Visa Builds On Starkware, Yuga Labs Strategy, GBTC Disaster | Roundup

Transcript

all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-hosts today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone this episode is brought to you by our friends at Avalanche they're the layer one blockchain that is fast stable and scalable you're going to be hearing all about them later in the show for now let's get into it what I see Visa doing is using this very stripped down very fast very decentralized blockchain and slowly kind of building on things like okay here's

chargeback protection here's fraud protection here's you know reversibility here's like all of these things that would be in a typical payments Network and like they're just slowly gonna just like Port all these Concepts onto blockchain rails but right now blockchain rails are like just like very dumb payments networks you know you send something you can't get it back you send something to a wrong address like you know it's gone forever there is no concept of fraud that's why credit card processors have such a hard time interacting with crypto but I think this is going to actually bridge that Gap all right everyone welcome back to what I think is the last Roundup of the year on bell curve uh we got Michael who is uh gallivanting around Europe I think possibly right now and uh so I was not able to make it but thankfully we have

the better mic uh joining us calling in from a negative 40 degree Bozeman I'm I'm allowed to roast I'm allowed to roast him if he's gone yeah just like I'm allowed to uh roast Vance's like skater hair from uh like 90s skater hair that he's got going on right now drunken suppose some sweet lettuce yeah I mean Michael's hair is absurd right now so I'm not the one you're looking for fair enough but this isn't the last episode either we're doing the predictions app we're doing predictions we have predictions we have the predictions app but I think the last like Roundup of the week so of the year so um yeah we do have the predictions up next week um all right guys there there are a couple thoughts I had for the for the Roundup this week um and I know Vance we

don't have you for too long here one was uh Visa's news uh the next is Yuga Labs uh hired uh I think it's like the CEO or the CEO of Activision and then the third was um some stuff going on with dcg so Vance in your mind what was the big news of the week uh I mean other than those I spent last night reading and not because I had to more because I thought it was just like really interesting the cftc SEC and sdmy complaints against uh the FTX crew those were I mean it's always interesting to look back and see how it really worked and you know what struck me is not only how early the fraud started but

they didn't just blow 10 billion dollars they probably blew close to 20 billion like 10 billion was the whole they probably made a couple billion Market making they probably made a couple billion on Seoul at least you know probably more than that probably like 10 like they this was not just a massive fraud but these people are just idiots like they just lost so much money it's mechanically hard to do um but I thought the complaints were really interesting did you think it was interesting that Gary and Caroline Flett which is the news that came out yesterday yeah I mean reading into the details of it you see all these massive loans they took the biggest loan that Gary Wang took was two hundred thousand dollars and so you know you kind of Wonder like

what was the interpersonal dynamics of the whole situation and Gary I'm sure he knew what he was doing was wrong but like he didn't seem like he was in it for like the power the money the prestige in the same way that SPF was but in the complaint you can kind of stitch together how it worked Gary monitor or Gary altered the code and led that side you know Caroline was kind of the money woman she took the money she received it she knew where it came from she spent it and SPF was kind of you know puppeteering the whole thing and you kind of get this interesting like tapestry of like the interpersonal dynamics of like SBF and Caroline who were maybe dating an SBF and Gary Wang and he was probably very dominating over him and you know the open questions are where's nashaud uh where's Trabuco uh

but I think those are forthcoming you know that was the big you know uh thing about the sdny announcement Damian William said we're not done we're coming after more people hmm where is Tabasco where is that guy he was all over the place there's a tweet there's a tweet that's held up just so unbelievably poorly which is why you know when he was when he stepped down he's like why do journalists feel the need to ascribe anything other than the need to go over water quickly you know why are you basically reading into me stepping down and one month later this entire this entire fraud gets uncovered so not looking so good uh in retrospect there but but it looks like Caroline will will not be prosecuted for any of

the crimes related to FTX the tax stuff is different the SEC civil complaint is different so is the cfdc um it looks like she's going to have to discourage any profits that were made and like you know the government gets to calculate that so that can be a very very large number uh potentially that she doesn't have access to but it doesn't look like she's going to actually do any jail time which I thought was pretty interesting hmm what do you think and last thing on on this entire situation because we're putting this in our rear view for for 2022 but but what did you think about this there were talks about clawbacks right so there was an announcement that the um John Ray was going to be seeking clawbacks basically from the political

donations that SPF made I think it was basically ring fenced around that particular set of donations but you know SPF you know we kind of keep getting more and more details about the money that he spread around crypto and the people that he either gave loans to or paid people off with or whatever and I think the big question is what why are those clawbacks gonna happen who are the clawbacks going to apply to what's the time frame that the club like the clawbacks are going to be applied on so do you have any thoughts I don't know if you saw that article but do you have any thoughts on the clawbacks I mean it's going to be a battle to get the money back um you know if SPF gave the money to somebody who spent it on somebody who spent it on something like

do you get to go after like the third derivative of the person who took spf's money I don't think so um and so I think it's going to be a negotiation where it's you know give us the money or we're going to sue you um and if we sue you it's going to cost a set amount of legal fees and so the incentives are skewed to settle basically but I don't think all that money is coming back I think a lot of it is just you know kind of gone at this point um but yeah wrecked the the photos of him going to the airport are also just uh brutal Foxhill diet he actually was pretty good um I actually thought he looked good too yeah you know because he looks better than that before amphetamines and like eating real food is actually good for

you but yeah that's so true he actually does look healthier than I've seen him in years it looks way healthier yeah yeah the the worst that we've ever seen him was at that Bahamas conference when he had like the longer like uh pair and he was like really kind of like bigger he was trying to convince Bill Clinton to come on board yeah okay I'm sorry that is not the worst time the worst time was that video that got produced do you guys remember this video that was fake sleeping yeah so I in my head up tell that do you remember the picture that you had for a long time was him like when he just entered into crypto and he was kind of the skinny guy with this big wiry hair and then suddenly you kind of looked at him in this video it's

like dude I thought you were vegan you're a vegan brother what's going on I want to talk about Visa actually so Visa basically proposed um it was Catherine Catherine goo I think who Lee is like either on the CR I think she's on the crypto infrastructure team visa she was previously at uh JP Morgan and Anchorage and Gauntlet um like pretty she's pretty crypto native I'd call it and um she posted this thing which is a big Visa announcement Visa is now proposing to do uh automatic payments using starknet um and and I think their proposal the way I understand it is they want to set up these like self-custodial wallets where you could use a account uh account

abstraction method to set up automatic recurring payments on starknet um the way that eth is set up right now does not support this so like if you think about the just like how the eth network works today you have two different types of accounts you have uh EOS like externally owned accounts uh that are controlled by private keys and then you have contract accounts which are essentially smart contracts this introduces this I think I mean Vans you could correct me if I'm wrong here but like a third type of account which is an account abstraction which I remember vitalik writing about like several years ago and this would basically combine user accounts and smart contracts into a single type of account which then I think what you can do there is then you

can start running automatic payments through the use of smart contracts it is similar to what was The Proposal I think it was eip1337 that allowed for like subscriptions on the Block like subscriptions on the on on ethereum um so it seems maybe similar to that um I don't know I just thought it was really cool that visas uh they're working with like the Argent wallet they're working with like they're pushing this like self-custody narrative um and use case they're like they're working with Stark net and l2s like I don't know I just thought it was really cool to see Visa pushing into this it's it's a well-defined market it already has product Market fit this is a really good good use of a blockchain and it's pushing on one of the key things that ethereum doesn't have yet which is a cam abstraction

and vitalik is is actually put out a piece of research which effectively on ethyl one would allow for account abstraction by the creation of an alternate mempool just for account abstraction transactions and so like this is one of the main things that especially with things like payments and gaming that is a feature that people absolutely need and you know if you think about starkware uh in a very concrete uh you know use case for this um you can do gasless transactions on on stockware so like if you're a game developer you don't actually need to go and pay gas for every single transaction you can just you know abstract that away on the back end like once that comes to ethyl one and the other l2s like that is going to be a really big piece of

adoption that pushes companies into this so it's positive um I want to see the follow through all these corporate announcements that's kind of always what I I wonder is like what's going to be the actual product that gets pushed out I'm yeah I mean that's that's always what it comes down to also this stuff just takes a really long time right like JPMorgan started working on Quorum back in like 2015 and they're now finally just I think they just did their first trade a couple months ago on on polygon right that trade that we talked about so um yeah I don't know I'm torn on this like on one hand uh I can see this world where like okay you open your Visa app it feels like this normal app with no seed phrase just like your biometric it's got a an account abstraction wallet

on the back end you can make usdc payments to like merchants or to apps instant settlement Merchants no Bank fees non-custodial Mass adoption is here boom super exciting on the other hand you've got like it's Visa right Visa is not our friend they have a business model that is like kind of rent seeking on behalf of banks who in exchange defend visa from competition it's like kind of uh I don't know just like they just they just force businesses to collect feet they just collect fees from everyone and have this business model that forces businesses to do this right it's like a sales tax um that could end up ends up getting paid to Bankers by moving a few numbers over the Internet so like that is their business model today so on one hand I'm

like I don't know I'm torn between that I'm curious to get your guys's take I well hold on we made the comparison to these things take I feel differently about this news from Visa than I did for Quorum with JP Morgan because this makes a lot of sense to me this Visa announcement because the core business of Visa is basically batching and processing large uh groups of payments and I think they've taken a look at starkware and said hey this is a step function Improvement in technology that helps my core business I basically just think they've identified a use case that makes a lot more sense whereas I always kind of looked at JP Morgan and thought this is a little bit of innovation theater no offense if I maybe I'm like totally missing something but

there's kind of GPM coin and there's all this sort of nebulous and Enterprise blockchain stuff that at least my personal opinion I'm happy to be proven wrong here but I've never really looked at it as making a lot of intuitive sense this Visa seems like a bit of a different announcement to me I also I don't know I would push back a little bit on it's the bankers and they're doing evil stuff I don't know at a certain point these are companies that perform services and I think one thing that like Jason you know I've talked a little bit recently about public goods there are a lot of people that are basically saying there are these blockchains and they're going to be public goods and they're not going to need to extract fees or value from the services that they're providing and I would like kind of gently push back on

that and say we're in the very early stage of a lot of these companies and networks and they can get by for now the expectation is not necessarily that they extract rent or value But ultimately blockchains are gonna have to figure out a way to do that so I would like kind of gently push back on that particular point of you I guess the I guess my pushback there was like the real what this is in my mind is centralized crypto with your name stamped stamped on each transaction which kind of like I don't know does defeat the purpose a little bit of like Visa sitting in between these transactions I don't know I might be honestly misunderstanding what they're building to but one one way to kind of think about this is so if you if you think about a payments Network

um and you think about blockchains in parallel blockchains are like a very stripped down version of a proper payments Network that these people run and so like what what is a payments Network obviously it's the ability to send money it's it's things like fraud protection it's things like being able to reverse transactions uh it's things like compliance and like what I see Visa doing is using this very stripped down very fast very decentralized blockchain and slowly kind of building on things like okay here's chargeback protection here's fraud protection here's you know reversibility here's like all of these things that would be in a typical payments Network and like they're just slowly going to just like Port all of these Concepts onto blockchain rails but right now blockchain rails are like just like very dumb payments networks you

know you send something you can't get it back you send something to a wrong address like you know it's gone forever um there is no concept of fraud that's why credit card processors have such a hard time interacting with crypto but I think this is going to actually bridge that Gap if it gets off the ground the problem with these things is like you always move at the pace of the slowest executive you know involved with the project and so um you just gotta like get those people excited and and keep those people at the company for long enough where it actually plays out I think the other challenge in addition to just like getting the the last executive on the train is that there might if this is the classic clay Christensen disruption and why it doesn't necessarily happen from incumbents because you're to your point

about blockchains being dumb payment rails they're also very cheap payment rails when they start to operate at scale and you know Visa kind of looks at its Core Business and they charge whatever they charge two and a half three percent or whatever it is on transactions to Merchants they someone some Finance guy probably a CFO or Finance is saying hey this is this that two and a half percent makes up an enormous part of our Core Business this is cannibalizing and I'm sure there's some internal there's another part of Visa which is saying hey this is the way the world is moving and then there's someone that's trying to defend the core business and that's ultimately the tension that incumbents struggle with I think last thing I'll say is like if if people are interested go look at the financials of uh MasterCard and Visa they're very

interesting you know they're not high growth businesses at this point but you know they're 60 65 percent you know margin businesses so really healthy you know free cash flow they're each valued around like 300 400 billion um and you know they're they're not anywhere near as profitable as something like ethereum but they do pay dividends and it's it's a very interesting comp in terms of where you know these big L1 blockchains could go ethereum right now is about a third of the price of either of those stocks on the theme of being sort of positive and optimistic going going into year end there is and Jason maybe you and I feel this a little bit more even than than others just because we're involved in media and have a newsroom but if you were to look at if you were to look at the announcements

that were kind of coming out during the bull run and be like oh the price is going up because of XYZ announcement naidig has another big partnership with a bank or like you know another El Salvador just bought Bitcoin or whatever the news that some of the news that's coming out during the bear Market that gets absolutely no play is very significant like this is a huge announcement in my opinion up 30 in the last book I also I I know I got some shade on this podcast for saying this but Fidelity doing what they're doing making at least like Bitcoin and Ethan custody accessible to a more institutional audience is I think it's a massive I think it's a massive deal so there are these small incremental but like very meaningful bits of adoption that that are happening right now that people

aren't paying attention to because frankly the price isn't going up but progress is still being made I think it's very very optimistic Vince do you think that this will um this made me think about uh nft payment models excuse me nft business models like right now the nft business model is bad like there's a bad business model around nfts which is why the conversation about royalties is such a big Topic in the nft community it's because the original nft model of like one-time drop and then royalties was like was like people saw it as bad model do you think this moves nfts uh to subscriptions like do you think the new model of nfts in the next cycle will end up being more subscription based

versus percentage of royalties based like right now if like let's say I own an nft but I don't I don't ever sell it like that doesn't that doesn't drive any value for the network and that doesn't drive any value for anyone um so like okay so burmes if you own a permi right now you get access to blockworks research we charge 2 500 a year for Block Works research but if you own a permi you get access to you get access to blockworks research for free it would be nice to be able to have an nft or like burmes if they wanted access to blockworks research maybe there's like a a 50 charge a year or something like that I'm not saying this for permi specifically but like there's like a Missing Link in in the in the current

model I feel like and maybe subscriptions are it I mean I think it's going to be all of the above yeah you know there's going to be some that are subscriptions like this winter I've been looking at a lot of art blocks you know I'm not like a super fancy art collector but like I really do like those and I like the idea that the artists get paid and like that feels like it has product Market fit with me things like d-gods feel like they have product Market fit with the Solana people you know punks obviously have that like I kind of see it being a lot of different things but I think the most impactful you know exponential growth will be the ones that you know have two percent goes back to the treasury is spent on something to develop the project it's just like you know that's the only

real huge upside model with nfts not that they can't replace subscriptions I just don't think it's like 10 times better than what exists right now all right everyone quick break from this episode to talk about our show's sponsors Avalanche many of you know Avalanche as the fast reliable and scalable layer one uh the folks at Avalanche have a really great message for those of you who are in the crypto industry right now which is bear markets are for building so while a bunch of our friends over in C5 are kind of going through these struggles and travails the folks at Avalanche basically put their heads down and are shipping products that Builders want the latest solution elastic subnets right and just to expand on that Avalanche is consistently upgrading all of their platforms right so on the platform side you've got elastic subnets you've got new VMS on

the infrastructure side of things you've got core which Mike I just uh I know you used that the other day yeah exactly exactly uh so they're upgrading the infrastructure side with core and Enclave the chain has had like no downtime super customizable for devs uh yeah if you're a builder if avacs.network avax.network great place to be but do Yano and I as well so you definitely go check them out but click the link at the bottom of this episode click the link otherwise you're not going to get any credit come on yeah give us click the link at the bottom all right give us the credit exactly so yeah big thanks to Avalanche um yeah you I mean you you just had a great experience with them the other day on the user side of things so go check them out guys thank us later

let's get back to the show let's move past Visa stuff uh exciting announcement we'll we'll keep eyes on that the next one is um I don't know if there's anything you guys want to go over but I thought Barry tweeting out the article so uh I don't know if you guys saw this but so basically backstory uh grayscale subsidiary of dcg they've been obviously pursuing this conversation of their closed end uh turning their closed end fund gbtc into a Bitcoin spot ETF over the past like two years keeps getting denied by the SEC um Barry's been pretty quiet about this recently he tweeted out a Wall Street Journal article along with the caption if grayscales Bitcoin ETF dreams fail firm may try a tender offer so I don't know if you guys have seen that but you

should pull it up um you know the options the option here I think includes a tender offer for up to 20 of the outstanding shares uh and the trust is like I think roughly 10 billion dollars right now um this would be like a direct appeal to shareholders to sell their shares at a specific price during a specific time frame and I think this led to a lot of confusion among Folks at least at least what I saw on Twitter um because dcg would need a pretty significant amount of cash to repurchase shares that are currently trading at like a 40 or 50 discount to nav um so I'm just curious what you think of this the high level of the whole situation is rumors that the hole is like 2 billion or something or

dcgo owes Genesis that about that amount um and so this would be a 20 tender offer on a 10.7 billion dollar trust or call it 10 billion today and so that's a two billion dollar offer and then they would you know buy that at some sort of discount to spot at gbtc spot they would then need to go get approval from the SEC to do this and I think they would need that approval because they would then take that gbtc get a special approval from the SEC convert it into Bitcoin sell the Bitcoin and kind of net the profits and if you cover the hole for Genesis this is this is what I was thinking at least it's like you know 50 discount you know 2 billion tender

offer you make 2 billion in profit that roughly is like the same puzzle piece as the hole that's missing so maybe that's what's going on um but it's good to hear that there's a plan the other stuff that I saw this week is like Gemini earn and creditors you know talking with Houlihan Loki to get them some sort of plan it feels like it's getting better at least more transparent um and this feels like at least part of the strategy to to bolster everything I feel like just at a high level gbtc is basically the Crown Jewel the enormous amount of basically Bitcoin that they have locked up in there and the fees that that's going to generate on a revenue basis and there's a hedge fund fur tree that sued grayscale and talked about it pretty publicly is that they're very unhappy about the enormous discount

that gbdc is trading at and I think the tender offer is kind of it fits it fixes like a bunch of things it's a way to get liquidity back to some of the shareholders right that aren't super happy about having their their Bitcoin essentially trapped in gbtc the structure and you're also raising some money from like Vance said for dcg to basically fill the gap on on Genesis and if you also go and look at you know there's there were rumors about this right this was reported on a couple weeks ago that uh Barry might be trying to sell coindesk as well and you know I think basically what he's trying to do is just prioritize within his fiefdom what are the revenue streams and businesses that he cares about and he's got to get enough liquidity to

basically make Genesis whole and then I assume he's got to shut that down I can't imagine ever wanting to be in that business ever again it's got to be been pretty traumatic for him to be honest in a weird way there's a perverse incentive for him to just like drag this out because if everyone sells their gbtc and it's trading at like you know 10 cents or you know 10 on on the nav of of the Bitcoin you just buy that up and then wind the trust up and you know you profit 10x the difference like this is just such a dumpster fire this this product I really hope that ETF gets approved not because I want you know the industry to like benefit from that obviously but this is just such a bad look and there's such a rolling disaster too like it's not gonna get better in the next two

years probably at least now do you think just out of curiosity Ben says this mechanically if there's this tender offer and that ends up getting executed does this mean there's going to be some cell pressure on on bitcoin I mean that's the other thing that's why we're talking about you know you got Mount gox um which is a insolvent Bitcoin exchange from the early 2010 odds and they're Distributing all the Bitcoin that you know they got and that's I believe around three or four billion that'll happen in January you're gonna have you know maybe this happening in in January February you've got core scientific that just filed for bankruptcy yesterday I don't want to rag on bitcoin too much but it's just like a lot of a lot of things that are going wrong right now the

I I guess the look this this whole dcg thing is still being solved and there's some probably like short to midterm cell pressure but there are basically I think three threats sort of Damocles type things that are hanging over the market that could really impact price which is sort of this dcg Genesis situation there's tether potentially in in binance and frankly like each I don't know those are in my opinion the three thing the three threats that could probably send the market lower from from here and I don't know I kind of think every day one of those things doesn't happen it's looking mildly better I do know that now there was a deadline that was passed for Gemini earned Predators essentially

where they can file for suit they're now I think the Genesis loan that you know ultimately your your counterparty is Genesis for the Gemini earned customers so they can you can file suit against them so I think some important date was passed but basically every day I think that something drastic doesn't happen is like probably good probably relatively good sign um I don't know there's always someone else you can sell you know June to you know November July August September October November you know five months these things have like a lag um you know someone fails everyone pretends they're okay someone else fails um and so it's kind of like one interpretation is every day that doesn't happen it's it gets better and

the other one is like you know every day that the earthquake doesn't happen just like more pressure builds up when it eventually does unleash so I don't think any of these other ones are gonna go insolvent but I think it's more of a time thing like in by the end of q1 we'll have all of this stuff behind us I think we're going to be dealing with it for you know the foreseeable future at least um I do I do think the the point taken there's definitely is a lag but also these big blow ups tend to happen at the very bottom of markets not like at the beginning they like the bottom is almost always marked by some enormous explosion and then it makes everyone extremely nervous so I'm feeling very Po and just maybe it was because I was um you know we were going to do our

predictions episode today now we're doing it next week I was looking at some of the predictions that I made last year at the very top of the bull market I it was painful for me to read what I thought was going to happen some of these predictions it was like I don't even none of her stuff I don't want to talk about it uh I'll probably have to just yeah that actually the one prediction that I got I was like one for ten the one prediction I got right was consolidation in Exchange Land didn't know why that was like the one thing that ended up being correct for the consolidation yeah it was all this stuff I mean it was like go back rewind to like November buying a sports team did not come true Dal playing a sports team yeah it didn't come true yeah yeah hey

we're taking risks all right on these predictions I'm not here to make safe predictions but yeah point taken not great but I think the reason is because I was extrapolating what was happening and I don't wanna you know when we talk about predictions next week I think the Temptation is to continue to extend these bear Market negative sort of uh predictions but like probably I don't know my working thesis right now is we've the worst of it is behind us and there's probably some period of apathy that we have to work through here before or you know some sort of return to positivity but I want I have predictions on the theme of positivity I would say there was a coinbase survey they sent out I don't know I tweeted about this oh yeah only eight percent of investors believe that crypto is going to go higher next year

that was that was pre FTX when that survey happened yeah from October of 2022 yeah so well take a look things are worse [Laughter] take a look at like go back to it took basic like the peak in 2017 was it was like November or December of 2017 then look at where you were one year after that and look at what happened price action wise basically like people forget that during a bear Market the price of Bitcoin at least like tripled and just to give you a sense of like how bad sentiment was back then the price of Bitcoin and crypto market cap overhaul like tripled and nobody talked there was no talk about like a bull market

returning it was just like yeah it's gonna go back down again so I almost feel like we're reaching that level of sentiment where even like sustained price increases wouldn't convince people that things are going to be better but that's what I've kind of been waiting for to be honest what do you think about that dance is our Perpetual Optimist here the thing I mean I've been in like much worse situations than this so I'm not really too uh too nervous it's just like a waiting thing and my motto is always like give it a year if things are bad just give it a year like things will be better next year I do think there's a lot of data on stock markets over the past 200 years of if you have a really bad year the chances you have a double digit year the next year after that are

generally like 75 80 percent you know pretty good um so that's kind of what I buy us on and I'm just aware that's going to take a while but I don't have anything else better to do honestly than than do this so this is uh this is kind of what I'm you know I love this so I'm going to be here um this is a story that I bet you didn't even see or didn't even follow but uh yoga Labs named the former Activision Blizzard president as their new CEO um so I don't know I know you're not I don't I know you don't follow the nft stuff as closely but Activision Blizzard right they are they're the they're the gaming Powerhouse right they own Call of Duty they own World of Warcraft they own Candy Crush they own one of the greatest games of all time Tony Hawk Pro Skater

one and two uh so this feels like such a good game phenology one of the best um so I actually I've been all downhill since Tony Hawk honestly honestly yeah exactly bring me back and I remember playing that what was the really good snowboarding oh my God on it's 1080. it's 1080. that was that was phenomenal so good um SSX yeah SSX tricky also good anyways so that like I love this move because I think of one of the mistakes that crypto companies make is they don't uh they don't bring in leadership from for folks who know how to actually scale

um because I think there's this like idea in crypto that like oh we're going up again like we're trying to build something really different which is true like we're trying to build something really different and we're not going to really bring in any adults into the room because like you know the the adults are who we're going up against here and uh if you actually look at you know some of the lending companies I heard one of the biggest mistakes that they made that like the board of some of these like London borrow platforms that ended up blowing up uh and just like C5 companies in general is the board would really push them to bring in the kind of gray-haired folks into the room and uh and they didn't do it right and they kind of refused to do it and and look what happened there so I actually I

really like this move of uh Yuga folks stepping aside and bringing in this guy Daniel Allegre to to lead the company yeah so I agree with parts of parts of that which is I think crypto under indexes on gray hair basically and I think they're really bear Market to take by the way you only say this yeah the bear Market yeah but no I mean come on but how right did that turn out to be you know crypto oscillates between these two extremes of hey you know we really need some adults in the room and some gray hair and people with experience versus at the peak of bull markets hey none of these old Boomers get it and ultimately this is a new paradigm and anyone who is in a native is going to be left behind I think the truth is probably somewhere

obviously in between those two things but I think crypto overall under indexes on experience and that's going to produce a couple amazing outcomes but it's going to end in tears for a lot of other companies so I think I like this move from that standpoint here's the thing that I here's the thing that I'm struggling with mentally on nfts and even just okay so this is the the previous CEO of Activision what are the lessons that you would have learned as the CEO of Activision when I look at that when I look at that company they're basically in a relatively similar business to Disney in that the Enterprise Value that gets generated for that is in IP how do you generate really good IP IP Mark use guys investing is a one-man

sport he has a better way of saying it but it's basically a one-person thing with a vision same with directors right there's a reason why there's a director for a movie where there's it's One Singular person's vision and then you need to work with a whole bunch to get you get other people's input but you need one vision and I would guess that it's very similar with games as well and there's this sort of narrative right especially you heard this around yoga labs and board ape and all this sort of stuff that you were going to crowdsource and somehow is going to be you're gonna create more powerful content because you had the input of all these different people and that's frankly just not how I think content really great content and IP ends up getting created I think you do need input from a lot of people but you need

one person with a vision I think the the business model for board Apes it's I think it's the Playbook is sort of being written in real time but it's not this like how do I create the next Call of Duty that leverages crypto I just don't I don't think that that's skeuomorphic I just don't think it's the right way of thinking about it so my worry right the the bear case for bringing in the CEO of Activision is like they're gonna bring in some incorrect mental models and Frameworks for how to develop good IP in crypto land yeah I think that's a good take I mean I I do think that that nfcs are getting away though from like how do we crowdsource IP and like build value bottoms up for uh to build this IP like I think they're

bringing I think folks are bringing in Executives like uh Doodles did this too they're bringing in like real Executives to to run this and uh and like have that Vision my I I completely agree with you that it's a very skeuomorphic idea I mean they they clearly brought him in for other side like the the land platform of board Apes to basically figure out how to build other side into what I think would be their vision of like this really expansive world not just a game but like a whole world yeah because sandbox games are really difficult who's the company that makes Grand Theft Auto GTA I forget but this is unbelievable company that does that um and the amount of time that it takes to do that work or that World building that's why there's an enormous amount of

time that gets you know yeah yeah that happens in between each release it's like sandbox games the sandbox model as opposed to like you know Call of Duty you go figure out a campaign and then a Sandbox model you're sort of like Skyrim and there's technically a campaign that you can do but I used to play Oblivion a lot I logged a lot of hours on Oblivion I never played the campaign once they're all these like side quests and everything that you can do that made it so fun I could sort of see other side I did the same thing with Skyrim yeah yeah so I don't know I I want to be supportive of I've I feel like I come across this bearish a lot of times on nfts I'm actually super bullish especially where gaming intersects with nfts that has always made a colossal amount of sense

to me but I think I think it's on it's on the onus of yoga labs to grow into a pretty large valid uh valuation at this point so they've got a whole bunch of different parts of their business they raised money through a lot of different types of sales there was kind of like board apes and mutin apes and then there was other side the land sale and it's sort of yeah it's kind of unclear as to what if you're an owner of any of those assets what that really means and then you have a huge valuation that got put on you there and you need to find a way now to grow into the valuation that Yuga has and I would love it if they do it's a it's a daunting

task that they have they've got their work laid out for them well one thing here so what the one last thing and then we can move past this is like I think their vision is that there's I think their vision is that a singular game or a singular world will dominate all the other all the other virtual worlds in terms of like popularity and fun and utility and that I think they also believe the future of gaming is through an integration with like nfts and things like that and I think they also believe that you have to raise a boatload of money to go do this so they like check all those boxes right one of my qualms about that is with every other game in the world you you can just like you can kind of just go join the game and you can just like jump in but they as part

of their fundraising technique they launched land in the other side right and and there's like a fixed supply of this land so like let's say we're I'm going to like jump into a game with like you or something like that I don't need to own land to go do that um but in I think the way it works in other sides you have to go own land to like jump in well here's something I think just to leave the audience with something to think about you know Chris Dixon talks a lot about skeuomorphic ideas and you sort of have when you go from one medium to another for example on you know before you had television you had all these different things about how you were supposed to produce radio and you immediately tried to copy that over to TV and then you're like wait a

second we have the use of film and cameras and we should be taking advantage of all this stuff but it was skeuomorphic in that transition initially the metaverse land is pretty interesting because I knew you could make a really compelling argument where people are trying to create artificial scarcity on land like the way the reason land has value in the real world is by real estate they're not making any more of it right it's there's a very programmed in scarcity there and it actually produces real stuff and you could say on metaverse land well that's a stupid artificial skeuomorphic constraint we should just create infinite infinite land but on the other hand the way you price value is this marriage of supply and demand if you have infinite Supply then nothing really has any value and if we're approaching

it from a gamer standpoint if any people played games on this one cheat code in a game is actually kind of fun if you play any game on infinite cheat codes it automatically becomes unfun you need some sense of like purpose and and achievement and adversity or whatever even in gaming lands right it kind of mirrors that aspect of real life so that's the one thing I've just never really been able to wrap my head around when it comes to to metaverse land I I don't have a strong enough opinion on it as well say there's three potential like metaverse Builders of the future there's like the Facebook and Microsoft Builders there's the like for fortnite and like Minecraft Builders and then there's the like crypto crypto rails Builders and it's like uh sandbox and and folks like this and I

think right now it's on other it's on other side and on yoga Labs it's like it's theirs to win right now um and yeah it'll be interesting to see if they pull it off yeah what else what else happened this week honestly I think it was a relatively slow week I think that's about it I I mean we already talked a little bit I mean the big story this week right was that we found out that Gary Wang and Caroline Ellison had flipped on SBF and that they were cooperating I this is just a personal preference at this point I'm just so done talking about SBF going into I just really want to leave this behind in 2022 and I've just what more is there to analyze there's a colossal fraud he's going to prison it I think that can be the end of this of this chapter yeah

but I will say um the last thing just on the nft note I got a demo of So Adam Brockman came on the Empire podcast to talk about like nfts and Starbucks and Adam brought he was I think CEO or president J Crew He also created the Starbucks uh Loyalty Rewards Rewards program which is the most successful one in the world and I got a demo of the Starbucks platform that they're rolling out and it completely red pilled me on nfts as not as like completely changing the game but just as a better loyalty program just in just a much more interesting extension of loyalty programs and I think I mean this will be end up being

maybe one of my predictions for the next year year after that is like every brand is going to end up launching nfts every media Brand New York Times Starbucks everyone everyone's going to launch uh launch nfts it's not gonna be anything crazy but it is going to be an interesting extension of uh of loyalty programs so that was that was my takeaway from like seeing uh behind the scenes of this platform I think it's I would maybe I actually agree with you maybe you're sort of starting to Red Pill me on this as well but this is something you can go this is where it's like no there are no new ideas in 2017 Marco santori did a did a podcast on Unchained where he literally discussed exactly this and he was like blockchain's basically allow you to

enable coupons right this is something that companies already do Airlines already do it with you know miles and there's weirdly airline miles are like semi-fungible they're kind of fungible but the the good thing about coupons in a in a web 3 sort of Realm is that you can actually track them you can see real time who owns what you can also see how long people have owned different things as well so you can do these weird benefits where it's like hey if you hold on to coupon or nft XY for some period of time if you're Nike you could get a special invite to this lounge with Michael Jordan or you could see how you would start to game those sorts of things I think in terms of prediction maybe I'd refine it to instead of everyone launches it one or two Brands launch it

successfully I would say it's gonna be a bear Market I think predictions episode you gotta you gotta wait for you you gotta wait for the actual predictions come on now um yeah yeah I yeah you're right I yeah I don't know I I think you I think here's what they'll call it here's a better branding here's a better branding on it than like brand based nfts is experiential loyalty that's what I that's what that's what I would call this thing is experiential loyalty um yeah like current loyalty programs if you think about them they're not exciting right they're very like transactional and entirely focused on spend but I think the loyalty programs of the future are like they incorporate digital ownership like gamification storytelling and like I'd bucket that is like it's just experiential loyalty programs I've got another weird one that

I actually thought about this week that I think would be sort of interesting I had a friend I have a friend I mean he's your friend too but I don't want to announcement it worked at a like sort of an e-commerce type company he was telling me this thing when they tried to give out coupons right they're basically like discounts and if you think about what you as a company what you're doing when you issue a a discount like hey take 250 off that's a liability that you're basically issuing to your customers you're saying hey here's 250 bucks that you're not gonna have to spend on stuff that I spent money on and it was this whole you know show because they didn't actually marketing didn't interface with Finance they didn't talk about who they were issuing these discounts to and how many of the discounts they offered so

suddenly all these people like way way more people than they thought were started to redeem these coupons and finance was like guys are you kidding me this is crushing this is crushing our numbers on our margin we had no idea it would actually be kind of interesting if there was some sort of chain where you could issue issue discounts that would apply blanket to different products like at blockworks say but then you could have a real-time understanding of who you issued how many how much you issued and who owns those different discounts and you could even have them expire at different times so it could all just sort of be perfectly tracked I don't know as a as a person who thinks about that kind of stuff I think it would be it's a small thing but it's actually kind of a big thing it's pretty

cool I think that would be yeah so I I hope some ultimately is that what we're all really here for no but is it cool and is it a thing that people and companies might use yeah I do I do think that it is so I hope we make some of those improvements over the course the next year all right buddy we can uh I guess we can we can uh spend a week thanks for listening folks we will uh next week tune in next week we're going to have a big predictions episode with Michael Vance uh Mike and me so it should be a fun one all right peace guys cheers everyone see you later [Music]