Your Favorite L1 Was Overpriced | Roundup

Transcript

all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-hosts today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone this episode is brought to you by our friends at Avalanche they're the layer one blockchain that is fast stable and scalable you're going to be hearing all about them later in the show for now let's get into it all right everyone welcome back to another bell curve Roundup you got Michael's one and two Vance and piano fellas welcome back to the show what up

what's up black hoodie gang this week you think Vance and Michael are on their game this week you two you guys were off last week like Luke couldn't even get his internet working yeah technical difficult is advancing events you really want to speak you there I mean the good news is there's nowhere to go but up from here yeah exactly the bottom is here's the thing you guys actually let you know and I get away with murder last week because we're wearing matching shirts the entire broadcast you guys didn't say a single thing we were we're like there's no way they don't call that out but uh are there are there more co-founders of blockworks or is it just just you two it's just just there's just two of us

but there wasn't there was it was it yeah yeah little little known story little known yeah getting to some blockworks lore here yeah you know sometimes the best addition is subtraction if you're listening to this buddy we love you I actually talked with last night and I know that he does listen so we love you buddy we love you brother um oh you know we were going to talk about that we didn't talk about last time was uh Michael and Vance's co-founder Dynamics oh yeah so but let's let's we got to give people something to look forward to so let's let's wait till the end to get into that um we got uh yeah yeah you also have a surprise right for for us this week shut

the [ __ ] shut up no no all right let's uh let's get into it here uh all right we gotta we got a bunch of stories I wanna talk about binance's proof of reserves so binance release they they tweeted out that they're gonna have a a proof of reserves system fully in effect and there was a little bit of pushback that came back from Jesse Powell who's the founder of Kraken so Jesse had kind of gone on record earlier and said hey I'm going to be better about calling things out when I don't necessarily agree with him so he tweeted out some problems to point out and you know a couple of the things that he pointed out were one there were there was a you know B BTC and btcb that was being used interchangeably with BTC those aren't

necessarily the same thing that's BTC on the binance smart chain and then there's beat like rap BT wrapped Bitcoin on eth basically and binance is the issue where both of those rap tokens so those shouldn't necessarily be equated one to one there's a there's a risk on the part of the issue we're there the other thing is there were negative account balances so the way spot margin sort of works is when you're taking out a margin position at an exchange you put up a tiny bit of collateral and then basically you're trading with more assets than you actually have and the way that works from an accounting standpoint is it's a negative balance for you because the exchange has loaned you money which shows up as a positive asset for them so there are like a whole bunch of

different sorts of problems with the and Nick Carter who's he said he's not the expert on this but he does talk about it quite a bit and he's he's very knowledgeable uh I'd probably call him an expert to be honest um has pointed out that he saw some problems with it as well though he has yet to respond with the piece do you guys have any any take or particular thought on the proof of reserves I mean looking through a couple of these things like the reserves is is just like one half of the equation most of the trouble that these exchanges seem to get in is like taking coins staking them making them a liquid taking on loans um lending out collateral to other parties like I guess this does prove that there is an aggregate large amount of of customer deposits in the system it

doesn't show you exactly like what they're being used for what they're pledged against um you know the negative balances don't aren't alarming if you have any sort of margin trading like that's how it works there's a big pool of assets and then some people have negative balances and that you're hoping that your Auto Liquidation mechanism basically Nets them out before they go truly underwater on a negative basis but this is a it's a very basic form of proof Reserve it's also like audited by some auditor that I've never really heard of I think it's a step in the right direction but like it doesn't give us any confidence like go put a bunch of money on on binance I also think like generally this is not part of the story but where we kind of see things going are like people that are in D5 chasing like long

tail coins like you know doing things like that on chain and then you know people that are in regulated venues at least if you're like a U.S presence like everything in between where you're taking counterparty risks where you don't know what the balance of liabilities and reserves are that's kind of like out of consideration for the us-based funds so maybe that's a standard that's okay for the Asian funds or the the more International ones but I don't know I I just don't see us getting there anytime soon in terms of putting meaningful assets on that exchange yeah only thing about that is just like to reiterate this is half of the equation right accounting is assets plus liabilities equal shareholders Equity what we have right now is assets we don't have any any idea of what the

liabilities are if we could get a sense of equivalently what the proof of reserves are for the user deposits and then be able to see if there is any mismatch of what the assets are versus what the users deposits are that would be an even further step in the right direction of being able to say okay like is there an asset liability mismatch one of the things that you know we've spent some time going through is with all the the details of you know all the six or five or six concurrent bankruptcies going on some of the details that are coming out of like what was happening in those situations is pretty damning and also crazy um but one of the the largest takeaways is there's just a massive asset liability mismatch and if that's something that's going on underneath the

hood a proof of reserves wouldn't be able to tell you that but B that's really all what needs to be figured out like it doesn't matter whether or not you have a hundred billion 150 200 billion dollars of assets on the on the chain or on the on the platform if you have greater liabilities or frankly even just a mismatch of what those liabilities are so it might actually be worth you know just giving a little bit of credit to two of the exchanges that are actually sort of pioneering proof of liability so to your point Michael what what we saw basically after the aftermath of FTX and all these exchanges came out and said we're going to do proof of reserves they were only doing proof of assets they were just pointing to a wallet that had a certain amount of Bitcoin that's completely useless because you don't

know what the liabilities that correspond to that asset were but actually I think it was bitmex that pioneered this idea of proof of liabilities and it is kind of cool because it's something that you can only really do on a crypto exchange so basically what you want to know is to your point you want your assets to to match your liabilities in this case you want the amount of Bitcoin that you have to equal the amount of customer deposits right that's let's assume it's just Bitcoin here um so what you what you can do uh basically is or the the approach that uh bitmex pioneered was uh you could basically do a full list of liabilities um within a Merkle tree structure so all

the liabilities are at the top but the rest of like each individual customer is arranged as a leaf in that Buckle tree and then you as a customer are given enough information to basically test to see our our my is my personal account included in that top number list of liabilities so obviously not everyone's going to test but like doing some generalized testing ability that's like pretty cool the limitations of that are just because your deposits are in a Wallet balance that match the assets of the exchange doesn't mean that they haven't pledged that as collateral in an off-chain sort of transaction so there are limits to proof of reserves and proof of liabilities but it's a step in the right direction and it didn't seem like binance

they've got a little ways to go I think totally I mean not only that but like uh so so there's an else it there's a solvency issue which is if you don't have enough assets to make make up for the actual liabilities there's also an illiquidity issue so if you have a bunch of eth on a platform but they've taken that eth and they've staked it and this is pre-shanghai you can't get that each back you know it's it's not eth uh it's some other asset that is staked in illiquid so like there there are two types of issues that you can run into and yeah I think this is once again half of the equation but it's really frankly not even the half that matters the the other stuff the I think the last one is

like if you have a scenario where there's a lot of volatile price action and somebody makes Bank on that you can you can bankrupt an exchange if especially if you're like you know able to trade 20x plus leverage like you are on binance like if there is a substantial move and and say like somebody Nets a huge windfall from something like shorting you know USC or luna like that can easily absorb all of the existing assets that you have in the system and so like it's not just your current liabilities it's like your future expected liabilities if this volatile price action plays out based on the open interest that's on your exchange so so you know one just taking this the thread a little bit further um one piece of news that did come out and I can't remember which uh situation

it was relating to but there's actually been a couple of Court decisions in the last week as to who owns these assets and what are the biggest um issues I think that that most consumers had with whether it was block five Celsius Voyager uh probably binance as well um is nobody actually read the terms and conditions and in some of these some of these instances literally the terms and conditions state that when you give your assets to the platform these are now platform assets these are assets that the platform owns and has you know authority to do whatever they want to do with them and so if you're taking your ease and you're putting it into a platform and they're taking that eighth and they're staking it or they're

converting it to bitcoin or they're converting it to Dollars and you still have that each liability it's it's totally fair for them in the terms and conditions in certain situations for them to go off and do whatever they want with it and so effectively you're pledging these assets to like a crypto hedge fund who's going off and doing whatever they want to do with them um and one of the things that is being discussed right now and being decided right now is who actually has authority over these assets let's say in the case that there's a bankruptcy or or in they'll solve it it'll solve a situation uh so I I generally think like all of this stuff is going to get worked out now but you know one variable here is is people need to read the terms and

conditions for these user accounts because they have very strong implications as to who has authority of these assets over the long run the other thing about real hypothecation did a podcast with Ben Hunt who was explaining this when you give your assets to a third party let's say an exchange in this instance and then they go pledge that as collateral the way the claims will play out is ultimately whoever they pledge that collateral to will have a senior claim to you as the depositor so that feels crazy unfair but that's how it works so yeah that's why you got to be super careful that's exactly the situation I'm talking about like like think think about uh the situation with block fi suing SBF

personally to get his Robin Hood Holdings Blockbusters secured creditor all of the people that are deposited in FTX are unsecured creditors to that claim and so blockbuy gets paid back first and then I guess the creditors will need to go to block five like the FDX creditors will need to sue block five and the block fight creditors to get those assets you know put into line to get distributed FDA it's just like this Russian doll of creditor ship that's just a mess but unfortunately it looks like most of the unsecured Predators aka the depositors are generally last in line for a lot of these things yeah and I think I just think the reason why this stuff is important right now is you know what's happened with FTX is a negative situation there is a silver

lining if we can do things better than we did before FTX so getting things like proof of reserves right is sort of the bare minimum that we can do I'm kind of of the mind that will always have some centralized exchanges they'll always be a subset of people that wants the convenience instead of owning and managing your own keys but there are ways that you can mitigate some of the risk of surrendering those keys to someone so I don't know I I think binance if they want to get like a perfect scorecard on this get a big four I don't know who master I looked it up they have 42 000 employees so yeah yeah they're pretty big but they're not a big four in terms of the you know I think you need that and then there has to be a uh there needs to be proof that

you actually have the keys right and that you control the wall the private keys to the wallet and then you can't exclude you can't include negative account balances in there that messes up the whole calculation so there are minor like we're on the right track but those are the things that they need for a perfect scorecard basically yep I mean also just like to say this this is what we do every single year as a as a fund we from our Auditors have to receive you know some amount that we have to send from all the different wallets that we have and they run a test to make sure that we have access to them and this is just like par for the course for the industry and so I think they're not too far off to your point Mike like they can do this it's just a matter of like

figuring out what the most reliable process will be to get both sides of the equation foreign yes I mean biggest takeaway is that they hired some good people on The Venture side um well like good good resumes maybe like I think that I mean I had talked to a lot of VCS who were like yeah you know FTX seems to have this good strategy on the Venture side like a year even no like a year ago people at least some VCS maybe none of you guys were saying that

and uh it's just looking at this portfolio they had they were even more clueless than about running an exchange like they were punting into like not even crypto company like weird fintechs and like real estate deals and it was like it wasn't even crypto companies they were just they were I think if you sent them a pitch they were just going to say yes that's what it looked like it was like I think a couple things number one they were known to like set the floor of like the Aptos and sweet private deal valuations like they wouldn't let anything clear that was like a legit after a sweet product for less than like 100 million for seed and like the same with Alana and so like they were kind of backstopping that implicitly or explicitly I think my favorite uh investment that they made do

you remember when they did stocks for like four months last year or like yeah six months yeah it was also through that like weird sketchy Swiss brokerage yeah like you had to like be like I forget it was like European or like kyc with the German subsidiary of the Swiss and then you look at their Venture sheet and they put 320 million dollars into digital assets AG which is the broker that allowed them to run this like stock experiment and so like I don't know what they were thinking but maybe it was like we want to do stocks all right how much does it cost 320 million okay cool invest in that company get them to do it and then they like basically just like went nowhere and I think that was kind of like very symbolic of the intellectual rigor and diligence they were they were doing and

like the level of like investment strategy that they had but there's a lot of like just like really funny looking ones on on that sheet generally I mean one of the largest takeaways of my per reading of of this is just how large this sheet is like think about it you know Alameda FTX all the different Venture Investments probably started in Earnest in 2020. I don't think they have the capital to really do it in 2019. so we're talking about less than two years a year and a half and they've done over 400 Investments like there's just no possible way that there's any sort of rigor strategy or diligence that can be done if you're doing that many deals in that short of a period of time

especially to this size uh the the other takeaway that I have is um you know while you could probably discount basically everything with like a 50 haircut maybe even a lot of these with like an 80 to 90 haircut I still think that you know there is some value in some of these Investments and there could be like actual value in some of these Investments and I think we talked about this on a previous pod um but there was some bankruptcy proceeding that happened I think you were talking about it you know where like part of the creditors got the portfolio Venture Investments that ultimately ended up making everybody essentially whole oh yeah yes with um on Empire yeah yeah I can't remember which one that which example that was

but there actually is some residual value here for FTX claims uh I think it's it's unclear as to you know how much and and when that'll happen but there will be some value that you can probably assume from this most of these are going to zero but some of them I think will be valuable do you have the sheet or the or the Ft yeah can we throw that up here like I just want to see what the biggest ones were again yeah here I can share it yeah oh yeah I was gonna say like there I think there are a couple angles on this but I personally think there are a couple very big checks to some very small names and I would be very curious to see once you dug into who we're associated with okay ready here's that there's a 500 million dollar

check I'm sorry 300 million dollar check yeah written to K5 right okay do you know what yeah K5 I couldn't find anything relevant on K5 yeah so I I got something here I'm not you know it's like a six-person Venture team with with no companies that I've ever heard invested um I I I'm not 100 sure um modulo capital I think so that is that is FTX that is Alameda it was registered at the exact Department that Albany towers that was living in and what I've what I've

heard is you know that and maybe they just found another great entrepreneur based out of Albany in the same Department complex and it was like what a happy coincidence yeah I was ran into the hallways yeah if you if you look at the date that modulo was registered it was registered basically a day uh before Luna collapsed and and you know what the scuttlebutt is on on Twitter at least is that this was a way for Alameda to hopefully Shield the remaining cash that they had right after like this big blow up happened and I I think that's like obviously that that's basically fraud and or money laundering like that's for the course to decide the other one that I think is a funny big uh investment that he made is the half a

yard that he put into anthro and that is a plant grown meat startup so like an impossible Foods competitor and you think about the things that could potentially make customers whole on like a 20-year basis if like you get really lucky and one of these things returns I think anthropic or whatever it is it's probably the most real investment at size that they have and no no the real Investments are I think the The Venture funds I mean they put you know a couple hundred million is Sequoia Paradigm I think you know there are a number of other like altimeter I think was on there like there there's some real Investments like putting half a yard in into some vegan Meat Company no it's not

a vegan Meat Company it's an AI research firm it was uh yeah yeah it was the Skype it was the guy who founded Skype created it or something like that but you know the like taking taking pot shots with that much Capital at single companies I think is that's gonna be harder to return the the funds themselves I mean I don't know if the capital has been called or like what the deal is or if those are just like commitments or if those are actual Investments but I I would imagine that you know the funds can have some residual value that's what I was referring to when I said there was some residual value here what about this gigantic investment in Genesis mining has anyone dug into that what is good with that that was like a is a yard a billion that was a full ER

did I do that right yeah that was nice did I get that one yeah but that was a big one and I haven't really heard anyone dig into that but that struck me as a very weird bet especially in these entities is just bizarre like bizarre FTX elevated was an investor in Genesis Genesis lent to three arrows three arrows O's block Phi money uh three hours also owns Voyager money who was bought by FTX like you kind of get this idea that the money was moving in a circle you know and and there were some fees or whatever being stripped off as consideration in between

but like this this looks very circular yeah 100 here's a uh here's here's a here's a good one actually there was a small one uh there's a 25 investment in a 25 million investment something called toy Ventures oh God and I'm going to ask you a question does the name ramnik Aurora mean anything I gotta give some great shout out to Matt Walsh to Matt Walsh uh from Legend from Castle Island Adventures who has a great like two minute rant on this but ramnik Aurora was a relatively high up member at FTX but he was the head of product

head of investor relations and he ran Corp Dev so you would kind of the implication there being through the head of product you kind of know if there was a back door that's in the middle of your product if you're heading up investor relations shouldn't you know how SPF has the ability to to uh stake 500 million dollars to buy you know invest in vegan meat companies or AI or whatever if he's the head of Corp like he was sort of the key man and he also got a 25 million dollar uh donation to his uh his Venture fund so maybe some answers from from old Ram necamore that we might demand here creditors are going to call that back congratulations you had it temporarily

but like that's coming back yeah I mean there were a lot of them it was this was also Matt calling this out he's like rockbird LLC raised 10 million from VCS like usually most VC back companies are llc's like 15 million into Lonely Road lonely roads not a real company like there are a bunch of these really no um I I think I think the net of this and this kind of like dovetails into like I think which is a larger discussion is oh my God this is the website for K5 Ventures oh yes let's see it pull it up yeah

that's how I was like how much money did they put into this again oh yeah 300 million yeah yeah ready to impact the world baby investment strategy go to market Focus sign me up baby that is that's put me over the Finish Line yeah hit their portfolio can you name it company these are not real companies but engineering is um Compass you put money in the comments I don't think that's the same Compass yeah oh that's Compass mining yeah yeah this doesn't really look like a fun that you'd put like 300 million dollars into I mean

there's a there's a company called coin oh tonight cannot be reached for people who are not watching along oops oh God great yeah that's pretty cringe so I think like the the point that I would like to get to on all of this is you know say that the hole is like at least 10 billion it's probably bigger than that if you think about you know all of the mismatches and and all of just generally like the the user deposit liabilities that they cannot cover um and if you assume that the 10 billion was made up of you know Pro rata crypto assets so like you know Bitcoin was

probably like 40 4 billion of the 10 billion maybe each was like another three or four billion of the 10 billion maybe like a portion with stable coins abortion was like long tail alts like if you think about the price action of last year really what was happening was they were taking this eth this Bitcoin the stable coins they were selling the Ethan the Bitcoin they were buying soleno they were buying fpt they were buying serum and like even if you look at the price action this year like there were there were these weird levels like 30 of sold 22 for ftt where like most mornings I would wake up and I would just like try to check where Seoul and ftt was to see like what type of day it was going to be and like there was just like this like a concrete floor

that they would bounce off of like it would never let let it drop below that but like if you're looking at the price action of the last year a lot of the narratives and the themes and and just the the ideas that were powerful it was kind of all this like all L1 wave and the all L1 wave in in my opinion was fueled by people looking at Solana that was pumped to like 200 250 fraudulently I Believe by SPF selling ethereum and Bitcoin you know artificially short these assets to pump Solana and then everyone else said okay cool Islamic can be worth more than 100 billion so can Luna you know avax can run like BNB Matic can run and like there was this idea that maybe you could actually create a legitimate competitor as money and on the scale of money's

opportunity as ethereum and Bitcoin I think without that in the equation the market looks much differently there's you know potentially 10 billion less of selling pressure so like another eip1559 less of selling pressure for ethereum same probably with Bitcoin but on the tail side like these alt l1s like that narrative and that idea is like fundamentally broken in my opinion like they're that was all reliant on basically the bidding of a fraud which hopefully next time is not going to be there and I think that's like the main takeaway for me is like if you're looking at the last year of price action or the last two years is a guide to where things can go you're probably entirely wrong and it's yeah it's it's just going to be

really interesting to see the relative strength out of this I think the people who believe that Salon is going to go right back to where it was you really like you're basically betting on another SPF coming along and doing the same thing I mean so to play this out and understand this is a theory but also you know we'll see whether or not I mean that is complete fraudulent action taken by the FTX and Alameda teams correct like there's no way to like say that that is not you can't like say that oh it was a margin account that got away from me and like oh I misplaced some bank accounts it's like no no that is legitimate fraud if you're taking customer deposit selling the assets that they have and using that to buy other

assets right like am I missing something I think that's what we've been saying for the last month yeah I think I I totally I'm in agreement if he's done that yeah I agree with you I just out of curiosity what's the rationale for him wanting to pump Solana is it just that there's such a heavy correlation between Solana and all the stuff that's built on Solana is that why there's the need to support that price instead of just ftt it looks like SPF personally owned around 10 of Solana and so he was taking Ethan Bitcoin selling it or just taking stable coins buying his own coins which he could then use his locked Solana to sit on as collateral and hedge out via perp and he gets US Dollars back in his account

and then like this the price action of Solana is something like I have never ever seen not even 2017 ethereum really matched that level of like oh it went from 20 cents to 250 dollars in six months um and I think there was this idea that there was like this new paradigm and like these things could trade his money and it would just be like Off to the Races but that idea is seriously damaged in my opinion like I think next cycle the all-l ones are not going to be the main drivers of the narrative it's gonna have to be applications with utility decentralized staking protocols decentralized you know Finance protocols decentralized games like that kind of

has to be where it goes in my opinion this narrative is just no longer workable if you think that this was actually a fraud which the math would dictate that it probably was to then play this forward what what happens to the alt L ones that haven't launched yet or are just barely launched and are trying to you know run a similar Playbook you look at I mean the things that I think are really interesting are looking I basically chart everything against eth in my own mind and like I'm mostly Ethan nominated when I think about our portfolio like if you look at any of the alts since about you know the beginning of May beginning of you know June it's basically been down only versus ethereum and the same thing curiously with

Bitcoin I think Bitcoin is a different issue it's mostly just like there's too many miners but you look at eth you know it did not make a lower low it made a higher low you look at all the alts they basically all made lower lows you know except for a handful and Bitcoin made a lower low as well and so I think that's telling you something very specific about how much ethereum was deposited into FTX last year how much was sold to buy these other coins and like what the scale of the hole was but I mean I think you have a couple of Tailwinds you have eip1559 which takes a lot of selling out of the equation and you just have the absence of SPF selling ethereum as well and like those two things in my mind are why eth is is relatively outperforming at the moment

um you might be right there I don't have any special Insight but it makes a lot of sense to me that he would do that frankly I think where I might push back a little bit and just I don't know I think there was a some someone said this a little while ago but he stuck with me it's like a lot of people were a lot of people lost a lot of money trying to find the next Amazon when maybe the thing to do is just actually buy Amazon at whatever price it was trading at so I think that there will basically always be people who are looking for the next X thing even if it does just make sense to go into eth then I think there will always be some Market because if I was putting my investor hat on for a second

like the point that you made about if you denominate everything in Ethan basically everything's a money loser like even including the daps that are built on the ecosystem and that I think eventually has to change otherwise there's no reason for anyone to buy or invest in or use any of those things because I just want to buy eth because that's going to outperform I mean to be clear like it even if framework was denominated in Ethan and we're not we're denominated in dollars technically uh we we have done very well in relation to eth so there there are you know opportunities to invest in things that do better than Eve but I think to Vance's point it's more about the alt L ones where you're competing on

the same plane the same Market which is you know what's the base layer and and what's essentially the operating system for these applications keep in mind like all of the all L1 you know like pumps for lack of a better word were like mentally based on this framework of Solana going up first because if you think about it with Lana first then it was Luna and then it was foam right or phone Phantom the the acronyms and yeah it's like so absurd last year I can't even remember them yeah nier was part of it but like all of those Martin games there was a flamingo or something at one point yeah yeah no phantom phantom but like all of those Martingale pumps off of the mental framework of like Salon is going up we we can get a part of this as well I think the next cycle

you're not going to have that Solana L performance that leads everyone to be like all ones are where we need to go I think you're going to have more organic price action around things that are generating fees and generating traction and people are going to be you know hopefully a little bit more mature and buy things that are early on the application layer versus like these massive all ones that are just like fraudulently inflated all right everyone quick break from this episode to talk about our show sponsors Avalanche many of you know Avalanche as the fast reliable and scalable layer one uh the folks at Avalanche have a really great message for those of you who are in the crypto industry right now which is bear markets are for building so while a bunch of our friends over in CFI are kind of going through these struggles

and travails the folks at Avalanche basically put their heads down and are shipping products that Builders want the latest solution elastic subnets right and just to expand on that Avalanche is consistently upgrading all of their platforms right so on the platform side you've got elastic subnets you've got new VMS on the infrastructure side of things you've got core which Mike I just uh I know you used that the other day yeah exactly exactly uh so they're upgrading the infrastructure side with core and Enclave the chain has had like no downtime super customizable for devs uh yeah if you're a builder avax.network uh avax.network great place to be but do Yano and I as well so you definitely go check them out but click the link at the bottom of this episode click the link oh

it's not going to get any credit come on yeah give us like the bottom all right give us the credit exactly so yeah big thanks to Avalanche um yeah you I mean you just had a great experience with them the other day on the user side of things so go check them out guys thank us later let's get back to the show man so you think we'll see the the um the price action that we've seen in the last couple of Cycles which is like Bitcoin moves then Heath moves then I guess last time it was like alt l1's move and then tokens move or like something further on the wrist Spectrum like last time it was nfts I I think it starts even earlier than that and I think we're starting to see like the beginnings of it so like remember after kovid when the S P 500

was ramping and crypto was doing nothing I remember this because I was like should I start buying like cruise ship stocks and like Airline stocks because like these are like it was just like left out of the equation so it like generally it's like Bond skip bid equities get bid eat Bitcoin then get bid then it's like what's next and like that what's next question is like the key thing because that's like the narrative driver of the market is it like these all l1s that are kind of like rudderless that are just copy pasting ethereum or is it like people are finally getting interested in defy and games and you know liquid staking derivatives and things like that my hope is that it goes you know into the more utility driven Camp than just like let's go pomp you know Soul Luna avax

you know phone or whatever people are interested in now I think another big uh something something that's important to think about is like where's the leverage ultimately going to come from so when you think about what ended up driving the great financial crisis there was these mortgage-backed Securities right that you could chop them up a million different ways and you could you could say this is a lower risk investment and you kind of ladder on this entire system of derivatives on top of that the leverage that drove this particular cycle and unwind was basically like the C5 bucket shops and uh all piling into the same like two arbitrages that everyone saw so do you know what the 10-year U.S government bond has done in terms of

yield in the last month it's down almost 20 percent so to play this out you know once again you've got yields going down bonds are getting bid stock market so the S P 500 is above I think 4K today or it's close there it's 19 39.50 it's starting you're starting to see the tea leaves and the and the line of sight to where the bid starts to get pumped um so yeah this makes the world make more sense to me actually because you didn't see this like Bitcoin should have gone beyond 65k in the last cycle

it it and both Bitcoin and eth should have pumped higher in the last cycle um but now with that thesis it's like if you believe what Vance just said and Michael what probably you agree with the price of the majors has been artificial was artificially suppressed in the last cycle um yeah in lieu of these alt coins alt assets uh that we're getting higher a bid than they should have yeah so sort of like you can't just like yeah you can't just like pull value out of the out of the system right it has to it's like one of those balloons where you like squeeze one end it pops up on the other that's that's kind of the the core thesis here

God the Bitcoin Maxes are gonna be so cringe in the next cycle oh God oh oh just wait for the eighth matches did I like youth Maxis uh David Hoffman throws a good party um hey there we go did you see uh did you see uh coin desks like most influential by the way I I don't think Mike is going to come back I think Mike's he's having some struggles this week he's like [Music] uh did you see the coindesk and most influential list came out this week oh my gosh we didn't get hit up is there a horrendous list uh just I was like who is making this thing uh just a horrendous list but B um

the Bitcoin Maxes were really really upset because there were no Bitcoin Maxes on it so we'll like pour one out well Nick Carter was on there but like they took some Nick Carter's not a Bitcoin Maxi I actually would not throw him in the Bitcoin Maxi yeah not not anymore maybe he used to be I like Nick if I was a bitcoiner I would probably like elect him president of like whatever you know Council there is well what happened was Castle Island Castle Island made some really good Investments last year or yeah this year um still in 2022 unfortunately um they made some good investors they made some defy Investments and the Bitcoin Maxes were like you're not a true bitcoiner and he's like I'm getting returns for the fund like sue me and so they got pissed

right then he didn't he have the whole like hey I've actually like really taken a hard look at the Bitcoin Maxi Community uh and uh did he like change his name to nick.heath or something yeah something like that yeah I love it um I got a question for you guys as we uh wait for Mike to potentially come back so uh apes and punks both trading at about 63 floor right now I think technically Apes might be like one or two each higher what would you um ooh your lawyer won't let me ask this question what you can ask this question what do you like more apes or punks at these prices oh uh or okay what question do you want me to ask there Vince

I mean I own I own I I think I own it like a couple crypto punks or something like that uh oh aren't you so cool I bought them because Michael and I started an nft startup before we started framework and then for the first like with the first like year and a half we refused to do anything that's idiot oriented because like we had so much scar tissue and then I I bought literally the absolute Pico top of crypto punks to like see what what it felt like and it was the most anticlimactic experience of my entire life see what it felt like you want like your screen to pop up like I like show my girlfriend I was like look like it's like that cool I mean

I think the execution risk of the board eight metaverse is like very high yeah if they blow that you kind of like blow up the whole ecosystem but like if it succeeds maybe it's a lot more valuable kind of like eth versus like if punks are like the Bitcoin and like there's never anything that's gonna happen with punks I also just like I think the apunks Avatar is Iconic you know I think there is a market for that at least like the board apes are just like kind of ugly to me I am wearing a board Apes hoodie right now though because they sent this to me so thank you but um I do love merchandise I think is the point I do too God that's what that's why we do a pod is to get the free merch dude I wore a block five shirt to the gym the other

day and people like Mike was Michael's wrapping a Luna shirt the other day just gotta do it it's free um Vance why isn't your pfp your punk on Twitter because I bought it into my docs wallet or my undocked wallet and I don't want people to know that it's mine I have that uh gotta have that Dash wallet yeah that's the bad part about a one of one nft you can't really send it anywhere else and have people not know who you are no that's true all right um let's talk about maple so Maple got on the wrong side of a loan to orthogonal um Michael you want to do us the the

justice of summing this up yeah uh and just as context we are investors in Maple uh you know not providing any Financial advice etc etc um my read of the situation and you know just to describe Maple a little bit they are a platform that has three parties that facilitate the the ecosystem you've got the lenders who put capital in and usually it's in the form of usdc or sometimes eth into a pool then you've got borrowers on the other side of that pool and the people who are making the credit decisions are What's called the pool delegates they take a fee so they get a cut of uh the loan origination fee um I think potentially sometimes part of

the interest but essentially the the ecosystem is maple is just the software solution and you've got pool delegates who take on the credit risk usually provide some first loss Capital to the pool itself and then they're making credit decisions for the borrowers and borrowers pay lenders with interest and and you know principle um certainly what happened here and and you know we we've been a lender I think we've also been a borrower you know we're we're you know users of the platform and and still think that the platform you know is is going to outlast the situation but essentially um Maven 11 was the pool Delegate for a pool that lent a substantial amount of the pool's assets to a Trading Company a market making company called orthogonal

trading orthogonal trading um had assets it seems to be on FTX um originally when the fds situation blew up uh orthogonal said that the losses were like 10 of what they actually were so there was a misdirection or just sort of a an untruth that was told um to the credit deciders here and and essentially you know the the hole was a lot bigger and and so it became apparent in public that the hole is a lot larger people who are lenders in this situation are going to take a loss on the capital that they lent and I not sure exactly what the resolution will be but maybe 11

you know essentially is the is the uh credit decider here and and they probably have some um you know either Capital Dash stop that they lose or some credit uh you know reputational risk that they have as well um so tough to see all around um you know this is just like part of the blowback and frankly um you know when we were talking with them with the teams all the different parties relating to this um you know way back a couple weeks and a couple months ago it seemed like you know we got off stop free and there wasn't any situation there wasn't any blowback there wasn't any issue um and uh in reality you know the issue was larger than we were initially LED on um but ultimately what I'd say is like

this isn't a software or a platform issue and it's more of a credit issue uh in a particular situation um and uh yeah that's the only kind of directive going forward when you say it's a more of a credit issue I mean like that's that was that's the same issue that like a block pot had block I didn't have a software issue credit issue so very very distinct difference in that blockify in this analogy was both the um while the the users of the platform were the lenders the borrowers were the borrowers but block five was the pool delegate it's it block 5 was the pool delegate as well as the the software

solution the platform so like yes they are the platform but they were also making their credit decisions of who to lend to uh so there is a very very clear difference so I mean default like defaults are a normal thing in these in in any platform right like uh when a borrow defaults that's that's basically a failure in underwriting that's like the risk evaluation went wrong somewhere um though I guess that's like it's normal to default but you would hope that if the risk management and like your risk engine is good enough then that risk gets priced into any loan uh into every loan origination which then helps create this like reserve to account for defaults right so I guess a couple questions here one is who just to make sure I understand the maple system

does maple do the underwriting or does who does the underwriting the uh the pool the pool delegate right okay and the pool DeLay So this is a very kind of clear difference the pool Delegate for each individual pool and so there are when we were participating there were like four or five six or seven different pools each one of them has a different yeah each one of them has a different pool delegate who is making the credit decisions who's doing the risk management who's also putting up first loss capital and so there is some skin in the game but they're also the ones who are making the decisions it's sort of like saying okay block five failed and therefore that's an indictment on the internet because all of this was running over the internet you know it's not it's not the same thing if you're if

you're running the platform you have the software you have the network but you also are making the credits so like on the on the positive so I love Maple and like like Sid and everything that they built on the positive side of this it's defaults happen they had like a 99.7 repayment rate on two billion of loans issued after this week that repayment rate goes down to like 98.5 um platforms getting better every single month like that's the positive side that maybe the pessimistic side of this is like if this had been big enough this could like this could have taken down um they're they're lucky that this didn't that this was so small I would say they got they got pretty lucky here

yeah I think there's there's learnings too like Maple probably needs and like Maple is like you know there's Maple version one like Maple version two is coming out next year and part of maple version two is just like better underwriting tools like proof of Reserve proof of liability giving tools to the pool delegate to understand like where exactly are your liabilities um in real time because if you looked on and this may have not have told you anything but like if you looked at nanson.ai you can see orthogonal depositing you know like 23 million dollars to FTX and at that point you know you probably know that like okay these people are stuck here um and that wouldn't have helped you because the money is just like gone at that point but like having a direct

understanding on a position by position counterparty by counterparty basis of where things are I think that's where this is going and there's always going to be a need for under collateralized or like at collateral borrow um that's not going away and all of the Alternatives that today are completely dead yeah I was about to say especially with Genesis blowing up block fly blowing up you know like the the centralized counterparties like let's just run this run this out and take it to its logical conclusion the thing that we've been saying for the last six months is that C5 sexualized Finance where you have black box uh institutions ultimately can run away with the value and they can take it and

they can do whatever they want with it right it's a black box when you have the ability to have transparency and decentralization that's where you have a competitively advantaged position relative to the centralized Black Box providers better tooling better better understanding all of that stuff makes the most sense and is going to be you know literally months away but if you have Genesis if you had genesis's lone book in the same manner that Maple has their loan book you would have been able to figure out the insolvency or the illiquidity way sooner because it's all on chain you know the only situation here I think the the other big lesson here from pool delegate perspective when you're making credit worthy decisions don't put over 40 of the pool into a single centralized entity like that's

just not smart uh so like that's more on this that particular situation but you know as a lender you can see that that pool delegate decided to put 40 with orthogonal trading you make that decision and you make that decision every day that you put assets into that pool and so the ability to see that is just a competitive Advantage versus something that we've seen blow up historically yeah I think this just shows how big of an opportunity underwriting is in in crypto and to make yeah I don't know I I hadn't thought about that that much but like under you basically just need much faster underwriting you need better underwriting you need more data available on chain to underwrite things

on chain yeah are you guys investing in that or is that is that is maple your play on that or how do you like how do you invest in that one of our big themes is like rebuilding D5 and like rebuilding it not from like a position of like we need to go launch like 50 more uniswap V2 clones but like underwriting that makes sense in an undercoateralized basis on chain regulated Platforms in the US that people can use to do defy things without going on chain explicitly you know like even things like exchange connectors and low latency trading infrastructure like these are all the things that are going to lead to the next boom in D5 the bad news is that they don't all have a token like retail can't participate in all the emotional like private startup Investments that are Equity but the

future of D5 is like bright there's like a lot of very obvious holes that need to be filled and I think like once those holes get filled the Market's going to be entirely different going forward we're also funding like new prop firms that could be like the next jump trading things like that like building those Market participants and those personas is also part of kind of what we're doing and so we're not just like building the tools we're also building the users and funding them I don't know it I I think D5 has a very bright future ahead of it it just needs more tooling more infrastructure and just like better underwriting just generally you know 98.5 is a pretty pretty amazing statistic so you you guys are uh optimistic Maple makes it out of this

yeah sit like there's startups that we worry about that don't have product Market fit that we're like trying to like steer towards like having an audience of people who want to use it Maple does not have that problem Mabel has like an egg on its face problem and like a we need to launch version two problem but Sid the team like they're high quality entrepreneurs they have a product that people want like it's just a matter of weathering the storm and they have the capital to make it so we're not too concerned it's just like awkward like we're friends with the May 11 guys like we were friends with Josh and orthogonal and like we're investors in some of their projects as well they just got on the wrong side of some trades for probably a mixture of you know bad trades and leaving money in these places

but like that's local markets and like you know at the end of the bull market it's kind of like oh you're in a group chat with like all of them and like one of them blew up the other is pool and like now you have to like you know like play intermediate or it's just like a shitty situation yeah yeah I don't want to be in that situation and it's tough too right like everybody had some pain whether it's direct interact like they they're the contagions has the the different contagions have spread extremely far where it gets to be unrecoverable is is misleading people to think that there isn't as big of a hole as there really is and and that I think is that's the toughest part chat gbt

foreign I'm curious if you guys I mean obviously it's just [ __ ] cool we don't have to hopefully people know it at this point um but I'm just curious if you think it has implications for like either your business or for any of your report codes definitely definitely has implications for our business I would say that like my impression of chat gbt in general the AI Suite of software is that it's amazing productivity software and you know that allows people to iterate faster it allows entrepreneurs to ship faster generally I think it leads to like a productivity boom in in the US economy or just like the global economy which is really positive and I think the setup is kind of like you know you had Google in 2001 really start to gain

Steam and traction as a search engine and it made everyone's lives a lot easier it allowed people to be wealthier it allowed them more free time to do things they don't want and then it's like or that they want to do and then the question is like okay what is the social network that gets built after all this productivity software frees people up to do more things be wealthy or experiment with more things and I think the social network is crypto and like you know instead of like having the next Facebook Instagram Tick Tock I think like the social network of things like ethereum the identity ecosystem are really the things that like are allowed to really flourish because all of this productivity has basically been taken and spread around all these different Industries and so like if it was just crypto as a technology trying to lead us

out of like this recession that that's going to be hard crypto doesn't like help people solve day-to-day problems that frees them up but like chat GPT like I'm looking at this thing and thinking like hmm like do we need like another analyst like can I think just ask this thing questions like and I'm sure that that's a lot of the thought process of many people running businesses right now is that it's going to get easier for them which is great that's what you want you want a productivity boom so I totally agree with everything van said maybe a different take on this is I I think productivity is one of the enabler one of one of the things that gets enabled here uh one of the things that I was thinking about is this in relation to Dows and historically you know yes you've had chat Bots you've had widgets

you've had the ability to have like customer and support be in a different location from like the core team and like the sales team or like the people that you call when you want to buy something like those those people you know are elsewhere I I think you take all of the the things that used to be like human scale issues for any of these large-scale companies and you can now put that into a chatbot that has artificial intelligence enough to be uh easy to work with easy to understand and like something that a Dao and a set of smart contracts can actually have control over and you know think about that if you wanted to build an institution that had customer support that had inside sales that had a lot of these functions but was a dow and had software as the core infrastructure of

what you know was enabling this institution you would be able to integrate GP to chat gbt and have that be sort of like the the interface for people who still want to pick up the phone who still want to chat with a customer support agent you know those types of opportunities are now possible for software just so happens that Dows are basically software institutions it's really interesting do you guys listen to all in this week no or last week yeah yeah last week yeah last week I guess one of the things they were talking talking about was um I only listened to like half of it but one of the things they were talking about is uh this is like this this kind of marks the the Pico top of SAS or like SAS the it's

it's going to be less and less about SAS now which I I think everyone that's not like a that's not a unique take everyone's like okay yeah the like set we've we've maxed out like how many SAS businesses can be successful businesses but talking about how okay now you've got this like General AI data General data set basically that feeds into gbt and the future uh like really valuable companies will basically take that generalized generalized data set and combine it with one of their own so the example that to to and that's where a lot of the power will come from so the example that chamoth gave is like okay well can you take the data set that chat gbt is built off of you go acquire a hospital system now you're mashing up like the healthcare data system with your chat

gbt data system um and now that's a really really powerful Healthcare gbt data set or something like that so yeah I worry about like is it real like okay like say you combine the chat gbt with the hospital system data what do you get tactically like what is the specific output of those two things put together better medical recommendations more efficient record management I mean to play this through I think you could have sort of like an interface of you going to the doctor that's not it's like oh you had a shoulder surgery four years ago like yeah your shoulder hurts okay like we can get you some basic information and

some basic treatment if you know we can read your medical records and have a pii HIPAA compliant conversation right but I guess WebMD and Google stuff no no what I think it gets here is like the the ability to I don't know scan a like look at a bunch of scans and be like oh wow that like there's a 99.99 chance that that's cancer instead of like some random doctor being like yeah that looks like cancer totally and and that may improve the outcomes for the you know the point one percent of people who didn't get the right diagnosis but like I really want to be specific about like what is no I don't know these two things I'm like is this just better WebMD or a slightly better search engine like yeah it's actually clear to me I

don't know I've been thinking about it a lot because obviously the nature of our business is content and and media right so like it's has a direct implication we already use dolly for our for our business like we dolly is now if you go on our website like Dolly we our copy editor who has no design background we don't have to send our images to a designer before they go on the site now we just use Dolly like we'll type in like picture of a guy on the beach with a Bitcoin in the background boom there's your there's your cover all right so like we've we use it we use dolly for Block works it's really really cool um and uh so I put in a news story I was like this weekend I was like oh go write a news story on Sam bakeman freed and it

was really bad because it was like Sam is this great guy he's a philanthropist and um but but it's the reason that that happened is because the data set for uh chat gbt cuts off at the end of 2021 so it doesn't have the new data but chat uh gbt4 is coming next year mid 2023 and that pulls in 500 times more data than chat than gbt three 500 times more data and the most important thing is that it pulls in uh live Google search data so I bet if I asked gbt4 like go write a news story on right so like it's so I've been thinking about this for our

business it's like what are the implications on journalism what are the implications on podcasts there's a new podcasting tool someone showed me where you can put in someone um it's like hey go put in uh go uh go create an episode of Jason and Mike talking about uh the fact that eth just went to 10 million dollars and and use then and talk about this this and this new story and it spits out a podcast and uses our voices and it's like that's a that's a podcast um it's just really interesting I don't know I'm like still definitely trying to wrap my head around it I have like two thoughts on this number one at Netflix like back in the day when I used to work at Netflix getting uh subtitles and then

dubs so like people speaking the native language so that it made sense like if you're just listening to the movie um with such a huge cost center and took so long because we need to find like to dub it over with the right guy who spoke Japanese who could read English but like had like an actor level voice like that is like a business process that like entirely gets like used by by this and kind of removed I think that's like you're gonna see a lot of productivity gains to my original point I also think it's funny that like in the original descriptions of AI everyone was like oh yeah AI is gonna make you know everything except for like the human creative uh jobs like irrelevant like you know we're all gonna be free to do like macaroni noodle art and uh you know

Finger Paintings for the rest of our lives and like that's what the human race will end up doing and like in reality the first thing that AI knocks out is like the designers the copyright writers the creative people that need to like write stories like those are kind of the first to go and so like I do feel like it has been a little oversold as like a a friendly to creative human tool it really is just like replacing the need for most people and you know replacing them with people who can like ask the right questions or describe the right scenarios not like the right painters yeah hmm I think the implication one of the implications for our business is going to be that there's actually or actually just for media in general and there's going to be a return to what journalism I think used to be which is

um you used to have this huge Advantage when you broke a story because you would have a 24 you'd have like I don't know 12 uh no actually 24-hour lead on any other competitor right because it would be printed in a newspaper and then every other newspaper would be like oh crap that's the story okay that we'll run it tomorrow then what happened is like now that went from 24 hours to like 15 seconds like if you know if we post a new story coindesk is like oh crap there's a new story all right cool we're gonna get the same news story up there I think there's gonna be a return if like chat gbt can write these stories pretty quickly and like using apis you can automate all this stuff there's gonna be a return to original journalism breaking news getting Scoops things like that I

don't know that's one thesis that's a positive State yeah it definitely makes it more of like an individual talented sport like all all of the people who are kind of Commodities like they're they're kind of going to be reduced by this productivity software but everyone else who's really carrying their own weight is going to be entirely distinguishable from everybody else and so like it makes the orgs a lot top heavier in my mind like if you can just if I can just like ask GPT to make me a deck for like you know if we're when we go out and raise money like we don't need people to do that it's going to be very interesting to see oryx develop with this in mind I mean I think basically every SAS Company 2 is just going to plug this into some version of

Chad gbt or excuse me of gbt3 into their thing so there's have you guys used pitch have you used pitch.com it's like a really it's a really nice way to you to create decks it's like much better than Google Slides um and like for me it decreases the time to create a deck like it if it takes me like 10 hours to create a deck on pitch.com it creates it takes like two hours to create like this beautiful deck you could see a world where it takes like 30 like I don't know 10 five minutes to create a deck if I just put in like a one-pager Google doc I'm like hey go create a deck based on this or like go create a deck based on this prompt or something so dude like outside of that think about like homework when you were a kid I mean that's what I was gonna say

how do you how do you teach kids to work at I mean also like is that even a relevant question do you need kids to go memorize stuff I mean probably is like a mental exercise to build memory strength but like I don't know yeah fourth fourth grade Michael is like where was this where dude we're pre-internet kids too I mean I was at least super internet kid like yeah you couldn't Google stuff I feel like we've been reading about AI for a decade and uh and now it's like I feel like this was the moment do you guys remember when you first saw the iPhone I I remember where I was I was in like seventh or eighth grade and I was like sitting on the like we called them the stacks they're all these like outside blocks where I like the cool eighth

graders hung out you know and uh my friend uh maybe it was seventh grade my friend Mia she got she got she had like the iPhone 3 or something and she's like look at this thing I was like oh my it's nuts like mind-blowing and uh I actually had a similar thing the uh experience the first time I used uniswap I was like wait I just I just traded and I didn't open an account and like didn't send like it was one of those and I had that with using chat gbt it was so I I was literally about to say the the instances that I can remember super viscerally are number one the first time playing a computer game like using a computer and having a digital stream where it's point-and-click I mean it seems rudimentary but it always does in

retrospect uh the first time sending an IM and like having Communications over the Internet with another person that I knew in the real world the iPhone was definitely a moment setting an ethereum transaction I think is similar to your unit swap experience chat GPT is up there yeah let me let me give like the bear take on on chat gbt um I was talking with smarter child on AOL Instant Messenger when I was like 14. I'm sure you guys were as well like the automated AI chatbot um maybe this is just like a productivity tool that fits into existing applications and business org maybe it makes it a little bit lighter but it's like not entirely game changing um

there aren't many specific end use cases other than like media content and some Commerce that could really use this like I do still think the burden of proof is on like open AI chat gbt to like prove its usefulness is at least an Enterprise you know software but like keep in mind the really big Tech outcomes over the past 20 years have been the social networks like how do you build a social network out of AIS Les does that even make sense like that like I think that's the rate limiter for how big this can get like is this does can this become a social network so so let me take the bull side of this which is I think yes over the last decade the the largest outcomes happen social

networks the previous decade and still one of the largest outcomes ever in the history of uh you know capitalism is a search engine and I think chat GPT or any sort of AI originated uh search experience is just going to be fundamentally better than typing text into a text box like that that model is actually going to be more fundamentally interesting that becomes the if you're changing up what the text boss is and what Google homepage is you you now have the greatest money printing business because that previously was the greatest money printing business for Google yeah but like like Google's gonna respond to this I I think they're probably like a few months away from unleashing something that looks like chat gbt but for search queries I think that nuke's a good part of their search

ad business like that that's going to be fundamentally negative for Google um but like maybe that's the story like maybe these companies don't actually have a license to print money in the way that they actually envisioned and AI actually strips those profits out and gives them back to you know the consumer The Advertiser Etc like I don't know there's going to be some successful enterprise software companies created for this but generally I think this is just like stripping costs out of the system but that's the so I so I agree with that advanced but that's the best but that's the best thing like in my I don't I agree with you I don't think there's gonna be these like a huge there's all these I think this is gonna be the next big bubble in in VC and I'm already getting pitches in my inbox like

oh we're like built on we're built on gbt like all the I'm already seeing all those and they're a bunch of fluff in my mind and there's gonna be 10 000 of these funded and most of them won't make it but the best thing in my mind about this is not the companies that get built on top of it it's the it's how existing companies can can use and new startups can use this to decrease the cost it's like when we were starting off when we started block works we built using a Squarespace website that saved us like 100 if you to create an old website used to like get a server and then get like and we use like 99 designs it's like all these little little things like save entrepreneurs so much time and so much money and they save companies time and

to companies money and like entrepreneurs make the world a better place so it's a trade-off of it's a trade-off of producer Surplus to consumer surplus yeah and like that equation and you know economic terms is exactly what you're describing either it's going to be realized through lower cost price points of being accessed getting access to these different services or it's going to be produced in you know less people working at these companies and therefore more efficiently run companies like it's going to be cost savings fundamentally but I I don't know I mean I agree it's probably bubblish and probably will continue to get published because we just you know run the same Playbook every single you know two to three years but I I think one of the one of the things that I think about with GPT and sort of any exponential scale technology is that it always looks

small in the first couple of years but the fact that it's exponential means that it surpasses expectations at some point and I think that there is a moment where it will surpass expectations and like AI has been on that path for literally a decade now so the the other one I'll say is that we actually have numbers on how many of these startups have been funded and how much has been raised so um about 12 billion has been raised by AI startups and there's about 480 of them today cool guys good chat good pod good pod we are entering 2023 where there is going to be no narratives it's going to be tough to catch a narrative where uh the the last the last stage of the bear cycle where it is uh

I disagree I think you know because there's such a void everybody's gonna go home for the holidays You're Gonna Come Back refresh renewed it's like great we're gonna start a new year and people are so tired of 2022. it is remarkable it's remarkable I talked to a fun the other day who's like yeah we have a bunch of dry powder we're just not allocating because we don't want to deal with any of the paperwork and like deal with deal with stuff in 2022. and some advertisers like you know blockworks one of the ways we make money is and people are like yeah we've got money we raised like 120 you know three months ago we're fine but like I'm just done with 2022. oh my God all right I was talking with one of the one of the investors on our team and he was saying

he had two instances where some Founders sent him calendly's but the first available spot was like January 5th I respect it just throw it in the Dell and punt to the new year next year yeah cool fellas great pod see you guys next week see you later [Music]