Was Coinbase's Echo Acquisition a Good Deal? | Weekly Roundup

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think if you want a oneline summary of this deal, it is it is this Coinbase needs to become the place for capital formation or said said differently, right? They they need to become they need to control where new tokens are born. Um it's not clear to me that like Coinbase the exchange needs to own a crowdfunding platform and maybe I am at curfeing it but like every time the companies like raise a big round and every time they stall out and don't do well like and so maybe like you know now is different but if I take a look at the last 15 years of of of investing like this is the same thing that has caused people issues and the same trap that people have fall into for 15 years.

>> Rob this time look at me this time is different. Okay. Okay, >> this episode is brought to you by Block Damon. You'll hear more about them later in today's episode. 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 Blockworks. Our hosts, guests, and the Block Works team may hold positions in the companies, funds, or projects discussed.

All right, everyone. Welcome back to the roundup. We have Rob and Santi. Rob been traveling back to back, looking refreshed. Santi, looking refreshed as always. Me, not so much. But Santi, Rob, what's going on, guys? >> Excited to be home back in New York. >> Yeah, dude. You got to get off the planes man. I'm >> I'm with you. I think everyone agrees. Santi, >> how you doing? Good, man. You know, refreshed, too. Busy week last week. Rob and I uh were in London as you as were you and then I headed off to Amsterdam and back home. Man, it's exciting.

>> Nice. What's in Amsterdam? >> We there was a this fund of funds called Theta Europe. You know, I think I talked about in the last pod, but yeah, they they put together a nice >> Oh, theta's event. Yeah, of course. >> Yeah. >> Yeah, >> that was good. >> Um Santi, you guys are hiring like crazy. Can we get a quick inversion update? >> Yes, sir. Biggest priority for me hiring um technical talent, head of engineering, it's it's been hard to fill to be honest. Like we have a very good understanding of what we want to build for the inversion chain. Um and we're holding the bar high. Look, the reality is we don't like we're very focused on acquiring our first business. We've done a lot of work there. We've done probably

looked at 30 companies deep like with a with a close look. So we have a really good understanding of what we want to build. So it's a right time to bring engineering leader uh and a couple other folks. Um what we don't want to do is I tweeted about this earlier this week is you know we don't need another chain with empty blocks. The whole reason for inversion exists is to bring quality supply quality demand for block space. And so now is the right time to go and start building the inversion chain in parallel because we do have a lot of line of sight into the companies that we're going to acquire and the core functionality that needs to live on the chain. So we have really good candidates but of course if people want to join you

know go to our website we have or even on our Twitter X uh profile we have all the jobs. >> Nice. >> So it's a head of engineering a forward deployed engineer is also a role that we're looking for maybe a little bit different than your typical crypto company. Um, so I quite literally am like spending more time on LinkedIn just DMing people that I think are like a lot of like I think Palanteer is a really good company that has FDES that type of profile >> cuz you know these guys get deployed in the battlefield and just like work >> it's like working with it's so different from what the crypto industry has done which is let's build something and hope someone comes. No, it's like no let's go be deployed in the end customer and work backwards and build.

>> Yeah, it's an extremely sticky extremely sticky model. It's funny. I've I've Uh, I've heard Alex talk about Alex Karp, the CEO of Palanteer. So PE, if people don't know, they have this FDE model for deployed engineer model where they actually almost like port their engineers into their customers companies and the engineers go work at the customer companies. And investors in the early days really didn't like it because it was very service-based business, right? It's very very human intensive. What investors didn't realize is it makes you much much much stickier. Um, and you basically make it so you can't rip out the product. So that's great. The last two things I'll say >> just to be clear like like that's also happening now in stable coins. It's also happening now in AI, right? Like corporates and enterprises, they don't really understand or they don't really

have like the talent to figure out how these like new technologies are actually going to disrupt their business and how to really deploy it. And so we're starting to see a lot of like, you know, the Palunteer model for AI, the Palunteer model for stable coins. It's happening everywhere across all industries now. >> Yeah. So again, we've been fortunate. We've hired a couple like we've um interviewed uh a bunch of folks and a lot of what we hear is folks that have been crypto curious and said, "Gosh, this actually now fundamentally makes sense cuz it's a company that like you're going to be focused on implementing this technology beyond the casino." And it's like very refreshing.

So we keep hearing that over and over. So yeah, if you're like an FTE at some of these companies um and have always been crypto curious, like this is the company for you. So apply. I want to meet you. >> There you go. There you go. All right. There's your ad for version. Um, >> thank you. >> Let's talk about some big acquisitions. So, there are two big acquisitions this week. Um, Coinbase bought Echo. We had Sean, the uh, chief business officer, also runs ventures and M&A had Coinbase on the podcast. If you guys haven't listened, go listen to that. Uh, he talks about the Echo deal. Um, but I'd love to get your guys' take on that. I'd also love to hear um, you guys talk about 21 shares and the Falcon X acquisition. I think this one got a lot less uh less interest on crypto Twitter

because, you know, it wasn't Kobe's company, but 21 Shar has been around for a while. Uh they're the first and I think the largest crypto ETP issuer. Um and they uh yeah, Falcon X scooped them up. So Santi, Rob, where do you guys want to start? Which deal? >> Should we start on the Echo one because I think that's probably what more of our listeners >> talk. I' Yeah, I'd love to get your take on that. >> Yeah. So, I'm going to be my guess is a little more bearish on it than uh probably everyone else, right? So, like the vast majority of people, you know, or the vast majority of like conversations that I've heard uh about it and tweets that I've seen about it have been like very excited, right? And I think I come at it from a perspective

of what has happened in crowdfunding over the last 30 years, right? And we've seen a lot of crowdfunding startups starting, you know, with things like Angel List and with things like Cedars and with things like Republic. >> Yeah. And, you know, for a long period of time. >> And what always happens in these crowdfunding startups is that they get a lot of interest early when they have um a niche that they were able to dominate. They're able to offer some sort of, you know, really differentiated access for a couple of deals, right? People get really excited. A lot of these companies

have raised a lot of money. The VCs are getting excited and then they have to scale. They have to scale into the VC capital. They have to scale into, you know, a business that can be standalone and not just doing a few deals. And it always becomes adverse selection every single time. And the reason it becomes adverse selection is because while there are always a few deals, there are a few companies or a few protocols that want to raise decent amounts of money in these like crowdfunding ways, >> there is not enough of them. The incentives are not there to raise an amount of capital that makes for a great business otherwise, right? And so what we've seen is a a you know a lot of

these businesses angelist and and republic you know they raise up these valuations you know a billion-ish dollars and they kind of stall there right and there's like it's really hard for them to make that next step. If you look at Ekko Kobe's done an incredible job uh being an evangelist obviously there's been a couple of good deals on Echko that people have been very excited about me being one of them. uh Plasma was on on SE as well, right, which is an Echo brand, right? So, there's been a few of those, but if you look at the history of Echko and most of those deals, almost all of them have like lingered out there, have not done particularly well. Like, they have been had a really really hard time um getting the amount of capital. Most people have lost money. A lot of the conversation on

Twitter has been like, "Listen, these aren't, you know, doing particularly well or haven't made money anyways." and it's raised about $200 million for projects and they paid what it was I think equivalent of like 400 million you know if you include the up only NFTt right and so it's hard for me to see how Coinbase gets the ROI on that deal based on like going and and Santi I can see him smiling so maybe he's going to disagree with me but how they get the ROI on that deal to like build it into a big business right and so I don't know Oh >> yeah, congratulations to Kobe. Like I the Coinbase guys have done a lot of M&A this year. I mean the Darebit deal, you

know, there's the rumored BBNK deal if that happens and they win that. There's a lot of the, you know, kind of smaller deals that they've done. They're one of the most inquisitive companies in the world. They've been very very thoughtful about this. But my the history of how I have seen these types of things happen. And I history does not repeat but it rhymes. Makes me think that even with the synergy value here and maybe some crosselling with bass that this will likely be one of those things we look back on and we'll be kind of like eh like what what really happened there. >> Rob I think you're m curving it man like okay co Kobe as a as a HR currency is probably worth more from a brand perspective than 400 million.

>> You think that's true? >> Yeah. Yeah. For sure. He's like the most He's the most rec the most influential person in crypto bar none. >> Yep. >> How much how much how much do you think Kobe as a recognizable person brings? Like you think he brings new users to Coinbase? You think he brings new volume? >> Everything he brings new users, he bring he like the perception of Coinbase within the crypto industry is vastly improved. Um look, I compare it to Binance. Binance has the Binance launchpad, right? And that's what's made Binance and the demand for B&B so interesting. Um you could argue that a lot of projects that have gone through Binance Launchpad have initial success and then have tapered off much like a

lot of alts. But you know the launchpad has made Binance um the platform that it is today the largest financial service you know fint company in the world. But just to be clear about the launchpad, they take a bunch of free tokens from the uh from the you know these protocols and they make everything that wants to be listed on Binance go through Binance Launchpad, right? Coinbase is not going to do that. >> But it but it actually ultimately helps Coinbase a lot. So let's say Echo is real. Okay, so the first thing that this does you could in the moment did they overpay? Possibly. Did Stripe overpay for bridge a billion dollars, right?

Everyone said they overpaid. Actually, Santi, you were one of the few people who were saying at the time they they didn't overpay. What it did, if you talk to Stripe people internally, is it told the world that Stripe was into crypto. And what the Echo acquisition does is it tells the world you can go fund raise on Coinbase. You can fund raise on Coinbase. So you maybe you buy the tech for 50 million, you buy co you buy Kobe for 50 million, and then you do a $300 million this is a $300 million marketing campaign to say come launch come fund raise and launch on Coinbase. And then actually what ends up happening here is if you successfully launch a token on Echko or Coinbase's Launchpad, you're Coinbase is way likelier than Binance and Bybit and all these other guys, Mexi to be the dominant venue for that pair,

right? So Santi launches, you know, Inversioncoin using Echko. The USDC >> uh in invertcoin pair is way like more likely to be the volume is going to be generated on Coinbase now. Uh, and then you can you can do things like early incentives and all this kind of stuff. >> Let me run through a quick math. Okay, Coinbase is an $86 billion company. They paid 400 million for this thing. That is4% 47% of their total, you know, equity value, right? They pay all cash or what have you. The other component, so it's like from a acquisition perspective, small. Now, again, you got to look at it from just pure ROI. Is this actually going to pay for itself? Jana, what you're saying, if you look at it from a marketing expense standpoint, Kobe being

the brand that he is, I think it cleans up a lot. Having Kobe within that organization just immediately lends so much more credibility to Coinbase within the crypto industry um on the retail side now, >> do you think Coinbase needed more credibility in the crypto industry retail? >> Glass half full or or glass half or a glass half empty? It's sort of one of those things where you need to you either need to maintain market share or you need to maintain relevance. I think they maintain relevance by bringing Kobe for sure. I mean, Coinbase has spent 250 million in Q1 alone in sales and marketing.

>> Let me pull up this quote. So, there's this this tweet by Dave David Rodriguez, Effort Cap, um, who runs Blockworks' advisory business. He said this, this is back in May. First time in years I'm unsure about Coinbase's competitive position and growth potential. Robin Hood has better distribution among retail traders. Stripe and Meta have better distribution among merchants and normal consumers in terms of stable coin usage. The bet is on the integrated offering working out or winning out. The bet is largely on CDP plus base. Um, Coinbase needs to accelerate the tokenized equities and IPOs, ICOs on base. It needs to become the place for capital formation. That should be priority number one. And I think if you want a oneline summary of this deal, it is it is this Coinbase needs to become the place for capital formation or said

said differently, right? They they need to become they need to control where new tokens are born. And that's >> I listen I just don't think it changes the way people like like the incentives are still wrong, right? Like they're what we're talking about here is a complete reimagination of the incentives and the way projects think about raising capital, right? If you go look at what has happened on Echko, who raises money on Echko? The people who raised from good VCs, right? Like those are the people who raise money on Echo, not the other projects, right? If you're a a new project that wants to regular raise capital and you go and put your that on echo that has time and again those deals have not gotten funded right the what happens every time that somebody goes to

any and this is not an echo specific point so I don't mean to be I mean this is the the topic but this is just crowdfunding time and again there's information asymmetry and there is misaligned incentives the information asymmetry means that the people who buy these things do one of two things we used to see this on coin list uh and and Binance launch has the same They either buy every single offering because they think it's like structurally like you know kind of underpriced and that you know if they buy every single offering they're buying a lottery ticket and they'll make money over time or if it's not that they buy every offering and they think these things are not necessarily just structurally mispriced then they look for the things that have signals that they are good and the signals that they are good really the

only thing that that people are using right now is did the VCs do the deal like that that is the number one correlated thing that there's other people doing Echo. So, if Coinbase is going to say, "Okay, well, like we're going to take projects and we're going to do like a pre-listing deal in the same way that Binance Launchpad's going to do it and we're going to make them do this here." Like, I'm with you. Like, that builds community, right? If this is going to be a standalone, you know, capital formation vehicle on base that also that, you know, also includes traditional crowdfunding, it's going to be the same as all the other crowdfunding because you as a uh as a founder do not want 400 people on your cap table. Okay? So, you put them into

an SPV, but you also don't want all those people, you know, necessarily tweeting on you, tweeting at you. and maybe you want to go and do okay like a um you know a little bit on on on the then the crowdfunding platform but it's not going to be a real big part of your capital formation over time because you're going to need the bigger checks and you're going to get the bigger checks from from the people who help >> you're really making a comment on uh on on uh crowdfunding platforms in general right which which I agree with. You have adverse selection which is if you go on Republic or uh Angel List or any of these it's the bad deals. It's because Andre passed and Sequoia passed and Dragonfly passed or like all the web two funds passed. So then you have to go to

the crowdfunding platforms. It does seem like crypto though has been different. You have good deals on Echko which you shouldn't see good deals on crowdfunding platforms usually. >> You you have a couple good deals and and you see that on I mean like Republic has like a SpaceX deal, right? Like there there are a couple good deals and that those continue to exist. But um you know I I haven't looked at all of the deals on Echko, but I'm in a number of the groups just to kind of monitor what goes on. And like I would bet you the good deals are 1%. 2%. Right? If you look at all the deals that happen, they've raised $200 million in total over time.

Like the ones that I know of that have sold out and been exciting are Mega Eith GT and Plasma, right? I don't know if any of those have like sold out quickly. I'm sure some have and I'm missing some. So >> Plasma Yeah. Plasma and Mega were the two I was thinking of. >> Yeah. Yeah, >> right. And I know GT sold out really quickly too. Um, but like then you look at >> what do you do then Rob if you're Coinbase because everyone so you have Legion, right? Legion's going to horizontally integrate across all the exchanges, right? They've done it with Krak and you got to imagine they do it with a bunch of other exchanges. Do you just not and then you've got the launchpads going up, right? You got Pump Fund now has Pump Swap. Like what do you just if you're Coinbase here, do you

just sit out of that game? I well number one I don't like like I I think to the point around um like the tech itself like I don't know if you actually need to acquire somebody they're they're definitely acquiring Kobe and the brand right and I think to Sandi's point like that's that's very clear um they certainly could have built a similar product themselves for less than they spent uh on this but um I I I don't know if it's clear to me that they need to be in this game right like I mean um Robin Hood has democratized access to IPOs that's interesting Right.

So if I again if I if I take traditional um sort of a a corlary here like I think it is interesting to get more people more access to something but do you need to go and buy a large launchpad and then you try to do crowdfunding to be able to offer people you know access for like new listings like kind of not really. they can do the same thing around like community building on base and they can they could do I mean they have launchpads on base today that are like you know pump fund uh competitors right and so >> um it's not clear to me that like Coinbase the exchange needs to own a crowdfunding platform and if that really offers uh much and and to me so I I don't know and maybe I am at curfing it but like I um I feel like I I mean you

guys know right I've invested across fintech for a while and I feel like every 3 years I've seen this like excitement around crowdfunding happen and every time the companies like raise a big round and every time they stall out and don't do well like and so maybe like you know now is different but if I take a look at the last 15 years of of of investing like this is the same thing that has caused people issues and the same trap that people have fallen into for 15 years. >> Rob this time look at me this time is different. Okay. >> Okay. >> I have no by the way I have no no skin.

Kobe came to me back in the day when he was building it. Look, I love seeing someone that has done so much with space win. I love it. >> Of course. Yeah, >> the NFT is something that God I I immediately sent was like, "What the are we doing?" >> Dude, I'm I'm hearing that Rob against Kobe. Rob is Rob doesn't like Kobe one time. >> No, no, no. Of course, I like I'm I'm happy for him. >> I'll I'll give you some inside scoop. Right. When I was raising uh for Inversion, obviously Dragonfly is a lead. We talked about echo like cuz you know Rob like mega which is relevant for this mega ETH did around >> you want to you want to you want to involve the community I think really good projects like plasma and and and and mega mega is now doing an ICO like

yo let's uh let's talk about that and uh you know it's it's a good platform legion I don't know if there's like I would be agreeing with Rob like I'm bearish on like 10 crowd like platforms like it's like all right like >> at some point that business does not on its own stand I smart of Kobe to sell it because I I would have struggled to see much more. I think with the good distribution that Coinbase has, you could probably like get more excited about doing something more productive with that asset with the brand that it has created, you're selling it at probably the best time. You just had like you you gave access people access to the seed round of plasma that that crowd is really happy.

>> Yeah. >> And Sonar is, you know, giving if ICOs are going to be back, we should talk about that in this pod. >> You know, something interesting, right? an asset that probably fits in at Coinbase and becoming more of bro. The last thing I'll say in this, go look at equity research reports on Coinbase. The biggest concern is the fees that they're getting on on retail are going to get squeezed. Like it's just going to get more competitive. You have you Asian-based exchanges, which your guys are investors in Rob coming to the US. So like it's you got to defend that position somehow maintain relevance. So that's what I'm saying.

Like you look at the sales and marketing expense at Coinbase, it's spending like 300 million bucks a quarter. god knows where. I don't know, like maybe some Formula 1 cars. The ROI in that marketing spend likely higher acquiring this asset than spending it in, I don't know, some weird ads. >> Yeah. >> Yeah. I guess I guess my I listen, I'm happy for Kobe. Um I also think the fact that he's sold probably tells you something about how he thinks about his standalone prospects relative to uh the combined prospects, right? Um I think Coinbase has been a really good acquirer so far. Uh I do think there's a question around their ability to do all of these integrations. Um it is hard doing integrating uh M&A and you know Darabit uh and if the BBNK thing happens which

people have t which you know obviously has been in the news um in this deal and all everything else like it's really really difficult to do that. Um and so I think there's some question around that. But I listen, I don't disagree that something like Echko makes more sense in the, you know, full product offering of of Coinbase. Um, and so maybe the ROI is there from a marketing perspective. I sort of believed that like, and maybe this is wrong, so you it sounds like you believe differently, but I sort of believe that for them, the goal needs to be competing against Robin Hood with non-crypto natives, not winning more crypto natives. Um though that said, I mean we obviously, you know, an hour ago

we got CC got pardoned and we'll probably get, you know, Binance US back. So, uh maybe it's, you know, defensive against against that crowd. >> So, I've had the I I want I want to make Empire titles just really unhinged because we just have the normal podcast titles of like, you know, roundup like we talk about this acquisition. I think the title of this episode should be Rob, why Rob hates Kobe. And uh >> listen, listen listen, let me tell you something. Let me tell you something. You can't. I'm gonna defend Rob. I'll always defend Rob because I don't want Rob to be picked apart by Kobe. It's like It's like It's like >> I got into a beef with Kobe about it.

>> I will never do that again. >> I I can't Rob I can't have Rob foul out of favor. He's doing such a good job evangelizing stable coins for all of us. >> Yeah. Rob Rob, you're in right now. You're You've got you got good favor. Don't >> I >> don't change. I got to tell you, I got to tell you, you know, we had that, we started the last pod about, you know, somebody coming up to me at a conference. Um, somebody came up to me at the Fed literally two days ago. I was at the Fed, came up to me, referenced us having that conversation about somebody coming up to me at a different conference about my time on this podcast and said, "I agree." So, listen, I'm uh I'm in.

>> Your takes are good, but your co-hosts are so handsome. I I'm really loving our I started watching on YouTube. Yeah. >> Do Do we want to move on? M&A right now. Do we want to keep doing M&A? >> Oh, yeah. Let's talk about 21 shares. Yeah. Yeah. So, so, uh, Falcon XOT 21 shares. So, 21 Shares, um, it's funny actually, they were one of the first companies ever to spend money with Blockworks. Is founded by this guy Hani Hani Rashwan as well as his co-founder Oilia Snyder. I think it was built in 2018, uh, or they founded it in 2018. They have over 12 billion of assets. They were the, uh, I think they were the first provider of crypto ETPs. um 12 12 billion of assets, over 50 different crypto ETPs. They have two companies. Um they have 21 co which is the holding

company. Then they have 21 shares and 21 technologies. Um raised a big round a couple years ago. I think around like one and a half or two or two and a half billion. Uh 21 shares uh is the asset management business, right? ETP issuance, investor products. 21 technologies develops uh like tokenized products, institutional risk management systems, things like that. So um I think BalconX bought it all um if I if I got that correctly. Actually, fun story about 21 co if you guys remember JP Morgan had Onyx, the Onyx blockchain. Um they had to change it to to Kexus. I think that's because 21CO has a got got there first and has an Onyx OS system.

But anyways, yeah, big acquisition by Kraken. Um curious what you guys think of this one. >> No, listen I think um for Falcon X, you know, we're shareholders there and so um you know I I didn't know the specific deal was happening but I know they've been thinking about being inquisitive. Um they're you know they are probably the largest uh alongside you know a couple of others in terms of like providing like institutional quality you know financial services to the crypto space right they've you know they're have the OTC desk they have you know uh direct market access they have the the lending business um they're also been doing they had an acquisition last year on the FX

side trying to do like fiat stable coin FX this is clearly like another you know um deal where they're trying to provide to their core client base some other type of you know financial product. Um I think you know that horizontal expansion for them is really around trying to you know kind of open up the aperture so that in any market environment they are able to monetize they are able to serve their clients. Um I think it's a good deal for the 21 shares guys at a time when uh they were probably losing a little bit of steam on a relative basis. Obviously in Europe they've been dominating, but the US market is getting bigger. We're about to see a lot more uh ETF issuers here. I don't think they've had the same success

in the US in the same way. Um and so um I think it's a uh you know interesting deal for everyone and you know I think um for Falcon X as they think about getting bigger and potentially as a uh you know a public company someday you know this allows for them to continue to uh open up that aperture. So makes sense. um wasn't surprising to me in so much as this is the type of deal that they would do. And I think um you know I don't know I don't have a lot more to say about it than that to be honest. I think by the way I'm reading about it now they bought just 21 shares not 21 technologies but across 30 plus networks and 180 endpoints block Damon earnst stack unites staking and defy into a

single institutional toolkit for crypto rewards with multi-layered security full asset control and 247 support Damon Earnstack is built for scale and regulatory clarity non-custodial staking and seamless DeFi access allin One stack direct access to DeFi with no intermediate smart contract or vaults. To book a demo, make sure to click the link in the show notes or head over to Block Damon Earnstack to find out more. Thanks to BlockDamon for making today's episode possible. The machine economy is here. Devices are monetizing data for their users all over the world.

Tokenized robots are generating revenue for token holders. The first machine economy free zone is live in the Emirates and it's all happening on peak. the machine economy computer. Head to peak.xyz, that's peaq.xyz to find out how you can benefit from the age of automation or click the link in the show notes to find out more. As always, investments in blockchain technology involve risk terms and conditions apply. Anyways, um Rob, tell us about the Fed conference. What What was this Fed? It was a Fed Fed payments Federal Reserve payments innovation conference. Um I would love to hear how first off, who was there? what were the conversations like and how much it was a payments conference, right? Not a crypto

conference. So, how much were payments and stable coins in the conversation? >> Yeah. So, um and just as we're wrapping up M&A, actually, it's going to it's going to um relate a little bit to uh to this to to the payments innovation conference at the Fed. Um but one of the guys that was there was the uh CEO of Modern Treasury. Um on the M&A side, too. We also saw Modern Treasury buy a stable coin business yesterday called Beam Cash. >> What does Modern Treasury do? um modern treasury I actually don't know the business that well um but it's primarily like SMB um the uh focus like uh like I think like bank account like treasury management services uh things like that um but I I actually don't I don't know Santi if you're you're super

deep on modern treasury >> is it move money instantly move fiat and stable coins with APIs proven on 300 billion of payments they do payments ledgers huh yeah that's cool Yeah, I mean it's it's really SMB focused. Um I think it's mostly a domestic product. Um they you know a lot of you know APIs for like how to manage your your uh your business here. Um but they bought a thing called Beamcash uh run by a guy called Dan Modis uh who out of Visa who is doing kind of like stable coin uh orchestration and and ramps. Um so just another you know kind of traditional you know payments business moving into into you know offering more stable coins. So I think that that was interesting as well. So I wanted to call that out and

congrats to Dan. Um but I think listen so to provide context on the uh on the Fed conference. So it was they were called it was called the payments innovation conference. Now that said it was a uh primarily a call a stable coin and AI focused day. So if you looked at most of the the panel so there's there's four panels. There was a opening remarks by Governor Waller. Um, you know, a lot of networking in between. There's probably 50 or 60 of us there that had been invited. Um, a woman, uh, Sunaya who who is the chief innovation officer at the Fed, I think, helped put it on.

Um, and it was really really focused around what are the things that could happen in emerging technologies that could disrupt payments. And so, you know, you can actually go online right now and you can read Governor Waller's opening statements. uh and he talked a lot about stable coins. He talked a lot about AI. He talked about identic commerce. He talked one of the I think most interesting things things that came out of the day which didn't actually get a lot of news or at least I think the appropriate amount of news was the thing that Governor Waller called the skinny master account. And so it was a talk around um actually providing access to the Fed payment rails without having to

be a full bank. And so, um, for fintexs, for stable coin companies, you could actually theoretically access the similar types of payment rails, um, that the Fed has with banks themselves and access the entire, you know, kind of, uh, network without having to go through the full process of being a, you know, regulated, you know, underfed supervision bank. Um, that is actually an incredibly big deal when we think about the future of fintech and the future of stable coins. Payments accounts are big deals, you're saying?

>> Yeah, exactly. It's an incredibly big deal because right now the entire payments market essentially ends up moving through banks. And so even when you think about like fintexs who allow for uh allow for like crossber payments or domestic payments, usually what they're doing is they're either they're renting a banking license and they're using a federal a bank that's under federal supervision or that has a agreement with a bank that's under federal uh fed supervision uh to go and access federal payment rails. Um often you and and Governor Waller did talk about this a little bit. You wouldn't have full access to what they call the discount window or borrowing. Um, so you wouldn't have access to credit, but it allows for more innovation to happen outside of banks disrupting payments at

fintech companies, at stablecoin companies specifically. And so that was the whole day of the conversation. So it was um a conversation around >> how are banks okay with that happening, Rob? How are banks not up in arms about that? >> I'm not sure banks are okay with it happening. Um, now you know there was a really interesting So everything I think was public because it was all um it was all livereamed. So there was a a couple of interesting panels. There was one with uh the president I believe it was the CEO actually of Fifth Third Bank, right? And so we also had JP Morgan there. You also had B uh BNY Melon. You had a number of others. Um you know JP Morgan has obviously been very active in thinking through uh you know how they used you know stable coins and and blockchain rails with Kexus right BNY

Melon has been a little less active but they've been doing some work and they've been public about it. Fifth third though, you know, this is a a midsize bank that, you know, I think is probably most under attack by this type of innovation, right? And there was some um questions to him specifically around, you know, what does he think they should be doing? Do they have concerns around um you know, things like this skinny master account? And he basically said and and actually the final question to him was do you think the incumbents win and they capture all the value and they're able to bring stable coins into their business or do you think the innovators are able to out innovate the incumbents and the CEO of Fifth Bird Bank was like we understand that we are

under attack and we have to innovate to win and if history it repeats itself the innovators will win not the incumbents Right. He was very clear about that and he was very he was very much saying fifth sees this as imperative to the future of their business. So you're seeing uh in Congress right now a lot of banks push back against the Genius Act, push back against regulation, say that they want there to be, you know, they want to basically control their regulatory mode where Fifth Third was coming out and saying we want to try to innovate because we believe that it is happening regardless, right? And I think that that is likely true. And so it was really

interesting to see the Fed put some of their weight behind this potentially happening. And and just to be clear, I think you can read Governor Waller's uh statement. And he said this is just an idea right now. It's not something that is put into motion, etc. But it's clear that we're moving into an era where people want to be able to innovate around payments and stable coins. And the banks need to adapt or they're going to get passed by. H >> what do you do you guys have an updated view on what happens with the market structure bill >> my my opinion and and Sante I don't know if he has a a point of view um is it's still a pretty long putt to be honest.

So, a lot of the people I was talking to on on Tuesday, many of them were sticking around for um the few days after and you know, maybe we're still in DC yesterday and today >> because there was uh a lot of the there was a basically these roundts that were happening and these conversations that were happening um with uh senators to try to find a middle ground to get market structure passed um where there's a lot of conversation back and forth.

There's, you know, the markups that are happening. It strikes me still that it is unlikely, though not impossible, that it gets passed. There's, I think, less political will now than there was 6 months ago to get this passed. It has become more of a fight than we thought it would. It is a bipart there's bipartisan support and bipartisan against of the current structure of the Clarity Act. And so, you know, really meeting the middle and figuring out exactly how to define what, you know, DeFi is and how it should be regulated has become a really complex problem that I'm not sure people have the will to try to, you know, uh, get past at a time when we still have a

government shutdown. >> Yeah. >> Yeah. >> Let me um, look, I mean, we think that crypto is the center of the universe, but the reality is there's hundreds of bills that want to be passed in the administration. obviously with shutdown, but who are the and maybe it's worth bringing on like a Jake or a Rebecca who are extensively involved in policy. Who are the main guys that like where does this rank in the priorities for for for people that really matter in Congress to get this passed, right? Because a lot of times I mean there's a number of other bills that want to get passed and like there's a pecking order, right? And how important is it, right? We we used to talk about like crypto was important for the election. I think it it it is that you know still the case. Uh how

do things get passed right because a lot of times there could be a lot of lobbying and whatnot but you know if this is not like super important in the grand scheme of things just going to get delayed. I'm just not privy to Jason. You're the political expert here. You're muted sir. >> H tough. the longer it gets delayed, the more I mean, if this flips, if this pushes into 2026, the likelihood that it gets done really drastically goes down, right? Because you start getting the midterms and then yeah, Cong, you know, maybe the House start, you know, starts to change or senate changes like uh I think we should really be going all in trying to get this get this done this year is uh is I think the sentiment on the

ground. It's also interesting. It's not just this bill. like um the CFTC chair. So, it seems like uh Celig was the the lead for the CFTC chair. Um now he just got bumped. It sounds like from folks on in DC, it's sounds like he just got bumped down to commissioner. People have no clue who's going to take over at CFTC now. Like it it feels like a lot of the momentum that we had the last couple of months has has has slowed uh significantly. I don't know if >> are you reading too much, Rob, or in between the lines of like is it because anything specific that the crypto industry has done or you know are events like uh the liquidations uh affecting that? I mean I was on the panel with H your partner and I think it was Matt

Hogan who said like honestly guys like Black Friday doesn't really compute into the thinking of like doing damage whether this thing gets passed or not. people not really focused on that. Do you agree or disagree? >> I don't fully disagree. I mean, Matt probably is is more plugged in Washington than I am. Um, I I think listen, I I agree with Ariano that like I think it has to happen now or like this is just going to get put on the back burner for a long time. There's been a lot of focus on it for the last month specifically. You know, I was in um I was in Jackson Hole in August uh at a at a a fundraiser for for Cynthia Lumis, and she specifically mentioned

that, you know, this was a going to be her full October focus trying to get this reconciliation done for a market structure bill. She's obviously been, you know, the biggest champion for the uh the industry. And so I think it's it's very clear that you know this there are groups of people who want this to happen but at some point if we can't get to an agreement in the next I think like three week like before Thanksgiving I think this goes out it just gets put on the back burner and so there there are very specific questions that people still have and I think even within the crypto industry you hear people have around should there be maybe dual classes of DeFi right should there be

KYCL D5 versus, you know, unregulated DeFi. Should there be what is a a a security, what is a commodity? How do we define that? I mean, there's been a lot of conversation back and forth around um like is in Drezen and Paradigm, who both have the biggest, you know, lobbying arms in the space. Are they pushing for actually different ways to think about a the what is a security and what's not and there's been even within the industry, I think, a lot of debate around how to think about these things. And with the industry has been unable to put together really a consolidated front that's made it I think also hard in DC to hear exactly you know what we want as an industry and and so then there's there's all of this it's basically made

it multifaceted in terms of how to reconcile different viewpoints because it's not just >> that seems to be the biggest issue from what I'm hearing is like you know with stable coins we all wanted stable coins now there was some beef between like onshore and offshore and that was the one issue right comes down to circle vers tether But right now there's a there is no alignment from what I'm hearing. Uh you know there's there's two two strong groups of of people for this market structure bill and they're they're debating across 30 plus networks and 180 endpoints. Block Damon earnstack unites staking and DeFi into a single institutional toolkit for crypto rewards. With multi-layered security, full asset control and 247 support.

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age of automation or click the link in the show notes to find out more. As always, investments in blockchain technology involve risk terms and conditions apply. Hey, while we're talking, there's a new acquisition which is Fireblocks is acquiring Dynamic XYZ. So, Dynamic is a a Privy competitor. Um, let you build wallets. Deal was done at about 90 million it looks like. Um, I'd love to actually just hear you guys' thoughts on uh Stripe moving in, like maybe updated thoughts. I don't know, Sante, if you guys work with them at all. um if you guys have started building or if it's too early. But um one thing one deal that we didn't talk about because it was too late in the week last week was Tempo raising at a five I think they raised

500 million at a $5 billion valuation. And now this dynamic deal gets done. And the dynamic deal is relevant to Stripe because Stripe owns Privy. Uh Privy I think is Dynamic's main competitor. Maybe if you see that and you're the founders of uh Dynamic, you you know you got to hit the ask a little bit. Um curious to just get your guys' updated views on this. >> I'll start here. I mean, yeah, obviously we're have talked extensively with the bridge team and other kind of stable coin orchestration players as we think about integrating stable coins, not just in the businesses that we acquire, but in the inversion ecosystem.

Um really interesting what they're seeing. Um we haven't made a decision yet as to who, but we're, you know, we're actively having these conversations. Um, I've also kind of interviewed a number of folks in the Stripe field. Um, it's just been interesting to see like that evolve and just some insight into kind of like the integration of that new team. I I think back to your point like the bridge acquisition I think was like since the bridge acquisition you've seen obviously the privy acquisition and then also the head of crypto at Stripe has left gone of Polygon. I think there's a lot of um movement uh especially now with tempo.

Um there's, you know, uh I think you could probably wonder like how much weight stripe is putting behind tempo. Uh I think if I'm reading a little bit between the lines, like their commitment initially, I think they've sort of back walked it back a little and and uh Paradigm has really taken more of a front-facing kind of more of a lead. So like I don't I'm speculating here. I don't have like you know inside look into it but you know obviously it's just very interesting. Obviously the the Ethereum Foundation guy they just kind of resigned went to tempo. They're making some really high-profile hires.

So I think they're serious about it. Um but yeah that's it from from my side. >> Rob, what do you make of the $500 million raise at a $5 billion valuation? I think it was Green Oaks and Thrive. By the way, this is Thrive. Thrive does not make crypto investments. I think Thrive has made a few crypto investments. They were all done kind of at the top of the last cycle, right? Moon Moon Pay, uh, Board Apes, right? What do you make of this? >> Yeah. So, so it's pretty much all the Stripe shareholders that did the deal, right? Um, and I mean, Thrive has been I think they've led the last three rounds on a Stripe, two rounds.

>> Thrive. Yeah. Thrive did the big private round for Stripe when they needed to raise that down round because the employee RSUs were coming to the seven-year expiration. And I think Thrive I think Thrive put in a billion and then went and raised like an extra five million or something for them. So >> yeah. So they've been they Thrive have obviously been very active at at Stripe. Uh Green Oaks I think is a is a relatively large um Stripe backer as well. Um so I think the vast majority of the other uh investors in there um uh you know do they need $500 million? Like you know pretty clearly no, right? But you know it's a it's a nice number for you know it's a it's a war chest. It allows them to do things like acquisitions. It allows them to do things like, you know, owning the end,

you know, consumer interface if they want, owning the application, not just doing the chain itself. My guess is they'll do a lot of call it like full stack uh work to try to like bring people in on the stripe side as well who like don't have to know that they're on Tempo or they're on any other blockchain. Um, so listen, you know, big deal. Obviously, you know, John and Patrick Collison have made crypto and stable coins a core part of the future of their business. They've made a big bet on this and, you know, this is just another, you know, piece. Um, you know, I I think, well, I'm excited to see what happens over there.

They've done a good job hiring. They've um, you know, I've heard talked to a few people around also like what they're paying people and like their big salaries. they're like really they're really happy to pay people for um who are you know kind of worth it and so and then I you know I talked to some of the guys at Paradigm and it it it seems like this is also a lot of what they are spending their time on internally right they're very focused on this as well and they want to get this off the ground and so um you know I don't for me like Stripe has this aperture right like they have these customers these customer they've continued to add, you know, different horizontal product offerings to serve their customers, to get deeper

with them, to get stickier, to increase the amount of economics that they can get from people. This is another part of that in my mind, right? And I um, you know, I'm obviously a big believer in stable coins and so my expectation is is that Stripe can take that aperture that they have, that funnel that they have, and they can bring people through. Um, and what probably will be true is that they will probably also utilize stable coins to get rid of some of the intermediaries they work with now and capture more of that economic value, right? Because stable coins allow you to do that. You don't necessarily need, you know, the I wrote a article about this a few months ago uh before they did any of these acquisitions that was, you know, basically theorizing that they would try to eventually, you know, u replace the

issuer bank and maybe the maybe the acquiring bank as well. And it seems like that's what's happening, right? And so like this goes back I think to the other conversation about banks with I think banks are in a lot of the weakest spots here especially in the types of people who are more digitally native. So retail users SMBs um who are willing to use you know alternative payment methods. So um listen I I don't have anything to say beyond that but I I think it's um exciting for the industry that all of these people are in. Santi, have you at Inversion thought about um I know I know you're looking at buying like uh sell cell providers and you know phone companies and things like that. Um have you ever looked at buying a bank?

>> Yeah, we we've looked at it. Um I would say there was like one guy that I spoke to who's on the round. He was like he owned a bank and he didn't disclose that but he was like hey you should own a bank. And I was like where's these guys coming at? I was like hey I came at it and said, "Okay, I need a buy bank of decent scale." Um, and the multiple may or may not be as interesting. Just kind of depends. A neo bank multiples are like way out of whack. There's like some NEO banks that are like a little bit kind of fallen angel, so to speak. So, those could be interesting. A traditional bank, yeah, we looked at it. The conclusion that we came at it is, it's not that we're never

going to buy a bank. The issue that I have is that the larger guys have just so much market share and distribution that I don't think I'm going to compete credibly against a JP Morgan uh Bank of America once they come at it. Um I'll tell you when I was actually looking at buying a bank in in receiverhip like in distress like this was when when the silverlay silvergate went bank went down I was like all right seems to be like a a void in the market that could be filled. So I looked at it way before inversion to kind of like cater more to the crypto industry and the end of that process I sort of realized most of the criticism back then was like if you're in crypto you typically don't get banked or like you're getting

debanked and part some of it was true but the reality is I think if you furnish all the documentation they will bank you true back then in a different regulatory environment certainly true now it's just that I think a lot of the people um I guess for better or for worse don't furnish all the documents for KYC purposes. Um, and and that's why you don't get banked. So, I I sort of paused. I said I I'm again from in the businesses that we look at, we want to buy businesses that have a lot of distribution in the buying a bank of like midscale is just didn't feel like we would have that much of an edge. Um, because I do feel maybe you disagree here, but I just think that the larger guys are going to eat capture most of

the value here. >> Yeah. I don't know, Rob, would you disagree with that? >> I I don't necessarily disagree with it. It sort of feels to me like like yeah, like the G S like they're going to do what they're going to do. Like they've carved out, you know, a a business for them. Maybe their, you know, ROE, you know, gets hurt over time and they are take too long to digitize as they've continued to do, but they'll be fine, right? I do think like it's community banks. It's like the banks, midsize banks that are in the most trouble right now. So, you're going to have you have all of these new kind of tech first, digital banks that are going to serve the needs of customers better than and better experience. Um, more data, be able to underwrite better. Like there's

still a question around, you know, credit creation. I think if if the banks are hurting, but like that's something for for we can talk about later. But I think all the mid-size banks, the community banks, those are what's in trouble. the GIS are fine and then all of the digital banks are going to especially if we're going to see more of these digital banks have OC charters or like the Coinbases of the world have OCC charters like we're going to see more banking happen at like Robin Hood. I mean I I think I saw a tweet um that Robin Hood's wealth management arm is over a billion of of AUM. Is that is was that the right number? Maybe maybe I'll go back and look at it in just seven months, right? and like it's growing really really quickly like if they offer more bank banking products like it's

going to be the same thing right and so I do think that there's what's happened before uh in the banking as a service market is that you've seen you know people like lead or like some of these other like evolve these smaller banks grow by renting out their licenses to the fintex but now if the fintex can get a skinny master account the fintex can get an OCC charter they can go direct at to getting regulated themselves and they don't need any of the mid-size banks. They'll just take over. I think a lot of this, you know, mid-tier, right? So, you have the Gibbs, you have the FinTech, um, and like I think a lot of the other banks are in trouble.

>> Yeah. Yeah, definitely. The only thing, well, we are looking at a payment processor. To me, process payment processing might be a bit bit more interesting than just buying an outright bank. Um, so that's like an active deal we're looking at right now. This episode is brought to you by Geonet, the world's largest decentralized RTK network delivering realtime centimeter accurate positioning around the globe. Powering technologies that enable precise navigation for drones, autonomous vehicles, first responders, farmers, and robotics, Geodet shows that blockchain can be a truly transformative force. By delivering real-time centimeter level accuracy, Geodet enhances emergency response, boosts construction precision, and enables advanced navigation for

drones and surveyors far beyond the limits of standard GPS. To find out more, click the link in the show notes or follow them on X. As always, investments in blockchain technology involve risk, terms, and conditions apply. Should we do our weekly check-in on uh our prediction market friends? We've got a Poly Market. Uh so there's an announcement. Kalshi's looking to raise at 10 billion. Next day I I love this. It comes out Poly Market looking to raise at 15.

I think I'm liking this drama more than more than other people. But uh I don't know. I'm I'm I'm enjoying this. Um there was also something about clearing houses I didn't read too much into. Rob, you had a tweet which said, uh, oh boy, you uh, it's going to be really, you said it's going to be really awkward when Robin Hood announces Poly Market as a new clearing partner. I I'm not sure what the context was there. I think maybe Cali got announced as a clearing partner for someone else, but yeah, Rob, give us give us the latest, my friend. >> Yeah, I mean, that was um a little bit of a post. Uh, but it was they so I think you both saw that um >> or I don't know if you saw this but yesterday the NHL announced that they were yeah partnering with both Koshi and

with with Poly Market but both Koshi and Poly Market put out a tweet that was like we are the partner to the NHL and so then they were like wait a sec um and so I uh and obviously for Kawashi a big part of their I mean basically all of their volume is Robin Hood and it's Robin Hood sports and It's it's Rob NFL actually specifically. >> Yeah. >> Yeah. Poly market I think actually has about 80% of the uh the market share in prediction markets if you take out sports which is a good stat. >> Yeah. No I mean poly market is dominating every market uh other than NFL on Sunday through Robin Hood. So um the the Koshi guys obviously have spent you know they're they've taken a

different tact which is that we want to be infrastructure. they they are um you know they went and got you know regulated first before offering like a retail product um they are trying to do more I think they announced this deal with Jupiter that you can do prediction markets through Jupiter now >> um so they're they're trying to do more I think crypton native stuff um but they um you know it has been very interesting to see the rate of change and the rate of adoption I mean the draft kings thing incredible right I think draft kings On October 7th, there was a headline out that they were that they had said basically like we don't think that people will want to use prediction markets instead of, you know,

traditional sports gambling. And then literally 3 weeks later or two weeks later, they bought uh a prediction market platform and they announced that Poly Market was going to be their clearing partner for that. Right? Like you can see everybody understanding that this is taking off and if these guys are not on the sports side specifically if it the government is going to take the perspective that these are uh you know separately regulated then the state gambling commissions are doing with you know DraftKings and FanDuel then every single person who wants to be in sports gambling is going to do it in a prediction market form factor right because it allows for easier access to

uh the retail customer and it allows for quicker go to market. You don't have to go state byst state and so if that's the case, DraftKings is going to do it. FanDuel is going to do it. Everybody else is going to do it. Um and it's going to be a huge win for both Poly Market and Koshy as they become the infrastructure providers to these guys. It's going to immediately 5x these businesses. >> Yeah. Yeah. Did you look at what was the drama with Limitless? So Limit CJ from CJ the founder of So there's a new prediction market called Limitless. Um, one confirmation just backed the round. They did a direct listing, I think, on Kaiito. I didn't follow it super closely, so I'm going to botch some of the information, but did you guys follow this? And I I read the messages. I the the epic

I just, man, I know I know Rob likes to watch, you know, movies and horror movies and whatnot. And man, I just I just tune in to crypto Twitter and get all the entertainment I need for the day. >> What happens, Auntie? >> I have no idea. Yeah, I think I think those like I actually who um there's a CIA officer I think that like he goes by that. I think he he has a good tweet about it. I haven't gone to it other than um No. >> Yeah. I I saw some tweets was like, you know, this guy CJ's crashing out. But you know, I I'll take the other side of that and just say it's an attention game right now. And uh it was actually Mike Dudis who taught me this in the early days. We were building block works and he was building the block and um it was

like 2018 or 2019. He would just every day someone would be pissed at Dudas and he was when you're getting a company off the ground you got to just do some kind of crazy stuff to get attention and if that's that's not the way that I would get attention but >> yeah but just to be clear right like what happened here was that >> I didn't follow this >> so so they launched the token >> um and you know they don't do it with you know an exchange in the normal way they launch it on chain Um they I think it runs up to maybe like a $500ish million dollar valuation. Correct me if that's wrong. Um you you know they're kind of like the third biggest

prediction market at the moment, but obviously significantly significantly smaller than than the two we just been talking about, Poly Market and Keli. Um, and then people realize that a wallet that is connected to the team and the foundation has been essentially selling into the market. >> And so and so they, you know, it maybe I I forget how quick it happened, but you know, kind of within like two hours people realized this was happening. and this wallet that had uh connected to the team and the foundation had sold like $2 and a half million dollars worth into the market and people started tweeting about it and they're like oh like you know this is the guy who just talked about how he didn't want to get ripped

off by Binance and now you know the team has this unlock or the team is supposedly locked for some period of time but now the foundation's selling into the market like are they just dumping on us? um immediately when it starts getting talked about online uh the wallet starts buying, right? And so then he starts tweeting, "Oh, this was our uh he keeps tweeting like this was our market making algorithm. this was our onchain market making business or and then um I think Eve Genny uh the the founder of Wintermute uh kind of engaged with him a little bit and he sent out a tweet was like um I think it was basically like do you not understand what cont he said have you ever heard of concentrated liquidity dumbass to uh

Steve Genny the founder of Wintermute right and it became like pretty clear that he was like >> they had gotten caught doing something that like they did not want to get caught doing and people were like, "Just shut it down for the day, buddy. Like, just just take a take it." Okay. Okay. >> And listen, like, maybe it was, you know, I don't know what he's going to do with the the money. Um, maybe it's not going to the team. Maybe it was really about providing liquidity. Like, it it's, you know, I I don't know the intentions of what happened. But what was happening which you can verify on chain was that they were the foundation or the team somebody connected to the project was selling into the market dumping on everybody's heads and then it started being talked about and then they

were buying. So like that was >> mistakes were made in a wallet that I control. >> Ladies and gentlemen, ladies and gentlemen, this is what I love about crypto, you know, it's if it's on chain, you can't get away with this stuff, you know? So like just know that like, you know. >> Yeah. >> Hold on. I got to see if I can I can share this if I I've never >> Sometimes the loudest critics are just, you know, sometimes, you know, >> they do it out in the open. >> You guys see CZ got Oh, Rob, what are you pulling up? Oh, look at Rob. Screen sharing. Mr. Producer, look at this.

Wow. Wow. Wow. The training, >> Rob. What is this? >> So, this is this is the wallet from the foundation. >> No way. Those are sell orders and the red and then >> Yeah. So, the red are the cells and then it started getting tweeted about right there and then the green are the buys. So, so just for for future reference, what we like to do here in the podcast is is we draw a line with a tweet and it would look right around the time where the red turns into green. >> So bad. >> I'm gonna get better at this. This is my first screen share. So, >> look, it's not bad. It's a good chart.

We appreciate the the effort. >> Yeah. Yeah. Analyst Rob. Um, you guys see CZ got pardoned? The man, the myth, >> legend. I told I I forget if it was last week or the week before, but I think I said it's just CZ's world. We're living in it. It's uh Yeah, good. I mean, I don't know how you guys feel. I I I think it's going to be fun to see CZ back at the helm running Binance. Clearly going to push pretty heavily into the US. Going to take Binance US back under the under the empire, get Binance public. It's good competition.

Always has been at the helm. But yes, optically uh I guess more public phasing the US Binance. Binance US. >> You're telling me Richard, you're telling me Richard was not really running Binance? >> Yeah, shout out Richard. He was here. Um I'm curious. Binance US, did they totally shut that down or is it like just in dormant phase that they could pick it back up? >> Dude, we're still looking for Kathern Kohley to this day >> because I guess like yeah, I mean I guess FTX Europe was sold to Backpack, right? And so I was just curious what had happened with BinanceUS.

>> Rob, do you know? >> Uh I think Binance US I think technically still exists. >> I think they're still going. >> Yeah, they're still going. There's still some employees there. Um you know, it's a small business. Uh but it's still there. So >> caught up. Yeah. I mean, it's it's it's probably not worth the $4 and half billion dollar valuation it raised at in 2021, but um you know, maybe maybe those investors who waited it out, like maybe they'll actually they'll make money. >> I I mean, Binance gets public. I don't know when, but they get probably 27 or 28, but they're they're getting public.

>> But but by the way, um I was just curious, did you see the tweet by Dudis? I think it's worth calling out um the A6Z report that we had talked about. Um I I don't think we've covered that but A6C there's a good slide in there that Dudas calls out to around the regulatory look as you said A6C has been extensively involved in policy in line with paradigm and they put together this report around saying it's a very good three charts that talks about um the amount of value is created uh by token networks and then the amount of value that's been created captured by token holders has always been a disconnect um Like things like Uni, right? Uni UniS swap like Universal Navigation LLC labs

kind of like equity versus the UNI token holder. Like there's always been that disconnect. Exactly. Right. And so this is something that again we talk about Mega ETH doing an ICO. Um we're obviously thinking about on the inversion side. You know, I think it's just interesting that the design space for tokens is something that everyone's kind of shied away from, but we've all thought about it, right? At the end of the day, these are like super cash flow generative protocols. Um, and and and tying the worthless governance token is maybe not so worthless anymore. But I do think that it leaves you wondering like if you're a protocol and you launch with certain codified tokconomics, can you actually how much can you rework that

through governance or some other mechanism to align better the incentives of equity holders, token holders and just the protocol generating fees. And so I think it's um if there was like one slide that I really liked it, it it was this one. And I think you're going to see a lot of the design space for tokens. I don't know how quickly, but I do think over the next, you know, couple years, it's something that I'm paying a lot of attention to obviously from where I I sit. >> Content of the week. >> I'll go first. I I said it before, The Gatekeepers.

Phenomenal book. Uh, it's about all the chief of staff of all the major US presidents. Just a I love House of Cards. >> The the book on chief of staffs. >> The the book. I think I recommend it to you. I was asking someone in London um about like, hey, I'm looking for a crack chief of staff. I've been a chief of staff before at this aging company. Uh, and so I had a good idea of what I wanted, but I just read this book. Couldn't put it down. It was just amazing. Like, uh, amazing amazing book. if you like politics or just like you're a builder. Uh it really gave me a lot of really like I was just writing a bunch of notes. Uh it was a really good book.

Great read too. >> Called the gate the gatekeepers. >> Nice. >> Mr. Havoc, what do you got for us? >> Well, okay. So, it's um it's October and I think, as you guys know, I'm I'm a big horror fan. So, I've got to give a little bit of a shout out to some of my like classic my favorite classic horror movies, right? So, there's three that I always recommend. I'm going to I'm going to give you all three. Okay, this is extra bonus right now. >> The Hills Have Eyes.

>> Is it The Shining? >> Yeah, exactly. The Hills Have Eyes. No. Um uh my my favorite three. Hellraiser, the original one. Okay. Um the uh Nightmare on Elm Street, but the one Dream Warriors, which I believe is the third one, right? So that that is the best one. Um I'm really really like much better than the first one actually. So like I know people have the first one, but Dream Warriors, that's the one. And The Shining. So you know, get your Halloween on. So and uh and you know, enjoy yourself this week.

>> So Rob, let me ask you this. So, you watch you watch a horror film Thursday, you know, Friday night, 10 10 p.m. to midnight. Do you then fall right asleep or do you then go watch like do you watch like 30 Rock or The Office or something? >> Right asleep. >> Right. >> Straight asleep. >> Ladies and gentlemen, if you had baby, where does that put you in the U FTMP score? >> Yeah, like what's your ostraign? Uh uh Rob without disclosing of course you know social security number and date of birth.

>> What's my what's my sign? >> Yeah. What's your sign? >> Uh I'm a Scorpio. So you know birthday is in a few weeks. So >> I was gonna say >> dude I don't know. I mean I I still So I was I hate horror movies. I was forced to go home. >> I'm gonna get you Santi. >> No way. >> We're gonna go together. >> You will get me to do all kinds of other except watching horror movies. I'm so traumatized. I got I I was forced to go see like I was like in middle school went to go see The Exorcism of Emily Rose. >> I don't think it's like that like crazy.

But to this day, if I wake up at 3:00 a.m. close to 3:33 a.m., you best believe I think about The Exorcism of Emily Rose. And if you've seen the movie, you know what I'm talking about. Don't watch the movie. I I will tell you I will tell you I um somebody showed me it with like the the clown when I was like six and I still don't love clowns. So >> I don't know who likes just like I hate >> Yeah. I'm not it's it's not my it's not my favorite. So I I still think about Pennywise. Uh >> have you read Steven Coon's like Velocity and some of those things?

Because I thought that like I really enjoyed that read. >> I haven't read that one. >> That's good. Maybe I'll I'll give it to you for your birthday. >> I appreciate another content. >> Content of the week. My content of the week um is not a horror movie. I'm bringing this back to reality here, Rob. No one else likes horror movies. I'm sorry. >> Nobody likes horror movies. Are you kidding me? No. Horror movies are the only place where you can get independent film that makes money today. >> You know who likes horror movies? Are >> we talking about the independent? >> Is that really a good Is that a real fact? >> Oh, yeah. That's a real I mean, it's it's it's an opinion, but it's opinion that's widely held, right? which is that the horror is the only place in Hollywood today where you can get a

movie made for sub $10 million and you can make $120 million. Can't do it anywhere else. And so that's actually why you see a lot of the independent filmmakers today move to horror because it's the best ROI right now because people love horror. >> Uh ladies and gentlemen, I'm not a I'm not a psycho. I'm just doing it for ROI reasons. >> Come on. >> I listen like the Blumhouse is probably one of the greatest businesses of all time. Okay. Like in in the media industry, it's probably done a tremendous like I'd have to go look and and figure out what they actually made, but they pump out these movies every year for 10 million bucks, 8 million bucks, 15 million bucks, and every year one of them goes to $120 million. So, $150 million at the box office. Like,

it's a it's like a it's a great business. >> Rob, I think you might be in the wrong investing industry, man. Like, why don't you just go uh go talk by the way, go talk to Mark. You remember Mark? Morgan. Mark Republic. >> Yeah, man. I I'm I gotta see Mark. >> Yeah, Mark, shout out to you, man. >> Go fund some films. >> Mark's Mark's the one who who put me on uh that you could pay a million dollars and get a Sam Ramy movie. So, >> content of the week, Rivet Capital wrote a 40 40page piece. It was their investor update. It's on Doc Sendend. Um I will tweet it out or we can put the link in the show notes. We probably won't put the link in the show notes because we never do, but I can tweet it out or something. Um it's a really really good

piece on what is going to happen with just to like tokens in general. It's about the token revolution and to to the thesis is kind of tokens are everywhere. Tokens are everything and tokens are everywhere and um what what what the world will look like. It's somewhere between it's a mix between uh a really thoughtful investor update and a Joshua Tree acid trip. and I would highly recommend reading it. And a lot of it seems a little crazy, but I actually think they're really on to something of what the world will look like. So, I would recommend it.

>> By the way, >> guys, >> yeah, >> I'm I just saw it hit my inbox. JP Morgan initiating coverage on Stripe. They've been doing a lot of this for private companies like OpenAI and they have a whole section on uh their acquisition, their crypto 4A borderless financial services. Good to see that. >> Talk about privy. Talk about tempo. Yeah, potential 350 billion TAM in play by 2030. We can talk about it next week. >> Nice. All right, folks. Thanks for listening. Santi, Rob, good to see you guys. I will see you Monday for our episode. Cheers, folks.

>> All right. Thanks, guys. Have a good weekend guys. [Music]