Why Protocols Should Advertise and When to Buy Your Watchlist | Roundup

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this episode is brought to you by the chronicle protocol a cost-efficient transparent and decentralized Oracle Chronicle has developed a Next Generation Oracle primitive called scribe which reduces Oracle gas fees on l1s and l2s by over 60 percent you'll hear more about Chronicle later in the show all right everyone I want to introduce you to Bumper a new D5 protocol that is here to redefine how you protect your crypto assets obviously Market volatility can be a concern for us crypto holders go check out bumper It's bumper.5 take a step towards smarter crypto Asset Risk Management [Music] Santi

happy Friday what's up man oh not much you know I I think you somehow this this uh conference virus was streamed through the internet and reached over because I'm feeling some throat pain and uh blockworks is hurting right now I mean we're down back I I hate to say this but if there's a way to short block where it says the productivity you can't say that on the Pod come on I love you guys but you know productivity is down if more than eight percent of the companies now productivity is booming we're just doing it with less people right now we're uh in the bronchitis the laryngitis and uh yeah whatever it is you know there has

been a spike in copen it's like no surprise everyone's like the kids are back in school you know um but yeah it's what that Dynamic where like you're more productive when you're like very busy or just like yeah you lose you yeah so anyways maybe it's that we're almost two years into this bear Market um from like Market tops how are you feeling about things right now oh it's very interesting to say that because that's the the thing that I was mostly focused on just kind of reading the room absorbing the sentiment at permissionless um how am I feeling probably as important as how like I think the market is feeling um but I do think we're entering the state of just apathy

kind of despair desperation because you think we're just entering it well not not entering it I mean look we've been chopping around this range for a long time I do sense some eeriness in traditional markets uh like my I just if you're looking I mean this week has been terrible um for General Tech and just the stock market um like I've said it in Prior podcast it was not on my bingo card to have a super strong year-to-date recovery of the NASDAQ of the s p it's just it's just been pretty impressive I don't think it's been substantiated by fundamentals uh like I'm just really cautious

uh largely informed by people that I respect like Stan druckermiller and others that have just generally have been very honest about and open about saying it's been a very challenging environment and then you go to a conference like permissionless and you talk to you know some of the folks that I was on the panel or just some of traditional Builders or particularly allocators like in in crypto and they're like look um business usual there's a lot of very interesting stuff happening in crypto it's a secular Trend like you know there's there's reasons to be really excited about all this stuff but a part of me can't overlook this idea that like anyone that's up 35 years old has never invested through uh persistently High interest rate

environment and I think it has been my kind of thinking for a while that most people are of the mind that we're gonna go back to a lower interest rate environment um and I get it there probably is you know whatever probability you're ascribing to you know rate Cuts has been totally demolished over the last six months we keep like pushing the bar but more importantly it's just this I do think that is regardless of rate Cuts in the near term or in the medium term I think that as an investor class perhaps the biggest mistake that we could have done or I I could have done is not factoring in that we're not going to go back to

another 10 years of record low interest rates and how do you go from there not so much of where we are in the bear Market it's more of like that reset of like okay like so what asset class so what do we do and how do you manage that juxtaposed with this idea that I mean we're here we talk about crypto we are very much of I wouldn't be you and I wouldn't be wasting our time if we didn't believe that this is the best bet that you can make in the next 10 years I think that probabilistically with high conviction and there's reason to be really excited there's reasons to be not as excited there's a lot of frustration at times but yeah I don't know I mean this is from my as an investor that I'd like to

get involved I'd like to talk to Founders on on The Daily but I am curious you as a builder you manage a lot of people you cover the space how are you feeling we have different proxies right of growth of the industry right I can actually get pretty insightful metrics into like our analytics product with the on-chain metrics but as a media company right we have podcast downloads page views newsletter subscribers newsletter open rate um but ad Revenue I think is a pretty interesting indicator of how actually not just we are feeling but like the industry is feeling the bottom of their Market ad Revenue goes to an all goes to like a low at the top of a of a top of a bull market actually there's like a

little bit of a lag in ad markets usually six to three to six month lag um at the top ad revenue is like you know everybody's trying to acquire new users and the reason ad Revenue Falls at the bottom of bear markets is because uh companies and protocols don't believe that any new users are coming into the industry so they don't believe that they need to spend money on advertising and for the first time in about four or five quarters we're starting to see that ad Revenue pick back up and what that tells me is that Founders CMOS cross kind of growth leads and protocols and C5 companies are starting to believe that either there's a new cohort of people coming into the industry or that maybe

they'll be able to raise their next venture fund so they can allocate a little you know or they'll be able to raise their next uh their next round maybe because there's like kind of fresh Capital coming into the Venture space as we saw with blockchain capitals 580 million dollar raise this week so I think the ad markets are actually a kind of interesting proxy uh for how folks are feeling that people don't really know and look at because who like I don't know us coindesk like not many people have info on the ad market so I think that might be a number I'd throw out at you that's super interesting I'd like to understand like do you look at the composition of that Rooney like who's actually spending is it crypto natives is it C5 companies is it like some other random like

and how does that change in at the top of the market at the bottom of the market like um is there a meaningful change or is it always the same suspects that end up spending money meaning like protocols and and app and crypto native apps so it's changed over time it is it used to be the here's kind of the evolution of of big ad dollars coming into block works it used to be the ins the companies going after institutions largely because that was also blockworks brand right so if you look at the advertisers they're anyone trying to pull AUM onto their platform not through retail but by reaching institutional customers so uh that would be folks who spend money with us to get in front of family offices hedge funds uh pet sovereigns pensions you know Ras uh

financial advisors folks like that so those were like the big custodians of the world right the big kind of settlement layers of the so fire blocks right copper Ledger bit go coinbase custody um cracking institutional people like that right those were kind of the big advertisers then we saw a shift in the bull market which was the big advertisers and the big kind of money Spenders were the big exchanges right um okx uh coinbase Kraken uh crypto.com people like that those are the kind of Big Spenders in the at the top of the bull market and now The Big Spenders are uh for anyone who's been going to these conferences you'll see a lot of the

protocols right um there were protocols at ECC for example who spent three million dollars on site and the reasons it's good to use the money I don't know but um how much 3 million I did hear one protocol spent four million dollars to what to do what side events basically side events so here's what everyone needs in a bear uh so in wait I I I'm just really shocked maybe I don't know the I mean I know that the conferences can be lucrative I'm just thinking I'm just thinking of the of the guy get that massive thread of like of FTX and how a Sam's parents his dad was like you're only paying me and like demanded a raise

for one million bucks per year like just disgusting stuff but so of course we know that they Charter private planes to to get Amazon into the Bahamas but but but man like here's how ad markets work at the beginning of a bull market the biggest advertisers and the biggest kind of cohort of people that companies want to go after are institutions because oftentimes institutions kind of maybe kick off a new a new market or there's this narrative or like Paul Tudor remembered May of 2020 or whenever that was Paul Tudor Jones bitcoin's the fastest horse in the race so then everyone wants to come after these institutions they want to pull the institutional money onto the platform all right Institute come into the industry Market goes up then who comes into who comes into an industry retail

and consumers right so then The Big Spenders are like back you know in the last bull market it was exchanges because they were like block fire Celsius or FTX or coinbase or crypto.com or whoever Gemini they want to get all the millions of users who are coming into the industry onto their platform because once you onboard onto Gemini you're not leaving Gemini right it's like onboarding on to Bank of America you're not then going to change onto Wells Fargo it's super sticky then that happens and that maybe takes another 18 months then we go into a bear market and the number one Advertiser in the fair market before we go there who's measuring the return on ad spend like like okay first of all my working assumptions that retail usually comes first like retail all the crypto Cycles have

very much been retail LED uh you know stimulus money and whatnot like all of like but it's very much a retail phenomenon when you talk about institutions you're the say you're a chief marketing officer at like protocol flavor or competitor to Ethan wants to spend a ton of money and just raise 200 million dollars and you're saying you maybe you come from Google and you're a marketing Guru what kind of like marketing return on announcement row ass are you doing to justify spending millions of dollars to what end to convince Paul Tudor Jones to put money on bitcoin uh that guy is uh not to convince him to put money into it yeah no I mean that's right

that's right so like here's the metric that we track for folks who advertise with block works mqls so in a B2B SAS in a beat in B2B SAS there are different metrics that matter so mqls are marketing qualified leads those are the people at the top of the funnel those are the that is typically like a CMO of a of a of a SAS company crypto or not crypto we'll have one metric that matters it's mqls marketing qualified leads how many leads are they able to pass to the sales team once you pass an mql over to the sales team a sales team will have an intro call with them if they are a qualified lead that becomes an SQL sales qualified lead and then that's when the pipelines that's when the pipeline starts and you

move it through the pipeline right uh Discovery conversation that goes poorly move them out of the pipeline that goes well moving through the pipeline then it goes to Pro you know proposal present and then contract out and then or intent to buy and then contract out so what we help with is the is the mql is the marketing qualified leader right so if you are the CMO of bitco you're like hey I have a 30 person sales team I've got to feed them leads um the we need to reach hedge funds interested in allocate in staking you can't run an ins you can't run an Instagram that's right right or like or like research or I understand like a webinar or anything like that if you're a custodian Anchorage yeah that business

I I get it I get it and then they have their ltvs right like they know the lifetime value of a customer so if you if Anchorage if Anchorage signs up um you know Santiago or like you know when you were a pair I don't know what custodians you guys use when you're a pair five but like they onboard you right they're clipping a tiny tiny tiny percent of of AUM though though that actually the custodian model is changing to a SAS model from a fee model yeah and then they upsell you right they upsell you through trading fees and lending borrowing and all that kind of stuff so yeah no that I understand that segment of the market and that was my original question like I can appreciate how someone like bitco someone like Anchorage like like C5 you remember that term cd5 yeah yeah those kind of players

like exchanges sure but but I do see in the correct me if I'm wrong a lot of spa a lot of spend from you know like protocols like you know like I don't know L1 of sorts and I I think I'd be really curious to understand because one sector that I've been investing in and thinking about is uh how do you stitch together a profile to understand um you know basically like a uh an AdWords if you will like just understanding like and stitching together like to figure out customer acquisition and what type of marketing is effective if you're a protocol and how do you acquire the said users because you know they come from web 2 and then they enter web three and then there is a disconnect there to some

extent there's a few kind of like Pro like companies that I've been looking at that are trying to kind of stitch together this profile of a customer uh but I think it's fascinating like uh and to be fair I'm not like dismissive of the category like I look at imitation no no I know there's a lot there's a lot of flow there's you know you can look at it in slice in many different ways like the average crypto user nft like is is above like you know is fairly well off and has more disposable income and it's a very attractive it's a very attractive cohort let me show you yeah let me show you this auntie so like let me let's talk about the the ROI of a protocol doing marketing so um let me pull up the base all right so this is the

this is block horse's analytics platform so you can click on base you can look at the financials right so uh you can see that base right you can see the the fees so every day like here's the fees 200 KN fees the cost to settle back to the L1 is you know on September 14th they did 189 000 fees the cost to settle back to the L1 was 88 000 so the profit was 101 000. now what is driving most of this right what is driving ever like this black line is profit right here what is driving this well it's friend Tech so then my question like the the question becomes all right well what is the LTV of like friend Tech like let's say let's say you're let's say your base now base didn't have to really do marketing well

let's say your ZK sync or scroll or arbitrary or optimism like what is the value of getting the two founders of friend Tech to build on your platform and that was probably relationship driven deal but like you know at ECC there's like or at permissionless there's a lot of Founders who are like look I'm I just moved I just came in from Facebook I'm trying to figure out which L1 or L2 I should build on um and if and if you're arbitrum and you're you've got the 40 by 40 booth and you are sponsoring the hackathon like it is more likely that will build on you yeah so no that's a really good point actually um you know it um there was this idea of like you know the I always think when you say that VHS betamax like sometimes the best tech doesn't win it's like the best

marketer in this case you know uh VHS was a super inferior product um but you know and and but just you know had better marketing had better visibility had you know better presence um so you know ultimately became the standard and I think that that decision tree of from Founders I think is very much real and I experience it you know obviously I'm biased because I'm investor in in you know something like scroll and an arbitrary but you know when people ask me you know I naturally direct them to hey go talk to these teams right um yeah so so yeah there is um let me read you this quote so there was just a huge study done on basically B2B buyers and crypto

um now in SAS in SAS actually um but I think it applies I think B2B like I think they're very similar um two-thirds of the all right two-thirds of the time this is this is uh this is one of the biggest brand studies ever done on buying behavior of B2B buyers two-thirds of the time so 66 of the time when a business decision maker purchases software they already have a brand in time and 94 of the time if they do have the brand the brand in mind the buyer ends up sticking with that brand yeah so like I don't know it's funny because like part of my job is convincing marketers that they should still spend on brand Marketing in a bear Market very hard and I totally get why they don't do that but like if you're not part of the

original consideration set there's no way you're getting bought there's no way they're using you so this is very real like actually this was something that uh I talked to a few folks in crypto uh at the conference around yeah they're very opinionated folks that just come to the table and they don't do proper like rfps they just they just kind of go with someone because they've there's you can't really justify and it's like all right okay well did you consider X and Y they're like no we just kind of wanted to do this and I was like okay it's trust man it's true it comes down to trust so if you do especially in a bear Market six percent times 94. so that is 62 of all software buying decisions are being made with a brand that the buyer already knows right so

that's why something like so we did this we sent out this survey after permissionless yeah this is just turning into an ad for uh for Block Works uh marketing but like we said we'll never do that here we would never do that you'd never never do that um we sent out a survey after the conference and got a couple hundred people to to respond to it and one of the questions was like what's the most memorable brand in your mind after permissionless and no surprise it's the it's the big it's the ones who spent a lot of money again or scroll uh it was OK X OK X was first oh yes they had they had that formula second I think metamask was third I had a good day and I think scroll was like fifth or sixth I'm

pretty sure which were bio intensive purposes the largest boots so you better believe like let's say there's an I don't know let's say someone wants like let's say someone wants to get off of I don't know I'm trying to toe line here because they all compete with each other but like yeah people are more likely to now use okay who went to permissionless yeah yeah the brain works in mysterious ways you get a sticker from a company that you put by the way never put stick crypto stickers on your tech gear uh for an opsec perspective folks um you know stay safe nonetheless some of those are really cool like you want to put them on uh laptops I've seen laptops like with bombarded I'm like guys um you're at a cafe and you have every single crypto logo on your laptop

you best believe someone's looking at that and you're a Target uh but like there's some good merch um I have a markets question right now like kind of Shifting Gears a little bit um so you guys this is not a marketing podcast but hey it was interesting it's shocking well you you didn't join us on this podcast but Antonio from spindle came on right and Antonio helped build the ad Market team at uh at Facebook and so you should should go listen to that podcast um all right so there's a liquid trade that's happening right now um yeah Mainland for a while it's been going on for a while so I I said Lido in the in the in the telegram Channel but it was really it's maker like so I just had breakfast with um with that fund I was telling you about

that that is going to announce soon and then and then coin fund coin fund was there too and uh there's some other like kind of big crypto investors there and everyone's talking about like what they call the most crowded trade in crypto right now which is maker and if you look back over history the last at least five six seven years in crypto kind of sustained positive repricing of a couple of altcoins oftentimes leads to this kind of market-wide rally because people get excited they start chasing other things and if you look at the beginning of this year or maybe it was end of last year but Lido and Seoul led the way there's probably actually beginning of this year like January February Lido and soul led the way and then a kind of bigger Market wide rally came now it

sold off obviously but that's all right so right now what's happening is people are flooding into this kind of crowded maker trade pretty quickly and makers up like 30 40 percent yeah yeah um and the last couple of I don't know a month or two I haven't looked exactly at the charts but um and I think a lot of that is because people are getting excited about you know roon and uh really these sub the sub-dial vision and stuff like that I would just be curious how you when you see something like maker outperforming right how do you like do you start to think about hey is that trade over yet should I kind of pile into that do you say hey look I'm not going to pile into that trade but maybe this is a harbinger of this kind of coming market-wide rally I should

start to allocate elsewhere like or you're like look I'm not touching trading I'm I'm I'm staying away from this game well I think everyone in in crypto needs to somehow is forced into this liquid venture conundrum which is you have to you cannot Overlook trading from a risk management perspective um you know even if you were a long time believer in maker you know you constantly need to wake up and do this exercise of based on where things are today at this a particular price valuation would I from scratch build this portfolio again in the same way and in

the same composition that's an exercise that probably some of the best advice I've gotten and A framework that I take to heart you wake up each day not eat not each day on a some sort of cadence to your point so yeah like I pay attention to trading because if some if a position becomes a disproportionate share of my portfolio um like it's a it's a problem I need to manage that risk somehow and so but I don't like I don't like chasing these narratives like I do think that there is a probably half of the folks that are or more than half of the folks are piling onto this particular trade as they have they're the same kind of folks that pile on

these trades maker for instance it was very obvious on chain that the largest holders of mkr a16z in Paradigm we're dumping it they were sending it to an exchange usually people send coins to exchanges to you know dispose of them and they were pretty big holders and they were they've been for years I think a16c LED some of the earlier rounds and so as mkrs had a rally they started selling off I think they've totally they've and you and by the way what's so interesting about crypto is like you can understand the wallets if you're mad if you're using an Analytics tool or whatnot a lot of these wallets and then you're saying you're seeing exactly how

the position that they have right unlike like 13 F's right where you see the retroactively what hedge funds did in that quarter in crypto is real time like you say okay you know they have 10 of the supply and they every day they're selling at XML which is X percent of volume and so you're you're seeing a seller in real time and so that was part of what sometimes catalyzes these trades right um and or like large unlocks and whatnot for maker also I mean we had roon talk about the end game it's it's a protocol that is you know from a fundamental perspective I mean I don't have the figures in front of me but it spits out cash flow um you know I think they'll do 100

million in Revenue this year don't quote me on that but I'm pretty sure give or take right and so and so if you look at whatever the kind of the evaluation of maker the market cap what is it now you probably have in front of you but I'm just part of maker so it's makers up 115 in the last year I don't understand that but I'm just making it like one point 1.3 1.2 billion fully diluted 1.3 right and so if it's cranking out 100 million of Revenue no You could argue that it has some of the you know it's what 13x 13x yeah uh I'm sorry to break it folks but you look of any Tech name first of all it is very interesting

that that you have like cash flow generative companies this early on in an asset class that is very much super early stage like go look at like instacart they just IPO Uber Amazon I mean these businesses don't are not cash fully generated if they don't have positive unit economics but but they've only survived because over the last 10 years I go back to this we had free money they wouldn't have worked otherwise and that's I have a theory on those businesses like all three of the ones you mentioned but I mean like fundamentally this is like you know no surprise we've

had band Foreman here by former partner he's a Maker bull has been as maker of as a as much as a Maker bull as one can be yeah yeah consistently well you guys jumped in on on whatever we call that day black Thursday right oh God yeah that was fun and we were very active talking to the team and you know it's one of those things where how long are you willing to be patient and this is a common problem that you have in particular crypto where we're just liquid markets where the like mkr just grossly underperformed eth and everything else for a really long time and so to defy D5 started really underperforming eth uh even before you know there's some list of rate hikes and

everything else you know tumbled in November of 2021 22 22. and so it's really difficult when something like that in your face is just you know underperforming what do you do you pile on do you buy more um you know you have your your you know it really eats at you and so I mean is it a crowd of trade you could argue that a 13 times PE the real question is where does that go like where's those earnings go given the fundamental changes in the protocol and the end game and what in roon is articulated that's what I care about um why would you know makers business

model is effectively allowing people to you know programmatically mint a stable coin a stable unit of called die um depositing a particular asset said e for instance eth and that was really the novelty of maker in a very volatile asset class you want to borrow against your Holdings particularly in a bear market like maker really got a lot of traction in the last bear Market that you could have looked at maker and that's where people really sort of say huh you have an asset class particularly if that has gone down 80 percent and this protocol has allowed people to borrow against that that don't want to sell because they didn't sell at the top to borrow and as maintain solvent in

very adversarial conditions like this is that's pretty interesting like you know in traditional markets something goes down 10 The Regulators step in and freeze the goddamn trading you know Banks collapse and so that's when actually that's the real story behind D5 taking off not not to like do you know history here lesson 101 but to your point around yeah I do think that is it a crowded trade probably hard to tell but if you look at the fundamentals you say does it have more room to grow well you'll be the judge of that if 13 times if you believe in the quality of those earnings if you believe in you know macro does there's a high correlation yada yada yada but more

importantly I think it's the idea of and we keep talking about use cases that is a good use case like the idea of borrowing against and like the money market use case is very real the defy use case is very real um and and then you through a market analysis how many people how many more people do you think are going to show up to to Mint to borrow against her Holdings um and are they going to be the preferred venue to bar against those Holdings do you believe in die do you believe in their you know multi-collateral die which is a huge huge controversy in this end game so anyways long story short I don't pay much attention into these things is but

it is an interesting opportunity if you for instance have been doing your homework on some assets whatever it is maker I always have a shopping list I have like literally I track like 20 names or so and add cut to list and then I'm looking for catalysts and the best Catalyst that I love is a foreseller yeah like you see someone that's just for selling yeah yeah I'll clip I'll buy when you have a shopping list do you put a price next to it yeah I have alerts okay and when you see that price all right so let me let me just use make I'm not saying makers on your list but right now Maker's trading at thirteen hundred dollars let's say you had a price let's say your maker goes on the list then you're like well what price am

I a buyer of maker maybe you say a thousand a thousand dollars there is a person where I will literally sell traditional assets load up the trouble sell my podcast to equipment I will go to a pawn shop and yeah or even raise a fund what is that price of beef for you solve a thousand seven thousand no this is a financial investment function is this just my opinion yeah uh and I I a lot a lot of conversation not to like but a lot of the conversations I had with folks way back was like and you've hit like 900 or so large it's informed by the prior cycle low and also I think we've been holding and hovering around this trillion dollar

aggregate market cap which is anyways I triangulated but I think ether sub a thousand is something that I am quite interested in yeah Solana you think you think we get there this Market and you know this is this is try it every single time take a shot take a shot look I will say this every single time that I think I'm not going to see an asset at a given Price ever again you know those like memes like folks this is the last time 30 000. I'm like you could almost counter trade that to a T and and be patient so uh I'd be fooling myself if I were not

paying attention to traditional markets something that I've been paying more attention to I appreciate it it's not my strength it's it's super hard but it you have to pay attention to it like it feels fragile and I do I do Wonder like again the biggest question is if we're in a persistently High interest rate environment what's the appetite where's the incremental user going to come from you know at this point to me it feels like we're sloshing around funds within crypto and there's just a value transfer from one player that's already in the economy to another I don't see many people coming in yeah but you know the real perhaps the question to you which from your Vantage

Point like Juan a how are you feeling about you know do you think we'll ever get you know a soul sub 10 Bitcoin back at 10K uh or 15K like you know not not to exactly say is it going to be 15 is going to be 16 is going to be 20 but what are the things that you're seeing that you would that that you know from a probability standpoint do you think it's high or lower probability we see Francis for instance with eth do you think there's a higher probability of seeing eth at 2000 or back at a thousand so he's got two thousand or back at a thousand two thousand like like hands the hands down hands down

um the reason for that is because to get to what's what's eat that today 1500 1690 we call it 1600. fifty percent okay so the so the reason for that is because the only way it gets down to a thousand in my opinion is if there's like something catastrophic that happens in crypto so you could have a big macro drawdown for example macro drawdown would pull it down to I don't know 1400 1300 something like that things that pull prices down that strongly are FTX collapsing Terra collapsing uh Celsius and block five going under big colossal crypto inside the ecosystem movements that suck all the liquidity out and and cause a bunch

of four sellers that I think is gone in crypto I don't think we have like I believe that we've washed out a lot I think we've washed out all of four states but you know all of that now macro could get much worse before it gets better the more like the NASDAQ could go back down after having a decent start to the year like and that would push because crypto's farther out in the risk spectrum that would push it down but I don't think you see just to put a finer comb on this so it's like this would be a 25 to get to 2 000 you're basically a 25 rally to go down to a thousand it's like a drop at 37 drop so you know there's a bit more there's a bit more you know but so again the nasdaq's up

what is it 27 of the year if if crypto has a 3X two and a half two to three times beta do you believe that as I can't drop ten percent 12 percent let's get some of the gains is the beta that strong to the NASDAQ on the downside I would think it's definitely I think it's two-ish I mean depends on it's always depends on what kind of timeline you use but it's fairly High I hear your point though I hear a point um the other issue though that is we are I have one more question

the thing that we ought to have is some of the you remember genius there's some of these Traders right because liquidity is very thin it's thinner it's thinner now that the market makers are all fighting on Twitter you're watching these so we're back to like we basically are back to like early days very limited crypto trading infrastructure and liquidity and so it takes you know these price movements can happen particularly in the absence of of robust liquidity but anyways I interrupted you were saying well we actually have the infrastructure unlike last time we just now don't have the liquidity again but um okay so maker so let's say you had maker to the list

this is how this conversation started so you have maker on the list it's at 1300 today let's say you have a price Target at a thousand let's say maker hits a thousand do you buy and let's say you have a a mil or a hundred dollars to allocate um do you buy do you allocate all 100 do you depends on the magnitude of the drop some days um you pull the stash fund and and you you buy the full full amount you like you you get filled um but largely it's I would probably Reserve still some amount it just depends on the magnitude of the drop

um for me I always feel comfortable like when there is a very big ShakeOut I feel comfortable adding in a meaningful way historically I think that's been you know served me well but at times yeah you like you know may of uh 2020 that Infamous day like eth went like eth dropped quite a bit and then it rallied a bit and then it just re continued to go down so you said it before the podcast do you want to catch a falling knife I don't know it's impossible right um but I just feel comfortable adding and lowering my

my cost basis so I I in this environment I would want to hold some cash I think it's different from an institution like if you're a fan like most of the most time they're allocated they want to be fully allocated yeah and holding cash is not something that you kind of do right um but uh but yeah like it is also a matter of what percentage of the portfolios is and what percentage of the portfolio do I want it to be pre and post all right everyone I want to introduce you to Bumper a new D5 protocol that is here to redefine how you protect your crypto assets obviously Market volatility can be a big concern for us crypto holders bumper alleviates this by

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cool we can go quickly through these yeah yeah um maybe like one take away from each story so first story was blockchain cap raised 580 million pretty impressive yeah very impressive so blockchain capital for those who don't know is the the largest running crypto fund I think correct me if I'm wrong one of the one of the longest it's been around for at least 10 years one of the longest not the largest actually 10 Years 2013 not the largest but the longest yes um uh Bart and Brad and I think Brock Pierce was one of the third Founders as well but it's really Barton Brad Stevens yeah they raised uh so 580 million it goes into two funds there's the fund six which is their early stage fund and then

what they're calling an opportunity fund which is the later stage um it's a major institutional investors um a couple big names names that were announced visa and PayPal uh crypto Venture right now is at an all-time low um excuse me uh excuse me is a three year low so lowest has been since 2020. in terms of like Capital that's flowing into crypto Venture so this is a huge raise I would say um curious if you think the VC climate is changing I my understanding of like a little bit of the behind the scenes of this of this blockchain cap deal was that it was already rate it's been maybe this was the second close or yeah that would that would actually be great to know because

I spoke with his fun funds and I mentioned the prior pod and they were like there's zero interest so I gotta think a lot of the a lot of the fundraising and funds not just in crypto is as you said a couple closes first close second close third close so I had probably been in the market for a long time maybe their target was a billion and they raised 500. but these are I mean I would love to maybe have the guys on and give us a little bit of inside take on on how the process went and you know a lot of maybe it was how much of that was existing LPS recycling Capital how much of that was new LPS was those family offices endowments where they come from you know yeah comment on uh the Youtube video or tweeted us if you

wanna if you want us to bring on blockchain cap on the Pod if that'd be interesting yeah um one other interesting note and then we can move on from this news is uh the late stage investing kind of the series C Series D so 600 million it's a hue or five eight a huge amount of capital the late stage has been dominated by a couple of small uh a couple a couple of very specific firms like 10t who invested in Block Works um they've kind of dominated some of the later stage stuff right because they can allocate like a hundred million 200 million into a company later stage right Kraken Gemini Ledger uh some of these really large influential Brands where they need where they're raising 500 million

um the lead has to put in like 200 right or 150 and so interesting to see more folks get into that later stage yeah it's a tough uh tough space to play in because you need so much Capital so um all right next up PayPal so PayPal released uh pyusd which is the PayPal stable coin they announced that it is going to be available on venmo so PayPal owns venmo I think they bought them for a pretty cheap like 26 million several years ago um they announced that PayPal the PayPal stable coin is going to be available on venmo inside of the PayPal ecosystem there'll be no gas or they cover the gas but user won't see the gas outside of the PayPal Network

so right if you have the stable coin on venmo uh you want to send it to a friend on venmo no gas if you want to send it outside let's say you want to send pyusd from venmo to uh your wallet and put it into Ave or something like that there then uh then then gas will apply so yeah that's huge I think yeah I do think that I think PayPal is kind of like this big Behemoth of a financial services company obviously it's cool to see I've always thought one of the problems with payments is that there's no interoperability between these Brands right I'd like like cash app and venmo yeah why can't I move my money between my cash app and my venmo they don't talk to each other so this is a cool development to be able to you know if I

could send money from venmo Into Cash app and Robinhood into my TD Ameritrade account like they're right now you have to send it almost back into your bank account not almost you have to send it back into your bank account it's cool if these things all talk to each other I mean plaid in some capacity but uh you don't send it to a plaid though plaid plaid is the connector that's my point yeah oh yeah yeah that's a connective tissue yeah that ended up being valued at like a couple billion dollars I'm like guys uh you don't need plaid in uh D5 everything is uh compatibility is a beautiful thing yeah um podcast Emory Alum good people yeah um the number to look at is the demand demand for pyusd right now it's a whopping 44 million so not much demand I

would say um but we will we will see as uh we'll pay attention to this number as it goes on Denver for sure yeah um other news of the week what do you got for me well there's of course that huge uh what is it legal document dossier whatever you call it uh that came out detailing a lot of the juice behind FTX As It prepares to go to court um you know detailing a lot of the Apparently Sam's parents were heavily heavily so I didn't I didn't read this yet this is like soap opera Thriller this is your entertainment piece of the week folks uh you know I'm waiting for the documentary to come out like pretty

Pronto here but yeah apparently uh Sam's parents are very renowned Stanford professors um Barbara and Joseph I believe um they they were involved heavily apparently the the big realization was they were very involved in the structuring and the operations some operations of FTX um the father of Sam uh there's some in ex exchange between him and Sam and he was like demanding a higher salary raise he was like being paid but his dad was demanding a higher salary I think he was being paid like 117 000 or like not no like 17 000 a month he's like no no I want a million bucks a year and

something like that and so I was like it's pretty interesting to see it like anyways and then and then all the donations and of course Stanford is returning I think five million that was donated from FTX back to the uh you know the what is it the trustee or so the the folks that are handling the bankruptcy um yeah so it was very detailed I mean these are great threads out there um there's like it's just it's just shocking to be honest yeah uh there's won't be some news as I heard you say Ledger that I don't think we covered but I believe one of the co-founders stepped down but this was like a couple weeks ago September 6 I believe is when he announced it and I

think a lot of it was just as a result of the uh social recovery kind of Fiasco if you will or just kind of drama oh that's funny all right so I clicked this I clicked this article the SEO hasn't updated so the Google how it shows up in Google is ledger co-founder bids farewell after after recovery Fiasco and I click and I click the link and it says Ledger co-founder departs to pursue project to onboard more users into crypto so uh some some editorial uh brand oh I won't name change their change their title yeah um I have I have actually what I think is probably the biggest news of the week which is uh Eclipse we probably could have started this whole podcast with the clips uh

Eclipse announced that it's launching their svm ethereum kind of celestium L2 uh on on mainnet soon so let me try to explain this I think actually folks should listen to uh Mike other co-founder block works one on Bank lists and kind of explained how there's these three kind of converging um ecosystems with uh Cosmos and salon and ethereum and they're all kind of looking over each other's shoulders saying hey look I like what you're doing let me let me kind of take a piece of that Playbook and pull it over here so one of the problems today is that the uh kind of single threaded evm with global fee markets has put eth l2s at a little bit of a disadvantage to newer

Alternatives by kind of forcing developers to pursue these app specific evm chains you get this isolated block space but it can really severely fragments ux and liquidity adds a bunch of developer complexity so Eclipse launched uh eclipse's main net kind of what they say is they leverage the best pieces of the modular stack right so what they're doing is they're using eth they're using ethereum for settlement they're using the Solana VM virtual machine the svm for parallel execution they're using Celestia for data availability and they're using risk zero for ZK fraud proofs so it's pretty interesting to see this right settlement is on ethereum uses eth as the gas token execution is on uh execution is on uses the svm which enables right paralyzed

transaction execution greater throughput data availability is is provided by some Celestia offers higher bandwidth than ethereum's da and then improving is using risk zero for ZK proofs evm compatibility is done using the neon evm which allows for right like I think my understanding is really easy deployment of evm smart contracts on Eclipse so this is kind of what we're seeing here is like the best pieces of all of the modular stack coming together um been interesting to see the takes have been all over the place I think right some people are saying eth killer some people are saying long Soul some people are saying soul is dead because of this some people are saying look because of this news it's clear eth is

eating the world Salon attack is eating the world huge wins for l2s bad for l2s some think this is bullish for Solana some people think it's not um I'd be very curious I can get into more of the details of this news if you want but would also be curious just to hear your thoughts on this I know first of all I don't think it's negative like an eighth killer it's just why would it be an Heath killer the sbm for scalability right it's basically saying we want to use the svm for scalability but we really want to

leverage the security and the network security ethereum um so let's do that I I'm actually really encouraged by this because I think from uh assuming that assuming that you don't lose efficiency or the connectivity actually works by pulling and using the picking and choosing the best kind of parts of the stack to leverage for aggregate execution I I think it's a I mean it intuitively and I admittedly haven't looked too deeply into it it makes a lot of sense yeah the the real probably the the critics might say well um the execute there's a trade-off by doing that relative to a monolithic structure or a I don't know like and so I'm I'd be curious

maybe Mike or some other folks can can have a more informed opinion on on how that execution by by doing all kind of this picking choosing of the best parts of the stack compares to like uh what would you say like a monolithic architecture that would be the com I mean I'm sure there's other comparisons you can make but but like you you see what I'm saying you would compare it against not using kind of the best of of all worlds and uh and seeing you know how that compares from a fee from a latency a secure aggregate security standpoint whatnot but you know I think it's very encouraging yeah

I agree I agree I think uh I I think that I think the the fud on Twitter was probably due to everything in crypto has had to either be good for ethereum or good for Solana or or good for something else and then that inherently means it's bad for themselves mentality good yeah this is good for this is good for both parties I don't know I think it's really cool it's the first svm roll up on ethereum right um I'll go back to Mike's conversation right he said soon it's going to be possible for an application to be built using the salon virtual machine using Celestia for data available availability and settling everything back onto the the best security which is ethereum and that's what you're seeing literally in real time right now you know I I remember

folks uh have a short memory in crypto um but this was a like layer twos and breaking composer breaking composability was probably the buzzword of Defcon in Osaka this was before any L2 launched what what was composability breaking composability breaking composibility this was like a thing this was names of panels people were talking about it this is like it's gonna really detract from the value proposition of ethereum and D5 is going to break this is a pig D5 right or default is really taking off and look I'm not technical to understand how the internet developed but my punch was that the internet kind of went through this problem too of latency and I asked the question to someone's

like uh that was like James prestwich or some like some that I think is very smart didn't the energy kind of go through this and it's not so much that you're gonna break composability as kind of a bad term it's just you're gonna degrade composability you're going to like it's a latency thing and shouldn't we be focusing on improving latency like or you can never improve it like it's just you break it and that's it like and I always felt in my uneducated mind technical mind that we should probably focus more on thinking about ways and use cases that not all use cases require the same level of atomicity and and execution

number one so you could have different Roll-Ups and then you can you can trade latency for lower costs you know I mean like if you're if you're playing a game and you're you don't need to settle that instantaneously so you don't even using a flash loan for defy yeah you're probably going to do that in the L1 because you're probably seeing some crazy ARB and you're sloshing around Millions to clip up you know some sort of you know close the gap and profit and it's an economic decision that is very clear to use the much more expensive Highway that you're going to pay for but you can use the the non-highway non-toll route and pay a lower fee and and use you know L2

because you don't care so much about this like composability you don't care as much about you know Atomic execution um and a lot of the folks that I talked to back then in Osaka this was like five years ago like pre-covered World of the mind that yeah we probably should think about that connective tissue between all these different chains and I think that's that's what you're seeing unfold now like there is a lot of tech it is there are so many different use cases like gaming requires different security than D5 than nfts than other potential use cases um

and I think over time the connectivity between chains is going to improve dramatically and there's going to be a huge opportunity for for a relayer for instance to in the same way that you can do the instant checkout instant uh when you're in venmo I think there's an ability to bring the money back to your bank account right and you can do instant and it charges you five percent you can wait two three days and it doesn't charge you same thing same thing uh it's a it's a priority fee model that's why uh and and the gas the way we think about gas which is one of the things that I really like about Salon is this Dynamic gas um that really is is is much more flexible it's much more interesting and how things actually like to Market but

yeah having a flat gas is is really difficult when you think about all the different kind of varying use cases but when you have a dynamic gas model I think it's much more interesting but we're getting I suspect we're going deep in the rabbit hole but uh but yeah a lot to talk about I think uh yeah I think it's a good place to end yeah agreed man I just uh Mike's walking into the room but I also probably saw Mike kicking you out of the room so Mike Mike's to blame here folks we could have just the reason why we're not leaking Alphas because you know Mike just you know just can't give that to Mike and give that time here last thing last interesting thing we won't talk about I'll just leave it in people's heads is uh I feel like you're seeing all these

alt L ones that haven't taken off recently go become l2s on ethereum like Kanto just did this cello is becoming L2 on ethereum interesting to see yeah hey I want to get your thoughts next episode on the real world asset Summit didn't you go to that one yeah I did go to that one right well we we will spare you two episodes in a row because we talked about real world assets on the prior it was really good it was do you know that um there's a do you know that there's a rwa there's a all right so there's a company called figure which was Mike Cagney's company figure said that hey look we can bring our costs of settling loans down by like 80 to 90 if we put it on the blockchain

uh we were investors a purifier oh interesting okay so that was like five years ago they said that then they're going public since 10 hours he locks exactly exactly so they had to spin out their blockchain they called it around and you've been around the game uh so they spun it out they will do 30 billion dollars on chain this year uh and the flow is basically users get a HELOC from figure figure puts that on provenance Province versus blockchain yeah provenance is the blockchain um and they on the other side of that it's like Apollo and KKR and they've been screen lineman costs in the back end and I'm at the CEO of provenance at rwa I was like that's pretty interesting this is a beautiful place to end because

when people question the use cases and that this text is not being used it's not so much that it's not it's just you haven't heard of it and that's the state we're on crypto because you feel that you're getting fed all the information crypto Twitter you feel all very empowered and smart because you're looking at friend Tech and you're in the Cool Tech but there's a lot of boring stuff happening behind the scenes yeah like this and and I think um it's it's very encouraging like the cost savings are there the use case is there and and and it just makes sense like good good place to answer absolutely anyways folks have a great weekend um and we'll see you here next week I'm being more active on the on the

comments on YouTube it's like uh I'm more active on YouTube that I'm more active more obsessed I don't know I'm active I'm actually not on Forensic folks uh I am active on YouTube so uh you know go go drop some comment there I'll be I'll be lurking in the comments section you gotta respond to these the reason no no I'm gonna interrupt here because I remember thanks to one of our listeners who posted on YouTube who reminded me of the bet that we had made of who had the most followers oh this was not this is not a real bet listen we have our witness Joseph uh here uh who's our fantastic producer in the back end he does fantastic work he also confirmed this Jay uh Yano said that he

would shave his head if he had less users than I did upon permissionless that was the case folks so one of one or the other or he shaves and then he just kind of like comes on Bald which I think might be the reignition of a true bull market we need that bald energy like you know Brian Armstrong we do need that bald is back baby I'm not I never gonna do it because first of all I would never make a bet that I would not win um I've lost many bets in my life but more importantly we could also live stream it so if you want us to live stream Yano it'll be kind of nice if you're being shade like like just like Mike can do it or someone can do it and then we talk

about crypto while we're while we're doing that oh yeah yeah I would I would be willing to do a double or nothing where that might be the most viewed episode of Empire if we'd live stream you being like you know your shape like being you know I think that'll be the most viewed episode I want to go double or nothing on that excluding Eric Voorhees like you know permissions we're rapping I'm over time all right folks okay time to cut it out uh cheers next week have a great weekend [Music]