Rollup TV: Trezor and Haseeb from Dragonfly

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>> [music] [music] >> Wow. What camera angle is this? All right, let's get dialed up in here. CZ got pardoned, so everything is about to change. I recently said that I thought CZ getting pardon was going to be uh the number one threat to Hyperlid.

Coincidentally, or extremely strategically, one way or the other, Hyperlid got added to Robin Hood at the same time and is now 10% higher than it was 24 hours ago. It has eclipsed $40 and looks like it's off to the races. Um, the market wants to go higher. We can see it. You can see it. You want to believe in it. You just need to be given a reason. Let's refresh the time in the top left. Come on, guys. Let's get dialed. It's Thursday. What are we What are we doing here? Let's go. Um, we're gonna we're gonna talk about all the fun things that are happening across the docket.

Uh, I've got a lot that I'm going to uh show you guys and I think there's a lot that we can uh that we can that we can talk about. Uh, we've also got a banger lineup. Treasure is going to be coming on and talking about their new product. Uh, they launched a new uh, hardware wallet called the Treasure Safe 7. I want to talk about Quantum with the CEO of Treasure, Matez, because Quantum is coming. We saw Trump and the administration start to explore buying quantum stocks and backstopping some of this industry. I think they're going to fuel additional investment into the quantum computing industry. Google also

uh had an announcement recently where they were able to solve a problem uh that consisted of 15 quintilion combinations. they had a breakthrough as quantum computing surpasses the ability of supercomputers. This is going to be uh we're going to see more and more of this coming out as quantum continues to develop. This is happening at the same time as AI and I anticipate that these technologies will just kind of reinforce one another and we're going to see breakthrough after breakthrough in this domain.

So without further ado, uh I want to pull up some screen share and I want to show you guys some things. So, we're going to get that going in just a moment. Let's get that dialed. Um, in addition to Matez coming on the show and talking about Quantum, how they were able to uh build this quantum ready hardware wallet, uh they're not calling it quantum secure, they're calling it quantum ready, uh but it's ready for the age of computing that is coming. It's fully wireless. It's Bluetooth. uh magnetic charging, multi-de device compatibility. Um, and honestly, it looks really, really cool. I haven't gotten a chance to try it out myself, but Mata is going to come on. He's going

to tell us uh how this is an improvement uh beyond what the current treasure is. Um, and we're going to be hearing about the latest happenings in hardware wallets. Hardware wallets and and uh AI models actually feel really similar. Every [clears throat] time there's a new one, they kind of leaprog one another. And so we're going to see what the incremental improvement in hardware wallets is and we're going to be learning more about that. We've also got plenty to talk about today. Let me just get this going.

CZ pardoned. Absolutely insane. Uh let's see. Let's see. Let's see. Okay, first news of the day. Let's bring it up. It's Hyperlquid on Robin Hood. It's Hyperlquid [snorts] on Robin Hood. We're now trading at above 40. This is not a live feed. I don't have Robin Hood. I don't have an account. I'm a crypto native. I bought Hyperlid on Hype. Um, Sticker Dude's in the chat. What's up, Sticker Dude? We're here. Um, so what this means is that retail, like actual retail, the same guys that are

pushing beyond meat to a 14x are going to be in the same domain as Hyperlid. Um [snorts] this is pretty exciting. Uh, Hyperlid is the biggest position in the rollup fund. Um, it is, uh, obviously continuing to make strides. Uh Jeff was on TBPN yesterday. Um we're just continuing to bring crypto and more specifically Hyperlid into the fold and uh we're seeing the effect that it has and it's uh performing quite nicely as the rest of the market is sort of chopping around.

Next thing that we have is Melania Trump and how she has um how she has gotten caught up in this memecoin fraud just like Malay and the Argentina coin. Um and [snorts] we have a pending lawsuit. The legal filing in a class action crypto fraud suit points the finger not at Melania Trump or Malay but instead at a startup founder. And I think this was pretty interesting. Uh we can read a little bit more about this.

But the gist here uh is that you know I'm sure everyone saw the guy and it's like karate uniform. I forget his name, but uh he had red hair and uh we saw him sitting in front of a uh basically a Captain Kirk chair and talking about how extractive uh he could possibly be. Um and um what this lawsuit is doing is it's painting the Meteora founder Benjamin Chow is the mastermind behind the notorious Libra and Melania meme coins. Uh it asserts that you know Melania Malay they promoted them but they're not to blame for the alleged crimes. Uh this uh lawsuit is filed

against Meteora's founder Ciao. Now I'm sure you guys have seen the news. Meteora also has a TGE that is happening as we speak. So the confluence of events that's happening here is pretty incredible. um as we're seeing uh we're seeing Meteor launch a TGE but at the same time uh their founder is in some hot water. Uh the token is down significantly about 25%. It launched upwards of a dollar and now it's back down to about 50 cents.

Um we're going to see this thing bounce around I'm sure. But uh this is pretty a pretty sticky situation. Uh of course we saw what happened with the Libra token. We saw what happened with Melania's token. And now uh they're pinning this on um on Chiao, the founder of Meteora. Now, previously, uh, we saw Hayden Davis, that's his name, Hayden Davis. Um, he was at the center of this debacle following a spree of it. He did a a bunch of interviews following the collapse of Libra.

Um, and, uh, now they're asserting that Davis executed these token launches at Chia's direction. And, uh, Chia was sort of the the mastermind behind this. Hayden Davis uh was uh responsible for carrying it out. So I think uh you know whether you blame Hayden Davis, whether you blame Chiao, either way, this is not a great look for Meteora as her TGE goes live today. Um let's see what else do we have on the docket.

Bang. Form S1 filed with the US SEC. Hyperlid strategies. We're going to be hearing a lot more about this. I think we're going to get the CEO of Hyperlquid Strategies on the show coming up. Uh the purpose of this is a digital asset treasury company and so that is really really exciting. Hyperlid could also be moving on this news. Uh we saw again Jeff went on TBPN yesterday. Hyperlid added to Robin Hood. Access to retail is becoming real. The hyperlquid strategies DAT is going live uh at least sometime soon as we see the form S1 here. I believe this is going to be uh limited and stalled until the

government shutdown is resolved. And so guys, we have an interview with Hester Pierce that is going to be going live that is also stalled by the government shutdown. I find it particularly interesting that lawmakers were in Congress. they were able to discuss legislation and the Clarity Act um and try to continue to push that forward with industry leaders like Brian Armstrong uh among others that were present in Washington DC putting some of the final touches on the Clarity Act. David Sachs was there uh Congress was there. The Democrats had their meetings, the Republicans had their meetings with industry leaders, but the rest of the government is entirely

shut. Uh they're not doing anything. uh uh we're actually getting automatic replies to our emails that say, "Hey, we can't even uh check our emails until this is resolved." And so, unfortunately, this is the reality that we're in uh at the moment. Once the government reopens, I think it is going to be bullish. I do think the government in general being shut down, not a huge deal, not particularly significant, but as we go further and further with it being shut down, it becomes more and more of an issue. Obviously for us, we want to get this interview with Hester Pierce. We want to talk to her about all the exciting things that are happening in this realm. Uh but at the same time, there's lots of ETFs. Uh there's these S1s that are are uh in the process of

being approved and unless uh these things get reopened and the government is reopened, uh we're not going to be able to to go forward with these things. Uh, next up on the docket, Tether joins $39 million funding round in Programmable Pav Bank Bank. Um, we're seeing Tether make all kinds of strategic investments. Uh, they've got Bitcoin, they're investing in real estate. Uh, Tether is buying cows in Latin America and they're investing in programmable banks. Now, I had an fascinating fascinating conversation yesterday. Um, we're going to play it for you guys in a

little bit. Hib is going to join the show. I really, uh, encourage you guys to tune in and listen to this one because, um, there's all kinds of exciting things that we can talk about when it comes to the banking system, when it comes to the way in which the Fed is looking at stable coin issuing companies and how they could uh, they could actually uh, have an account at the Fed. Uh we're going to talk about whether that's a big deal or not a big deal. Um there's lots of things that we can talk about. Also, uh programmable banking is uh very very interesting.

This is the last thing that we have for you guys. Start the engines. Strap in. JP Morgan King chairman Jamie Diamond expects the Fed to end quantitative tightening next week. Let's just stick on this for just a moment before we bring our next guest, our first guest, Matez. And we're going to talk about quantum computing and all the things that are happening uh with quantum as of recently and how they're preparing for it uh uh in the hardware wallet landscape.

But I just want to want to check something on the macro side of things. um October 28th to 29th, that's next Wednesday. That's our next FOMC meeting. I believe that's going to go on without a hitch. Doesn't matter if the government is open or not. Um that is going to happen. And let's see if we check the call sheet. Check the call sheet. What is the likelihood that the Fed lowers rates in October?

95% chance that they cut 25 basis point. Okay. Uh that's the reality. That's what we're looking at. That is what's on the docket. Really appreciate you guys. Uh we have a great show for you planned today. Uh we're going to get Matez in here in just a moment and we're going to get him on the show so that we can discuss quantum and all the things happening in that landscape. Uh but again, keep in mind next week we're going to get uh JP Morgan expects uh the end of quantitative tightening. I my understanding of this is they've effectively drained all of their their reserves which means that um they can't tighten anymore. I mean this is not just a hypothetical theoretical thing. This

is a mathematical thing. Uh once they disperse all their reserves, uh the only direction for that uh to go is and again the more that they're have they they are printing to buy uh these treasuries and these bonds and hold them on their balance sheet themselves and uh and hold these things and and perform open market operations. If they exhaust all of their reserves, the only direction for that to goes up, JP Morgan is calling it. We've got the FOMC next week. That's a little bit of the macro landscape as we see it.

Uh let's get Matez up on the stage so that we can chat about all the things that are happening uh at Treasure. They recently launched uh their Treasure Safe 7. Pretty pretty exciting. I think there's a whole conference as part of this. We've got Mateza up now. Mate, welcome to the show. >> Thanks for having me. >> Absolutely, man. It's a pleasure to have you. I'm uh I'm particularly stoked. This conversation couldn't come at a better time. I'm sure you're keeping track of all the quantum news that has happened as of recently. Uh and you guys are marketing uh Treasure Safe 7 as the world's first quantum ready hardware wallet. Um I noticed, you know, we're we're kind of orbiting around this idea

of quantum security. Could you just describe what it means to be quantum ready uh in the context of a hardware wallet? >> Yeah. Yeah, absolutely. So uh just a disclaimer I'm not engineer myself a cryptographer so I cannot get into any specific technical details. Uh but what we tried to do here is it's it's not supposed to be confused with somehow us solving uh the quantum thread for bitcoin or crypto in general. That's not the point. Uh the point is that it happens on uh the hardware level and the software level of our device. And since we are um since we recently launched as I say 7 we are uh basically looking for

ways how we can make it sort of future proof for potential I mean we are security companies right so we are looking for any possible threats uh to our um sort of security model and then we realized well we can as well already use some postquantum cryptography that would make it uh you know basically uh uh sort of upgradable when the quantum threads would would potentially come and the idea is basically that it happens you have certain layers layers of the software of the device there's something called bootloader then the bootloader then the firmware and then the software that you would see as a application for example and so these two layers that that I mentioned the the bootloadader is

basically where we already have cryptography then we can build on in the future and the device is upgradable for for other postquantum cryptography uh that would withstand, you know, those threats. So that's the idea. >> Yeah. This is a conversation that has kind of exploded in in recent times because I I'm sure you've seen there's kind of this debate right now between Bitcoin maxis. They're getting really mad at Zcash and Zcash has kind of exploded in popularity as of recently.

Uh it kind of had uh a rise really out of nowhere. it was dormant, you know, for for such a long time, but it's really it's really taken off recently and it has sort of this element of quantum security. Um, there's a lot of other aspects to the new Treasure Safe 7. Maybe you can just take us through some of these things. You know, it it I have my treasure here. I can I can see it and it's still kind of like this, you know, trapezoidal looking thing. It's got a small screen and I kind of, you know, I've got some fat fingers like, you know, it's it's tough to push the button sometimes. You guys have had a lot of learnings and a lot of exp. Yeah.

Okay. There. Here it is. This is the new device. We've got it in front of us right here. Tell us about this. What how does it feel in your hand? This is Let's make this a proper unboxing video. >> Yeah. Yeah. Absolutely. So, actually I keep this in my pocket as almost like a token for good luck. Uh because well, we had a as you said like a big conference around the launch. Uh I had a speech there. I mean quite obviously as a keynote I had to introduce the the product. I mean, I probably did, but uh I'm not, you know, that well versed in public speaking and it makes me super nervous. So anyway, I I just keep this with myself all the time. But anyway, we are super proud of this device. It's our first uh wireless hardware bot. So it means it has Bluetooth. It actually has

um NFC as well for future applications. Uh but the Bluetooth is the main connection. How would you connect it to your uh mobile phone? um we couldn't really serve the iOS market uh which by the way US market is one of the you know it's probably like 40 50% of everything we sell sell so it's quite important but we are not able to uh to serve the mobile iOS use case specifically with our previous models uh because you cannot simply connect um the device with with with your iPhone let's put it that way uh so yeah we we have a Bluetooth device um some could argue well is it safe enough as scalable. Uh well, we actually u created our own sort of

protocol. We we call it treasure host protocol and it's like an end to end encrypted uh communication making it like really super uh super secure. Um so yeah wireless uh that's that's a big one. Uh then you can see we actually made uh it's attach display uh so we created a uh like a custom screen. So, it's actually in the treasure uh like the iconic sort of shape, the treasure shape. Uh so, we actually had to work closely with a manufacturer that would make specifically for us the the kind of the custom shape which yeah, it's quite nice because it's like edgeto edge and it feels pretty nice in in your hand. I could say also the device is um you know

quite heavy you would say but in a nice sense that it like uh you know it's not like a some plasticky gimmicky thing because it features a unibody metal um design which makes it really like high-end consumer electronics you know feel to it and then but metal doesn't you know you would not get the wireless connection through the metal so that's this is actually glass uh like a special kind of technology that vaporizes metal onto the glass in 14 different different layers and it makes like a super nice kind of colors um that kind of changes under different angles. Maybe you can even see it on the on the video and then

there's like this this uh this pattern that we that we have created uh which is quite neat uh as well. >> Very cool. >> Yeah. And then maybe the the biggest feature of them all probably would be that it this actually features a secure element the first ever auditable secure element in the world uh called tropic 01 and let maybe let me and by the way stop me anytime you >> this is great this [laughter] >> okay perfect if I was talking too long just feel free um but it features uh two secure elements but one of them It's actually uh the first ever auditable secure element in the world and what it

means is that it's sort of as open source as possible and maybe let me talk about secure elements in general what they are and why would you want them in device such as hardware wallet. So those are sort of specialized chips that uh protect the private keys from all kind of physical attacks. So if somebody would get hold of your hardware wallet and they would try to uh you know put like uh some laser attack on the chips and they would try to you know destroy it in the in the labs in like specialized labs the security limit would make it really super hard for uh for the attackers to to you know get the secret get the private key and therefore get the bitcoin and crypto itself from

uh from the device. Uh now the problem with by the way secure elements are everywhere around you. They are in your you know passport, credit cards, all kind of devices. Um but the problem from especially the ethos of Bitcoin and and cryptography and in general like the crypto industry >> is problem that these secure elements are usually closed sourced and you would have to sign NDAs with the manufacturer that would provide these uh these secure elements. So what's the problem with that? Uh well like five years ago or something like this we wanted to add the sec closer secure element into our hardware wallet and we signed the MDA and we found out within within days uh

that there is like a big vulnerability that there's like actual that you can extract the secret not even with a specialized equipment but with like very simple stupid attack right but uh the manufacturer because of the NDA disallowed us like legally to be able to talk about it publicly to the customers or even to our competitors that were actually using and still using these secure elements to this day. But simply c can I just can I just clarify what you're saying? You're saying that there's competitors of yours. Obviously you guys are treasures. So we're talking about not treasure companies that are currently using a secure element that >> is potentially corruptible and and easy to extract this the private key.

>> Yeah, it's not even potentially. it's like 100% because it's quite easy attack. Um, and definitely in the old older models it's they still have it. Uh, and they were even historically sort of attacking us for all kind of you know like that we don't have secure laments or whatever. Uh, but we we are not legally allowed to talk about it because the company could sue us, right? So, and that's where we we thought well this is completely wrong because then the ethos of you know Bitcoin by the way yeah Bitcoin white paper behind all [laughter] >> yeah it's in our office um you know like it's completely wrong right from the ethos of transparency uh so and that's how the idea to start a new company

around this um sort of began and yeah it's been five years in the making and now we are super happy that uh the transparent uh secure element is now in this device. >> Beautiful. And so that makes the new treasure safe 7 the only hardware wallet on the market with this device, this new secure element. >> Exactly. Exactly. >> It's incredible. Um do you anticipate that other wallets are going to upgrade their secure elements to ultimately match the security that you're talking about? it just, you know, it seems like every attack vector that's out there has been uh has has been taken advantage of, right? Um and so I mean, have we seen hacks of the secure element in these

other wallets before? Are they still you said they're still using it, but how can they how can they possibly still be using this if it's if it's 100% able to be extracted? >> Well, the problem is u multiaceted. let's say first they would not have to be aware of this right so we were kind of not me but we have smart enough people that were you know figure out that were able to figure this sort of vulnerability or find find this problem uh with the chip so that's kind of one way to look at it the other hardware wallets are uh like a long-term storage solutions right so most people are hodlers to certain degree definitely on the like for the self-custodial kind of again ethos and and reasons. So many

people would use these devices for many years. So I'm pretty confident these are still on the market. I believe the manufacturer already uh because we disclosed it to to them, right? So we the only person the only sort of entity we could talk about is where the manufacturer themselves of course which we instantly talked to them. So I believe they fixed it in the versions that are that they are selling now. But still I mean it's it's still somewhere on the on the market, right? So right so there are definitely still a lot of users that that would be there. >> And the second part of the question or maybe the question itself like whether we would like other companies to use it 100%. So uh I mean you could argue like how come you know C of treasure would would give this feature to the other

competitors. Uh but I think I think I mean we were also creators of the BIP 39 wallet backup you know the seat trays. I don't know if you are aware or but actually that's a standard that was invented by the original founders of the treasure company and now half of the industry uses it. It's open source anybody can use it. U so we more look at it more as a yeah becoming a new standard that other companies could could use and we would be actually super happy because ultimately and that's another sort of way to look at this. I'm not like a huge fan of like the hardware wallet uh competi competitors trying to kill each other because it's still sort of nich niche when you look at it and I think the mission is greater in the

sense that we should be after ETFs and exchanges and those kind of substitutions like in in terms of the product >> more than just trying to you know like uh pardon my words but like on the direct competition because we are in this game kind of together in some sense Right. So I mean in the end customers will choose the best product and I'm super happy for the competition. It's good to push ourselves uh you know against the competition but I would not I would still recommend for this to be used by you know all of our competitors very happy.

>> Yeah. Quick question. I this is kind of the last question on this topic and then and then you know there's plenty more that we can talk about here. We and it's a question from the audience. The audience asked, uh, are you going to be sued for announcing this vulnerability on the rollup? >> No. If if I don't give specifics, then it's fine. Uh, I actually, yeah, I I made sure if I if I don't talk specific, it's fine. >> Okay. Okay. All right. We want to keep you out of jail. You guys are doing great work. We want to make sure that you're still safe. You're going to continue to build. Um, okay. So, a little bit more broadly then, uh, I I have a few questions and and I love your mindset. I think you're, you know, you're thinking about it the right way.

the pie is a lot bigger. So, I I'm curious about your approach to self-custody in general. Um, we've seen the rise of a lot of custodial solutions that make it easier for people to access some of these financial products but compromise some of the security properties. For instance, ETFs in in the US at least, making it really easy for uh traditional retail users to buy some crypto products on their brokerage account. Black Rockck has these ETFs. Um, Bitwise, all of these different uh providers. Um, Robin Hood is listing some of these things and and you know, users are are interacting with crypto in this way, but it's not self-custodial

and self-custody is a pillar of our industry. And so I'm curious when you see some of these more regulated and um you know more institutional offerings for custody and for crypto products. You know it's helping expand the ecosystem and and you know grow the pie but it it's not getting hardware wallets and self-custodial wallets into the hands of these everyday users. What do you think this is a net good or a net negative for the industry as a whole? I think it's a double uh edged sword of sort because you could argue that this brings more attention to you know all of us to Bitcoin crypto it you know drives

the price up for sure so more people owning Bitcoin and crypto is you know probably getting richer in that sense um but also exactly as you say I mean of course we are self-custody company so you could not expect me to say anything else but I I believe you should self-custody or Bitcoin, right? So, actually I talked about a couple lessons uh around this topic uh in my keynote in the launch of of the product. So, maybe let me rehash some of the ideas there. Um yeah so uh well I started the talk with like a history lesson in the Czech Republic or the Czechoslovakia where there was like a big monetary reform um so to speak which basically most people lost their

savings like really 98% was gone because the country under communist rule basically decided to print new currency and then people were forced to exchange it within a month and at a rate you know 5 to1 or even 50 to1 one again like somewhere between you know like a 20 to just few percent that you will retain just a few% of the value it's just incredible right so and that was in 53 so actually like still my grandparents lives through this so kind of the family still remember it here and that's by the way why I think checks are historically a strong you know bitcoiners and bitcoin innovators um because we're tiny country but like still we are quite um good at

this I think but anyway but and then I I I asked myself. Well, so maybe would that would these things repeat? Like is it possible? And and if you do some research, there there is actually a lot of cases in the world today where uh yeah, countries are going through hyperinflations. Uh you know, or there's some or at least if not hyperinflation at least like strong inflation. Uh well, yeah, we could talk about Bitcoin for forever, but u I don't have to introduce it here, but anyway. So, it's still happening, right? So it's not like it would be some think of past and we would grown up and and those issues wouldn't be here. It's still you know it's still happening. Then if you look at the private sectors uh I was so surprised

when I was doing the research that in like like the last 100 years uh somewhere between 20 and 30,000 banks went out of business like globally right not not just one country but it's like it's a it's an incredible number. Yeah. And if you look at the century alone, it did somewhere like around 7800 or something like this mostly in US and Europe, right? So not even um like global south or some low lower middle- inome countries. So so yeah, these problems are still here. Um and then you still have the hacks as well as you already hinted uh previously like uh security is always a moving target, right? So u so you would say after 15 16 years of bitcoin being around we would

have figured out the security no like we would uh but yet by bit you know is the biggest recorded hack in the history of the industry and happened this year right so it's um so so it's still there uh by the way when these hacks happen such as you know FDX in the past we instantly see it in our sales so people then get the message well it's kind of makes sense to go go to to self custody and then specifically with ETFs um I mean yeah you don't really own the underlining asset and this whole industry bitcoin started as a you know uncorruptible money that is no not owned by any intermediary uh and then you can actually prove that you own

it so so then it's kind of a pity that that you would uh not own it directly when you can and by the way the ETFs exist because it's a business. So you have to actually pay a fee for uh you know to the to the intermediary or uh to the custodian in that sense. So uh so yeah my question would be like why would you do that when you have uh amazing solutions such as this [laughter] uh that is easy to use uh it's sleek you know um is yeah mobile friendly mobile first and and you don't have to pay any sort of recurring fees on owning your own money that you should actually own yourself right so so that's kind of the

pitch >> yeah yeah I I think there's a general trend here where we're seeing adoption happen. Uh and then you know the the asset is sort of the first entrance, the first door into the into the world. Uh, and then people tend to go deeper and deeper down the rabbit hole, especially as some of the events that you that you described, the FTXs and the buy bit hacks, when these things happen and people realize not your keys, not your coins, they come to a place where they can own their own keys and hardware wallet is a place where they can own their own physical keys. Um, another instance of this, but maybe to a lesser degree, and and I'm curious to get your thoughts on this, is uh some of these

social wallets, social login wallets. you know, we've had a few of these guys come on, uh, let's see, like Privy, uh, you know, Third Web, Magic, uh, you know, these guys, they're again, they're making it extremely easy and convenient for new people that have no experience custodying their own wallet, custodying their own private keys. Um, you know, they make it extremely easy to get on board and to get using one of these consumer applications for crypto very, very easily. But again, we run into this situation where not your keys, not your coins. Would you have the same thing to say about some of these social login wallets or generally how do you see this sector of uh custody?

>> Yeah, absolutely. We we like to say it's kind of a principle that's actually in our mission like like our mission statement, right? Uh we talk about three pillars of self custody, security, privacy and usability. And you can look at it as a uh like almost as a equation. So you would have security multiplied by privacy multiply by usability. And if you actually as a math if you remove one of those it you know becomes a zero right or it scramles as a as a equation. >> Yeah. >> And what I mean by it it's of course I mean um it is easy to you know have like a hard wallet on your phone for example.

um it is potentially easier and that's even cheaper right because you would not need this device um to start uh with you know crypto and bitcoin but uh the problem is the than the security part because um it's easy but uh hard wallets get hacked all the time right so uh so that's the that's the problem we are ultimately a security company and you know we have you know, a lot of engineers that are just thinking about this every day, right? So, so we are not in the business of making it um how to say easy beyond uh some reason that would that would

allow you to be you know fished or or hacked online. That's that's simply not why we why we are here as a company. >> Uh but we are in the space of also making it easy as well. I I I do believe of course we want to want the Bitcoin and crypto be usable. Of course uh but again this is our answer right so that's that's that's our solution to to the problem. >> Yeah. Yeah. Under understood. Um maybe there's ways in which these things can work together in the in the future. Um because we want the best of both worlds.

We want to make it easy for people, but we also want people to take custody of their own money uh and prevent a lot of the things that we've seen uh time and time again over the years that just continue to happen. Uh I I'm curious also about kind of the the demographics of Treasure customers. Uh how many of your users are uh more retail uh you know power users of the chains uh and generally using this for their own individual sovereignty versus enterprise customers? Do you have, you know, enterprise customers that are using treasure for custody?

>> So, we actually don't have official enterprise customers. Uh, I mean, or we would not know. Let's put it this way. We don't have like a official enterprise product. Uh, but I mean there could be, you know, businesses that actually use treasure uh to to custody uh their Bitcoin. But as we talked actually about this pillars, security, privacy, usability, privacy is important as well because we don't really know uh who are the the actual users. We don't we don't have any customer accounts. We don't we don't know who these people are. I mean we we do have like anonymous um analytics to help us to make the product better. Uh right. So which is which is sort of consensual like you can opt out but um or opt in. I I never know which which one is which but uh but you have

to give us consent. Let's put it this way. And then it's completely anonymous and and it's just like a statistics nothing else. >> Got it. Okay. Um, man, now that you guys have launched this, uh, you know, you've launched products in the past. I'm I'm curious what's next, right? Is there a go to market strategy that you guys are rolling out? Are you guys already starting to work on the next device? What are, you know, when when you're thinking about usability, privacy, um, the these pillars of hardware wallets, like where's the innovation? What are you guys optimizing for and what's coming next?

>> Right. So um one thing I already mentioned a little bit hinted uh we don't officially talk about it yet but uh yeah I think it's fine. So basically this device also has uh NFC in in in it. It doesn't have any features today but it sort of is NFC enabled. Let's put it this way. Um and so we want to make like NFC enabled backups. So today you know you make a backup of your private keys with with piece of paper or for example keep metal which is like a steel bar where you can punch in the words but we would actually like to use uh the NFC technology as well. So that's something currently we are working on and we would like to deliver it uh you know uh next yearish

and then software is huge for us as well. Uh so actually our software revenues are growing um quite nicely in that sense. So we have buy, sell, swaps, even staking. So so we are expanding uh the services there. Uh we would like to enable more functions such as you know for you to be able to spend um your crypto your hard earn uh coins uh through the mobile uh app as well. So, so there are different ways that we are considering today. But again from a very safe self-custody uh point of view uh what else is there and then and then yes we we are also working on new hardware devices as well

more in let's put it uh in the uh but it's it's a far farther out it's not anytime soon but uh let's say more in the um entry level category let's put it that way. >> Okay. Feel like there's alpha there that you're just you're holding on to, right? Can't can't disappoint the the PR department. Let it let it go too early. Um >> Exactly. >> Okay. Okay. Very cool. Um yeah, it reminds me that there's a software component to Treasure as well. Um and that is growing nicely uh as you guys are growing the hardware wallet ecosystem. You guys had a conference very recently, right? Just last week or maybe this week. Uh you had the conference. I was unfortunately not able

to make it, but I heard it was a massive success and you guys unveiled this new product. What else came out of the conference? Obviously, the the you know staple of the event was the new Treasure Save 7, but generally what what was kind of the vibe in the room. What were the takeaways from some of the other people that that were there? >> So, in one word, probably ecstatic because I mean everybody was super excited. Uh ourselves included, of course. I mean, we worked pretty hard. Everybody was sort of sleepd deprived and yet I I mean uh yeah we were going for many days sort of sleepless uh but the adrenaline was there so we're super excit I mean we have been working on this for many years you know when you think about it because hardware is hard

that's the famous saying and it's not sort of agile development it's pretty much waterfall uh and it takes you know many years to to be to be able to do it and then the production complexity is there as Well, so so yeah, but we enjoyed the the event like so much. I would say our guest I believe as well because I I really received a lot of positive feedback from from many people all around the world and and yeah, I think it's sort of like a new chapter for the company quite frankly. Uh it's something really to be proud of. Um and I think yeah, we will be sort of living from this moment for for some time.

>> Yeah. Certainly, man. Well, absolute pleasure. Uh I'm really glad that we were able to have you on. Um is there anything else to share? I mean, you guys again unveiled this. I think it's going to go live next month, right? So, people can't quite see it yet. Uh they can learn about it. They can they can see it on the website, but they're not able uh to buy it quite yet. Um >> they can they actually can. Yeah. Yeah, you can. We We are already in pre-orders. Uh I see pre-orders. >> We actually Yeah. Yeah. So we are actually um already in the production. So every day we uh we make a lot of these devices every day. But we actually have to wait uh for a little bit for a couple weeks before we have enough so we can satisfy

the demand because the demand is here. Um, we need to wait for to have enough stock to then be able to uh sort of ship it to enough people because otherwise some customers could be uh sort of uh there could be some delays for some customers and that would be pretty uh and it would be kind of messy in the communication to specific uh customers around the world because mind you we are selling everywhere around the world right so it gets pretty complex. So, so yeah, we are pretty happy that we have this production ramping up and in couple weeks we we will start shipping.

>> I love it. So, everyone can go to uh treasure.io. They can find the new Treasure Safe 7. Uh they can check it out. Uh they can research it. They can make sure that it works for them. They can also choose a few different colors uh and make sure that they find the one that they like uh and then pre-order. >> Uh very cool, Mate. Uh thank you so much for coming on, man. Uh, anything else to wrap up before before we let you go? >> Thanks for having me. I I really appreciate the conversation and yeah, please if you're in ETFs or on exchanges, please consider self custody.

I'm not even saying you can try even other competitors with this. Uh, but I I think uh yeah, give it a give it a chance. It's hardware worlds are not hard. I mean, there is this sort of um boss tip that are somehow like made for engineers or whatever. That's not the case anymore. It's it really is super easy to use. >> Yeah, I I'll say myself. I I have a treasure. It it is my first hardware wallet. I've used it for years now and it uh it's never failed. It works every time. Um and I'm looking forward to making the upgrade now with the new uh Safe 7. So, thank you so much for Matez and uh keep up the great work.

>> Thank you so much. All right, we'll see you next time. Cheers. >> Beautiful. All right, that's Matez. Guys, check out the new Treasure Safe 7. Uh, it looks super clean, super slick. Uh, hardware wallets are extremely important. Uh, I'm sure I mean, Mate hinted at it, but you guys have seen uh plenty of uh plenty of hacks out there, and there's just no there's no need for it. Um, you want to get a hardware wallet, you want to protect yourself. Um, and and there's really no downside.

Um, it's a couple hundred bucks. It's 250 bucks. Uh, and honestly, it's uh a super affordable uh insurance policy against any kind of hack uh that could happen on centralized exchanges uh or you know, a SIM swap is also extremely common. We see those things happen quite often. So guys, check it out. treasure.io. Get yourself a Treasure Safe 7 today. make the pre-order. Definitely worth it. All right, without further ado, we're going to get our next guest up in a few minutes. I think we're gonna have a few minutes before we get him up. It's HB. You guys know him well.

He's from Dragonfly. Plenty of spicy takes, hot takes coming your way in just a few minutes. We're going to go live with uh coming up in just a moment. We're going to go standby and we'll get up in a few minutes. Hey hey hey.

Heat. Heat. Hey hey hey. Hey hey hey.

Oh, hey. Welcome back to the show. It's a

pleasure to have you on again. I think the last time you were on, we were live from Permissionless if I remember correctly and you broke the internet with your claim that Stay King's [laughter] dead and yield go to zero. >> Yeah. Well, that did not happen. Luckily, DATs saved uh yields. So, nominal yields are are here to stay as long as DATs are here. >> Yeah, I maybe that's a good place to start, man. I mean, Tom Lee came out. He said the DAT bubble has burst and then I had Smokey on yesterday and he said $110 million DAT for Bar Chain. We are so back. I mean, it feels like Micro Strategies kind of tailoring away, tapering off their buys. I I did see that uh there's a new billion-dollar DAT

coming out of I think it's Huobi uh that is should be going live soon and usually these guys they announce before they fill their their bags. So we should see it uh we should see the execution of that here pretty soon and then the long tail I just it's just a swath of more more of these coming in where what's your take on DAT mania nowadays? Do you think do you think this is still going to have a material impact on liquid markets as we get into the long tail? I mean, how quickly are we going to see these MNABs go negative?

>> So, the first thing to recognize that a lot of the MNABs, maybe even more than half of them by number of companies are negative. Now, the biggest ones are not negative, right? So, if you look at Bitmine, you look at Micro Strategy, they are not negative. And the other thing to appreciate about them is that almost all of the trading volume in DATs is just those two names. It's something like 90 plus percent of the trading volume is just Micro Strategy and Bitmine. So you can kind of ignore almost everything else at this point because nothing else has really permeated into retail uh the way that those two names have. So now that being said, uh I think it's pretty clear from anybody who's a participant in the market that DM mania is over from the private side in the sense that none of

these new DATs are getting off the ground. Uh a lot of the fundraisers fell apart. Uh that even even that people thought they were going to close. Uh a lot of the commitments are getting pulled. A big part of the reason for this is just that people don't have that much money anymore to say nothing of the MNAVs themselves compressing, right? when all these assets are trading at, you know, 3 4x um or even at 2x or even 1.5x, then it's just kind of free money. It's a free money machine. And the way the capitalism works is that if there is a free money machine, people will keep pressing the free money button over and over again until it stops spitting out free money. And it stopped spitting out free money, so people stopped doing it.

Yeah. Um, now the dats that currently exist, Micro Strategy and Bitmine, they're somewhere right now between I think it's like 1.15 and 1.3 >> lower than they've been recently, but they're still positive. Yeah, >> they're still they're still positive. Um, you know, in the limit like as long as the MNAV is above one, it is accreative for you to issue more shares and go buy more of your underlying. So whether that's Bitcoin, whether it's ETH, like it makes sense for you to do it mathematically. Um, and I suspect that both these two assets will keep doing it. And if it trades below NAV, they'll probably stop and take a breather and wait for the market to kind of pull back up and, you know, spend more time talking about the asset than actually going out around and buying the asset. Um, that was inevitable. Like

there is there's just no way that in the limit these things are going to trade materially above NAV. they can trade a little bit above NAV because of the fact that they're doing this financial engineering, they're staking, they're they're earning yield through all these other strategies, but them maintaining like 1.5 or even 2x is just mathematically impossible because they would just keep issuing more shares and keep buying more more tokens until like all of the financial assets in the universe are in debts or at some point the MDs have to go down, right? There only two options. Um, so I I don't think this is an unsurprising outcome, >> but uh a lot of the people I mean you know this like uh this bear chain uh this bear chain one wasn't it only 50

million I think that was cash >> something like that. >> Oh maybe I saw $110 million in the in the pipe but it could have been 50 and then they had to back it with some cash if you contributed in kind is what I saw. >> Something like that. I don't remember I don't remember the exact numbers. It was a mix of inind and cash. Yeah. if I recall and um you for this for this ETH one I mean this is like the Asian one that I think it was like Hashki Venbushi Sequoia China now called Hongan they were potentially going to get involved in this one um it wouldn't surprise me if that one just never launches because they're just like hey look at these MDAVs they're awful even Metaplanet the one in Japan has traded down really dramatically over the last couple months

and Metaplanet makes more sense than probably any other data I've ever seen Because in Japan, a corporate Bitcoin vehicle is actually a tax arbitrage. It's a it's a it's tax advantage relative to just buying Bitcoin because Japan is this like crazy high crypto tax. So if you buy Bitcoin in a corporate shell, it's actually better tax- wise. >> Whereas in the US, it's the other way around. It's worse to buy Bitcoin in Micro Strategy because Bitcoin in Micro Strategy, you pay corporate tax on like all the stuff in payroll taxes and all this other stuff that's like a drag on everything that's happening within the Micro Strategy level. uh whereas an ETF is tax advantaged. That's why ETFs exist. Um so there's there's a lot of weirdness about the fact that this has even worked in the US. Uh and and the

premiums have been as elevated as they have been. What we're seeing is the market normalizing. It's it's rationalizing and that that's an inevitable uh outcome of just capitalism. >> Yeah. Yeah. And mean reversion is one of the things that's just tried and true. These things come back to reality and they normalize out [snorts] like you're saying. I I think you also brought up the ETFs and I had James Seafar from Bloomberg come on last week and describe essentially how a lot of these things are chomping at the bit. 150 plus ETFs that are that are primed to go live and we're set to go live until the government shutdown once the government comes back. It's really just a matter of time. These things are inevitably going to go live. But I'm curious as as you're looking at the DAT landscape and you're seeing a little bit of maybe we call

bull market fatigue. We're not seeing as much demand for these things. Do you think that's also going to carry over to the ETFs? We're not going to see as much pent-up demand like we saw when Bitcoin ETH, you know, uh, uh, launched back in 2023, I think, and then ultimately rose a lot in 24 had a ton of demand. We're just going down a long tail. We're not going to see as much demand as maybe we're expecting from these ETFs. >> Almost certainly. I mean, so it was actually 2024 that the ETFs launched. So, it was just last year, beginning of last year. And if you remember the Bitcoin ETF when it launched, it was just this rip roaring crazy ride. And then the Ether ETF launched and it was a massive disappointment.

>> And I remember Ether rallied like crazy into the days of the ETF launch. And then after the ETF launched and people realized like, oh, nobody wants this. It's getting almost no trading volume. Like the inflows are very weak. Uh it just kind of slowly started driving down. And then of course ETH E, the Grayscale Trust, >> could basically just start selling. it was just massive amounts of selling of of uh of the of the first and biggest ETF. Um now other assets aren't going to have that problem. There's no equivalent of ETH or GBTC for soul or for XRP or for any of these things. So that dynamic won't be there as there was for the E3 ETF. But the general sense that like hey an ETF is this magical moment that retail can finally buy this thing that they wanted. That's kind of what the

DATs were supposed to be. >> The DATs were supposed to be like hey it's what's even easier to buy than ETF? the answer is in equity, you know, so the story of like, okay, there's some access story that the ETF is now, you know, opening up the the floodgates, you know, maybe if Black Rockck launches an ETF, they'll be able to market this to a broader set of buyers. Um, but these kind of longer tale ETF issuers, I I don't see a realistic story. I mean, even when Black Rockck launched the Ether ETF, it massively underperformed for a long time. >> It was really when Ether started rallying this year that the Ether ETF started blowing up to the extent it has today.

>> Yeah. So just to be a little reductive, I mean like you said the gray the grayscale e we don't have that overhang on on some of the long tale of ETFs but again we're not seeing a lot of the the demand. There is fatigue in the market. Do you anticipate that these ETFs are going to be they're going to go more like Bitcoin and be a buy the news event or they're going to go more like ETH and be a sell the news buy the rumor sell the news event? >> Honestly, my view is that it's neither. I think like when you see these ETF announcements now the markets aren't even moving.

>> Yeah. >> Like you know somebody announces like oh we're doing XRP ETF XRP moves like 2%. >> Right. >> You know it's like it's it's nothing. And I think the market is correctly discounting that this is not going to be that impactful to the underlying. >> Now if Black Rockck comes in and they say hey everybody get out of the way. We're launching an XRP ETF. I think the market would react because they understand that Black Rockck has distribution and a sales engine that nobody else has for these products. But, uh, just having, you know, some longtail ETF issuer say, "Great, I'm going to issue, you know, Doge ETF." I don't think people actually believe that's going to move the needle that much.

>> Yeah. I'm just I I I like to segue into like what actually moves the needle these days. Is it is it big names and tariffs? Because I'm generally looking at this and I'm seeing the same thing. I'm seeing that we have all this bullish sentiment really. I mean, the Fed is hosting a payments conference. There's all of this this, you know, it it feels bullish. It feels great with to see the level of adoption and generally the Overton window of crypto just open up and everyone is is kind of [snorts] open for business now. But we're not quite seeing the reaction in the market that would warrant or justify these things.

Whereas, you know, [snorts] six months ago, a year ago, we would have think every single one of these announcements was the biggest thing since sliced bread. It you think it's a matter of fatigue? Is it just where we are in the market? Is was it that we were so overlevered and we had so much open interest in the market and we needed the wash that we had a couple weeks ago in order to kind of clear things out and kind of start a new what just what if you have your you have your finger on the pulse you know I you know you're as much as anyone these days just zooming way out where do you think we are and what do you think just the vibe is if you're if you're doing a temperature check on the industry >> look I'm not going to tell you anything

you don't already know which is that uh like the fundamentals in crypto have really never been better for any time that I can remember being in this industry, >> but animal spirits are pretty low, right? And so, you know, why is that? One thing, of course, is that >> uh the reality is that especially the flush that happened um a couple Fridays ago, the the big leverage blowout um that that like retail is out of money and retail at the at the margin is a marginal buyer for a lot of these assets, especially in alts, right? So, so Bitcoin's holding up okay and that's the, you know, the the reality is that Bitcoin is the institutional bid. That's where all the institutional money is going. Uh, a little bit to Ether, but mostly to Bitcoin.

>> And everything else is retail. And to the extent that everything else is kind of lagging, it's not really doing that amazing. And the longtail of alts is really dragging. Um, you know, even before the election, like even last summer, alts were higher than they are now. uh which is which is weird because you know last summer Trump wasn't even elected there you know there were no laws government didn't own any crypto uh there was no you know there was no Genius Act there was no Clarity Act there was no none of this stuff was happening you know the Fed was not announcing that they're going to incorporate Fed master accounts for stable coin issuers or whatever none of this stuff was even on our bingo cards a year and a half ago and yet prices were higher um so a lot of this is connected

to macro a lot of it is connected to retail the fact that retail is just not they they just don't have the money. >> Um, for the most part, the institutional bid has been holding up the market and retail has been bleeding. And now, why is that? You probably just saw today, uh, Beyond Meat is up 600%. Uh, you saw, uh, what was there was some other meme stock that was pumping really hard this morning. Uh, >> I didn't see I was Beyond Meat I saw was a 14x in the last few weeks. I I didn't see the other one. >> That's right. That's right. I think it was it was like it was like 600% pre-market or something. There's just so like basically the answer is that the AI bid and the the the crazy volatility that's coming back to the stock market >> is ultimately pulling a lot of the hot

money away from crypto. And where is that hot money going? The answer of course in the stock market there's two assets that retail's trading which is Bitmine and strategy which means that yeah none of that money is going to Salana. None of that money is going to you know arbitrum or um you know whatever anything further on down the list. So what you're seeing is a tail of two cities, which is that Bitcoin and ETH are holding up pretty well. Not not amazing, but they're holding up pretty well. And everything else is kind of dragging because that's just not where the hot money is. So I do think that changes. I think this stuff is cyclical.

And I don't know that it's that easy to foretell where, when, and how it starts. Um, and so I think for the most part, my advice to investors in the space is just be patient. >> You have to be more patient than you think you're supposed to be. Yeah, that it feels like sideways is kind of max pain at this point because people are just fatigued. They want to go on vacation. They want to take a holiday and it it the market's just not letting them because it's not letting them put on a bid and just hold, but it's also not letting people just cash out because it seems like there's enough substance where there's still things that could >> Yeah, that's right. I mean, look, rates are coming down. We know that um there's going to be a new Fed chair within six months, right? And probably whoever

Trump puts in there is going to be a let it rip kind of guy. Um and so we're going to be in a very different macro environment a year from now. And that almost certainly is going to is going to impact risk assets, right? Because all that money that's sitting in money markets, that's sitting in T bills, that money is coming out and it's got to go somewhere. So crypto is almost certainly going to be one of the places where it goes. Uh now, how long does that take? When does that happen? I don't know. Uh but that affects both institutions and retail. >> Yeah. that have their money locked up in these assets right now. >> Yeah. So, I I'm curious about this because I I've started to to keep track of macro a little bit more. Uh I love Arthur Hayes. You were on a panel with

Arthur Hayes. Kind of had a fireside chat with him out in in Singapore. Um, I'm curious what your takeaway from macro is because at at the 100,000, you know, foot view, it's it's tariffs and then it's usually like, okay, do whatever the opposite of of the tariff announcement is, but there's a lot more macro uh money printing that could or could not happen at play here. And and you also mentioned the Fed governor situation, whether or not they uh you know, Trump takes control of the Fed and he's able to print kind of at his will um before May of 2026 or if we're going to have to if we're going to have to wait for that. What's your what's your tabs on macro? Maybe first, was there any takeaways that you had from that conversation with Arthur or broadly, you

had a lot of good panels out in Singapore and Korea? What were some broad takeaways that you had from from the Asia conference tour? I mean, look, my my takeaway is always that no one knows anything. We're all roughly we're all basically in the same boat staring down the same river and like, you know, people will say like, "Oh, I can see that there's a curve coming down and that this thing's going to happen. Oh, I I know it that there's a rainbow right at the right around this corner." I I don't know. No one knows anything. It's it's macro, right? Obviously, if the market knew something, it would be priced into the market. So, I I tend to not uh be too bought into people's prognostications about macro beyond the obvious stuff, right? What I mentioned is obvious. what I mentioned is what everybody already knows. I I do

think in crypto it is possible to see around the corner with respect to flows. Um in just the sense that it's difficult for crypto to price a lot of these things in because there isn't that much institutional capital in alts for Bitcoin. There is for Ethereum there is in alts there is no marginal buyer who can say like well this thing is clearly be worth more in six months so let's just bid it up now. U there is nobody who has that money to do that. So that's one of the reasons why I think you can just kind of see far enough down the future and and that's why it's sort of being patient can be an effective strategy with with respect to a lot of crypto markets. Uh for Bitcoin, I don't really know that anybody has any alpha at this point. Um I think it's just like

this big Ouija board that we're all playing together and just kind of pulling in as we go. Like it's it's very unintuitive that you've seen uh bit uh uh gold >> rockets all-time highs. Same thing with silver, you know, silver rallying like crazy. Obviously, there's been a pullback in the last couple days where uh gold went from like it was like, you know, 4600 down to like 4K. So, big big pullback in gold. Um but uh still massively up on the year. Very very good year for gold. Nowhere near as good of a year for Bitcoin. Uh but if you if you line up to when Trump got elected, then Bitcoin has outperformed gold over that period of time. But from beginning of this year, gold's outperformed. Uh that's weird, right? If you think that what's going on, the way that many people in macro describe this is the

quotequote debasement trade, which is okay, the dollar has been weakening. Um, you know, people are moving into harder assets. They're they're concerned about uh debt levels. And if you're concerned about debt levels, the natural thing you're going to go into is gold. Maybe that's what's driving this gold trade. The reason why that doesn't really make sense is like, okay, one, Bitcoin is not responding the same way, >> right? >> Um, and Bitcoin historically has been this kind of debasement trade. Uh, that's classically how it's been marketed. Um, and then second is that you can also see there's a lot of markets that already exist that anticipate future inflation. And if you're implying that you think that, okay, the dollar is going to debase, that probably means that there's going to be inflation because dollar is going to buy you less. It's going to buy you

less eggs and less metal and less houses and less, you know, everything that that that's what debasement means. Um, and we are not seeing an elevation in future inflation um expectations for the dollar. So, it seems that people are just bold up on gold. Maybe it's this more like multi-olar world that we're betting on. Uh but then again, Bitcoin should benefit from that. So, I think a lot of this stuff is very difficult to understand what the market thinks right now. Um and that's part of the reason why my answer to most of these things is to just be patient, just chill out. I don't think there's one consistent narrative that explains the whole thing.

>> Is is there anything that you do to help you stay patient on the investing side? if you're looking at more venture than you are liquid or just if you're just taking a break and like zooming out and what do you what do you do in your free time when you're being patient? You're not taking so much of your time in the market. >> Yeah. I mean, look, I'm I'm a VC, so it's kind of a little easy for me to say be patient because that's literally I'm forced to be patient with a lot of my investments. >> Exactly. I have I have a long time horizon. Now, we do we do also manage some part of the liquid book. So we do make decisions about liquidity and when we sell things and obviously so liquidity if you're doing crypto liquidity matters to everybody and when

you get in and out of markets is is a universal. So, um, the answer from my perspective is just that like look, you're always looking at the delta between fundamentals and prices. And when fundamentals look this good and prices seem not bad but mediocre, >> the answer in every time, like look, I've been in crypto now for like eight years. Uh, every single time in the past when I thought, hey, this that doesn't look like a great time to exit, the answer was chill. Just chill. Relax. like, you know, go go read a white paper, go learn something, you know, go try out some products that you haven't used before. Um, but like don't start making panic decisions because eventually the market catches up with fundamentals. It just takes time.

>> Yeah. Got it. I just going to double double double down on my question. What do you do in your free time? Like I I I totally agree with all your patient mindset, but I am just curious. [snorts] >> Um, free time, honestly, I don't have that much free time these days. Uh, I kind of work like a dog, but um, free time that I have, try to work out, try to eat well, um, spend time with family. I, um, try to go hiking, although the weather is kind of turning now. Um, and, um, you know, just chill, watch a good movie, you know, play a video game. I I don't know. I don't think I'm going to surprise anybody with what I do in my free time.

>> We're taking it easy. This is what happens. We get bull market fatigue and then and then our podcast, you know, we just take take a little more more laidback. [laughter] >> Yeah. Yeah, I don't think I have any great advice about how to spend your free time because I I anybody who knows me knows that I do not um indulge that much in free time unfortunately. >> Okay. Well, in that case, we we'll go back to fundamentals here and how they may or may not catch up with price. I I think one of the most fundamentally interesting and bullish things that came out just over the last couple days was this Fed payments innovation conference. I I mean just to see our industry be recognized at a a a scale [snorts] like this was incredibly reassuring and and encouraging uh to be kind of taken

seriously like this when we all sort of knew what was brewing underneath the surface. Uh Fed Governor Waller announced this uh skinny master account. Uh you and Dragonfly are very involved in the stable coin boom that's happening is I think a stablecoin super cycle. It's been coined. Um, and so one of the things that came out of this conference was that stable coin issuing companies could get Fed master accounts or these skinny master accounts at the Fed. What's the significance of this? H how could this change the stable coin landscape by no longer requiring that these stable coin issuing companies go through intermediaries to get their treasuries or or to hold uh cash?

>> Um, candidly, personally, I don't think it's that big of a deal. Um, I mean, I think obviously as an industry we're not supposed to say that supposed to say like, "Oh, this is amazing. Thank god that the Fed is finally acknowledging that our industry exists." Um, but I mean, you know, was that the problem with Circle or with Tether is that, you know, they had to go through somebody else in order to get their um hold their treasuries or to hold cash? Um, I think them being directly on the balance sheet of the Fed is more secure, but it's not like BNY Melon or State Street or Cantor were not secure. It's not like people were worried about these guys being intermediaries. Um, so I think it's a streamlining. That's nice, but does it really fundamentally change the game?

Not really. Um, and of course, like the the thing about having it these sort of skinny Fed Master accounts is that they don't have any yield. So, you can't get the overnight Fed funds rate on your cash the same way that a bank can, in which case, like it really is just the same as parking your money at a bank that is actually getting the yield, right? So in some sense it's actually negative sum to do this because if you give your cash to you know let's say you give it to BNY Melon okay BNY Melon then goes parks that at the Fed and then earns the overnight rate uh if you directly have it in a Fed funds account uh or sorry at a skinny Fed account then you're earning zero nobody's earning anything on the cash so it's kind of

worse from a net perspective um and you can imagine maybe what it does is it gives leverage to Circle to go to BNY Melon and negotiate more of the overnight rate that >> that BNY Melon is making because they're say look if you don't offer us some of this we're going to go just get our own account. Um >> if I'm bank of New York I'm telling Circle like you're not going to go to the Fed. You're not going to get any more interest over there than we're going to give you here. >> Right. Right. I mean I don't know that's the thing. Yeah, you're right. I don't know that it's going to have that much of an impact at the end of the day. But that's the only thing I could imagine it would have an impact on. Beyond that, I think it's the the Fed is being I think

it's going to matter a lot more for FinTechs. Uh that that's that's the thing I'll say for fintex. I think this matters a lot more than for stable coin issuers. Stable coin issuers, they don't need the Fed to affect payments for them. Uh like what they have right now is is mostly fine. >> Um I think fintexs that basically can circumvent the banking system entirely and don't have to go through bank risk controls and like you know, hey, I don't like you as a fintech or I don't think you have enough uh track record or whatever. If these skinny fat accounts can just be adopted by fintex, that's great for fintech innovation. But as far as I understand it, I don't think it has that much of an impact on stable coins.

>> The the result of this from from my perspective is that the current [snorts] banking regime and and how we have, you know, some too big to fail banks and we have commercial banks, regional banks, if everyone kind can go directly to the Fed, the sort of kind of blows the system up. Okay. What's the hierarchy once everyone has the opportunity to kind of go direct to the source? >> Um, so, you know, to be clear, because you are not going to be earning yield at a Fed master account or a skinny master account, whatever it's called, because you can't earn yield. Um, it is more attractive to you, all things equal, to go through a bank, okay?

>> Because the bank can offer you some yield, right? They're not going to give you the whole yield, but they're going to give you some yield. Um, so they intentionally designed it that they do not want to intermediate commercial banks. That's been the Fed's MO from day one and it's part of the reason why the Genius Act does not allow stable coins to pay yield is that they do not want to intermediate the banking system. They want to make very very clear commercial banks are here to stay. We don't want there to be a big stink. We don't want there to be a big shakeup. We don't want there to be instability. We don't want deposit flight. We want everything to mostly be as it is and for stable coins to be this like cute little thing over here. That's what the Fed wants. That's

how this whole thing has been designed, right? If you remember way back in the day, there was this uh this uh this thing called I think it's called the Bank of Chicago, which was like this a narrow bank. And a narrow bank is this idea that you take a you you get a bank charter and you open up a bank at the Fed and you create a full reserve bank. So most banks are fractional reserve meaning, you know, they lend out most of the money that they're getting and at any given time it's like 30% reserves or something like that. Um, a narrow bank means that all the reserves all the time are sitting at the Fed and they're just earning the overnight rate and they're passing the overnight rate back to you.

>> And uh, they were trying to apply for uh, a bank charter from the Fed and the Fed denied them. This was like in 2018 or something, 2019. Fed denied them and it was a big kind of brewhaha. And the reason why the Fed denied them is they said if we offer this if there is a bank that is allowed to be full reserve and have a bank charter and offer yield that is going to be so attractive to retail that is going to drain deposits out of the commercial banking system and cause a financial crisis. Right? Basically all the money is going to leave JP Morgan. It's going to leave Goldman Sachs. It's going to leave uh you know Bank of America and Wells Fargo and it's all going to go into this narrow bank [clears throat] >> because it's just better. Right? It's

just it's full reserve. it's completely safe and you're earning they're just passing through the overnight rate. They have no branches. They have no employees. They have no nothing. It's just like this this this you know pass through. And uh the Fed was like absolutely not that this this will be the end of the American financial system if we do this. So that should be ringing in your ears when you hear about stuff like this like oh skinny Fed account. How's it going to work? The answer is of course no yield. >> Right. Okay. >> How is stable coins going to work? No yield. Right. >> Right. The answer is the Fed is willing to do this as long as there's no yield because that is going to entrench the existing commercial banks uh for most use cases. Only in cases where it's really cumbersome to go through the

commercial banks is it going to be the case that uh these things are going to be attractive for for a fintech or for a new company, >> right? And so for stable coin issuers, [snorts] they own the treasury. they can capture all the yield and then they can choose to pass it through to the users or not depending on if they're they choose to be genius compliant. And so that creates a large spread here where if users or or consumers are not able to go and make deposits at a narrow bank like Bank of Chicago and get the Fed funds rate uh because you know they have to go sit in their savings account at their regional bank and get 0.001%.

Then it means it's going to force these companies to go and get treasuries. Is that is that kind of the case? And that's going to be closed to a certain set of institutions that are able to to institutionally custody and hold treasuries and and that is going to create kind of this this layered system that we want so that we can extend credit further and further down the line. >> That is basically correct. Um from the Fed's perspective, they see stable coins as a product for non-Americans. And if you're a non-American and you can get access to a stable coin that doesn't pay yield, you don't care. You're like, great, it's a dollar. That's that's all I fundamentally want. Um, and so this whole system is really being designed, I think, with that as the mental model for

what stable coins are for and who's going to use them. Uh, if it was Americans that are primarily using stable coins, then a lot of this stuff feels like very anti-consumer, >> right? A lot of this stuff really feels like hey why are you why are you making it so that this new product is hobn is hobbled >> and uh it's unable to compete on a level playing field with other fintech alternatives. Uh if the answer is that like well but this thing is you know completely outside the US banking system these are all incremental owners of US dollars US debt then who cares you know we're not we're not hob we're not hob uh uh what's the word I'm looking for? um uh we're not hobbling them, handicapping them. We're not handicapping them with

respect to what they might otherwise get access to because if you're in China, if you're in, you know, Japan, if you're in uh India or whatever and you're getting you're getting UST, you weren't going to get dollars anyway. >> So, this is your only path to getting dollars in which case you don't really care about the fact you're not getting yield, >> right? And and from and it's a win-win because they they can get access to the dollar. Um, and then the the United States can continue to expand global homogyny of of the dollar and dollar dominance, but they don't have to pass on any of the yield. So, they can kind of get the best of both worlds. Um, let's let's switch gears a little bit.

Let's let's talk to let's talk about this longtail altcoin, good TGE, bad TGE price rise uh situation that we've got going on. >> Uh, you should see the chart up there now if you click on the little box. and you commented on this. Uh they put they put a lot of coins up in the strong TGE half of this uh this plane. Um when in reality we could have flooded this graph with weak TGES uh that occurred over the last the last uh the last 12 months. And I saw your comments on this was essentially this. It was look we could have added a lot more coins here and we chose not to. It would have thrown the

proportions off a little bit. Are you looking at this and you're thinking to yourself, "Wow, did we did [snorts] we actually have that many strong teach?" What maybe I'll just ask you, what was your first impression when you see this and and before you look at it too closely, it's you're looking at this, what what's your initial reaction? >> I mean, the first reaction is, okay, what's the story this person is trying to tell with this data? I mean, data is maybe a strong word. Like, I don't I don't even know what these lines are. These red lines just seem to be doing random things. Um, but let's ignore that for the moment. >> Uh, and then, okay, look at the axes. Okay, there's like strong TG versus weak TGE and there's token is down, token is up or the axis, right? The the Y- axis

and the X axis and Okay, so what is a strong TGE? I think what he meant by strong TGE is like hype that there was a lot of hype around the TGE. Um that being said, like a lot of this is a little bit in retrospect because, you know, did Scroll have hype around the TGE? Yeah, it did. Did uh did Sonic have hype around the TG? Yeah, it certainly did. Um, so some of these things are a little bit just so stories of like, well, we're kind of memory hauling the fact that this was hyped at the time. Um, relative to the fact that it's done well. Uh, and then, you know, then you you get like corn and redstone or redstone super hype TGES compared to those. Like I don't know. It kind of feels like he had a story to tell and he

decided to tell that story by just moving, you know, this very arbitrary thing of strong versus weak TGE. But fine, let's take this data at face value. Let's assume that it's true. Um the the the issue I have with this is that look when whenever you have data that's this messy um it's always there's a lot of degrees of freedom and uh you know there's there's the old line of uh there's lies damned lies and then there's statistics right and this is kind of very much in that in that vein which is that look when you have this many degrees of freedom with your data there's just a lot of stories you can tell and it depends on what story you want to tell and you can find a way to tell that story. So, the story that this person was trying to tell uh in the

tweet alongside this chart was that this strong big bang TGE thing is over. These big hyped launches have mostly been failures. And the thing that you really wanted is to be in the bottom right quadrant. And what is the bottom right quadrant? Bottom right quadrant were things that had pretty crappy TGEs that hung out for a very very long time and then eventually blew up. So the the two examples are Zora and virtuals, right? Which Zora and Virtuals both launched with little fanfare. they were relatively small applications and they blew up and got really big and his his you know the learning that he's supposed to take away from this chart is that's what you should do. You should be like virtuals or Zora, not have a lot of hyper on your TGE and slowly become this like big, you know, runaway success and

have all your holders uh participate in that in that success. And I look at this, I'm just like this is this is just obviously stupid. This is [laughter] extremely stupid advice. Basically, what ad like what does that mean? The advice is basically like okay launch be a failure and then become a sleeper hit. That is not advice. That's not useful advice. Nobody could can plan around doing that. Um if you become a sleeper hit that's amazing but that's not a strategy. You there is no such strategy. Uh the second thing as you pointed out is that the vast majority of tokens are failures. Vast majority of tokens there's no hype. There's no nothing. So that bottom left quadrant should have 100x the number of tokens in it. Right.

like there's just this gigantic graveyard in the bottom left that he is not pointing at because it doesn't help tell the story that he's trying to tell. Uh and when you do that, it becomes more obvious that the bottom right are outliers. >> These are not that again, that's not a strategy. You cannot decide to do that. And the top half of the quoteunquote strong TGES, half of them are winners, half of them are losers, which also fails to tell the story that he's trying to tell, which is that obviously strong TGES are overrated and you should not do a strong TGE. >> Do you think Do you think he missed anyone? I in any quadrant really I the where you want to be is the top right quadrant. You want to you want to have a strong launch. You want to have a strong

community build up have a lot of uh demand around the product and then launch at a fair valuation a fair float and ultimately rise from there. Did he leave anyone out of that category in particular? But but more like is there anyone that comes to mind and you think why are they not here? They clearly had you know a terrible TGE or they went down. anyone that sticks out as uh being being left off? >> I mean, I'm not gonna I'm not going to call people out for shitty TGES. I think for for strong tokens, um it's hard to think of other great example. I mean, SUI, but the Sweet TG was was actually a little while ago and then the runup happened over the last year and a half.

Um so I don't know I don't know if you would count that. I don't know when these uh when the sort of specific date uh that's set in stone for when these launch. Then of course there's Athena. Um, uh, so I I can't I don't know about whether they launched I don't know if he had states on here, but I don't know if it's like launched the beginning of 24 maybe is what this chart is meant to convey. >> Yeah, >> I think these are most of 24 launches. >> 24 25. Yeah. >> Yeah. I think these are most of 24 launches. Um, so I don't know. But then if you're including like Zora and virtuals, >> virtual virtuals have been around for years.

>> Yeah. Yeah. Exactly. These have been around for years. So it's a little again like you're sort of cherrypicking to tell a story you want to tell. Um, which is fine, but it's just like, okay, is that story true? And the argument that I made in my post is that no, I think the story is actually just wrong. And not just wrong, it's like worse than wrong, it's unhelpful. So, if the story you're trying to tell founders is like, don't have hype around your launch. Is that really the right advice for a founder? Uh, because the vast majority of things that don't have hype just they die a silent death. they don't even have a chance of getting into the the the the top quadrant or the top top right quadrant. Um, and so I think the the overall thing, look, I think a lot of

people have have noticed the vibe shift in tokens and in TGES, right? And and I think in a way that's what this post is a response to is the vibe is bad. >> A lot of these tokens, a lot of these TGs in the last year have been down. Almost every TGE has been down. And uh, now that's true in large part because alts have been down >> since the beginning of this year. You know, if you remember, alts were rallying like crazy when Trump got elected. And almost everything is down from the beginning of this year. Even Salana, which has had a blockbuster year with respect to fees, is down since the beginning of this year. Um, and so that is the backdrop for looking at this any meta stories that look the beta is down.

So if the beta is down, it's not surprising that alts in general are down uh or that TGES in general are down. Um, but the fact that TGS have been so weak, >> I think people tend to uh overdraw conclusions or they try to find too too narrow of stories to explain what's going on. Um, you know, I think people also don't know just general facts about how the distribution of assets works. Generally, most IPOs trade down after their like a year out of IPO. Most people don't know this, but I think it's something like 60% of IPOs are worth less than they were at IPO date. And that's even inclusive of the pop that generally happens during most uh ICO ICOs IPOs. IPOs, right? Most IPOs trade down. Now, that being said, despite

that, IPOs are still profitable on average. Now why are they profitable on average even if 60% of them are down a year out from IPO? The answer is because IPOs are power law distributed is that a small number of companies end up making a shitload of money and becoming 10x 15 20xers and most companies do okay uh and the average company goes down you know moderately right uh tokens are the same way is that tokens you know if you think about when a token TGES it's like three years after or two years after the project was initially created >> that's like a series A startup >> you know normally in in startup land We still consider series A to be power law distributed. Meaning that most things

fail, a small number of things do well and one or two things are going to knock it out of the park and do amazing, >> right? >> And that still applies to tokens when they're ting. They're still very much a part of that power law distribution. Now, when you get into the S&P 500, it doesn't look like that anymore, right? The power law collapses and it becomes much more normally distributed. >> But at the early stages, the power law, I mean, it's it's part and parcel of what we do as venture capitalists is that we have a big portfolio. We understand most these things are going to go to zero, but a small number of things are going to do really really well and they pay for almost everything. >> Yeah, >> that is how tokens are mostly distributed in normal times. E >> even the S&P now the bag seven is just

continuing to make most of the gains in the S&P and and it's just compounding what what you're saying. >> Um and and so this is the nature of the hyper financialized world that we live in. price discovery and liquidity is coming earlier and earlier in the capital formation life cycle of a company and and I mean this is extended this is even to the nth degree in crypto where we have pre-markets on mega e that just launched their sonar their sonar around and now we're getting pre-eposits on hyperlquid or excuse me pre pre-market uh perpetuals on hyperlquid which is just an incredibly early place to start price discovery and and a recipe for incredible volatility maybe to to wrap up on on this chart Is there what are some of the the TGEs that are

coming up that you know don't belong here because they haven't launched yet but ones that you're most excited about you know coming up supposedly in the next three six months any of them that are public. >> Yeah. So we're we're investors into Mega ETH and into Monad. Um obviously two big TGES that the market is very excited about. Um I'm eager to see how they fare in this market and I've also told both of those teams that I think it's a great time to launch uh because markets are depressed, people are down bad. uh valuations are are smaller. I think that's good. That's a healthy thing because it gives you a chance to allow people to participate in the rise um as the market gradually recovers. And of course, it's not guaranteed that any of these things are going to go up. Uh you have to actually deliver. You have to

actually prove it. You have to actually create something that the market wants. But I think at the end of the day, infrastructure is still one of the most important problems in crypto is how to just make a better mousetrap, how to make a better blockchain. So, uh those are two of the TGS upcoming that I'm most excited about. But I think also the market is most anticipating. >> Yeah. Yeah. It's interesting to hear you describe um what what good timing looks like. And I think maybe that's the storyline to take out of what what you describe because if you're looking for kind of that that rise up that strong TGE with with strong community monad both have um then it all comes down to timing. It all comes down to you want to have uh that strong community that will

continue to grow with you as the market appreciates and and compounds from kind of a local low where where it was. Um okay, the next uh the next thing that I wanted to talk to you about uh because you guys are investors in poly market um and you know we're we're big fans of prediction markets on here have been. It was one of the first uh DAPs that I found on Ethereum was was UMA [snorts] and Augur. Uh, and so the NHL has done deals now with KHI and Poly Market. Um, and so man, the NHL announced both of these guys. They're both claiming to be the official prediction markets partner of [laughter] the NHL. How can you have an official I mean, how can both of these guys be the official partner?

>> I think we are probably going to see a lot of this. So, if you remember, the same thing happened a few weeks ago with the South Park prediction markets episode where they both claimed that we were the first prediction market to ever be listed. We had a South Park episode about us, about KHI, and about Poly Market. Um, I think these guys, they uh they obviously don't like each other. There's a lot of bad blood between these two companies and uh they're both engaged in a very aggressive ground game now about just kind of papering the world with partnerships and deals in order to get as much distribution as possible for a product that's really starting to take off which is of course you know for in this case it's uh it's sports and especially domestically in the US um sports betting is is a huge

huge huge market. So it was just announced earlier today as well that uh Poly Market is going to be the official clearing partner for DraftKings. DraftKings is is launching their own prediction markets and they're using Poly Market for clearing. Uh DraftKings getting into this game now. I mean, it's maybe good to some degree, but DraftKings very clearly a competitor um to the three of these, right? Because they're the the largest uh sports betting venue in the US today. Um I think all of this spells that it's going to be a dog fight. >> And uh the market here, you know, we're no longer playing in a kiddie pool. This is not Kumbaya crypto stuff. This is like big boy money, serious markets that are very, very cutthroat. Um, so I expect to see a lot more of this. It's a little silly when you see it uh

happening like this, but you know, look, we've been we've been longtime investors in Poly Market and I think um Shane comes at it with this very cryptonative spirit. He's been, you know, you mentioned uh uh Augur and UMA. We actually invested into Augur and UMA way way back in the day. Um and so we were we were there in the very early days when prediction markets were dog Did not work. Absolutely horrendous products. There was no demand. There was no volume. And Shane was the guy who just grinded it out for, you know, the better part of a decade just because he believed in the story and he's kind of the guy who made prediction markets a real thing.

>> Um, and so I I believe in Shane. I think Shane's going to win. He's he's right now playing from behind on the US side because of course they were uh targeted by the Biden administration. They had this, you know, FBI raid. All that got resolved and dismissed um I think it was like three four months ago. They had this big investment from ICE, the parent company of the New York Stock Exchange. And now they're re-entering the US market in a fully regulated way with the blessings of the US government. Uh so they got this no action letter from the CFTC which allows them to come in. >> Um but like I said, it's you know KCHI is no u no slouch.

>> Obviously they've been doing very very well with their Robin Hood integration. Uh and so now it's like Battle of the Titans. Uh and we've got a new third player coming into the game with DraftKings. So I'm I'm very intrigued but I think at this point it's uh it's anyone's game. Limitless TGE today. Kind of a weird one. Kind of a stealth launch. They kind of came out of nowhere and did it. Now people are claiming, oh, they sniped their own token. All kinds of shenanigans. Their team >> I saw some tweets about it. >> Yeah, their market makers. They launched without really telling [snorts] anyone and then uh looked like they had one entity that gobbled up a ton of tokens and then started selling the tokens. No one really no one yet knows who this entity is. They suspect the onchain retail salutes are suspecting it's the

team itself. So, we'll we'll see. I'm sure we'll we'll find out more about that. But uh last question here as we wrap up is who what do you think is going to make the difference? How do you think these prediction markets are going to separate from one another? Do do you think any of the the long tail the you know limitless is probably a third at this point but then there's a whole long tail afterwards. You know where do you do you think a third or or or longer is going to have any chance at uh superseding one of Poly Market or KHI? And generally, what do you think is going to make the difference between Poly Market and Koshi for for the ultimate winner in this in this category?

>> I don't think it's very likely that you're going to get a third unless the third is bringing their own distribution, right? So, if you're if you're coming in and you're trying to compete head-to-head like directly on the big markets, right, like on politics, on sports, um I think it's pretty tough unless you are a DraftKings, right? You already have your own distribution. You've got your own betting um uh uh sort of you've got your own customer base that you're bringing into these markets. And for somebody like DraftKings, the reason why this is so compelling is that uh right now sports betting is regulated on a state-by-state basis, and there's about 20 states in the US that ban sports betting. So, you're not allowed to offer these products in those 20 states. Uh the prediction markets are CFTC licensed. They're licensed federally.

>> And what that implies is that these prediction markets or these event markets, technically, they should be available in all 50 states. Now there's been lawsuits filed by I think seven states attorney general as well as some uh Indian tribes against KHI for offering these uh prediction markets on sports in the US in these states because KHI has claimed we are the first legal sports betting uh venue that's available in every single state and it's kind of a regarb right now and this regarb is being challenged by the state attorney general as well as by you know these other uh uh uh plaintiffs. We'll see how it plays out. Um there's obviously gonna be lawsuits and fights about whether or not this is legal and if not um there will be state-by-state regulation most likely of prediction markets. If not,

somebody's going to get a cut of something. Uh but this is a big part of the reason why DraftKings is so compelled by this is is that they say look if this is the way that you are accessing 20 states that we are not allowed to access, we won't in we want to alo also get into the prediction market game. And that's the exact same thing for Robin Hood, right? Why is Robin Hood using Kchi as the back end for their sports betting? The answer is that one license, extremely easy. You don't have to do the state-by-st state um you know uh state-by-state licensing for for sports betting. You can just have one product available everywhere in the US, which is exactly the way that that uh um Robin Hood would like to like to play it. So, there's a lot of legal and regulatory wrangling that's going to

take place over the next 12 to 18 months to see how this market is going to play out. And it may not be it likely won't be uniform across the the entire US. Um, but this market is so big, many, many really big players are going to want a piece of it. So, is some tiny crypto startup that doesn't really have a unique value prop going to be able to sneak a word in edge-wise? I don't think so. Uh, but if you have a unique angle, if you have some unique mechanic, if you have some unique innovation, then I think plausibly, right? So, it really is more about innovation like coming up with something new than it is I'm just another prediction market. Am I going to be able to, you know, it's like saying, are you gonna be able to create a new exchange to compete with Coinbase? It's

like at this point, no, not really. >> Right. This is where user generated markets could get really interesting if someone cracks that. And right now, it seems like there's still not a way to really do that. You need discoverability. You need liquidity across all these markets. Things get duplicated. You end up with regulatory hurdles where people create assassination markets or all the all these wonky kinds of things. But I if you if there's a prediction market that does crack it and maybe it looks like you have to stake a token or some sort of cash requirement in order to list that feels like that's everyone can kind of suspect that's where prediction markets are going but no one's been able to crack that nut just yet.

>> Yeah. So I'm honestly I'm pretty skeptical of this story. I think this is one of the oldest and most obvious ideas in prediction markets and there's a reason why it doesn't exist which is that >> in theory it sounds good in practice it's a horrible experience >> which is just that users learn that they cannot trust the markets that they see in front of them >> they learned that some of these markets are scams I mean do you remember the um uh what was it uh um uh suitg >> the thing about is wearing a suit and there was this gigantic like that was that was like >> it was it was a genuinely innocent disagreement about whether or not this market should resolve yes or no. Did Zilinsky wear a suit?

>> And there was such an enormous uproar over this market, right? >> And that's not even a scam. Nobody was getting scammed, right? It was just genuinely a dispute. Um, >> if you are getting rugps in markets, you're getting fake oracles. You're getting people who are setting up markets and manipulating them or they're they have direct control over the outcome because they're betting on something that they themselves control. People lose trust. They get extremely mad. They get away. They run away from the platform. They say, "Fuck this place. Never coming back." Um, you just learn this very quickly. It's the reason why, you know, you could think, okay, why don't you just create an exchange to out compete Coinbase that just lists everything.

The answer, I'll tell you very, very obvious. It's oldest idea in history of exchanges. The answer why is because there's a lot of tokens that are just rugps and if you list them, your users will lose money. They'll get really mad. They'll never come back. And so, people learn, it's like, it's not even about, oh, I need like this regulatory uh cover. I need to make sure that I don't list securities. A lot of it is I need to make sure I don't list tokens that just go straight down because my users are going to be upset and they're not going to come back. >> I think that's a great way to to sign off. Don't list coins that go straight down. And how about hey founders don't make coins or build projects that go straight down.

>> H the VC want to invest in those. Thank you so much for coming on. It's always a pleasure. >> All right. Great to be here. Take it easy. man. It's always good having a se on.

That dude's the just top G. I mean, he comes on, he spits fire. Uh I think he was a little bit under the weather today, but he uh he always comes on and uh just just blows everything away. Uh today was no different. And generally he doesn't get boxed in to the way that other people think. Uh, I mean, you know, I was making a little bit of a big deal around uh the skinny master accounts for Fed uh at the Fed for some of these stable coin issuing companies and then, you know, just got educated on how uh in fact a skinny master account means that these guys can't earn yield and it actually makes more sense for them to hold their deposits at a bank, an actual bank. Uh so that then they can

go get the yield from the Fed and pass it on and they can have some sort of yield sharing agreement. Um, as always, fantastic conversation. Uh, I mean, he's the Dollaly Lama of stable coins and so, uh, plenty plenty, uh, to chat about, guys. Great show. Um, Trump andQi are going to meet uh, next Thursday. Um this was something that just came out uh as we were chatting with the seb and so I think that's why we're seeing markets uh rebounding pretty nicely now.

Uh ETH 3900 Bitcoin on the verge of 111 uh hype bounced a bit has fallen a little bit from that $40 mark but generally uh these things are doing quite well. Um Clarity Act is going to go through. We saw Brian uh speak very positively about that. So, that's a wrap, guys. Great show. Another good one. Uh we're going to come back. We're going to finish up the week strong tomorrow. We've got another great lineup coming to you tomorrow with uh let's see, let's see. Let's see. Uh we've got Dom from Alvara. We've got our guy Nick from Janice Henderson. That one should be really interesting. Uh Tony from

Ubix. uh very institutional Wall Street focused stream tomorrow. We are bringing you guys closer to the frontier of Wall Street finance on chain. Nowhere else only on Rollup TV. Guys, thanks so much for watching. We'll see you again tomorrow. Peace. [music]