How Coinbase serves institutions as an everything exchange

Transcript

If we go to the supermarket and apples are 30% off, we don't stop liking apples. Now, we may not buy more apples because how many apples can you eat before they go bad? But we certainly don't buy fewer apples than we than we normally like. And we come home happier with our apple purchase. What's up everybody? It's LG Ducet here and welcome to the Milk Road Show, the daily crypto show where retail panics, institutions quietly keep building and no one admits which one that they actually are. Today is December 18th, 2025. Joining us is John Dagasino, head of strategy for institutional at Coinbase. John works closely with some of the largest institutions in the world as they navigate crypto trading, derivatives, tokenization, all that stuff. And just yesterday, Coinbase had their biggest kind of series of

announcements of the entire year. And lucky we have John on to take us through what that means for us and of course for the institutions that are super keen on crypto going into the new year. Before we even get to the sponsors though, you guys are loyal listeners of the show. Thank you for being with us the entire year. You know that we cover the crypto market every single day and going into 2026. I want to hear from you guys. What do you want us to cover? Listen, I know you like hearing about how we're down bad uh and how we're going to be up again sometime very soon. But more let's go deeper than that. Is there a specific guest, a specific topic that you would love to see on the on Milk Road? Let us know down below in the comments or in

Discord if you're a pro member because we want to hear from you. Today's episode is brought to you by chain link which links web3 to Wall Street. Bridge sends stablecoin payments instantly simple global friction free and reserve DTFS the onchain equivalent of DTFS. John, what's going on, man? Welcome back or welcome to the show. You haven't even been here. >> I haven't been on this one. I'm a big fan of Milk Road. Uh this is daily. You do this every day, man. You >> do this every day. I'm here every day. Oh yeah. >> Uh thank you for having me. It's easier It's easier, John, at other times of the year. It's been easier at other times of the year. It's been an up and down year to do a daily crypto show. I'll put it that way.

>> Yeah, I I get you. And feels like mostly down, right, these last few months that that we've reached hopefully we've reached kind of peak peak pessimism. >> I hope so. I hope so. And I want I want to dig into that with you uh a lot today. But I think what people want really want to hear about, John, is they've seen probably on the timeline, maybe they watched the announcement yesterday, a lot of your fellow team members did a fantastic presentation on all the products that are coming to Coinbase in the near future, including stocks, prediction markets, derivatives, uh, the token launch platform that we saw with Monad as well as Coinbase Advisor and some major upgrades to Coinbase business. John, tell me from your seat, what's what's the most impactful for you and your line of work here at Coinbase?

Well, thanks. Thanks a lot. And it was it was a fun thing to watch because we've been working on this for quite some time. And for me watching it as a Coinbase employee, you know, I was really kind of happy because it's always it's always nice to know that the person you're working for ultimately uh means what they say. And so we've been hearing internally from Brian, you know, I want to be the everything exchange. We want to be the everything exchange. And all of us have been really excited about that because I feel like that's why a lot of us got into this and and chose to work for a place like Coinbase. and to watch it all come to fruition not in peace meal but in one kind of really elegant top level presentation um you just sort of see the future like and and

and for me as a person who spent most of my adult career in exchanges I was head of strategy for the New York Merkantile Exchange um I've got this wonderful admiration for the role exchanges play in an economy um I'll tell you a quick story after um after 911 in New York City uh the first two of the first businesses that were opened by federal mandate. Like we have military helicopters flying us into work with the New York American Exchange and the New York Stock Exchange. And the reason is if you don't have price discovery, everything grinds to a halt, right? If you if you don't know how much something's worth, you can't determine whether margin is required. You can't determine how to cash people out. You can't know everything starts with price

discovery. So, I've always been a huge fan of exchanges as critically important economic infrastructure and to see and and so I was, you know, the choice to to work for Coinbase was, oh wow, I did this once for commodity derivatives. I get to do it again for crypto. And to watch this very natural evolution um of seeing viewing crypto as an asset class to realizing blockchain and infrastructure technology layer to watch the evolution grow pretty in a pretty short period of time into how do we use this technology infrastructure layer to power all asset classes and all elements of finance. It was it was really fun. So it was it was great. It was cool to see the guys up on stage. Um, uh, I wasn't there because I don't own white sneakers and apparently bomber jackets and white

sneakers are a prerequisite to, uh, to I'm gonna probably get fired for this. I I mean that they're very, very cool. Way the dress is very, very cool. >> Lots of white sneakers. Yeah, there are. There's the white sneakers. Yeah. >> Yeah. Max is a very smart guy, but his career has been accelerated by the whiteness of his sneakers. That's That's pretty much >> Is this the Brian like is this the Brian dress code? cuz I feel like every time I've watched Brian do some kind of address or specifically when he does interviews at conferences like I have this image Brian sitting in a seat visa V like some bigname interviewer maybe me one day >> sitting and he's got he's got his jacket he's got a shirt underneath he's got his white sneakers and he's >> I wouldn't say it's a Brian thing I say

it's a tech thing it's probably it's probably I've done a bad job of adopting of adopting the car I I certainly have I used to be a three not 3P I used to be a suit guy every day So, uh, we've all kind of adopted, but it's like when you it's like when you live with someone for a long time, you start to dress alike, right? Um, but I think it's more of a of a of a tech forward culture, um, than, um, uh, West Coast versus East Coast thing maybe. >> A quick little timeout from the pod here because we've got a huge problem. You're listening to the show, but most of you are not actually subscribed, which is crazy because we're here every single day dropping the stuff you actually want to know, the liquidity, the charts, the major players, and which way the

market's going to go. So, hit subscribe, hit like, and let the algo know that you actually kind of like this. >> Oh my god. So, you must be you must be grateful then that Brian wears like a something simple like a bomber jacket and sneakers, which are relatively like nice, cool items versus like a turtleneck every day, right? >> I'm I'm grateful the leadership team at Coinbase. Like, you know, two things can be true at the same time, right? It's not mutually exclusive to be a techro company, but to be, you know, meeting with, you know, we we we just announced uh crypto as a service. you know, our clients are PNC Bank, standard charter, etc., etc., and and the the team suits up when when appropriate. So, I like the duality of it. I like the optionality of uh of bomber and white sneakers or a

suit when you need it. Um, I think that's kind of like honestly as we get into this conversation about the state of crypto currently. You know, some of the anst I see on crypto Twitter, I think is a grudging acceptance that we are shifting into that dual mode that it's it's no longer pos crypto will always have its its its roots. But I think it's no longer possible to be a global crypto firm of of import that's going to truly if our goal here is to change the financial system and update the financial system, then we're going to have to live in both worlds. And um you know, I like the fact that our sea level suite can do that. Is it is it mind-blowing for you as somebody who used to work at an exchange that now there's an app in your phone that's a

originally a crypto app that's going to let you trade stocks 24/7? >> There are times when like when I first joined the NYX, it wasn't 1960, it was 2004 and the the exchange was still open outcry at that point. Meaning like the most important commodity in the world was 850 guys on the floor of the New York Merkile Exchange screaming and yelling and making crazy hand signals. And I knew from the first day that this is insane. Like this is obviously archaic, right? And everyone knew, but there's all reasons why systems don't change and some are valid. You know, you have to critically important systems.

You can't just swap them over when better tech arrives. That that tech has to prove its resiliency. Um, so it it it was it probably wasn't crazy that the NYX hadn't transformed by 2004, but it was crazy it hadn't transformed by 200 like 9 10 11. That that was nuts. That was a function of just corporate inertia and other and other things. So longwinded a way of saying my 8-year-old daughter when she's my age will be trading assets on chain. I know this with one million% certainty because it's just better technology. And by the way, her grandkids will probably use something different, right? That's just how evolution kind of works. Um I don't know when um because the forcing function is challenging, right? So this crazy system I mentioned LG of the NX4

traders pricing the world's most valuable commodity. Here's the rub. It actually worked really well. That's the problem. It wasn't It wasn't fracturing every day. We priced crude oil, trillions of dollars of notional options contracts traded in this crazy manner, but it still worked. And so there was no forcing function to to change that. And there was a forcing function for people learning how to use wallets in crypto if they wanted to invest in crypto because that's the only way you knew how to do it. So what's going to get people to switch from buying a share of stock through DTCC through the traditional securized matter on on a on a rail like a Charles Schwab or something in the way we all know how to do it. You know, it works pretty well. It's not hard to buy

a share of IBM. So, I admire the fact that Coinbase is willing to step up and try to create the forcing function, and we will see if the advantages of trading on chain outweigh the switching cost and the friction associated with that transition. But it's going to take companies willing to to be courageous enough to say, we're putting our balance sheet in the line, and if you want to trade stocks through us, this is the mechanism to do it. >> That makes sense. Yeah. Is this something that how does this translate over to the institutional side, John?

Because I think obviously that's you know, you're you're head of strategy there. You know, we're you're talking right now about someone like your daughter being able to trade these stocks in the future and the forcing function, but what is actually going to happen on the institutional side or what are the institutions looking to you to solve at this current moment like on the Coinbase level or just in general? >> So, I feel like it's a great that's a great point. So, so obviously the thing that caught everyone's eye know token equidi equity tokens kind of caught everyone's ear and that is super important especially for retail that kind of that's it's a lot easier if you've never if you if you're new to trading stocks the notion of learning how to do it through DTCC versus learning how to do it on chain that that's right that's it's open open book

right we can win that we can get that that young client over day one because they don't know any they don't know any different right so um uh I I don't like Apple I'm an Android Like if I was starting, I just I can do it. I can figure it out. I just choose not to uh because I I'm I'm set in my ways, right? But if I never touch a smartphone before, right, is a 50-50 shot. I can go in either direction. So So institutions, you know, I I I think are going to be a little bit slower to adopt um equity tokenization unless you can offer them like, you know, really interesting stuff like margin offsets, then that's then that's a game changer. That's a forcing function to get them on. But the other stuff Brian announced, the lending, the prediction markets, um the expansion of

a prime brokerage offering and all the things that that that come to bear with that, that's really really interesting for institutions. Institutions first and foremost care about liquidity and then they care about margin utilization. Those are the number one things they care about. Then then things like improved USDC returns uh versus interest rate returns. That's great. But most investment institutions don't make their living. They don't they don't brag to their investors about their return on their cash. They'll take they'll take that juice of of course. Why wouldn't I want to get 6% versus two on my cash?

But that's a lesser cell for for large institutions. Um asset managers specifically I'm talking about here. But the notion of I can offer cross margin cross margin on on these assets if they're all under the same umbrella that's really attractive. Um the notion of accessing interesting markets they can't otherwise access through traditional mechanisms like uh uh like prediction markets that's super super interesting. um all the massive quant shops that you know trade that were responsible for like the majority of order flow in in all traditional markets they are going to jump all over prediction markets if you can improve or decrease the friction associated to them trading those markets. So if there if I'm a big quant trader and I've got my

crypto position with Coinbase and now Coinbase calls me and says hey you can also trade prediction markets on the same platform al together that's super super interesting and we can lend to you based on those balances you keep to us very interesting and then that opens the door to a conversation of hey why not just try testing out your equity trading here too and see if the see see if the totality of that relationship is but it's going to take time for us to bring over that business because you know it it works right now. It it's it's not hard to and and they're plugged in.

They're trading on a nancond latency. So, but but over time all of that will move over as well. >> So, I like that. I like what you're saying that basically by developing all these products, right? Coinbase is creating a suite of these new these new somewhat new primitives that perhaps larger institutional clients are going to feel a lot safer dipping their toe into it with Coinbase and then eventually maybe you can win a lot more of their business with all the products that they're currently doing in some other way but then you're going to be the everything app, right? And they'll they'll they'll start to do it all in one place which is kind of the long-term strategy. Correct.

>> That's the idea. Now I will I will say look I mean markets like igopies not monopolies right? So, so you know I don't think anyone reasonably thinks that every single institutional investor will have all 100% of their just like by the way like I don't think there can't be one exchange there there it's better it's back in the day when I was at NYX um we had a competitor exchange right up rise up back then this tiny little fledgling electronic exchange startup called ICE intercontinental exchange and everybody kind of poo pooed it and they were like oh these crazy open cry is the way to go and I was noticing just ICE growing and but I noticed this idiosyncrasy because So then the NYX I remember the NX guys like figured out ICE was a competitor and they're like we got to kill ICE. We got to kill them. We

got to destroy him. But I noticed that when they were live because they were, you know, they had London trading. They were live on different hours than our our trading. Um our trading spiked because traders were trading the arms between the two. There's all this really exciting stuff going on. And I was like actually it's better for us if there's now you can't have fractured liquidity across 50 exchanges. That doesn't work. But institutional not retail institutional traders like a few options to spread their order flow around. So I think I think you know being an everything exchange may not mean having a 100% of their business but it could mean having 20 30 40% of that business um split across another another few

venues and that's insanely accreative insanely insanely exciting. Um, and if we can if we can get to that point, if we can get 25% of institutional trading across multiple verticals, you know, Coinbase is a 10xer and um uh the the margin utilization efficiency for that institutional investor, you're talking about materially improving their net return, um, which ultimately is what they're judged on. Stable coins are the biggest use case in crypto right now.

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Reserve ETFs are rule-based baskets of crypto assets packaged into a single token like Coin Market CMC 20, crypto's version of the S&P 500. Go to milkroad.com/reserve to find out what's on offer. John, at this point in time, obviously, and we mentioned this at the very start, you can't believe we do a daily crypto show, especially in these times. Um, institutions, I'm assuming, are relatively unfased by a 30% pullback, especially from an all-time high on something like Bitcoin or on crypto. I want to depend on trying to screw up, but it depends on the asset class, but I agree for this asset class, yes, they should not be agreed.

>> They should not be right. I guess >> if I'm trading munis, if I'm trading munis, I get 30% pullback. That's a different conversation. If I'm trading commodity derivatives, tech growth, crypto, if they're not, if their risk parameters don't envision the possibility of that every 18 months or so, you're not doing your homework. >> This is an insanely stupid question. What are munis? What's that? >> Municipal bonds. Sorry. >> Okay. Okay. Okay. >> Yeah. Anything anything boring, right? I mean, if you're trading if you're trading large cap US equities like like dividend paying stocks, you don't model a 30% draw down barring like COVID or something extraordinary. But if you're trading derivatives or tech or any

anything that's where volatility is a feature, not a bug, right? That's the problem. Volat not problem. That's volatility is a feature of these markets. You want it. You need it. and you're not envisioning a potential 30% draw down from time to time, you're not that good at your job. >> So, are they so are institutions hungry in times like this when this exact thing that you've kind of, you know, you're telling them it's a good sales point that's like the volatility is the feature. Are they are they are they calling being like, "Give me more Bitcoin, John." Is that what they're doing or are they are they a little worried? >> The good ones are the ones that are bad risk managers are are overlevered.

They're they're in trouble. But the the high quality ones, this is exactly when they feed. This is exactly when they get greedy. this is exactly when they get less fearful like how what opportunities are being created here, you know, not not to be too like prosaic about it, but like I I was I was lucky enough to learn finance. I took a finance course at at at business school from a legendary investor, Bob Bertton, uh who who was one of the creators of Black Scholes, brilliant man. And he said something that struck me for the rest of my life, which is in the Merin household, we like apples. If we go to the supermarket and apples are 30% off, we don't stop liking apples. Now, we may not buy more apples because how many apples can you eat before they go bad, but we certainly

don't buy fewer apples than than we normally like, and we come home happier with our apple purchase. So, that's how institutions, the ones that risk manage properly and don't get overlevered, that's how they think. Um, so now I don't want to be I don't want to seem cold-hearted. It is it is scary especially if you've entered a market where you even though you know it has the potential for these draw downs you haven't experienced it the first time you're experiencing that is scary what I think has happened LG though is it's a and and it's a little frustrating because I I I think as we go through these things and everyone the industry is getting better the market's getting better but you still have this sort of knee-jerk reaction to um these cyclical draw downs as something must be really

wrong there must be some everybody wants to like find this hidden disaster that's um we know like we we know about the disasters. We know when they occur pretty readily um so right now the big rumor is there's some massive market maker that's blown up. Um you know again October 10th the afternoon of October 10th um I would have said possible you know in a in a massive volatility event yes it's people can get can get outside the risk parameters it's absolutely possible um those things don't stay secret for months you know they they leading up to the FTX implosion there were like subtle rumors hey things are kind of weird there what's when they when they became insolvent we all knew

within minutes not hours, minutes. So massive spiraling insolvenies of of of material players, not like the oneoff small industry participant that maybe they can hide that. I mean that just becomes criminal criminal behavior at some point, but a massive exchange or central market maker insolveny that doesn't stay hidden for for several months. So there doesn't always have to be some big secret boogeyman. Sometimes you you get overlevered. Now, here's what's probably happening. And I say by by probably saying I've spoken to most of the market makers. I think October 10th was scary. I think some folks realize, wow, we survived. We're we're

okay. But that was a little bit too close. I don't like that. I think they realized they didn't really understand how the ADLs, the the auto deleveraging platforms worked, particularly for some of the overseas exchanges. They really didn't they didn't get it. And that scared them. and they've taken risk down on those assets on those exchanges. They've removed that risk from the market. And if you just think about it mathematically, what is the difference if a billion dollar market maker blows up? They just exit the market completely. That's that's bad. But what is what's the difference if if if five market makers take down their exposure by 200 million in in reaction to a scary event on October 10th? That is economically the same thing. That's a

billion dollars of liquidity being removed from the system. So that's what people are seeing and it's just going to take a little bit of time for these market makers to kind of reset their risk parameters, do their research on the ADLs and they'll start stepping back into that risk. But I think that's what's happening, not some, you know, secret blow up that no one knows about. John, I think a lot of people took that opportunity as well to say that the four-year cycle was done because it almost lined up perfectly with all these timelines from Reddit and 4chan of uh this date, this date, you know, >> what's your take on that? Because I think that that's, you know, it definitely killed the vibe of the the cycle potentially extending, but I think a lot of people like you were saying like, listen, forget the four-year

cycle, we're going to have a pretty good year next year. >> So, I don't know if the four-year cycle is done. I I I'm not smart enough to predict the future there. What I can say is this. If you believe in this, if you believe this asset class is truly transformational, if you believe that institutions and if you believe that normies and it's going to go from a a niche group of cryptonative folks to becoming a globally institutionally and society transformational asset class, get used to the idea that those patterns will not persist. Those patterns persist in small niche markets.

They cannot persist in large globally accepted markets because institutional investors will trade in front of them. Smart investors if a if literally every six months a stock falls then and it only keeps doing that if the same buyers and sellers are in that market. If the market's not growing, if the market's growing and expanding and smart investors are joining, they're going to say, "Oh, look at this pattern. Let me start buying this stock. Let me start selling this stock." you know or buying up on the dip because I know it's going to start going down and that volatility starts to smooth. these patterns just don't persist unless there's some structural there's you know natural uh gasoline markets uh have this cyclicality because in certain states

like California when the summer driving season starts they switched to ethanol and so for years you saw this kind of cyclical pattern but then once commodity markets beame became more institutional the traders front run those patterns because they get they they understand it's coming and then the pattern changes and shifts so the worst thing that could happen for crypto, Bitcoin is if that four-year pattern remain unmolested forever. That means it's just not evolving. It's not growing. New participants aren't joining. So, I don't know if the four-year pattern is over. I know you should not be scared of the four-year pattern being over. You should view it as a sign that the market's maturing.

>> I like that, too. I mean, it would seem so silly that forever crypto would be tied to a four-year cycle, right? Because that's I mean, even the narrative, it's like, well, that's only like three times. It's not this it's not this 20 year or like hundredyear pattern like other people paint for stock market right where it's like oh listen this happened so and so and so new buyers coming in >> that means because if nobody's supporting if if it's truly a a cyclicality I'm buying the hell out of that dip all the way down and then that's going to prevent that different so that that means that no new buyers are coming in it it's it's it's not it's not a maturing market so it's not a good if um if these very predictable patterns continue to persist and they never get

disrupted by new new smart investors coming in and front running those those patterns. >> That makes sense. I want to shift ahead to to next year as well, John. Uh and hopefully hopefully we don't know what will happen to the four-year cycle, but I think you gave us a pretty good perspective there. I think the next narrative that's starting to pick up steam now, John, is the midterms in the US, right? And that's obviously that'll come a lot faster than people realize even though it's later in the year. Um how how how is the potential swing of power going to impact crypto prices and specifically the institutional demand?

>> I think again it goes perception versus reality. So I think I think there's this common very simplistic perception that you know right now in the US one party likes crypto, one party doesn't like crypto. Um, I don't think that's true. And and I certainly don't think it's true that the party, which is perceived as not liking crypto, um, is going to run on an anti-crypto agenda ever again because they realized in the last election cycle there's 50 or 60 million Americans who believe passionately enough in this technology to vote on the issue. And the remaining Americans may not understand it. May even have a, you know, a bad, you say the word crypto and it may inspire. I think you I've seen

these polls where it's like the average American has a neutral to negative view on crypto. The problem with those polls is they're very misleading in terms of in terms of uh intent. So, if you substitute, I'd argue, I haven't done the research on this, but if you substitute any complex financial term, swaps derivatives options swaptions um, term structure, uh, investment banking, any of those terms, I think you get that same sort of like, I don't I don't know that I don't I don't like the way that sounds and, you know, it sounds very Wall Street and it sounds very um, uh, I think you get that same negative reaction, slightly negative reaction.

But then the follow-up question needs to be, but do you care enough about this issue to vote on it? And I think the answer for almost all of them is no. Right? I use I use my mom as an example. My mom doesn't understand crypto, she I bet if you gave her a poll one to five, how do you feel about it? It would she would give it a two or three because my son's in it, right? But she doesn't care to vote on this issue. And so I think the politicians realize we're not getting we're not gaining a single voter, but we're losing many because of this because of this issue. So I don't think that it's as simple as one side likes it, one side hates it. I do think, however, if there's a massive swing back, you could see you would see a

short-term market reaction because I do think that's the simplistic view. Again, I view those as buying opportunities, but um we'll we'll see kind of when we get to that point, you know, what's there. But I think I think you can't compare the way that our government and most politicians view crypto now versus a year ago, which was still in the aftermath of FTX. Um, I think things are demonstrabably different. Look at every major bank using Coinbase for crypto as a service. Uh, look at all the stable coin issuances. Um, the the Czech Czechosvaken central bank has bought Bitcoin. Now we are in a very very different world in terms of the

permanence of blockchain in the financial ecosystem and the growing realization that the next iteration of our financial infrastructure will maybe not built entirely on blockchain but we'll have blockchain as a foundational pillar of support. >> Sure tokenized financial products are the future but there is a big sticking point. They all need to speak to each other. This is a tough problem to solve, but Chainlink does exactly that. It's the universal language for financial markets, linking Wall Street to web 3, banks to blockchain, and so much more.

See how Chainlink is linking the world by going to milkroad.com/chainlink. John, what's something that nobody's asking right now? Cuz we have a lot of investors that listen to the show. People are long-term investors. They're holding their stuff. But I think, you know, even the questions I've asked you, John, those are standard questions. Four-year cycle, midterms. What's something that nobody's asking right now, but we really should start asking soon? >> It's a great question. >> You take Think about it. >> To what degree To what degree is crypto really fulfilling its potential promise of fungeability across markets and across geographies, right? So, let me let me explain that.

So you know the zeitgeist the whole one of the reasons we do this I would say two two of the core principles of digital assets versus traditional assets or blockchain versus uh other ledgers is the ability to self- custody the ability for ownership of of assets um and the notion that they are uh open architecture so anyone can participate and you can send these assets anywhere in the world cheaply simply easily with no central intermediary right those are the two things that make crypto crypto right without so you know I work for a centralized exchange that we have a we have a big uh uh DeFi component we have a DeFi market we have self-custodial wallets you know it's it's and I am of the belief that while um centralized

custody should and will remain um incredibly important for both individuals and for institutions if you didn't have the option of self-custody then there's no point in doing this so I think I think that self- custody is is essential. The optionality of subkati is essential to cryptocurrency. Can't live with that. Doesn't it doesn't that's not it doesn't mean anything. Now I think most people will choose to keep their keys in a centralized custodian. I think they should but that's my personal belief. Um but but that doesn't mean I think that self-custody is is bad or worth crypto doesn't exist without self- custody. So similarly, I think it's unlikely that

governments will allow massive amounts of value to transfer between geographies with no level of government oversight. I just think I just don't think they'll allow it. Um you have to have the option for peer-to-peer transfer and self-custodial transfer of value. Um so where are we in the so so that that tension between government's desire to control their monetary systems um but their realization that once the cat's out of the bag with certain technologies unless you're going to be North Korea and shut down the fiber optive cable coming into your country you can't stop the internet like where are we on that on that tension that's the question I think people in crypto

should be asking because if if our goal is to change the world. Um, rebuilding the current rails with more efficient technology isn't really, I think, what most people got into this for. So, um, and to answer that question, I would say, um, based on the work I'm doing in places like the UAE and, uh, El Salvador and I think I think that it is it I would have lost the bet. Meaning three or four years ago, even when I joined Coinbase, I would have said it's no way. Like it's it's just not the these countries are going to not not shut down. You can't shut down crypto, but they're going to be so adamantly opposed to concepts like

self-custodial wallets and peer-to-peer transactions. They're just going to they're going to do everything in their power to shut all this down immediately. Um I have been shockingly surprised. Uh we were the worst for a while. We were the worst under Gensler. Like you go to the UAE, you go to these places which you associate certain places like the UAE with sort of strict government controls. And I was just shocked at the open-mindedness around embracing a technology that has the potential to make it easier for people to get around those government controls.

and the the realization that the cat was out of the bag and there was just no no way to do it. So, we might as well wave it in and embrace it and understand it um and see if we can work with the peer-to-peer centric community and I'm speaking the point of the government. We work with them to find a middle ground between safety and security of our monetary system and our citizens data etc etc and the reality that this technology is is cannot be contained. And it was weird for me to come from America and go to the UAE prior to to Atkins act being chair and have to be made fun of because my government was more oppressive than their government.

So um that should that should be very very encouraging for people in crypto. It it is it may not be what they want. It may not be you know the total ddollarization and abandonment of fiat fiat system. Um but it is in in seven years which is really about how old I think crypto is as a mature asset class. the notion that places like the UAE would produce white papers talking about the role of DeFi and self-custodial wallets and that paper not saying they're illegal.

The paper could be two words, they're illegal. Um it's not what's happening and they're signing with Salana and other foundations. Um that should be really really encouraging to folks who are in this um for for the uh to change the world. Is Salana the leader there in that type of like I guess in that terms of self-custodial asset potential in terms of RWAs and anything else that could land there or or is it still pretty wide open? >> So I don't think it's wide open. Remember I said how these things aren't monopolies or agopies. So I think um as well right one chain will not rule them all but if you think about like if the if the goal is to um u think about how can I replace core essential financial

infrastructure um I think chains like base and chains like Salana are clearly winning and I've said this before and people people um have given me kind of quizzical looks about this but um I love Salana I love Lily is one of my favorite people in the world foundation is I think extraordinary the reason so I'm talking to global exchanges right now equities exchanges that are considering testing tokenized equity trading using the Salana blockchain and the reason is memecoins right so this kind of very political like people are very emotional about memecoins my buddy Omid Malakin would like slap me if I even said memecoins deserve to exist in any way um I I I'm I'm more agnostic I think people should be able to buy what they want um but

here's the thing about memecoins they tested the salana infrastructure right so when you read about some wacky named coin uh went up and down in market cap over the weekend uh gain and lost $5 billion. What I'm paying attention to are the words weekend and $5 billion. That means that $5 billion of value was transferred. Thousands if not hundreds of transactions occurred over the weekend. Try doing that over the traditional financial rails. No trade breaks occurred. Nothing. No infrastructure breakdowns. Uh gas fees stayed reasonable, etc., etc. So, so Salana has proven just like the early internet was tested with cat videos which you know one can argue is

frivolous if not enjoyable. I think one can safely say that a lot of memecoin trading is frivolous if not enjoyable. Um but that frivolous activity proved the resiliency of the infrastructure and so I would say there's a few chains that are in the running. Um but you know certainly ERC20 compatible tokens like base um Ethereum Salana uh they've proven themselves as having that 99.99999% uptime that you have to have if you want to replace the current financial infrastructure.

>> Maybe a good comparison is YouTube for cat videos where the early the early launch of YouTube it was just silly things silly videos homemade videos cat things and now now look what's on YouTube. uh the NFL, you know, sports leagues, major films, like uh the entire there's some Yeah, >> you're absolutely right. Right. We we we looked at as we we looked YouTube was a Would you Could you imagine ever releasing a movie on a television screen? If you told a director in Hollywood 10 years ago, you're going to release your big budget movie on what potentially could be a 2-in phone screen, right? They would laugh you out of the room. Um, so the the but the resiliency of the infrastructure was proven, the speed, the laggginess, all

remember like early streaming, it was awful. It was awful experience. But but now I have more delays in the movie theaters. There's the higher probability that the movie theater like something goes wrong with the projector than it does me streaming it uh Welcome to Derry over my phone, which I've been doing for the last, you know, six weeks. Ironically, the the Academy Awards, what I was going to say is they just announced they're moving to YouTube in 2029. Isn't that Isn't that a funny thing? So, maybe that's kind of what you're saying with the Salanas and bases, that's kind of what they're competing for is that at first it's like you have these more kind of attention drawing vanity things like meme coins that are silly in in their in their nature, but over time it becomes the actual the actual pieces of that of the

infrastructure that that end up there, >> right? And the infrastructure is one thing. That's a big step. But then once you have infrastructure, you have to have product. And that's why the Monad distribution was such a big deal with Coinbase. If I were if I were the investment banking community, I'd be shaking in my boots right now because what Coinbase just did is quite frankly extraordinary. without an underwriter, without an army of salespeople, you know, running around taking their golf buddies out to dinner to like pitch them on this new great stock in 10 business days or less globally, 70 countries, 80,000 people. Median investment was around six grand.

Highest investment was, I think, 80,000. We distributed $260 million or so of utility issuance. Um, and that just transformed investment banking underwriting. So, so you've got the infrastructure, that's one thing, but you got if you if you're just selling crap over the infrastructure, no one's going to care. I mean, NASDAQ is NASDAQ because they took a shot on a little fledgling tech company called Microsoft that none of the other exchanges wanted back then. So, when you've got the Monads of the world, you have these highly soughtafter platforms being used by tons of people. If Coinbase can convince more of them to issue over these rails, that's the forcing function. LG, people will learn the the

the kmudging kmging hedge fund woman or man who doesn't want to learn a new rail. The the me who doesn't want to learn iPhone. You know what? You know why I'm I made this big thing about iPhone. I'm learning the iPhone. You know why? Because my eight-year-old daughter wants me to learn the iPhone, right? That's the forcing function. I'll do whatever the heck she wants. So if really high quality product like Monad starts to get distributed through these rails, you'd be shocked how quickly everyone will learn to buy, sell, transfer, and store digital assets.

>> Investors will follow the profit, man. Especially if it's if it's legit from somewhere like Coinbase that it legitimizes that kind of stuff so much uh that I think it makes a huge difference. >> Yeah, Clarodia comes out. I know I know I'm dealing with a trusted public company. It's high quality product. Maybe I'll put my junior analyst. I'll put the young girl on it, young guy on it, and say, "Okay, you figure out how to do this." But trust me, every every hedge fund, every asset manager, every pension fund, they will figure out very very quickly how to work with these assets. >> Lovely. John Dagino, thank you for coming on, man. Great to chat with you and uh hopefully we will see you in the new year.

>> Thank you so much. Have a great day. Want insights on what's moving crypto markets and how we're trading each event? Subscribe to our channel and join the Milkro Daily and Pro newsletters and start investing like the top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.