Will Crypto Leave the US? | Roundup

Transcript

hey everyone wanted to give a quick shout out to the Wormhole Foundation if you're a bell curve listener you know that transferring across chains can be a massive pain I certainly do I complain about it on this program all the time that's why we are super pumped to have partnered with the Wormhole Foundation the stewards of the Wormhole protocol the Wormhole protocol connects over 30 blockchains and six different run times including salana soie ethereum layer 2os and more and the coolest part about this particular partnership is that they have made custom bell curve nfts which you can get meant for free you can claim that by just going down into the show notes and clicking on the link all right guys on with the show hey everyone wanted to give a quick shout out to this episode sponsor flood protocol the optimal deck aggregator now if you are a

listener of bell curve you know that me is a massive problem which is why we are so pumped to partner up with flood on this season flood is the only gasless and me free aggregator that not only gets you the best execution but also gives you back all the extra Surplus that you create every single time you swap now this is relevant for both swap ERS and developers but you're going to be hearing all about them later in the program so for now thank you flood and back to the show hey everyone this episode has brought to you by Unis swap delivering the best onchain trading experience in crypto period Bar None one thing I want to call out is the Unis swap extension so say goodbye these days of these annoying as our popup wallet extensions you lose your place trading you have to open it back up unisoft now

has a nice Sleek sidebar that persists no matter where you are in the web it's much easier to use if you click the L Link at the bottom of this episode you can join the waiting list and I'll see what I can do to get you moved up that waiting list but definitely go click the link check it out all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host 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 fellas welcome back to another round of a bell curve you got

the boys back Vance and Michaels one and two it's been a little while miss you guys thanks give me give me a trump thumbs up just fired right in I mean Legend absolute absolute Legend do you guys see the uh Obby Felman was there I saw him ask he was like what would you do what' you think about what would you do about like the hunter B laptop or something he was like I would have picked it up from the the repair shop that's what I would have done um well so so what is this this thing I like vaguely know that he granted an audience to crypto people that own the nfts but what is the deal that he's doing this week he's launched like three

or four nft collections in the past couple of years um we we both own I think we're some of the top holders of these nfts similar to the people who went to Mar Lago and and people don't know this but the NFD collections that he sold over the past couple years sometimes he's done monthly calls with the holders and it's like pretty funny you know it's it's just him talking and you know it's it shows that he's engaged in the space and he you know launched these to his credit uh when they weren't as hot uh and he also brought that up last night which is pretty funny yeah but um he's like I was there through the bear yeah we so um but uh his whole point about these I

think is um a I think he's raised a bunch of money selling them which you know obviously is a good thing but B just shows how Pro crypto he is and you know when he sold them it was funny was if you go to collect Trump cards.com you can I think buy some still but uh you you get this card you get a dinner with the president but you also get a uh a physical card with a piece of the mug shot suit the suit that he took the mug chop photo in you know like plastered on the card kind of like a jersey card for like a baseball player or an NFL player um so they're pretty cool but I think the bigger you know event was the event last night where he came out is just being explicitly Pro crypto you know

saying he wanted wants to keep the industry in the US and you know Biden doesn't get it and he does and he's fine with it uh and that crypto comes in many different flavors he's not just like a Bitcoin or an nft guy he's like you know for whatever we're trying to do and wants to onshore the whole stre I think it was unironically one of the most positive um moments for crypto over the past couple years you've never had a presidential candidate come out and say you know I'm cool with it so just awesome well and with that uh justos of yesterday you had the house and 21 Democrats vote positively on the uh repeal uh what is it the repeal of the sabb 121 so basically this is a a house

legislation that would allow financial institutions banks financial intermediaries that are regulated by you know the the SEC and other Financial Regulators to be able to actually custody Bitcoin custody crypto assets Biden yesterday or two days ago came out and said that he would veto if this if this happened to pass the house it passed the house with 21 Democrats and all Republicans voting for it and so you have the justos of not only is there you know movement in the house movement with you know the legislative bodies but then you also have Trump on the other end basically saying this is something that we want to onshore this is something that we want to promote within this country and yeah it was just hilarious

to see the the the two sides basically go head-to-head over crypto uh in the last 48 hours so yeah so Sab 121 as well just to give a little bit more details on that requires custodians to record customers digital assets as liabilities on their balance sheet this this I'm quoting from a jake trinsky tweet here this has the Practical effect of making it extremely prohibitive for responsible custodians to hold digital assets among other effects it would result in own risk Capital requirements against such assets and this was there was a little bit of a it's it's a small nerdy Victory but there was this s fasb uh change where you actually get to recognize um crypto appropriately on balance sheets that's why coinbase got this sort of boost boost uh to their p&l um on their

income statement when they recorded earnings earlier but I got to be honest I'm you know cus has been banging this drum forever right like he's on the Twitter saying that there's just no future for crypto in the US if the Dems win and I gota be honest it's looking like he's right I'm I I don't really understand the logic at this point coming out of the Democrat side let me number one celus did an incredible job uh in uh in logo last night definitely a little golf clap for the the boy um he gave a speech you know of some sort you know Pro prophesizing about what a trump Administration would look like for crypto saying nice things about the big

guy in the industry um and I think that's kind of what we need here like when when the next collect trump card series comes out the industry needs to go hard Michael and I will certainly be buying them as collectors um but I I think you know you could kind of see some of the subt seem to be like the wheels are turning in Donald's head he's like I can sell these things there's no cost to produce them there's a lot of people who are willing to buy them and they'll buy them for you know5 to $10,000 a pop that is something that doesn't really happen you know he's selling Bibles for $60 each he's selling a hat for you know 15 bucks like like like I'm serious it's it is kind of a

different Paradigm for selling merch where you can't sell a hat for $5,000 will literally come for you if you try to do that it also doesn't cost anything to create these and that that I mean Falon for every single thing that he's done he is a merchandiser and yeah he recognizes what yep he's got Trump Stakes got Trump wine I mean but this is probably the highest margin item that he can possibly sell um but it it's just amazing to see it's it's probably hard for people to imagine after four years of Max regulatory pressure what a pro crypto Administration would look like and it

looks like it's going to be absolutely lit um you're GNA see I I think I mean like if you just go sector by sector imagine a defi sandbox where Banks can interact onchain imagine you know games that can sell onchain assets that are not deem to be you know gambling imagine all these different token projects get ETFs like there is like a Max positive scenario here that people are not considering that I think is actually the most likely scenario if you consider where the presidential betting markets are so I don't know it it never made sense to Michael Ry the shorter cycle thesis like you're playing for 2024 an election year

where you know nobody knows what's going to happen the status quo is going to persist but 2025 is going to be pretty incredible in my view I'm I agree with that I agree with that Viewpoint and you know politics aside like honestly I'm not a huge fan of either one of these candidates but at a certain point you know the financial incentives just get too too crazy like if you work in this industry it's just like I don't know man this is always cus is line like I don't want to leave the US I love the US I don't want to go abroad but you know you guys were the ones who flagged this to me like probably six months ago about the amount of Founders that guys are seating outside of the US versus inside all you have to do is look at conferences like

look at the like token 2049 ascendant because no one wants to do conferences in the all the US conferences are getting smoked it's like consensus and the Bitcoin conference permission list is was a tough year last year because can't get the the founders of the protocols are where they're going to get put in jail if they step foot in you in the US that's nuts that's nuts so nuts like people are imagining that they're going to step off the plane and be carved Away by you know any number of you know three L agencies but that that's not even an imagination that happened that happened remember midet in uh 2021 do ju exactly you know this this stuff isn't might had it com you might have had it come very find people on both sides okay

dude all right you know what to go down a little tangent so I was going down I like to listen to Old podcasts every once in a while to just get a sense of like what people were thinking at the time I went back and listened to some old up only episodes if you want to just get a sense of how differently people are thinking in 2021 just go back and listen to some up only episodes on that time period man what's what's the vibe bro it it it's like these guys are laughing about no one knows what it there's I listened to this one they were talking about axi and everyone was laughing about how no one knows what the token does but like it keeps going up forever and you know there's like I can't even remember there like one subset of the token was rare the and the

other one was like no the alpha is you buy the rare token and I remember listening to it at the time being like [ __ ] that is some good Alpha I'm like this [ __ ] is so stupid this [ __ ] is so stupid um but it's just and then I listened to an episode with Sam from Alaba and he was giving his like Dogecoin Alpha um which you know I listened to these as they were coming out and I remember thinking like man this is really smart now it's just like dude you you want you want to hear some contemporary you know view on that yeah so meme coins we've we've beat this hor horse to death basically we don't need to reflog it but um there is an argument that mem coins are like the you know the the Super Saiyan of speculation you know the final

form of you know what we're going to be trading forever okay go back and listen to nft podcasts back then so yeah yeah like look I I think like anom has become this like all powerful you know figure in the space I think he's going to continue to do well but there is a chance that the mcoin people look like the nft people in a couple years yeah you know maybe it's not 50% maybe maybe it's 20 or 30% but like nft Nick choose rich like that Arc could be coming for any number of people you know that are that are the meme coin Folks at at the at the current point so we'll see it's just hard to how these

things will age so here's one additional nuance maybe is that even if maybe there are a couple like Dogecoin is actually stuck around Dogecoin is one of these rare assets that's actually like outperformed Bitcoin across multiple Cycles so maybe there are a couple meme coins like Doge or or whiff or whatever magas crushing right now uh but it's it's not going to be like these thousands of meme coins I I saw on on pump. fun it was like uh shoot I want to actually get this right but it's like thousands of new coins are being minted per day and that's just not sustained like this is what always collapses this is what collaps the nft bubble too it's the cost of bringing on new Supply is so low yeah so we we got asked by somebody uh like what what what were the what are

the most common mistakes in in crypto investing uh and I think one of them is the the annualize you know yes dude yes preach FS Yes we made 2 million in Revenue today and so we are going to make a billion in Revenue this year it's like no no no no no that don't that don't work like that if you're selling like groceries you can annualize it if you're selling meme coins there could be some seasonality to that or or if you're selling meme coins and it's a daily process you can't extrapolate this over the week over the month over the year there there are some pretty hilarious extrapolations going on

but yes the annualize is definitely one of one of the things you cannot do you know people bought Unis people bought uh um opy at 13.9 billion 14.5 was the secondary and then it went down 99% you know there there are Market Corrections in this in this industry not not to throw shots at the pump do fun team we we like them we think they're they're cool guys but uh you know it's it's just worth like considering um with all of these things how how they will age you know can you annualize them what's the seasonality or repeatability of that business just Bears paying attention to I speaking of axi I think some of the

worst takes out of the 2021 era were the annual oring of the axi revenue do you remember people were comparing it to Blizzard like Blizzard's Revenue it's not that off I mean I was just that was pretty nuts you can also fall into a trap I've noticed some investors who want to be metrics driven and like Hey we're different and we invest based on income revenue and that type of thing and th those people fall prey to the annualize oring you know like look these revenues are real and then it's like oh yeah they're but they're down 98% eventually yep it's uh I mean it's it's tough it's tough to be fundamentally metrics driven in a in a

bull market where things are maybe not quite what they seem so here's a question for you guys speaking of um well actually do you is there any good explanation for open SE I have yet to hear that was such a dominant you know whatever you think about nfts and honestly I was super wrong going into this year about them coming back but they were really dominant there there is still a bunch of nftg trading that goes on like blur ended up eating that market share uh tensor was doing really well there uh Magic Eden is crushing what happened to open I just haven't heard a satisfying explanation for that fall I mean I think that uh I mean you really do need to listen

to those podcasts from back in the day to understand just how cool meme coins work to Jo suppose just how cringe they are today and understand that the Delta there buts yeah nfts LGE but you had um basically crypto punks and board Apes kind of powering the market and specifically on the board AP side you had all these celebrities like Eminem had one has his profile picture Steph Curry had Tyrese halberton had won in his profile picture picture um also shout out to Tyrese halberton we we've we've spent time with with the with the men nice guy he likes crypto but uh it was just kind of like a more you can kind of draw some parallels to memecoins

were like they had pictures on them you know it was just like a little bit more retail friendly yep even if they were a lot more inefficient as a speculative mechanism like you need to find one buyer for your one nft you know they persisted but once it crested like it was just kind of over and I think like you can kind of think about um blur is one of the factors that impacted them and just brought you know liquidity and efficiency to a market that was retale oriented and very inefficient and that's kind of what I wonder about mcoins like is there something that's going to make it 10 times more efficient that's going to Brick the market RIT large what could that be I

mean one of them is just the amount of meme coins that are issued like that's one thing that we saw with nfts was like I remember one of one of our our friends who we won't name uh was like you know we got the rights for Bob Dylan nfts we're like dude nobody wants to buy Bob Dylan's nfts he's like it doesn't matter like we're gonna send it it's like okay once you just see the volume pick up then you have the fragmenting of of attention the rotations get quicker and that's kind of like the beginning of the end um and the other one would be some sort of like blur style um different liquidity Paradigm where you know maybe like the pump. fund

bonding curve gets transfigured some way and you know they put leverage in it and like the rotations become quicker you know that would be the other one I would say like the the just to pity back off of that um I remember very distinctly there was a flow Arc as well remember top shots all the top shots and uh there were there was this moment where everybody was starting to like bid on these top shots it was the first season that they had all come out every like they were trading at you know hundreds to thousands of dollars and everyone was like well wait what if they create more and that was they wouldn't do that

they wouldn't do that they wouldn't do that to us but but but lo and behold there were more top shots The Following season and The Following season after that and The Following season after that and so like the supply effect ultimately has the same effect if you ever seen that chart of like the bouncing ball it like bounces and then it bounces and then bounces and it just slowly dissipates in terms of energy going forward I think that that that is is one of those elements that ultimately you know we're going to start to see play out with the denominator effect in crypto the other thing too and this is something we've been talking about a lot more recently but um just like the comparison and sort of the mid mid curve to bring it about

to bell curve uh perspectives of everything uh crypto that that relates to another type of business another type of company that exists outside of crypto and I think opy is that perfect example of something where you have a bunch of people who don't understand this industry super well who are just like oh let me put like my understanding of the world on this industry this is O this openc is eBay for nfts and I know what eBay is I know what that business is I know how well it can do and let me just like go and put this like plastic casing around it and and you know it it's going to be the eBay of the world and the thing that I keep coming back to is every single thing

that has done well in crypto is something that is not appliable in in the real world and and it's not something that you can just say oh it's this for that oh it's this for the other thing and I think that that's something you know one of the big lessons that we have at framework is you have to be something that's genuine and new and different because anything that applicable in the real world is frankly just like not going to succeed in this industry and that throws people for a loop and it also makes people very Furious uh and people have lost money you know betting the other side but I think that that's one of the like North stars that we have as well let me let me piggyback on that and say

that when when like Coca-Cola and Coachella started issuing nfts that's kind of when it turned from based to cringe and I think that's like a symbolic Market you know turning point when you see some of these big corporations issue a mcoin I think that's when it's when it's kind of like the the hour grows late for for coiners but you know yeah there's there's a lot of there's a lot of time between here and then and um I do think meem coins are a little bit more durable because they're like this like Crypton native thing that's are but you know nothing nothing lasts forever and the the amount of meme coins

just means like the attention's fracturing and it's like you're kind of trying to like no no no don't look over there don't look over here like like concentrate on Dog with fat but the problem with that is that there's always a market for being early so you know it's it's tough to scale those those incentives basically across more and more meme coins and more and more parti participants I I'm 100% in that camp and you know Michael to your point about this is Yano and I talk about this a lot too just having hired a bunch of people at block works over the years people come in with whatever industry background knowledge that they have and try to jam that work view onto crypto and a good amount of people never make the the full the full Bridge into just

accepting crypto for what it is and betting on things that are net new instead of skoric some people just frankly never bridge that Gap and like one example we talk about being applicable to mediat it's like YouTube was a new thing and it wasn't it's not like the Don Lemons that made YouTube big right it's like new people it's Mr Beast and Pewdiepie like whoever was making it big back in the day right it's net new things and net new Star Wars guy yeah right yeah yeah or that guy in the wood yeah like that's so I'm 100% on that page hey everyone wanted to give a quick shout out to the title sponsor of this season of bellur The Wormhole Foundation now if you are an onchain

user which I bet you are if you're listening to bellur you know that the cross chain experience in crypto still sucks let's just call it spade a spade we talk about it in this program all all the time interop is still a big problem which is why we specifically wanted to team up with the Wormhole Foundation they are a decentralized interop platform that powers multi-chain applications and bridges so that could be anything from defi to nfts governance oracles and more so if you are a developer and you're building uh cross-chain assets apps or data or anything like that I highly recommend that you click the link at the bottom of this episode and go check out to see what you can build on Wormhole and worm whole first of all this is a fun team they did something really cool with us

you can actually go and click the link at the bottom of the screen which is going to send you to a landing page where you can claim your own unique Wormhole nft so we're doing this with me and we're doing this with Jason my co-founder so help a brother out it's a super cool nft I promise go click the link at the bottom of this episode and fill out your PO app get your free nft and if you're a Dev head over to Wormhole and check out to see what cool cross chain stuff you can build hey everyone want to give a quick shout out to this episode sponsor flood protocol the optimal decks aggregator now flood is the perfect partner for this episode on the multi-chain future because flood is solving so many of the issues that we're going to be talking about this

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you want to reach out to them go to devs flood. bid or just jump right in the Discord all right guys thanks very much appreciate you flood hey everyone this episode is brought to you by Unis swop delivering the best onchain trading experience period Bar None in all of crypto here's how I would divide the protocol today there's a web part A mobile part and an extension part you can say goodbye to the pop-up wallet extension which just not great from a ux perspective now what they've delivered is this nice clean sidebar where you can just very easily track swaps sign transactions send to receive crypto anywhere just a huge ux Improvement on the web part of it huge improvements here you can buy and sell 700 plus tokens at your price on your terms and they've got limit orders which are powered by un swap X and there's gasless

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bit skeptical on what the timeline is going to be for that happening but some of the growth uh the smart growth strategies I think that they leaned into was one they made it super easy to Port it over from Twitter which is awesome and then also they leaned into the gambling thing and you can speculate on your friends networths uh right which is we love doing that kind of stuff uh and then they they put a chat feature there which I'm just going to go ahead and say I'm not really sure that's particularly useful or a meaningful part of the product I know it's ostensibly a big part of the product but I don't think that's why anyone's using it the the mechanisms of the airdrop the mechanism of the airdrop I thought was pretty interesting because this just came off the back of em and I understand honestly

I I think it was I think they just sort of botched the communication of it a lot but I understand why people were upset about that airdrop and a huge part of it was the tokens were in transferable only 5% was released in the first trunch out of out of a total of 15% they later bumped that up but people are just not happy with that air drop r large there's a Geo fencing and it seems like uh friend Tech just counter positioned and they dropped 100% of the supply and there wasn't like a big h of beloo about it you didn't hear about an inter subjective work token they were just like here's the tokens you know um so what do you guys think about front Tech Brit large and this airdrop strategy well it's funny you know some of the best ways of positioning yourself in

this industry in any industry actually is just a counter position and what that means is basically whatever is the top of dour of whatever the canical example is of your launch strategy your go to market strategy whatever it may be do the opposite do the opposite by default and whatever it is that they are doing do like literally the exact 180 degree difference and and that's sometimes mostly the best way of of uh positioning yourself the the thing I'll say about uh crypto um social or social bu whatever we want to call it is that I think that it will happen I think we're going to

have social fi or you know social on crypto the thing that people are kind of like missing I think with social fi is that there are extremely huge unlocks that happen at different infrastructure unlocks that were missing and you know even when it comes to social on the internet there were 25 different social platforms before we had Facebook and it wasn't just the fact that okay Facebook started college campuses it it wasn't just the fact that you had sort of like a Mass Appeal of social networks at that time you did but the unlock that happened with Facebook and and I think this goes kind of like underneath the

surface is that you had the ability to take photos on a digital camera and have it be a really easy upload experience and that's what enabled you know taging which was the viral Loop that got people on social networks it was extremely difficult back in the day to be able to put digital images on MySpace because nobody had digital cameras nobody had the ability to like upload those photos and so I think we're still at that phase where we're waiting for that unlock on the infrastructure side to be able to enable people to actually have social experiences on the web3 internet and I don't know what that's going to be exactly but there's going to be some unlock where it's like oh I get it boom okay we now have this maybe that's

wallets maybe that's you know signups maybe that's the infrastructure capabilities of blockchains being cheaper faster more scalable but it's something that we don't have right now that's holding everything back I mean we're extremely biased in this perspective but I think that it's going to be games as that conduit to Bringing people into the web ecosystem that has that ability to be social and and so it's going to be these community- based social networks that ultimately become you know the forecasters the the broad-based social networks of the world uh but yeah I'm still waiting for that moment yeah I I think um broadly uh most of the ideas from Pro prior Cycles will actually work in the

future and that'll catch people off guard like people are like you know uh web 3 gaming failed it's like no axi failed and there weren't enough people on chain for it to even really matter and so like you know in the future this is going to work I would argue it is working right now or starting to work defi same thing it's like oh you know T5 summer was so great and blah blah blah is it ever going to come back it's like well it's literally illegal for banks to touch crypto at the moment and so like you know the chances we get inflows outside of crypto natives are are zero um but when that happens defi will be 100 times the size and you can kind of say that for each category and each use case obviously aside from the complete Sideshow ones um and I think like it's

tempting for crypto natives to be like X didn't work or Y didn't work there was friend there was Myspace there was a hundred social networks before Facebook came along you know there was web van before there was instacart you know people were trying to figure out how Uber works and then it was actually workable once there was a smartphone a lot of this stuff is just like if we have 100 million people on chain the likelihood for any application to work is probably 10 times higher than it is today and so you know I think you need to take the Super Long View and not get into this like jaded but hurt you know sentiment that I see so much on crypto Twitter where it's like oh this product didn't work today it's like well doesn't mean it's not going to work ever it just

means that you know this isn't the Mark Zuckerberg of this specific industry the last thing I'll say is like um how many successful social networks are there today three maybe four how many did it take to get there 4,000 probably more you know how many apps failed in the 2010s I I don't even want to know the answer to that how many YC classes were there what's the hit rate on those like you're going to see a lot of failures to get to some successes I think when you're when you're in the Venture mindset of of seeing that it makes more sense but from the outside looking in I get how that could be discouraging but you

got to trust the process I totally agree with that the I actually I was listening to uh his podcast I like called alphalpha pod it's a little maybe a little bit of a niche reference there I like that one yeah I think you might have I think you put me on to it actually uh a while ago and I've been tuning in they were all debating this this article that Lyn Alden put out about the returns of different asset classes over the years and there's a discussion between Bitcoin and or sorry between gold versus stocks equities troun everything but it's like 2% of the equities end up generating all the returns it's just tricky that's why everyone loves indexing but we just need to take more shots on goal but I think you also bring up a really good point about around the hardware uh so I mean

what do you guys think about we didn't talk about this on the show but about a month ago sui came out with a handheld gaming device and crypto compan like salana came out with Saga their their Hardware device and phone and these have been met extremely skeptically for pretty good reason from what I understand about the suie gaming device it's been entirely outsourced which I think is really hard to do and come out with a competitive product but I I agree with you I I do look at this as make baby one of the things that we're missing is the hardware component to a company what we're doing on the software side what do you so that that is the prime example uh like one of the Prime examples that I had in my head of like what's the unlock that's going to enable this industry this category of

this application um so here's my take on you know generally like Saga versus and the company that created the suoi handheld device is called platron platron is um an operating system company and you know all of this off-the-shelf Hardware is OEM based you can kind of build it you can piece it together it's not like super genius in terms of the hardware specifically it's more it what is required is more about an abling the hardware to have the software that would be web3 native and and platron is building that operating system that will be web3 native for gamees specifically and you know if you really think about it it's really hard and this

is like one of the shots against the iPhone way back in 2005 2006 before the iPhone actually came out one of the shots against the iPhone was the phone is the hardest thing to replace you don't have multiple phones I mean unless you're a registered investment advisor with the SEC like we are and you have to have multiple phones but uh the uh you you really don't have multiple phones and so you're playing for a market of 101 and phones are some of the most ingrained you know devices in our lifestyle just because it is the connection to other people and and to the rest of the world and so you're trading off one thing and trying to replace one thing versus something like

a an oem device game based device that frankly is something that's additional and and that additional factor is a huge component in being able to sell these handheld devices I think in terms of web3 gaming and this is just a further Point as to why games is that entree into you know web3 ownership web 3 Nativity I actually think the the platron sui device and and there will be other devices sui is is the first one to have this device and there will be other platforms that have this enabled as well but just being able to have a game based device that ends around the the Google Play Store the Apple App Store the 30% that they're charging to be able to have

a web3 native Dam experience is actually a really ingenious way of bringing people into web3 ownership and I think it's going to be a game based device and it's not something that you know is trying to replace your iPhone because that's a really hard task and and you know imagine you know basically saying hey here's this solop phone replace your iPhone or carry both devices around those are the two options no one's actually going to do that whereas if you have something where you say okay here's a game based device you don't need to bring this with you everywhere it's not something that's going to replace the connection that you have with other people in the world it's something where if you have in an extra 15 minutes 20 minutes to be able to play this game go off and play this game it's a better

experience if you play it on a handheld device that I think is a much better side point also just the competence of building a phone is very difficult I agree extremely hard yeah it's really tough the the I guess the counter to that would be I I don't have the the statistics off the top of my head for like game boys or Nintendo switch or PSP but I'd guess their Market Shar is getting it eaten into by just kids that want to carry a phone so It's Tricky on both sides you know um but is that is that a downside or is that a potential opportunity could be an I I think that that's you know one of the other angles too it's like you don't have to sell and that's the thing it's like one for one

you have to sell tens of millions of phones to be able to have a market share to be able to have you know the distribution angle of making this phone relevant whereas on the on the flip side it can be a game that's additional it's a it's a third feature in you know all all the ecosystem applications that you own so it's just a very different experience I think yeah I agree I was I was thinking and you know what the this is one of the I think this is why people get excited about social f as well is is like this the hardware like why people over subscribe to The Saga phone round two is you know Bon did an airdrop for Saga round one people ended up like people were like arbitraging The Saga phone which is hilarious and then the next one ended up getting over

subscribed and that's all very silly and it's very easy to look from the outside and say that's stupid and that's not uh a sustainable strategy but that's what that's what tokens get you to do at the beginning it helps you bootstrap that initial demand and the idea is that hopefully you can take down these really entrenched incumbents with that initial boots dropping so well and and so I I don't disagree with that as a as a strategy whatsoever I still remember being able to take Uber pools across San Francisco for a150 like this is exactly you know what every business does they they want to incentivize you early on have higher customer acquisition cost to be able to get you ecosystem but but this just goes back to the exact same example which is

what if you have a preloaded 20 different games on that game device as opposed to a phone instead of Bon and instead of all the other you know application tokens that you have on a phone you have Dame assets as something that subsidizes the entire purchase of that game device like this exact same example can work for games and for you know game based applications and tokens and imagine being able to have you know a game based device that you get for free because you have you know three times it in in terms of tokens that are launched preloaded on your on your device uh I I think that there's going to be some really interesting Hardware examples in this next cycle that we haven't really thought about

yet completely agree I remember uh there was I don't know if you guys ever bumped this guy named Scott Galloway he he was go like he created something that went semi viral this week around like young young verse old than money transfers it was good it was there's stuff we've talked about on the show before it's like cost of buying a house isn't possible you know Co was like a transfer of money from old to or from young to old um all this but I remember actually he he said a couple years ago that an interesting strategy for some of the software companies out there like Spotify would be to vertically integrate with a hardware provider like Sonos or something like that and like it does end up being distribution in a sense if you have like a really valuable Hardware

product this was the whole threat with Microsoft and antitrust back in the day like they had the computers and then they put the brows are in there as the standard and I think that's the angle that the government ended up taking with them but yeah I I'm with you guys on the gaming front too by the way it's just the clearest it's the it's the clearest thing that people will will want to play and uh it's the EAS it's like the easiest line of sight applications to get millions of users I think guess we just need one to hit honestly so pixel's already hit like this is already happening people just don't notice it on CT because they are they're not gaming people like increasingly the crypto space and we've talked about this is fragmenting there's

the ETF buyers who are buying the majors there's the gaming people who are playing the games there's I guess the memec coin people are kind of the crypto people I wouldn't say that's like a different group of people but yeah it's going to be hard for people to keep up with the industry progress um as it continues to fragment but you know Scott Galloway to your point he had this whole thing about um how it's hard to make money as a kid as a young person it's hard buy a house all that stuff if I was broke today you know what I would do I would just go on crypto Twitter and spend 16 hours a day on there cuz it is the most egalitarian Alpha filled place that you can be um and so if people are butthurt or jaded about the cycle I just don't

get it this is uh also in Prior Cycles there was no air drops there was no free tokens for people we were buying them in icos like So Soft is my response to all of these people that are jaded at this point in the cycle incredibly soft how do you view this I'd be curious you guys as veterans having seen a bunch of these like do you think that this is a fundamentally different cycle like is it is this just like a yes this a fundamentally differ we've got ETS we got a president saying a a former and potentially I mean probable future president saying that he's cool with

crypto he likes it we've been under attack for as long as this industry has been alive and we've had basically no use cases either now we've got a bunch of use cases um we've got a bunch of developer activity you know sure there's problems there's scams there's rugs there's North Korean people trying to steal money but like look I would take this cycle versus the others any day of the week and sure you're not quite as early you know the uh the easy money from from being early is is probably not you know the 100,000 X's is no longer there but like the big money in terms of like the institutions are starting to move in and and do things at scale that's about to be made so just it's way different I I think um

one thing that you know we've touched on but we haven't really like double clicked into is just like the effect of what Regulators are doing and and kind of the best way of analogizing it I think is Imagine in the same way that interest rates are something that is just like a constant pressure on financial markets asset values we have the exact same interest rate effect which is a constant pressure that is ever present and you don't know where it's going to Bubble Up and you don't know exactly how it's going to affect things but it will constantly affect things in the same way for our industry and you know where is this rate right now well right now it's at the worst thing you could possibly imagine let's say it's like 15% interest rates you

know the FED funds rate is 15% in crypto um and I'm I'm just using that as an analogy but right now it has never been worse to be in crypto in the United States and so any sort of relief any sort of movement on that front is just going to have the most massive effect in terms of what's the terminal value what's the potential of this industry where are things going and that I think you know we kind of joke it's like okay well there there are people who are proc crypto there are people who are anti- crypto I I do actually think it's kind of an existential question for this industry in the United States particularly as to who is in charge and looking forward into November I I think it's very obvious as to who is pro who

is not but that will have a major effect and I think once people start to actually recognize that in terms of where things are are moving where the political winds are changing that will actually be a catalyst for the entire industry just even just the recognition of it you know it's not it's not the the ACT ization necessarily but just the recognition of it will be something that moves markets as well do you guys think you also hear from from LPS and like Michael was at this traditional Finance conference called medich this week and we've been talking to a lot of LPS recently and um like they think about this probably more than even industry participants where they're like is this like is this like legal is this going to

get banned is this you know is this like kosher and it comes the tone comes from the top of the US government but if that flips you got to watch out it's going to get pretty interesting yeah also I do think the Black Rock stuff there's the effect of the actual flows but I mean come on I mean that's just that's that's different but black Black Rock puts to bed the whole FDX garle and everything that happened in 2022 and that that's a massive thing don't get me wrong I think it's becoming very obvious that we won't see any more movement on that front until there's a new Administration well yeah it's it's not going to be a bunch of different ETF

it's not going to be you know posit positive movement in the tokenization front all the different things that we hope and want for this industry are not going to happen until there's a new Administration yeah do you guys think that even if we were to Michael to use your analogy of lowering the crypto fed funds down from 15% to 2% has some amount of activity been permanently put ped out of the US like I don't know just one thing that I have been thinking about is you know we we used to I I know like we're a media company I think a lot about conferences and audiences and where they live we've we've hosted conferences going back to the first one that we did in London was 20 it was 2020 because it was like a month before Co

but there was no scene there there was nothing we actually we decided at one point to stop doing it CU we're like London is dead as a crypto play like Europe there are some people here but it's not huge now I I think the the conference bases that like we're going to D London was the biggest one we've ever done like we're going to keep doing that year over year there's ECC now I it feels like it's easier to get an audience in Europe than it is in the US at the current moment and at a certain point there's just like momentum and mass and people have moved out there and then they don't want to move back do you think some amount has been pushed out or is it if it were to all reverse tomorrow with Trump then it would revert to I

think he would revert it it would revert like look like just like you saw London as a dead spot and now it is not you know a function of that is price action um and I think you know sentiment follows price and the moment you see BTC above you know 100K um it's going to be like this Global reactivation of the industry and it'll be homogeneous in some ways and then it depends on like you know think about people like Hayden think about People Like Us think about people um like Andre the Paradigm guys like to the extent that crypto continues to work this is going to be a rising tide that lifts all boats and those

people are going to rep the US hard and more Founders will be interested and there'll be more companies that get started and blah blah blah but like keep in mind that the the US capital markets and the US banking system are the Envy of the entire world and if those get connected to this industry via some sort of regulatory framework and if the ETFs continue to be you know these things that are d ating which way the markets move and we get more of those the us is going to be the center of the universe once more um just like it was in the in the 2021 run so um I also think there's positive benefits to having the the industry be globally dispersed there's kind of this like crypto diaspora that's that's spread um and I think it's just

like another step on the path to crypto dominating the Z gist in the capital markets but it'll it'll take a little bit it's not going to be like Trump gets elected turns back on there's going to need to be some some follow through from the regulatory perspective or no follow through and we just say we don't need laws for this stuff we we know they're not Securities maybe they're Commodities but we're going to kind of leave it alone and that will be enough to to kind of push the us back to the Forefront I um on Monday actually uh had breakfast with uh a congress person who is running for Senate here in California uh and uh you know one of the conversations that we had was basically about this

like Global dominance versus um what we would consider to be a national imperative to be able to have this industry exist here at the United States and we're starting to see you know the Ripple effects of trump being pro you know as a candidate um I think it's very obvious for a lot of these other candidates they're either Congressional or Senate senatorial candidates that this industry needs to exist here and anyone who's willing to listen to that uh perspective I think is um receptive to the idea that if we lose out on you know the the global competitiveness of the United States also California it is you know a potentially dangerous thing uh in a lot of ways but the analogy that I did was um you know and I I grew up in

paloalto kind of the epicenter of the tech industry and the Venture Capital industry and there was this there was this uh kind of famous adage from Don Valentine who started sequa capital and he said if I can't walk to the office of the company that we're investing in I don't want to invest and that was from Sand Hill Road in Meno Park and being able to say hey I want to be able to walk to the startup um and now it's it's actually pretty interesting because the conversation that we have with Founders is like basically okay uh you exist in California you exist in the United States are you ready to move are you ready to get out of here and I think that narrative is something that really

resonates because you know in the in this particular instance this candidate is it potentially going to be the senator for uh for California and recognizing where the economy of California sits and a lot of that you know if you throw a stone 20 miles from San Hill Road right now 80% of the NASDAQ exists right there um and so that I think is just a recognition that if we lose this industry it's a potentially National imperative for us you know as as a country to be able to have that growth industry here and so people are tring to recognize this but it's it's something that um is potentially disastrous if we lose it so I I agree I also think that the other thing I would

say is if you look at the history of Technology it's not the first or the second or the third iteration that ultimately ends up winning and the size of the outcomes of the ones that do win are 10 times 100 times larger than first you know iterations of it think about myspace think about friend Ser versus Facebook um and so a lot of the things that we succeed are going to just be so much larger than the ones that exist right now yeah and on that on the on the sabb 121 rule repeal which is basically like this politicized uh crypto rule that we're trying to get overturned there's 21 house Democrats that broke with their party to vote for it like the the political work that's being done behind

the scenes is starting to work and it's easy to forget but making payments on the internet used to be illegal cryptography used to be classified as uh Munitions grade weaponry and you couldn't send it over the internet you need to fax cryptography to people um and so like you know history doesn't rhyme or doesn't repeat but it does rhyme and so I I think we're we're in that part of the industry's jcurve at the moment yeah there's a cool story about so pretty good privacy pgp is this standard for encryption who was the guy that invent there was a guy the let's see pgp inventor this guy Philip Zimmerman so when he invented this uh

this standard which is literally just lines of code and he was worried about this getting classified as Munitions grade Weaponry he created a t-shirt he put his code on a T-shirt and then walked across the border got arrested ended up going through a huge legal battle and then it ended up going to now that that's a guy that's got balls and conviction is frankly that's it's just a cool piece of lore in terms of how this ended up playing out but you probably do need some people like that to seriously push the envelope and get people to think differently about this stuff like oh we've we've had a number of those um some good some bad I do think generally like we're going to need to do some work

uh for people like Roman storm and tornado cash Ross in in the Pirate Bay there's a lot of people who will be looking at probable prison sentences uh from the industry who are I think at least good actors and I hope over the long enough time frame for the industry is that like we can get people like that pardoned because you know they may not be the exact people that are like building the consumer apps but they made important ideological stances when it mattered and they're currently being punished for it so I think that's the other hope that we have is like hopefully we free those people at some point agreed hard agree so I got one one more thing I wanted to uh ju just do like a brief update on ethereum here

because so something that uh stuck out to me in the so coinbase released their um released their earnings like last week or a couple weeks ago and they break out their uh trading volume by asset and the the ethereum one uh stuck out to me it's it's like the lowest it's ever been the percentage of eth trading and I feel like ethereum right now is Vance you use this phrase I don't know months ago about needing to basically everyone needing to like get their pitchforks out and say that super bearish for something to for us to finally get bullish on it again and I'm

S I think I'm starting to wonder if we're getting close to that with ethereum so if you're following along here you can see the trading volume percentage of the total for coin brace and it's gone down over time with Bitcoin as well um but ethereum you know at one point there was almost parity between ethereum and Bitcoin 33% versus 35 and now bitcoin's gone from Q4 2022 uh like a year later Bitcoin went from 35 to 31 eth went from 33 to 15% but I don't know I just think that that wall of worry like the market is ready to climb that for ethereum and part of the reason I was calling this out today I read bolik put out a blog post on multi-dimensional fee markets for ethereum so this has been something

that's been been talked about for a really long time and I think there are a couple of like big Tech improvements coming down the line for ethereum so you know we've been talking a lot about igen lay recently and everyone's excited about it being a way for eth to attract more yield then secure more chains outside of eth but also I think there's an element that people are under appreciating which is the native reaking apparatus which is basically ethereum um validators being able to opt into perform pering more tasks for within like ethereum validation so that unlocks things like single slot finality that unlocks things like stateless CL like all this stuff that would have been very very difficult beforehand and I don't

know I just sometimes you just need to read a little bit of italic stuff to get you pumped up and be like wow the tech here is actually sick and the technolog is improving the tech is improving I think feel like we're sleeping on it a little bit you know I I mean what usually happens is that uh everyone gets bearish on something until they realize they're drastically underexposed and then they have to like pivot and do a 180 and it reverses right um and you know the EF is starting to ship be it the multi-dimensional gas pricing um be it any number of initiatives we've kind of heard rumors about like that's kind of how they tend to respond to things and I think the volume stuff specifically is probably

more of a function of the ETF and the flows there and like we're Believers that these ETF flows are driving the direction of the market and it doesn't really make sense to fade the only other asset that's going to have an ETF in the next three years and so like if if you believe that the ETF flows are are what is driving the market and I think you know that's like the number one factor and maybe macro is like a very distant number two then it makes sense for for eth to kind of be lagging but also be something that's kind of next up and you know what's the timeline for an ETF I mean the 23rd of May we'll see kind of what happens seems like the market is like basically zero chance for this to this to

transpire but you know that approval process frankly is is less relevant than who wins the presidential election because like you know if Trump wins there's not going to be this like let's review it and like let's see these lawsuits and blah blah blah it's like lawsuits get dropped the ETF gets approved it happens in pretty short order interest rates go down interest rates go down and price drives narrative and flows Drive price and you know all that stuff kind of picks back up but um I think you're going to see these these the majors do well because they're kind of within this as we talked about regulatorily approved framework and I think you know things like salana and things like um I guess like madic are

kind of like the next ones but next means like a few years probably at a minimum and I I didn't actually mean interest rates I meant like the proverbial interest rates of the industry go down but the uh the the point here is so ethereum Futures markets have been live for three years now and the Futures markets are the indication of whether or not we're going to have a spot ETF and that's basically the entire math and the entire reason why the lawsuit against thec from brace Deale went live but we don't have any Futures markets other than ethereum and Bitcoin right now and so we literally have to have the clocks start whenever

there's a Futures market for another asset and right now that timeline is two and a half to three years and so when when I I think this is like the other aspect of this industry which is like there's nobody else who coming through the door other than etherum for this ETF opportunity for at least the next two to three years uh and right now the the math is is pretty robust um it's going to be really interesting on the 23rd or the 24th you know to see what that reason is for the SEC but I expect that there will be some lawsuits that are filed probably within the next 10 days after that La last thing I'll say is like um basically every asset has had trouble keeping up with Bitcoin like even even this year like

Soul BTC is flat to down soul eth is is basically flat to down um and then alt have gotten cooked for like negative 50% draw Downs this year and so there is kind of this like perception versus reality thing and I think the reality is that you know by and large things haven't really moved a ton this year you know after that kind of first couple months of of price action and so you know I think you just need to take the Long View on basically all of these assets but we are optimizing towards a future where the things that have ETF flows are going to be the ones that perform the best and you're not going to see this homogeneous Rising tide lifts all boats and I think we've been proven right on that you know so far like

polygon is still basically at the lows of the of the 2022 cycle um and you kind of see there's like this invisible maybe like 20 to to30 billion dollar ceiling that that alt kind of can't really get past in terms of FTV and we don't expect that to change unless those things get get ETFs and get approved um or you have something anomalous like um you know people buying the unlocks for soul but you know again like a lot of those unlocks restart next March so a lot of these things are going to struggle with with these overhangs unless they have an ETF or they're perceived to have one in in the near future yeah you know what else is I think eth is the first major smart

contract platform to really struggle with this but I think it's challenge that every smart contract platform is going to have to struggle with which is actually what you were describing Vance about the fragmentation of attention in in the meme coin ecosystem like eth has that problem a little bit because it's like because eth was so successful and attractive at so many developers now you've got all these l2s that you could bet on or most of the apps are on ethereum and it's like well it's like the right Curve Way of exactly that same problem right like the left curve and the mem coin is like no focus on my dog with hat instead of whatever you know Meme coin and and eth it's like what eth is really good instead of like arbitrum or optimism or uh you know whatever but it's the same challenge it's the

fragmentation of attention and but that I think eth was just the first one to like really deal with that because ultimately that's going toen to salana as well and all these other I happen to Every Chain totally you can you can scale your chain to be free if you wanted to but you still need to deal with the incentive problem of if you're an L2 you're more highly valued than an application on an L1 and so I think like when when is it going to get really bullish and when is the thesis going to like restart it's when the blob Market probably picks back up and and starts to get you know it's like oh [ __ ] eth has scaled it's still generating revenue and the blobs are are you know generating a lot of fees for the main chain people

going be like oh [ __ ] this works and I think you're going to see that for probably a few different ecosystems whether it be eth or whether it be Bitcoin or whether it be who knows maybe even Cosmos like that will be the architectural model for the acet to fees and yet it scales um not not just from like a cost perspective but from an incentive perspective because you know like one one example is like all the meme coins that are going on in salon and like pumped out fun as being the creator of a lot of them do you think those meme coins are proprietary to salana or pumped out fun I would say probably pumped out fun and so like you know this is the same thing would happen with like eth nfts

and I guess to a lesser extent like eth D5 which hasn't really been replicated as much but like everyone will have to deal with this issue of like what happens when these things start leaving our chain for a higher valuation or a different value capture mechanism and it's probably better to front run that versus you know having to respond when they create their own L1 actually I do want to amend my original statement to say that Bitcoin had to deal with the fragmentation of attention too to like eth and all the other chains so that's why the bitcoiners hate that's the O reason why they hate all this [ __ ] which is I guess kind of funny but yeah they all wanted us to build on Lightning but there's not really an incentive compatible way to do that for many of these applications with their

own token we should do like an episode at some point with Eric wall and because lightning I actually S I sat next to Victor boonu and Shout Out Victor uh on like my flight to eth Denver and he explained lightning to me I'm I'm not I'll be honest I've never like dug really hardcore into how it works but he was the guy who pushed forward the lightning integration at coinbase and the more you really discover about how lightning works like how did anyone ever push this as a solution this this is insane I I don't know I don't want to be a hater but like maybe we should just do an obituary like and just call it this was not the right model and then we can you know try to actually scale through other models that work but yeah

lightning seems a little convoluted to maybe end in a more diplomatic no bad ideas yeah if you're right right no no bad ideas just bad timing yeah yeah exactly all right fellas I think this is a probably good place to end it this was a fun one see you later cheers hey everyone Mike here if you're a bell curve listener you know that transferring assets across chains can be a massive pain I certainly do I complain about it on this program all the time that is why we are incredibly excited to have teamed up with the Wormhole Foundation the stewards of the Wormhole protocol and the coolest part about this particular partnership is that they have made custom bell curve nfts which you can get and mint for free click the link at the bottom of this

episode take you get your free nft [Music]