innovation this week with wallet to wallet messaging so if you guys missed it this week they long

uh they launched built-in messaging on the coinbase wallet uh coinbase while it's been around for years been around for like three four five years I think um but they launched this week it they launched um uh end-end encrypted private portable uh messaging on the on the coinbase wallet it's really really cool I think it's a it's a big innovation it was powered by um uh this startup that's been around for a couple years yeah xmtp or disclosure I'm an investor oh big surprise yeah yeah yeah what was he building before was he the leading product at Kraken I remember him from like many years ago um I remember when they went and did this years ago and I was like oh messaging protocol don't really get that now it's cool to see it come to life

yeah so yeah it's really um but basically What it lets you do is it allows you to connect directly through your wallet engage with anyone whether it be kind of business to like company to community or just person to person it allows you to send payments across thousands of different coins uh you can send like I could send you usdc just if I had your like ens domain uh gas free uscc as well um gives you full control and ownership over your chats which is a concept that we've never really thought about before um it's kind of like like imagine being able to take your telegram slack and uh I don't know signal conversations and like in Twitter DMS and kind of move

them across apps essentially I mean maybe one example of this is just like SMTP which is the email protocol I can open up Outlook or I can open up Gmail or I can open up any any app for for with my email and it like and it's got It's got my emails in there so it's a it's I don't know I think it's really cool um yep all-in-one messaging payments no more juggling a bunch of different separate apps from for payments and messaging and actually my takeaway for this was not I care less about the person to person here because you know we've I message you on telegram like at block works for you slack we already have emailed I feel like there's already so many messaging apps I wasn't that excited about this but it solves a big problem that we've had at block Works

which is um uh interacting with permis actually so if you own a permi it's very tough for us to get in contact with you let's say you buy a permi we don't there's no way to email you there's no way to message you so we just have to hope that you see our tweets that tell you to go jump into our Discord or jump into the telegram right and that's just a hope now we can actually message you one to one through this through this app to be like hey by the way if you own a permi you get free access to permissionless this year now we can actually send that we've never had a way to directly communicate that before so yeah we're really excited about it yeah yeah yeah yeah um wallet Wars are here like we've talked about before we gotta have Chow

back on the podcast talk more about the wallet Wars but it's just cool to see uh coinbase pushing the limits of what wallets can do here I think it's very exciting yeah the functionality of wallets is is to think very Bare Bones here um and like even even of course like uh etherscan supports like messaging certain wallets and you could send tech I mean sending a message to a wallet anyone can do that of course an encrypted manner is a different story right because you could send if people may recall this whenever a hack goes down like a lot of times protocols communicate with a hacker by sending them like appending certain data in the transaction that is you know when you read by code it's sort of like translated to text but no one can see it so you could see this exploding and it's

very very nascent but uh the use case is there right yeah um which by the way like further reinforces right like venmo really made like Finance fun but like in the sense of like yeah with the news feed it's a messaging right and you're like it became really popular so is Robin Hood because you know what they did that by the way was uh when you when you type an emoji to your friend like it's like you type a house emoji then they can much easier it's much easier for them to categorize uh the data on the back end yeah the reality is most people don't like to think about their finances or research providers but anytime you embed it in the flow of messaging like a Communications it explodes like the

number of transactions the number of users like the the Asian Giants really did this particularly well like WeChat and cacao and all these different app Messaging applications or social applications really embedded Finance after the fact and so this is where of course we joke around like D5 has like 10 active users um I think you can see through messaging and communication channels opening up uh this could really like stable coins are a killer product they're probably the best product crypto offers today right and so you know when you talk about embedding now Communications to that it's huge yeah we got to get coinbase as a sponsor here

because I got one more coinbase thing base is now open base just opened up uh base like quietly opened up mainnet today for all their users so well I'm good for coinbase bullish coinbase yeah yeah you know it's good to see that I think they carry a lot of weight yeah and they do good for the ecosystem that's all I got man Arkham botched a bunch of stuff this week we don't need to pay yeah guys uh watch out for the referral link you know they're toxic people and they have your wallet address so you know don't don't do that uh Google opened up crypto access that's kind of cool really cool could you just talk like one minute in that because I think in my mind is probably the biggest news oh yeah yeah basically Google Play Now allows users to earn crypto assets

in apps and games so uh the the tldr is it's been very hard to like kind of embed crypto into into these apps there's a lot of restrictions against it uh Google announced that they will now permit apps and games and games this is on Android right yeah that allow users to buy sell and earn um uh uh crypto like nfts and um didn't uh well it's always been an issue with the the phone right like the app store for instance has been really hard on crypto any sort of payments or crypto application even like buying a book through well very slow and concern derivative when it comes to allowing users to try well it's monopolistic Behavior too I don't think they're like

yeah but axi I think got like approval this week and there was a report that even in spite of that like the user base was like not really growing that much but I think my point more so is I think it puts pressure on Apple like having Android not really moving this direction then uh you know I think it's it sets a stage then for for really making the argument where if all of a sudden Apple feels pressure that in loss Revenue then I you know I think obviously they're the Behemoth right dominant smartphone player but still I think it's important as we talk about these Gatekeepers that have been historically very reluctant in along any sort of crypto um apps or Services uh in their in their let me redo let me redo this quote from

uh this guy Joseph Mills who's a uh a product manager at Google Play said from reimagining traditional games with user-owned content to boosting user loyalty through unique nft rewards we're excited to see creative in-app experiences flourish and help developers expand their businesses good for Google good for Joseph yeah absolutely true rap man that's all I got for you I think so short one 45 minutes uh any oh you don't want to watch yesterday what uh Mission Impossible the hell yeah man I went to this movie at 9 45 p.m of course trailers what's going on with the world trailers last 25 minutes now I'm

sitting there I'm like the movie started 10 P.M it's a two hour homeless three hour movie I mean it's a I love these kind of movies like I I'm a fan yeah James Bond like the mission impossible is fun it's a good movie um but yeah I can the last time I was in the cinema I think girls like a watch a James Bond movie no I definitely did not go alone talk about alone not go along but even if I were to go away that's okay okay listen I'm you were the one that was talking may I remind listeners and viewers that uh Yano last episode as we talk about books a lot in this said hey

maybe we should put Amazon referral links here so we'll start making some money on books I'm like listen let's not encode anymore we're good we're ripping even if we were even if we were in a really bad bear Market I wouldn't like no you wouldn't you wouldn't even let me say subscribe to the podcast I'm like we gotta get we got to get some subs out here I'm just not into selling the best form of selling is not selling you know but hey not nonetheless if anyone at Amazon is listening uh and wants to give us credits because we buy a bunch of books then you know that'd be great yeah there you go uh you know content I've been consuming I fell down the Mr Beast Rabbit Hole you know who Mr Beast is

uh he's like a wildly influential YouTube Star right that's right he's like the biggest YouTuber the biggest right yeah he has 160 million subscribers uh 27 billion views on the channel I think he did like a hundred million in Revenue last year guys 25 years old I listened to this uh there's a good episode on uh I've never listened to this podcast before but someone sent it to me is really good call in it Colin and Samir I think it was called the Colin and Samir show or something like that and they had Mr Beast on uh and they just talked about his whole life the guy's an animal he's uh he's like an incredibly focused ambitious human he's 25 did 100 million he's got a couple hundred employees uh yeah it's very

impressive videos it's like comparing a one dollar yacht to a hundred dollar yacht to a million dollar yacht to a hundred million dollar yacht like I was watching this yacht video and then like Tom Brady shows up on this 500 million dollar yacht and a billion and then it's um yeah he bought like a train and like drove it it's like child's content it's like it's like 16 year old boy humor and it was let me ask you a question do you think anyone in Hollywood ever imagined um this level of distribution and engagement from these uh uh no no 100 no right like even as far as like 10 years

ago like I wouldn't think people would have thought even the Sequoia memo like they like a lot of them wanted a lot of the partners wanted to pass on YouTube and then it was like well or whatever his name is to like know I have a prediction listening to Mr Beast I have a prediction that guy is going to go launch a TV show on Netflix and he already has one on YouTube no but he's gonna go get into the traditional streaming game he's gonna go watch a show I mean I don't know I bet you he does I bet you it'll be the most watched season of TV ever in history when that happens just I was talking about to a friend about this like it's crazy to think about the book I believe Justin Bieber and Taylor Swift got discovered um on YouTube like perhaps the two most

popular artists of Our Generation like you know I'm not saying if you like their music or not but they're probably one of the most popular or successful it's got discovered through through this distribution um and and like this just what is a discovery engine YouTube it's crazy fun fact the guy who discovered uh Bieber was in my fraternity at Emory Sky Scooter Braun he's now a huge deal anymore he wasn't talking to you he wasn't talking to you before though when we were at Emory he would uh we were you know we were in Atlanta he was still in Atlanta and he would basically like he would get like a nightclub basically in Atlanta and be like yo I got I got ludicrous to come like you got you guys should buy tickets to that thing yeah he was that guy yeah

he's promote yeah he's like you know you should buy a table we're like oh [ __ ] okay he definitely tried you definitely did yeah I could see you I could see you wouldn't do something you would do no comments anyone folks uh ECC happening next week a lot of stuff coming out I think no you're not going no only one conference a year man um I'm holding myself to that but yeah really exciting folks are going to be there uh let us know drop a comment uh let us know how it goes and interesting stuff and otherwise cheers see you guys [Music]

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