Pudgy Penguins in Walmart and Coinbase Perps Approved | Roundup

Transcript

all of a sudden we've equated knowledgeability to wealth which by the way I met really rich dumb people and really smart people that haven't made money because they're early in their career for whatever reason and the fact that we we've just set this arbitrary standard in the U.S of who can invest in these things or not and we've excluded the vast majority of the population from these type of opportunities is ridiculous it really is the amount of wealth creation that has happened in the private markets is astounding and only very few people have been able to participate oh and then you wonder why inequality is on the rise in the US and school of financial crisis like well guys like update the goddamn rules this episode is brought to you by the

chronicle protocol a cost-efficient transparent and decentralized Oracle Chronicle has developed a Next Generation Oracle primitive called scribe which reduces Oracle gas fees on l1s and l2s by over 60 percent you'll hear more about Chronicle later in the show this episode is brought to you by toku if you are planning to launch a token already have a live token are granting employees or contractors vesting token Awards or just trying to figure out how to take care of taxable token events for your team from easy to use token Grant award templates through track investing to managing tax withholdings make it simple today with toku I know there's so much variety but like

I usually gravitated to Granny Smith apples I love Granny Smith apples but now I've like tested and expanded my horizons I've landed on pink lady yes ladies that's really nice that's fitting for you yeah what do you mean is fitting for me what does that even mean that's how I know you're bored is when you're testing apples folks I was like three days of sitting in Berlin like trying to not be have anxiety over running this Marathon I was sick and so I was like all right maybe I'll get you know 10 apples a day cures like also not the marathon so you ran the Berlin fantastic fantastic event I was so people who I remember when we recorded the podcast last Thursday I was feeling sick

I woke up on Friday I had fever I'm like oh boy and my flight was like super early so I I'm like I might as well just go like everything's paid for so I counted this plane I don't even know if I'm gonna run and it was just really nice like I recovered surprising well not 100 I still like had you know I'm still sick because it's going around but I ran it third best time I my I missed my PR by a minute and 56 seconds so I ran 140 249 15. two two hours for nine minutes 15 seconds my fastest was London earlier this year and yeah man it was fantastic the course is amazing it's one of the flattest I think the flattest of the six Majors there's six major um marathons it's New York Chicago Boston

Tokyo Berlin and which one anyway you ran a 249 so 249 is so that's 120 169 minutes there's about 26 miles in a 26 miles so 6. 169 divided by 26 is six and a half you're in a six and a half minute mile every first 26 miles yeah and the nice thing about how I did it like it was not my best time it was the best execution because I ran a negative split which means every incremental 10K I ran faster like I increased the pace and I was feeling super strong um but I went in with zero expectation I'm like I just want to break sub three which is Con work you know considered

pretty good time and I did really well so now I'm gonna do New York in a month I'm gonna see you out there so yeah how long do you train for a marathon like that yeah so that was the other thing I got injured after London in April and I didn't run I counted the runs that I had on Strava 10 runs I cycled most like 99 of my trading was in the bike and of course like the aerobic capacity like my heart rate was much lower in this Marathon than the other one it's just like zone two training for anyone that cares about this stuff like there's just the incredible amount of 72 training you can do and that set me up really well but my biggest fear was like your condition doesn't translate from the bike to the run one to one because you're using

different type of muscle groups and recruiting different types of like Fast switch loads anyways not to get too went into the weeds but it was like a big unknown for me how I would respond to a marathon I know I can run it I just didn't think that I would be able to run it as fast as that um because I hadn't trained virtually anything so now I know it's great because the bike is super low impact right you can go 100 mile bike ride and then do it again the next day you cannot do two Marathon I mean the amount of impact that it has on your joints and your body is like it takes a week to recover some people take more than more than a week so yeah this is something that I love uh I just get so much like the crowd the

people running it's incredible man these things are just there's like 30 40 000 Runners um what what made the last one say what made it so important this time around is the world record was beat by uh the female like the women's time was beat 211 which is crazy three minutes less than the world record and then kipchoge which is this guy from Kenya he had broken the the world record like 201 and it's always been this idea of like can you can someone run a marathon sub two hours in a sanctioned race and he did not break it but everyone was speculating that he would this year so you know it will be broken um in the next year or two I think someone will run a sanctioned race sub two hours which is insane crazy man crazy I love that there are these

records that people just think are unbreakable and then yeah they always get broken you know it really is just uh amazing to see that like you know how we set ourselves and we break these artificial barriers uh but it's crazy what the human body can do yeah the four minute mile everyone thought that was an impossible human feat and then Roger Bannister there we go yeah um we got some we got some housekeeping first off can we get a haircut no all right I thought you got a haircut no all right that's the housekeeping pot over well speaking no no no no no no you can use haircuts folks Yano needs to shave his head and I will I will I will

stop I will stop coming I will stop coming and showing up until Jano commits to shaving his head you decide when man you know like you're gonna be in Holiday pictures like your hair can grow back if you shave like in the next episode but if you wait further like you're gonna have Thanksgiving and Christmas like just if I were you I would like do it pretty appreciated to ask London so block Works announced this week that uh we are moving Das to das London the original for anyone who's been follow so we've blockworks has two conference Brands one is permissionless permissionless is like our huge event that we had a couple weeks ago um Das is our institutional buttoned up crypto conference it's probably the only crypto event where still people are still wearing a suit and a tie

um we've hosted it it's it's the first big conference we ever hosted back in 2019 we've hosted seven digital assets Summits in the past this will be our eighth uh we had the idea several months ago to go to uh to go to Washington DC so that's where Das was originally supposed to be March 2024 and after conversations with with a bunch of big crypto protocols and companies and funds we realized that sending a bunch of protocols into the belly of the Beast DC might not be the best idea in uh very heated regulatory environment so we're moving into London super excited about that I was telling you before we hit record uh it's it's probably one of the best responses we've ever had to a conference we've got a ton of inbounds um

from sponsors won't even sponsor big speakers some big folks in like the UK government um tickets are to be bought so we're super excited about Das London that is March 18th to 24th next year uh tickets are 4.99 right now it's the cheapest we've ever priced ass usually they're it's an Institutional conference usually they're like a thousand bucks sometimes even more so tickets will go up soon that's one announcement so it's like a one day event uh this is a three-day event actually oh wow yeah it's gonna be bigger than we've ever had it so this year there'll be about 1200 people nice yeah that's great I love London I mean I think it's just uh what's the next um like has been really vocal about being pro crypto and being an Innovation

Hub and yeah yeah a16 you open an office there you know there's just so much connectivity between Europe Asia the rest of the world there like London is probably the second biggest Hub after New York financially yeah yeah London has quickly become this like a very hot crypto Hub again and I think when we talk to a lot of folks on the ground right Innovation is thriving you've got some new institutional investors flocking in you've got Regulators like the FC FCA that are taking this pragmatic approach to crypto oversight you've got the PM I mean the pm has welcomed crypto with open arms he's getting beers with crypto Founders a crazy story when I was uh like this is like when Cosmos was launching and proof of stake was a thing and so we we at the

time was running validators and I wanted to get clarity this is like staked and all these companies were popping up buy some trails and we want to do our thing and so we wanted to get clarity on how these things would get treated from a taxation perspective like the proof of stake lines is something that I helped create with Heaven who ended up like just joining bikes and trails and like trying to get how taxi like Clarity from the IRS how like staking Wars would be treated in the U.S so that was a good initiative that came out of that but we also wanted to get a Clarity on like how do you run a validator and like is it like money transmission like if someone delegates to your validator in in in Cosmos or in tasers is quite different so we just wanted to get Claire to reach out to the

SEC you want to get a meeting with them we actually ended up going meeting them in San Francisco and the cryptos are shows up it was like a pretty fascinating at least understanding for me of how at the time there was this idea that The Regulators didn't know much about crypto needed education that was not the case meaning they were very knowledgeable and they knew all the different players they knew the nuances between so that was like a pretty interesting experience but it took it took a couple of months to get a meeting and we didn't get clarity um needless to say we were in London at the time we requested a meeting with the FCA we got it like within like that same week and to me it was it was impressive you

know it was this was back in 2008 19. and it was it was like a stark difference in in the level of hey we want to welcome you um I know you have questions that and they gave us Clarity actually very quickly oh so it was fine but you run a validator and I was like wow this is it's just a very different tone um and posture towards just we're trying to do the right thing we're just trying to get we want to understand we can run a business and if we couldn't run a business then it was fine like we just like we can change stuff and if we can't change it then we'll you know at least we know um and and it was very refreshing actually yeah and I've heard the same from like you know the obvious base there and I was doing a lot of work with

them at the time and you know Rebecca was on the regulatory project you know they they all I think unequivocally so many people have been have had very positive interactions with The Regulators out there yeah we agreed so we're excited about London um what were you doing by the way were you running the staking yeah steak is I did it with a few folks was this because you have this gap on like your you know proverbial resume after Elysium before parify what did you do in 2019 was that what you were doing yeah exactly so I had a huge you know I had a position in these protocols and so I want to because staking is so

important not just to get the it's to secure the network right and I didn't feel comfortable using Solutions out there that I didn't understand I didn't know and so I said well I might as well just build it and that sentiment was shared by the team that we recruited um and and so we're a team of five um we kind of knew each other um for just being crypto for a long time and we we set out to build a a effectively a staking as a service company um you know for ourselves first and foremost and then you know friends and other people reach out and say hey and so we we said okay we can let's see if we can productize it there's so many learnings from there

um we ended up shutting it down um but of course like there was other like stake into and buy some trails and so many others like you know ended up having great success the probably the best thing to come out of that was understanding how sticky like user Behavior was in crypto like if you were not the first Val like validator in in the set good luck trying to like like acquire users once they delegate they don't want to switch validator even if you went out with lower fees they don't care and that was learning for me in tezos uh of how hard it was to like recruit and get delegations um of course it's huge educative model which is too early like yeah I I I'll send you a link uh there's a post out in

my sub stack that talked about how I thought like all the different products derivatives like like you could do so and we still haven't seen much of it I guess the other thing that came out of it does that gave me a lot of conviction to invest in vital because the guys that started Lido had the best they would win these like competitions of like game of stakes or Cosmos and they they're just around the best they had the best team technically I think they were the best we're one of the best and so I I knew them from from that experience and they always kicked their ass I was like oh you know this is a team that I want about another technically competent and lighter ended up being one of the best investments um so but yeah there's uh I think we've now

that the ethereum's online and you have proof of stake the Marcus has grown so much and that stream of income is is fantastic I mean then you can you can do so many different derivative products I mean we talked about it at permissionless right at that dinner there is still so much that you can build upon on this like stream of income that you get from from from validating um and and I think this can be really exciting I think we lied is a great case study obviously state was acquired bison Trail was acquired and so um these are really they just spit out incredible amount of cash flow yeah yeah um uh we're gonna talk about this week there was coinbase coin I think there's

two things with coinbase they had this marketing campaign in DC they brought a lot of folks to DC for stand with crypto there was also coinbase launch purpose right they launched uh uh re they got regulatory approval to enable retail purpose Futures Trading um so that's pretty exciting there's pudgy Penguins did this thing in Walmart that was kind of cool switch your camera a little bit so that we can come on show us your point I got my budget I didn't go to Walmart I will admit but I got I got I got this low guys you got a pumpkin is that like October themed yeah I don't know Lucas and Lucas sent more swag the blockworks office so Luca Luca Nets came on the Block on Empire yeah and uh this is the guy who bought pudgy Penguins he didn't

start it but he bought it um back in April of 2022 I think it was and he came in the podcast he's like hey do you want some swag I was like yeah sure so he sent he said probably like six huge boxes of pudgy penguin stuff to the blockworks office so we're hooked up anyways we've got this uh you know not in the blockworks office but you know I got one for you I got it I got another one for you but uh that's huge because you know who do you think is buying this stuff from Walmart I mean because you can buy it in Amazon right you could buy it in other retailers as well like Walmart is not the first retailer it's just it has huge distribution yeah it's cool I mean we we talked I've kept in touch with Luca they Walmart

originally was going to put it on like a kind of a row basically but what they actually got was these the the most coveted part of the the store which is the front of I forget there's a word for this and yeah and I remember because we were investors in GoPro you know what I'm talking about it's in the front of an aisle in front of a whole section so it says like adopt your friend your Forever friend and it is tons and tons of and tons of Pudgies and I think they're like nine bucks each and it's really really cool I mean they're available in 2000 us Walmarts with three exclusive toys every time a pudgy sells holders get a royalty I'm sure it's a tiny minuscule amount because they're only nine bucks but you know that that could be good cash flow and does that

does he uh does he does each of these physical items correspond to an nft or not really um I don't know that actually I'm not I'm not entirely sure yeah interesting yeah and then they have uh so each toy here's your answer each toy comes with a QR code that unlocks digital traits which can be redeemed in their digital social experience pudgy World um which is built on ZK sync and when you're there buyers can collect and connect with friends just from buying this this toy now who actually does that probably not not your nine-year-old you know yeah son or daughter who's buying this pudgy they probably don't do that but there's I don't know probably a world of 15 year olds who who do that I mean if

you remember do you remember penguin world I think it was called yeah that little game online so I mean it's kind of this again so and it was cool they have these I remember time ago actually I loved I'm Gucci like your online friend you had defeated and all this yeah exactly exactly so I think it's pretty cool I mean they have these they partnered with a couple of they partnered with me bits and D Gods so every toy comes with a random trait from a different nft project no there's um things from like nft composability physical composability yeah I don't know I think it's I think it's cool especially I would love oh if I would love the team to come on you know after like three four months of of data to tell us

but things that I'd love to understand exactly that like who's buying it and and all that data like what's cohort what's uh are they buying one or they're buying ten um who's actually activating the online stuff and what's the overlap between who's buying it and who actually has an nft that's like a I just would love to just there's so many analytics here because you're stitching the real world with crypto and understanding kind of that activity would be hugely fascinating yeah I think it's worth having an episode with them um so this is crazy the the actual Walmart account on Twitter like just at Walmart millions of followers tweeted out an extra special welcome to Walmart tweeted the penguin Emoji said shop the new Walmart exclusive budget Penguins

here pretty cool gotta respect Luca for this and correct me here if I'm wrong like I don't remember that bot as well but I think a lot of NFC projects have gotten caught up in promising this very Pie in the Sky road map and you know Virtual Worlds and yada yada when I think of how many have delivered it's basically none except you but I don't remember pudgy penguins being very vocal or even mentioning that at all they were just like these are cute I mean when Luca bought them in 2022 he said look nfts are basically all we're doing here is just creating IP houses we are we are putting IP on the blockchain and doing it in in innovative

ways and the way that you have to do that is by creating something that's super cute we've got that already with Pudgies then creating a [ __ ] ton of Impressions on social so they've got they have like a million followers on I think it's tick tock or Instagram and then uh innovating with retailers and for anyone who's ever dealt with licensing it is super hard to you know you know get your product inside of Walmart and yeah yeah respect no it's really cool you know again these are aesthetically what I think pleasing cute things like I would you know they're kind of nice you know it's a nice penguin I have I have a plushy thing collection here mostly of Harry Potter and then a penguin my mom actually gave it I see your Lego set in the background oh yeah I bought some

more Harry I mean okay folks if anyone that works at Lego is listening to Empire first of all we are open to it being sponsored by Lego because I buy Legos like crazy and second of all like when are they gonna issue nfts like the minute the issue went up tease like I'll just like go bankrupt because I'll spend everything it's just like it's it's amazing I love I love Legos and the price of Legos just keep going up is crazy like talk about a um a great brand of Hampton nfts not yet not yet waiting all right let's talk coinbase let's do it

so back in May coinbase announced coinbase International starting with that the first product was institutional Traders could trade via this API they could trade BTC and eth perp settled in usdc and um earlier this week they got regulatory approval to enable retail perps trading I think it'd be helpful and I I think they received approval from bermuda's monetary Authority the BMA to enable perp futures for non-us retail customers so now retail can trade perps retail outside the US can trade perks with coinbase huge development um can you maybe give us a lay of the land of like where do you trade perps today what are perps like just kind of

set up this conversation and and give me give me the high level on purpose in crypto yeah so perps are one of those things that were uniquely developed in crypto I think bitmex was the first one to come out with a Perpetual swap um and I guess for people that are what is the closest thing in traditional Finance right it is think of it as a it's very similar to a traditional Futures Contract but it has a few differences right the one there's no expiry or settlement like these are just constantly rolling if you will um and perps mimic like a margin-based spot market so that's why they kind of trade really close to to spot like to the

index price so if you have like an eth perp it usually very or a BTC purp or whatever purp it usually is very close to whatever the spot price is what you what's really interesting is this idea of a funding mechanism so you'll hear a lot of Traders talk about the funding like the perp funding is really high really low to understand how much of how much of people are going long or short a particular asset so just looking at funding mechanism is something that I observe in terms of how how over extended or you know just a metric for me to gauge indication like if um and and the funding mechanism is used so as as more people go long something or

short the funding mechanism is dynamic and to really anchor and keep the the perp swap close to the spot right because you don't want it to deviate too much and the funding mechanism is really that the funding rate is what keeps is a mechanism that keeps the perp close to the spot right um which is kind of different right because the Futures can trade very like the Futures can deviate quite a lot from spot and I think that's due to basis right but because you have a funding mechanism these perps trade really close to spot so so far so good I guess good um perps I guess have do you find them in different flavors pretty much every

major exchange like okay X and you know bitmex and binance have perps FTX this is like probably perps are one of those things that get used a lot in the exchanges there's widely popular there's three different things of course one is the perp references a particular index or a particular like coin right uh you have the funding rate and then you have Max leverage right um and what's really interesting is perp contracts don't require traders to Post 100 of collateral as margin right um and because of that you can trade with a ton of Leverage sometimes up to over 100x which you know kids don't play with fire right this is not an

endorsement you know but just beware like it's possible I'm just I'm just not learning what is possible here um and the margin you have to post some margin um and of course that can be denominated in in Bitcoin and other crypto currencies and it really allows traders to kind of speculate on on the future value um of of the particular underlying index if you will so you could go long BTC or eth perp with 33x leverage right and has no expiration just kind of rolls of course the funding rate is is the key there right if the funding rate's really high you got to keep that you've got to keep monitoring that um because you gotta you know that

basically eats into your profit um and you got to post more margin so um and and the other component I guess is perps can not you know they as I mentioned they could be you know inverse linear they can have some sort of ratio to the price of a particular asset right um and so you've got to obviously understand how that works and uh what is called like a multiplier right um so yeah I don't know if there's anything else that is worth noting here no I think that I think that's right I mean the important thing to understand here is that the global so there's spot and there's derivatives right so spot crypto trading accounts for about 25 of the market the global crypto derivatives Market is about three times bigger than spot I think roughly I haven't looked at

the numbers in a while but I think it represents about 75 of crypto trading volume worldwide so there's this really strong demand and the way that a lot of perps are traded today is probably either on uh kind of a maybe a shadier exchange or in D5 with like cuenta or dydx so actually coinbase and actually Gemini both announced this week uh offshore perps within days of each other so I think Antonio from dydx who's maybe obviously a little biased on this because he he runs do idx but he also has a really good take because he runs one of the biggest purpose platforms um let me just share some of his

thoughts he said well I just kind of clarify one thing with people about funding rate because I think it's important yeah so when the funding rate is positive Longs are paying shorts um and and when it's negative shorts are paying Longs right I mean against I think there's one or two changes actually have the inverse which is really confusing there's not like a particular standard across all exchanges so you have to make sure that you understand kind of the funding rate mechanism usually it's like eight hours where these things like funding occurs every eight hours right so kind of the funding rate is dynamic and it's constantly changing based on how many you know what's the ratio between people going long and short right um and and the payout of set you know kind of uh con you know so somebody was just I wanted to clarify that but go

ahead yeah um so let me redo some of uh Antonio's thoughts which I think were pretty uh summed it up pretty nicely said look so coinbase shared that they did 5.5 billion in volume in Q2 from uh from institutional perps not that big of a number but that's remember that's institutions only and um he points out he said look there's continuing theme from the collapse of FTX that there's now a lot of fud on binance right and we we decided not to talk about some of those rumors in this podcast but if you're on Twitter you can probably see Adam Cochran and others are kind of calling out binance for some things that they think are on the show and by the way I just recorded an episode with Tom and Brian Zur uh yesterday and we went into details you

did go into this okay you know some detail yeah but you know okay and that'll be live here um so coinbase has I think has earned this reputation as being like the most trusted most stable alternative to some of these maybe what folks would think of as kind of sketchier exchanges and now that coinbase is perps the question is do users care enough about safety to move over and for some users I think that'll matter right but Antonio's called this out and I kind of agree with him he said I've been repeatedly surprised how little users care about safety over my years in crypto for example when remember when bitfinex got hacked 2016 everyone got that they were done a lot of people kept trading on them like nothing happened so the biggest question is will

is Will users want to move over the other big question is will coinbase be able to iterate fast enough and be aggressive enough to compete in what is already a very competitive landscape for purpose products and in a in a market that has probably benefited from less regulation because with purse products you have to be super aggressive listings Max leverage features chart trading order types liquidity ease of onboarding can coinbase be as aggressive trying to speed this very regulated company so Antonio's uh Antonio's take was that they take probably five to ten percent of the derivatives market share in a year or two um we'll see they're very late to the centralized exchange derivatives game

but I don't know we'll see I mean look it's it's huge right because there's clearly a ton of demand I think it's one of those things where it's it's a novel product it's actually pretty sweet um and and so you know I would think that this is something that is going to get a lot of traction within the existing clientele of coinbase because you know a lot of Institutions can't can't access these other exchanges that have perps uh and so you know as coinbase gets more market share I think regardless of whether all these allegations or case I think by and large I mean coinbase is just coinbase and crack and I think are two of the exchanges that will probably continue to get more market share yeah

um you know coinbase just got a license in Spain it's gone out and gone more and more licenses overseas to serve you know retail and institutional right and has a coin it has a whole Suite of products and I think this is a good extension of that in in terms of something that clearly has a ton of demand and is a huge profit maker for so many of the other changes right I mean so um yeah I mean this is this is pretty key I think yeah so the other interesting coinbase thing from this week was they brought a lot of folks to DC they brought a lot of people into DC for uh this stand with crypto movement and um Gary Gensler so here so here's actually Kevin owaki kind of laid out what they what they did so so the first session of

the day was they brought all these folks in from I think it was 50 crypto or 40 crypto Founders I think 40 crypto Founders they brought them to DC from 15 different states that are kind of key States right and they did all these cool marketing campaigns they had these uh they had these cans that said like wake up 52 million Americans never cold brew anyone that knows is another response potential sponsor Goldberg if anyone wants to sponsor is you know I love luck alone that best Goldberg in the market by the way not endorsement but look at this this is yeah that was amazing yeah the nutritional facts 87 of Americans want to update the financial system 20 of American adults who own crypto uh or own crypto 22 uh 22 of Democrats 18 of

Republicans jobs crypto set to create by 2030 4 million jobs fortune five Fortune 100 companies that have crypto initiatives 52 Fortune 100 companies that consider crypto competitive Advantage 64 Savings of ACH payments uh uh I can't see that word but something something yeah replace yeah it got resolved by crypto 2.6 savings payments ran on crypto rails 2.6 and billion countries currently exploring digital currencies 130. crypto owners with an income of greater than 100K 75 no less than 100K oh less than 100K um Americans satisfied with the current Financial system nine percent it's time to update the system and a QR code which

I don't know what where that goes but probably stand with crypto anyways they had that they also had this big money truck like a Brinks truck where you you know you deliver Cash Money future money doesn't move on a money truck a [ __ ] genius really really really great campaign um so anyway his first session of the day they brought folks in to watch the Gary Gensler congressional oversight hearing live which is really cool to have these Founders and kind of sitting right behind them and people were putting the like stand with crypto a little sign right behind them reminiscent of like the the hot like what was it the uh Bitcoin sign way like years exactly exactly I like that guy I've met that guy a couple times actually he got fired right or something yeah yeah exactly uh that's okay so anyway I I thought it was super

successful campaign by by coinbase I was watching CNBC and Bloomberg throughout the day to see if it would make its way to kind of mainstream and it did not so that was probably I think we thought it was very successful but maybe just on crypto Twitter but it did feel like kind of the best coordination of policy and Regulatory efforts bringing Founders in from all across crypto uh it you know best in DC for a long time so yeah just big shout out to coinbase for kind of unifying the industry and making this very memeable content uh with the cans and the trucks and all that kind of stuff yeah yeah pretty awesome to see this episode is brought to you by Chronicle protocol the best on-chain source for cost efficient verifiable

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and a lot more reach out to toku at toku.com forward slash Empire or click the link in the description any highlights on the Congressional hearing I saw some clips uh that were I think yeah Tom emmer had some good Clips Richie Torres had good Clips um the takeaway so we had some folks who were covering it pretty closely the big takeaway is that both sides of the aisle are now joining in right there's Tom emmer who's Republican Richie Torres Democrat uh Mike flood republican from Nebraska Wiley nickel Democrat from North Carolina there's now a bipartisan group of Representatives that wants Gensler to as they say act for the the sec's failure to approve a spot Bitcoin

ETF and a lot of them called him out right so this is you know yeah this is like the anti-gensler movement so a Casey Wagner block Works wrote this article the title is the anti-ghancler movement is picking up steam on both sides of the of the aisle you know what's interesting is I because sometimes uh I think it was one of the first where crypto Twitter said wow it was uh they really grilled him and you know and then I spoke with other folks um and they were like you know you know what like he kind of like danced around it brilliantly and you know I was like okay that's interesting because most people seem to think that you know he was really cornered and you know

I need to have good answers to a lot of the stuff particularly he's the security like he wouldn't answer I wonder what the feedback is now and I think we we ought to have an update on the regulatory pod soon with Rebecca Jake and other folks right um to talk about this and other things but one thing that I have found interesting was um there's been a lot like the popularity of genser is also not really positive amongst private equity and hedge funds uh because he's been trying to introduce like just new more probably what they seem to think owners kind of rules and um for the private Equity industry and it's got a huge backlash and well not only not only that they the rules that they've placed on late stage

private or on public companies make it really tough for late stage private companies to go public so what you're seeing is more and more companies staying private for a couple of reasons it's bad IPO Market but also it's the costs of being a public company go up every single year which incentivizes Founders to stay private for long yes so anyways it's just uh interesting to see that uh sometimes we look around and say hey are we crazy like are we missing something it just has felt that you know we're not getting answers and um but it was just interesting to observe that the the reaction and of other other Industries towards you know um you know Gary has not been as positive right and so you know clearly

that also weighs in all all this discussion yeah um we want to talk about Eunice there's uh there's some foundations like unisoft and optimism asking for money curious to get your take on that we could also talk about um block native shut down their their relay yeah um where do you want to go we can talk about these AI valuations that's always fun I mean I yeah when we talk about that as a break from crypto folks yeah what's going on in AI land just a one minute you see the secondary for uh for open open AI I did not I did not participate in that indeed I'm glad I'm glad you didn't so open AI is in talks for to sell some

secondary valued at 80 to 90 billion that's uh roughly 40 with Irish Market cup right give or take yeah what do you think about this what oh that 80 to 90 billion dollar secondary probably a local top um like on Tropic also like God like was it uh Amazon committed which is kind of like a which I actually do use anthropic every day at this point I will say yeah I like him I mean to be fair it's like getting AWS credits so like it was like it was like yeah we'll give you four million but you have to use AWS so it's kind of like a the the structure of the deal made a lot of sense I think for Amazon so but yeah look uh

I've been obviously paying attention AI just invested in a fun called Mythos like uh which is super early stage they were rages from the size and I think it's a really good Network and whatnot and um like I want to have exposure to AI in my portfolio I'm not going to be the one to do it um I wonder meet those Ventures do you know who ran a fund called Mythos Ryan Ryan Sean Adams a bankless re bankless his fund was called Mythos Capital oh right yeah I guess yeah popular names I guess um so uh there's a great podcast on Nvidia um and Taiwan semiconductor two actually

uh it's by acquired so I this is just pretty Illuminating uh the Nvidia one in particular there's two actually the most recent one is really interesting to understand like capex and why like why now like how like why did we reach kind of this huge inflection point where everything was just out of the blue to talk about AI uh in a media in particular but um I don't know like it's really interesting because I wonder how much of this is going to be open source and how much is going to be monetizable right um and I also have questions around product like I think there will be a lag between the amount of and we saw this in crypto the amount of companies that are going out and saying you search uh you know public filings on Edgar ICC

in like control F Ai and every like at this point every company is like talking about Ai and their filings because if they don't then the Market's going to punish them I do think there's going to be a lag between like I just wonder like what's the best way to understand how companies are productizing Ai and I'll tell you I mean did you see the Facebook did you see the Facebook announcement with their remember Google Glasses yes so Facebook just did a partnership with Ray-Ban to to launch Facebook or met up metaglasses and they actually don't look that bad um I always thought Snapchat was gonna be the first to Market with a pair of glasses that like really integrated AI these um yeah I mean they look like Ray-Bans but they're like full all the AI features of meta you can like you know you can I mean whoop recently

announced and whooped like this wearable uh to track yeah a bunch of things like announced like a the integration with the open AI so yeah like I understand that but I do I do think that there's going to be a lag between when companies do the spend and what they actually productize um some might move faster than others but that might be that might be the disillusionment is what I'm trying to say where people think wow it's really going to transform the business it's going to streamline it's going to increase your margin you're going to yada yada but in reality I think there will be there will be really positive and successful implementations of that and there will be not so positive that will take longer than what the market thinks or expects and that's where we might see this disillusionment where it's like

okay like magic leap is an example right a different example like different category obviously like augmented reality in VR but these things typically take longer and I think the market is pricing it to a point of perfection where the expectation on the impact and the timing of set impact is just price to Perfection and invadly when that happens you know there's disillusionment so do you personally use any of this stuff I pretty much stopped using Google and just use like chat GPT yeah yeah I pretty much do the same it's crazy the new stuff so I have the chat gbt app you can go to settings and then go to new features and then turn on voice and you can pick the voice it is the best like

sorry I asked it a question and then it responded in this in in the voice and it was like a Flawless response in your voice and no like in another person's voice but it didn't sound like a you know robot voice it truly sounded like if you put this behind a zoom with no camera on it I would have thought it was a person yeah and responded instantly to this kind of tough question I asked it and if you you should use the data feature of it too of chat EBT you can upload a data set it figures out what the data is it cleans it it denoises the data it manipulates the data into like how it should be structured and then it represents the data visually and creates something better than you know you did IB like then you're and that's Mega analyst yeah exactly then this then this

IB analyst could do it would take an uh you know someone in IB like 20 hours to do this they it can do it in three seconds so yeah I I listen to anything and everything that Sandra Miller says and he was along AI like a year ago and like a long video and you know I just like like a monkey just did the same um and I think the impact's going to be obviously lasting and transformative but just question like I think there will be obviously troughs of you know local tops and highs uh local tops and uh but um the other thing that I saw recently is that it is now able like Chad DBT is now able to search the internet like it was constrained the data set was constrained it's like not constrained until September 2021 it is now updates from

websites in real time which is really actually really really useful yeah you can also have it write code so I saw this video on online I haven't done this yet but someone wrote like hey take emails yeah down here to the age take a picture of that and it was just a whiteboarded thing and it was like turn this into code yeah there's like a guy who's like this is the this is the front page this is someone would look took a picture and then boom right or you can just screenshot a website put it into chatbt and be like create the create the the code for this for him so the only one that says uh two ones are really funny ones like kids will never do homework again and it was like uh they took a screenshot of of the of the homework and it was nice it was just

math and they were like yeah these are the answers and then the other one's like this guy took a picture of like you know like parking signs yeah yeah he was like I will never get a parking violation ever again because it's like hey chattvt can I park here it's like and it was like six different like things you're like what the hell uh it's so confusing and then of course it says yes you can park it for an hour it's like perfect thank you crazy that's great crazy um the evaluations I think the down so open AI is this unique like it's very one-off thing but I think there's a lot of AI companies raising it like a hundred you know 500 billion dollars right now I'm sure you've seen some of these and they're you know they're doing like a million of

Revenue the thing I would caution is I'm sure you're seeing some of these secondaries that are going on the secondaries are getting worse and worse and worse in crypto right now there is a company that did and general Tech too yeah they raised this company I just saw this week raised at I'm trying not I don't want to give them away but they they raised it up over over a billion they are not raising it they're they're their their revenue is three million dollars they're running out of cash because yeah two three years they're two and a half years into doing the last raise which is where most companies are right now and they have less than 12 months Runway they're figuring out how to keep themselves right so that so they raised it they raised it you know over a billion they're doing three to four million in

Revenue right now it sounds like it's closer to three million the 100x multiple 100x Revenue multiple would just be would be 300 million so there so the to get to the last valuation you'd have to raise it like a 300 to 400x revenue multiple obviously that can happen so to not die because they're not close to profitability or they either have to cut like 80 of their team get to profitability or they have to go raise more money but if they do that best case they raise a Down Round worst case they have to do a whole total recap um just a nightmare situation yeah look I mean this is probably when we think about the the things that I caution Founders to do is like be careful with raising a step function

like round that is just taking the highest valuation because down the road you're going to have issues most likely like growing into that valuation is going to be tough the options that you issue to your employees are going to be priced at that last round and invariably if you don't live up to that expectation probabilistically you won't then you're going to have to do a massive recap cram everyone down your employee and then how do you go from there like the morale is just going to suck like people can be like wait wait a minute I got to issue options at a billion and now this thing's worth 30 million seriously hmm like they're doing three million in Revenue God I mean that's a 30 million like that

are they profitable maybe they're cranking like a million in whatever ebitda again you shouldn't price these things necessarily on profitability but like this was like what people were saying you shouldn't price it on profitability you know it's a huge Market yada yada but now rates are where they are like yeah profitability is front and center or you need economics what's your attention like these are things that like it was uh I mean talking about things that are so difficult it's like imagine if you're fun you love that product you think that company's worth at that time probably like 200 million maybe and there comes a run and gives them a billion dollar valuation like and that happens over and over and over

again for six years like I would like it's really tough to hold the line and not and not just say you know I need to just I need to dance everyone's doing it yeah and so like that's where I think those type of investors are going to be heavily rewarded right now because those type same folks that love the company like the team passed it a billion now might have the capital to give it to them and end up owning a huge chunk of the company uh at much more favorable realistic terms yeah but you know you know it's tough It's really tough let me ask you about these secondary deals that are hap

or I guess not secondary deals these token deals these locked token deals that are happening from foundation so optimism this might have been last week but optimism they sold a couple of hundred million or so I think it was 117 million um I don't know the the facts on this but what I heard is it was roughly a 30 discount to your lock-up or two-year vest I think seven funds took it down it sounded like Andreessen probably took down about half of it it's not not fact I just this is what I heard um yeah in some group chats what uh how do you think about doing those do you do those deals do you skip on all those deals do you just you know just Case by case well as it relates to lock tokens no but

at Foundation tokens yeah I mean I think um it makes a whole lot of sense at the right terms I think when you think about why it would trade at a discount it's for two reasons right it's a or one particularly it's the marketability of it like the the liquidity discount needs to be there and usually is at least 20 depends on the lockup but it has to be at least a year lockup and I think it was at least 15 20 and I've done a number of those deals look it makes sense right I mean if the foundation goes out and sells in the open market only the ethereum foundation is at that position where ease is just that grown in that level of size and there's big big constituent holders of ethereum like Joe Lubin consensus as a bunch and like right the ethereum

foundation just it's there's different very big parties that hold a lot of ease and so the term Foundation can just go on sell you know in coinbase but for every other more fragile team like I think the signaling is stronger if you place those tokens in hands of investors that are committing to holding and and believing long term I don't know if a16c was part of it but they were investors in the earlier rounds of optimism for them it just makes more sense to acquire a position the signaling is super strong um you know there's there's ways to go about it I think this is where people get critical it's like wait a minute why didn't you offer this deal to retail and you know the challenges associated

with that unfortunately the investor accreditation rules like there's a short of it and it sucks and it kind of it really sucks like why shouldn't retail that's been an investor in optimism believes it understands it technically can't participate in this type of deal and lawyers will like shoot it down because of the lack of clarity in an investor creation so you wonder like that that's harm right like all of a sudden we've equated knowledgeability to wealth which by the way I met really rich dumb people and really smart people that haven't made money because they're early in their career for whatever reason and the fact that we we've just set this arbitrary standard in the U.S of who can invest in

these things or not and we've excluded the vast majority of the population from these type of opportunities is ridiculous it really is the amount of wealth creation that has happened in the private markets is astounding and only very few people have been able to participate oh and then you wonder why inequality is on the rise in the US and school of financial crisis it's like well guys like update the goddamn rules have sophistication tests knowledgeability tests but you know we can't do that um but these deals make a lot of sense like Lido did a number of these yeah uh and and the found the fund like Paradigm did it and they came and they posted on

the blog in the community like responded and they had to prove their worth and then the terms were very openly negotiated and then voted on upon lighter holders yeah and then another fund came and they were not they were rejected right uh no name fund and so you know it's it's it's happening in the open I think is really interesting um and uh so yeah I'm I'm uh generally a big fan of of doing these things in an orderly manner you know the team needs to get Runway and you know I I understand why they would want to do it right to secure the runway founder selling and Foundation selling for the right reasons and the right amount makes a lot of sense I have I have no problems with that a lot of people are really

critical of Founders selling I'm like no of course like 99 of their net worth is tied in this company they've been working on for so many years do you think they're going to be less or more distracted if they diversify like it's stressful right so I'm a big believer I think there's a yeah I agree with that when a family stack you're like okay there's a danger there's a the most dangerous place for a Founder to be is someone to have a little bit of financial Comfort but not too much Financial comfort so what I mean by that is I've seen some Founders take 100 million in secondary right the founder of hop in there's a crypto company founder who they raised a lot founder took 100 million in secondary that is

too much secondary that that in my mind really disincentivizes you the other side of that spectrum is a Founder who's never taken secondary has no money and is super stressed out money every day you can't take the risks you need to take to kind of stay on The Cutting Edge of your company so I think the the most dangerous place for a Founder to be is in a good way is having a little bit of financial cushion but I've done this a number of times and I think it's quite healthy like yeah I like that I have you know so like fatality like look at look at historically vitalica sold a bunch he sold at six he sold at 18. he sold at 18

and everyone freaked out the tug went down to six again and that was you know it's like guys like I want to eat dropped 10 because we thought vitalik got hit by a car I forgot about that one here fragile I mean I remember when vitalik sold he sold a bunch of his stack it I think it was 18 bucks went down all the way to nine I'm like guys what's wrong I mean he sold like X percent like yeah it's kind of normal but yeah and then Mark and bear Marcus people just want a reason to the market excuse negative and it just reads everything is interprets everything that comes out as negative and so it's like okay yeah you know that you you know you're in a bear Market when that happens right so we have two pods coming up I think this is a good place to wrap the two

pods we've got you Tommy and Ryan that'll be fun yeah we had two guys from blockchain Capital Spencer Bogart and Alex to to the GPS of blockchain capital so yeah really excited for that conversation is a pretty good one um and yeah Monday and Tuesday those both drop yeah really excited for those drops a comment um as people have noticed I'm more active on the comments on YouTube so drops comment if you like those conversations uh I like when people tweeted us I like I like uh I mean obviously I'm I'm more active on Twitter so it's nice on YouTube everyone's a dick to me on YouTube most well I went on this podcast called MFM my first million oh yeah yeah it's

like one of the biggest podcasts in the world right now and I went on it and let me like these comments are just right now nice well I will save you shave your head I think there would be interesting comments first of all and well actually one other thing um you won't say it but I will I noticed that you guys were one on block Works did like top in a bit like there's this Awards oh yeah native companies like can you can you just uh LinkedIn publishes for the last seven years LinkedIn is published their top 50 US startups list and all these great companies have been on it like Brax and this year the number one was ramp you know ramp um number two was uh liquid death

there's it's a really fun list and I always read it this so yesterday I'm sitting in the office and you had no idea I know I had no idea a lot of these lists you have to pay for like 4 30 out of 30 is like you know you get a nod from like the The Venture partner and one of his analysts it's like hey can you name him 300 so yeah Forbes that we we also got 430 under 30 didn't have to pay but like there's definitely like a hey who do you know type of game yeah there's all these other lists like cranes and Inc 500 you have to pay money to be on those lists and so link LinkedIn you don't have no one ever reached out to us I was sitting in the office and we have this new reporter Jack uh down our D5 reporter

and um he's like hey we got we're this is super cool we're on the top we're on linkedin's 31st best us startup to to work at and I was like uh it seems like a scan like see it's probably a fake list he's like no no we're getting it it's on linkedin.com sure enough yeah block Works sitting at number 31. it's pretty cool congrats yeah thanks brother good stuff uh I don't check LinkedIn uh I haven't checked in a while but I saw it on Twitter so yeah it was cool yeah this year it's their top LinkedIn news story this year is 50 startups to watch you click it scroll down and they called us a software development firm so not sure they know what we do but that's okay maybe they give you a credit for

the research analytics yeah exactly exactly we have some good software here so yeah awesome uh any books stuff that you're watching I'm reading the new Elon book s yeah the Walter Isaacson Elon book yeah it's nominated as one of the best books Financial Times with like the probably the best like top books of the year yeah kind of awards and that's one of them I guess I see Walter Isaacson I'm a simple man Walter Isaacson put that biography I read the book so God yeah Simple Man Leonardo uh code breaker Einstein generators Steve Jobs um yeah those are those are all great

what about you nothing I'm out of content guys I need I need content um again this acquired podcast I've been going through all of them I've had some I've had some deep like acquired podcasts really good lvmh Nvidia Costco Taylor Swift I want to listen to next uh the NFL was a good one too NFL is on the list too yeah I know it's uh um really nice Discovery and I really have enjoyed you know so I've talked to one of those guys a couple times just on Twitter DMS one they record like 10 hours of content and drill it down for a four hour podcast and they don't talk to each other before the podcast so like they will be like we're gonna record

they do extensive research I mean I think we're gonna do a Nike episode they'll be like great like see you in a month for this episode I mean they talk a little bit but they don't talk about their research at all so it's brand new so they'll get on the Nike episode they'll be like yeah I read this thing and the other person's like oh my God I didn't know that or oh my God I read the exact same thing that's so cool uh anyways they surface a lot of like the lvmh one is fascinating I had very little understanding of how that came together and that was the Nvidia one was excellent that's where I started and I was like okay really thorough really good um yeah so anyways that's what I'm doing cool man I'm running of course that's the pod that's the pod that's it

under an hour so folks uh thanks for listening as always uh we will see you here next next week see you on Monday and see on Tuesday back to backs back have a good weekend folks I'm doing my homework thank you thank you foreign [Music]