LIVE: Axiom and AI Layoffs | 0xResearch

Transcript

dupat. What's up, guys? Welcome back to another

episode of ZeroX Research. Today, I'm joined by Danny D5K from Lightseed Fame. Danny, how you doing? >> Light Speeded Fame, feeling feeling good. Doing good. How you doing, Boach? >> I'm doing well as well. um still struggling with what is going on in crypto in particular because there isn't much to talk about on the podcast but apart from that I am doing fine overall thankfully. Um yeah I assume you're doing well as always.

>> Yeah. Yeah. The uh yeah as always the uh the industry is feeling it. I think the number of topics are they're quite condensed right now. It feels like it's the the same same few things are are sort of all the rage and that's how you end up with nine episodes in a row about HIPP3. >> Yep. Yep. That's that's a good segue into today's topic. I guess I'm just kidding. We won't be doing HIPP3 today particularly because people are getting upset with me now for doing too much HIPP stuff. Um, I guess before we get into it, I wanted to give a big shout out or shill to the digital asset summit in New York March 24th to 26, 2026. It is getting close. It's in a month. So,

if you haven't bought your ticket yet, I would recommend buying it. Um, well, actually, I don't know if I can recommend buying stuff, but you should look into buying it. And if you are going to buy it, you should buy it using our code Zorx 200. Um it's going to be where I would like what we're talking about with crypto kind of becoming like this smaller and smaller thing. Um like industries I guess that go through these periods where the amount of protocols or businesses there are just dwindle down. Um but that's a good thing because the strong survive and they end up becoming stronger and stronger. Um and we will be having a lot of those strong protocols at that's New

York March 24th 26 and we'll also have a lot of institutions there. So we have some pretty big names coming in. I know a few people few people from the SEC um a few people actually I think we're having some people from the Fed as well. Um some big names. Fed chair, CFTC, couple couple of um you know government adjacent folks, regulators, but also funds, big institutions, big fintexs. Um pretty broad coverage. It's going to be pretty pretty amazing. I think the the point you harped on like I don't know. I I feel like I saw people talking about this last year. Yeno and and some others were commenting on prior des where

retail is like kind of been feeling the pain but like institutions and and fintex and other businesses are like very excited. Um so there's like that weird dichconomy going on but this this d like it's it's incredibly stacked. >> Yeah. uh just like to harp on that point about how institutions and fintex were really excited is we lost the battle for cipher punk and to like whatever consumer crypto protocols and whatnot or like majority of it. Um but what we have won is the the entire back end of the future of finance might actually run on blockchains which is quite exciting. Now I don't know James Kristoff friend of the pod has a funny take on this which

is that yes like a lot of this is going to be running on blockchains but a you will probably not make any money on it or b a lot of it is going to run on canton for example who has existing banking relationships they figured it out kind of and that might be one of the big venues that are dominant in crypto going forward and it might not be I guess like what a lot of people may have expected which is maybe Ethereum, Solana etc. maybe know Hyperliquid etc. Um yeah but it is quite exciting I guess like in the sense we're we are and we'll talk a bit more about this but we are going through this like super interesting period in the world um in which there is

like a very clear change in human capital which is that's being replaced by AI or by robotics and then there's also like great improvements in financial systems because the reason these guys want to adopt it is because of T plus zero T plus zero settlement, not because they believe in the decentralization. I'm sure some do. I'm sure some have like like value decentralization. I think it's more a bigger thing in America because of the way that like the political culture is in America where it's like a bit more freedomy and a bit more like you want control of your own money. Um anyway, so it's it's it is a very exciting period and I think like DAS will be part of

that exciting period as well like that will be what is mostly discussed not a lot of AI talk so um but yeah overall should be exciting March 24th 26 0x 200 perfect um and with that I guess as mentioned since we don't have tons of crypto stuff I think what we want to talk a bit about today is kind of crypto adjacent. Um because Jack is very crypto adjacent, but the block layoffs. Um I guess Danny, do you want to give like a short intro or I can give a short intro and then we can kind of talk about it?

>> Yeah, I guess the the big news piece of news here is that Jack Dorsey announced Block would be laying off 40% of effectively 40% of their staff today or the other day. Um, and the stock immediately jumped like 25% in aftermarket or after hours. Um, it's kind of funny. I saw a funny take actually about this. Um, where it's like imagine being Catrin and dropping that that doomer AI post about companies laying off a bunch of workers and and like kind of smiling and giggling in the corner and then it happens the next week. Um, with Block and Jack. I maybe a couple things to comment on is he followed up on this. Um, let me see.

I'll I'll share his tweet that he actually he dropped as a follow-up comment, but he dropped a big post saying talking about the layoffs first of all, but then he also dropped um some follow-up context and said, you know, yeah, we overhired during COVID um because I incorrectly built two separate company structures, Square and Cash App, rather than one. Said they kind of corrected that mid24 um but misses a bunch of the complexity they took on through lending, banking, BMPL, uh and other stuff. Um so now they're targeting you know more more profit per person um and to increase their efficiencies sort of like compared to precoid.

>> Yeah. >> Um >> basically I think there's two things happening right I think and we can talk about both of these is that >> there's there's probably still some like pre-postcoid um like plus or minus to uh you know company employee you know employee balance sheets if you want to call them that. uh just the amount of employees that were hired at at some businesses and um maybe they have not you know maybe maybe those some folks there were a lot of layoffs in like 22 and 23 for example but you know maybe they did not cut enough people and now that we're seeing a lot of excitement and advancement around the AI tooling um it feels like one may be a good scapegoat

to use as a chance to say hey we're going to cut a bunch more people because AI Um because you know individual people can can do a lot more work now. Um but also too you know to some extent that probably is also true right like you know an individual person can be much more effective now especially in a in a white collar kind of job you know if you're spreadsheeting and docking and you know doing powerpoints um you can be a lot more effective now um with where the AI tools are at. And so I think there's kind of like a combination of these things happening and um Square and and Jack seem to be maybe like the first big case uh jumping on this this potential opportunity.

>> Yeah, I um those figures are kind of insane like the per person going from 500k to 2 million. Did they overhire postcoid or was it pre-COVID? I think it said pre-CO postco. Yeah, I think it was a little bit of both because he he he kind of explained in their scenario they it was sort of like two businesses. So they were kind of hiring for two businesses which maybe could have been like acting more like one with Square and Cash App. Um so they were sort of hiring for two businesses which could have been one but probably also hiring a bit more um during COVID as well. So they kind of got like that double whammy. Um, so he's saying they're they're kind of

correcting for that, but also I would imagine some of this as well is maybe, you know, being early to the, you know, jumping on the AI is going to lead to efficiency gains and then therefore kind of taking advantage of this uh moment in time to do so. >> Yeah. And I guess like kind of a scary thing here is that if people see that oh the market is valuing like XY Z higher now because they're doing layoffs and I imagine a lot of people might be incentivized to just also go through layoffs because they're like oh the market won't be scared in fact they'll actually appreciate it. um on what you mentioned like the spreadsheet side and like well there is like probably a lot of overhiring but um in a lot of

companies um I know like a lot of the time when you bring up I don't know the industrial revolution or something people are like oh like it's not really comparable because this one's at a much larger scale and probably yes but um like there I guess like following layoffs my ignorant opinion is that we will probably have at least like people's lives will change and then there will be like dramatic population changes as well like societal stuff but I imagine surely it all up okay eventually as like new industries pop up. Um the other thing is yeah just like on that first point to harp on it a bit more maybe um it is

quite scary that the market's reaction is very good because I feel like it's just going to get more and more ramped up like do you know what I mean people will look at this and just say we just need to go more and more like deeply into it. I feel like this happens in and maybe like some people also just make bad decisions and just overfire maybe like the maybe overhiring is bad, but we already talked about this this morning as well and you I I alluded to your one like factory or like plant example that you gave last time we talked about this, but there is um actually James Kristoff was talking

about this. You need to have some people. You need to train some people because there just needs to be at some point certain people to like error correct or something like these things will probably always make some errors just the way that like human beings always kind of make errors and you probably need to keep a check system like a checks and balances system. So you need to hire to some extent, right? Or else it doesn't make any sense. So I imagine like a lot of people try and fire everybody for example or just like keep four people and then I imagine a lot of those go bust and also like a lot of people who just don't adopt it at all will probably go bust. I've been doing small checks with my friend groups and some of them are like using AI for everything but I think most of those

people are in tech and in crypto and then the people who are actually not in tech or crypto who I would say are like I don't like they're just regular people smart um good education work for good companies like white collar um some of them just don't use uh AI at all to do any of their work and I guess it was like kind of news to me because I also don't think that their company's thinking about firing anybody because they're not using AI at all. And a lot of this is like I know like banks for example, they are gonna have they're going to be super slow because they have tons of regulation that they have to deal with, but some of these companies aren't particularly like very well regulated. They just like are also moving super slow. So, it is interesting

to see kind of both both sides here. And then >> I don't know. I think it happens slower than people expect, but also the intensity of the shift is probably a lot more than like for me I'm kind of imagining, oh, it won't be that big of a deal. I imagine I'm going to be quite shocked in 10 years. But I also think like the people who are like, oh, by 2027, you won't have a regular job, they'll also be like a little disappointed in 2027. >> Yeah, I feel like you hit a lot of things. I had a lot of I have a lot of thoughts um on a bunch of different spots, but like you know the overfiring kind of maybe risk to some businesses I think is interesting. Like I feel like we have a good example in that with um probably Elon and Twitter. I I feel like

if you asked most users, I don't know if you asked the internal employees now, but I don't know. I think it what they must have had a few thousand employees prior to him taking over the business. And I know recently we've seen comments from like Nikita that they've got like 20 or 30 people there now. Um, and the the public comments from them are like, "Yeah, we we can't make this change to like uh how a color looks on dark mode because we only have there's only 20 people working here. Sorry, that's like way down on the backlog." Um, I think that's as a user of Twitter and maybe others can can comment on this as well, like maybe I'm being a bit too anecdotal, but like I think the product has certainly gotten worse. um in the past couple of years and it they they probably could

have more people working on it. Um I mean he bought it for 44 40 billion or whatever. Um 20 employees sounds a bit small for that size of of product and how many people use the product, but uh I agree with you that there's a potential for some businesses to maybe overcorrect. And um I saw the the comment from Jack on this specifically on like why this many people at once was sort of like from a morale perspective of you know if we cut 500 and then we have to cut another 500 in 6 months and then another it's like how does the market interpret that? How do the people within the like does that kill morale and everyone's like starting to look you know start looking to jump ship like before even getting fired in the first

place? like it might really might really hamper the inside and outside morale around the business. So I can understand it to an extent. I think the hard part is like how do you really know how do you have a really good feel for like whether minus 40% or minus 60% orus 80 like that's such a huge swath of of workers that I think it would be pretty tough to to really know whether that's the right amount. But maybe just being quick and like adaptive is the way to go of like, you know, minus 40% and then maybe if we need to hire a couple hundred people back um over the next, you know, year, that's fine and they'll kind of figure it out. They'll they'll grow through it. But it it might be better than delaying uh the inevitable.

I could see it going either way. I think the the the bigger question generally speaking is um what you said about the if the market interprets this as a good thing. Does it drive like other management at other large businesses with huge headcounts to say all right screw it let's like we have 200k employees maybe we need to cut 50k right now. Um, and there's I guess there's like a potential scenario where a bunch of companies do that all at once and it's like, okay, you got a million people who now don't have work at all at the same time. That's that's a pretty dramatic scenario. Um, I don't know if that if it will be I don't know that it'll play out like that. Um, I I I doubt like the larger and larger that

workforce size gets, uh, it's probably not so easy to just say, hey, okay, minus 100K off the employee count. um unless you're going to cut completely like a line of business that you think doesn't make sense anymore in like the new kind of shape of the economy or something. Um so we'll have to see like I'll be curious to see if other if other like big tech companies follow on this trend and relatively quickly or not. Um if they do then maybe that means something. If they don't, then maybe this was like more of a square or yeah, a block specific um problem that they needed to correct for that they didn't correct for previously.

>> Um yeah, to your point as well, like maybe just some other evidence on the some folks I know who work different jobs. I've got friends, a ton of friends in software who say that, you know, they can speed up a lot of processes now. um they can do a lot a lot of things more quickly, but there are still like touch points where the AI is not like using these tools is is limited because they're just still stupid about certain things. It's like if you ask it to review something and you want it to review something specific and like you know don't use you know this type of style when coding an app or like make sure to avoid this type of practice and sometimes it will still still do it and you have to manually review it and if

you don't then like your codebase ends up just like turning ugly after a point in time. So like large complexity and like the growth of these things um seems like you still need like kind of individual coders who know what they're doing um to manage that. But certainly for like all this oneoff stuff that uh you know high agency people it's like oh I just want to make a dashboard for myself like quick and easy that's that's become super effective. And obviously for simple like yeah make a quick spreadsheet for me and like maybe it would have taken 30 minutes to set up and now it's like one prompt. Um there's there's a lot of like those small efficiency gains that I think are bleeding through to like you know maybe the slightly above average person who who today might be prompting and maybe

previously would have been like okay maybe I'll learn maybe I'll learn Python or maybe I'll I'll like you know Google how to use code to automate some of my work processes. I think you you're seeing the uptake of >> tools for that type of like individual. Yeah, >> I think so. Two things. Uh, one is like I don't think trust in AI is still probably where it should be to like mass lay off 40, but like in my opinion, it's probably not where it should be to mass lay off a lot of people. Um, I would say I use AI a lot more than regular people do. Um, and I still like I have to double check if as especially if something is like very important, I have to double check. But what it has helped

me is exactly what you said like previously if so I learned programming on my own and then but a lot of it has honestly just been throughout the time throughout time me just like being oh like going through Stack Overflow to figure out what I need to do and now obviously you don't have to do that at all. Now you don't even have to I can't remember the last time I wrote actual code. Um, I imagine a lot of people feel that way, like especially I imagine you're at the same maybe because you have a more science background than I do. Maybe you wrote more code previously, but like um I imagine you don't code anything yourself anymore. Um, and I think like it's been really really good for that kind of person. Um, and we still haven't really

seen like a massive negative from AI yet. Um, and it's been like obvious apart from the 40% of people that have fired from the block. Um but like you know what I mean like we haven't seen so far it's only been like positive for this like I would say maybe like 30 40% of white collar workers who are like very who are just like work that would take me eight hours now sometimes takes me 15 minutes and sometimes takes me two hours. Um it's been very good for that but like I haven't seen anybody like completely lose their job. Maybe that's still coming. Um but like so far most things have been relatively good which is also something to kind of be happy about I

guess a bit. Um, but completely agreed like that I'm hoping that productivity boosts are good enough that you can justify that 40% cut because I think a lot of people are going to go for that 40% cut of like but a lot of companies will go for it and I hope they're not overdoing it such that they won't have enough people who know the internal processes, who know what like a good quality product has to look like because there's a there's a risk where it's like let's say We're all creating I don't know I'm a consultant and I my entire job is just creating decks right and then by the third generation of consultants there might not be people who know knew what like an

originally good deck was supposed to look like and now the decks are just going to share the consultant's a bad example because I don't know if a lot of consultants will remain in business but you get the gist of what I'm trying to say like we're going to lose a lot of this knowledge um and I don't know I hope people enough people stay or like are hired to know what it should look like. Um, on the positive side of AI, well, I guess also kind of negative, we've had a few raises recently. Um, obviously there was the clawed one, the anthropic one, but I guess like the bigger one is OpenAI closed their funding round at $730 billion valuation. Um

uh they're raising up to 110 bill. Nvidia and Soft Bank are committing 30 bill 30 billion each in pre-installments. And Amazon is investing 15 billion up front with 35 billion contingent on an IPO or achieving AGI is what this article that I pulled it from says. I don't know what that looks like. I would love to see like the legal document around what AGI definition is on both of their ends. Um, and then Microsoft didn't participate and there's going to be more equity from sovereign wealth funds and investment firms. Um, and they say it's like a stepstone towards an IPO.

I have a friend who's recently been looking into these second uh dairy markets or like I guess private markets for OpenAI and anthropic. Um, first of all, they're mostly like SPVS. Um, and sometimes like third layer SPVS. Um, then second of all, I don't know if you do open it at 7:30 or at 850 or whatever like would you do open it at 850 for an IPO in 2026? You're >> Would I buy the Would I buy the IPO at 850 billion?

>> Would you buy the secondary market right now? Oh, like an S like some wrapped SPV vehicle. No, probably not. >> It's like first player though. Like you get direct access technically. Like it's not through like the third person. You're not paying whatever like >> no one no one's like haircuting me and >> I don't know. I think it there's like terms and things like are you locked up for a certain period of time um post the IPO. I feel like at this point >> you're better off buying more. Maybe this is the wrong maybe this is the wrong view to have, but I feel like at this point it's like if you're looking at getting in to the secondaries um on something like Open AI, you're you're just seeking like that one next

raise or that IPO Val as like your exit opportunity. Um, I don't know cuz uh unless we really see here's the thing that's questionable to me is just like you'd really need to see the revenues for these companies like accelerate meaningfully. But generally speaking, like the most, you know, exciting and like largest valuation for an IPO ever um doesn't sound like a great opportunity to buy into at market. Like that sounds like okay, you're buying the perpetual top of something for like the next five years. Maybe that's true,

maybe it's not true. Like who knows? But I don't know just given the the raise history here. like they raised some money in October, they raised some money in November, they raised some money in December. Like it's um I I feel like the the riskreward the riskreward feels a bit skewed. um not in your favor at this point. But I think that there's this problem that we've talked about where it's like there's a lack of I don't know there's like a lack of buyin to like AI as as businesses. I mean you can you know you can buy the Mac 7, you can buy Nvidia if you want but um terms of like the

businesses who are actually selling the AI there's there's this like lack of buy in for you know outside of these big funds and some of these big companies I guess technically. Um, so yeah, I don't know. It's it's a weird dichotomy where it's like, you know, maybe you do want exposure to these businesses, but at the same time, is it a are we going through that sort of like peak of overinflated expectations and then you will actually want to buy like the winner from the wreckage and the rubble in a few years?

That hard to say. I mean, you never know. Maybe if they go for another year and a half, then maybe it IPOs at two trillion. I don't know. The number could be anything. >> Yeah, >> it does feel a bit like a FOMO. Like I first of all, I don't have enough experience in IPO. Second of all, I don't know anything about the way that AI businesses are going to make money. I know some are doing like advertisements, catch PT. Some are just doing like trying to go mass market, $7 subscription, very low rate. We just get as many sales as possible. Enterprise deals. Claude is like very expensive per token. There's different ways to do it.

Whatever. I haven't looked at any of his financials. It does feel a bit FOMO. Like it feels like the type of thing that I don't know. It feels fomoy. Certainly, it feels foy like doing an $850 million round. Well, no, it's $730 million round. >> If you assume the like I guess if you just assume the that the numbers like kind of quoted around they're going to target a one trillion valuation for an IPO. Um, and maybe that's a like 6 to 12 months out. Um, did I don't know just like doing the math does buying at 730 billion and then targeting a1 trillion dollar IPO and then like what's your lock is there a lock up and like do you have fees on top of that? I don't know.

Does the math make sense? I I think there's some specifics that are required to even like do the math there, but it feels kind of thin is maybe my point. >> Yeah. Um, and there's also like a few things that like they're I think the thing about OpenAI was that they're growing at like really insane numbers, right? But eventually they're not going to be able to grow at that many at it logically makes sense. You can't grow infinitely. Um and then apart from that you also there's kind of a from my understanding there's a limit um purely due to compute and energy like you need to there is also they're going to eventually hit the ceiling where they're growth is slower and slower and slower.

Um that kind of stuff you need to consider. Um I'm not sure. I just saw it and I thought it was ridiculous. The more interesting thing that I want to chat about is this is that thing that Strey talked about. I think it's like one of his Twitter articles. um a lot of things of streaming getting discussed more and more but um the social contract being broken with regard to public equities and I think the amount of price discovery that has happened like off public markets for realistically like you should always feel relatively excited to be able to buy something at like a private market valuation like that's the whole point of

private market like I don't know if CAD GPT was if OpenAI was like $200 billion I would be really excited to buy it um right but if it's like at a point where it might IPO at two trillion you know like all of the price discoveries already happened secondary market it's just soft banks just um shipping in $30 billion a year into it some you know like it's it's not as exciting as it should be and it's like this broader thing of like more and more of this is happening. I don't know what it's like in the I know it's like a general thing like Stripe is a big one although maybe that's a good thing because they're going to get or like they had so there was some payments thing that post

Satrini article the payment stuff um all kind of crashed like AMX crashed um so yeah I think it's it like speaks to that a little bit more broadly as well like I don't know it's a bit crazy that you can't buy this thing easily without like getting a some of these SPV thing cuz I like every once in a while get super interested in it and I was like you know what I'll look into it like third layer SPV and I'm losing 15% overall on like the initial haircut and then there's like also if you if I profit there's a haircut it's I'm losing quite a bit off my profit. It's just a stupid thing to do. Um, >> yeah, it's a weird it's a weird dynamic because it feels like the practice

previously used to be once you got to a certain size, you kind of just I don't know, there was just sort of an expectation that you would go public as a business, but now it's like it doesn't matter how big you are um as a private company. Some of the biggest companies in the world now are private companies technically speaking based on, you know, their private valuations to most recent raises. Open AAI at 730 billion is like that's a massive company. Um so yeah, to your point, it's just it's it's very strange that uh you have some of these like in incredibly massive private companies um that that can't be invested in just normally through the public equity markets. And I mean there's a lot of factors there, right? Like there's so

much money floating around in the private markets that it's like it's very easy for them to get capital. Um that isn't to say that there isn't a lot of money in the public markets. There there is too. But I think it comes along with you know you don't have to do as much as much disclosures. You don't have to do as much like financial reporting. Um so some of that like maybe headache but also like employee count like you don't need to maybe hire a bunch of extra um you know accounting and and financial folks to run all of that stuff for your regular reporting um for being a public company. Um yeah, it's like that compounded with just there's just so much money out there um that it's made sense to basically just stay private and

just keep doing rounds after round after round after like there are companies doing like series K like they're getting all the way through the alphabet at this point. Like I would not be surprised it would not be crazy to me that we see series Z rounds in few years time if the trend continues and they just like continue to stay private. Um yeah, >> but yeah, I do agree with that viewpoint that or that piece that Satrini put out that it's just it's very strange that um I don't know that just like the average investor cannot like normally buy into businesses that otherwise like you would have been able to do so and um kind of like have buy in to the success of like the future

economy if you want to call it that, right? You could you could invest in in Amazon and Google and all of the like you know giants today. The Mag 7, you could invest in all of them in like the 80s and the 90s at um kind of like you know modest valuations relative to like other major mega caps at that time. Um and now you you can't really do this for the most part. It's you got to wait for the >> uh massive IPO valuation, the inevitable like kind of draw down and pull back and like cool off period and then maybe you make the decision to uh to buy in after that.

>> Yeah, it's my god-given right to buy the AI bubble and they're making it very difficult for me to do. So, you know, my father had the opportunity to buy the dot bubble and now I don't have the opportunity to buy the AI bubble. That's really messed up. Um, one thing I wanted to mention in the previous one specifically is I actually haven't seen um, and this is something I feel like not a lot of people discuss, but is the amount like how much easier because you mentioned accountants and I was like why would OpenAI hire more than like two accountants because they're just going to have like chat to figure it out.

There should technically be more and more companies launching, right? purely because you can you now don't have to have like legal um as at a small company level you don't need to have legal accounting and then whatever marketing etc. you can just kind of be like a two person thing. And I feel like this is this was touted a lot from so the the way that AI companies presented themselves have changed a lot as well. Like previously they very much were like, "Oh, we're going to see like a unicorn with only one employee soon." And now it's like, "Oh, we're going to make sure everybody's unemployed and no one is going to be able to make money and we're going back to neofudalism or we're going to neoffutilism." Um I don't

I haven't seen and I'm sure like somebody will correct me on this at some point and they'll say, "Oh, we actually have seen it." But I haven't seen a massive uptick or any data regarding a massive uptick in company formations um or like new businesses created. Like I feel like Shopify was really big for this, right? Or like whatever other um or like website creators, etc. versus and the internet obviously massive uptick in new businesses but I haven't seen maybe it's too soon and we're going to see it soon but like as something that is meant to replace um quite a bit of the workforce in terms of marketing accountancy lawyers etc like a lot of these white collar jobs that maybe is a bit prohibitive for people to start

businesses before just hasn't worked yet like technically we have AI and we have the internet you don't even have you don't need storage space for like you don't need store space to sell things anymore. We have the internet and you don't need a lot of workers. We have AI. Like unless it's a super heavy industry, you should just be able to like if you're an entrepreneur, you should be able to start a lot more businesses. And we just haven't seen that uptick at all. This was another positive, I guess a negative thing that I was going to mention before, but I forgot about it. >> Haven't seen that uptick since when?

>> I don't know. I just haven't like seen any um any mentions in any newsletters, any AI related newsletters, any macro related newsletters, any tweets, any like I feel like if it we were because people are always trying to find Are you seeing something now and you're just going to be like actually we've seen XY Z or no? I just haven't seen any data from the time. >> Yeah. No, I was just going to say I think I think one like the majority of of like new businesses and obviously small businesses are going to be they're going to be privately owned. Um >> and so maybe part of that trend is like you don't see you don't like see a lot of

new businesses. One because of the trend that we're seeing with staying private versus going public. So like the number of like publicly listed businesses is I think has been shrinking. I'd need to go check the data on there, but I think um there used to be a a larger number there, but I do think there has been, you know, probably in the last two decades an explosion in like new private businesses because, you know, the rise of like like you mentioned, you know, software softwarebased companies like basically online internet businesses. There's been a ton of those and an uptick of those and like you know anybody can make a little store on Shopify or like you know the the millionth SAS product. Um there's tons of those but yeah to your

point like on the public side we we just we we aren't really seeing it on the public side but that goes back to that same trend of just companies staying private. >> Yeah. Oh that makes sense. Um, okay. Last up, we have a sadder story. The Axiom. Were you surprised about this? >> This is the big crypto news this week. We talked about AI. Now we get to finally talk about crypto. >> Finally, crypto. Were you surprised?

Okay. Um, background for listeners listeners. Um, a senior BD employee at Axiom allegedly abused access to internal tools to look up user details such as wallets and referral codes and used that to insider trade by tracking private wallet activity um, in early 2025. Um, there was a leaked call about it where he talked about this is one thing in crypto that I find super funny. every time there's like, oh, like this guy stole, I don't know, $47 million from somebody and it's just like they've recorded a Discord call of themselves doing this and there's like Zack XBD just it's so funny to me that like the

moment that people steal money in crypto, they're just like go online and they're recording themselves talking about it. Anyway, stole money. Um, I think he was tracking Kos and he had a Google sheet of wallet addresses. to be honest with you. Um, I am not particularly surprised. Like I think this just means that Axium didn't pay his employees enough money or it just means that like this person was a bad person because Axim they were bringing in a lot of what was the figure was like $180 million in six months, right? Like back then when we look at something around those numbers I can't imagine it's a very big team. Um, if you have

team members that are resorting to insider trade, um, I don't know. It's either a morality issue at like the the BD guy, which probably is, or like if you're making enough money, I don't know if you want to inside your trade. It's a massive risk. I don't know if you want to insider a trade and publicize it in any case. You know what I mean? >> Yeah. I think part of it was um so basically the guy had access to addresses associated with accounts created in Axiom that maybe you otherwise you would not be able to so easily link a bunch of wallet addresses together. So you could take like the classic example would be like if he knew

every single one of Frank DGOD's addresses then if he buys something on like a wallet that's not tracked by anybody or like nobody knows that it's his address. Um but then he buys it later on his main one that people kind of track you can insert anybody here. Insert Orangey or you're like you know whoever on CT. Um then supposedly all the people following the wall you know the address are going to are going to then buy in and like kind of follow him into it and pump the price. And so if you can you can he could exploit that gap in info um to make money consistently by by trading against that information. Uh I think there's probably a few things like one the fact that every like I'm the fact that everyone at Axiom had access

to that info was probably just a controls issue like just a an oversight. They just probably didn't all need to be able to see that. Um, so that's one thing. Two, like who knows is was just this guy they hired like uh I don't know, you could say this about any business, but we've had we've had cases of of insider trading in the past at you know OpenC at even Coinbase and it's like is it is it a problem with the entire business or like did they just hire one guy who like got a little too excited about the money that they could make? you might have a good point about how much they're paying. Like I

don't know, maybe maybe they weren't paying him that much for the work that he was doing, but it feels unlikely. I mean, just given they came out of YC and they they were like one of the fastest apps ever to get to 100 mil um in in revenue. So, I I would find it pretty surprising if he was like being underpaid um in a in a business in a role like that. Um so, I don't know. It could be a one-off thing. Maybe it's not. We'll see. They they uh responded. Axim responded. The CEO responded with a note just saying like, "We've we modified access controls to some of that information and we're reviewing the situation." So, who knows?

But it's not a good look. It's a terrible look. >> Definitely not. It's definitely not a good look for because you so this is I guess like kind of a crypto problem anyway. But when you trade on a wallet or when you trade through an interface or a terminal, you assume that your order flow is being sold to an extent, but you assume that it's not being sold to a malicious extent and you assume that it's like a commercial relationship that at least slightly benefits you, right? like maybe a validator is going to include you your transaction in their block and this is good for the validator but it's not a negative to you.

I don't know if technically like if people just following you and tracking your wallet it's definitely illegal but I don't know if it's like a negative to you but on the other hand I don't think you assume that people are using your wallets to make money and it's a massive privacy issue. The access thing is that I always thought that they would be like a team of 10. So, and if you're a team of 10, you know, everybody. You don't need to have access, right? Like I guess there needs to be privacy stuff, but I just I guess I didn't I didn't assume that they would have like I don't know five BD people. I thought they would have two BD people.

Like majority is engineering. they have one marketing person and then one whatever insert security or finance or legal or whatever like somebody who covers that stuff. Um I guess their team is a lot larger than before than I assumed and they need to have access things. Um but either way like I think it's not a good look on unfortunately on the acting side. You never want to like feel like your private privacy is being taken advantage your data is being taken advantage of um without benefiting you obviously and sometimes like it can benefit you like if you're getting better fills because they're still in your order flow but I don't know it's

another thing is that I think nobody really assumes that a lot of memecoin people are super like a lot of the memecoin teams are super um ethical Not in a bad way. Then you kind of got no evaded into the There we go. I don't know if like I don't know. Do you assume trading terminals people are super ethical people? Probably not. So like maybe that's why people weren't really shocked. >> Like operating the business you mean? Like yeah who run them? >> Um >> I guess I assumed Axium would have been a bit more ethical.

because they're like a relatively big name. >> Yeah. Like I think in their case I don't know it's it's uh being YC backed like that almost feels like a stain there as well. Um like that's here's what I'd say is there there was some pretty solid like positive coverage of them early on in their like growth upswing. Um, and some of that was like, yeah, YC knocked it out of the park with a another crypto startup and they're like going crazy. Um, so I guess just maybe a bit disappointing from that perspective. Not that like being YC

backed means that you won't ever have like fraud or something like that associated with a business that comes up through your cohorts. Um, because people are people. >> Uh, you can only do so much there. I think not that this excuses anything but that the guy the BD dude is clearly very young and I think the entirety of the Axiom team also clearly very young. Uh I think same for a lot of like you know pump team is very young. There's lots of like teams in the space who maybe they just like don't have a figure within the business who is like willing to provide that harsh perspective of like, okay, we can

never like XYZ thing, you can never do that. If you do that, you're fired immediately. Like, you're gone from the company. Um, I don't know that like that type of thinking has been implanted in some of these people's minds. Um, especially with just like within the memecoin trading space, things the things that are normalized are like rugging and like bundling and dumping things on other people. And so, I don't know, this guy, whoever he is, might have just assumed that like, oh, I can just do this. Like, it's we have the info. This is like free money for me.

Um, >> yeah. Not. And again, I'm not saying I'm excusing what he's doing, but I think he like he might actually believe in the same way that there's people who like look at prediction markets generally speaking and say like, you know, it it's not insider trading. It's uh they're just making use of theformational advantage they have to make the markets more efficient in cases. >> Um this guy might have actually believed that what he was doing was not wrong. >> Yeah. >> Which is which is probably objectively worse than like if if he knew what he was doing was wrong and he was doing it's like I understand there's some bad apples there bad apples exist and you just when you find out you have to you correct it. Um but if he even if he didn't even think

or know what he was doing was wrong then like you have a bigger you might have like a like a core cultural problem going on of like these people don't even understand like the difference between right and wrong in your business and that's that's like much more difficult I think to correct for. >> Yeah, I I think that's a good point. I I like the prediction market example because we just fought about this in the ZX research chat the other week where somebody kept saying like oh it's not insider trading because it's like not stocks or something like commodities can can't have insider trading or something. It's like that's not really the thing though like that's not first of all that's not going to hold up in court when some of these things actually go to trial maybe at some point. Um, and yeah, like you said,

like these guys don't even This did happen in meme coins. I think it got more previously it was like nobody really calls things pumps and dumps anymore. Like previously it used to be like, oh, this guy like PND, but now it's like, oh, it's just like game is game. Now it's like it's like a >> it's like a it's like an accepted part of the industry almost like yeah we're making an app that's explicitly around like pumping up in coins and like selling them onto your followers. Um which I don't know may maybe it makes sense maybe it doesn't make sense. I do think to the

point around the prediction market thing, it's like we're having like a a technical debate around like the terminology of like, oh, it's not insider trading because like that's not actually a classification according to the CFTC or whoever. But I think more so like if you point to examples of like sports books for example, if an NFL player bets on a market involving them and then they like throw the game or they like do more or less effort or something, they impact that market, >> people have been people get cracked down on for for stuff like that, they get fined, they they get like kicked from the or they're on.

>> Yeah. >> Like we under we understand generally like that that's like not an accepted practice for things. So, it's just interesting to see that uh when it comes to some of the prediction market conversations like we >> I don't know this more collective view that that shouldn't apply for some reason which I I don't understand. >> Well, I think it's it's now the the narrative that is being pushed. I also really hate the argument that is like, oh, it's really good for a lot of people because it like uh it it makes insider knowledge more transparent. And to me, that's not like first of all, it's done that like a handful of times and sometimes these

things are just wrong and are just scambling things. But on the other hand, I don't know if that is a very good argument. Yeah, to me it feels like an implicit like I' I've heard that argument and I like understand it to an extent of like yeah there's like um there's like a giving up factor of yeah we know that there are insiders who do exploit the law and make money but now that we can see them trade the markets more easily everyone else can profit on it too but I don't know that that's like the logical conclusion that comes from that it's more like okay If we know that there are insiders that are doing things that are illegal in the first place, we probably

should prevent them, you know, stop them from doing that in the egregious cases, uh, and not just like say, "Oh, well, now that it trickles down to everyone else, like now it's fine." >> Oh, that's Yeah, I just I never really Yeah, I don't I don't It's very hard to police, right? It's It's always going to be very hard to like catch those things. >> Yeah. I think in two years or in one year a lot of the opinions on meme coins and prediction markets and whatnot will change um purely as I don't know some people go to jail maybe we'll see or nobody goes to jail and then people just suddenly develop better morals but we'll find out it's it it actually remind I don't know if you saw this but uh SPF

has been tweeting from his account recently and I had I've muted him because it's annoying me but I saw that Senator Cynthia Lumis responded or like quote tweeted at him and was like, "Uh, actually based on the uh based on the regulations and rules that we're putting in place for the Genius Act, you would have gone to jail for a much longer period of time. So, you you should actually just shut the hell up," which I thought was a pretty funny and based response coming from her. Um, but yeah, we'll see. I mean, are we going to end up with some folks in prison from some some more fraud? TVD.

>> I don't know. I don't know. It never really We'll find out. I'm not a betting man. Um I guess before we end things off, I want to give a really quick shout out to my favorite analyst of the week, Carlos. And then I also wanted to say that D New York is um we already gave you guys a shell. March 24th through 26th. >> DYC March 24th through the 26th. Bach won't be there. I'll be there. Come out and see me. I'll represent both ZeroX and Lightseed in one conference. Uh super excited to see you guys out there.

Most stacked Blockwork Works conference ever in the history of the entire world until the next one after this. >> Uh we're going to have folks from the SEC CFTC Black Rockck, Tether, like Binance. >> Everyone's gonna be there. >> You name it. Everyone's going to be there. Noah's going to be there. Uh >> is he not gonna be there? >> No, he will. Noah will be there as well. >> Okay. I know it'll be there. Pick your other favorite folks from from Multicoin is going to be there. Uh just throwing names out at this point, but come out, get get your tickets. ZeroX 200. Get 200 bucks off. Carlos will be there. Our analyst of the week.

>> Carlos will be there. My favorite analyst of the month, Carlos. >> Very good. Okay. Um sorry, Danny. I just kind of >> No, I was done. That's it. >> Okay. Perfect. Thanks for listening, guys. And I wish you all a happy weekend and health and success and joy. Thanks for tuning in. We'll see you next week.