AI Breaking Software Economics, CLARITY Bill, & Debating BitGo’s IPO | Weekly Roundup

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At the beginning of Block Works, when we had no money and we wanted to to do a bunch of hard things at once, we just said we can't do that now. We we just we just I'm sorry, we just can't get to those things. Then when we got money, we raised around. We start we were spitting off decent bit of cash flow. We said we can do a lot of hard things, but we have to go hire lots of people. And now that there's Claude, and this sounds like overly simplistic, but it's like if we want to do a lot of hard things, it's like great, take ownership of that thing and someone goes and builds it in a day or two. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only and the

views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Block Works. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed. Oh, what's up, folks? Welcome back. We got uh January 22nd. You're listening to this on the 23rd or the 24th. We finally got the gang together. Santi Rob, what's happening guys? >> Only took us 22 days. >> Whole crew. >> Crazy. >> Whole crew. >> Crazy. Santi's been spending the first 22 days getting some like glorious rug behind him. Where are you, Santi?

>> I was in Davos uh yesterday, so I made my way down uh stopped by halfway through there. Uh >> like the global elite that you are. Yeah, definitely feels like you're in the old continent if you >> The the only people who hang rugs on their walls are people who have way more money than I do, right? Like that is the group. So >> I will say Rob, you have an interesting pattern and you we're public. I'm not doing any OBSC stuff. You said you were moving to Miami. You kind of were, you know, the billionaire's tax, all this.

>> You're moving to Rob. You're moving to Miami. >> I am not moving to Miami. I have a place in Miami for a few months, of which I am back and forth between New York and Miami right now. >> He made sure to do the the the IRS >> and I'm not I I'm still paying New York City taxes. I will be a taxpayer in New York City in 2026. >> Why would you be Oh, in 2026. Okay. Um >> wait in 25 like you know last year, this year, every year. >> Yeah. Noted. Noted. I will say New York New York right now sucks. It's like seven degrees here. >> That's why I'm here. And you know what? It kind of sucks here. It's like raining all morning. 70 degrees, but it's like pouring rain. Hasn't been particularly nice honestly.

>> I spent we did our um I spent a week in Costa Rica and it was lovely and I was like, what am I doing in New York right now? >> Well, you um you have a a newborn, so you know, unfortunately, you can't just pick up and move to Costa Rica. >> That is true. That is true. Yeah, I know. I was like, "Oh, Dana, we gota we got to move here." And she's like, "Yeah, you have a child. We can't we can't go to we can't go to Costa Rica." So, um Santi, you were talking about Slack before this. Let's um I'd love to hear just how how like maybe Claude and I did this we did this podcast with Ciao that I did solo and it's now I think one of the most listened to episodes we've ever done in the history of Empire. Um

which just tells me that I think people are really trying to figure out like how these tools are actually being used. And I'd love to hear either Rob like you guys at Dragonfly or your port codes what you're seeing like on the edges Santi you guys or maybe you're not using it that much today. I can talk about block works but would would love to just hear like how it's impacted the orgs. >> I mean talking about like internally at inversion we are we were just talking Rob Rob and I actually talked about in the last pod uh and we it was you know we it is a priority for everyone on the team to like get up to speed constantly on AI. Uh everyone in the team across the board and we are incredibly more productive. Like for instance, one of my analysts on the private equity side was

we're looking at a it's a public company. It's not very well known. Doesn't have research. There's not much out there. He was able to put like the amount of work that you can cram into a 24-hour period. I was like this would have required a team of like five or six people and at JP Morgan we had an external army in India to do slides and like it's just incredible the amount of productivity uh we're getting out of uh on the engineering side of course as well. Um, so you know, of course we raise around and you're thinking you're going to hire certain amount of people and you have an op a burn rate, but it's just incredible how much productivity you can get. Um, we haven't so so Claude has not rolled out co-work on the enterprise side. I think it comes out tomorrow actually,

but on the individual side, we've been poking around with it, but it's just incredible. like every other week the amount of progress that has been made now it's just one week you think you're mastering open AI and prompting and then it's like no no you got to transition to Gemini and then it's like co-work um so we're getting a lot of efficiency gains internal in gains internally on the investing side of course like I'm paying a lot of attention to SAS like it's been a massive disruption in terms of multiple compression there again Rob and I covered it last time there's a great tweet out there that actually I I retweeted I'm off Twitter most, you know, less active now, but there's a great tweet that says, um, you know, adapt or die. Like SAS is going from

like, >> yeah, >> EV to revenue, EV to gross profit, EV to Ebida, EV to free cash flow. Uh, and of course, I couldn't resist the temptation to say that E crypto trades at the very top of EV to TAM and it's going EV to revenue. Um, but yeah, I'll pause there, but it's just been very dramatic the rerating that has happened in the public markets for SAS companies. Uh, so I'm just paying a lot of attention to that. >> Yeah, >> if your business I'm interested what you're doing at Blockworks, but on the engineering side, if your business isn't writing almost 100% of its code today, AI assisted, uh, you're probably falling behind, right? Even Anthropic is writing all of their code. they will tell you

using claude, right? And so it I mean they're dog food in it. They >> think there's a difference between writing a 100% of your code with claude and then writing 100% of your code with AI assisted like >> sure I agree with you. So AI assisted, right? Like claude itself is not going to write 100% of your code. You clearly need people not today yet. So maybe maybe at some point and maybe for some businesses, but there's uh and you clearly need people in the loop in terms of you know quality checks and making understanding that you're um uh as you go through and make sure that you fix bugs and for some of the more complicated uh problem solving at times but you know not really >> but the it should be AI assisted today and every single one of your engineers should be using it and if you're not one

of the things that we've seen in our organizations is that especially for call it some of the senior engineers and they're a little more hesitant, I think, to potentially, you know, use Claude or use um, you know, I mean, Copilot is not not at the same level, but, you know, one of these types of >> of uh of of, you know, AI um, assisted uh, bots or agents and >> what we've seen is you have to mandate it from management, right? So like even if a non-technical management like Yano I'm I mean I'm I'm interested to hear what you're going to say but you probably have to be using it yourself to understand the power of it to then go

and actually require the engineers use it. We've seen that across organizations if the CEOs are using it seuite's using it it's being adopted much more quickly by everybody else and if they're not it's still a push pull at times by some of the you know the the staff. >> Yeah I would say there have been two enormous cultural shifts at Blockworks. One was co which uh forced us to go remote and completely change how we ran the entire company. This is the second one. So I think I think we are starting to see a huge cultural shift since it was specifically cloud 4.5. Like I think we're a pretty like AI native org.

Everyone's been using chat since the beginning but it was Claude, you know 4.5 that really changed things. I think at the beginning Santi you mentioned like you know we raised this money. We thought we're going to hire people. At the beginning of block works when we had no money and we wanted to to do a bunch of hard things at once. We just said we can't do that now. We we just we just I'm sorry. We just can't get to those things. Then when we got money, we raised around. We start we were spitting off decent bit of cash flow. We said we can do a lot of hard things, but we have to go hire lots of people. And now that there's clawed and this sounds like overly simplistic, but it's like if we want to do a lot of hard things, it's like a great take ownership of that

thing and someone goes and builds it in a day or two. And that gives us the ability to assess if that V1 is good enough or if we should scrap it or if we should double down. And I want to actually show you guys an example of what this looks like. So our sales team, we have a 10person enterprise sales team. We now have the I I built this out personally. It's the Blockworks pitch assistant. So you put in the name of a company. So I'll put in Maple Maple Finance. Let's say the sales team is going to talk to Maple today. It looks at the whole website. It looks at all the company details. It has all the information in our HubSpot. It has all of our pitch documentation, all of our sales numbers, metrics, pricing. It's got our pitch deck. It's got all of our

product information. And then it generates a whole talk track. And then it gives you objections that it thinks Maple will have. It's like, okay, well, if you're talking to Sid at Maple, I bet he's going to say this. If you're, you know, maybe talking to someone on the growth team, I think he'll say this. How does Block Works compete against, you know, X, Y, and Z competitors? It gives you all the information here. So, and this is a tool that I built in an hour on Replet. You can do the same thing with create a proposal. If you post call, you can actually upload your your call notes from granola. So, the whole sales team uses granola. You can just copy paste the granola transcript, put it into this, and then it'll do the same thing and it'll actually generate a proposal for you. Again, these are the

sales team should not read the pitch word for word. The proposal should not be sent to the client right away. You got to review it. But it's crazy how much time and honestly extra people this has saved us. I will say uh what you said around like prototyping like that time if you think about like what needs to be done to reach a conclusion it probably would have taken this would have taken a long time for us like as we evaluate companies like we're able to do analysis on so many companies very quickly but I will say a lot of times at the very beginning one of my analysts would come to me and say I've created all this and then I would ask him hard questions and it nothing I I I still think on certain disciplines. It will not replace the

judgment piece. And >> there's just some things that you need to spend time doing yourself, whether it's writing it on paper, just looking at it. And >> and and I I worry that I don't think it's it places more val I was thinking like it probably places more value on judgment. And so for instance, Claude, I think it's AI assisted, but that engineer that like architected and like created the prompt, that was probably a 10x engineer that is now like a 100x engineer because he knows how to architect. He has so much experience that is kind of letting the AI like write the code, which is not it's like the Albert Einstein famous

quote where he says like spend 90% of your time focusing on what the right question is, >> right? and then 10% and the answer comes much faster. I I think that like if you have that skill of judgment of knowing how to prompt uh or just have a lot of reps in you like Rob, you understand the payment space so well that with AI you can just probably not need an analyst because you could just like use AI to like effectively be that analyst for you. Uh but nothing really I think today still replaces your understanding and knowledge of payments or you know >> yeah I mean I do think that's true especially for like complicated topics but you can get up to speed on a complicated topic a lot more. I there's I think especially in the valley right

now people do I think undervalue experience and they undervalue still just like ingrained institutional knowledge about like being able to understand where the potential you know hidden issues are right or where there might be you know the the question you need to ask to pull on a certain string to get to a certain value lever certain type of you know diligence um area where like you can kind of start to understand some of the inner workings of business. Like I I actually think like I use AlphaSense uh as well which I I in the past I kind of felt AlphaSense was a little bit you know wasn't that helpful and recently it's gotten so much better where I'll say okay listen I want to go

and I want to understand everything that's been happening with uh Interactive Brokers for the last year. I want to understand you know what they're thinking about in terms of you know future strategy. I want to know um how each of the lines of business are being talked about, whether that's publicly, whether that's at the analyst level, whether that's uh in, you know, kind of a quarterly earnings call from one of the CFO or CEO. I want to understand the um the lines of business, how they're growing, you know, what the the makeup of the revenue is, what the makeup of um the, you know, the IBIDA is, and how we expect that to grow over time. and it'll go back and it'll they have this kind of this version that will take 10ish minutes maybe and it'll come back and it'll probably give me the single best

sellside research report that has ever been written about in uh Interactive Brokers and it'll include everything I possibly need to understand that business and yeah if you read that and you don't have any kind of context or knowledge already like you're not going to really understand the kind of some of the main points but if you already have that institutional like level of knowledge and context like that is all I need to get up to speed on a new company, >> right? And it's it's incredible like how much time that saves you and how much manpower that saves you. >> Rob, maybe a counter-argument to that would be like there is a fine line between being too much in the weeds and analysis paralysis. Like like Sorro, some of the best traders, traders, investors would tell you, I don't really need to understand everything about the

company. I just need to understand what the market sentiment is and like have a have a very strong point of view. And sometimes it it hurts you to know too much. Um I wonder like what would what would uh the next Soros or the next Drunken Mill, you know, like like they probably tell you like we don't need to know everything, but this could allow us to be way more effective. >> Well, drunken Miller, what's the quote, right? Um you buy first and you research later. >> Exactly. And but again, these guys are are more traders than they are like long-term fundamental investors. And they're macro guys as well, right? Depending on who we're talking about.

>> Um, so I I think it really depends on your investment style, time frame, context, all of that, right? When I'm doing an investment, I I'm not actually investing in public companies, right? I I I research public companies as a corlary to or for me to think through like how my companies which are earlier stage high growth technology companies can potentially go after traditional markets. And so it's more about me understanding those markets and how these, you know, traditional incumbents are thinking about, you know, the IBKR example I gave specifically because I've just been thinking about it because they're doing they've been talking about prediction markets more, >> right? And so but but I think the it really depends on the type of investor you are.

>> Yeah. And I want to ask you a question because I I think you were you're pretty up to speed on AI like you poke around on the weekends, you build stuff. Um, what is something that you've changed your mind on recently about AI, positive or negative? >> Um, I think that I always thought that as companies, there's a couple things. One is I think as I I thought of the connective tissue of a company as being like an ops layer and like uh you know, you got to get people to as companies scale, you need this like connective tissue. And I think what Mike and I have both realized recently is adding people to be the connective tissue just adds a layer of an extra layer of people and

you can use AI to um basically be that connective tissue. So that's how we think about it at block works. I think um another thing I recently changed my mind on was I thought memory was an extremely was going to be an extremely good lock in for the platforms. So, I thought once you went really deep with chat like chat GBT, you'd be locked in because it knows all my health data and it knows everything about my personal relationships and knows everything about block works. Um, I have found zero lock in memory lockin. Um, I'm now completely off chat. I I was I was all in on chat GBT. I didn't use I didn't use Claude or Google or even really Perplexity that much. Um, and I'm one I I haven't pulled up I haven't used chat in about two

weeks. I'm 100% on Claude now. So, I think the it's made me think about uh the lack of lock in for these providers and like where they'll sit in the stack and will you even ever go to claude? Will you go to all of them? Will you just go to these like things that sit on top and yeah, I think the memory lock in was way uh way weaker than I thought it would be. >> I'm I'm still using chat GBT ge I'm using Gemini the most at this point still. Uh, I've used chat GBT a little bit. I Claude code I've been I've been playing around with that, but I haven't been using Claude as much otherwise. Um, I don't know it would you Gemini feels to me still like it gets me

the right answer quicker. And I I will say today it feels like Gemini gets me the answer more robustly, more deeply. It seems more thoughtful than chat GBT by almost 100% of the time. >> Yeah, Gemini Gemini is better. I think Gemini is better for answering just like questions like hey what what what is this thing? I think claude is now the best for projects like hey I want to build this sales ops tool for the sellers to like do this and I also think replet um which isn't talked about that like replet is an incredible tool um as well. So that's what I would say. >> Yeah.

>> Can you on Replet you can bring any other any of the foundational models in or are they using someone specific? Okay. >> Yeah. Exactly. Yeah. What do you can can you say a little bit more about the connective tissue because that's something I think about a lot. Um you've heard like um I recently hired this guy from like Palanteer. He used to work at Palanteer and he was telling me look for the first like but even for like right after the IPO we still had a super flat organizational structure. >> Yeah. and we didn't have OKRs. Like it was just super like just fast sprints and um the Airbnb guy talks about like not ever having like one-on ones like >> how how does AI fit on that? Like >> because there's still some we're we're

still humans at the end of the day like so like when you think about like leading a company like Block Works, you and Mike like what do you mean by the connective tissue being replaced by AI? >> Yeah. So um here here's like a place where connect where you need connective tissue inside of an organization is between finance and sales. There's like a lot that happens in between finance and sales discounting. Hey this this client wants to do a two-year a two-year thing. Like can we discount? Hey my sales commissions are going out. Hey there's this custom deal. Like am I going to get paid on that? Hey there's so much that happens between sales and finance. We're now uh using a tool called Stream OS that just automates basically everything between sales and finance. So what traditionally companies do is and I think stream OS is built on

top of like all of all of the models. So it it sits on top of mainly I think chat and claude. Um so instead of hiring what you would traditionally do is hire a revenue ops team, a rev ops or a sales ops team and in that adds that adds a person that the team has to go to. Hey it's you know commissions are sent out on January 31st like are my is this included in my commissions? And then the rev ops person has to go to finance and be like, "Hey, finance like you know this seller at >> it's all it's all in stream OS now." Um, >> yeah.

>> So I think there's different platforms like that. >> There was somebody on and I blame on who it was on TBPN maybe it was end of last week or earlier this week. I think it was earlier this week who said you know a large uh portion of these like large tech organizations has been people who can essentially uh translate between like product and technology right and translate between those two parts of your organization and now essentially what claude is doing is it's doing that for you right you no longer need that translation layer because somebody in product can just tell Claude what they want and then they can go and do it and

claude can help you build it >> and you need you need some tech and some software engineer to go and make sure that it's right to and to utilize AI to build this thing but it's doing basically most of that translation for you today and so this whole like translation layer that exists at these tech organizations is probably just going to get completely hollowed out over time. So Rob, what is the what is the role of a VC when like we we talked about the the cost to start a company went from like 1990s like millions of dollars software as a service lowered that dramatically because you didn't have to like pets.com went bankrupt because you'd have to spend millions and millions of dollars to do what effectively cost zero today spin up a website with Squarespace and now you can do that even vastly cheaper. Um

what is the role of venture? Like if you take a super cyn like cynical view here, it's like does are we at a point where you're going to see the second order effects are way more innovation, way more folks starting their own companies because now they can prototype and they can build apps and what has been the probably the biggest um barrier to innovation and entrepreneurship has been stopped being capital for a long time and and now is like probably more like technical expertise like if you know how to code it was like you know like I need to have a co-founder that is technical Now you could argue you don't. Um, and then like what is the role of VC in that world?

Like what is the how do you think about your edge and like the value that you bring to the table for entrepreneurs when you have all this access? >> Yeah. My my my belief is that and I I know I disagree with some people on this, but my perspective is that what's happening in AI is not displacing people in terms of, you know, there's still going to be a lot of workers. There's still going to be people uh who they need to have jobs. There's still going to be inventing things. There go there's going to be more businesses. There's going to be more innovation. There's going to be more people trying new things. there's going to be a uh significant amount of more productivity

if with any single individual and there's going to be a we're going to have to put a lot more emphasis on creativity and ability to sell and distribution and you know the the business aspects the the intangibles of you know those founders because what's going to get commoditized is the software engineering right that's the commodity now that's it's no longer that that is the the edge, right? Oh, this is the best software engineer I've ever met and they're going to do something better than somebody else that's going away, right? And so people are just going to be that much more productive.

>> And so for VCs, that means that there's going to be a lot of things to fund. We also most likely there will be a, >> you know, businesses are getting bigger, right? We're going to have trillion dollar IPOs in 2026, right? We're going to have multiples of them, right? This is going to continue to happen. And we're also seeing a, you know, I think we're seeing a resurgence of, you know, funding of hard assets, right? Or of hardware. And that's not my business, right? But we're going to see, I mean, we're seeing all of the large, you know, platform VCs, you know, kind of lean into that as well. So, I don't think there's a, you know, a der of capital to put to work. And I think expertise to our point earlier still matters.

Knowledge and expertise are not the same thing. >> Yeah. tell you the truth like >> dep one note on that Sante to answer your question too is venture will move away from the thin software layer right simple workflows another enterprise SAS tool and I think venture will get even more important actually in like let's call it four buckets um fixed costs or high capex um scarce or privileged companies with scarce or like privileged data uh people who have like extreme distribution modes and real world execution So capex fixed cost this would be like I don't know anyone from like Nvidia to I don't know Grock or any yeah any of the big

>> I mean any of the models >> any of the model companies um distribution modes would be like or and and or scarce or privilege data would be like I actually think there'll be a bucket of enterprise SAS that does I know there's the chart that Chimath posted of enterprise SAS is falling off a cliff. I think there'll be a I think that'll dul like I think everyone's bucketing all SAS together right now. There will be a bucket of enterprise SAS that does extremely well and they if they own the dist the distribution mo if they have basically scarce privilege data or they own the distribution and they are the system of record for a company. So the people like this who will do well is like rippling like if you own the payroll data the HR data your whole company Salesforce HubSpot Service Now Oracle those guys will do

well who won't do well is like Monday.com Aauna like just this thin SAS layer and then real world executions like robotics hardware climate energy logistics like anything where like atoms and safety and like basically dominate the the cost stack. So >> yeah, >> yeah, there there's a lot of there's a lot of conversation right now about basically the hollowing out of like middleware. >> Yeah. >> Right. And I think like there that's probably right depending on the vertical in the industry.

>> There's but there is going to continue to be I think a somewhat of a data mode and a distribution mode especially for you know very to your point earlier Yano about there's no lock in right now with any of the chats. That's not going to be true on the business side. like there is going to be lock in because people are going to integrate you proprietary information into then a something that they're fine-tuning over time right and so we are going to see lock in on on certain types of businesses but to the point again like we were talking about okay there's all these people so many people work at large organizations that exist to just answer questions right you know there's the whatever so Salesforce is in every single company or many many large companies in the world it's

basically a CRM software They and a lot of people are employed at companies that are basically answering the question what does Salesforce say like where you know what does our pipeline look like you know where are we in the pipeline who is moving between uh down that pipeline how is our success rate like what is the funnel conversion look like what do we expect revenue to be over time and that question can now be answered by you know a model right that question does not need two people on your finance team now to do that question and you don't necessarily really need Salesforce in the same way because you just need the data, right?

And so that's the that's the type of stuff I think is going to be really disrupted. >> Just to round out this conversation, I saw I think it was um Andy Jasper, I think it was a CEO, the COO of Amazon said, "Hey, look, we no surprise like Salesforce like has all it's not very custom. It's just kind of like we need a there's all this training that needs to happen when you're onboarding and your team and training your team to use a solution that is a lot of it out of the box because SAS would rather sell you out of the box software not super customized because it's a professional services just blows up and it's a lower margin. Uh and they I think it was the CEO of Amazon that just they built their own CRM and he's like honestly better for us because it's like way more

customized for our needs. And so if a company of Amazon that scale, I don't know if it totally replaces Amazon, but I think like sorry Salesforce, but it definitely begs the question of like I've I've interacted with Salesforce a ton. It's not as customized to like your needs. Like we're using it at like Sage and you're like [ __ ] man like all these unnecessary fields. It's not really relevant. So I I think I don't I I actually don't necessarily agree with you that like Salesforce may or like unless they change their pricing or their type of business model or really want to like rearchitect and like be more custom customizable for clients I don't see that much lock in to be honest for something like Salesforce. I do think if you own data then that's a real mode especially like

that will continue to be a mode. Salesforce I don't I don't just don't necessarily think the lock in is there as much. Okay, here here's how I think about it. Um, if you want there's a there's a bucket of things that you your team does, right, Santi? That like uh they that AI will end up doing like an agent filling out notes from a user's client. Uh Aaron Levy, who's the CEO of Box, had a great post on this. He called it non-deterministic systems. You want AI agents doing the non-deterministic thing. So, an agent filling out the notes from user client meeting, generating a sales presentation for a new customer, answering a customer support ticket, doing research, providing analysis on a on a set of documents, that's all non-deterministic work that an AI agent can do. Um, but if you ask the agent to generate more

outbound emails, create the sales presentation, do the create the pitch, send the follow-up email, that all all of that has to pull from somewhere, right? It it almost certainly pulls from some sort of CRM system. So, like when an agent processes and reviews like invoices and transactions, like they have to kick that data into a system. So it's there's some system of record that will do well. I think your point is well should I just build a perfect system of record for inversion?

>> Yeah. Like if you can export but if you can export all that data and you and you can move pack your stuff and just plug it into a a mod and say hey listen here's our Salesforce instance. Build me something that you know optimizes for across these different things. You could do that. I mean that was the whole point of the Amazon goal. Well, this is why but this is why businesses like data bricks are going to continue to really do well and Salesforce doesn't necessarily need to because what Salesforce is more of a a layer to help you understand what is happening >> versus like the system itself, >> right? It's a translation layer, right?

And so I don't necessarily need the translation layer anymore. I need the data layer. I need the data indexing. I need the data lake, but I don't necessarily need the translation layer or the translation software anymore. Oh, >> I think I disagree. I think Salesforce is the system of record. I would disagree. Uh we should talk crypto at some point. Let's um >> All right. Before we do that, before we do that, we need to make a bet. So Rob, are you taking the long Salesforce like short Salesforce? Janna, are you taking long Salesforce? Because >> so I mean Salesforce is a system record. I just want to make that point uh for him on like a lot of customer data, but you don't it doesn't need to be it's a system of record that then translates for you. The thing is you don't need a

lot of what Salesforce does. So it shouldn't be it shouldn't cost you as much because the value isn't as high. >> Right. >> Correct. Yeah. Okay. I that I agree that I agree with I but that's a business model question that's you're talking about the business model of software that will 100% evolve like the seatbased model is horrible seatbased model should go away immediately it should all go to usage based like anyone who's used people should really use replet and see how replet is charging it is amazing the more they charge me like they'll be like I'll do a task and be like all right that task called cost you 14 cents I'll do a bigger task walk away from the computer it works for like 30 minutes they're like hey that cost that task cost you like $6 and you know 17 like okay this is clearly where the it's

better for the customer so that's where it'll go >> we're moving on before we do that ladies and gentlemen please click on the link below if you want a referral rink to replet yano uh on >> they should really be sponsoring I've never talked to >> you want to know the craziest okay the other crazy thing is I've never talked to replet and no one in Blockworks has there's no they don't have a sales team and we're still so that's also how enterprise SAS could change Coinbase cryptobacked loans powered by Morpho empower users to borrow up to $5 million using Bitcoin or $1 million using ETH as collateral. Loans originate in seconds with no additional credit checks and competitive rates typically between 4 to 8%. Use USDC for down payments, debt refinancing, unexpected

bills, and more. Repayment anytime with no fixed deadlines. Over $1 billion dollars in loans have been opened through Coinbase to date. With the Coinbase app, you can manage cryptobacked loans with ease. To learn more, click the link in the show notes. As always, investments in blockchain technology involve risk terms and conditions apply. Anyways, let's talk about clarity. Um, this is a crypto podcast after all. So, uh, the House passed its version of, uh, clarity, which is the market structure bill. um Senate Banking Committee was preparing uh this markup. This is this is kind of what I know. Um they were preparing a markup based on this like heavily rewritten draft. There's a lot of like debate over um Titan rules on

stable coin yield and interest. And on the eve of the markup um basically Coinbase said that they could not support the draft as it's written. Company formally withdrew its support. Um I think in response the Senate Banking Committee committee uh postponed the markup and said there's broader work that needs to be done on the market structure bill and it's we're going to delay this for weeks or maybe even months. Um what I'm >> just to clarify there the the banking committee put out their draft of the markup. The ad committee was also supposed to put out a draft and people had originally thought the ad committee was going to be probably the one that was more likely to get make it out of committee and be the one that was going

to um take, you know, or at least be the more the the the more influential version. And after the banking committee draft came out, Coinbase came out and said, "Hey, we uh do not we cannot support this." And so then the ad committee postponed their new draft because of the yield piece specifically and now it's been about a week and they haven't come out with their new draft. I've been told that maybe the ad committee draft was supposed to come out uh next Tuesday, but now people are worried about this historic ice storm that is coming across the US and that that might push things as well. So, we might have a few weeks, you know, past when when their uh draft was supposed to come out, which if anybody knows

anything about Washington, losing momentum is always a bad thing. >> Yeah. So, I was um I was in Davos and I was on a panel in the CBC house with the head of policy at Coinbase and he said, anyone that is not familiar with regulation says every bill that is passed dies three or four times before it gets passed. So, this is kind of normal. Um, in that same conference, Brad from from Ripple was a bit more critical of Coinbase's um, kind of stance and u saying, listen, more of the tune that I I don't know where you guys sit. You could argue, hey, listen, we finally have an administration that has, you know, put its best foot forward. Like, it's still progress is progress. Take the bill in its current form. It still went for the

industry. Like, don't jeopardize, don't miss the forest for the trees. I will say like the point that that I think Coinbase makes and I'll just kind of reiterate but you guys should fill in but there's a couple I I think there's one key issue here for them which is kind of stable coins um that would probably hurt them to be less competitive. Um this idea of um you know effectively the bill in its current form would eliminate rewards or yield. Mhm. >> Uh, of course, we've always understood that like stable coins can't offer yield, but like Coinbase kind of gets around with that with with the rewards and so it's just kind of a very, you know, it's more of a mechanism, but obviously you think about that is

impactful for them because they want to continue to be competitive like offering rewards to users for parking more stable coins has a direct impact to their business. Um, so that's in my opinion like probably their biggest cons like issue with the current bill. Um there's always some ban on like tokenized equities. So that obviously continues to be a huge kind of point. Um um there's some stuff on DeFi that I candidly I don't know if you guys understand as well. Rob so so I don't think there's a ban on tokenized equities. What there is is there's like a study that has to come out and like how >> Yeah. Right. Um, listen, I I think in this draft

clearly Coinbase is concerned about, you know, the yield on stable coins. And if you read the language, what it essentially says is you can't give yield on stable coins if yield is or if the stable coin is just sitting in a wallet, right? But you can't give yield or rewards if you're it's tied to them doing something, right? So whether it's using the platform or transaction volume or whatever. And so most people looked at that and were like, "Okay, well this is fine." like there's a lot of ways to build our business around this. Now, part of the issue is that it's so opaque that you know there's going to be a bunch of rulem after this law is passed and you can drive a truck through these definitions. And so, like I think people are worried about, you know, kind of this slippery slope. Coinbase, I think,

is specifically worried because of the fact that they have this like new line of business where they're going to, you know, allow you to do like a white label stable coin. underneath it's going to be USDC and USDC is just going to sit there as a deposit probably and the they because they have this revshare agreement with uh with Circle which actually gives them 100% of all USDC revenue that's in on their platform. I think that's probably what they're they're focused on most most closely because they expect that to be a huge line of business. And then obviously today like they gave you a few points for just like you know parking stable coins there. But like there's very easy ways it seems based on first reading to kind of work around that. And so I think people were surprised that Brian would

come out publicly like that instead of engaging in the normal course which was you know to go and talk to the senators and say hey listen like let's you know negotiate something. And one of the things that, you know, it's clear when you talk to, you know, the staff who actually write these bills is they much prefer and they're usually much more uh emicable if you engage with them outside of the public sphere or public eye than if you do things through public like usually you want to be that's like a last resort, >> right? And so it really threw this draft into a bit of disarray because he did that. So, where where did uh this I mean Coinbase probably has the biggest presence in Washington. Where they it seems to me like they were caught off

guard in in the latest kind of draft of the bill. What's behind that? Like is it the banking lobby that obviously you know is like why were they caught off guard? Cuz their whole point I think was we have like a couple of days to before this goes vote like we have to take an extreme measure of going public. I don't think their policy people and lobbyists like disagree with what you're saying, Rob. They just took an extreme measure because they were kind of blindsided. Felt like >> you know in my so I'm I don't have the apparatus. We don't have the apparatus that like a Coinbase does. And so my experience in DC is not you know nearly what a lot of these people are uh have.

Uh what we have seen though is that like even the most well-connected lobbyists and a lot of the the apparatusers they they don't they don't exactly know where things are going to land until they actually come out. And so like they they can you can kind of get the wins and you know what you know you have certain um you know relationships that allow you to understand where you know certain senators or you know one side of the aisle is thinking about a topic but you know there's a lot of deal making that happens you know in these committees and in Congress that you're just not going to be privy to until the very end. And so you might know which way it's leaning you can kind of you know tell the wins but you don't know exactly till till the end. And the other thing I think people

were really surprised about here and I think the more more problematic piece more broadly is that there's the this draft basically shifted a lot of the onus of regulating crypto back to the SEC from the CFTC. So the CFTC was was kind of more of the focus in the Clarity Act and I think the ad committee version will also probably be the CFTC primarily. And there's a very there's a large concern that if you just say, okay, well, like, you know, here's a very high level bill and then we'll leave it up to the SEC and the Treasury Department to think about how to regulate this over time that there's just going to be a bunch of whiplash, right? Because we'll get to, you know, the SEC is a lot less friendly to crypto

and then they'll kind of change their position and that just won't cement the rules that we we want in place. I think that's probably in my mind the biggest concern as we need more enshrined in law and we probably and we want the CFTC to be probably the um default choice uh to be the regulator here. >> You're the political expert here, man. What what um you've been fairly quiet there. >> I was getting messages about Bitco IPO of the year. So, I was I was looking into it doing a little prep for the next session, you know. Um, so yeah, I want to talk about BO. BO's I mean BCO has been around for what 20 I think they launched in 2013. Like this is Belshi's been at it for 13 years. Um, obviously started as a custodian now kind of this

full stack institutional offering. Uh, they've got token they do tokenization, trading lending borrowing uh custody and um, yeah, they IPOed at $2 billion. So I don't know if either of you guys have looked into it or have thoughts. Uh, I was thinking about Galaxy's back like what is Mike Novagrass thinking right now? Because they had an offer to buy they they were going to buy it then I think it all it was right around the time Terra collapsed I believe or FTX >> I think it was a $1.2 billion deal that was >> deal. Yeah. Do you think uh you know obviously we ended the year 2025 figure and circle were some of the best performing I think circle was the best performing IPO of the year. uh where do

you think Bitco trades from here and do you I can almost anticipate the analysts saying it's not a defensible business model like there was a lot of criticism about Coinbase having that issue as well on some line items and fee compression. Um does it deserve to be a standalone company? Can it be a $10 billion plus company? And if so, what's what's it gonna take to get there? >> I I mean I have a really strong opinion on this. Uh so I don't know >> the air. >> Yeah. I I do share it.

>> You sh Rob, don't let let's unshackle you from the dragonfly uh uh compliance. >> Yeah, this this is one of those ones. I I was at a dinner last night and uh to to preface this a little bit and the somebody who worked at a different company in crypto um yells across the table and was like, "Do you have a problem with this company?" uh because they had heard me like say something like somewhat negative about you know or that you know about their valuation on this podcast. So I you know I got a little shook by that because I don't want people to think that I I don't like them uh because this is not you know this is not in any way personal.

>> This is such an amazing way to tee up your negative take on Bitco. So just hit us hit us with it >> which is going to zero. >> I uh I I just I just don't see how the business is worth $2 billion. So, you know, listen, like it's it priced in the middle of the range uh about So, they priced it from 1.9 to 2.1 was the range they put out. It priced about two billion exactly. They uh it was almost entirely hedge funds in the book, which that tells you a little bit about like, you know, where the fundamental like long-term investors think about this business. They uh they were overs subbed, but you know, that's that's that's pretty typical. Um they you know this is a business today

that it priced at about you know call it I think about six times uh what they expect 26 net revenue to be there you know it's on an IBA basis like this is you know a very very high multiple I think it's they did like 30 million of ibida last year they'll probably do I think some people think they'll do something like um >> 50 uh >> what like like 5060 this year, right? And so, you know, we're we're we're talking about a, you know, 40 times IBIDA type business, right? And the all of the story here is actually not Bitco specific, right? So, it's okay. Well, there's going to be stablecoin

proliferation. There's going to be a uh more real world assets. There's going to be this significant uptake of um you know tokenization and uh these you know platforms like like Black Rockck and others now in trading different types of tokenized assets and all of that will be good for this custody business, right? Uh uh and all that I can agree with. But if the entire story around this business is, hey, we have feed compression, we have margin compression, we have we're probably, you know, publicly accepted as the third best tech of the three biggest custodians, uh, and significantly behind Anchorage and then a little bit behind Coinbase and we are going to ride the wave of the market, then the investors

are going to sniff that out and if they want exposure to, you know, these secular trends, they're going to go to the better asset, right? And so in my mind, this thing trends down to a more typical, you know, IBIDA multiple and it probably the chart probably looks less like circle and more like Gemini. >> I'll take the other side of that. Other side of this is going to circle. I mean, we remember how much circle ripped. Do you remember how much everybody was just destroying Circle's business model for being, you know, an archaic stable coin that has only one one one product and revenues are going to go down. Um, if

you look at Bitco's numbers, yes, I the the multiple is a little high. I I get that. But they're assets under custody grew 100% year-over-year. Their trailing 9-month revenue grew 65% year-over-year. Um, they've got a run rate of, I think, almost 250 million by the end of the year. It's up 85%. Um, and these numbers are actually greater than Coinbase, right? Coinbase only grew AUM by 60%. Net revenues by 45%. So, I think if you look at the growth rate of the business, yes, the multiple is a little high, but multiple should be high when you have 100% year-over-year growth. Um, as opposed to something like maybe a Coinbase or a, you know, someone else who's like maybe that they're growing at

30, 40, 50% a year. So um yeah, I think you can actually justify some of the elevated multiples because u the growth rate and also if you look at the percentage of their revenue that's quote unquote sticky revenue, it's like I don't know 70 80% whereas Coinbase's sticky revenue is somewhere around like 40%. So they also hold a this is not a reason to buy Bitco but they hold a stupid amount of Bitcoin on the balance sheet. I think it's like 2500 Bitcoin or 2,300 Bitcoin. So yeah, Bitcoin goes back up to 12 120 125 like you know it's a nice it's a nice little play there.

>> Yeah. So the difference with Circle though, right, is is Circle is a is a scarce asset. It's a unique asset, right? So everything that everybody said about Circle's uh just you know financial profile, >> but it but it got long because it's the stable coin play. >> It's a scarce asset. Yeah. It's the only way to get pure play to stable coins which everyone agrees is you know kind of one of the technical regulations of the last couple of years. you know, crypto custody, you can already get exposure to that through Coinbase. Um, I expect we'll get an Anchorage IPO at some point in the next, you know, year or two.

I I don't think, you know, I don't think there's anyone while Anchorage is a smaller business today, there's a general belief in the market that Anchorage has better technology and is more secure. Uh, and I think, you know, you can debate more about Coinbase versus Bitco, but, you know, Coinbase has probably has a better a better reputation there as well. And so I agree that if crypto does well, tokenization does well, stable coins do well, this stock will do fine as well, but uh on a relative like par trade, I would expect it to do a lot worse than you know these others, right? And I think a little bit of what we might see here is probably somewhat similar to what we saw last

year in the exchange space as well, which is that we got a few exchanges that came out, right? Coinbase traded well for a big part of the year and then you know bullish came out and did pretty well and then Gemini came out and Gemini was the only one that did poorly but it did poorly because now people were comparing different assets right they had an ability to do okay I want exposure to this and now I have multiple assets where I can get that exposure to it's different when you have a scarce asset like uh like circle >> so I will say I do agree on the technology uh what was the last round for Fireblocks by the way on the private side eight billion, but the the the secondaries have traded significantly below that for for >> Yeah, like two two billionish I would

say between >> it never got down that far. Uh but it it's you know it was significantly down >> and there's not that many sellers. I think also um I the the saving great I mean I think uh I go back to my initial assessment. I think custody as on standalone like it's still primarily a custody play and that's a not as exciting for the market to Jana to your point like if all markets are just momentum and skewed heavily towards momentum I struggle to see that bid just because it's it's a more boring business. uh if they can somehow convince the market that it is something more than custody, you know, you don't see like folks getting super excited about BM White Melon. Yeah. Just um but I I I I wouldn't necessarily buy

it. It's just it's just I struggle with the defensibility of it. Um like what is the real moat? Um and I don't want to play short-term games around like hey, maybe it's an acquisition target. Maybe maybe the more interesting question is like if it trades really poorly, goes below a billion, does it get acquired by a legacy player that wants to move into >> trader BNY? >> Yeah, >> I think that's 100% right. >> Yeah. >> Yeah. I'll just say >> no. I mean, so like um who was it? It was uh it was Matt Seagull from uh from Vanek who kind of put out a bullish hey we we want to buy >> Bitco argument and almost the entirety

of his argument was about the market not about the business, right? >> Oh, that's I got I got a a lot of the numbers I pulled were just directly from Matt's tweet. >> Yeah. He talks about the numbers, right? And then he talks about all of the bullish catalysts are none of them are Bitco specific, >> right? All of the bullish catalysts are stable coin proliferation. Yeah. Yeah. >> Yeah. Right. And and so when I see that, I have a natural uh aversion to that business because and this some of this is because of the type of investor I am versus the type of investor he is, but the you want to buy in my mind the best asset. You always want to buy the best asset that has access to some sort of secular tailwind. And so the secular tailwind might, you know, be a rising

tides, everything does well, but I think it's pretty clear that there are better assets to get exposures to stable coins and >> no, >> you know, tokenization. >> On the business side, it's very simple. So, if you're going to have another trillion or hundred billion dollars that need to be custodied, where are they going to be split across Coinbase, uh, Anchorage Fireblocks Bitco? And if the answer, >> if if you look at the ETFs, right, all of the ETFs use Coinbase, all of them. >> That's right.

>> What do you think the sum of the parts for Coinbase is on the custody versus trade like retail institutional? Like if you were to deal with some of the parts of Coinbase, how much of that val 65 billion is attached to their coin custody business and can you actually untangle that because I would say a large part of their ability to win business on the custody side is because they do so many other things that Bitco hasn't been the the in people's minds both retail and institutional. it just becomes an easier argument to say, "Hey, you're already trading here. Um, why don't you just kind of deposit more assets here?" And you can also earn, you know, for me, the funnel and the ability to convert customers is easier for someone like Coinbase relative to some of the other pure play custody folks.

And moving up upstream is a bit harder when you also have like legacy players moving in that have way more distribution. So, I see very little defensibility on the business model on pure play custody or or majority custody business. I just don't think that that's just a commodity in my mind. >> I don't disagree with you. Like I I I 100% agree with you. It's it's a core piece of infrastructure. It has to exist. They were one of the first ones to do it. They deserve all the credit in the world for that. And in terms of a winning new business, they're they're behind Coinbase today. And but and but around the people who really really care about security, user experience, they're behind Anchorage. So, Anchorage is a

smaller business today. Coinbase is a bigger business. So, they're kind of sitting between the two. I personally I my expectation is that from a custody alone, they're probably the smallest of the three in two years. >> Here's what I'll say. Don't bet against Belshi. That guy's like he's just survived, persevered, and survived. And like there's so many times Bitco third third place. They just persevere. And yeah, if they're not as big as Coinbase, yeah, probably not going to be as big as Coinbase, but like I don't know. I think that business will just do well. Um, let's move on. You guys see Polygon bought two companies, Coin Me and Sequence. Um, I thought this was really interest uh very very interesting. So, this is I think

the first time that a chain is now using capital to make acquisitions and I do wonder if we're going to start seeing this more and more. Um, so Polygon bought two companies, CoinMe and Sequence. I think the rough dollar amount was around $250 million. So pretty pretty decent sized acquisition. This gives them the ability to be a regulate to have regulated money movement in 48 of the 50 states. Fiat on and off ramps, 50,000 fiat to crypto locations in the US, easy onboarding with wallet infrastructure, one-click crypto transactions across many chains.

They're calling it the Polygon open money stack. Um, now I think there's two interesting takeaways here. One is one is that you have this general purpose chain basically deciding to go all in on one thing which is payments. That's an interesting thing for me. And then the second is yeah using you know Santi I think you've talked at length about like what are these guys doing like all these protocols doing just sitting on these ridiculous treasuries and mismanaging their their treasury capital. Um, I don't actually hate this that you gota you got to find something to do with that capital. And I actually I I actually kind of like this strategy by Polygon by picking a lane, trying to own a niche and using some of their a lot, you know, a lot they have a lot of capital using that to make some uh

strategic acquisitions. But uh yeah, Santi Rob tell me what I'm missing here. What what do you guys think? >> I mean, I don't think you're missing anything. Like listen, they they this might be the first time that the public looks at Polygon, they're like, "Oh, they're really leaning into payments." But the reality is like they've basically decided other than Poly Market that payments is going to be their main focus for almost the last year, right? They launched Katana I guess in in May was it? And the idea was they could do like interoperability between very focused chains like there would be a DeFi chain and a payments chain etc. But

they decided over a year ago that like Polygon was going to be focused on payments, right? And they've had this, you know, really deep kind of integration in places like India. They've got um flows happening in places like Latin America. They're doing a lot of the remittance flows from Revolute are happening on Polygon now. They've done really good BD there. And so this was a somewhat of a coming out moment, >> I think. But it's been, you know, a year's worth of or or longer strategy to focus on this. And so they've been doing a really good job. And I think they looked at what, you know, the

opportunities that that Tempo and ARC and Codeex and Plasma and all of these guys decided or or saw, you know, a while ago over the last few years. And they thought, well, why couldn't we use our war chest to go and do this ourselves today? And so they get the MTLS in the US, they get the the the business, they are able to you directly interface with these customers now and they're able to drive flow to Polygon. There's a I think a very interesting question still about like what this means for the value of the token and how it drives value there. But in terms of building a sustainable business in one of the, you know, fastest growing areas

of our space, I think it was a smart move and I think it's a continuation of what they've been doing. Well, >> let's not forget that they hired the head of crypto at Stripe, Josh Heaggan, uh, last year. So that that was obvious >> John Eaggan, sorry, not Josh. Um, so I think they're smart and recognizing that payments is like there's a lot of efficiency there. And um I I again Polygon is one of those that does not get enough credit in the space. It's not in the inner circle of Ethereum Cabal, but you know, I I even go back to their acquisition of Hermes um um way back uh like zero like they've been focusing on zero knowledge proofs for quite a bit of time. Um and I have a lot of respect for

them to be honest. Um, I I would preface maybe maybe you don't count Ripple and what they did last year and the amount of acquisitions that they've done as directly like a chain doing it, but I think Ripple probably is the first in in my book like in terms of how they >> Manad also acquired a business last year as well. >> Yeah. >> So, there's been a few. >> Yeah. Like there's been some acquisitions. I think you're gonna I mean I I sort of called it last year like it just makes no sense to not be using these treasuries to solve the biggest problem that we have which is finding demand. Uh I think the the strategy of both Ripple and Polygon deserve a lot of probably probably the sharpest uh to date. Um so we'll see uh silence on the token and the value cruel

there. Uh but it's sitting at like 1.3 billion fully diluted. Uh I wonder how they >> traded up a lot on the news, right? >> Did it? >> Yeah. Yeah. Yeah, it Yeah, I think it's been doing quite well. >> Okay. It's down today, but yeah, I guess. Yeah, I think it >> Let's see. >> Not really. I mean, maybe I'm seeing last seven days. >> Last seven days down 13%. Polygon. >> It's the >> They announced it on the 13th and >> Oh god.

>> Okay. Can you guys see this? It's the fifth best performing token on the year right now. >> Yeah, but that it's like we outperformed the market, but we're still down 40%. too. >> Yeah. >> Yeah. I mean, it's up 24% this year. Everything else is >> take it. >> We'll take it. How's figure? How's figure on this topic? How's figure doing by the way? >> Let's go back. >> Why were you long or short figure? >> No, it's one of those that like when when I go to traditional events, it is >> up 40% the last month.

>> 100% in the last six months. >> Yeah. It comes up in the conversation. Again, talk about long if stable coins were the hottest, the second hottest or now the hottest is tokenization. It's everywhere, right? Figure uh I think again you talk about not betting against Mike like Belshi. I don't think it's >> bet against Kagy. >> You shouldn't bet against Kagny. I think he has it. There's he was he's very um in his communication. You read read the S1 he's like forthcoming. He's like, "Hey, we probably didn't have the best strategy for Providence." Uh but like I could tell you I think they're very focused on like now that they found a wedge with HELOCs what else they can do.

>> So uh it's it's a company that I'm paying a lot of attention to. I don't have a position on it. It's just out of curiosity, you know. I I think they're worth paying attention to. >> We've got Mike We've got uh Mike Kagny coming on the podcast soon. So we'll we'll be sure to talk to him. Let's talk about um I want to shift gears. Uh Farcaster got acquired. So Farcaster um Andre backed company had raised like 150 million bucks maybe 180 million at a billion dollar valuation very hyped up exciting decentralized social platform um they are selling to I think one of the applications that had built on top of Farcaster the Farcaster protocol called NAR not to be confused with soccer player Neymar um and uh yeah I want to get I just yeah I mean many many

takes here I think I've got a lot thoughts, but curious to hear how just when you guys saw this news come out. I mean, it comes in about a week after a parted ways or abandoned Lens and someone else mask Network I think bought Lens. So, it's kind of backtoback. The two most promising probably decentralized social experiments uh of the last couple years are are now shut down or have now been acquired. So, what do you guys what do you guys think about this? I read Dan's post. Was it an acquisition or was it some sort of weird transaction here?

>> I mean, look, NAR raised $14 million, I think, and Farcasters raised 180 million. So, there's there's something going on. >> How does the fish eat the whale here? >> The fish ate the whale. The fish ate the whale. >> Great book, by the way. I just that's my content of the week. But anyway, uh yeah, I don't know how they funded this or how it was like they folded some assets. maybe was some sort of tax structuring deal here for folks, but it just Yeah. If anyone has details, I don't >> Rob, do you know? >> Yeah, >> I don't I don't know the details of the how the transaction was structured. I mean, I I I think my only main takeaway here is like, you know, RIP web 3, you know, 2021 to to to 2026, right? And now, you know, I think everyone's come

to the understanding that blockchains, what blockchains are good at and what they're not good at. And you know what people what what allows for a better product and how do people build better product is on blockchains it's probably not going to be social uh it's probably going to be financial applications >> capital markets. Yeah. >> Yeah. And so I think it's >> or if it is social it starts first with financialization and then you stem into maybe a little bit more social. >> Well yeah like like Poly Market is a social platform. people talk about poly market when they're on poly market but it's it's you know it's social with a financial aspect to it right the I I mean the forecaster guys I think Dan announced what was it only two weeks ago

that they were like going to focus on trading now right and so like they had already given up on it and so I don't know if this deal was already in the works then I would have assumed it was considering how close it was but but we're starting to see you know clearly uh an understanding and a lot of consolidation around the ideas that people know are working. >> Also comes at a time where crypto Twitter is dead. >> Yeah. I mean, Aikita's trying to kill it. >> Public enemy number one. >> Do you guys think uh do you guys think so decentralized social's dead? Like would you Rob, would you would you even consider funding one of these? Santi, would you invest?

>> We have never funded decentralized social uh business because we've never believed in it and uh I definitely am not changing my mind today. So, uh, listen, we fund really good entrepreneurs. So, I never say never to anything. If what an entrepreneur came to me who I thought was incredible and said, "Hey, listen. I have an idea. It's kind of wacky. I want to do something in social." Would I potentially fund it if I thought that entrepreneur was great? Sure. Uh, is that a category where I'm actively looking to see deals and I want to talk to entrepreneurs building there? No. Mhm.

I was talking to the other obvious category here is so I I I was an investor lens uh more so like you know relationship and longtime a you know supporter or whatnot. Um I sized it appropriately I would say. Um I think the category is tough like like gaming as an example. I was talking to someone the other day about it like look I I made a number of investments in in gaming. Some of them did phenomenally well uh others that did not. the category as a whole has come down and and it's a time where like it's grave dancing. It's like you should have never invested in this. I would say it pays to have an open mind a if the technology evolves because prediction markets were like this like in 2020 in 2019 2018 like

after augur died and even Nosis like everyone was like discounting prediction markets and then Shane comes along you needed to have like an unwavering founder. Um, but also you needed enough stable coins because without stable coins, prediction markets don't work. You can't do betting without a stable unit of account. Uh, so it pays to rewrite thesis under new environment. You could argue is there going to be a new environment like a higher throughput blockchain or something. I don't really know if it's going to be a technological breakthrough. Um, but gaming for instance, it's like you have to I think tease out like why why is gaming not worked? like Axi. You could argue Axi was more like uh DeFi with a veneer of

of gaming, but it wasn't really fun to play. So therefore, you can't call it a game. It's kind of like DeFi. Uh it was like it's like yield farming like yams, you know? That was that was [ __ ] fun. You didn't have to learn anything. You just have to click two buttons and you would be, you know, farming. Uh Axi required a little bit more work. And so at some point it didn't have enough supply. But but also you have to consider like gaming as a category outside of web 3 is also in a really tough spot. Like the fast casual category is kind of dead. There's only very few games that like look at Zingga stock crushed. Like unless you're like Grand Theft Auto, Call of Duty and maybe one other two franchises you you basically incinerated money. Uh, it's kind of like movies, you know, unlike

Rob who's like investing in in GoFundMe campaigns for movies, most people don't make money on the category. So, so I want to like just I think you got to contextualize it. I don't think social like the what what do you call it? Decentralized social is dead. I think we got to probably rethink of how how you get to a network, a social network. And I think the go to market just was failed, was broken, didn't work for a variety of reasons. You ran out of money. Um, but I I I I would I would probably take be a bit more aggressive, which is I'm probably going to fund another decentralized social application in the next 5 years. And I hope it kind of works because, you know, and it may be that it stems out of

something that already exists, you know, but who knows? >> Yeah. I mean, you shouldn't at some point some of these things will probably work just like a lot of the tokenization stuff is working now, but you know, you guys remember all the 2017, 2018, 2019 like ridicul I I had basically written off remember security tokens, STOs and Harbor, if you guys remember Harbor >> Harbor, >> who Bitco ended up buying Harbor. Um, >> yeah, it was just like a a wasteland of company and now it's the hottest thing now. It's the reason BO is going public.

So >> dude, >> also I mean forget about decentralized social. Social as a category is also really hard like gaming. Like it's >> remember Vine. Did you guys ever use Vine? >> Yeah. >> Yeah. >> Remember if you if you wrote off short form video after Vine kind of had like a failed exit uh you know then you don't get >> Yeah. Exactly. >> Yeah. Yeah. >> All right, folks. Um anything else? Any other news we missed? Uh New York Stock Exchange launched their tokenized platform. Uh, Gusto, we we actually used to use Gusto HR platform. They're rolling out stable coin payments. Deal did the same. Um, I thought Interactive Brokers had some interesting comments around prediction markets. Robbie, you mentioned that. Bermuda is fully moving

onchain with Coinbase and Circle trying to become the first >> uh place for first fully onchain national economy. I thought that was interesting. Both Larry Frink and Trump mentioned crypto at the uh World Economic Forum. So, >> uh, the B >> Did you Larry Fin Larry Frinks comments were incredible. Did you >> Larry's comments were amazing. Rob, do you >> Yeah, >> I don't know if you have the tweet pulled or his talk pulled up, but >> uh, I don't. >> He said I can try to find it quickly. I mean he essentially said that every single country on earth should be focused on bringing all assets on blockchains coordinating across a single

blockchain tokenization >> stable coins. He was basically saying right now the you know largest economies in the world are trailing Brazil and India and this is a should be a national priority for all of us here at the world economic forum because it'll make it uh it'll create GDP it'll make it easier for us to you know trade cross border it'll uh reduce the amount of you know inefficiency that exists in the market and it allows for less fraud allows for you know less uh waste essentially and he was like everybody should be doing this. it should be, you know, what you're focused on right now. And and for him to go up there at the World Economic Forum and say that so explicitly, I just

it still feels like people do not understand the gravity of what is happening in that part of the market just because you know whatever some meme coins not going up 100x. >> Two years ago, that would have been taboo. Now it's surreal like just the largest financial company in the world doing that, right? or one of the largest. >> Crazy. >> Yeah. Good place to end it with hope. >> Content of the week. Santi, you've got you're talking bananas. I know that book, >> dude. Dude, so apparent I'm going to pivot, guys. I'm going to go bananas are fantastic businesses. I mean, my god, I've been surprised. They grow extremely quickly. They grow so fast that they make noise in the middle of the night

and they produce year round. It's a crop that is incredibly The yield is very high. So anyways, people should go read this book, >> but they spoil too quickly and that means there's opportunity and with Samuel, what's his name? Zam Zamurai or something Zurray. >> Oh, I think it's one of the best. It's like that and Shoe Dog are like two of the best entrepreneurial books of all time. >> People should go read it. It's the fish that ate the whale. How this guy basically built a banana empire. I really enjoyed the book. Again, I'm mostly off social media these days. I'm just reading old school books. Um, history does not repeat itself, but it definitely rhymes. It's just a great a great story about just finding a com It checks a lot of the box. It's a

commodity industry. It's tough, but a guy building incredible value on like building a better supply chain for for obviously a pure good. So, anyways, great book. >> He would a pre quick preview of it for people who haven't listened is banana companies at the time would when a when bananas would spoil because they grow really quickly, but they also spoil quickly and they get too ripe. So he would take the ones that were about to be too ripe and he'd take them and then go resell them and he started this whole banana empire and he he ended up what overthrowing the government of uh Nicar was it Nicaragua. >> It was he just Yeah. I mean this this he's kind of was the guy that like coined banana countries and like the US the CIA got involved the the US and >> crazy story. Crazy story.

>> Yeah. Pretty pretty awesome story. >> Rob, what do you got for us? So, I I just want to preface this. Today's actually a big day, which I think you guys don't realize. This is a really important day for me. Uh, today was Oscar noms day. So, all of the Oscar noms came out this morning. And I I hold a big Oscars party every year. I I I really enjoy the Oscars. >> Thank you for the invite. >> Yeah, they haven't gone out yet. >> Look in my spam folder. Thank you for the invite. >> Not till March 15th. So, you know, check it out. Maybe maybe you'll get invited if you are nicer to me on the next pod.

But but uh on the I'm gonna call out an older movie because I don't know if anyone here has seen Sinners. It came out like last February, but it shattered the record for the most Oscar nominations ever. >> Wow. >> And it's um you know, it's a movie. Michael B. Jordan's in it. where he plays kind of these twin brothers who are I think it's supposed to be set in the 20s and they come back to you know their hometown in the south from Chicago and they try to set up kind of a um like a dance hall you know kind of bar area during the prohibition area >> and they um uh it's like an action movie there's you know I won't I won't spoil it if you haven't seen it really good

movie for that type of movie to like shatter like Titanic for the amount Oscar nom 16. It's actually crazy. >> I want to be nostalgic about old movies, but is there this phenomenon that it feel it's always like is move is music not getting better and you're nostalgic about Avichi and like nothing ever came close to Avichi? Like does every ex like as we grow older, do we grow nostalgic or and and we have an opinion that like new content is just not as good or is the voting just gone wrong or like do you actually think it's better? is better than Titanic.

>> You know, I actually rewatched Titanic on a on a airplane recently. I hadn't seen it in a while. Titanic is still good. >> No, no, I didn't cry. But I Every time I watch Titanic, I look at the end and I'm like, why didn't she like try to make room for him on the door? Like, why did she let him stay in the water? Like, what is happening? >> But, uh, no, Titanic is still great. It's still a very good movie. >> Uh, James Canron, shout out. like nobody has made more money and by like multiples than he has in uh in in Hollywood. But I listen I really like centers. I did not think it would do this. I mean also Formula 1 F1 the movie got a best picture nom. I also really enjoyed that.

>> That's a horrible That's a horrible take. That's that was a trash. >> It did get a It got a best picture. >> That was a trash that was a trash. That was a trash film. >> Discussion resolved. The committee and the nominations are there's no >> This is my point. There was a lot of kind of weird stuff relative to what the Academy was like previously that's been happening. And so I think it'll be an interesting >> Oscars. I'm I think we'll see, you know, at the Grammys or was it the Grammys or was the Golden Globes? We saw Polymarket predictions at the Golden Globes.

Hopefully we see them at the Oscars, too. Um so that's my my content of the week is go watch Sinners historic Oscar nomination, 16 of them. It's great. >> Who did you see? Marty Supreme. >> I did. I um >> Or did we talk about this two episodes ago? Yeah. Yeah, >> we we No, I don't think we did because I I saw it and I expected to like it a lot and then I just could not like a single character. Every character in that movie is uh just a terrible person and like completely unlikable. And because of that, I just couldn't I I just I just thought it wasn't as believable as I didn't relate to it as much as I would have liked.

>> Interesting. Isn't uh Kevin Olri in it? You didn't like Kevin. >> Yeah, this is good for Kevin. He's got, you know, multiple sources of income. You know, he's trying to things maybe things are tough and and uh Mr. Wonderful land. So, >> yeah, maybe not so wonderful. >> You're gonna get people to shout at you across the table on dinners. All right. So, this is our cue to starting it. >> Yeah, I've got a podcast Toby on uh David Senra. Amazing episode. Um I will Yeah, amazing episode. There's also a podcast called Step Change, which is uh they do these like 4hour deep dives.

It's it's uh in the same I don't know if you guys like Acquired, but in the same way that Acquired does these like huge deep dives into companies, they do huge deep dives into industries and sectors. So, they did one on coal. I realized I knew very little about coal. It's like five hours on coal, the whole history of coal. Thought that was good. And then there's one on data centers that they came out with a couple months ago that I've heard is fantastic. It's uh looking at now four and a half hours on data centers. So, >> wow, >> good stuff. >> All right, folks. Good chattering. We have really good episodes coming out. We just dropped uh we did one with the lighter founder Vlad. Um we've got Rain.

Uh oh, we actually have three coming out. I forgot I'm recording with Belshi tomorrow. So, we've got Belshi coming out on Monday. >> Ask him about my opinion. See what he >> was say. Hopefully he doesn't >> all starts making a whole lot of sense now. I was gonna say hopefully he doesn't uh hopefully he doesn't listen this episode. So we've got Belshi coming out on Monday. Then we've got the founder of Rain um who Rob has been mentioning many times. Really hot, one of the fastest growing probably fintexs in the world right now. Unbelievable conversation with their CTO. Um and then we've got a really good episode on vaults with uh uh two yeah two probably two of the best people to talk vaults.

So very excited about that. Listen on Monday and we'll see you next week for the Friday roundup. All right. >> Thanks, guys. >> Cheers. Thanks, guys.