Winklevoss Twins "Zucked" by Genesis | Roundup

Transcript

all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-hosts today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with 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 whatever you do you just need to be the best at it if you're the best at what you do like there's always going to be a role for you but middle 80 it's gonna be tough advice to live if you're gonna do something just got to be the absolute best he's the best seriously Vance I heard you're horrible

at skiing though so what's the deal with that bro I can I'm I'm nasty come with me seriously walk around and find out all right everyone welcome back to uh the first bell curve Roundup of the year I know you all missed us I know I miss these guys very excited to be back so uh today we're talking about Solana is Solana dead is Bonk the new big thing is Bonk the New Meme coin of crypto um we're talking about Cosmos in the usdc um we're talking about Winklevoss twins open letter to Barry uh we're talking about silvergate being down 50 so I think let's start on the Solana stuff um Mike where do you want to uh where do you want to begin with here well maybe we can frame this in

something of uh you know debate just because I guess the big story about Salon is just the price action's been absolutely horrendous uh Vance I think you're the Tweet thread that you put out a little while ago about basically Solana and the whole all the Sam coins getting punished because they're selling Bitcoin and eth deposits and they were kind of artificially pumping you know the price of I want like at least the Solana sort of ecosystem and I think that is basically being Unwound so you know a little while ago Solana you know it was hovering around 13 and then it dipped to like 850 I think at the absolute low um there was definitely a time when I was thinking in my head what if it actually hits three dollars and coin

Mamba is actually Vindicated against uh SPF I thought that that might actually be a possibility I think since then the price has largely recovered and it's trading right about you know range bound to where it was like 12 or 13 bucks there's been a there's been a small and needed win I would say for that ecosystem in the form of Bonk uh Bonk as far as I I can tell I'm a supporter of the Solana ecosystem but I seems like it's a meme coin that got airdropped and it's done like a 35x or something like that in the past week I'm not sure how much like long-term viability or or what that project really stands for but I think it's a small and probably necessary win in the depths of a a pretty deep bear Market uh maybe we can start I don't know if you guys have any

specific takes on Bonk in general um or if you just like what are your thoughts on the future of Solana in general I guess as a as an L1 I don't think uh I don't think Salon is dead necessarily I mean these things only die if the developers leave and you don't actually need that many developers to keep an L1 together through a bear market like eth actual application developers through the last bear Market Michael what how many like in counting the core D5 people um I mean in the thousands like I think the people that people really know are the application developers and in East last bear Market

there was probably hundreds there's probably thousands of core developers infrastructure tooling people like that and so it's not Unthinkable that Solana comes back I think what you're seeing is it's just re-rading to a lot of the existing l2s and l1s that are out there so the salon is like still seven and a half billion it's getting closer to something like optimism which is four and a half billion and is doing 42 of the transactions of ethereum Adam is I think three billion um you know it's they're starting to be just this re-rating and it still seems like there's more you know things it has to work through there's overhang that Alameda has there's overhang and a lot of investors have um but it's either gonna make it or it's not but most chains don't actually have

this like dumpster fire of a circus that goes on that can like you know Define it in the crucibles of a really tough bear market so if it does survive I think it'll do pretty well but if you know it doesn't it wouldn't surprise me either the the way I'd think about it is sort of like what's The Narrative of Solana now I think historically over the last year and a half you would kind of point to Solana D5 and Salon D5 being enabled largely through you know institutions like FTX uh Market Majors like Alameda and just activity and capital that both of those and and many others kind of represented jumping into the ecosystem and supporting these assets um and so what you're gonna go through

now is basically you know to Vance's point a re-rating but also just a new narrative void that you have to go off and solve eventually and you know maybe it's consumer applications maybe it's you know pfp nfts um maybe it's you know things like Bonk uh maybe it's games and you know Solana at least last I heard that it had something like 25 games launching in in q1 um so I agree with the take that they're not dead uh largely you know it's developer ecosystem but it's also um just general excitement and activity that bill momentum and I don't think momentum has has stopped or gone away I think really kind of what's happening right now is you're just it's it's the nuclear fallout of what just happened over the last two months

um and I I think that there will be some application category that Solana is well suited for um but they're yeah you've got overhangs of vesting schedules you've got overhangs of price uh falling I think a lot of what that last couple of weeks in the year price action was and you saw this across a number of assets not just Solana I think a lot of that honestly was tax law selling um because as soon as the the year was done you you saw everything a lot of these illiquid or other assets pop you know 20 30 40 percent um and so I think you're going to start to see the building of the base um for Solana and um yeah I don't really have any tapes on bond specifically I I know that there's sort of like a one

pager there isn't a white paper nobody really knows like what it is or how it's going to work or what is it's going to do but the one thing that I will say is positive at least for the trajectory of Solana is speculation seems to be back and there's excitement there's energy even if it is around something that's supposed to be a Sheba you know knockoff um Doge knockoff uh just the fact that there is something happening like that I think shows that there at least is some activity going on do you guys think that because there are kind of like the big difference in terms of scaling trajectories that somewhere like eth has taken which is like modular versus Solana as being monolithic do you think there's no like steel main case for a monolithic blockchain like Solana

attracting a bunch of market share and activity there there probably was more of a case in a world where 4844 EIP 4844 didn't exist but we are now we now have such an excess of block space of cheap block space and it's only going to get 10 to 100 times cheaper that I don't think the same monolithic argument stands up as to when you know if fees were like 300 to use it a transaction um so I I also think it's not necessarily about the characteristics of the blockchain itself it's mostly about who sticks around um like you have like the D5 people you had like a lot of ideologues in the last eth bear Market working on you know you know private preserving Technologies D5

games like random stuff um I think the question is who sticks around on Solana and and like what do they make the new culture of the chain like the Judo guys are really talented we're an investor there um D flow certainly has aspects of Solana in its stack um but then you kind of have step in Orca and a long list of of honestly like Sam projects and and I think it's going to be interesting to see who emerges from that list uh because that's going to be what the change new narrative is to Michael's point yeah very fair I think Orca for what it's worth is pretty high it's a pretty high quality project um but point taken 100 I like so much of this is actually like there's a big like kind of a technical argument but then

there's a lot of this which is like a BD and winning hearts and Minds argument so I think this is like The Crucible and they'll emerge from this or or not I'm totally in that campus well yeah like I mean on the same token like people that are in the atom ecosystem Believe In self-sovereign Chains and like you can tell when you talk to them like that's a philosophical point that they're willing to you know Don Hill for I don't know if people are willing to die on the hill of like monolithic blockchains in general so the chain probably has to stand for something other than that um so that's what I would I would say why don't we move on to let's talk about the open letter that uh that the Gemini that Cameron Winklevoss wrote to Barry silbert so basically Cameron published an open letter on Twitter and you know

we can go through kind of the cliff notes of what it is and why that's important as a reminder to the audience so Gemma and I had an earned program where you could basically deposit coins and then the the users of the Gemini iron program would earn some sort of yield on that what was happening on the back end is all that yield all those coins basically being rerouted to Genesis and then those were going to uh you know genesis's customers right and they were supposed to be earning more yield so Genesis obviously been in they've closed uh their withdrawal window for a long time now um and Cameron Winklevoss published an open letter to Barry silbert saying hey we've basically you know alleging that hey we've tried been trying to get in touch with your team we've been acting in good faith we've put forward several

proposals uh you know one proposal and then we iterated on it and we just haven't heard anything from you so basically he was alleging that Barry's acting in bad faith installing for time there's also something kind of interesting he called out dcg owing Genesis 1.675 billion dollars that's about five times the five some odd million 500 some odd million that he was uh that it was public that Genesis owed to uh our dcgo Genesis before so what do you guys think about this hole I mean is this you know let's set some context here is this like an important development I mean do you guys have any takes on this whole situation that's unfolding so so I think the tldr right is so gen so just to make sure I understand it

Genesis owes 900 million to Gemini earned customers Barry Cameron is claiming Barry is refusing to meet and find Solutions uh dcg used those funds from Gemini earned to speculate on risky trades probably probably like the The Venture side of their business um and it seems like the date is January 8th that they need to find a solution by do I have is that do you guys understand the same way is that right yeah I think January 8th is the date and reading the Tea Leaves of this this isn't in the letter that they will you know are threatening to put Barry into a notice of formal default which would theoretically push him into bankruptcy

it all all depends on the terms of service in terms of who actually owns the assets but I do think that if you have a loan agreement uh that you know has this provision in it you can push someone into bankruptcy if they cannot pay you back the the one part that I kind of think is potentially a stretch and if this is the case it would be you know pretty pretty bad um Genesis uh taking assets from Gemini customers and using them at the dcg level would be you know something akin to uh you know the the rerouting of the entity structures you know that we saw with with SPF and Alameda and fth Fiasco um yeah there are certain separations of

concerns for each of these different entities and if you're lending customer assets retail customer assets for an earned program that then go into let's say the dcg Venture portfolio that those are that's not good um and and wouldn't be able to happen independent of terms and conditions um so I I don't know if that's actually true I would hope that that is not just for the sake of everybody involved here um but it is clear that Genesis was at least lending out these assets you know as they would with any other assets that were being put onto the Genesis platform and earning that yield for doing so so whether or not this gets solved by the eighth I don't think it is they basically dcg came back over Twitter and said give us more time this is really

complicated to figure out like we're working hard to figure it out um but yeah where where this Net's out the longer this goes on I think the harder and harder is going to get because there's going to be more and more people that are involved and frustrated and and want to you know come back and get their assets and it's just going to get heavier and heavier for them to handle over time so I would hope that there's quick resolution but I'm definitely not holding my breath let me take the other side not the other side of this but like there is another angle here which is I know I the other reason Cameron's doing this is to like get everyone on Gemini's side here but also Gemini offered this magical 7.4 return which is like was a very unrealistic return they did so by

lending 900 million if you look at their website on how they did that they're like we do a bunch of due diligence into all of our counterparties they only had one counterparty it was Genesis they just basically funneled money into Genesis so like I know that Cameron was he's trying to win hearts and Minds by being like the money of school teachers is being stolen as if like Gemini is not the reason that the money was loaned but like at the end of the day that was your product and like I think they are at fault as well a little bit here too so I'll take that very much so like 100 their spot exchange did 11 million dollars of volume yesterday like it's not like they have like this whole other business that they need to be paying attention to and are like

making moves because it's super successful like they were primarily in the business of lending money if they I mean and they did lend 900 million to Barry and if that goes to zero highly probable the equity value of Gemini is is less than zero as well and so you know if you lend someone 900 million dollars and they can't return it that's your problem um and and I think that is the part that I hope is not uh swept onto the rug here is that you know yes Barry was responsible for it and and he'll get in trouble for his own set of of things but on the other side the twins you know they blew this up themselves um and so yeah this it's I honestly thought the letter was like a little bit of a misdirection slash pretty weak uh

to be honest let me ask you guys something what do you think the right move would have been here for the twins because would you guys have like stepped up and tried to make customers whole I mean 900 million dollars is a lot of money I mean what was the right thing for them to do in your perspective not not lend out this money not start this business um like I mean coinbase kind of got saved by the SEC because they put the kibosh on their lend program uh or their earned program but uh there is no person that has ever worked at any sort of financial firm that will tell you that lending 100 of your customer deposits to one person is okay um even if it's a pass-through um you know your counterparty risk is on

the Genesis level not Genesis of counterparties which turned out I guess to be also very you know buying gbdc and Venture stuff um and to Michael's Point looks very mechanically similar to FTX and SPF did you guys read Sue's take on this I thought I thought Sue's take was relatively correct I mean he's also the person who owes them a billion dollars but I don't see a logical flaw in his argument I do see someone who has so much bias and should not be allowed a Redemption Arc et cetera et cetera but um he's not wrong well so the the one the one point that I thought was not as accurate with Sue's

take was and this is and I haven't read the um Genesis terms and conditions but I have read a number of the other centralized lending platforms terms and conditions um FTX definitely was incorrect about its terms and conditions like that that is that is one thing that is fundamentally different from any of the like Celsius Voyager or you know basically all the others that you know basically said as soon as you give us your assets they are not your assets anymore they are property of the company and that's literally what happened in the case of uh you know the the ruling that happened yesterday so I I generally think like that's a major difference and it may be minute and legally's but there's a lot of lawyers and there's a lot of Institutions that read those

terms and conditions and put their assets on FTX because they thought hey this is this is how it'll work this is what it is whereas that may not be the case with some of these other providers you know what I didn't know is that somehow I completely missed this is that SPF was on the board of Genesis completely that's that that's Genesis Digital mining or sorry why was why was Stu using that then in the shoes just moving quickly and and just like you know trying to make an argument in his favor but you know a lot of it is not wrong uh it doesn't doesn't remove the fact that they did bad things and they owe money but um just just to double click into that point I I haven't dug in a ton but I saw this morning did you guys see the

Singaporean government I think tried to serve Sue and Kyle via Twitter that is technically what happened you know I don't know if there's a difference but um you know if you're gonna hang out on Twitter and try to build a Redemption Arc you might get served there too it's a new and exciting day pushing all kinds of Frontiers in crypto if you were DTG what would you do here what's this what's the get out of this the problem is you don't know where what the like actual hole it like I'm sure they do I'm just saying at this point we don't have perfect information to know like when all of these maturities are happening if you know go back to when

FTX you know blew up and they were like oh 175 million dollars is is really the exposure here and like they filled that hole pretty quickly and then it was like might be a little bit more than that it's like you know how far does this threat actually go if you pull on it the whole way so I I don't know you know all of the details but I I mean if you need to fill a hole you need to fill a hole and and they do have some significant Assets in the form of gray scale they've got you know a venture portfolio um there there definitely is an opportunity to recoup value on a lot of those things um but you know it's getting to the point where you put the entire dcg at risk because of something Genesis you

know at least originated so you kind of have to think about do you save the body by cutting off the arm as Barry stated publicly what he took the loan from Genesis 4. yeah share repurchases and they also were public about buying you know hundreds of millions of dollars of gbtc uh like there's a lot that's public The Missing Link is like whose money was it and one of the all-time funniest things that SPF ever said was that dollars are generally fungible so I don't really know which money was used to pay for what and it's kind of like the same thing here where it's like yeah oh that's that is your money but that is my money and like here's the blurry dividing line I think it's gonna end up

they just need to make some sort of deal like dcg has leveraged that if you try to put us into bankruptcy we're just going to put Genesis and you can fight over that carcass which is not worth that much uh and the winklevosses have leverage because they have this like popular uprising of you know School teachers and the people that they highlighted in that letter um but like neither of them are in a great position because like they kind of have like this Mexican standoff thing going and they need to come to some sort of agreement which I think is part of of what this is this is like a pro forma like we're gonna argue on the internet to turn up the pressure on each other type of type of deal I I don't think they need to come to an agreement though it seems like they're

not like if I were I mean I I don't really know about restructuring Billion Dollar Deals here but like couldn't you just Genesis is not really worth anything anymore in my mind so couldn't you just let Genesis go into chapter 11 so then with that so then because then Gemini just Gemini gets hit with all the retail lawsuits then like then then all the school teachers are Gemini's problem not Genesis and Barry's problems but then that that kind of calls into question all the different uh Affiliated party transactions that happened over the last two years and you know there's an argument as to like how far the look back window is whether it's two years if there's you know illicit uh activity or if it's 90 days I think you're six months you know once again also not an

expert on billion dollar restructurings but you know the the share per the the loan for the share purchase buyback you know that might be taller than a question at the dcg level like the the intermingling of all of this is where I I think you don't really have just like a clean break of like okay kill Genesis I I do think you're gonna have to go through some some form of restructuring you know in the slightest um but yeah I agree you know at current current stand like genesis is worth nothing it seems like there's only two options here in my either understand Genesis into chapter 11 or you have to raise funds if you at the dcg level either by like selling Equity or dissolving grayscale and a sale of gbtc

something like that it seems like those that was the rumor in early December right I mean we're doing some sort of capital raise but yeah at least so far that hasn't come to fruition yeah one one something like this goes cold like it's hard to re-heat it up in terms of people interested in buying significant assets so I mean the other the other thing which is kind of remarkable is if you look at the Genesis terms I have them pulled up it basically is very clear in if your deposits are lost or if there's an accident you know with our counterparty you take on all of that risk number one I I think terms like that should be outlawed because nobody reads the terms of service they just assume that they're signing up for an account which will theoretically give them their money back but number two like I wonder

if there is a world where it's just like sorry the terms are what the terms are and the money's gone I think that is probably if you're discussing that you're probably in some sort of Port which is probably not good for them but it certainly some sort of outcome that could happen where you know kind of neither of them get in trouble but the Gemini entity has claims against the the Genesis entity foreign I think it does come down to those related party transactions because if you've done that within some sort of reasonable window that that pushes down the ring fence right and then suddenly like all of dcg is at risk and you know when you're restructuring I'm not a

restructuring lawyer either but like I kind of know in general you can kind of like push out right your when you need to make your payments right to match up uh cash flows that doesn't really work because there's no more cash coming in you could convert some of that debt into Equity that's not going to work because there is no equity when it comes to Genesis and then you know it really depends on those related party transactions and what they use them for like if you put all those into like dcg Venture Investments like that's a big problem that's that's a massive problem you think chamoth is going to send back the billion dollars that he made wow I don't know that's a that's a good point what's the worst case scenario

here what if there's just like look no agreement can we reached we're gonna have to fight this out in court they're gonna be Mass liquidations of like whatever is left of Genesis Sloan book what what is there a worst case scenario here or like is it kind of just some I mean in the worst case scenario right now which is that there's no resolution I I don't think like first and foremost when you're in this type of you know halt withdrawals perspective um with a volatile asset like crypto I think you get hedged pretty quick so there's not gonna there's likely not going to be like Mass selling due to you know forced liquidations Etc but I I do think that you're you're basically just seeing the worst case so maybe other people who had assets on the platform

until they get resolution are selling assets to cover you know potential losses that they'd have other places maybe that's what's happening but I don't know it it doesn't feel like there's going to be anything worse than you know where it currently stands which is 100 assets 100 of the assets are not available to customers unlikely that the trust gets Unwound in its entirety there's also legal limits of what they can sell at Market if that were to happen um I mean I see the probable outcome as the twins probably file against Genesis to put them into bankruptcy just Genesis files uh you know like they they can try to put dcg under but really dcg needs to put dcg under if it's going to happen

but more likely they'll just put Genesis in then there will be a legal fight to you know unencumber the rest of tcg's assets into that bankrupt pool but it just depends on on what goes there on one timeline you know Barry is right that he's current on all of his loans so you know I think he's either botting for time or hoping that there's a pump in crypto because keep in mind they're a lot they're long a ton of crypto assets if crypto doubles you know probably the whole is a lot smaller on the dcg side so it seems like he's stalling for time for exactly that like pure speculation but waiting for the pump you know just to save you those it wouldn't be the Z cash buys version of uh he needs his own Bonk coming yeah yeah

he made um yeah if his portfolio wasn't such like Duds like I think there could be more of a reasonable solution but who wants to buy like you know Zen cash and ethereum classic and you know the ethereum classic great skill trust like there's only one market for that and it's Barry saw the the discount on the East trust hit like negative 60 percent seems like there's something to me too easy too like yeah the other thing we saw last night was uh and we monitor all of all of those wallets we saw small amounts of crypto moving from Genesis while it's like 0.037 you know very low dollar value those are well we do those for when we do them or to prove that we

own addresses so there could be some sort of like okay that's mine and these assets are mine and and some sort of resolution potentially hmm or the other reason you move small amounts of money test transactions before the big one [Laughter] not not in random uh two-digit figures I'm kidding um should we move on to silvergate last one on on the bankruptcy circuit looks like binance got blocked from buying or there was a limited objection filed I don't think they will end up blocking them but uh just interesting to see the SEC now really really out there so I missed them

so I'll describe it the what they did is they filed a limited complaint against uh binance Us's acquisition and Voyager suggesting that they don't have sufficient information as to where the source of funds was coming from basically my reading to this is that the SEC is asking for more information as to what are your business operations how can you possibly be spending 1.02 billion dollars on this acquisition and you know where does the money come from essentially the the thing that I read from this going in is that it's actually not a 1.02 billion dollar purchase they're basically just assuming 1.002 of the customer liabilities with

the same amount of assets basically that they're acquiring from Voyager and they're putting up to 20 million dollars of cash consideration so I think this is more just like symante in terms of how you describe what the deal is and how it works but it does showcase the fact that the SEC is very interested in learning as much as they possibly can find about binance and how it works and where does money come from monies come from um so interesting but like every single day it seems like there's a new interesting twist in this you know slew of bankruptcies that we're going through Gary Gensler actually did Brian Armstrong a pretty enormous service by blocking that earned for coinbase it does depend on how they were planning on building the earned product

um you know obviously Gemini basically just send all their money to Genesis but if it was going to be that uh coinbase for instance was doing the credit assessment and going to their existing customers and lending assets to them directly and then they were also you know using that as you know Assets in to be able to have their collateral to give to those customers it is a different proposition slightly but you know any sort of lending product over the last uh 18 months I think none of them are still survived there would still be they have the same client set though as Genesis like they probably wouldn't have gone down right madly but like they're still lending what were the other options you know I mean I don't think they would have went to Alameda in the same way

yeah I don't think they would have went to three arrows in the same way you know doesn't really fly right they're the risk averse you know centralized provider in crypto um and that served them well like that's they're the ones that are still standing um you know with with all limbs intact uh and and so I think generally they would have done a better job I I just would assume that but I agree you know it still would have been a lending product um all right let's let's move on to silvergate uh and talk about what's happening there so silvergate obviously it's a it's a public company and it's a bank that has access to like the the FED discount window and everything their stock open we're recording this on the fifth so Thursday it's down some 40 odd

you know 40 some odd percent today uh and this was based on on the back of a story from the Wall Street Journal that reported that uh customers withdrew about eight billion dollars uh from their accounts there so silvergate silvergate stock you know it's trading at about 1250 or whatever it is right now that's down from a high of all-time high of 222 dollars so over the last year and a half or so it's been about a 95 decrease uh the total deposits from digital asset customers declined to 3.8 billion which is down from 11.9 billion in sep on September 30th of 2022. so basically within the last quarter it processed about eight billion dollars worth of withdrawals in order to satisfy the withdrawals

silvergate liquidated debt that I was holding on its balance sheet that resulted in a 718 million dollar loss um and that that's more profit than the bank has generated since 2013. so obviously investors didn't didn't like that very much um silvergate in addition to being a bank so they have a lot of deposits from crypto customers uh actually about 90 so silvergate basically restructured they kind of sold a lot of their core businesses and really pivoted to 100 focus on crypto they have 90 of their deposits are related to digital asset type customers um so a lot of exposure there Alan Lane is gone and said you know the reason why

you know there were these withdrawals was not necessarily just like people moving from silvergate these were people these were kind of like institutional crypto people as I said you know we there's nothing happening in crypto so we're just we don't need to keep our money with you anymore we want to put it with treasuries and things like that um but they just mechanically describe that 718 million dollar loss they they were holding their customer deposits in like mortgage-backed Securities and treasuries so when interest rates were going up you know the value of those you know debt Securities went down and they had to sell it you know to cover withdrawals so they got smacked with a huge loss um that's yeah which is tough but but you know they're still they still live you know they still live and there's a

uh they kind of live to tell the tale they also have these numbers here somewhere they have more cash right now than you know there's like 3.8 billion dollars worth of customer deposits they have uh you know over that and just cash you know in addition to their existing portfolio of debt so it sounds like they're still solvent they cut 40 of their head count which is it's a lot um but what do you guys think about the whole the whole Soviet situation moving back to you know the beginning of silvergate silvergate was like a very small Regional Bank in San Diego that and I I remember listening to some discussion about them where it was like essentially a family-run bank and they

caught on to you know the the crypto Trend a few years ago back when basically nobody else was willing to bank uh crypto startups I think Advanced correct me if I'm wrong but hashlits was a silver gay customer in like 2017 um and you know that that was like the only bank that we could possibly get uh at the time and you know we had a couple of accounts with them um and I I don't think we have any any existing accounts with them now but you know generally like they were the original uh crypto bank and so they caught all of this upswing and all these assets because they were the ones who were willing to take on all this risk and you know in a period of time when

nobody else was willing to take on those customers um and it seems like yeah the the same sort of Affliction that hit all these other centralized custodian centralized operators has hit now a publicly traded Bank um and you know they're they're still existing they're still alive um you know the big knock that they had over the last couple of months is that they were the primary bank for Alameda and FTX um and so then there's questions of you know how how did they do sort of AML kyc checks and like all the different things that are required for you know anti-money laundering know your customer type rules and regulations especially for banks financial institutions um so you know there was a lot of there's a lot of consternation over the

last couple of months um the reason why today is such a bad day from the stock isn't just in uh Wall Street Journal article it's they issued preliminary Q4 financials that are unaudited um you know think about that it's January 5th it's basically two days into the trading uh uh days of 2023 and they're having to issue like emergency Q4 financials that ended five days ago um you know that it's exposed you know the amount of withdrawals that exposed the 40 reduction in headcount um and basically all the different losses and and things that Mike you just talked about um so I I think it's it's going to be tough for them and definitely a reputational hit and when you're a bank that that is a lot of the value that you

have um but yeah they're still alive the other thing that's you know silvergate did that was to my I wasn't really around then when they launched silvergate exchange Network send but that was a pretty that was a pretty foundational piece of infrastructure so you know crypto is obviously 24 7 Banks there's just a limited window of time right it's like nine to five I'm pretty sure Eastern that you can send wires so you know basically if you want to partake in crypto markets outside of those hours sometimes you have to like top up collateral right so it's a very it's you know you need to be able to send at any period of time um so silvergate basically made this payment Network between some of the major exchanges and big investors and it was like it's still a really necessary

piece of infrastructure so they did some stuff really right I guess well isn't it isn't you guys need to help me understand this isn't there what's the thing that said Network or something the now the network they created isn't that how exchanges all move money between them like if I'm bit stamp and I want to send money to coinbase you want to send it to Kraken it you don't wire it from coinbase to crack and you send it on the send Network right do I understand that correctly it's basically yeah they've sent leverage they launched in the last like six or nine months as well because everyone needs something yeah got it the way I think about then is it's kind of like having you know a checking in a savings account at the

same bank you can always make internal transfers because it's just like you know an internal accounting technical change for them and and that's basically how they built sen every all these uh exchanges all of these participants you know ecosystem participants all had Accounts at silvergate and when you would do that they would just open up internal transfers between the different entities hmm I'm just maybe I'm looking into this too much but I remember Warren calling out silvergate a couple weeks ago or maybe it was in I forget if it was November December uh so wire also went down this this week or they announced that like so wires an on and off ramp company more on the retail side of things like metamask uses them and stuff like that I think if if I were sitting in the government shoes and I really

wanted to go after crypto you go after the on and off ramps not that wire shutting down because their acquisition with bolt fell through and like I'm sure they just weren't making money in like different reasons but like it's not yeah it's not a good it's a bad Trend I would say for like these on and off ramps to keep getting hit hard because if I were going one step deeper if I were a government going after Bitcoin and crypto I would attack the on-ramps I think it'll be damn I mean it'll be damaging right if if silvergate ends up going down for what it's worth like this isn't a form of due diligence or it's not Financial advice but like I I've met Alan Lane like I think he's a pretty high integrity guy like I respect the bet that he took purely from a business

standpoint on crypto I mean they are going through what many other very reputable brokerages in exchange have gone through they processed all these withdrawals their Equity you know their banked Equity got a huge hit but they're still standing so I don't know I mean that's kind of what you have to do right I I'm I I don't know how their reputation ends up coming through here but you have very few options um and if you're a crypt like we're a crypto adjacent right like we're media and information in crypto but we don't really touch crypto rails from a block Works standpoint and we bank with one of the big banks in the US and like Json price you know once a week go on a rant about how much I hate our banking

relationship and would do anything I can to get like get away from them as soon as there's a viable option so I don't know people have short memories I don't think it's a it's a death toll for silvergate um I have another observation to to make about this situation I'm curious to get your guys take there was there were kind of especially during the last bull market there were these like public crypto stocks that act as kind of proxies to get crypto exposure so I'd like silvergate was in that basket microstrategy was in that basket Voyager when it was public was in that basket Galaxy coinbase and if you look at not really like coinbase because they ipo'd like right at the top but if you look at those the performance of those stocks they actually outperformed crypto in general

um and now they're underperforming crypto and a lot of people kind of fell you know people that couldn't they're like this is probably something you guys have heard 100 times I can't really wrap my head around Bitcoin I can't value it but I can invest in a minor because there's cash flows or I can invest in a bank or I can invest in coinbase and I've tried so many times to describe that that is not how that necessarily works right like it's not necessarily less volatile because it has cash flows because everything is really indexed to the same thing but there was a I think investing in those Public Market proxies there was a hidden premium in that it made it perform better in during the bull market and all these stocks are getting hit worse during the bear Market because people wanted exposure and there

was just such there were so few vehicles that you could do that easily for public market investors that like that was just a hidden premium in those stocks and that's all getting extracted like like coinbase also is down 15 today as well you know for yeah they were up 15 yesterday like 20 Pace has been pretty volatile over the last six months I mean I don't know if you guys remember this I know Vance probably does but remember the the conversation of when coinbase was going public how everybody thought it was going to be like you know 100 billion dollar plus company because of the premium of the lack of really solid publicly traded companies that have index exposure to crypto like that was a lot of the selling point you know of of the IPO and you know what the stock

would represent afterwards um sorry I guess they did a direct listing not an initial public offering but um the the premium I think is really just a new form of beta and you know when crypto is down when crypto's up it'll be up higher and when crypto is down it'll be down lower um but it it is you know just more speculative um and yeah I think you're gonna have to rewrite all of those because not many of them still last do you guys buy publicly traded stocks like publicly traded crypto stocks like coinbase and silvergate or do you like play in that game not in the fund yeah no like personally personally I own zero equities you have zero zero equities

you do two Vance you have zero equities uh that's not true sorry take that back zero zero crypto equities if I'm if I'm gonna buy crypto I'm gonna I'm gonna bet on what I think are the fastest horses which are the actual crypto assets themselves like all of the public stocks that are crypto related have absolutely gotten smoked if not bankrupt this year of course scientific just filed for bankruptcy I think like a week ago that's the largest North American Bitcoin miner is yeah like none of these things uh I think expressed the true potential of crypto and in a down Market none of the big hedge funds can actually short crypto like where would you go in short crypto today you can't trade through Genesis you can't get accounts on finance your

only source of short exposure is potential spot so most people are just going to short the names that are available on the Bloomberg terminal and those are coinbase silvergate core scientific you know all of The Usual Suspects so I don't like the the favorability there a random question but Michael do you buy stocks like text like tech stocks like do you Shopify I own I own zero equities love that love love that for you like I mean I do think that when crypto recovers coinbase will also recover and silvergate is a good exposure proxy to lending within crypto which is basically at zero and if it's going to come back it'll be regulated

and so like there are some favorable Dynamics there but everyone on Wall Street just hates crypto right now I just saw Dan Loeb tweet out hope is not a strategy about uh Market or David Marcus who's building lightning Network for Bitcoin a year ago Dan Loeb almost LED uh and then subsequently pulled out of the blockify I think like series G or whatever it was he was going to put in like hundreds of millions of dollars into block fi and now I won't even touch or or speak you know positively about lightning Network the the tide has just gone out on those stocks for the time being just because of who has access to them and the incentive to short block five had a there were a couple of just like very pivotal moments where it all could have

gone very differently for them not trying to defend that business model or anything but like there were isn't the backstory that Dan Loeb pulled out of that deal because they sent they fat fingered the customer deposit or the customer withdrawal thing so he's like the he's like that's so reckless so he pulled out pulled out of the deal he pulled out around the same time that the SEC slapped him with a hundred million dollar fine so they thought they weren't going to have 100 million dollar fine and they were about to raise a huge round month later get hit with 100 million in costs and don't Can't Raise a round so keep in mind like download was all speaking speaking all sorts of mumbo-jumbo about like you know the promise of blockchains and the metaverse and you know how like I think Chris

Dixon was teaching him about you know nfts a lot of these people are just fair weather fans like when it's down they're gonna hate it when it's up they're gonna love it and they're gonna time it completely wrong to get in the market like a lot of these people are the people who are buying the gbtc premium at 60 up bad your Uncle Jason he said let's just talk about your uncle yeah yeah okay yeah my 401k is George now Christ um at least you didn't buy ethi well it's pretty close now I guess but Jesus yeah

um let's talk about uh usdc launching a consumer chain in in Cosmos so this was actually announced a little while ago but in September Circle announced that there was going to be native usdc that was officially coming to Cosmos and you know some more details have come out about that but basically the way it's going to work is it's going to be a consumer chain which is secured by this thing called interchange security which goes through the cosmos Hub and it's not going to be like a circle chain it's a generic asset issuance chain um so I guess in theory it could you know apply to more than just to more than just circle but this this is a pretty big deal because Cosmos lacks a native stable coin it kind of had that

in the form of Terra Luna for a little bit right and obviously they're the TBL and Cosmos gotten wiped as as that has failed but uh you know there are there's a there's a like a nascent defy ecosystem over there and there's just no native there's no native chain um so apparently a big a big driver of this was actually dydx migrating to Cosmos so one of the big reasons that dydx migrated to Cosmos in the first place is they wanted more control basically over their uh execution environment and what they want to be able to do is like not use um the native token of like that to use eth before they want to be able to use like a stable coin like usdc uh so that

was like there was kind of like a push pull there of dydx's migration and uh Circle investing with usdc of putting usdc in that in that ecosystem um so it's expected to launch next year the reason why this is one interpretation of this this is bullish for Adam the token because you know when you mint and redeem usdc stablecoin when that gets secured through interchange security so the validators on the Hub 90 of those fees are going to go to stakers and validators um so it's it's you know there's a there's a case to be made that it's bullish for Adam the asset and that's been the the a really tough thing to underwrite with Cosmos in general is like why do we really need Adam so that's kind of the high level I'd be

curious to see what you guys what you guys think about this the atom token model is actually Well Suited if like if someone is like let me back up one of the main use cases of bridging is bridging large assets usdc eth um etc etc and you know if you're thinking about atom as a value of cruel mechanism just from fees that are going to come from The Interchange scheduler stable coins are probably going to be what's going to drive that if you think about it it logically makes sense what other assets are people going to be trying switching from chain to chain in a cosmos specific context probably not very many and so this is likely the most bullish thing that they could have uh I think the missing thing with the usdc

business model is like what are people like how are people going to accrue value from the actual using of usdc if you're a usdc stakeholder and having their own chain and being able to pass fees from whatever gas transactions happen on chain to those validators I assume there will be a token to run this chain at some point uh or maybe it'll just be an eoa setup but if that does happen you know that would also be pretty bullish for Circle as a company and be this hybrid on-chain off-chain business model that not a whole lot of people have pulled off because there is no off-chain corollary to establish you know value so I think it's pretty cool um I certainly wouldn't go charging headlong into Adam just because there there still needs to be I believe that proposal voted on and passed that actually sets up all of this stuff that

you know in the vision of The Interchange schedule and things like that but it's pretty interesting can I I have a really dumb question probably why so the consumer chain here pays fees to the hub why wouldn't Circle want to capture those fees why wouldn't Circle just create their own chain here like a circle because you you'd assume that the usdc is going to a chain to be used not just held on chain on the you know Destiny on the usdc chain um maybe a few SEC ends up building their own applications in D5 it lives there but until proven otherwise I would assume that all the defy apps are actually separate chains in a cosmos

context at least is there a um is there a regulatory reason for this is like specific to something like usdc which is purporting to be something that looks like a dollar right like a crypto dollar um I wonder if there's like you know if you suddenly have your own chain of validators that like at least for the beginning right like you would it would be very difficult to bootstrap a network of totally decentralized validators right from the beginning so there'll probably be like a small set of permission validators to start that you theoretically control and you're issuing dollars that people are using suddenly that kind of starts to look a lot like a payment Network to me I'm wondering if there's a regulatory component as well for using validators that aren't associated with with circle

I'd be curious to get you guys take there but I'm you know venturing into territory I don't no depends on how it works if um when you when you I guess there would need to be some sort of front end that you would create usdc through or it would be on an exchange that would then send it to that chain on your behalf um but like it's not like there's going to be a permission list uh like I roll up to the chain you know I deposit something on chain and I get usdc back that would need them to do all the kyc AML and that's really the Crux of it like who does that work it's either the exchange it's either a front-end that you have on your own website

um or it's you if it's you know done natively on chain but you need to figure out how to do that and uh in a permissioned way yeah I think nothing really changes from like a Money Services business or money transmitter license uh perspective here it'll be the same which is if you're a centralized provider of user deposits you you have to register as a Money Services business if you are decentralized and the users own you know their own equivalent of metamask or their own you know wallet uh itself then you aren't you know the metamask isn't the Money Services business because it's it's not user deposits held on behalf of another person um but to Vance's point there there will at least have to be some centralized

component here which is creating or facilitating I would imagine deposits of dollars and creation of usdc so there will have to be some entity at some point I would imagine maybe there's a decentralized variable that goes on top of that but it would be something that's on top not really like the core of what it is Michael and let me just ask you more like zooming way out about Cosmos you don't I'm you guys are very long eth you like don't you know you're interested in the app train thesis but like you're not very long on it in general um you don't think buying like you don't buy Adam or anything like that as like a hedge against ether like as a call option on the app chain thesis at all I'm I know not Financial advice like your lawyer

whatever your lawyers wants to say not Financial advice but like personal or for the products like what Adam wants what do you say no but like you don't like I feel like I I don't know there's obviously a lot of stuff happening with Cosmos in the app train thesis so like you don't dabble in it at all it's like a call option on that space well I mean let me let me let me put it a different way we're not really in the business of like building a hedged portfolio like that's not what a venture portfolio is we're supposed to be making concentrated High ownership bets and things you know that we want to have a a distinct perspective on um you know maybe more of like a hedge fund would be in the business of like okay let's have all you know the base

layer one assets and you know run that Playbook um so not specific to any specific assets but the the portfolio construction kind of precludes us from taking that approach I also think just on a relative basis it's not like we we don't like it and we don't believe in it and you know we're never gonna buy it just like right now we think there's better uses of that capital with a more aligned thesis like we don't want to be paid to get you a generalized crypto portfolio that doesn't doesn't feel worth it um let's talk about uh liquid staking derivatives a little bit um we've got kind of this this coming approach of Shanghai um so the Shanghai hard Fork is kind of emerging as new narrative so that's

basically when uh you know among other things that would basically be the time that you could allow youth will facilitate withdrawals from staking um so that means that all the revenue that these liquid staking derivative protocols like Lido or rocket pool or CBE or whatever have been accruing um you can finally get utilization there so in addition to allowing withdrawals there are Arbitrage opportunities and there's Better Price parity and trading volume for lsds themselves right so it's been a big rally in uh the Lido um rocket pool et cetera so I'd be curious to you know there's also kind of this big question of like is this a is this kind of a sell the news type is

this going to negatively impact East price somehow because um stake withdrawals are finally enabled so I guess I'd be curious to get your your thoughts on just that point to start off with and then like what does this mean for the you know the LSD sort of ecosystem real quick what's the timeline that we're working on here like when is this yeah actually happening so Shanghai is targeted to be March um and that you know is a target that ethereum has uh have made does not mean that it's happening in March um the other thing I'd say is that there is a withdrawal period based on how much is desired to withdraw at a given point in time and there will be a queue um you know that depending on how much

is being withdrawn that queue could be days to weeks to months um and but you know generally let me let me maybe go back and ask you guys a question uh with Shanghai let's say it happens by the end of March by the end of April and then in June so one month and then three months out where do you think and let's say that there's 15 million eth being staged right now where where do you think beef staking amount will be at the end of one month and the end of three months higher or lower because I I can see Arguments for both let me yeah I can see Arguments for both but I'm not sure I can even make an educated guess on it won't staking just well I mean won't staking just my really super left bell curve our argument is

that staking just continues in 2023 and like more and more people end up staking because you can earn yield so that's my super left bell curve take sure so that's part of it but I I you know assuming that withdrawals are enabled in March and then in April and then in June you have the ability to actually withdraw those assets you know one one argument would be okay there's been uh you know there's there's give or take about 10 million each that is being State that's not represented with a liquid staking derivative right now out of the 15. so those you know people who've been staking those assets don't have liquidity and haven't had liquidity potentially for years at this point how much of that is going to get withdrawn is kind of one of the questions the other half of the argument is now that

let's assume that you have withdraws that de-risks the liquidity of having state eth in a state ecosystem so so wouldn't that increase the amount of people that want to stake their assets and it's just really a question as to like how how strong are those two different vectors and which one over the course of one month three months six months whatever will paste the other my guess and this is 100 I guess I I finger in the air I think it will actually increase over time where now that you have the the limiting of the restrictions of uh or or the ill liquidity that you have from staking right now and the de-risking of Shanghai going in I think eventually that will

draw more people in as opposed to you know allow people to withdraw there's also a third bucket of like there's like staking is just pretty new as a thing that people do in crypto and um I think we're really early days of like the innovations that happen with staking on eth like I like I'm I'm I'm finally digging into eigenlayer and it's pretty cool like allowing like providing these like security as a service I'm still trying to wrap my head around it to like roll ups and bridges and oracles um and like allowing people to use eats staked security to like complement the security that's provided by a native token I I I'm they're coming on the Empire podcast next week to like really explain what they're doing but it seems

pretty cool and like it seems like that's a new bucket that's coming in 2023 as well like Innovations in the staking space which will increase staking I think I mean number one app in in D5 Lido you know it's doing 40 50 million a year in Revenue uh these things are super leveraged to the growth of of ethereum specifically and not surprised to see a lot of activity and interest coalesce around ethereum native projects that are levered to the story uh you know in the wake of FTX and all these blow-ups and yeah it's it's pretty early in our opinion there's going to be a lot of these things where you have eigenlayer you have things like oval that just basically extend the utility of steak teeth and and I think where

this is going to go is eventually people realize that a lot of the value prop of ethereum itself is the staking Community the validators they run and you know the other things that they're able to secure via that that you know a combinatorial slashing system like eigenlayer so it's it's you know probably overdue frankly um just in terms of looking at all the PES of how these things are are valued can you explain can you guys explain eigenlayer actually I I get what it is at a very high level but I'd be curious like here you go because I know you want to talk about it like a couple weeks ago maybe like a month ago at this point eigenlayer is technically an L2 that's how it's actually constructed where you deposit your stake teeth into a smart

contract and you know if you want to be visual about it uh you deposit it into a smart contract and then you're taken to what looks like a marketplace where you're able to say all right I have my steak teeth that's earning four and a half five percent per year but I can go off and use uh you know re-hypothecated steak teeth to stack my yield and go secure things like middleware or things like a data availability layer or things like a settlement layer and you know from this what do you do well you get all of these pieces of middleware and other scaling solutions that don't need their own native token they can just use in the value Cruise back to there but you also get this kind of other scaling solution for ethereum if a lot of the

properties of what this restaked eth will be securing are things like data availability in settlement that's a lot of what actually ethereum does and so you have um you know this combinatorial effect of the yield you have this Marketplace of staking opportunities and you have these New Primitives that are produced that are secured by the restaked eth and the validators that are running it so that's kind of what eigenlayer is and last time we talked to those guys they said that it would be you know q1 Q2 of when it launches so it's not actually too far off super interesting it was interesting to see CB eth so far up there in terms of market share that's a relatively new product they I think have over twice the market share of Rocket pool

it's just who will be the largest staking Provider by the end and end of this year who's the biggest probably lydo or or coinbase do you think it'll be Lido or coinbase I assume those are the only two do you mean staking provider or liquid staking asset liquid staking outside look I was thinking I was thinking youth versus Steve the lighter has like 4.7 million each coinbase eth has one million one and yeah but coinbase can just turn on turn on more click of a button inside of an app yeah but they've already done keep in mind

yeah the the other thing too is that CBE is not available for institutional customers and I would imagine that most of the activity um you know as we're talking about the de-risking of Shanghai most the activity that we'll see for the rest of 2023 is going to come from institutional staking providers you know and and that's just going to be something that's different from CBE coinbase has a solution there too with alluvial so they've got forget what the I forget what it's actually called but it's like l s e something I'd forget what it is I think LS eth is a Japanese okay um so that's uh some sort of uh what is I'm blanking on the word

um but it's there's a combination of different it's like uh coinbase is in there and um block Damon and a whole bunch of different uh it's an interesting projects it's the institutional approach uh to liquid staging do you guys have any thoughts on the tech layoffs in the week so I know we've been talking about this for a period of time but I have I have a I have a friend so so like am like the two big ones I think that announced this week Amazon cut about 17 000 jobs uh sales force I think was eleven thousand jobs I have a I have a friend who works at one of these companies uh not not one of those two but like who that just did one of these successive round of layoffs you know about like a seven percent riff or something like

that and they were like this is this is one riff uh there will be more they will continuing happening this year it's like that's kind of that's a really interesting that's kind of it because the the you know the wisdom they're supposed to be cut once so people aren't worried about their jobs and this company's taking the exact opposite this big huge company the exact exact opposite tackle like yeah we just caught 10 we might do it again we probably will so there you go it's a really interesting psychological tactic yeah it is yeah yeah I think uh all those people who made those Tick Tock videos are excited right now dude I tweeted I tweeted that today like do you think those uh those product managers are like uh rethinking some of the videos

yeah so it's interesting I mean these numbers how many did Salesforce lay off seven thousand I thought it was 11. hold on I can't uh listen not to say that my uh 2023 prediction is already coming true but it it is this is step one in a 10-step process to where attack becomes a value as opposed to growth I was watching the Madoff documentary I'm watching the Madoff documentary this week it's on Netflix it's uh it's decent it's not amazing but it's decent um and then they show these like old CNBC clips from like 2007 and 2008 and 2009 and we think these layoffs are a lot the numbers back then were staggered it was like Bank of America to lay off 55 000 people this week it was like these colossal numbers so I know

I don't know I'm not saying things are going to get worse or better but like 7 000 in the grand scheme of things or 11 000 is still like yeah seven thousand is still like you know 10 of what they were doing of like what One bank would do someone maybe tweeted this or said this recently and hasn't been fact-tracked by me but it was something to the effect of like if you got rid of every single person at every single tech company and just a riff of the entire tech industry it would increase unemployment rate by like 0.25 percent you know like these companies are large and yes these you know thousands or tens of thousands of of Rifts are are also large but they're not large in the grand scheme of like American employment

and I don't I I you know we have to keep that in mind as well you know these are these are going to be you know a vocal minority in in the grand scheme of things they've had it so good for so long I actually I I was talking to my parents about this when I was back in Montana for for Christmas and I was describing like everything that was going on with tech and these layoffs and how it's been very cushy to work in tech for a long time and both of their memories of tech was that Tech like worked due to the Bone like if you worked in technology that was supposed to be kind of how I think of Finance or consulting or something you know now and their their conception of I was explaining to them it's like not like that at all and you know

there's the kombucha stations and all this everything's like paid for and yeah that was it was just interesting as a generational Gap that was like not their memory conception of it yes what you just said I'll actually take the other side which is I don't think Tech like the industry and like the mass of the tech workers in San Francisco is actually ever going to really recover I think it's in a switch and you're gonna see like the tech industry become this like highly profitable you know engine of of success and and you know then it'll be like okay well what do we use our money to go off and do but it's not going to be like you know Apple sits on how many hundreds of billions of dollars of cash it's not like they're going off and just like hiring hundreds of thousands of people to make up for it I

think they'll use their money in different ways versus like headcount the sort of dystopian you know just when you look out I mean it's been it's been actually if you look at the real wages the real wage growth of different income Strat it's been it's been a pretty interesting picture like you often hear inflation is this like super aggressive tax against the poor where actually like the lowest income earners have grown the most relative to everyone else inflation-adjusted which is kind of a counter narrative but it has been I mean all you hear from employers right is like complaining about I have to pay my workers like XYZ and you can see it in the wage pricing Powers is it sort of growing so there have been polls to like big companies right like the CFOs and CEOs about how

are you thinking about responding to wage pressure and some of them are like we're going to pay our workers more that's not a very high one the highest one is we're going to confront this with automation like 84 of respondents said that wasn't the did you see the McDonald's stuff it was like the first fully automated McDonald's just came to Arkansas and yeah there's people still making the food there I checked I did a little fact check you know I know but like someone from McDonald's some someone high up was like what someone's like I I guess a reporter was like why are you doing this they're like well because we're like the state is demanding that we go to 15 uh 15 minimum wage so this is how we responded right there's a lot of things you will

do before you do that if that is the only solution yeah I I think it's going to be a different type of employer Market going forward I think a lot of people who spent the past three or four years working these large tech companies that may be as good as they ever get it from a work-life balance and stand and pay standpoint um it's going to be interesting to see what happens going forward like we still know people who work at all the large technology companies they still get paid very well they still do very little but it feels like slowly that's going to be chipped away at um and that's validated multi-year cycle yeah like my friends who still work at Facebook and Instagram which I guess that's one thing like they're they're not doing much

these days I can assure you of that they're chilling so it'll take a while for that to to work its way out of the system but I think it's just a cycle too like you know it'll take a year or two and then like there will be the market will come back and then like companies will start hiring again maybe it happens in Tech or like maybe it happens in crypto or maybe it happens somewhere else and then several more years will go on and like that industry will make an insane amount of money and like maybe it's crypto and then maybe in 10 years like where people say that about crypto workers like man they just sit on their ass don't do anything and they all make you know 400k a year like maybe who knows I I can see it I I think it needs

to be something new whatever the standard bear is going to be like a solid but open AI is raising a 29 billion valuation certainly candidate crypto recovery certainly a candidate but yeah the fangs are I think just a little bit different yeah I agree there's a guy who used to to work here he used to work in like trading like not Quant algo sort of trading but like more traditional like you'd think of trading um and he basically said the dynamic there is you know he's a little older than than we are and he was like that was like a job that you really wanted to get coming out of school and the guy that was kind of his mentor described this Dynamic of he set his income peaked

when he was like 32 and has been going downhill ever since but the problem is like that level from where he started was still so high in trading such a specific skill there's like no Alternatives so you just have to like kind of psychologically just watch like year over year you're still getting paid a lot but it's like less and less and less and less and it's just if you think about going through that's a tough uh you know tough thing to go through but I just thought that was an interesting anecdote asset managers Traders they kind of do one thing well you know and there's not a lot of transferability of that skill set so get it while the getting's good

that's what I mean don't get stuck they're kind of also I don't know if you guys have um there's a lot of I mean Jason I live in New York so there's a lot of kind of investment bankers or private Equity people or whatever it's a very specific skill set that doesn't sometimes translate super well to being in the military same thing it's like you're really good at that like how does that transfer like it you really kind of need to to kind of reinvent yourself if you're gonna move you have the ability to Showcase that you have very strong work ethic you have the ability to present analytical arguments and do analysis in general like there are some transferable

skills and not to say like there are none but the higher and higher you go up the more particular they get and the more particular like the prospects of where you're going to go next for your next job are going to become so I I'm I have a ton of friends that are going through this right now it's like do you go up and continue on or like you know ride ride this place to the best of its abilities or do you kind of like change things and go into different more broad Direction um it's going to be a tough predicament over the next couple years for that question I think it well I think it's also really tough to transfer Industries so like if you go into if you're uh if you work in PE or something like that you can't like you don't have another

skill necessarily but like if you're like a VP of product management or something like you can go into another industry and do product management I think like you could move into a lot like move into crypto or like you could probably even move into like healthcare and do like product management for like their Tech platform they're building or you could go become an investor but like it's very hard to go the other way you could be like a you can go to like Finance be like a VP of Finance at a startup or something like that like I've seen that yeah but then but then you have to take a huge pay cut is the yeah yeah you do which is hard to wrap your head around yeah whatever you do you just need to be the best at it if you're the best at what you do

like there's always going to be a role for you but middle 80 percent it's gonna be tough advice to live if you're gonna do something you just got to be the absolute best you're the best seriously Vance I heard you're horrible at skiing though so what's the deal with that bro I can I'm I'm nasty come with me seriously walk around and find out I'll take you in the backcountry I'll just leave you there around okay that sounds appealing yeah definitely gonna go now oh yeah great sounds like an ideal weekend I'll be there soon yeah we'll catch the next I'll leave cameras around the area where I leave you just

to get the the reactors so uh all right fellas this being a fun one to start the year see her uh same time next week foreign [Music]