Crypto's Value Capture Problem & Why Robinhood Built Its Own Blockchain

Transcript

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 Blockworks team may hold positions in the companies, funds or projects discussed. >> All right, every welcome back. Happy Friday. We got the man, the myth, the pessimist, the bear, Santiago.

Hi, Cabaron. Listen. So, dude, you you I thought it was going to be a very bullish episode last time because you weren't here and it just turned into Rob and I arguing the whole time about VVV. So, you know, I got quite the quite the controversy, right? I saw a lot of people like posting and then I think saw hib kind of went out and >> people were very mad. People were Yeah, people thought Blockwork Works was like attacking VVV and I I that really was not the goal. And I I would just say like I do want to start the episode saying I have a ridiculous amount of respect for Eric and VVV and or uh and the Venice team, but it was more of a commentary on the state of the industry in this dual model. So anyways, how you doing? We'll talk about that in a sec.

How you doing? uh coming back from the Seleni conference and can I think is one of the best uh private conferences out there other than of course block works ones. Really good crowd very good discussion. I was on a panel and uh obviously a debate discussing you guessed it uh the prompt was the argument the debate was are generalizable L1 tokens investable. So, it was like such an easy debate to have, right? It was like me, >> who'd you debate?

>> I debated Brian Pellegrino from Layer Zero. Phenomenal builder and Sahir from Plasma, >> Sahir, >> I believe is his name. If it's not, I'm sorry, but I think it's here. And then, uh, Yan Liber Lieberman from Deli was on my camp. U, good discussion. We won the debate in case you're all wondering. >> That was a 2v2. Interesting. [clears throat] >> Yeah, twoon two. >> Nice.

>> Um, no, it was really good. I basically got to share a lot of what I've been thinking yet again with a little bit of a twist and you had the benefit of seeing it. So, um, no, it was it was good discuss. >> Yeah. And markets are so bad you're just having to hold your mic. We have no stand today or what's going on with this? >> Well, that yes, markets are tough. What can I say? No, this is this is me bringing passion, you know. I'm trying a new form, you know, of like, you know, Wolf of Wall Street reading this one. [laughter] >> No, I changed >> the stand doesn't work.

>> Good. Good. Okay. Well, um I don't actually know how much you want to share here, but I got your investor update for inversion. Um and look, we can cut this out or we can skip through this um quickly if you don't want to talk about it, but I I thought it was one of the more thoughtful investor updates I've actually ever received. And um you know most investor updates >> and even the way that Blockwork sends theirs oftentimes you know the way that we do ours it's like here's our revenue team size bank account financials you know here are the here are the wins the losses and here's you know goals for the next quarter and this was um you know I think you've done that in the past but this one was very it was several pages long and I think it just outlined your

entire um not only thesis today but what you've learned since starting inversion right you guys had this goal of acquiring a company and embedding it with crypto and um I don't want to put words in your mouth, but it seems like you're updating the strategy. So again, we can skip through this, we can even cut this, but if you feel comfortable, I'd love to >> maybe dig into your your learnings. >> Well, first of all, thank you. I mean, testament to the team. Well, so obviously the what goes into producing a shareholder letter is a combination of a collective effort. So, um >> my team has been amazing. I've got Mr.

Perplexity, I've got Mrs. Claude, and I've got >> got Fable Five. Um happy to show. I was actually thinking and I asked you like hey you know is probably we'll share a redacted version uh because I I do think it's um I'll start from the very end the very end was just like if our investors have seen hard evidence on the contrary operating results not pilots we would rather be corrected now than later and I think so like the the the we've been quiet for a while um under the hood we've been doing incredible amount of work on evaluating Basically the prompt is hey can we buy businesses where we can implement crypto

and have a great return on investment commensurate with the risk. And I want to emphasize the last part because none [clears throat] of this is that crypto is not useful. None of this is that tech is not real. It's on the contrary I wouldn't have started inversion and I wouldn't be here if I didn't believe that. Um, and I think there's a lot of evidence to support that. Like, you know, you go look at your own dashboards, and I don't need to regurgitate any of that. The nuance is is uh is is by implementing crypto in these businesses, does it actually produce a above market return?

And and I'll hold myself really accountable to that and the rest of the team, you know, because rule number one of investing is don't lose money. And rule number two as Charlie and Warren would say Warren would say is don't forget about rule number one. And I think in this journey it's like I started inversion under this hypothesis. I really wanted to understand like how real is it? How are we going to see it? And I took >> Wait, so maybe restate the hypothesis. What was the hypothesis for >> the hypothesis was can you buy a business and make it dramatically more efficient with crypto?

And we've looked at, you know, 20 plus sectors companies. >> Tell tell me about the journey because I know you guys were looking at the MVM MVNO's. You're looking at >> like a host of companies. Yeah, >> totally. Yeah. People might have heard me say in here and other podcasts like the MVNO thesis was predicated on this idea that you could bundle telco and fintech together. I'm a student of history. So you know you look at places like the thesis [clears throat] is stable coins there's a huge demand for stable coins outside the US especially um in places where there's not enough financial infrastructure and services stable coins have really worked and you look at tether is a true testament of that and then you look at companies like Empessa

that bundle telco u basically an everything app right telco and and fintech and so I said gosh the best way to build the largest fintech in a place like Mexico or Latin America is through telco because you're a core service Um what I've started to notice is like once we started looking deeper and deeper into MBNOS's which you're just you're it's a very um competitive business in on its own. Uh MBN's like rent infrastructure from large carriers.

You don't own the infrastructure. It's basically can you acquire customers. Problem is these businesses have terrible unit economics. There's a lot of churn and there's no cash flow. There's not meaningful cash flow. And so [clears throat] it's really hard to underwrite this bundling when you don't have cash flow to invest in the business to make the transformation and and again there's a lot of risk and so that strategy kind of fell uh on its own. Um and we've deprioritized it. Um and we then looked at like credit this idea like hey could you borrow on chain? uh you know rates are low. Yeah. And so I guess I'm

opening the the letter now, but we looked at another sector we really looked at was credit like hey there's a number of businesses outside the US that just don't have access to capital markets like they they don't have uh the same availability to capital and we uncovered like so many of them and I talked to like a former Rivet partner who launched his own fund. and he's investing like in places like Venezuela and Colombia and uh Asia and and I think um our conclusion there was you know credit is challenging like there is a capital markets on chain work mostly for cryptobacked loans. Uh anytime you start

doing anything other than that you're faced with a couple of challenges. One not to me it's like smart contract risk. other risk is your borrowing variable and maybe with Maker Sky we kind of looked at what they're doing with better as like an interesting experiment. Um and and you're exposed to like these utilization rates and borrow curves that are you know uh are difficult to underwrite. Uh the true so when you package all that up the true borrow rate for like what I would call like business like B2B borrowing business lending is closer to 8 to 12%. On chain today not the 2 to 5% that you see in a stuff and so that is

>> that's not competitive with Tradfi. >> Yeah. Because again, if you want to buy a good business outside, like a good business in the real world has access to capital at a cheaper rate. >> And the question is, well, if I'm buying a business that is borrowing at 20%. That's likely not a good business. >> There's like a lot of risks embedded to that. So again, the the common denominator I I'll just say it now and then I keep can keep going and interrupt me whenever is the mistake I made was when you hold constant the filter of which business I want to buy where you can release a lot of value with crypto, you end up you end up looking at businesses that are not

great businesses. They're kind of broken in their own way. They're kind of melting ice cubes. They're out of favor >> and you lost You're falling. You're catching a falling knife in the private equity version of the term. >> You and I have talked extensively here about remittance companies, companies like Western Union. You know, obviously go look at the chart and the financials and it's a it's a business that has challenged, right? You have uh more technology forward companies like Reitly and Wise that have like really compressed the unit economics on certain uh corridors. uh they're also facing heat from like companies like Felix Pagos and stable coins, you know what I mean?

And I I instructed the team to go let's look at pretty much any remittance company that we could buy after hearing Western Union and like you know boldly claimed that they could like really cut preunding and so we go out and you know we talked to a number of remittance companies and again remittance companies are challenged the multiples come down the the the business itself is again a melting ice cube. Um, and what we found there actually more more revealing is it's not a it's not a like in order to fix our immense company, it's not a technology problem.

>> It's a stakeholder incentive problem. And again, just going back to my initial observation, like the technology works like stable coins are very real. You can definitely implement stable coins to move money in real time, but you also need if you're dealing with stakeholders that don't want to implement the technology. It's a hard sell, you know, and it's not one that I want to undertake. >> Yeah. >> I'd rather I'd rather like we did a lot of work there. We came out of that bearish. >> I'd rather be in wait and see mode like if Western Union can pull it off then we'll re-engage, you know, no problem.

>> Yeah. What's your take on uh distribution? Right. I you know I think a couple times on the podcast you've said um I want to buy distribution at the best price possible. If I can get cheap distribution, you know, I can do a lot with that. Um tell me tell me your takeaways from uh distribution. Another mistake I think um not all distribution is created equal and I guess said differently. You want to buy a business that has uh pricing power brand um and is not operating in a super competitive industry. That's what makes

a great business. Those are like real modes. That's a downstream effect of that is distribution because distribution is like do you have an install base? Do you have connectivity with a customer? If let's apply that again in a company that might have distribution. But if a company has distribution, it doesn't have pricing power, it doesn't have brand loyalty, it doesn't have uh profitability, distribution doesn't matter at that point. H you mean and and so you know I think you can get into this trap of buying businesses that have a huge install base a huge user base like MBNOS's but >> uh it's not high quality distribution and I think there's a nuance between

like aggregation theory >> high quality meaning the users are sticky or the users are are are valuable like kind of dare I say like wealthy users who you can upsell more and more products >> a little it has to be both in in my opinion because for instance in the telco case you could definitely have access to like millions and millions of customers. The question is are they actually going to be willing and receptive and how how costly is it going to be for you to upsell like upselling is not like a slam dunk in of it like I'll get in the example of MVNOS's I very quickly understood like wait a minute we're going to buy an MVNO in a place like Mexico that doesn't cash flow and you have New Bank which is the best run fintech in the world probably absent

Revolute that has invested over a billion dollars in Mexico and has only converted like 9 million users if they can't do it for a billion and I don't have cash flow to do it. Uh what do I like, you know, I mean at that point it's a hard sell. >> Yeah. >> Yeah. >> So, so I guess yeah, distribution I would reframe that now today as like just I I love listening to this podcast this week that you know and invest like the best. He talks about like big ideas and billion-dollar PDFs. We talk about that. Um I think simplistically in version now is and part of the investor update was like I want to buy a good business. I uh a quality business and I think a quality business by default has all what makes a quality

business is you know it cash flows like if a business has been able to produce cash flow over a different market environments that tells you everything you need to know about a business right like if there's only one filter it's that like are you are you if a business doesn't um oh and the second piece is I think a business that can be transformed with technology easily is not a good business. >> Interesting. >> I and I I would actually I'd be curious to get your opinion because in media like newspapers for instance like were they were definitely transformed with technology but newspapers technology is not like the BN >> but the newspaper companies weren't the ones who won by the way it was media was

transformed but it went to Tik Tok and it went to Facebook. >> Yeah. Yeah. >> Yeah. Yeah. 100%. >> Yeah. What's your >> I think >> Yeah. Go ahead. >> Go ahead. the [clears throat] the the other so we we talked about remittances we talked about MVNOS's we looked at credit we've talked about that already the the other sector I want to talk about which is really popular amongst crypto crowd is FX and uh we actually did run an a RFP for a very large uh multinational industrial company and they said look we we have operations all over the world we want to do treasury management want to be moving money much faster and we said okay Um we went out to a bunch of providers in crypto and said hey quote us your

best rate what can you do here and what we've learned is quite the contrary like um most of these crypto aggregators were quoting above the mid-market rate like 2050 bips that's a lot and especially for in in exotic quarters like in places like you know Colombia and Egypt and Israel and and it's a liquidity problem it's not a technology problem it's a just a liquidity problem you need to have liquidity against these pairs to be able to price competitively and again that someone's going to solve that and it's going to be great but you know we don't that's not the type of risk that we're willing to undertake at this point.

>> Yeah. Yeah. So that gets into what I I [clears throat] think the important question which is what do you do with inversion now right because you you raise this money sitting sitting on some some funds. So are you going to do you wind it down? Do you invest in other things? Do you broaden the mandate? Do you get more specific? Like there's also another question here which I think is probably tied to this which is is there a play on AI that you will look at is there okay so yeah >> what's the update >> yeah the update is broaden the mandate and it's first and foremost like go buy good businesses >> that technology is orthogonal to value creation so like you want to buy a good business whereby implementing technology and that is AI that could be crypto that

could be other things like best practices will make that business a better business. It's as simple as that. And uh again, as a student of history, I look at how two the two best examples of what Inversion is trying to copy is Bergkshire Hathaway and Constellation Software. Everyone knows everyone knows Bergkshire. Um they got started very small and they were super small team as a holding company. They just Warren and Charlie just went out and bought really good businesses like good operators just give money good brands good good quality businesses you look at all their shareholder Mark Leonard started consolation after leaving his he was a venture capitalist

he left and he built this holding company buying software businesses you you know probably the story really well most people would be surprised to know that Mark Leonard started with 25 million Canadian dollars back in 1995 and he built a $500 billion plus business and he would do$2 to4 million acquisitions and he did many many of them and he he was just a capital allocator right he built what I think is like a really good proprietary data set of what makes a good software business so he got to a point where he had such good understanding of what good a good software business was that he could very quickly buy or not or make a decision of capital allocation because he had the perfect perfect like perfect information

of what a good software business is margins magic number growth growth sector vertical horizontal like everything, right? And and so that that that's uh so we're m running the mandate and um we're going to deploy balance sheet capital that that's my desire. That was a shareholder letter. Of course, we have a shareholder meeting. Um but that's um yeah that's that is like it's been very this whole process has been incred has really been a validation of a couple of things. One has been very revealing of a couple of

things theories that I had in my mind. One of them is that the hold model is better than the fund model. If we were a fund, it would be you like you have this identity, right? You you you have a mandate to invest in crypto. And and I think that's something that at the Seleni conference, I was talking to a bunch of fund managers and they're like, "Guys, I don't I don't uh I wouldn't want to be in your seat because you you you've sort of like promised your LPs you can invest in crypto." And I think all privately will tell you that they're they're they're sort of moved on. You see it, right? They sort of want to invest in other things like robotics and AI. And I think credit to Paradigm, right, who just came out this week

saying they're they launched and they got a lot of heat for it like in their prior fund where they said they're going to pivot to AI and everyone was like laughing at them. >> I think they're smart. It that's what you should be doing. Like the game of investing is ultimately truth seeking and sometimes you're going to figure out stuff that doesn't conform with your hypothesis and it is your responsibility to adapt. I think it'd be it'd be irresponsible not to explore implementing AI and other stuff. It would be irresponsible to buy shitty businesses just to prove to the world that you can buy a business. And it would be irresponsible to buy a business to prove that you could implement

crypto. Of course, you can implement stable coins to a business overnight. Any customer of Stripe has already done it. The question is, is it going to release value to outperform the broader like, you know, I mean, to outperform the market, right? If I >> I was having a discussion with Brian after the podcast and you know, he's an investor, he's great. I said, "Bo, Brian, like if the answer might be if you really wanted to be long this thesis of like businesses implementing crypto, well, honestly, go buy Stripe secondary and go buy Robin Hood equity because I do think that the larger players are likely in a better position to reap a lot of benefit from this." And you're kind of already seeing with the Robin Hood chain, we should talk about that >> and Stripe and,

>> you know, I think they're in a better position. Um, and I want to just emphasize like it's not to say that crypto won't work. Of course, you can buy a business and and and shave some costs and improve that business with crypto. Like that's not the message here. The message is not sufficient to clear a good return on investment. >> Yeah. Yeah. Maybe let me ask it differently because I think the thing that people would probably be wondering right now and the thing that I'm wondering is are you bearish on crypto right now? that was also part of the letter. Uh because I do get asked this question a lot, right? Um you know, you hear me talk of like, you know, in these debates and you know, I I here's what I wrote in the letter and I

firmly believe is um first off, I'll say I don't I think as a group inversion has done probably the most amount of work going deep into trying to understand how crypto fits into ordinary traditional businesses. Um I think the technology is real, the interest of businesses is real, the willingness to implement is real. Like stable coins are real, tokenization is real. Um the val and here is where I come at it. The value cruel is still not resolved.

And you know, open source networks have a habit of pushing value away from companies and onto consumers. like te technology the curve of technology you know this well is the cost of production is like technology is incredibly um uh disinflationary and a lot of that just ends up in consumer surplus right like and I don't want to be caught on the wrong side of that trade and I still don't know where value is going to be acred I still don't know if tempo is going to be a profit center for stripe or is it just going to help stripe the actual business I still don't know how popular like what Robin Hood chain is going to do to Robin Hood I certainly know that Robin Hood equity probably benefits. I probably know that Stripe equity business benefits, but I don't know what that means for

um smaller businesses that we're looking at, which is the other thing that is worth mentioning is we're looking at much smaller businesses. Um so I am I am waiting to see more evidence and this is why I just ended the the the letter. from like I I by the way as part of this journey we've been at it like systematically for eight months looking at many many different sectors and as George and my team likes to say it's like turning over stones to see what's underneath. I think that's a really good way to kind of crystallizing what we do.

But a lot of this was also serving crypto founders. I would go to them and say a lot of them in my portfolio and say hey guys [clears throat] have you seen evidence of like businesses adopting your solution and is there any clients or potential clients that you think we should be looking at to invest and you'd be surprised but a lot of them were like no can't think of any I said what do you mean like none I said um and I think this this is the nuance it's like a lot of these companies are starting to implement like deepend solutions But I wonder like if every if every company so like if I do it for a company that I buy and I implement like a deepend solution and I lower the costs

well open source networks like my competitor is going to be able to do that as well and so you're back to square one because if everyone adapts to the new normal it goes goes back to if you haven't bought a quality business you're you're in a you're in a pretty bad spot like just everything just rerates down. Um, and likewise, I mean, the benefit of having a lot of most of our investors are cryptonative funds and founders. So, I I'm, you know, constantly just talking to them and saying, "Hey, what are what are you seeing in your venture book that will that is like worth paying attention to that I could, you know, implement."

So I think like I'm bearish crypto in in the in the being a said differently I don't think crypto [clears throat] I don't think the ROI of implementing crypto in a business is suff is is is big enough today. Uh I think there are still going to be huge successes like hyperlas of the world that like you know really profit on like trading and and hyper financialization. Those are not the businesses we looked at. We looked at the more traditional use cases. Um and and definitely like I think the ROI of implementing crypto is nowhere near the ROI of implementing AI because one of the other things that is worth mentioning that I me that I um talked about in the letter was when we go talk to founders now of traditional businesses

when we say okay what are you going to do for the business I'm like we've implemented AI in our workflows in our company um and and it's incredible like I mean I I'll let you talk about it like that that is very real Like I'll give you an example. We've been super capital like we've been very efficient. Um we have a really small team and it's deliberate. I I couldn't I couldn't be doing what I'm doing now without AI. I would have I would need a much much larger team much much more resources. I mean I remember the days I was at JP Morgan like think about like if today you and I say okay hey you call me and say you should look at this sector within like hours I have a very enriched CRM of some of the best

companies that I can go by a lot of it is super high filter and you know agents scrape industry databases and really high quality information to the point where I can get on the phone with a founder and it's like I have call notes and it's super enriched that would have taken weeks and an army of analysts and and and subscriptions and now that's no longer the case. >> Yeah. Yeah. >> Yeah. That Yeah. >> Like that that Yeah. I mean, you can talk about what you guys are doing, right? [clears throat] >> No, no, no. I mean, anything I will um because Fable is just I mean, we've got 5.6 coming out from chat soon, which is just, you know, mindblowingly good according to the people who have used it. I haven't used it yet. And then Fable is just like crazy. But anything

else on inversion that is worth touching on? >> Um I don't think so. You know, obviously Uh >> there's a lot to talk about. Let's talk about Robin Hood. >> Let's talk about some I'll probably share some of the some versions of this letter just for the benefit of folks because publicly I'd push you to >> I want to open sources to people um >> because I think it would be helpful for the ecosystem. >> Yeah. Yeah. Um the one the one I mean uh the one thing I'd call out on AI stuff is we have um really leaned into so Fable is insane. If you haven't used Fable yet, it is by far the best model.

It is way better than 5.5. It is nuts. Where do you notice that >> in what it can actually build? So, the we have um the thing I've become obsessed with over the last week is uh Claude design. So, we had um we have our I had uh I didn't have him do it. He he just did it. Um our product designer, this guy George, uploaded our design files and design system into Claude Design. And then our head um someone on our creative team, this guy Zach, uploaded all of our creative assets into cloud design. We can now make any landing page or any slide deck in it.

Literally takes I'm not kidding, Santi. Five minutes to build. So So So I want So we So we bought Msari, right? And we need to update all these landing >> Yeah. We need to update all these landing pages. So like we need a new landing page for our API. We need a new landing page for this monitoring product that Msari has which is phenomenal. Um we need a new landing page for investor relations. We need a new moni uh landing page for our our contact us form right to book a demo. We need all these new landing pages. That would have previously you know I would have told our head of product we need this. The head of product would have gone to the product designer. Product designer would have mocked it up sent it back. I would have been like ah we need some work.

Then you got to send it off to someone who like is good at the copy. I'm not kidding. This took 24 hours. It took the whole thing took 24 hours and then the the product team just built it and then sent it to the engineering team. The engineering team just took the zip file from claw design. We designed this whole thing. We didn't even go into Figma. Our our design team doesn't use Figma anymore. I mean I might be speaking out maybe maybe they do a little bit like 5% but like everything used to be designed in Figma. It's now 5% of the usage that it used to be. So yeah, Claude design has and then and then the sales team by the way. So we took all of our sales decks um and then combined them with uh with this creative s like um the our our

creative like uh design system put it into cloud design and now our sales team you can literally go into SA you can literally go into cloud design and if you're a seller who hates the sellers hate making deck right decks right they're like I should be closing and I agree with them. So, you know, actually for years we had a whole idea of like, should we have a a product marketing team or like an like an in-house agency that just builds these assets because we have so many decks that need to be created. It's such a pain in the ass. They could go in, they upload their granola notes. So, I don't know if you know use granola, but it's like a call transcription to tool. So, you upload your >> best thing ever, by the way.

>> You you upload your granola notes. You combine it with the HubSpot record. You combine it with the internal Slack. So for every sales deal that we for every deal that we have, we have a Slack channel. So it' be like customer inversion if we're trying to sell to inversion. So it you then upload all those things and you can just do it automatically with a connector. And then you say, I'm I'm pitching inversion. It's a 275K deal. We're pitching them investor relations and they want to buy, you know, 50k worth of credits for our API. It will make you a deck in in two minutes. That's better than our That's better than we ever could have had.

Okay, by the way, um, [laughter] man, for all oldtimers, >> it's messed up. It's it's it's messed up. It's like fable, if you haven't used Fable 5, like I I you know, I'm not I'm not debating like do we have AGI or not AGI, but like this is the first this is the first thing when I've been like, >> you will definitively spend less time at a computer. Like >> you will just have these it's the it it Fable 5 is really actually what has made everything click for me. >> Robots and machines will outnumber humans onchain and peak is how they get there. Peak OS enables any machine to do business on any chain. It turns machines into autonomous actors and liquid assets with ease giving robots access [music]

to capital and the ability to compound their value. That means funds, allocators, [music] and institutions can underwrite, finance, trade, and route capital to machines the same way they handle any other asset. [music] Millions of new potential consumers for any web3 service, from compute to storage to anything a machine may need, without a human in the loop. Head to peak.xyz or click the link in the show notes to find out more. >> So, two two things on Fable. one uh interesting to note that Cursor and uh um Facebook released two models that like they're back, right? Like the the performance of those two models are very

interesting. Anyone that was like short meta, you know, is is pretty remarkable what Cursor pulled like they announced yesterday, right? Like very similar performance and dramatically lower token prices like like an order of magnitude cheaper. >> Yeah. Well, the other thing that has happened with Fable is that the the cost of Fable is ridiculous. It's ridiculous. So, >> it's hot. Like, when you say ridiculous, it's ridiculously high. >> It's ridiculously high. It's super expensive. And it chew because it chews through tokens. Like, no model I've ever seen. So, you know, everyone at Blockworks has access to Claude. Um, and uh we we're now getting more requests than we've ever gotten internally being like, "Hey, I just ran out of credits."

And so I think this is actually a thing that companies have to figure out is how do you keep your AI spend? How do you normalize the AI [clears throat] spend while your token usage is going to grow exponentially, right? And so that's where some of these >> um like I think uh the one Facebook just came out with today is I think they said 75% cheaper than the Claude and I haven't dug into it too much, but 75% cheaper than Claude and um and uh OpenAI. So this is where things like uh GLM 5.2 2 or um Kimmy 2.7, you basically need like an LLM gateway because probably 80 to 90% of the work at Blockworks could just be done with Opus 4.8 or you know chat I forget the model

before 55 I guess 54 I 54 sucks but like maybe one of the mod previous models but there's like 10% of the work that has to be done with Fable. So how do you tell the team like no your work is not worthy of Fable right now? This is this is I think a thing that many founders are thinking about is I want all everyone at Blockworks to be using AI exponentially, but we have to you can't route every single question through Fable. Um and so yeah, this is just a Are you want me to share your screen?

>> Yeah. Here, let me pull this up. Um all right, Gavin Baker. Yeah. And by the way, if you want to be at the front of like what's going on, Gavin's a great follow. this uh doesn't include the latest model for meta, but I'm sure the benchmarking stuff is going to come out today and we can updote talk about it next. But yeah, like you want to talk through this? If not, I'm happy to. >> Is this correct? So what you see is Grock has similar performance as Fable and the average cost per task is

>> fascinating >> basic like just dramatically dramatically lower and it seems like Meta also pulled something similar which just on this point alone I I agree with you like a lot of people if you're just prompting like question answer Fable 5 like you're using a Ferrari to for for a you know is not for that. That's why I asked you earlier like what are you using it for to create to like code and stuff like that. Um there's actually an interesting prompt that you could do which you can ask you know like hey like how am I not am I using uh AI like am I utilizing AI correctly and I I prompted it was like you're you're definitely

using Fable for things that like are just not >> right >> necessary right [snorts] >> um but I think the biggest uh criticism dooms like the the biggest bears of of AI have been ones that have said like you the ROI is not there like token prices are really high like companies like like uh you know I think it was Uber and Amazon and or Microsoft that like blew through their budget and it's like you know employees are spending like 10% of their salary on tokens and that's untenable. Um this this is this is the Jivvon's paradox argument which is like the price of tokens has come down the performance is still high in Grock like go you know like you've seen the chart of like percentage of the population that's like using AI and it's

like one red dot uh so the penetration is super low my reading this it's incredibly bullish like just adoption enterprise consumer grade creativity like long all of that it might not be the best of like whether whether anthropic wins for or opening out like that game I still is TBD right because it obviously puts into question like totally okay fable >> but I think it's a really important thing that we're talking about which is every founder has to these you have to have your company get as AI pled as humanly possible but you also can't have these costs get too out of hand and so you have to figure out internally like you might need custom harnesses to do better routing you might need better caching right like uh you know if you

miss the like cash mi cash cache misses are the easiest way to drive your costs up. You need to keep the context lean. You need better visibility, I think. So, so like we use ramp, like how do you who's spending money on the tokens and how are they actually spending it? And so, I just pulled up our AI channel on Slack while we were talking about this and I just saw um you know, one of our data analysts said, I created a skill so Claude and Codeex can delegate their tasks to Grock. And um you know, the a lot of the comments are like, yeah, this is the way. Um, and so it's it's yeah, it's interesting. And I I actually would recommend people put a full-time employee on solving this internally, like an AI engineer, but not to build AI into your product, which you should also

probably do. Um, but to figure out what software are you paying for internally that you don't need and what tasks happen at the company uh that are repetitive that you can automate. And then the third thing would be how do you get your cost down as a company? >> Yeah. Yeah, >> we have that by the we're super lean team, but we have one person that is like constantly looking at our workflows and saying how can we codify skills memory like reduce dependencies in one model like make sure we have a memory layer like basically following what Andre Kapari is like saying about obsidian and like the memory like he's like let's implement this which is very real like we we in some of the modifications that we've done in a short period of time you you you see the huge impact downstream impact of that and so

yeah definitely agree with your recommendation there >> should we we're 35 Five minutes in. Should we talk crypto? >> We have been talking about crypto with talk crypto news. This is the weekly roundup. We're supposed to round up >> the weekly round. I I alluded to it, but yeah, let's run through it. >> We're supposed to round up the week. Um, Securize finalized their I think they officially went public. Um, there's this whole VV thing which I'm a little tired of at this point, but we can talk about it because, you know, I I would be curious to get your take on on this dual token equity structure at some point. Um, but probably the biggest thing that happened this week was Robin Hood chain.

So, we talked about it last week. They had just launched the chain. Um, and I would say it's been a very successful week. Um, I think this is my take is Robin Hood chain is a very real thing. Anybody with um the So, to look at the numbers here, let me I can pull up our data here. Um, there's been over 500 million in uh in volume on Uniswap on the Robin Hood chain. That's more than any other chain other than Ethereum mainet. Robin Hood chain is now doing more volume on Uniswap than any other chain in the world. So, so I mean, yeah, it's 10x day over day. Um, here, let me try to pull up some other stats. Uh, new wallets here. Let's look at new wallets.

Robin Hood chain, uh, there's about 150,000 new wallets, active wallets yesterday on Robin Hood chain. So, this is a very these are real numbers, folks. Like these are these are these are bigger numbers than I think many of the biggest L2s have ever even seen. So >> that's not doing much. more than B&B because that's to me like immediately I think of like I saw Roman chain like >> no no I don't I don't think more than B&B but I think this is what this is telling folks is that uh this is a signal to people that people are actually I think the everybody needs their own chain narrative was dying and I think what Robin I think Robin Hood chain is going to you know actually be quite successful here and it's going to tell other people that they need their own chain too and by the way I don't

think everyone needs their own chain but I do think that Robin Hood I think Robin Hood chain and Bass, by the way, are going to and BNB are going to be some of the largest chains in a couple of years. >> Yeah. I mean, user aggregation theory in in in effect, >> they control the users. They can point to their own um databases. >> I thought Mike, >> go ahead. >> Well, let's go to Mike. I want to get your take like what's the benefit of Robin Hood launching their chain? >> Vert. It's what's the what's the point of verticalizing the stack? like what's the point of what's the point of verticalizing um what's the point of Robin Hood working with Kali for prediction markets

and then eventually um you know getting rid of Kali and just doing it all inhouse. It's it's to verticalize the stack which means you have more more control and better margins >> more fix more upfront cost to do it but but ultimately better margins and so my theory where all this goes is that centralized exchanges all trading will move onchain eventually. So, if you agree with that, and you might disagree, but if you agree, like I think Coinbase, I think most trades that route through Coinbase eventually will just settle onto a onto some decks. And by the way, Coinbase might own the decks or they might own the >> they, you know, but I think it'll ultimately settle on chain because blockchains are just better ways to move

value around the world. And so if you agree with that >> like a system we to put it in software terms for people that are not crypto likes it's a the Robin Hood chain is like a system of record to to trade reconciliation and and also probably monetize a user a bit more that was going to go onchain to another chain and there's a subset of the Robin Hood user base that is trading crypto that is going onchain to trade and you're looking at that in the dashboard and saying okay this is growing to a point where it's we're going to verticalize and insource it and we can make more money uh by launching our own chain.

Like there was a there was some there was some >> discussion at the board and someone said and showed the stats of saying >> uh 20% of our users are trading crypto or whatever the number is I'm using hypotheticals and of those they're going to these other places and this is how much they're spending and that's money that we're leaving on the table because we own that relationship and it's the same reason why Coinbase launched base although not that many users short like I don't know if that What I would actually be curious if Brian wants to come on and talk about it like is the initial what I'd be really interested in asking him and then Robin Hood eventually Vlad is how did it line up to expectations after a year or two?

I mean I I think that base took some strategic missteps really pushing into um you know creators and all that kind of stuff. Really simple capital markets are coming on chain. Lean into capital markets and and by the way I think they've adjusted strategy. I do think they get that now and I think that there is a allout war between Coinbase and Robin Hood to become the and and by the way I'd put Kraken in this. I think Kraken's execution has been phenomenal under Arjun. Um and so I think that as more trading like I really firmly believe Robin Hood settles 99.99% of their trades in a centralized database today. I firmly believe that number will get lower and lower over the years and more and more will move on chain. So, so

if you're Robin Hood and you agree with what I'm saying, do you want to do you want that to flow to Ethereum or Bass or Salana? Yeah. You're probably like, "Well, I actually want to own the chain." >> But like again, like the crypto like maybe a topic for a broader conversation. I'd love to have a debate to really unpack what you just said there because I feel like Robin Hood's internal systems are pretty efficient because they're a database and they track it. like the soon as you introduce a chain it has more surface area for things to go wrong and there's there I don't know if there's an efficiency to be had like what is the efficiency there like like where are they where is it going to show up in their P&L by launching this and >> and by the way is it is it a chain can

we call it a chain because if it's a if it's a if it's a entirely operated validator operated chain Uh, like is it just like are you just back to square one as a database that I guess rents some security from Ethereum? I I don't I don't know. >> Yeah. Yeah. I don't I don't know. I the real answer is I don't know why Vlad and and Brian are so excited about Bass and Robin Hood chain if they're just single sequencer what you know whatever whatever. >> Yeah. Yeah. I mean, >> but what I will say is, so I was with the guy, the FOMO guys, um, Paul and two two of the three founders from FOMO, Paul and Say that business is a rocket ship right now. And, um, you know, they were at the day that they were in the

office, which I ended up recording a podcast with them and it comes out on Monday or Monday or Tuesday. Um, the the the day they were in the office, they showed me their user metrics like on their phone. They added, I think it was 12 or 15,000 users the day before. We're we're in a bare market. There's like a 100,000 crypto people who trade crypto probably in the world like and they're adding 15,000 a day. So, who are those users? They're people who want to trade things on chain. They're not crypto natives. They're people coming from like Tik Tok and Instagram and stuff. And so I think as all these assets move on chain, SpaceX preo, you know, 5x levered copper, it all moves onto a blockchain, >> you want to Yeah. You want to meet the

users where there are where they are. >> So I actually think of it more from a user perspective. What does the customer want? >> Yeah. The the other aspect might be like Robin Hood has had a relationship with Citadel. Like they are becoming Citadel in some ways by launching the Robin Hood chain. you know, like they're they're sort of, you know, going to clip fees of flow and, you know, and that might be the answer to all of this. Uh, who knows what >> flows all the way down. Yeah. >> Yeah. Flows all the way down. And yeah, I think um probably the thing about fun is like my appreciation for crypto is you make it so easy for people to create an account with one click and fun with Apple Pay now that if you you're on a weekend, you want to trade oil because you saw news

or you're at a party, like you on board in a second. And that's not the case for traditional um for traditional like uh you know opening a bank account opening an interactive broker account takes days right and so because markets are so in real time so momentum I think eventually like you asked the [clears throat] thing that crypto has really good like is the user onboarding now is actually much much faster and like companies will say you can trade >> today if you want to go long copper because a buddy of yours at a party told you to do it >> you could do it now click of a button And then you can do the onboarding later.

>> Totally. Totally. >> And I think that's what Robin Hood is probably doing like from a they're going to onboard much more users that are wanting to just trade so quickly in options and all this and they can onboard them much faster than the traditional route with their chain. >> Yeah. Yeah. The other thing here is like there is regulatory reasons to like if if if Robin Hood wants to go list an asset on the exchange, um it's probably a total pain in the ass. like I I don't really fully know but like it's you know it's it's a pain in the ass or actually I do know it is a pain in the ass. There's a listings team and a compliance team and they are at odds with each other and uh you know not just at Robin Hood at every exchange there's a listing

team that wants to grow the P&L by listing more assets and there's a compliance team that says no no no you can't list that asset. So the second you move things on chain, well you can actually just list any asset that's on on unis swap or you can list any asset that's on you know if you're on Salana like FOMO can list any asset on FOMO that's on Dflow and Jupiter and routes through Zerox right so boom you've got every asset >> we're back to it's always been someone should create a meme it's always been regulatory arbitrage like always has been you know >> always has been which which Oh yeah, >> by the way, it's not just that, but like that's not the worst thing. Like users should be able to trade any asset that they want globally and this system has

gotten too too um too privatized or too um just archaic. Um let me let me let me share this take from Mike which I thought was quite a good take. Um uh he said uh so Mike Mike is you know co-founder of Blockworks said uh Bass and Robin Hood chain look similar but it's possible that the early activity on each is very different. One thing that Coinbase has that Robin Hood doesn't is a lot of users who sit on unrealized cap gains on Bitcoin and ETH. And what this actually does, the dynamic here is it makes it makes the coin ba it makes Coinbase and actually base a really great market for borrow lend protocols like Morpho where users who don't want to sell can borrow against their assets.

Robin Hood probably doesn't have the same thing as much as Coinbase does, right? Coinbase has people who are like buying Bitcoin in 2013 and 14 and 15. Robin Hood has more of the uh the retail traders though, like maybe a little bit more uh degenerate than the Coinbase users. And so Coinbase, again, this is all Mike's take. Coinbase by virtue of having its L2 on Ethereum and a more conservative listings process, again, that's the listings process we're talking about, doesn't have the same type of memecoin traders that Robin Hood does. So, in this case, Mike's final conclusion is Coinbase here might look a little bit more like the corporate chain on top of Ethereum, whereas Robin Hood looks a little bit more like Salana. I thought that was an interesting take and

um yeah I think I uh I need to think about it a little more because I just read it but I I do I think tend to agree with him there that these things it's the underlying users of these platforms that will determine what the chain looks like. >> Yeah. Does that does that then >> which is why I don't think tempo will ultimately have any users. I don't think temp because stripe doesn't have users. Stripe has businesses and Tempo will build a beautiful blockchain for businesses who need to do payments, but I don't think they'll ever have any memecoin activity or you know DEX activity because there's no individual users.

>> We should have Dan Robinson or some of the team that that has been like architecting it. But isn't it like they made a very specific like design choice to optim hyperoptimize for stable coins like primarily for B2B use cases after they acquired bridge. And so, um, >> yeah, I think about that stuff. >> I think Dan Romero is now running Tempo. >> Oh, yeah. But the the the thing about Robin Hood, what I found interesting, curious to get your thoughts, is I saw a tweet from Vlad saying like super long rwas. And then he was like, "Oh, by the way, like the chain is also good for memes, meme coins."

>> Because he gets it. He gets it. This is Rob, this is the Robin Hood strategy. Come to Robin Hood. You should trade your S&P. You your your your your Q's. You should trade just don't you know buy that buy the S&P but also by the way I will give you GameStop. I will give you the GameStop mania that was like the GameStop mania was all on Robin Hood. And so Vlad understands how important the retail >> degenerate. Um you know same >> I think we should call it I think we should stop calling it degenerate to be honest. I think it it's like the reality is like it's an affordability crisis.

These are lottery tickets. Markets are more momentum driven. Hedge funds are also conceding to that. This is just a new normal and adapt accept. >> I agree. I think that's a good take. >> And like you know that's the reality of things without too much emotion because in cash around like the the the connotation of like degenerates. It's like I' I've met some really good crypto traders that do pretty good risk management and they are investing in the frontier of in the trenches of pump. >> Yeah. Yeah. Um, >> can I can I tell you who gets this? Who you know who gets this quite well? Who I think maybe people think of as a memecoin trader or memecoin streamer, >> but who is so on the nose of this? By the way, yes, Anom, but I'm thinking of

thread guy actually. I think that thread guy is more on the nose of what is actually happening in the 25 and under crowd and how they treat finance. And so I saw a thread guy tweet on this. He said, you know, everyone is all m, you know, Robin Hood is unserious, blah blah blah, but what if memes and crypto fundamentals are foundational to modern finance and never going away because clearly it looks that way. And so it's kind of like, look, if memes haven't died through retail getting absolutely rinsed over the last year from memes, >> yeah, thread guy might have a point here, >> sir. Any sufficiently advanced technology feels and looks like magic. I would swap advanced technology with memes.

>> [laughter] >> Yeah. By the way, Thread Guy Thread Guy has an amazing piece on Twitter. You can just >> on the Hamptons. It's a >> he's so he's you read that and he's like this guy gets it like he's introspect like he understands psychology and I think in order to be a good investor like you just have to be on there >> there's a good tweet I saw from someone's like if you want to build a retail brand and you don't understand how 18 to 24 year olds think and shop you're never going to make it like ever. And I think it's true and I think the thread guy just gets it.

>> Yeah, totally. >> Does that make the case like one question for you? Last question. Does it make the case to constantly be hiring younger people or is age just not an issue? And you find that older people can like just really get younger generations. >> I think you have to constantly be hiring younger people. >> Yeah. Kind of delusional, naive that are going to, you know, and >> by the way, the the banks figure this out. There's like I heard an interview, I think it was with Jamie Diamond, maybe, and he talked about the stats of the two-year analyst program, and he said of the two-year analyst pro program, only like 3% of them are around in 10 years. But it's ex if the if someone goes through the two-year analyst program, they are a and

they stick around for 10 years. They are then a lifer at JP Morgan, and they they tend to make it to the leadership levels. And so you almost yeah it's it's um you need some process internally at your company to get the 22 year olds and the 23 year olds into your company and take bets on them. And actually, I mean, like if if just speaking from experience, like if I look at Blockworks, the best things ever at Blockworks and specifically the best products have come from people who are under 30 who have their really have their finger on the nose and look, we have people in their 40s, people in their 50s, like not to be and they they are really amazing at helping scale the business like >> Yeah. Um,

yeah, I'm I'm not going to name names, but there are older people at Blockworks who like we could not run Blockworks without them, but the it tends to be the 24y old who understands the market so well that drives forward a new like um you know the token transparency framework, I don't know his age, but this guy Robert like I think he's probably 23 four or five maybe and he's just he just gets it. He's just he's just driving it forward. And so yeah, I do think that. And by the way, they are so AI native. >> Like I was on a call with Robert yesterday, the guy who runs TTF, >> and I was like, "Hey, like can we um >> can we get this like you think it's realistic to have this by Friday?" He's like, "I'll have it to you by by

tonight." I was asking him for a massive it was a massive amount of work. And he's like, "Yeah, but he's like, "Have you not used Fable?" I was like, "True." So actually, as a manager, you have to update how you think about deadlines and requests. But if someone's not very AI native and you update your how you talk about requesting information and materials and deadlines to them, they're going to think you're crazy. So, >> Right. Right. Right. That sounds like a great employee because he's he could very easily say, "Yeah, I'll get it to you by Friday." And he does it like in two hours, but he's like, "Give me more." Like employee productivity goes 10x.

>> Yeah. Exactly. So, um, VVV, um, maybe I I just I'm I'm sick of talking about VVV, but maybe just dual token equity structure as someone who is I think probably angel invested in more companies in crypto than maybe anybody except for Bellagi, more than Bellagi. Um, >> yeah, I mean, the number the number in Misari, I think, is is understated. Let's put it that way. I'm over 200 >> at least, actually more. >> Yeah. So, I mean, you've seen so many of these, you've seen every structure that exists in crypto investing. Like, what what do you think of this dual model?

Are you fine? Like, there's two camps here, which is I'm fine with it. Um, actually, there's probably three camps that have emerged. One is I'm totally fine with it. Doesn't really matter. You got to do what you got to do as a founder. The second is um the second is look, I'm not sure this actually makes sense, but in e in traditional capital markets, you have so many different structures. you know, you have different types of bonds, you have different, you know, you got you got the common A, you got the common B, you got the preferred. Um, it so you so it actually all the like tokens and equity are fine. You just have to be clear with the market what they represent. And then there's a third bucket which is you need one one vehicle that drives the value of your

company where someone can clearly bet on your company in that way. Um, it doesn't matter. there are true tokens out there and because true tokens exist, you're in a bind. Anything that doesn't look like a true token is going to be discounted. And this is why like if you look at the best performing, for better or for worse, there's to true tokens out there like Ethereum, Salana, Hyperlquid. Um, and there's counterfactuals, right? You could point like Ripple for instance. Hey, well they have ribbal label equity and you know there's always there's always probably examples that you can cherry pick to make your argument but I think unequivocally you want to have like and it like you

want to have one instrument and like I can tell you like Carl Malone for instance like has been really good at like Liberty Media for instance has tracking stocks and there's like very interesting tax reasons why these instruments are useful to like you want to go for along Formula 1 where you can buy tracking stock A and tracking stock B and then you have exposure but it's more for tax reasons and it's very like it's very niche I would say for crypto because it's very retail driven because it's very perception and vibes and narrative you won't have one token like the meta is one token like just now but it doesn't matter why why why it doesn't matter because the reg it's just it's just I understand why you have these two structures it is it's just a reflection of the regulatory environment and and

the lack of clarity that we still have and we have safe harbors and we have some of these things but yeah of course I don't think there's anyone out there in a perfect world just have one entity like one instrument and again Berkshire Hathaway did this extremely well you want to go along Bergkshire you buy the stock right that's it there's nothing else like you can go buy Coke if you want or buy the underlying positions uh there's there's uh markets are so psychological like investor there there's like a study out there that says like investors can't understand more than one concept like one narrative so like like just focus on the shelling point should be one token >> and I think any other project that unfortunately whether it's intentional or nefarious or value extractive or not like look at all the DeFi protocols they're like yeah yeah fe rich switch

and we all understand >> why and but the market doesn't care like they don't care and hyperlid and the problem is you have some like hyperlquid that is just very clean >> understanding and this is why I think L1's have been so successful if you want to express a long view on an ecosystem you buy Ethereum or ETH, you buy Soul. Like, end of story. Like, that's it. There's no there's no there's like foundation that has some tokens and then there's the labs, the builds, the architecture. But like a got caught in this whole debate, right?

>> Totally. >> And like I don't think we can disagree that there was there's a why the token transparency act is so important. You want to build trust. trust is what gives a lot of value and if you don't if you degrade trust like if if you this again like not to toot your horn but like I think I think is there a world where you have two different token and equity and you have a team that has like really good communication really good disclosures and transparency and abides by your standards could it thrive yeah abs like yes I could see a world where that happens like in the same way that like Liberty Media has all these tracking stocks and is super buttoned up and disclosures and understands how to how to you know how to make it work. So that

I don't know if that answers the question, but like it's complicated. It doesn't matter, but because tokens exist, you're going to really have a hard uphill battle fighting against something that doesn't look like a token. And the market again, it doesn't matter what I think. The market sort of already spoke. The token's down. Like end of story. >> Yeah. What else? This week, Anom launched launched a coin and uh securitized went public. So there's your >> and and AI is just wonderful and you know >> five okay so 5.6 six live stream going on now Sam Alman in addition to the model three major product things one chat GBT work okay so this is a competitor to um Claude you know obviously um

>> okay >> uh number two is new chat GBT desktop app number three is hosted sites >> oh wow that's great you can just deploy through >> just deploy so maybe no need to you know go through Verscell and replet and or you know previously you could use like a >> Versel on rail gun and stuff like that. Um, >> uh, take a look at this. Suck tweeting. I don't think he's tweeted in a long time. Quote unquote, just to round this out, the pricing from some of the other labs is very extreme and has very high margins. We think that there's a real ability to be able to offer frontier or very high intelligence at a much more affordable cost.

Epic pricing war breaking out between these companies. >> Interesting. Zuck tweeting. That is >> tweeting. That was the last time he tweeted. >> Zuck. Zuck Zuck's last tweet was 2023 before where it was literally just a Spider-Man meme. And then the tweet before that was 2012. So this is only his second tweet in 14 years. >> You know it's real. >> Oh, now he's out here now he's out here retweeting people. Oh, he's addicted. He's he's hooked. He's hooked. >> The co Palto Networks also is doing that. Honestly, let's go content of the week because this goes to something that Jeremy and that Invest Like the Best podcast.

>> I think we're both having the same content of the week this week, which is Jeremy Gifin on Invest Like the Best. If you want to understand why Mark Zuckerberg and you know what's the Palatoto Network CEO >> Anish? Oh god. Anyway, I saw him at the All-In Summit. Um he's he's fantastic. Doesn't matter his name. Pal um if you want to know why Zuck is tweeting, why Palo Alto Network's CEO is tweeting once a day, why all these why Twitter >> remain Nikesh Aurora >> Nikesh Aurora um by the way goed CEO unbelievable executor um I would try to get your hands on whatever that guy's putting out because he he's a phenomenal operator. If you want to understand all this and you want to understand why

Twitter remains and will remain the single most important place in the world to build a personal brand, go listen to the Jeremy Gifin episode on invest like the best. By the way, that guy outside of this more aferisms than than any one person. It's like him and um Will something or another >> mandates or Yeah. >> Will him and Will are the um the like if I if I >> they're the new priest. Uh what is it? the new uh priests of the world, not billionaires anymore. And I love what he just nonchalantly just said. Everyone, >> why do you like the episode? Can you summarize it for me? Billionaires are dead and priests scientists, the age of the scientist over and yeah, go listen

to it yourself. You know, you know what I experienced is to be honest when I was working at the health startup, we had like all these noble laureates and we we I think we hosted a dinner and we had like all kinds of billionaires showing up because they all want to live forever and and they all that's when you realize like yeah money is not the end goal. its relevance and everyone wanted to be sitting next to you know the Nobel laurate and the Nobel laurate the Nobel Prize winner in chemistry and nor you know it was that's when I understood like yeah I think at some point you wanted you would rather have less money and more relevance and he really gets it.

>> Is there anything in that episode anything else that stood out to you or anything that you disagreed with? >> Not much that I disagree with to be honest. I think the guy's just on it. He really understands it. He also talks about like um >> the thing the thing I would disagree with is being a billionaire is still a thing that 99.99% of the world would be thrilled about. And I think that if you live in the world that we live in or you're in the circles and you go to the dinners and you go to the events, you go to the all-in summit, you go to F1, like you're like "Oh >> that guy's just >> You attach the lowly. He's a lowly billionaire. But for >> I think that is a very um

>> I think it's important to remember that that is not >> actually how the world works. So >> I think yeah >> what I do think he nailed sorry I keep cutting you off is what I do think he nailed is that most billionaires today do feel so um my my wife's business many of her clients are these you know she had many companies that she works with but many also just individual billionaires and um she has a lot around crisis and you know reputation management and many of them feel like they like like being they they were important five or 10 years ago and they are no longer their billionaire status no longer makes them irrelevant like ma no longer makes them relevant. So I think what he nails is that being a

billionaire used to be it was that it was that alone that title alone was the thing that made you relevant and now >> you need to post on Twitter to be relevant. >> Yeah. I I would say like there there's uh it's always been like that I think because I' i've talked to people that are were billionaires like 10 years ago and and they they would probably tell you the same like they they just deeply unless you have like your true identity and you have like it it's uh we're all having the same problems of like you want to feel relevant, you want to feel validated, you want to we're all social species and so you want to be part of the tribe and Peter the I think Peter Theel by far remains like the clearest thinker of our age. I think um which is

like mimemetic desire. Doesn't matter how much money you have like you're going to want to copy people and it's incredibly hard to resist that biological primitive urge to copy. And like I think only few people like him and Elon like have truly defied that gravitational pull to conform. But if you're a billionaire doesn't matter, dude. Just does not matter. You will constantly crave and seek validation >> like like >> Yeah. >> And you want and it's all the signaling right attached to that. I do wonder in in a world of abundance >> is that it >> like like in a world of abundance like if you go back to ancient like Athenian times >> there's like a whole class I think he mentions in the podcast there there's a there was there used to be a time where people got paid to think

being a public official was the highest honor. >> Yeah. being like you had a class of philosophers like Plato, Aristotle like Mark that one of the more important things that he talks about at risk of like being a spoiler alert is this idea that we glorify the grind and I've really experienced that move in Europe. I'll leave it at that. I think there is there is an art and there's a you really have to start questioning like the freedom what it means and I've always felt output driven like that's what I and I think it's but it's very difficult because you want to feel like you're relevant and for better or for worse you want concrete evidence of that

and there's no better concrete evidence of that of time inputs not so much outputs time input is is such a concrete thing to say I work 100 hours a week you deserve my respect, sir. Doesn't matter. It doesn't matter in the world of whether you can do [ __ ] in like two seconds. >> Mhm. >> And that adjustment, I don't think we figured out what that means for our brains. >> Yeah. My thought, so I I agreed with most of that section. The counter to it is that I really genuinely do feel busier than I've ever felt in my life. And I think the reason for that is because >> Do you have a kid? [laughter] You have a baby at home. You're cleaning diapers because of a child. No. Well,

that that but also because AI is uh very deceptive in its ability to make you feel more productive. It is it it it is the great enabler of starting new projects. And so there's, you know, I have a laundry list of things I've always wanted to do and build at Block Works. Never been able to build them because they're we're constrained by people. And now these things can actually take something from zero to 60 in and I'm not kidding three hours or one hour or or two days. But it's um it's very deceptive because once you get that thing to the MVP stage, you actually still need a bunch of people and you need to spend a bunch of time to do it. So I think I feel and many other founders feel busier than ever because they're actually starting so many

things. You probably saw this in our investor letter that I sent out, you know, last week, which is, you know, the low lightss of Q2. The things the thing that I think we're not doing well at Blockworks is we're doing way too many things. And this is probably an output of me and Mike doing thinking that AI can help us like we're trying to push the boundaries of what AI can do internally. But this is that's probably the downside. But the the I think you've just summarized the the the bull case for AI, which is you're still you said something there that's so important, which is you're just going to launch way more creative experiments. And in order to execute them and see them through and really scale them requires humans. And so

it requires new skills. But it's not that like you can take it from zero to 100 like zero to one. Yeah, maybe. zero to like one to 100 requires humans, requires that. And um yeah, but I I don't uh I I'll say it is hard for me to go to sleep because I have a cabinet of ideas and now I don't need an engineer and there's no degradation in the message and the output and the output doesn't it doesn't require $100,000 and a consultant and a month of work. It's like two hours and you're like, "Holy [ __ ] let's go."

>> Holy [ __ ] Yeah. >> Like holy [ __ ] I don't >> Yeah. It's Wow. Yeah. >> Yeah. My wife My wife was like, "Why why do you always leave your laptop open and why did you why do why are all of our computers still running overnight?" [laughter] So, all right folks, Santi, good to have you back. You're looking very dapper today, by the way. >> Thank you. Well, you know, just >> Seleni conference. >> Seleni. Nice. >> They said business casual. So, you know, this is business. >> So, Seleni conference is probably like 15 minutes from your door. Huh?

>> Depends on how fast you drive. >> Yeah. [laughter] >> Depends. Awesome. Well, good good to uh good to be with you guys this week. Um Monday or Monday or Tuesday, we're releasing an episode with the FOMO founders uh Paul and say um really interesting. There have not been many businesses, consumer businesses that have taken off recently and they are just exploding. Um and so it's yeah, really interesting episode. We talked a lot about marketing, customer acquisition. What are you doing to that mic? >> I'm not leaving.

>> I'm not leaving. >> I'm not [ __ ] leaving. >> Have a good Friday. Cheers. Great weekend, guys. Have a great day.