SotN #43 Coinbase Goes Direct | CIO of Arca Jeff Dorman

Transcript

[Music] hey bankless nation welcome to another state of the nation episode coinbase went direct last wednesday we're going to go over what you need to know on today's conversation with jeff dorman from arca invest david how are you doing today absolutely fantastic it's been a week since uh crypto's biggest company is now a public company uh and so now that there's almost a week it's all the week's on wednesday and now that we have time and data to reflect upon we are going to do that what lessons can we learn from coinbase now being a public company

guys uh this broadcast of state of the nation as usual um is coming at you live streamed over youtube we're doing it a day early but you're still going to get this on the podcast stream on wednesday so this coming at you on monday at 2 p.m eastern usually on 2 2 p.m eastern on tuesday but we're giving this to you a day early so we are talking about the listing of coinbase coin is on the market on the nasdaq what does traditional finance think about it the banks fintech wall street what do crypto natives think about it like binance gemini and uniswap we're going to cover all of that before we get into it we want to talk about some things that are going on in the bankless nation the first is this david it is bankless badge week a two-week bankless badge week two

weeks starting today so what's happening what is bankless badge week yeah so the bank list badge is a po app in nft that you can get if you are a paid bankless subscriber and so you you uh become a bank paid banquet subscriber and then you go and claim your badge if you are not yet a paid bank list subscriber you will get that email to claim your badge at the start of the month in may in roughly 10 days that's why we're doing this for two weeks uh and so then you get to enter raffles and we are giving away really cool stuff uh the bank the the baps the escape shirts which there are only 50 of we are giving away the remaining six uh so you can be one of 50 lucky people to get a bap uh and then there's also even cooler stuff as well

including uh pl dye pool together die and ether we are actually giving away ether to a lucky bankless badge holder who wins the raffle you have eight hours left if you currently hold a bankless badge you have 8 hours and 52 minutes left to enter the first raffle that goes out on monday that's today and and then there will be one for tomorrow and the day after and the day after and so make sure you get your badge and make sure you enter the raffle of course join the raffle by connecting your metamask wallet having the poep badge in there and you can join and the raffle begins today as david mentioned we're doing this because we really want you to get a badge really a badge many of you guys are bankless premium members have not picked up your badge um check

your email address check your email account for an email from lucas to banklesshq.com to see if you have that in the archive and pick up your badge david another thing that's going on we just dropped kind of an audio book it's like a very unique bankless podcast uh just dropped that uh today actually so this is this is monday on all of the history of crypto before bitcoin actually starts in the 1970s right super interesting conversation and episode can you describe that for folks yeah whereas coinbase and coinbase going public is really pushing the frontier into the modern realm and really we are at the bleeding edge of what crypto is this is going all the way back before bitcoin and so peter pan he's part of the meta

cartel uh uh team there and he wrote this really fantastic four-part long series called before bitcoin and it was all about the cypherpunks and the people that really led and stewarded the the just domain of cryptography into the public realm and really allowed bitcoin and ethereum to become what they are today uh and so really if you want to understand our industry from in totality you can't start at bitcoin which is why peter calls his series before bitcoin you have to go all the way back into the 70s where the fight for public information and public cryptography really began uh and so we are telling that story on the banquets podcast and that episode came out today guys if you want to understand crypto there's two things you need to

understand one is the history of money the second is the history of cryptography this is the second this is the history of cryptography this is embedded in cryptoculture as david says so often cryptoculture is tight this is why go check out that podcast also david we should mention i feel like we're getting into retail season what does retail season mean and uh how can folks get their friends onboarded to d5 what's the best way to do that yeah retail season is where everyone who wasn't in crypto before all of a sudden is in crypto uh and that comes with a lot of baggage a lot of a lot of cool stuff and a lot of pain because crypto is not yet the easiest thing to use um but dharma is actually if you've ever used dharma it is the easiest thing to get into defy

and the best part about dharma is that all of the defy assets which ryan and i beat the drum on as being like crypto's first real non uh non-l1 assets uh that are tokens that are legitimate tokens rather than just some stupid icos like all of the good assets you can get on dharma and so when you are a friend i know you as the crypto person because you probably talk about it ceaselessly because that's what crypto people do and they come to you and they ask for advice send them to dharma because it will make sure that they only buy legitimate viable assets and not stuff like doge don't i don't recommend doge but i do generally recommend this stuff that you find on the dharma app yeah absolutely guys so this is a way to just connect your bank account and then

uh you can immediately just in one tap of the app get assets into a d5 protocol like wi-fi start earning 14 in just the top of an app that's where we are sending our friends uh today who are interested in defy david i've got to ask you the question i ask at the outset of every single state of the nation and that is this what is the state of the nation today my friend the state of the nation is public we are a public nation and coinbase our our as a crypto industry our biggest company ever with over a thousand employees i think there's only one company in crypto that has a thousand employees and that's that's coinbase is now a public company and really the coinbase going public was

a monumental landmark event for all of our our entire industry because it's very legitimizing like the people that just like uh throw away bitcoin and ethereum and all these all other crypto assets as like non-legitimate really just have fewer and fewer and smaller and smaller foundations to stand on because something like coinbase is now public uh and it's really it feels like there's many events like this where there's like before and after and this definitely feels like one where there's the before coinbase was public and there's gonna be the after coinbase was public and now we are in the after part of the world of crypto so the bankless nation is public we went public absolutely and i feel like the narrative is going public along

with the coinbase listing on the nasdaq we are going to talk about what wall street thinks what traditional finance thinks about the coinbase listing as well with jeff dorman from arca investments when we come back but before we do we want to thank the sponsors that made this episode possible bank list is proud to be supported by uniswap uniswap is a new paradigm in asset exchange infrastructure instead of a cumbersome order book system where trades are matched with other humans unit swap is an autonomous piece of software on ethereum which is what ryan and i call a money robot no human counterparties or centralized intermediaries just autonomous code on ethereum input the token you want to sell and receive the token you want to

buy something brand new in the uni-swap ecosystem is the uniswap grants program is now accepting applications for grants we have been saying this for a while and we'll say it again dows have money and they are in need of labor if you think that you have something to contribute to the uniswap dow apply for a grant to uniswap just look at the size of the uniswap treasury it's almost 3 billion dollars this mountain of capital is looking for labor do you have something of value to contribute to the uniswap dal no matter how big or small your idea is you can apply for a uni grant at unigrants.org and help steer unit swap in the direction that you think it should go that's exactly what we did to get uniswop to be a sponsor for bankless and

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dorman who is chief investment officer at arca which is a digital asset management firm jeff leads the investment committee he's responsible for portfolio sizing and risk management of crypto and defy assets which has got to be a fun job jeff has a ton of experience in traditional finance so uh he's been in the space over 17 years close to 20 years and he has served at world renowned firms like merrill lynch and citadel he's now joined the crypto industry so i feel like jeff is a fantastic bridge from the traditional world to this new exciting world of crypto and we are here to talk all about coinbase which is also a bridge of sorts jeff how are you doing today i am great thanks for the intro

and thanks for having me oh man we're super excited to talk about this because this is really as as david and i were talking in the intro this is really a um a pretty marquee event for crypto right one of our biggest publicly traded uh companies um like a crypto exchange a crypto bank goes public can we start by talking about um how big this is so like um how big is this from your perspective is this sort of like shaking up traditional markets or are they like not noticing is this you know what's been the effect of the coinbase listing well they're definitely noticing i mean it's hard to it's hard not to notice the biggest company in the hottest industry with the only direct listing in the last what

year and a half so everybody is noticing there is no question uh that being said it it is a little bit under the radar more so than maybe people think right the traditional ipo right when you are issuing new shares and you have an underwriter like goldman or jp morgan or whoever there's a huge road show there's a long marketing process every financial advisor every hedge fund every mutual fund knows about it when you slip a direct listing in even though everyone has heard about it it knows it's coming it's just not sold to you in the same way i mean i talked to many financial advisor friends and hedge fund friends and mutual friends who it wasn't even on their radar until after it priced because you just don't have that same cell pressure that's coming into it so it is absolutely on the radar but i think not

at all surprising that it's going to take some time here maybe even months before this is really ends up in most investors portfolios that's super cool we got to talk about that actually let's start there because i think a lot of crypto natives who are listening to bank lists aren't actually sure what the difference is between an ipo and a direct listing what are the differences how is the direct listing different sure well the the biggest thing with the direct listing is that the company is not actually issuing more shares and therefore is not making any money from the sale of stock when you do an ipo generally you are issuing some percentage of the float to new investors and you are then raising money on behalf of the company so you are actually generating cash that didn't happen and that didn't happen for a lot of reasons

right one is because coinbase doesn't need the money they are just printing cash right now they don't need to dilute themselves further by selling more shares two is you know they definitely have uh this this mantra of of more access to everyone rather than access to a select few when you do an ipo process and you hire an underwriter not only are you paying egregious fees for that underwriting process but you're also then you know targeting a very small handful of large funds who are going to get the majority of those shares right the underwriter actually goes through an allocation process with the company and says we're going to give shares to this fund we're going to give shares to this phone we're going to give shares to this company and that is a you know a privileged process right i mean all the company all the funds who do the most

business with the banks are the ones who are the most likely to get those high allocations so there is definitely a democratization aspect there's definitely a we don't need the money aspect on the negative side though is it's complete price discovery right in an underwritten process the the research firm that is underwriting it will come up with a fair value for that price and they will market that price they will say we are going to sell x percent of the company's shares at this price you know take it or leave it and maybe they adjust the price higher or lower based on demand but generally it's being a guided process when you do a direct listing you're just basically teasing the market makers right the knights the citadels of the world all the equity market makers and saying uh go ahead and figure it out where this is going to

trade and you know they have some tools right they can look at whether it was trading in the nasdaq secondary private market beforehand or they can talk to you know a handful of investors on where they might care but basically it's a blind process you're just starting the process making markets on the exchange and hoping that that equilibrium uh gets you to that to that right level um so there's definitely pros and cons but most people who thought this was like going to shoot up 100 on day one like a typical ipo that doesn't happen it doesn't happen for a variety of reasons one is because there's less shares in an ipo you're only selling five percent of the five or ten percent of the company shares so the float is low and there's less to buy and and two is um because they intentionally often

price that at a low level to make sure that it does trade up again in a direct listing it's just market equilibrium there is no process there is no you know selling it cheaply so you've got a lot of market forces at risk and it takes you know it'll take a couple of months for big funds to accumulate positions rather than doing it all in one slug through the underwritten process so jeff if coinbase didn't mint new shares to do an ipo where did those shares actually come from to get on to the market did like did uh brian armstrong and all the other like uh early founders they just decided like i want to sell this percentage and that's the shares that we see being traded how did how did shares actually come onto the market in a direct listing yeah exactly it's from existing

shareholders so existing shareholders are employees they're the early venture funds it might be you know a couple of funds who bought it in the six-week auctions of the nasdaq private secondary market but yeah it's it's other firms and individuals who already own the shares so again in a typical ipo they might only offer five or ten percent of the float uh to new investors here you know it could be up it could be fifty percent it could be eighty percent it could be twenty percent it just depends on how many early investors want to monetize and i think a lot of crypto twitter specifically uh has been just way off in terms of what this process was but but more so they kept uh focusing on oh well why are these guys dumping on the market why are they selling right because it's such a mantra in digital assets that you

don't want the company to dump their tokens but this is natural right if you're an early venture investor and have been in this for seven or eight years you almost always sell when a company goes public like you've done your job you funded the company now it's time for you to move on and give it to the mutual funds and the other hedge funds who want to own liquid stock you know if you're an early employee you have been underpaid most likely for the last seven or eight years and this was how you got paid and now it's your turn to monetize that so you can go buy a house or go buy a car or do something with that money so this is how it should work in my opinion you should be you know transferring the ownership of this company from the early insiders and

investors to a more democratized investor base of professional investors and retail investors like it's it's it's kind of funny to me uh jeff that like uh crypto twitter didn't really understand this because this is a bit more like the the crypto native approach this is really what happens with with tokens i mean um they're not in a lot of cases they're not uh ipoint they're you know they're owned by existing holders and they're resold on on on the secondary market i want to take a look at this chart so this is um performance price performance uh for the first few days this is of course coin was listed uh on wednesday of last week and right now we're trading at about a 66 billion dollar market cap i got to confess i thought this would

pump a little harder myself um you know and i want to get back to what you think about that in a minute but let's maybe dispel the the the myth that you saw circulating so there was there was this myth that uh brian armstrong and all of the the coinbase insiders were essentially like um dumping all of their their shares right and you can understand why this sort of a narrative took steam because um you know crypto is also used to uh dumping by insider whales in in all sorts of its other asset classes but this is really not the case right like uh this is um frank from the block i believe reporting that actually the insiders didn't sell very much um is is this kind of what you're seeing as well yeah the the irony

of course is that in the digital asset world you almost never get full disclosure and transparency so you're always guessing here you get full transparency and people just interpreted it incorrectly created rumors yeah like you have to you have to file these documents with the sec and they did and everyone just misinterpreted it so what happened is a lot of the insiders and early and employees were given a lot of options in addition to the early shares of founding the company and those options exercise at various times and the report that came out was suggesting that all of the options that were exercised were then sold but they weren't selling all of their shares i think the rumor was that like brian armstrong sold seventy percent of his shares he sold one percent of his shares actually he sold seventy percent

of a small amount of options that he exercised and same with the other executives right so it's like again it's ironic because everyone's desperate for more information and less secrecy and here you have full transparency and just complete inability to interpret it correctly is this just crypto natives not understanding aspects of traditional finance i mean we kind of introduced you jeff as sort of the the bridge is this just what's what's happening they're not understanding how to read um like public documents yeah i think so i think i think it's an experience i mean i used to joke with people that you know you can learn to trade in two months you can learn to analyze companies in maybe two years but it takes you know 20 years and counting to uh get experience and understand markets and risk and things like that and unfortunately as smart as

most the people are in this space there's just no shortcut for experience you know if you've never seen a direct listing before if you've never you know gone through a 10k or a 10q or an s1 or a you know 13g filing you just don't really know what to look for so you know in this environment of the first as soon as i see something i want to post it on twitter immediately maybe you gotta slow down a little bit and actually understand it before you throw that information out there all right jeff well this is why we're having you on you've got 20 years in this so um what were your expectations for the performance of coin like prior to listing and uh did they hit your expectations are they below are they above or is this basically what you thought would happen sure so i didn't

actually have a view on what the price would be i did have a view that it would take a while for the price to go higher and there's a few reasons for that um one is the media has been just completely wrong on the share count since you know the first coverage of the coinbase listing three months ago they continue to point to this 266 million share number which is the fully diluted share count of the company but there's only actually 199 million shares outstanding the other 60 million are you know options awards and and uh other non-vested stock that may or may not ever come to the market so first of all they were reporting this hundred billion dollar number based on the price it was trading in the nasdaq secondary market before going public but they were converting that price times a higher

share count to get to 100 billion it was never trading at 100 billion it was trading at 60 to you know 50 to 60 billion the whole time and the media just kept saying 100 billion hundred hundred billion hundred billion so when it actually came below 100 billion everyone freaked out and said oh it's a disappointment um you know you could even look at the the ftx pre-coin ipo uh markets that they had where the price was you know 2x what it was actually probably going to come at just because people were misinterpreting the media so right there you had expectations that failed largely because the expectations were wrong um separately and i think probably more importantly is one of the things that happens with an ipo is the underwriter actually sells more shares than they have available they create a short on the desk and then they use that

short to then be the bid on day one and day two and day three of trading to make sure that it trades you know it doesn't trade down right they facilitate uh uh they do their job they become the market maker and they put support under it to make sure that it trades well well again without an underwriter and in direct listing that didn't exist all you had was new buyers and existing sellers and you're just trying to find a clearing price so let's say your fidelity and you're trying to buy you know a billion dollars of this stock well you can't just call jp morgan and say hey give me the highest allocation you can in the ipo you have to go out there and buy a billion dollars on the open market and you're not going to do it on day one you're going to buy 20

million here 30 million there 40 million here and it takes you know weeks to get that accumulation for these new investors who have never touched it before so not surprising at all uh that it didn't go higher right away what i think will happen now is now you'll start to see the street coverage right you already saw a couple of you know we'll call them tier three or tier four type banks come out with reports uh with 500 price targets 600 price targets pretty soon the tier one firms are going to start doing it you're going to see a jp morgan report a goldman report a bank of america report a morgan stanley report when the big banks come out there and they start putting their price targets out there that's when i think you'll start to see a real acceleration of the price and on top of it you know don't forget

coinbase had a blowout first quarter earnings that surprised everybody and now if you're a traditional financial analyst you're saying yourself well was that an anomaly or is that the norm and if you're new to digital assets you might be modeling this company for the first time have no idea if first quarter was a flash in the pan or if that's sustainable whereas if you've been in the industry for a long time and you understand coinbase's model and how it works and how they generate revenue you know that it's largely driven by the price of of bitcoin underneath and the and the volumes that are happening so most people in the space are expecting second quarter to blow the doors off the first quarter and you know this company's probably going to do close to 10 billion of revenue in 2021 compared to doing only like a billion of revenue uh all of

2020. well that's a big jump in revenues for someone who's in the outside traditional world and maybe not as well versed into you know how these companies work so i think it's just a feeling out process it's going to take some time but ultimately you know you're seeing it today right i mean over the weekend bitcoin fell like almost 20 and three hours on saturday night and if you went on ftx and you looked at the coin price on ftx which is mostly digital asset native traders they assumed it was going to go down to 285 bucks a share even though we opened today at 333 when the stock actually opened and that's again that's just crypto traders are like oh bitcoin down this thing must be down too because it must have a two beta like everything else and the reality is that's not how stocks work right people

are accumulating the stock right now they're going to buy it regardless of what the price of bitcoin is doing on a day-to-day basis and they're going to accumulate it based on a two-year-out view and the two year out view is that this company is going to be printing cash and i think it's a very cheap stock this very much strikes me as a process of like the crypto natives learning more about how traditional markets work right nasdaq works and but also like the financial industry in wall street learning how crypto works this is almost like a perfect case study for that i mean let let's let's talk about the uh the coinbase fundamentals for a minute jeff if we could um and uh you know look at it through the lens of of maybe a an analyst who's who's looking at this right so you were talking about kind of

first quarter here's some info from the block which i believe they pulled this info from um some of the public reporting from coinbase but we've got 56 million verified users on coinbase now in q1 we've got about six million of those transacting on a monthly basis coinbase is a company has 223 billion assets in its custody that be i guess assets under management um total volumes going up like q1 as you said was sort of a blowout uh quarter and here's revenue 1.8 billion and and you were thinking like you're projecting like a 10 billion dollar a year is this how an analyst is going to look at these

fundamentals uh you know are they going to kind of go through and and try to just extrapolate all of these things yeah for sure i mean you know staying in the crypto world for something go ask half your uh crypto investors you know what their bitcoin model looks like or what their ethereum model looks like you know most of them don't have one right you know we have models for the companies that we're invested in because we're investing in tokens that are accruing economic value whether it's defy or something like chili's that's doing sports but you know most cryptocurrency you can't model and therefore you don't have that skill a traditional financial analyst the first thing they're doing is they're ripping through the you know the s1 and the 10q and they're putting a model together and they're you know going to be pretty fast

at doing it they're going to look at the revenue growth they're going to look at the mtu growth they're going to try to figure out what inputs affect the model right so you know are you going to you're going to have a base case of you know 10 growth of users and maybe a base case upper and a bare case of you know mtus here's the hilarious thing though jeff and i just want to get this in there so like as they're modeling though they're going to have to try to predict the price of bitcoin and eat because that has such a bearing a large bearing on the volume that coinbase is going to do from a capital asset perspective yeah so generally what an investment bankers taught and what a research analyst taught is you figure out the inputs to your model first and you have

a separate sheet in your spreadsheet that just has the inputs and everything else is an output and then you just continue to toggle and mess around with those inputs to see how it changes your model so you have your base case of bitcoin say 57 000 and then you have a multiplier on that what if bitcoin falls you know 10 quarter over quarter what if it rises 20 quarter over quarter and you change these assumptions and you see what kind of sensitivity analysis there is to your revenue into your ebitda the the the in actuality this is one of the easiest companies to model of any company that i've ever modeled and that my analyst has ever modeled because it really is a fairly simple formula it's a price it's a function of the price of bitcoin it's a function of those mtu's and it's a

function of the spread that they're earning meaning the fees that they're earning on the transactions right 96 percent of revenue right now comes from uh uh trading so it is a really easy company to model and if you assume you know a baseline price of bitcoins call it you know somewhere between 50 and 60 000 and you assume modest growth uh in terms of mtus you get to a 10 billion revenue number really easily and that's what most analysts are going to come out to um and then you have to factor in other things like well what is their business mix are they going to you know brian armstrong said that 50 of revenue over time is going to be subscription and not trading right so then you start modeling in other factors but every analyst on the street is going to have a pretty similar

2021 revenue model based on just the price of bitcoin today and what this company should do in that in that case so when you start getting those numbers out there it's pretty easy to get to 100 to 150 billion uh market cap right when you look at the crypto stocks that exist today like riot blockchain or marathon or some of the others you know they're trading at you know call it uh uh look at it right now they're trading at 20 to 25 times uh revenue you know if you look at you know ftx and binance if you combine the enterprise value of their token market cap and their equity market cap they're trading at you know 30 to 50 times sales so you know if you're talking about coinbase right now at 60 billion market

cap on 10 billion of expected revenue that's six times revenue that is cheap by any financial analysis measure and they're just gonna keep buying it they're not gonna stop they don't care if bitcoins up or down five percent in a day or if it falls ten percent on a saturday night because of a leveraged flush out they're just going to keep buying it and i think you're going to start seeing overwhelming uh bullish calls from the analyst community over the next two to three months so jeff when you say that coinbase is cheap and we also have these analysts who are trying to put models together what are they comparing to are they comparing them to banks are they comparing them to tech stocks are they comparing them to fintech companies what is our baseline that you find that you or other other financial uh modelers or

people in in that cohort what are they comparing at coinbase two like where do they think that coinbase as a as an asset fits into what niche yeah i think it's all of the above right and that's the uniqueness of of when you do analysis like this is you have to think about what those comps are you know is the appropriate comp something in the crypto space like a minor or is the appropriate comp something like a goldman sachs or is it a tech company like you know paypal or or square and i think you're going to see analysis all over the map in that regard if you're bullish you're going to spin your model to you know take the industries that have the highest multiple so you're going to look towards the fintech world in the crypto world where you're getting those 20 and 30

times revenue multiples if you are you know a little bit bearish you might look at goldman sachs or jefferies which trade closer to like you know three times revenue um you know the difference of course is goldman sachs who does 45 billion of revenue and has 40 000 employees to get to 100 billion market cap forty thousand employees is a lot more than coinbase's seventeen hundred employees right their costs are much higher they have a twenty five percent net income margin whereas coinbase is going to have probably closer to sixty percent margins so you know there's a lot of different inputs that you think about when you're comping this for me personally i think i think first and foremost you have to assume that the market is the equity market in particular is very underexposed to the growth in digital

assets right there hasn't been a lot of ways to get exposure you could have bought like the grayscale product and obviously that is you know having its own problems right now you could have bought you know a galaxy stock or one of the mining stocks but those are all fairly small market caps there hasn't been a real easy way to get exposure to the space in a pure play way so no so right away you have to put a higher multiple on this because of just the the the demand for access to this space and then you have to look at this says you know is this a mature company that's going to have slower margins or is this a growth company that's more like a tech company it's going to continue to fly and and that's the you know that's where every analyst is probably going to

differ right some people are going to say you know it's not sustainable to be this high margin as a trading company because there's competition and because fees are going to get reduced others might say you know these guys are the biggest for the reason they have levers in custody and in staking and in banking and all these other things that they can do and you know we haven't even scratched the surface as to you know the revenue and profits that coinbase can produce so i think it'll be all over the map um but i i personally would look at this more in the fintech you know crypto comparisons which is high multiple fast growth yeah absolutely you know we're gonna get back to that line of uh conversation around sort of the the moats to do um coinbase's business model and how that

evolves in in in the future um but before we do that i want to actually move from our investor um analyst persona that we've been talking about uh so far so what if in your opinion jeff if we put our self in the shoes of a banking executive say uh wells fargo executive jp morgan executive right are they are they looking through coinbase's filings as well and like what are they thinking i mean here's a company that you know didn't exist nine years ago and it came from nothing to a fairly large market cap sized financial institution is this a shot across the bow for them are they beginning to look at this industry and see some

competitive threat or is that not registered yet well i think i think you have to right i mean the the the executives at the big financial institutions they're well aware of everything that can that can cut into their business model right they have been getting squeezed for well over a decade now both from the regulatory side as well as from the fees and margin side so they're always looking for new business lines but then you have that tug of war which is you know generally they want to compete with you and be in the space in this case they physically can't so now they're going to pretend it doesn't exist and you know to talk about it not being there i mean coinbase alone just snubbing all these investment banks by not giving them a chance to be the underwriter by doing the direct listing

you know all of a sudden you get the bankers who are negatively predisposed to these companies yeah while the you know quote-unquote independent you know walled off research analysts were probably would be bullish if it wasn't for the fact that their banks are telling them not to be so it's it it's it's hard to know exactly how that will play out but you the reality is you'd have to be foolish not to take this seriously right this is a real growth these are real revenues i mean you know again i said uh goldman did 40 uh what else i think goldman did uh 40 billion of revenue last year and this company is going to do 10 billion this year i mean you you can't ignore that that's a real number and that is you know profits and revenues that historically would have gone to your

firm so it feels like jeff they have been ignoring it thus far just a a news headline from hsbc they were banning some of their customers from actually purchasing microstrategy stock because microstrategy held crypto um you know so some of them might be ignoring it's your point they they can't ignore it for long just curious how do you think this plays out do the big banks start acquiring do they start getting active in digital assets do they start knocking on the doors of of um regulators and you know asking for for help what do you how do you think this plays out yeah i hadn't thought about the last one but it's probably true uh yeah i mean i think i think they are going to certainly be acquisitive to the extent that they can the biggest problem right now is that

the the pipes or the workflows for digital asset native companies are completely different than the pipes in the workflows for traditional companies right not not only just physically how these things trade and how you custody of them but the rules around it i mean you know you you you physically uh uh a lot of them physically can't custody you know at uh uh by themselves right they have to have a third-party custodian they have to have all these different uh intermediaries that that you know are not existing in the fintech world so when you think about like even how you know how did square and paypal you know grow as fast as they did without the banks getting involved a lot of them just because they just can't move that fast they you know they can't get into this you know unregulated world when they're sitting there with

regulation you know in every corner that they are so i think they will be inquisitive to the extent they can but it's going to take some time because because these are really two different worlds with completely different rules and workflows and it's just not that easy to tuck that in i think you're more likely to see acquisitions of maybe some infrastructure companies or maybe some you know research companies or even some asset managers before you see you know acquisitions of the actual you know quote-unquote broker-dealers or the traders in this space not to mention if you are a coinbase or you know a kraken or whoever else you're not looking to be acquired right now because you're printing cash right they they feel they can go at it alone and that they're well capitalized enough to compete so um you know i think you will

definitely continue to see consolidation but the banks are in trouble i mean they you know you can see it in you know whether you look at the kbw bank etf or xlf like you know bank stocks haven't gone nowhere basically for a decade while all this growth has happened around them from the fintech and the payment companies and now crypto so you know good luck good luck to them i wouldn't envy them certainly jeff one mental model i have is for at least with the long-term risks of coinbase is something that i'm calling the coinbase squeeze where we have uh centralized competition coming from the left and d5 competition coming from the right where uh just legacy like we already know that paypal is already introducing crypto and we already know that the d5 can do things that coinbase

can never really do and so one of the the risks that i think that coinbase can get is like their moat just gets eaten eaten from both defy and you know already instantiated brokerages that already have all the customer base but before we get to that conversation i think we need to touch on where coinbase gets all of its money from and talk about the actual coinbase uh business uh and and one of the risks that i see is that i think something like 97 if i got the numbers right of coin based revenue in the last quarter came from a trading volume uh and and so do you see this as a risk and if if you were on the coinbase side of things what would you want to see coinbase do to help diversify some of that revenue

stream sure i mean definitely a risk when you're concentrated um at the same time i still think we're early enough where that's a positive risk for the time being and that the trading volumes are only going up they're not going down now they're you know you can see it in robin hood right i think in the first quarter robin hood added nine million crypto uh uh traders on their platform and they only have a total of i think 20 million so half of their users are now trading crypto oh by those you know yeah exactly it's uh uh yeah i think they only have seven assets that are tradable so it's not it's not a it's not a laundry list for sure but they um you know i think there's no question that transaction revenue is still going to be strong at least for the time being

right the numbers are going up that being said from a business standpoint there's a reason brian armstrong of little guidance that they gave the one thing he did say is that we think subscription revenue is going to be 50 of our of our revenue at some point because he understands or he's being you know guided by someone who understands that you do need to diversify that business to get analysts to give you full credit for what you're doing so how do they do that right well subscription part of that is custody right if they can really you know go further with just you know instead of just microstrategy and tesla buying through them you know now they buy and they hold through them and they do staking and they do you know other services so you know there's a lot of subscription revenue that can be done

there there's also you know the idea of of in some way shape or form getting into uh banking in some way right consulting and advising these companies who are going to ultimately be bringing their own tokens to market we're probably only two or three years away from every company in the world having a token in their capital structure from the airlines to netflix to you know twitter anybody with a customer base you're going to realize that it makes sense to have a digital asset in your capital structure and incentivize your customers to become you know quasi equity owners so there's banking opportunities there there's a variety of different business models that you can get into once you have the brand and the audience that they have so i i think it definitely remains to be

seen how fast they can diversify and where that competition comes from but you know that is definitely going to be the push over the next few quarters earnings calls you're going to constantly hear them talking about their business mix and that revenue mix and try to get that down from 96 and on the flip side i i don't think the competition from other centralized players is the issue i think you're right i think it does come from defy and these other services um so the onus again would be on coinbase to you know can they figure out how to participate in that can they offer some sort of you know quasi or hybrid c5 type alternative kind of like what binance did with the launch of finance smart chain so you know they're going to have to be innovative they're going to have to uh

you know be proactive but at the same time again they're the hottest company in the hottest industry you don't have to do everything all at once right now the revenues speak for themselves and where do you think coinbase co goes from here um because me as as a young person who is extremely frustrated with wells fargo and other and any other bank uh i would much prefer my direct deposit to just go straight into coinbase and it would be even nicer if coinbase did stuff like debit and credit cards like where would in in my mind just perhaps the future of coinbase is just eating some of the more traditional services and just capturing customers and just keeping them in-house so that they never even have to touch a legacy bank that's my mental model for what you know coinbase could evolve into

at least on the centralized side uh what do you see as like the future of coinbase and future revenue streams yeah i i definitely agree with you on that one on the wallet side right i mean eventually you're going to see more and more companies paying their employees in you know either bitcoin or other digital assets and that's going to have to you know flow through your payment provider to somewhere and where is that somewhere that's a wallet so coinbase you know given the brand given the balance you're given all the things they've done like that is a definite place where they can you know start to have partnerships um you know with the gustos of the world and the companies that are providing payroll so that is a huge windfall because like you said right now you still kind of have to start in the

banking world uh by putting your money in a bank and then you know sending it to coinbase well if all of a sudden you don't even have to touch the bank and it comes directly into your account that's a home run right your aum just explodes and all these other ancillary services go higher one of the things that that my analyst alex woodard did a really nice job of when we were going through our coinbase analysis was looking at the one plus um customer mix what that means is the amount of customers uh uh in of coinbase that are using one or more than one product right and the margins on those were way higher than the margins on on single users so that is evidence of what you're

suggesting right if you can get more money in there and get them access to more product offerings they're going to become better stickier higher margin customers and and that's going to be the goal for coinbase right now is get not only get more users but get them to use more tools when they're in there guys coinbase eating the traditional banks traditional banking system not being able to move fast enough these are themes we've talked about so often on bankless we're going to come back with jeff and talk a little bit about something he hinted at we want to get into is the potential for a coin token as well we'll get into that in more but before we do so we want to thank the sponsors that made this bankless episode possible

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to better liquidity you don't even have to think about it try it out download metamask for desktop or mobile now at metamask.io and start swapping hey guys we are back with jeff dorman from arca we are talking all about the coinbase direct listing this is really the bridge from the traditional financial world to the crypto world jeff said something super interesting that we caught in the in the first part of this which is he said that he thinks in the future every company will have a token on its balance sheet and i think he was talking more about a crypto native token rather than sort of a you know tokenized equity or something like

that we'll get him to explain it but i want to start with this question um jeff it seems like coinbase has even opened this up as a possibility on page 68 of their risk assess assessment section they talked about the potential to issue in the future a customer of reward or loyalty program in the form of a blockchain token sort of interesting can you talk about the potential for coinbase to maybe issue a token in the future what that might look like and then talk more about your thesis that every company is going to have some sort of token as their in their balance sheet as well sure well first of all you know obviously the s1

the prospectus that is a huge document for a reason right it's not just about what the company wants to do it's about what their lawyers tell them they have to disclose to you know for a cya policy um but that being said like there is a reason to put that in there it makes all the business sense in the world so the way we've always thought about digital assets at arca is that these are the greatest capital formation and customer bootstrapping mechanism we've ever seen and what we mean by that is you know typically when you raise assets at a company you're either issuing equity which is a claim on your future profits or you're issuing debt which is a claim on your assets we think issuing a token is basically a claim on network or customer growth and you can see how impactful that has

been right binance was the fastest growing unicorn in history and you know went from nothing three or four years ago to now probably worth 250 billion dollars but that 250 billion dollars is a split they probably have about 100 to 150 billion dollars of equity value and then they have a token that has a market cap close to 100 billion right when you add that together that's your enterprise value now how did finance grow as fast as they did well it was because of the bnb token they issued the token to all of their customers and their customers not only are getting services like discounts and rewards for trading on the platform but they're also getting some form of a quasi equity or what we call a pass through uh token where the revenues or the profits of the company are being

passed through to token holders so what you're doing is you're coordinating and incentivizing your customers to also be evangelists because they're being financially rewarded for being so so binance is a great example of a venn diagram where their customers and their quasi-equity holders are one group of people the opposite of that would be something like mcdonald's right mcdonald's customers are probably not their shareholders and vice versa the shareholders are probably not dining at mcdonald's all that often there's no coordination between the people who are giving mcdonald's the money and the people who are actually spending and using the service if you can start combining that into one holistic group where your customers are also financially rewarded in addition to the utility then you can see much faster growth and

in my opinion outside of your decentralized projects like bitcoin and money and some evens like some of the protocols like ethereum the pass-through tokens and asset-backed tokens who have figured out this incentive model where you can basically bootstrap your own growth by incentivizing your customers to use your product more and to evangelize on behalf of you that's when that's how you get the hockey stick growth so going back to coinbase it makes all the sense in the world not only is it you know obvious from a copycat standpoint when you look at things like finance and fdx and how fast they've grown but also why wouldn't you as a coinbase employee want to own you know some piece of the financial upside if they can issue a token that's you know maybe 10 percent of all revenues get passed through directly to token holders either in the form of a you know

coin buyback or some sort of a dividend and if you own that token you also get better rates on lending or staking or more leverage or something like that all of a sudden you turn every one of your customers into a loyal evangelist and that's where we're headed i think every company inside and outside of the digital asset world will figure this out over the next three to five years and we'll have a token in their capital structure so jeff that's definitely something that we are definitely aligned with with the bankless world where we see like tokens as coordination vehicles for communities and companies but i want to i want to get your interpretation of uh what what we are what we saw in the s1 because i'm not i want to know i want to know if you actually think that that is coinbase's

strategy or if they are simply just talking about issuing equity tokens or security tokens on a blockchain because what they say what they say in the f1 is that if we issue additional shares of capital stock including in the form of blockchain tokens in connection with customer rewards or loyalty programs i actually think that's kind of not totally clear like are are you convinced that it is what you were talking about or could there could they actually be talking about issuing literally a security token on ethereum uh i i think it's intentionally ambiguous because they are doing oh they're exploring this now the issues with what i said earlier about companies doing this in their capital structure is that there's no real legal precedent at least here in the u.s right most of the tokens

that have been issued have been from non-us companies to non-us users and investors we haven't really broken that regulatory you know gray area yet in terms of how do you issue this in fact the two companies that have tried to issue tokens block stack and i think inx it's actually really weird right if you actually you know they're doing a full road show in a marketed process with an s1 and a prospectus that makes it look like you're raising debt or equity but then if you actually look in the filings it's being booked as revenue right that's not when you issue equity in usu debt it's not being booked as revenue but when you issue a token the you know the the accountants were like uh this is like pre-selling a product so you have to book it as revenue so there's all these like incongruencies

that just don't line up yet with regard to how accounting treats it with regard to how the sec treats it so there's going to be some work to be done before we get there but that's also why in some ways i was a little disappointed that coinbase just issued straight equity on the nasdaq rather than trying this you know you need some pioneers to do this and what better company to do it than coinbase meaning um if coin you know when when i and and block stack tried to issue tokens nobody really had heard of them outside of the crypto world and probably didn't care about but everyone had heard of coinbase and if you were ever going to push the envelope and be like we are issuing our stock as a security token and you have no choice but to you know figure out how to get a wallet and buy

this as a token or else you're not going to get access to the stock of one of the you know fastest growing companies and largest companies in this industry a lot of traditional uh mutual funds and hedge funds would figure out how to do it you know they would be forced to be like okay you know i got to figure it out no different than when you know google ipod in 2004. they they didn't use an underwriter they did a dutch auction people were pissed they're like i don't want to do that like just do the traditional route and they're like we're google if you want to own our stock this is how we're going to do it so figure it out and i think coinbase had an opportunity to do the same thing where they could have said we're coinbase if you want to own it you need to own it as

in the form of a token and figure it out now again they didn't do it for a variety of reasons probably some regulatory and legal some because the pipes aren't set up yet to really trade these things you know t0 is not a very active platform yet so it's not like you can really trade these things yet but in the future that will all be solved for you will have you know uh uh ats's that are actively trading digitized versions of stock and you know one day you might see two versions of a token for coinbase you might see the actual tokenized stock and then you might see the you know the pass-through token which is kind of quasi-equity quasi-utility and i think you know all these things are on the table um and i would expect coinbase amongst other large companies in this industry to explore all of these

options well what's going to be interesting is when some of the other exchange exchanges do list or do go public as i think they they may in the future if they take a shot at this uh i as well was a little bit disappointed that we didn't see uh you know coin in some form airdrop to existing coinbase users right that would have been a very crypto native play but i want to ask you a question about these these categories of assets because i just want to make sure it's it's kind of lining up um because it is the case that something like bnb the binance token sort of straddles the world of of capital asset and also like loyalty asset or loyalty coin right um and that seems to be almost like a regulatory barrier in the u.s that

companies like coinbase can't get across so let me know if this square so on a company's balance sheet you have debt and then you have some sort of equity instrument right if that company is public that equity instrument is a security essentially or even if they're not public it's still a security which of course u.s regulators have a defined perspective on what a security is but we're also talking about potentially this like you call it a utility token almost like a loyalty token that might do something else it might give you precedent within the platform it might give you a discount on fees it could give you exclusive access to something this is a bit more like a an airline mile or a hotel point in the traditional system right so you've got these maybe

these three categories of asset what we can't seem to do in the u.s is combine you know category two which is the the capital asset and category three which is the loyalty token because as soon as we do that we run a fi a foul of securities laws right whereas bnb binance does not have that problem they're very happy to create this ambiguous pseudo-equity loyalty asset that can be used within the binance ecosystem in a variety of ways but coinbase doesn't have that luxury so in the u.s um is it possible that they could release some sort of loyalty token do you see that path is maybe playing out that's not that's separate and distinct from the coin capital asset and stock or just talk

about that for a bit sure well first of all i don't have a lot of ad a lot to add because you actually nailed it you hit all the the the the focus points on the head there like that that is the issue right now is that in the u.s the laws do not allow for what everyone else in the world is doing and you know so you can understand why there's frustration here in the u.s um at the same time the u.s also has the best you know protections and and customer protections and investor protections of anywhere in the world so you know there's a school of thought that it's good that they're taking their time to get this right rather than rushing through regulation that will be obsolete three months later so you definitely have a little bit of that tug of war here that it is impossible to do

what makes the most sense to do which is those you know hybrid you know quasi-equity quasi-utility type vehicles i think we'll get there though um you know it is as much as it is fun to poke holes at at the government in the sec and how slow moving they are you know the the reality is they're not trying to crush innovation they're trying to understand it and um you know protect uh investors now they don't always get everything right you could argue like accredited investor laws for example are pretty archaic and don't make a lot of sense but i do think that we will eventually have regulation that allows companies to do this you know ultimately digital assets are still new they are bridging the uh uh the gap between investment vehicles and payment vehicles that's never been done before right traditionally you have your you

know investment vehicle through a brokerage account and you have your payment vehicle through a bank now we're trying to combine that into one entity with a token where it is your investment vehicle it's your utility it's your you know payment vehicle all at once that's pretty complex so i would like to see the laws loosened i would like to see you know this get done but ultimately you know this is again why i was sort of putting the onus on coinbase to have been the ones to try it because you need a well-capitalized large company with visibility to be the pioneer willing to you know go down that road and set legal precedent until you have legal precedent it's not illegal it's just not legal right you're in that gray area and you know somebody has to try it somebody has to work with the with the sec to get

it right and and um to your point yeah like there's no reason to have separate loyalty points anymore that is now archaic relative to this new technology and this new structure um we're gonna get there i just don't know how long it will take and that's definitely why i think so many people like me included are so excited about having coinbase go public uh just because now we do finally have that entity to really bear that banner for our industry um jeff as we get further into this conversation we kind of want to go through a number of uh just short little conversations to to really uh tie a bow on this and one of those conversations is who's buying coin because we talked about who's selling it a lot of the early founders are just selling a small portion of their of

their uh of their equity who's buying uh coinbase uh we we know arc invest has uh i think put in hundreds and hundreds of millions of dollars into buying coin uh do you have any insights or information there about who is the interested parties behind coin the equity yeah it's going to be largely the investors who thus far can't get exposure so i'll give you an example before i even answer your question i'll go back microstrategy issued a convert not too long ago convertible bond right the sole purpose of that was obviously to go by bitcoin from a micro strategy standpoint but the reason they are using a convertible bond is because that opens up the door to a whole new type of investor that has no access which is fixed increment investors if you have a fixed income mandate you cannot buy anything other than bonds

well convertible bonds are a form of a bond you are getting basically equity upside in microstrategy which is very tied to bitcoin's balance sheet but you're doing it in the form of a bond that was opening up you know a whole new audience well at the same time what is coinbase doing they're opening up to the audience that doesn't have access and who is that that's financial advisors traditionally at the big wire houses right the merrill lynch's the morgan's families you know the the td ameritrades the the um you know the lpls these are this is the group of of investors that thus far has been largely shut out other than buying gbtc or you know the grayscale east product right that's been the only thing that they've been able to buy so that's going to be your first big buyer base is all of these you know

equity investors who have money at you know these wire houses and brokerages who physically can't buy bitcoin directly they can't buy um you know maybe they can't buy uh uh you know the equity of these asian and european companies that had that in the mining community like this may be the only chance for them to get exposure to the space and that's gonna be the first buyer um as a result you know they're gonna end up in these mutual funds uh of the big companies as well eventually they'll probably end up in in you know one of the indices probably the s p 500 at some point if not the nasdaq and as a result then you'll also have uh index funds that have to buy it because they're indexed to those uh to those benchmarks so you know there is a natural buyer base out there um you know

as much as we focus on the digital asset world don't forget that low rates and a low dollar are also incredibly bullish for equities and we just saw the greatest you know largest inflow to u.s equities than we've ever seen in the last quarter that money has to go somewhere too and that money is not going directly into bitcoin or directly into ethereum or directly into you know uni-swap tokens that's going into equities and this is now the best equity vehicle to express a bullish view it's it's so cool it's definitely a well-stated the bull case for coin for institutional investors also bankless listeners if you were listening to what jeff was saying notice how siloed institutional capital actually is certain things you can buy certain things you can't when we talk about crypto natives being able to right now

front run the institutions this is what we're talking about uh there's a massive amount of opportunity there for us um jeff i want to ask you the question of who's next uh so we've got a number of other um us-based entities you know krakens on that list maybe gemini's on that list uh there are some crypto custodians as well do you think they all follow in the track of coinbase uh go the the publicly traded route um do you think we'll see a slew of crypto native companies starting to be listed on the nasdaq or do you see a different path playing out i think they're certainly going to try right i mean this is a finance has

always been a copycat industry as soon as you see one successful story you're going to see five more right behind it um you know equity investors in uh you know gemini and kraken and any other uh company that's similar to coinbase you know they've been sitting on private equity now for five plus years and if they can monetize it they're going to try to do it so um you know we've already heard the rumors that kraken is trying um i think you'll see a lot more uh public companies um in the next you know couple of years here whether they whether because of spacks or because of ipos or direct listings but you know you're going to see it especially if you know these revenues continue to be as high as they are there's no reason why you won't see more listings soon i have one more question

and this is maybe we've talked so much about the um traditional investor lens on coin but i also know you're very plugged into the d5 world too um so there there are these crypto native assets like uh like uni token from uniswap and and sushi how do their valuations stack up now to publicly traded uh coinbase if you're to look at kind of like price to sales ratios and that sort of thing which i know some of your reports have are they looking like uh interesting buys or just like interesting um compared to coin or or not how do you see that playing yeah i mean you know when we talk about sales versus earnings right what is the difference between

sales and earnings the difference is your expenses and what are your expenses it's largely you know the legal the regulatory the uh uh the employees the rent you know all those things that go into your expense line well these decentralized entities like unit swap and sushi they don't have that it's you know your sales are your earnings so when you look at something like sushi which is you know or sorry look at unisoft they're trading at the 17 billion dollar market cap right now and their run rating you know well over a billion dollars of revenue uh that's pretty cheap right 17 times priced earnings for a growth asset that's growing you know basically a hundred percent quarter over quarter 20 employees yeah right exactly i think sushi is is even below 10 times um you know i think sushi is

uh the market cap right now is only a billion and a half and i think their run rating um if i'm not off the top of my head i think it's closer to like 300 or 400 million or something like that you're looking at like a four or five times price to sales price to earnings right there i mean that's incredibly incredibly cheap if you are looking at this through the lens of financial analysis so you know i think the biggest winner from all of this in the digital asset world is that these dexes should all be repriced you know they are super cheap uh you know the difference of course is that you're relying on cash flow right there is no underlying equity value where you can get if there's a sale of the company but the cash flow is there right these are these revenues accrue you know

largely to the lps but you know some sliver of it with sushi already accrues to token holders you know eventually i think you will see the fee switch go on at uniswap where those cash flows will accrue to token holders as well so you know there's there's reasons to be very bullish on the deck space as we wrap up here jeff i've got a one last question for you which is what do you think coinbase looks like in five years and i think this actually blends very nicely with what we were just talking about with just the protocols and defy just being so slim and lean and offering so much surface area for other people to tap into vance spencer who we had on the bankless podcast very long time ago said gave this tweet that i think provides really good context here's coinbase in five years probably no order

book trades routed to open source liquidity where they lp coinbase lps coinbase focuses on the front end the regulatory the staking and the custody they earn most of their income from lping and staking the native tokens of dexes and primarily serve as a wallet for users and they are asset lights how does this take about coinbase in five years land with you and do you have any other opinions about what coinbase looks like into the future i think that's interesting and it would be that would be faster than i would expect it to happen as much as i love d5 and bullish on default it's going to be a long time before people are trusting putting you know billions and trillions of assets in these smart contract protocols and i think i would be pleasantly surprised if it happens that fast i think more likely

you know as much as we like to joke about the traditional banking system and how archaic it is and how slow it is like probably coinbase starts to look like a bank you know they probably look like a goldman sachs where they have you know pretty steady earnings across four or five different business lines where they're you know doing everything from you know wallets which is basically like a deposit they're doing some lending and borrowing they're doing some staking they're doing uh uh you know the traditional exchange and market making uh they probably have consulting and advisory services as well for other companies so i i think you know again we joke about goldman and all these banks going downhill but they're still you know producing tens of billions or even in some cases like jp morgan hundreds of billions of revenue and and have

multiple hundred billion dollar market caps i think coinbase probably looks and feels more like that in the early days before eventually uh you know becoming more of this kind of decentralized entity now the flip side is we've never really seen a a traditional bank and a fintech company be one right the fintech companies are over here the banks are over here coinbase may be the perfect you know company to be both right they might offer these same kind of fintech payment you know credit card type opportunities while also having your traditional banking opportunities as well and if that comes if that happens you know this might be one of the largest fintech and banking companies in the world jeff georman thank you so much for coming on bankless and talking all about

coinbase thanks also for serving as this bridge from traditional finance to this new crypto frontier we uh we greatly appreciate your insight let's do this again sometime soon absolutely guys thanks for having me and jeff if you want to want to learn more about what you've written about and more about arca where should they go to find out sure uh you can go to our website at ar.ca we have a blog on there with a lot of educational content including uh that's r2 satoshi's which is our weekly crypto market update um and then also follow me on twitter at jdorman81 guys definitely sign up for the arca blog publication it is fantastic lots of great uh analyst insights and items

there this also this conversation with jeff i think for for me solves part of the the d5 paradox we've talked about so often on bank list which is why aren't more people talking in mainstream about defy like the growth of unit swap alone has been absolutely phenomenal i think the answer to that is it's happening too fast it's too fast for everyone to keep up you look at wells fargo it's taken 160 years for it to get over 100 billion in market cap 45 000 employees now coinbase nine years it's about to reach a hundred billion market cap what we talked about remains true with two thousand employees now you've got uniswap two years the volume of coinbase already with 20 employees that is how fast this is

happening so this is what the peglet's journey is all about is trying to keep up with this and front run it thank you so much for joining us but lastly gotta say risks and disclaimers crypto assets are risky so are um assets on the stock exchange of course all of crypto is risky so is defy you could lose what you put in but we are headed west this is the frontier it's not for everyone but thanks so much for joining us on the bankless journey hey we hope you enjoyed the video if you did head over to bankless hq right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence we recommend joining our daily newsletter podcast and community

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