Takeaways From DAS 2025 | Weekly Roundup

Transcript

this episode is brought to you by scale the next evolution in layer one blockchains explore the gas-free ecosystem at scale. space ecosystem and follow their Journey on X scale Network thanks to scale for making today's episode possible all right happy Friday host D Day what's up Ms how you feeling buddy you get some sleep last night a little bit rested yeah a little bit of sleep how we doing I'm doing great yeah what a week what a week did you go to the uh March Madness celebration last night you know what I actually missed it um shame on us I didn't go either yeah I ended up getting I went to the uh there was a superstate um event I

know you were there we were there at the beginning and ended up staying there uh decently late but might have had a couple of whiskies and uh yeah ended up staying longer than I thought but yeah it was a great everyone does at the end of a good event yeah good Das really good Das yeah it you know the the vibe is just so polar opposite to I mean a lot of the sentiment in the industry especially just going to some other industry conferences which you know like eth Denver was a completely different story and that has nothing to do with the organizers of e Denver or anything like that it's you know usually conference organizers get blamed or you know kind of Praise dropped on them based on stuff that's roughly out of their control but I cannot tell you you know we opened up talking about this at

Das the Divergence in sentiment in between different parts of the market uh it's pretty unlike anything I've ever seen and usually you have the native in the space who all bowled up and excited and building cool stuff and that corner of the industry is a little bit in the gutter at the moment or just feeling down and the institutional Corner which is usually much more measured and you know long-term oriented you know they are like coming out of their shoes excited so the most excited we've ever seen them I would say yeah there's a real Divergence between uh the you know since we started block Works we're coming up on what this is seven and a half years now the crypto natives were always excited trying to get the institutions to come in and try to get them to come to the events get sell some

things to them and now the institutions are more excited right at the same time that the crypto natives are getting exhausted it's fascinating and yeah yeah it might actually be worth doing a little bit of a history of this event because you know a lot of people I got a lot of questions like oh we finally have this institutional conference and we've been doing this for six years that both made me so happy and so frustrated I got that so many times they're like so many people are like yeah great you guys are finally doing an Institutional event I was like oh if only you knew the trials and tribulations that went into getting here oh my God I mean d was the first big bet the farm uh event that we did at blockworks yeah yeah the first okay so Mike and I started blockworks December

of 2017 2018 we were just hosting these kind of what do you even call them happy hour networking call Happy Hours yeah happy hours I think we can call them yeah they were three hours after work yeah drinks like maybe one talk or something like that one panel yeah one panel and um yeah they'd usually be 600 to 10 p.m. I think our budget for each venue is somewhere between 5 to $10,000 um we would usually do them at this like Loft area in Chinatown Chinatown yeah where the elevator worked half the time and somehow it always rained on the day of our of our events um so that was that was 2018 and then we hired this woman Julie uh Julie mof who's our our still our head of events

we're so lucky to have her and basically brought this idea she said look to be in the event and she had built and helped sell two I think events businesses to informa it's a big events company she's like to you got to go really big to do events and she put this budget in front of Mike and me to do an event in 2019 and remember our events were like I think we would would spend somewhere between 5 to 10K and Top Line would be like 15 to 20 maybe yeah it was to give people a sense of the numbers here so we started Ed doing this in May of 2018 really full-time we did we did our first event in February 2018 but you and I both still had full-time jobs the first one that we did when we went full-time

was May uh that was actually the one that we lost money on so only event we've ever lost money great great like two days after quitting quit our jobs May 1st of 2018 May 10th we hosted that event during uh New York blockchain week when that when that was still going on yeah but the whole the revenue for the entire year was about 200 or 220k and Julie put a budget in front of us uh for $400,000 for this event and the two of us were too scared to tell her that we couldn't do it we had no business hiring like real like real employee you know like she had worked at real companies our first employee was Mike's high school friend second was this NYU grad who I think blockworks was his

first uh first job shout out R and so Julie was like our first real employee so we we didn't want to show that like we were like blockworks a real company so you can't you got to do real compan things like spend a lot of money on events not a little bit of money yeah so we went into that year and and keep in mind let's setting the scene here the 2018 2019 bare Market was really pretty brutal um that you know there really hasn't subsequently been anything quite that bad you know it was bad after FTX blew up in 2022 but this was really oneth as bad not like not nearly I mean I remember sitting with you having beers in 2019 saying like if this industry doesn't work with would you work at like Uber or Netflix yeah it got really dark it was

like tumble weeds proverbially blowing through the industry it wasn't even you know I know people look at uh sentiment on crypto Twitter today but at least there's energy there people are arguing and debating about things it was just it was just uh tumble weeds yeah and so we took this really big bet the farm event on an Institutional conference uh in the form of Das yeah the budget was twice what we did um in all of 2018 revenue and the institutional thing was important because there was was already this 800 PB gorilla in the industry and that was coindesk's consensus and so we I think actually still to this day we have this really strong like go to market belief that you can't just try to like attack a market as this like all-encompassing thing you have to find your Niche and so our Niche was the

institutions were underserved in crypto yeah and there weren't even like today it's like yeah there's an Institutional crowd in crypto but back then it was like I mean you would you would email 200 people who worked at bank and hedge funds and get like what one response maybe and then you'd have to convince you'd have to get on the phone with that person to get them to attend the event for free like it was a so that but that was our Niche it was really important to have that Niche I think so that was may we set up the event for May of 2019 and we rented chiani and we're like look if we're doing it right we're doing it right and you remember uh Fusion coming in I do save the day we we bet the farm we bet I mean if if uh if that event didn't

work we bet every dollar in blockworks bank account if that if that didn't work um there would be no blockworks like we just the the event had to work or there would be no block works and we were coming up against it leading into it and you know got some big sponsorships near the end and made the event work and it was uh yeah was I mean you brought the yeah Fusion sponsorship in which made the event uh cash flow positive and it wasn't even massively cash flow positive we did like a little bit of profit but we're happy we were in the game then and you know that's when we learned uh you know blockworks has been a series of just learning lessons but definitely scale of events matters quite a bit but that's what got us into the bigger conference game so it told us you know

be Niche like own a niche um and you know within that Niche scale up as much as you possibly can yeah and so you know we had uh you know we've changed our event strategy a little bit over the years but the next year we started doing D no no then we were like oh my God these are so good these are so much better than the happy hours let's run it back so we decided to do D markets later that year which was yeah chaos chaos and then we're like could we Outsource our events and so we did like coin alts and other other we hosted multi-coin Summit right you remember that I think in 2019 too yeah and and then we were like okay actually there's all this opportunity um in in London in Europe and uh Asia was

like really dead then so we like never even thinking about Asia but it was like we're like oh we we could go to to London so we did London we did D London February of 2020 and I remember there were these two Israelis there who were wearing masks and I was like a bunch of Scrubs like they took they took the balashi Tweet seriously like I remember that too yeah like what are people doing wearing masks yeah I was like come on guys come on and uh yeah month but we we we basically had another bet the farm event planned for New York which was New York blockchain week May of 2020 we were all in on this event by far the biggest event we'd ever started planning and yeah obviously Co hit March 2020 and um that was that was scary because we had

basically the the economics of conferences or you outlay all this cash up front to book the venue and you have to book venues way in advance the bigger the event the farther in advance you have to book them so we had outlaid all this cash and then we didn't know if we'd get the money um or we didn't we didn't know if we'd get the money back for the venue and there's all these legal terms like um what's the thing in the contract about like for majour yeah so you're so basically the way that the the cash flow profile for conferences what it looks like is you're deeply um in the red until about one or two months before the conference and then you're in the green and what you're kind of trying to line up you hope you're in the green you hope yeah you hope you're in the

green but it's like there's a big outlay up front for you know venue costs and things like that and you're gradually you know sponsors and tickets are kind of coming in and you're gradually kind of breaking closer and closer to break even and then you know in the one or two months before you go into the green hopefully if you've done a good job and so yeah we co hit basically right around the time that we were breaking even and so I don't know if people remember this but there were all these this was very controversial from an insurance standpoint because uh you actually had you actually had a bunch in a bunch of force maure Clauses uh you were specifically if you like business Interruption Insurance you were specifically prevent uh protected against a pandemic but you know insurance companies aren't set up to pay

out every single company in the US at the same time right so they literally just couldn't do it and at that point blockworks something like 80% of our Revenue came from conferen yeah yeah so yeah you can and by the way people forget this because they just remembered 2020 and 2021 but Bitcoin dropped from something like 9k to 4K in almost two days and so we were thinking this industry might be cooked but even within this industry we're in like the worst EP possible we're definitely cooked we couldn't even we couldn't even commiserate company in crypto how stupid are we yeah so I actually have to shout out uh at the time you know sponsors it took us a long time to get money back from

the venue like a year or something like that um and it I have to shout out the sponsors of that conference actually uh bitgo was in particular I don't want to you know call anyone out in person but they were really good about renegotiating and turning that b b was the goat B I remember belelli came through like turn my sponsorship into a digital thing that which to him was probably a small thing I don't know I remember it was like 30 or 40 or 50k but for us it was huge massive yeah and so we basically just grounded out for the rest of that year we couldn't do anything that actually was the acceleration of the media part of our business so editorial was birthed at the beginning of 2021 we launched January 11th or 12th of 2021 uh that's when we really started to lean into podcasts and

that's when we created webinars because we literally couldn't do in-person conferences so we had to to we it was that was the that was the Genesis that event getting shut down in March of 2020 is why blockworks is the media company it is today because we said oh my God never again will all of our Revenue be tied up in events let's go all in on the digital side too and so we spent I me we had no events to host obviously because it was covid so we spent all of 2020 building the media site hiring the journalists building the in-house podcast to to launch in you know q1 of 2021 and that that created blockworks that the digital the media company as we know it today right so back to das so then what what did we do in 21 with Das

did we do two we did D London and New York right yeah and we did that for uh two years we did London and New York and then we had a strategy where you know we've generally the the trajectory of blockworks conferences has been bigger and fewer um and so we're like we might be splitting there's a lot there's a huge amount of overlap between New York and London which I don't think is the case anymore but at the time the industry was much smaller especially the institutional part of the industry so like you know we should be consolidating this and this was in the beginning of 2022 if you remember this was before everyone found out about FTX and there were all of these uh companies that were really interested in spending more time in Washington DC then right so s SPF and

FTX were kind of leading the charge here but it was it was all the big institutional players it was you know the coin bases of the world the circles of the world the block FES the world oh you're jumping ahead you're thinking about 20 this is 20 you're thinking later on I was yeah yeah yeah I this was 22 we were planning because you have to plan things two or three years out um and so 2021 was good it was a it was a good year for institutions uh you everyone was coming in 2022 was good too but permission list was so good right it was such an outside success and such a bigger event than we had ever done we said what are we doing hosting these little dinky institutional events barely any institution still in the game

we've been doing this for five six years it's like no institution still in the game all in on the crypto natives permissionless so in 2023 we said let's go all in on permission lists us crypto conference and we made the a big mistake of not hosting Das yeah right yeah well what what I think we were gonna do we were gearing up we remember we were going to consolidate D from London and New York into DC and then FTX blew up that was the plan and then oh right right right and then we you know we got it went from companies wanting to be in Washington DC to being completely radioactive and they didn't want to be SE right they didn't

want to get on anyone's radar because you know chances were you were going to get sued or indicted or whatever and so yeah we just we that was a pretty tough that was that was a really tough mistake to make because not only did we then have to pause um on having Das at all but we had to move it from Washington DC and we pushed it out a couple of months to London of 2024 so there was a big gap in hosting Das we had to eat a bunch of event costs you know right at a time when you know 2023 everyone's Revenue fell quite this 24 we wanted to do D in DC in 24 I think I think it was it was around that I was either end of 23 it was end of 23 and then we pushed into March but

yeah it was just yeah it was a really costly strategic error and then we missed the Asia you know we didn't we underestimated the amount of energy that was going to go into Asia and we hosted at permission list at the same time as token and people kind of memory hold thems like token is a phenomenal event right like huge uh success to that team but they went from something like a 750 person event to a 5,000 person event in one year it was a huge huge growth um and so yeah that was a very tough year for us on the event scale but that was tough that was tough but but before then it came back though then we uh but we still didn't do we didn't do New York right it was just London so we just so

we did D London um and then we'll get forward to 2025 and just our takeaways from this event in a second but so we we did D London and permission list in 2024 both them went great and actually Das London was our biggest Das in history right we went from 500 people to 800 to 900 2000 to D London had 1700 I remember it was 1724 because the the hotel we hosted at capped out at 1724 we had to cap our registration um and at that point I think we're were like oh yeah d d is very much back this is a good event to be hosting so we said let's go if we're doing this let's go all let's go let's go big with it and so we got basically

the um Dynamics in New York really tricky because there's only if you want to host an event over 2,000 people in New York there are only three different places you can do it at there's either like a Brooklyn Warehouse type of vibe and you have to like create your own space it's really difficult that's Brooklyn Warehouse the uh there the other is like the Hilton or the Marriott and they're just kind of like men type of venues yeah I don't want to speak too poorly in case we ever do host an event there but you're hedging I'm hedging here I'm hedging but we didn't but we were like if we're going big let's go big and then the third is Javit Center yeah and javitz is like just a massive massive venue and we're like look do we think because you have to bet on these things far in

advance with events that's why they're so tricky and so we said we think the institutional crowd will be here in 2025 let's get javitz and so that's why we did it at javitz this year and this was obviously March 2025 and um yeah I guess that takes us into this event unless there's anything else from the the lore that you want to share no that's great I'm sure people uh this is enough of Y but that's you know we share this story if there are founders who are listening you know there are so many crisis moments and I think this this informs a strong belief that you and I have that you really only most of the major Innovations or you know forward progress in blockworks has actually come from crisis so the media bu part of our business really came from a crisis of not being able to do

in-person events and uh and the strategy of digital asset Summit was um you know it went a lot lots of ups and downs but now yeah so this ties back into the very first thing we're saying there's all these people at D this year saying oh my God so good you guys are finally doing an instit tional event in New York like about time you guys did that and I think every time someone said that to Mike and I it was just a little pain because I'm like we've been doing this since 2019 and we're idiots and at some point we just either didn't do it or pivoted to London um which London is great and I and we're doing London again this year too but like anyways happy to be back in New York it was an awesome event so takeway so sum summary of the event then

we can do takeaways summary of the event it was the biggest D in history by a country mile right we had 2500 registrants um three-day event two floors at the Javit Center um uh by by far biggest digital asset Summit in history yeah we had some of the best speakers that we've ever had obviously you know the headline get here with the sitting got the dawn we got the dawn the Dawn Dawn um we had you know we had Michael sailor we had Kathy Wood we had Mohammad aleran Mohammad aleran it was just you know it was a it was a Phenom Al uh set of speakers and I think the the quality of the attendees one of the things that I'm most proud about we used to have all these discussions about do we want to scale this up to more people

because you lose the high quality of attendees I think we've done a good job of scaling the conference while keeping the quality of the attendees very high and very institutional um and so yeah I think in terms of the takeaways for this year yeah the other highlight for me this is uh I got I got dinner with um there was a Galaxy dinner last night um host by Alex Thorne over there who runs the research arm and um I sat next to sailor and he's like he's like you guys are it was a machine he's like during my talk I had like 250,000 people watching that on Twitter and in real time pictures of me were getting up and then you guys were clipping it in real time and then there were new stories about my talk on blockworks and uh that was like I mean

it has taken us seven and a half years to get to that Mach every I feel like every year we have an event like ah why didn't the live stream go better why didn't we get the pictures up and like faster why don't so it did take us seven and to anyone building anything else like T it takes a while to get the machine going it absolutely does and a massive shout out to the blockworks team here there's I mean there were so many people that were involved in that but uh I think we had 40 people on site to make that whole thing happen this episode is brought to you by scale the next evolution in layer one blockchains with a gas-free invisible user experience instant finality and robust security scale allows for Limitless scalability and has already saved its 50 million users over1 billion in gas fees scales

High throughput zero transaction costs and Powerful web 3 infrastructure make it the ideal platform for gaming Ai and other High throughput apps to explore the gas-free ecosystem visit scale. space slos and follow their Journey on X at scale Network that scale de with a K thanks to scale for making today's episode possible this episode is brought to you by ZK sync in 2024 ZK sync took a step toward a multi-chain future by transforming from a single L2 into an ever expanding network of ZK chains the elastic Network to onboard the whole world into crypto many specialized chains must be able to coexist work

together and share liquidity institutions and Global Financial leaders choose ZK sync for unmatched security scalable infrastructure better onboarding gasless transactions and privacy first design join Over 20 chains including abstract sofon and Kronos in the elastic Network today behind ZK sync is the ZK stack it is a One-Stop platform for building private blockchains on ethereum the stack solves all the typical privacy regulatory user experience and deployment concerns of blockchain without compromising performance or security join the elastic Network today at at ZK sync.

iempire thanks to ZK sync for making today's episode possible um all right you want to start with takeaways yeah yeah so I think the I think that it's a really interesting time to be in the rwa and the stable coin space that's the most obvious thing but let's try to dig a little bit underneath that right I think maybe you can separate out a little bit stable coins the stable coin story and the rwa story and the way that I differentiate that is there's real organic product Market fit for stable coins both amongst crypto Natives and the original product Market fit for stable coins was you know originally all like the the trading pair the dominant

trading pairs was like Bitcoin you know Bitcoins to alt and now it's mostly stable coins especially on offshore exchanges um and that's mostly a tether story and then the usdc story has been basically the same thing but uh you know on us exchanges and then also in in defi right so there's real product Market fit for stable coins as a trading pair but also just people wanting to hold dollars on chain um we we'll get into this but I think there's a huge amount of demand uh for issuers on there's going to be a bunch of new issuers that come into the market later this year although I think they actually have to wait until this stablecoin bill the genius stable coin bill from Bill hagy gets passed but there's like a very organic and there's a lot of stuff on the stable coin side

of things rwas are also big but I think the story there is a little little bit nuanced and and interesting and so there's about wait will you before we go too deep into RW will you say more about what you mean by the issuers and your and your thoughts there yeah so okay so I think you can broadly break the stable coin market today into two groups there's really usdt and usdc so Circle and tether and then there's the more decentralized stable coin market so like the usds is of the world from sky and a big way to differentiate that is how much how yield is getting passed back to users and how centralized the issuer is right so usdc and usdc D are just you know dollar collateralized stable coins they've got a big pile of

treasuries there's a centralized issuer um and there's an enormous amount of yield that's getting generated there I think tether obviously has a much larger um market cap than usdc and you I don't have any special knowledge here but my sense is that uh they keep more of that Revenue right so they don't you know I what I've heard is that tether doesn't do a lot of like Kickbacks to Offshore exchanges or anything like they're pretty strict about that whereas usdc has a very um generous Revenue share with coinbase which is public so you know something like 50% of the if uh usdc is custody or held on coinbase goes to coinbase um it's a very large Revenue share and there might be you know certain Kickbacks to market makers or or things like that and so I think that

there's probably a little bit of pressure on the usdc uh business now but I either way they're just these are centralized issuers of the stable coin and then you also have more decentralized issuers in the form of maker right where it's a D5 protocol and anyone can go in there and dump collateral and then mint um die or usds so that's what I mean when I say issuer but when you look forward into the future I think the product Market fit is probably on the more centralized issuer front and so you're going to get a bunch more brokerages so like the robin hoods of the revolutes of the world you might get Banks right the CEO of Bank of America Brian Mahan said that he would consider issuing a stable coin if this legislation gets passed you might see large asset managers right it's anyone

um that has a large uh it could be there's a bunch of new issuers that are going to come into the market um and we'll have to see who's ultimately successful there nice all right you're H gonna go into RW okay so there's about 20 billion do worth of rwa that are issued on chain like 18 point some as of looking at rwa doxyz a large part of that is private credit um so I think there's like 14 billion of that is private credit the rest is mostly treasuries now the caveat to that is that a huge portion of that some 11 billion is a figure so that's helocs on chain and there's a little bit of nuance there about whether or not that's actually on chain or not but uh skip that the I was reading one of the takeaways that you posted in your thread

from Cindy um over at drift and you know her her thought was that okay there's there's product Market fit here on the issuer side so people who are issuing onchain uh rwas and buyers right yeah exactly actually you want to just read this can you just read this yeah I can read uh okay so this is from uh Cindy who's one of the co-founders of drift um okay so Cindy said it's clear from all my conversations at Das this week that now is the best time in history to be building for institutions in crypto and there are a couple sub buckets here one on the cell side so the issuers the largest financial institutions want to tokenize their own rwas and they need defi rails to create the utility right borrow lending trading vaults things

like that on the buy side so the investors uh Crypton native institutions and high net worth individuals are hunting for yields Beyond crypto especially now that Defi and funding rates lag the treasury rates right so big moves toward higher yield assets beyond treasuries that are traditionally unavailable to crypto users like private credit non- us treasuries things like that she said I haven't seen so much fervor around institutions and crypto in the intersection there in a while except this time it's very much becoming a reality let's let's pause there for a second because because she's got interesting take I want to address that okay on the buy side I absolutely do see that and I think there's a Hu there's early product Market fit for protocols like maker right who it's a it's a net

interest margin business right so they've got a bunch of depositors um that they need to pay some amount of yield out to in the form of the savings rate which I think now is around like six something percent and then they've got a portfolio of assets right that are generating yield and some of that is there's like a some non you know uh yii generating assets like usdc and their Peg stability mechanism but they've also got you know they actually just did their grand prix right so they've got Biddle which is signed on they've got treasuries but they're going to explore other forms of mostly offchain yield that they're importing and whatever the net amount of yield that they're generating across their portfolio is minus what they're paying out to usds or die savings rate holders is their profit their business for the year so and

that's where cind spot on where we'll start seeing things Beyond right just kind of the traditional treasuries moving on chain into things like private credit yeah and actually Michael Anderson from uh framework did a great expl I want to there's an rwe real world energy um like yield being brought on which I think is super super interesting but what I still struggle to see a little bit is on the sell side I don't fully understand what the value proposition is at this point from the issuer standpoint you know and I think that this is where it's important to get very specific and realistic here because you know what people say is oh you're immediately opening yourself up to a global market okay maybe but look if I'm Apollo right so Apollo issued one of their um

you know fixed income you know funds right like a like a distress credit vehicle on chain and they did it on salana and Inc and I'm asking myself are are there really more buyers on chain of like of okay you got this credit fund right you can do it in the offchain way or the onchain way do you really have more buyers onchain I highly doubt it I would be very surprised right Apollo has no problem with distribution like they have access to said th this is exact okay so this this thing that sailor said to me last night he said if you can structure yield in the right way for for institute there's an unlimited amount of money in this world for you right offchain like there's an unlimited amount of money with Fidelity and

Vanguard and the sovereigns and the endowments and the pensions and the capital groups of the World there's an unlimited amount of money in the world you cannot you cannot fathom how much money those folks have and so there's I I I agree with you this is what he's saying like you don't need to move on chain to get more Capital basically I agree so why are they doing it I think I'm this is me completely guessing I have no Insider information I would guess that did I just see you wink is that a no that was not no no no I I did not so no wink no wink happened there for people are just listening but I would gu that there's um you know chains are paying these issuers to issue on chain that's I would I would guess in the short term that's what's happening

um and there's a Hu and that could be anyone from l1's to l2s to interop uh protocols right like uh you know everyone wants to be very close to the issuers but I think long term I think what Black Rock and Apollo and whoever is seeing is that maybe in the long term there is actually validity here to this idea of a global permissionless uh Ledger right like it does actually make sense to me that in the long term once you break down some of these W gardens around institutional Capital you could be opening yourself up to a broader Market I just don't think that's the reality today so if I had to construct a rational argument from the issuer side say hey like this is a better mouse trap right like right now you have a bunch of assets that exist in Silo databases with

a bunch of compliance hurdles around them we're gonna we're going to move these things onto a global you know permissionless Ledger although we'll get it we'll do a little caveat around permissionless you know going forward into the future and eventually there's going to be more liquidity here and everyone's going to move their assets onto this but in the meantime it doesn't really make sense so we need a little bit of a sweetener and I think that l1's l2s in our protocol whatever happy to give them that sweetener but I basically think that these issuers are basic are yield farming existing protocols today I think that's right to agree I tend to yeah yeah yeah this episode is brought to you by scale the next evolution in layer one blockchains with a gas free invisible user experience instant finality and robust security scale allows for Limitless scalability and has

already saved its 50 million users over 11 billion in gas fees scales High throughput zero transaction costs and Powerful web 3 infrastructure make it the ideal platform for gaming Ai and other High throughput apps to explore the gas-free ecosystem visit scale dospace ecosystem and follow their Journey on X at scale Network that's scale spelled with a K thanks to scale for making today's episode possible this episode is brought to you by ZK sync in 2024 ZK sync took a step toward a multi-chain future by transforming from a single L2 into an ever expanding network of ZK chains the elastic Network

to onboard the whole world into crypto many specialized chains must be able to coexist work together and share liquidity institutions and Global Financial leaders choose ZK sync for unmatched security scalable infrastructure better onboarding gasless transactions and privacy first design join Over 20 chains including abstract sofon and Kronos in the elastic Network today behind ZK sync is the ZK stack it is a One-Stop platform for building private blockchains on ethereum the stack solves all the typical privacy regulatory user experience and deployment concerns of blockchain without compromising performance or security join the elastic Network today

at ZK sync. iempire thanks to ZK sync for making today's episode possible so one interesting I mean uh just a small thing but I thought it was very cool um what Michael and Vance on the framework side of things were talking about with uh real world like another form of uh yield that exists in trafi that being that's being imported on on chain is um an energy uh derivative and so there's a protocol I guess called well I don't want to blow up their spot because they're not quite public yet but basically there's a there's something called a uh PPA a power purchase agreement in the US where you can kind of go around and uh put a bunch of solar panels on people's um roofs and where the energy is stored in a battery in

their garage and if you get enough of this energy you can kind of package it up and then resell it to the grid and then in addition to that the US likes this form of renewable energy right because it's solar as opposed to gas or coal or whatever and so there's a uh there's a credit that you can get which actually trades on a liquid market and then you can deep depreciate this asset and further generate another form of yield and so if you actually can bundle up this stuff and coordinate it at scale you can generate a pretty good yield which again you could import on chain and so I think this is another pretty interesting there's going to be more experimentation here of uh crypto people looking to coordinate potentially through dpin um additional sources of yield that you can import on chain so I

think that's a very undex and I know melum you know she kicked the whole conference off and she she's very interested in the energy space as well and where that intersects with crypto and so yeah I think there's going to be a lot of experimentation around energy based yields and importing that on chain I like that I like that yeah um all right I've got some thoughts um I maybe I'll do one of my takeaways right now which is so I met with a lot of uh a lot of Founders and CEOs from exchanges fexs and brokerages so I met with us exchange Founders uh Asia exchange Founders SL some some CEOs uh and then there were a lot of actually fex and like traditional brokerages like the Charles Schwabs and uh TDM a trades of the world there and so I had had a lot of interesting chats

um one so let me I I uh I wrote down my kind of takeaways from from this bucket of conversations the first one is that uh all us exchanges are racing to offer equities and we saw this um acquisition with that Kraken made of ninja Trader and I I don't actually know why they made it but one one of my guesses would be because this is part of this big race for us exchanges like the coinbase of the world to offer equities they're all they all want to offer equities on chain and I think this there's this idea that the market structure bill will actually come by the August recess and if that comes all of these platforms they they're all there's a there's a great convergence of these platforms right

Robin Hood fully turns on the crypto switch coinbase and Kraken fully turn on the equity switch and so I think us exchanges are racing to offer equities uh I think the Asian exchanges are racing to enter or in some instances re-enter the United States so a lot of them maybe were here in 2017 201 18 they got booted and now I think not I think they I know they are all looking to reenter the US that's very interesting I think uh fintechs are like I'd bucket this as like the new brokerages like the robin hoods of the world um they're all racing to offer crypto assets and I'm not talking about you know Robin Hood offering Bitcoin eth and salana I'm talking about the top 100 so all the fex

all the Robin Hood like companies are looking to offer all crypto assets as many assets as someone like a Kraken or a coinbase list um stable coin bill I think people are EXT 95% optimistic it'll come by August 60% optimistic will'll get it in like the next 60 days um depending on who you ask obviously everyone's thinking about launching a stable coin um maybe not actually launching their own stable coin but issuing a basically issuing a stable coin and doing some sort of rev split so this could be partnering with usdc and getting more of the revenue it could be doing like Agora like a Nick Van X thing and doing you know doing some sort of Revenue share um

but everyone's thinking about how do they make everyone looks at tether's profits and they say I want some of that uh traditional brokerages TD Mar trades Charles Schwabs of the world they're all thinking about how do how do we offer crypto tokens Market structure Bill comes in the summer that means they can start to hopefully offer tokens they think how do they actually do that um and then the last thing is like these exchanges sitting on a ton of cash billions of dollars of cash uh one one of the exchanges I spoke with said they're going to do several hundred million in Profit just from their onchain wallet this year and that's a side business for them right so that's they're sitting out a lot of cash highly valued Equity they're all going to use cash and equity for Acquisitions this

year so th that's what I like that's a big bucket of takeaways but it all kind of falls on its bucket of like brokerages finex exchanges and their 2025 plans I agree okay let's talk about the let's talk about the exchange bucket here because that's very interesting I you know for such a long time people have talked about consolidation on that side of things and a big part of why we haven't seen consolidation on the centralized exchange portion of things is local uh regulation and jurisdiction right and that gets very complicated uh you know as you as you move internationally but coinbase has started to move International right so they have a us or they have an international entity where you can trade um I think perss and I'm they've got a derivatives product right that you can trade um

internationally and now you're starting to see the Asian exchanges move into the United States and so there's going to be more direct onetoone competition and I think that's going to be challenging for some of the incumbents that might not have a niche carved out or they might not have uh critical mass in terms of liquidity or users but it's going to be very and there's going to be a lot of competition in terms of product set right everyone wants to be a One-Stop shop so yeah you want to be able to trade equities you want to be able to trade crypto and yeah it's going to be probably a little bit of a knife fight I think uh yeah I think it's going to be a ruthless year in the exchange space I mean if you're looking at the top 10 exchanges on coin gecko they're all they're all they're

Asian exchanges right so they're coming into the US they've got they know they have they have customer acquisition dialed dialed in Asia and we'll see if they can replicate that in the US I agree I think the Challenge from the US standpoint would be one of brand for Asian exchanges right like the trust yeah trust it's just that's the general perception is that you've been conditioned especially you've been living in the US is there maybe a little shady I don't know about the risk management practices there could be weird stuff you know around some of these exchanges and their connection to their local government whatever it is right and so I think that'll be that'll be the challenge on their standpoint and then I think from the US standpoint maybe coinbase if I was looking at these exchanges coming and say wow some of

these exchanges have much much more volume in users than than I do so what levers can I pull here to maintain my market share and potentially expand into into their Market yeah one thing that could be interesting to watch here is perss Right perss are this like offshore trading mechanism I think for that hasn't really been in the US because it's not legal um and I think maybe the Asian exchanges get more comfortable launching perss in the US and that pulls market share onto the exchange uh the exchanges who are more comfortable taking riskier bets like um I think coinbase offers 10x leverage or 20x leverage if you're an Asian exchange are you going to be comfortable offering

50x leverage or 100x leverage are you comfortable offering perss before Kraken offers perss those are I think it's a they might be more comfortable pushing farther out on the on the wrist Spectrum in order to win some of that market share yeah and I think that there's going to be some exchanges that I I think I know you've been talking about this and I completely agree with you I think this is going to be finally the year that we see some m&a in crypto and I'd be watching the exchanges in general and I would see it from all exchanges right because the you know the the Asian exchanges that are moving into the US you know whenever you're moving into a new geography it's kind of like okay I can either try to land and expand here organically or I can kind of buy my way

in um so I think there'll be some you know some amount of m&a interest on that front okay I've got a question on this so the you know when we the market cycle 2018 2019 you know 2017 18 19 20 if you were a Founder like us building in crypto you built a business on the back of equity right bitgo Anchorage fire blocks copper chainalysis Amber data Kao blockworks Dune whoever these are like Equity businesses if you were if you join so all the 2017 Founders built their businesses like that you came in in the next cycle 2021 2020 2021 you built token based businesses you never really thought about your Equity it was all

about the token and that's been the prevailing I think idea Founders is like oh if I'm launching a crypto business it's got to be a token based business yeah um if you start seeing Acquisitions of these Equity businesses and you start seeing fellow Founders winning selling their businesses for 500 million a billion two billion and these are equity-based businesses will this bring will we see a new wave of equity-based businesses starting in crypto I think so yeah I you know I there's there's still so many questions around this and you know we we one of the last panels that we listened to at Das was a really fun one with uh Block's very own bacho hosting between HB and um and Mike dudas about whether or not we

still need VCS and you know there's been all of this you know discussion about low float High fdv sort of tokens I I think one thing that's going to happen is building a building a business that has a token really early stage before you have any product Market fit is a real double-edged sword um if if you're in a bull market and everyone's kind of buying everything and it's going up it's a huge advantage to you right because you can essentially offer you know very non-dilutive but very significant you know token packages um and get that for you know use that to acquire good talent but it feels like that Market's never really coming back we're never just in an up only Market you you need to actually perform to make your token price go up and so if your token price

is going down that is a massive drag on the morale of the company and so I think what's going to start to happen here naturally is you're going to start to launch tokens just later in the life of a of a comp like I think we're kind of the the market solution here is just that it doesn't make any sense to me anymore to launch a token before you have a product there are some exceptions here right if you're an L1 or an L2 you might need to do that for Grants or whatever but I think we're going to generally see tokens launch later in the life cycle and then I think once we start to to your point once we start to see uh Equity m&a happen on the equity side of things and have that be a viable path towards liquidity then yeah I think

it will shift some things and I think Founders will like do I really need to launch a token here like is this worth it I think is this worth it yeah I mean stonie we did this live Empire episode with stonie and uh Jack from scale and um by the way hilarious Jack thing so we sit down at this dinner and um sit down at this dinner and everybody's like Jason we got a big question for you who the hell is Jack O hollerin and what is scale because I swear yeah you know the way that blockworks is able to host the Javit Center which cost millions of dollars to host obviously we have sponsors and so you know Jack is you know scale is one of the sponsors and Jack was speaking um we said that Trump was going to speak at

10:40 but we were running like 1015 minutes behind so you know we got I think we had like 280,000 people on this live stream waiting and the and the conference Hall is packed waiting for Trump to go on everyone's waiting for Trump and meanwhile Jack is talking about scale and every apparently there's like a there's a big I don't have a Bloomberg terminal but there's this like Bloomberg terminal Anonymous chat and the whole chat was just saying who is Jack who is Jack who is Jack there like hundreds of people so who is Jack question Jack I think Jack I think uh scale got the best deal of the event I think I got their money's worth yeah yeah earlier in today's episode I mentioned Ledger's latest products the stacks and flex and I wanted to take a

few seconds to tell you more about them these wallets feature the world's first secure touch screens which don't just simplify your digital transactions but also keep them extremely safe these wallets are virtually impenetrable to online attacks because they store your private key in a secure offline chip you can manage more than 5,500 tokens and install up to 100 apps choose the most trusted name in Hardware wallets and take control of your digital Security today at ledger.com or hit the link in the description of today's episode to check out their latest wallets hey everyone Jason here wanted to uh just take a quick break and highlight everything that's been going on in the

mantle ecosystem in just one year mantle has seen its tvl surge by over 1,100% now reaching 1.69 billion that's just such a crazy amount to think about more than 225 protocols have made mantle their home while the platforms Eco fund has invested $38.5 million in 51 pioneering projects through strategic Partnerships with bybit including MNT as collateral supporting Athena to scale and the first ethereum L2 to integrate Ono Finance they just continue to be on the bleeding edge of l2s be sure to stay up to date with what's going on by giving them a follow on X at ZX manle special thanks

to the incredible mantle team for sponsoring today's episode AO the hyperparallel computer is here a decentralized supercomputer built on top of R weaves permanent data storage AO offers infinite parallel processing and leverages web infrastructure HTTP for unprecedented scalability addressing limitations of existing blockchains AO smart contracts support large programs including llms and can execute autonomously enabling new classes of decentralized applications utilizing tees for secure computations and features a 100% Fair token distribution to R weave holders and Bridge depositors emphasizing Community ownership thanks

to R weave for making today's episode possible you can find out more by clicking the link in the show notes yeah so I I think that part of the reason that you haven't seen m&a up until this point was that there was massive overval I mean it's really overvaluation um and unrealistic expectation from Founders and you know when you were looking at m&a between two protocols that had a token there were a lot of questions around how you going to combine these things and it never really made sense but I think on everything from the infra side which infra has been probably over valued and over invested in and you're going to see some consolidation on that side of things uh that mostly look like Aqua hirers I think but then I would be looking towards the exchanges to look at uh you know more significant m&a and

there's going to be two drivers of that one which is like look I got a lot of money in this is the market to win and I'm not going to be you know too stingy here but then there's also going to be some exchanges which you know are at risk of getting you know I think everyone kind of this is the this is your make or break time and it's you got to do something right uh to make a splash here and so I think you'll see m&a activity from both of those standpoints yeah but um and then the other thing too is you know to to complete the circle about stable coins and why everyone is so bulled up about these things I would there was a really interesting interview that Scott bessent the treasury secretary did on Allin this week and I would encourage everyone to

listen to it and you know putting a couple of connecting a couple of Dots here so at the White House digital asset Summit the slightly lesser well-known dig digital assets uh uh treasury secretary bet Besson spoke you know just a little bit but he basically said Bitcoin and stable coins right they' been very consistent on that message and when you listen to his plan and what they're doing globally here from a macro standpoint it's very very interesting I mean there there's basically four big policy levers that they have right which is tariffs spending cuts tax cuts deregulation so they're actually going with the two growth negative policies right now tariffs right which is revenue generated but like not good for private sector growth in the US and spending

cuts and what the spending cuts are doing is it's most of the growth in the US has been driven like job growth um and a lot of growth in the economy has driven from fiscal spending from the government so they're bringing both of those two things down and they're hoping to make it up by deregulating and uh and by doing tax cuts so they're Shifting the growth impetus from the public sector to the private sector and they're very concerned at this point as well with the amount of debt that the US has right and so you know part of deregulation Scott Besson has talked about uh changing SLR requirements for banks so actually mentioned that maybe even uh the supplementary leverage ratio even getting rid of that it sounded like in this interview that would be very uh that' be pretty radical but you know he

thinks they could lower uh treasuries by 70 basis points and the other big lever that they have is stable coins because they're buyers of US debt and so yeah I think one of the the interesting ways that you might be able to think about stable coins are you know you have they're very similar to bank deposits right Brian MO when he was discussing stable coins is these are just Bank deposits um but the difference is stable coins are global bank deposits from day one and they're lower overhead and they're backed by treasuries and they're kind of a new form of bank deposit which might make sense for a global population um and so there's this unbelievable product Market fit here from you know the treasury secr treasury secretary of the United States wants these things because they're buyers of debt and it

actually might make sense for a lot of people globally that want you know basic basically access to US Dollars like a US dollar banking deposit um and the the cool thing about this you can almost think about this as a if you wanted to get a bank deposit before you actually had to have a bank that was doled in the United States and had all this infrastructure built around it but now you can almost start from the bank deposit and then have a bunch of fex take that bank deposit and build services around it it's an actual money Lego where you can have you know real established fexs build services around these stable coins which are untethered from any One Bank that is just so freaking so yeah it is it a huge amount of global demand for stable coins I think I don't know what the play is here

there's a debate about is ethereum GNA benefit from this or salana or whatever the L1 is that's issued I I'm not really sure about that but man I mean I I think I know everyone's bullish on it and it's a consensus bet but I think everyone's gon to get blown away by what the stable coin market cap goes up to yeah okay I wish I was a better Storyteller because I tried making this argument at the dinner last night and we're talking basically talking about the price of Bitcoin and I was like look we've got this stable coin Bill coming I think this thing comes in the next like 45 to 60 days I know everyone's thinking August I think it's actually like way more finished than people think it is and I think it'll come in the next like 45 to 60 days and I'm like imagine what

happens to the total supply of stables this year not even 26 27 imagine so what's the total market cap of stables today probably like to 2230 yep uh yeah 20 yeah 230 billion somewhere around 230 okay okay two 230 billion imagine that went up to 350 even imagine bigger imagine 500 billion what does that do to the price of what where do what does that do to the price of other Assets in crypto like that alone and we're talking about the price and so I was basically trying to make the argument like look you double the you double the supply of stable coins and the price of these other crypto assets will get impacted it just has to

get impacted and people are saying look it you know it's got no effect money stays in stable coins once it's in stable coins like someone buys usdc someone buys tether it's just going to sit in tether us and I think that is dead wrong I think that is dead wrong I think um it was actually this Matt Hogan TW um tweet as well this morning I saw too he said I can't stop thinking about this quote from US Secretary of Treasury Scott Besson we are he said quote are going to keep the US the dominant Reserve currency in the world we will use stable coins to do that and Matt says however big you think stable coin AUM will get you're probably thinking too small so then the question becomes what does the rest of the crypto market look like if St if stablecoin AUM

becomes multiple trillions that's the that's the story right now we go from 230 billion to a trillion in Stables what does that do to the crypto Market okay so I think it's very difficult to reason long it is is difficult to reason in the short to midterm about what how stable coin inflows impact the L1 token price but here's one way that I would think about this probably I think there are two ways two takeaways at least for me is it helps at least for me to imagine um everything including trafi as different l1s right and what I would say is the more like imagine trafi is one big L1 where stable coins are you know interoperable amongst that security Zone

kind of Imagine salana is a big L1 ethereum is a big L1 Etc if you're ethereum salana trafi wherever you keep your US dollar if it's usdc or if it's USD in the real world or whatever you're more likely to buy assets where you have on whatever L1 you're on right so marginally right like and imagine this right like if if they're Crypt natives listening to this if I have you know 100 Grand on a phantom wallet or 100 Grand on metamask I'm more I there's a lot of friction Tove moving in between you know these two l1s even today so generally I would imagine as the amount of stable coins issued on ethereum or salana grow there's just going to be more buying activity because you've already got your

money over there and so I'm mostly going to buy stuff on just salana or ethereum or wherever those assets are so that's generally one way to think about it over time is the more stable coins you have the more volume that's going to translate to and exchanges on whatever platform you're on but the other thing that it does is I think it's going to make people question this idea of you know there's always two you know there's two forms of value for these L1 tokens in general it's like is it the money thing and it it's valuable because you stake it places and you use it as as money or or is it valuable because it generates fees I think people are going to gen this is going to force people to It's Gonna it's going to be fees because if people want to hold stable coins over

the L1 then you have to the only way you can make this trickle down into L1 value is the fees from moving those stable coins around that stable issuers have to to pay to the L1 or the L2 or whatever the chain is that's that's acting as settlement here so I I kind of think that you H I sort of think that this is going to kill the oh this is valuable because I hold it and lock it up and stake it and kind of the tvl based argument for valueable for1 it's it's got to be fees yeah yeah that reminds me there was the uh just getting back to some of these takeaways there was a Seth Seth Gins uh tweet let me pull this up he said every protocol conversation at Das has led to the same convers uh has led to a discussion of token value capture

so important for fundamental investing and fully enabled by the new administration's positive crypto stance that become this becomes the conversation so y I agree the Reverend uh shout out Dan Smith did a really great uh talk on this kicked off day three talking about token value cruel as well so I'd highly recommend people go watch that as well good job and just one final thing on the regulatory front these two Landmark bills which is the genius stable coin act and um and the market structure Bill people are waiting until these actually pass you know this is how the institutional World works it's not like oh we think this is going to pass Good Vibes like let's there there we have to wait until these things actually get passed like the slightly more you know

um on the slightly less positive side there are a lot of Institutions which are excited there's still not a ton of money that's moving on chain and buying a lot of these assets and I think what's holding everyone up is the stable coin Act and the Market structure Bill the stable coin act I agree with you I think is mostly mostly finished and we'll get within the next three months or so the market structure build there's a lot more open questions on and it's going to be thornier because it really really impacts everyone in the industry right the the tldr high level is what's a security and what's a commodity and there's going to be a lot of very spirited back and forth because man does that impact everyone uh in a really big way so that is still a TBD has to get figured out

y agreed what other takeaways you got uh I think those are pretty much the big ones I I think oh one one other thing that uh so on that Cindy tweet you know she described I think something that's getting figured out here as well is how permissioned uh you know trafi is a very kyc permissioned World defi historically has been non- kyc and permissionless and there's a big question around how are these things going to interact and the early the early uh iterations and tries of this did not work very well and I think we're going to get more specific around what parts specifically of like where do we need the permissions exactly and I'll give you an example of a so a ruled out a Arc

at the end of like 2022 era and they everyone had to kyc right the borrowers and the lenders but now this New Horizon product from avara is you know if you are a if you're bringing a um you have to kyc if you are bringing like a you know a an rwa but then you borrow in permissionless stable coins so there's a difference there in terms of who has to actually kyc and where those permissions exist and so I think by making small iterations there we can actually start to bring Defi and rwas together um and so there's still a lot of work there but I think work is being done on who needs the kyc exactly at what level do we need permissions Etc to make these two worlds come closer together so still questions

there but I think it feels like there's there's progress big breaking news right now ofac uh US Department of Treasury tornado cach delisting based on the administration's review of the novel legal and policy issues hold on let me just skip to the important part of this we have exercised our discretion to remove the economic sanctions against tornado cach wow OPAC has removed tornado cash addresses from its stn list wow that's big okay let's end on this there was a really great quote or a very long uh series of takeaways from uh Jeff Park and this is uh so Jeff is over at bitwise and you know he's got this long

take with my state of crypto thoughts from Das convos and I'm not going to summarize this because it's very long we can link it in the show notes it's a really great tweet but you know he's the tldrs everyone's very excited about the structural macro opportunity in crypto Bitcoin and stable coins Venture Equity companies that are servicing this area it's unst stoppable cheering for these Trends and it's very refreshing to policy on our side and this is where I going to start to quote him yet I also couldn't help but sense that this might be a mission critical moment for the crypto industry to reassert its values for the new entrance and stand tall unswayed by the known incentives of Wall Street capitalism and government self-preserving inertia which eats up so many truly radical dreams and man first of all very well worded Jeff poet but I

agree with him like this is there the there is a part of crypto which is a tech upgrade but there's also very different culture and set of values and so that's where the rubber is really going to meet the road here on are we just rebuilding the same thing with a slight Tech upgrade or are we meaningfully differentiated in terms of the value proposition and the set of values and I think a huge challenge for this industry is going to be privacy and like kyc right because one set of value I could make this argument on on the left here which is kyc is a failed experiment you know it mostly is just a uh is Administrative overhead on retail because any who's sophisticated can trivially evade kyc programs and they don't really work and it's a

surveillance State tool and all that kind of stuff or I could say look guys at the end of the day governments have to deal with pedophiles and human traffickers and terrorists and these function like we are not going to let these people um just use our rails and it's been interesting to watch the industry's response to North Korea right after the buybit hack yeah know a lot of this went through def5 protocols and even like industry stalwarts and people that really care about this stuff is like guys we got to be better we cannot let we cannot not let crypto facilitate this type of activity and so we all as industry participants that care about the future of this space and our the set of values that brought most of us here we need to think about where the rubber is going to hit the road on this stuff

and they're probably going to have to be compromises on both sides but I think not losing ourselves here and you know completely just bowing to the whole point of crypto is doing something new right so I think it's important to push where we can for privacy for non kyc for being Global from day one all that stuff is really important and we should not lose that in the excitement that these in institutions and all of the money and success that that's going to bring is you know we don't want to get changeed too much here basically 100% good call yeah that was a again this dinner last night keep mentioning it but that became one of the biggest conversation topics was North Korea is a way bigger issue than anybody thought we are going to

have to do some sort of kyc stuff yep yeah yeah good event buddy yeah this is a really good one appreciate you dude this is uh how we gonna how are we gonna uh gotta do something even bigger than the president of the United States what do we do we should get our dads do let's get the dads Goan John that would be actually quite a side yeah bring a podcast one time we've got something bigger than the presid we got the dads um we have permission list uh permission list is coming up June 24th through 26th in Brooklyn um then there's two days of a hackathon the two days before that and then we have another Das uh Das London much more focused on the European

audience and actually the Asian audience usually comes out big for that one too so uh D London is October 13th through 15th yep right I think those are the dates um permission list is 24 through 26 are you frantically looking up the L the London dates right now I was looking them up I just nodded as if those were the right dates yeah I saw that double check us double check us I saw that Julie shaking her head yeah all right buddy this was a fun one and yeah hopefully we'll see you all at permissionless in Brooklyn in June see permissionless thanks folks appreciate you guys coming to D [Music]