Roundup: BlockFi Down Round | DAOs Scrambling | Cynthia Lummis Bill | FTX vs Coinbase

Transcript

this episode is brought to you by bitmex the og crypto exchange that is back and better than ever you'll hear more about bitmex later in the show i thought after this last bull market that we brought more people over that had fully gone but i think many people who like dipped their toes and got in in this cycle just kind of were like yeah i believe in it here's my money please go up please go up and now that it's gone down they're like i knew this was a freaking scam you know like i like all the people that i talk to in my life you know for the last 18 months i got used to this i was like oh you're working crypto oh that's very cool and now they're like crypto well you knew it was going to come down didn't you like

wink wink nudge nudge and it's like all right man all right well and my and ultimately like for folks who do have this is why you can't borrow someone else's conviction uh so what i'll say is thanks for two more years of head start yeah you know before everyone else comes back in so [Music] happy friday everybody i am here joined by my co-founder mr mike polito santiago is on a big vacation actually right now he is doing what we should all be doing in the bear market which is taking a step back taking a quick breather so last week we were joined by byron uh and today we are joined by uh mr mike ibulido my co-founder of four years uh and one of my long-time good buddies so

mike welcome to empire that was a very touching that was very touching i appreciate the buddies you know i was i was going to make a joke i was guessing i'd give mark cusco a nice adjective every week and here i am i'm touched by that there's your adjective good question yeah i don't have one more i don't have what mark has which is uh does mark still do the socks at the beginning of every episode i told mark that we will know the show has made it when the market moves depending on what socks he shows so if he shows bullish socks and the market goes up that's the sign that the podcast has made it we can quit right see i don't have socks i have hats people send me a lot of hats because i used to wear that block works hat here check it out yeah i wish i

could be a hack i just don't look good on my head i got a weird shaped head look how many hats i have just like that people send me i've got i've got meow sent me a hat i've got look at this i've got a the one that pomp was pushing 20 20 sucks hat i've got this like super human send me a hat i've got a oh this is a maple finance has a very good swag maple finance is a hat i like so i didn't know that i should be offended by not getting these hats but now that i know i'm not getting hats i'm offended we get swag like every week dana is very unhappy about it i can imagine yeah i can imagine she's not sucked but don't worry i'm inside than she'll be yeah exactly exactly all right man um

this will be a fun episode uh here's what i would like to talk about but as usual i'm sure this will divulge into a bunch of uh we'll end up spiraling into a bunch of random topics but here's what i'd like to cover down rounds hiring freezes layoffs um that's i think where we should start optimism uh like quote unquote lost 20 million op tokens over kind of a wallet mishap with winter mute we should talk about that we'll touch briefly on the um eth test net merge success i'd like to talk about the sales force nft marketplace that they launched um and then there's one other topic that i think is interesting if you want to chat about which is dow treasuries um and just how dows are starting to respond to this bear market so a bunch of big topics i think let's start with

down rounds layoffs um hiring freezes uh hiring freezes at coinbase and gemini uh coinbase were sending offers um block fi it got announced that block five recently raised at a three billion dollar valuation at one point they were talking about getting uh raising um a five billion dollar evaluation led by dan loeb before some regulatory stuff came out and now it has come out that they are i don't think this is final but that they're raising at a billion dollar valuation which would be an eighty percent uh discount to the five billion dollar round that was considering uh that they considered raising and then the three billion dollar uh a 67 percent haircut to the three billion dollar round so i

would like your take on just what are your thoughts on these down rounds uh hiring freezes rescinding offers what's your take yeah well maybe it would be helpful for listeners who you know you can kind of put you in almost what the uh exact team of block works as the discussions that we're having internally and then like you can just extrapolate this across what i would say responsible companies right i don't think it takes a genius to look out at the market and say the environment the business environment that we're going to be operating in over the next 12 to 18 months is going to look very differently from the last 12 to 18 months so the way business planning typically works is you do forecasting you know i have a big problem with that phrase it's actually target setting right so we say we want

to be at this revenue by the end of the year we know it's going to cost x amount to get to this revenue so you start to kind of reverse engineer from that forecast or that target so say you want to be a you know do 40 million in revenue by the end of the year you say okay i'm going to get it this way this way and this way through all these different product lines i need to hire this amount of people i need to budget this amount of gna and i'm going to make this much money what companies are doing right now is they're saying shoot i don't know if that target that i thought i was going to get to at the end of the year is going to be 40 million maybe it's actually only going to be 30 million okay now i got to reverse

engineer my entire cost structure into fewer people uh you know like less spending on gna all of that kind of stuff so that's basically what's happening across the industry right now and that's why you're starting to see things like hiring freezes happen and what that's what that's greek for is that we just don't know what the end of this year and the end of next year is going to look like so what we want to do is we want to wait for our revenue baseline to reset to something where it's like okay i wasn't i'm not generating four or five million dollars a month i'm generating three million dollars a month and then i can start to reverse engineer everything in place so that's why everything feels so uncertain right now that's why you keep seeing this phrase like hiring freeze and companies are going to cut

what variable costs they have right so it's like fixed and variable costs in companies fixed cost is like infrastructure that you have if you're a software company you can't not build your software right that's like pretty important if you have an office that's like fixed cost depending on so then there's all these fixed costs and then there are variable costs like marketing honestly certain lines of personnel um and basically any extraneous spend so they're gonna start cutting that uh down rounds are very painful because i mean downloads are probably going to continue to happen i it's almost you know how i feel about block i'm a huge fan of this company i feel like they've gotten a lot of negative press for pretty unjustified reasons recently um and so unfortunately i feel like they're the poster child of

this right now but they're not the only ones right i don't want to call it any specific companies but basically just look at any company that tiger poured money into over the last year in crypto and take a look at their valuations and how quick it took to get there and pretty quickly you're going to come up with a list of very richly valued companies um and i think this is this is not going to be isolated to to blockfy in general i mean i think it's important to remember it's not just isolated to crypto right if you just zoom out a bigger market um let's look at maybe uh the october prices of some of these companies compared to today instacart 39 billion dollars now they're 22. it's almost a 50 haircut epic games 46 to 31 chime down from 25 billion valuation to 15

billion go puff 17 to eight right klarna 45 to 30. these are all 33 to 50 sometimes 75 percent haircuts uh canva right 40 to 27. these are all massive massive haircuts um and i think what you're starting to see is it all starts in the public markets right and then it just starts pulling back to the late stage the series d the series c and eventually that trickles down uh to the you know series b and series and then eventually i think the seed rounds will be fine those will still get raised uh you'll just see big haircuts on like the initial raises instead of the 60 70 million dollar pre-product seed round you'll see you know kind of what's normal 10 15 20. um but i think one of the important parts here is it puts the

leverage back in the in the vc's hands right instead of in the founders hands you're seeing these insane deals go through where uh no vcs in the entire round nobody gets a board seat right the the liquidation preferences were all screwy basically founders just had their pick of the litter of what vcs they wanted to invest uh to allocate into their round and now those dynamics completely shift completely and i think that's what's one of the most like there are two very painful things about that so think about what has to happen in terms of down rounds uh for down rates actually take place it's really violating everyone's incentives right because unlike public markets price gets set price discovery happens in private markets just by different rounds of vc investors and everyone wants because they want to

point to for their next fundraise they want to point to the unicorns that they had in their previous fundraise they really want that valuation to keep going up the founders really want that valuation to keep going up the employees who are getting compensated in you know rsu's or whatever they're getting commented they all want that to go up so for there to be a down round um you know the the business really has to change pretty materially and the other thing too is you are starting to talk about just just different layers of the capital stack right uh the most investors right most good vcs will insist on liquidation preferences or non-dilutive kind of covenants so when there is a down round their equity essentially gets protected and founders and employees get diluted right when they have to raise a lower valuation to

the effect that many many employees actually have their their options completely wiped out right or very close to it so that's why it's painful it's also painful from a psychological standpoint like you go to work at a startup because you feel like you're moving towards a goal and part of a team and like even though it's kind of hectic and all over the place you're still like moving up to to go through all of that at a startup and then only to have it go down psychologically right no i think you make two good points there there's the capital stack which is founders and employees will inevitably give up more ownership and these anti-dilution clauses that the vcs have put in mean that previous investors with preferred shares are given these increased conversion rates to avoid dilution which ends up meaning that the owners and the

employees get diluted even more and then on the confidence side and the psychology side lower confidence lower employee morale lower maybe even founder morale um yeah these liquidation preferences continue to make it kind of just much harder to get to this like to see the promised land per se right so i think it's quite tough yeah no i but i think a lot of this actually happens i don't know like i do wonder how uh if maybe it's on some of the founders to blame for this actually um and and here's here's here's where i'd go with this is you were just seeing some of these rounds get raised six to 12 months ago you just knew these were overvalued it's

like these 10 billion dollar i'm not gonna call anyone out like five ten billion dollars these companies launched products like a year or two ago right and i think you kind of have two options when you're raising capital uh in a really like bull market you can either do what is effectively a down round preemptively when you don't have to by just under pricing what the current round in the market is um so so let's use an example like we company raises at a billion dollars then in november of 2021 the market's raging bull market they get an offer to raise it 10 billion they know that that's overvalued right they know that that's crazy overvalued they could preemptively it's not technically a down round but like they could raise they could say we

don't want to raise it 10 we think that's overvalued we want to actually raise it five or six billion right that's like preemptively a down round kind of maybe it shouldn't be called a down run but like they are setting the prices lower than the highest possible price they can get to set themselves up better in the future i don't think folks did that i think instead folks basically just accepted the market price uh and said let's shoot for as high of a price as we can possibly get which then risks if you know if you don't hit your milestones or the market turns which it did then a lot of them are risking a down round so i think i'd turn this into a question and say how many companies do you think will need to raise a down round here if you have if you have a

buck of 100 crypto companies 10 raise a down round 20 raise a down round do you have any data points to back this up yeah let me just address the first thing you said about it being there are three there are three stakeholders right they're investors they're founders and they're employees i think everyone was kind of behaving a little irresponsibly if not just maybe maybe naively right so like to walk it down right like that founder example you used i i totally agree i also think that's kind of a move that more experienced founders or at least second time founders would have to do having the discipline to not take that money at not the highest valuation like we're sitting here saying that oh obviously they shouldn't have done that i think you know maybe nine months ago would have been a very different conversation so i think i think you're

totally right but i think that's more of a reflection of the lack of mature founders in crypto despite how far we've come in terms of attracting talent um i think there's also something to be said for investors that we're throwing throwing money at these valuations right like they're the ones who are supposed to be disciplined yeah also right but it kind of takes two to tango right it takes two parties to set a valuation a buyer and a seller right so there's that and then there's the the employees who who took equity at those valuations and you kind of can't have it both ways right like a lot of the mantra in crypto is like let people assume their own financial responsibility if you want to assume the financial responsibility and you're taking money from like you just watched the equity of this company or these tokens like how

many times you and i have this conversation where we lost you know people because they just got some like three or four million dollar token equity package and we're like that could go down 90 percent uh you know that's often and it has and they and they they knew the risks too so i think everyone is kind of complicit here in terms of like target setting like how many people are how many people are vulnerable to this i i think it's really hard to to benchmark because the the counter to what we're saying is that's still a lot of money has come into this ecosystem i think it will be more about dispersion and the good companies that raised at fair valuations um will be fine and attract most of that capital and then i think you could also do a down round or i

think most founders will just try to push it off and like kind of give themselves time they'll try they'll try to grow into their valuation over time and if they can not raise for that then i think they'll prefer to do that but what that will mean is that they're going to fire people i mean the goal for everyone right now is do not raise a down round that is the biggest goal and just survive everyone's in survival mode right now and i agree there'll be a dispersion between good and great maybe less focused on the valuation to determine good versus great but the amount of basically it comes down to your margins and how much cash do you have right um like someone like open c insanely high margins they were printing hundreds of millions like i think they did 350 or 400 million in revenue in january of

this year alone with super high margins so like someone like that will be just fine even though they did raise at a ridiculously high valuation they'll be just fine um and it's a good opportunity for someone like that who has a bunch of cash on hand to maybe do some acquisitions or or scoop up really good talent so with you on that i like cause just think about it from the perspective of someone who's making that decision you've got to let's let's say you are not because the i think the ones that are really in trouble are these businesses that were like 10 million in arr or whatever and raised 100 billion valuations doesn't matter how much you cut like you're so far off sides it's just there's nothing you can really do but let's say you're an open c a block fi uh one of these exchanges that's that

generates actually a lot of revenue uh and you actually do have the ability to cut costs so you could say all right you know we know this is not going to be a permanent state of affairs right we just need to get to the next 12 months 18 months 24 months however long this this winter lasts so you've got two decisions i can either keep operating like i'm doing now and risk a down round where i have to wipe out my employee's equity destroy morale do all this stuff or i could just take a cut right now you know trim the fat be more disciplined and try to get there and grow into this valuation that was probably high but i could probably grow into it in two years you're you're choosing that every single time one important thing to remember is that when companies raise

up rounds there is a good round it's a healthy market they want to they want to get their pr out they want to get them they want to do marketing around it right we we raised at 100 million now we just raised a billion things are going well i think there's gonna be a lot of companies that raise down rounds but they will do it incredibly quietly and it's just important to remember you don't have to announce your round and when you raise a down round you're doing everything possible not to make that known so just important to remember that um yep we talked about the founders raising we talked about employees right i think a lot of employees their rsus might be way underwater but there are hiring freezes across across the industry so maybe they actually can't leave even though their their rsus are

way underwater we didn't talk as much about the investors um there was a recent bloomberg article mike novogratz was quoted saying there are literally 1900 crypto hedge funds my guess is two-thirds will go out of business uh seems a little exaggerated to me in terms of i mean i mean i guess he'd have the numbers they have they acquired vision hill they would know the numbers but 1900 crypto hedge funds and 66 going out of business um what are your thoughts around this i think crypto's a very loose definition of what a hedge fund is that's what i think like this is this it's just crazy how similar this is to 2018. it was like remember there were so many people that like put 10 grand in they wound up with like five million they're like i'm gonna start a fund you

know and then they just signed up for a crypto hedge fund i think probably the level of professionalism in funds is has gone way up but again i think this will be a culling of the herd i don't have enough insight to be like is it two-thirds is it one-third whatever they're going to be way less let's put it like that but i think the ones that are fine that are good will continue to do extremely well like the multi-coins the paradigms the panteras the uh pearifies whatever and they'll continue to excel i think yeah but yeah i think there's some everyone was talking about when terra happened like these funds are going to blow up right it it takes a lot for a fund to blow up i think what actually just happens is that they're so underwater um and so below their watermark that it

just is gonna take so much to get back there that it's better to close shop and do it do it over again i agree oh one other thing though that i've got a prediction for you um that i think will play out over time is that right now like all the rage this last cycle was liquid venture and they're like that's the right thing to be and you had these funds like the three arrows of the world uh or whatever that was kind of trying to play like the hedge fund game and the venture investing game at the same time i think those are very separate skill sets and i think those eventually will segment out and be different things over a period of time and the reason that i think that is because like remember that exam remember the scuff that suzu and kane got into oh

this is a good example it was that was weird looking at that as a founder because i actually agreed with suzu that to rehash this this was the argument about ethereum abandoning its users and then that kind of led to some ad hominem attacks and suzu kind of implied like they were you know glorifying founders in the space and blah blah blah and i remember actually agreeing with suzu but also decide at the same time if we ever had to raise money i would not raise it from suzu because i think it's a very different mentality um a trader versus an investor they're just super different things and we all make fun of the vcs all this touchy-feely but building a company is full of touchy-feely and sometimes what you really need more than anything is for someone to be like i'm on your side i'm in it for the long haul i'm

gonna hold your hand and traders are not like that they're just not like that so i just think these like liquid venture funds that try to do the hedge fund thing and the vc thing they're they're gonna need to create a really strong firewall internally in the organization or they're just gonna split because i think good founders would rather take money from vcs than hedge funds completely agree yeah suzu's like what did i ever do to you mike what what what you sorry man i'm a stan dude i listen to the opinions i agree with many of them but i also it's like you know well there's another interesting thing on just public verse privates uh it which is just the mass overweight uh just like the amount of capital that's flowed in and just the amount of interest that's

flowed into the private markets over the last two years um has basically made it so that the public markets are nf are are have been ignored i think and that the the opportunities is it's pretty hard to lose money in 2020 or 2021 if you allocated into like a seed or a series a or even a series b company like you probably weren't going to be underwater on your investment and so so much capital flowed into the private side of things now you're i'm just looking at these private prices like layer zero i really like the layer zero team they don't have like they're pretty early stage they raised a three billion dollar valuation i'm looking at ave right ave is like one of the best products in all

of crypto they're sitting at a 1.5 billion fully diluted so like would i rather invest in something that's illiquid at 3 billion that like doesn't really have many users or market share or something that like is pretty uh it has almost become like a utility in crypto because of how much it's used at a billion and a half i'm taking the billion and a half all day long so i think a lot of the interest flips back to the public side soon me too i think what happened there is like twofold which is one everyone wanted exposure to this asset class and the way that the more institutional side of the market could get exposure they couldn't put liquid tokens on their balance sheet the most of them uh so they got it through venture right so they can buy equity in a startup that happens to be

encrypted that's just a much safer way for them to do it at the same time that was happening the way that the public side of crypto the liquid token side was growing its user base was by issuing equity right to the public and now that's completely flipped right because that's essentially continuous cell pressure on each one of those networks because the way that they grow is by bringing more supply of their equity online so they're basically just you know there's a continuous sell bid so at the same time there's that dynamic going on in in public crypto markets there was this like bottleneck effect going on in private private markets and eventually someone will try to close that spread or somehow those things will move together but now i agree it's huge dislocation i mean end of the day it's market and we'll find the equilibrium there's one

other thing that people don't talk about with private versus public there is one of the reasons people love to do private is the ego it's just the ego play of saying i've gotten that deal you get your oh we just raised a series a we just raised a seed you know blah blah blah like you're in it and your your name's on twitter uh it's i can tell you from just being in all these group chats with all these angels ego move there and even on the venture side these big professional venture funds talking to some of the gps there it's like when they aren't in a deal even if it's a bad deal they're getting texts from their lps saying why weren't we in that deal what's up with that yeah when you buy something on the public markets like it's i'm not sexy no one knows like i'm

not no one's if i buy ave like i guess it's on chain but but nobody knows so you could tweet it i'd like it my points are hurting these days your tweets are hurting all right let's get past some of this um let's talk about so we talked about founder invest founders investors and employees in the kind of response to the bear market there's a fourth bucket which is dows right now there are a bunch of proposals from different dows like lido and fey and frax um that talk about their response to the bear market and so let me just run through a couple of these lido has a

proposal for the dow to sell 17 million dollars of eth to quote prepare for the bear market uh the fey dao has a proposal to sell off a little over two million in uh curve convex tokamak ave and compound in exchange for stable coins and then there's a frax proposal by uh sam who started frax to buy i think it's to buy up to 20 million dollars worth of fracks kind of a show of confidence um but this is just this is just dao starting to prep for the bear market um what's your thoughts on this yeah i think that dials were just behind here and many companies were behind actually a lot of companies did a pretty good job of this so in general like when

valuations are high that's when you want to raise capital and then when valuations are low that should get you through the the less good phases right of the business cycle so actually do you remember like we actually talked about this when coinbase you know for all the flack that they're getting recently remember like six months before sometime last year they raised a billion and a half dollars in debt and you and i at that time were like damn that's like signposts right that we may be near the top because good companies like well-run companies that understand financing will like sell at the top i think what's happening with with daos is that they're just newer organizations i mean dowsers you and i are both very bullish on it but they've got a lot to figure out right they're like not only trying to build and ship products but they're literally

reinventing the wheel of how companies and governance should work i personally think they're trying to reinvent it too much but uh so they've just you know as a result uh because they're kind of immature organizations they probably don't think as much about like financing right um so i just think they're kind of late to the boat here and they'll eventually they're realizing like oh we can't have all of our treasures either in our native token or things that are correlated 95 to our native token you know so i think you're going to continue to do this what do you think about the frax the frax by well just one one comment there i i just got such flashbacks to 2017 or actually really early 2018 when all the icos were selling off their eth saying right right you might be going into a down

market isn't up only uh and we need to pay for things um it's gonna have pretty nega i think it'll have a pretty negative impact on the market actually um just because a lot of these uh a lot of these dows have they have um their treasuries are primarily like usdc eth and then their native token so if you're selling off a bunch of your native token and they're like maybe isn't that much liquidity in the market for it like this will have a pretty negative um pressure downwards so that's that's something to just keep in mind there i think this is a call we have an episode coming out um i i had a really interesting episode with um tom and haseeb from dragonfly um and it comes out this monday so in a couple of days they talked about just one of the

things that they're most excited about in the bear market is better capital market tools for dows like convertible bonds for example and that's one thing like you mentioned coinbase coinbase yeah they raised i think they raised two billion dollars actually um they announced like a billion and a half debt round and then they increased it to just a debt offering of two billion and this was back in september of 2021. um that you can't do that if you're a d like a protocol you can't raise debt if you're a protocol right now there's just no real way i would say but i think that's something that really gets built out in this bear market i completely agree with you especially because some of these organizations will have been around now for like a couple years right in the beginning it makes a lot of sense to

take venture or sorry like equity type funding right that's why venture is done in equity but then after they get big enough and solid like it makes sense to do some debt financing like that should be available to them i agree and um oh man i mean you'll have to listen to the episode on monday but tom was talking about tom schmidt at dragonfly was talking about how it's actually a really really efficient debt system because if you're uh if you're a dow and you've got you're basically spitting off fees you can use those fees to directly go back and pay back the the debt issuance so there's really no like debt middleman here um and it just creates a very efficient debt system yeah i agree the fracks so at the same time that right you've got lydo and fey talking about diversifying their

treasuries i think what was it that uh sam they just did a 20 million dollar buy of the native frax token um here's what i'll caveat this by saying every sam knows his business much better than i do right i'm not an expert on fracs like there are probably dynamics of running a stable coin like that where maybe where confidence is like a much more important thing that i'm giving credence uh there might be some like kind of reserve aspect here that i'm saying but i think the framework to be looking at buys of tokens by their own protocol should be the same framework that shareholder buybacks are looked at in public markets and that is it's a capital allocation decision so companies have three decisions when it comes to

capital allocation invest in your own organic growth it's like build products and services internally buy it m a buy a company or something that can do that thing for you or c door number three return capital to shareholders and the way they do that is by share buybacks so buy back some of their shares they'll jack up the price you know in theory of the of the existing shares and it's a tax efficient way to return capital in general when you are buying shares of a company what you're saying is i don't have a better use i can't put this capital to work in my own organization and generate returns above what i think i can get in the market for my own shares so like when i see you know

uh whatever protocols that are doing this again it might be different again because fracs is a stable coin and they're like reserve and confidence things that that might come into play that i'm not understanding what you're saying to investors is i'm giving you some money back because i can't that otherwise better spend this on products and services i i think it's pretty pretty um pretty early in the crypto ecosystem for any companies to be saying that right i think most of these protocols should be like okay could i take that x million dollars and hire developers and like ship x many more uh features this year like that's how i'd be thinking about it i i don't know as much about frax like just this this specific 20 million dollar buyback i'll be honest i don't

want to talk about that too much but i completely agree with you when i see companies in crypto buying back their own token there's so many other things that you should be spending that on stop worrying about the price of your token um and i think maybe one of the triggers like psychologically for frax is fx fxs just fell out of the top 100 on coingecko right so now it's no longer a top 100 coin like if i'm running for axe that's a psychologically that would kind of suck to see you know i know i know it's just no no i'm agreeing with you i don't think that i'm saying that should not be a reason that that you buy back your yeah it's like if amazon price falls like 30 like i don't think bezos is stepping in and buying the amazon stock back up he's investing in

aws you know so no maybe personally right sometimes you see this with executives or ceos or founders at times when their company is struggling they're like i'm personally buying more equity or whatever or i'm increasing my stake or taking more stock based compensation or whatever but i do not think it should happen at the cup at the company or the protocol yeah i mean fredericton like fred just did this he purchased a million dollars of coinbase uh the coinbase co-founder purchased a million shares of coinbase a couple weeks ago um when he saw it saw it going down in the open market right should have bought that saw it go down it went to 42 at one point i was also sitting there being like i should buy this but i bought the dip too early on some other stuff and i was feeling not

good about that classic classic classic you um yeah so i think i mean i'm not sure i i do think uh like dow treasury management was an area that you and i were talking about is is being pretty obviously immature um encrypted i i don't know how this translates to uh i'm not sure if it translates because like the dynamic in 20 2018 was east the icos all raised in eth some in bitcoin but mostly in eth and then they had to sell that to fund their operations i don't really think that's the case here i know most of these tokens these protocols have treasuries in their native tokens eth and usdc i think the overwhelming majority it's in their native token right or other

tokens like i don't think it so i don't think it's like people are exclusively fire sailing eth like they were back then so i'm less i'm less confident that it leads to decreasing my price negative price uh movement for eth but it could it definitely will for the native tokens as they diversify their treasuries yeah empire is brought to you by bitmex with the launch of their spot exchange bitmex is running an insane promo right now we wanted to give you the inside scoop here's the deal for the next two months users who trade two hundred and fifty dollars worth of crypto on bitmex's spot exchange will be entered into their million dollar giveaway prizes range from thousands of dollars all the way up to 500

000 that's right trade 250 bucks on bit max for a chance to personally win 500 000 beyond the million dollar giveaway new users can also get up to 200 bmx bmex that's bit max's new token coming soon just by creating an account and going through kyc and trading so you can actually get bitmex tokens just by creating an account and trading the more you trade the higher your chances of winning what are you waiting for go to bitmex.com today sign up for an account b-i-t-m-e-x dot com i don't know if there's much to talk about here but one interesting data point that i saw was just um may was the first month ever where ftx

passed coinbase um in terms of their spot volume ftx had higher spot volume for btc and ethan coinbase in may um i don't know it's really interesting i don't know if you want to talk about that i also i know you sent me um spf's tweet about hiring i don't know if you want to talk about that or we can move past this one no i um i mean if you you want to run down the the i mean the the numbers here i guess because they they are interesting right and everyone talks about coinbase versus ftx and really the gorilla in the room that 800 pound gorilla is still binance which is just quietly dominating it might it might actually be worth i haven't heard anyone talk about this but you know sam has become like practically the face of crypto over the last year have you heard

cz do like any public appearances or talks or anything like that i don't know if that's significant or not but like there's an enormous difference in the pr that's going on between well it's gotta be because of the sec because they're i mean binance is facing two different things right now right uh the sec launched a probe like this investigation against the bnb token examining whether the sale of their token in the they did an ico right people forget binance did an ico bnb five years ago five years ago um a measly 15 million right which back then seemed like a lot and today seems like nothing um but yes the sec is looking into bnb and um on monday a reuters investigation oh no that was reuters that's not sec what's this note

here reuters investigation positive binance has pro oh no that's fluff that's nothing yeah yeah so yeah i mean i think they're they're probably worried about that i think you know ftx is is an example of a really just a super fast up-and-comer that's taken some big swings and risks but also uh executed pretty well i think coinbase i mean so the actual numbers here so the story right uh is that for the first time uh ftx did more volume than coinbase in in may um i think it was for for higher spot volume for bitcoin and eth so it was like 30 versus 28 billion for bitcoin 21 versus 18 for eth um you know at one point i'm pretty sure ftx

at their last private market valuation round again we're talking about huge dislocations there between private and public markets at the moment so take it with a grain of salt actually surpassed coin bases as well i don't know if you had to do like some kind of swot or breakdown analysis for the two businesses i think ftx they would define themselves that they want to be they almost view themselves more as like a payment company they just want to sit in the middle of transactions like all over the world and you know they also now ftx us i think rolled out um stock trading i don't know if you saw that this week too i disagree with that take on what ftx wants to be i think fta yeah i know they have those business lines right they i know they have all the business lines

and stuff like that ftx i think is just going after the institutional crypto market and the they want to win the institutional crypto market and they want to win um the trader market that's what i think and i think coinbase will own the the retail market like look at all the stuff that that ftx is doing with the with the cftc they spent they spent i think 1.1 billion dollars um acquiring just uh just licenses last year right and they're really really really trying to um push that forward with the regulators i mean i'm sure obviously coinbase is trying to do the same thing but yeah i guess yeah that for so for me ftx when i think about them i guess i will stay in my like i i what i how i view

the business is like sam's background right he was at jane street that guy thinks in terms of markets by the way if you haven't heard sam talk about markets like it's literally like listening to i don't know beethoven talk about music i've never heard him that's a weird example but like the guy just knows it you know it's like he loses someone in their elbow you know what's the best episode on that is sam talking on um well he did come on empire so you should listen to that but a really good one was that that's the best it was uh within with patrick o'shaughnessy of invest like the best yeah you can throw it in the show notes uh plug another good podcast in here but that was a really good episode yeah it's phenomenal but he's a markets focused guy so i i would

imagine him you know like jane street makes their money by providing liquidity in markets right and fixing inefficiencies i would guess that that's kind of the lens through which sam views the world in general right so he wants to solve that for crypto markets he obviously wants to move into stock market the stock market he wants to do that for derivatives you probably got to move into payments uh right and he probably sees like this push into uh gaming and nfts is like there's going to be native fight like defy is going to interact with those those digital assets right they're going to be transactions that need to take place there i bet ftx is an enormous market for transactions there whereas i would say for coinbase i think the way that they look at the world is that they actually want to be more than just

an exchange they want to be the gateway through which people come into crypto right so there's a there's a legacy exchange business but they you know uh they want to get involved with um you know the like be a wallet basically uh they you know they're moving into nfts i think they want to be the way they described is like facilitating people's journey into open finance so i almost view them as like a conduit for capital to come into crypto whereas i almost see ftx wanting to burst out of crypto and actually stand in the middle of all these different transactions i don't think it has to be mutually exclusive but i do see them as like different different businesses the number of employees is very different at each of those companies too what are the numbers these days do we know

i think i heard coinbase got up to 5000 somewhere around there um and then uh let's see i don't know 230 250 is the last number i heard for ftx 300 i would bet they're around 300 now i would bet coin bases i think that this number's actually public like four or five thousand super like very roughly ballpark um yeah i know i think binance is more like six or seven thousand crypto.com is like 3 000 and then ftx is around 300. i could be i'm those are ballpark numbers but yeah uh the other thing i'll just add on the coinbase thing is they i folks probably know they rescinded a bunch of job offers recently i would check out the uh there's there's actually a they they

set up a resource for basically everyone who's job offer they rescinded maybe we can link that in the show notes yeah i have that actually yeah so obviously we talk about this in a pretty dispassionate way but like these are real humans and people that lost their jobs in some cases gave up great other opportunities to sign with a company that they were really excited about and then kind of had the rug pulled from under them many are like young people in their career so if anyone's listening to this and hiring i'd highly recommend you check it out there's some great talent there yeah we'll link that in the show notes yeah awesome um cynthia lummus you want to talk about this bill yeah i feel like you know the ins and outs a little bit better than me you want to lead it good luck to me yeah um

good luck to me yeah basically um senator lumis and senator gillibrand announced the responsible financial innovation act this was a basically a 69-page bill is that a meme i don't know i don't know if that was on purpose a little 69-page bill creating a uh basically trying to create a regulatory framework for crypto and overall i think this has been viewed as a very positive piece of legislation um i took some notes on it let me just pull up some of these notes here the first is that um it clears up a lot of the securities laws and i think puts a lot of crypto assets as commodities under the cftc and this has been a big uh just a big topic of conversations like should crypto get regulated by the cftc or the sec or should something new

get created and generally the cs the the sec is seen as much more just a much stricter place that comes down on securities where the cftc is what regulates commodities right and they're seen as a little more relaxed and so i think this bill would put crypto assets under uh categorize them as commodities under the cftc um there are also new disclosure requirements that would make uh anonymously run projects almost impossible to comply under this law so i can run through some of what i like what i think is it so it basically i mean one of the interesting things about it is that it lets taxpayers in many circumstances they're exempt uh right from like capital gains type income tax

when a crypto is used to buy a good or a service i have i view this as like largely a symbolic victory just because my my i think bitcoin is i know eth is ultrasound money i i'm not sure for me it feels more like commodity bitcoins really the money that we're creating here and i don't think it's the type of money that you spend on small purchases i think this is maybe a more symbolic victory and like a foot in the door potentially um for something larger later because i like i don't know how many people are buying stuff worth less than 200 in bitcoin but um it puts most crypto under the purview of the cftc but it does leave broad oversight for an array uh like for for sec oversight including tokens that provide a kind of a financial interest and it gives courts uh

this this procedure to to rebut this the assumption that that tokens are commodities which i think is almost like i think about it almost as like innocent until proven guilty so the presumption is that it's a commodity but you can always challenge that as well and to be honest that makes complete sense because in my view many of these tokens are equity they're actually having to bend over backwards and behave in weird ways to not fit the definition of a howey test and i think that um which we can get into a little bit but i do think it makes sense for the sec to be involved i don't think it makes sense to but but the cftc has been largely much more favorable so yeah there's something else that was um i think a misinterpretation by some folks which is i think a lot of

people thought that it requires dows to be registered entities in the united states i think my understanding and what i saw from folks like adam cochran and and jake travinsky who have good insights into this is that there are tax incentives for dows if you register in the united states but it but you're not required to actually register in the united states um so that was one one thing that i saw um also just bipartisan bill uh feels like it's pretty rare to see those these days so that's a i think that's a win um there's some increased reporting and compliance on exchanges which would increase their cost but in general i don't think that's too bad of a thing um oh there's one issue that i saw which was uh it tries to make amms it kind of restricts specific it

tells amms that they might have to restrict specific token tokens from trading which is kind of what like what we saw with uh unit swap if you remember right the unit swap front end delisted a bunch of tokens maybe six months ago but the protocol didn't delist anything right so they're trying to require something that maybe isn't possible um and that isn't really defy right so that's that's one thing from this but i think the the general sentiment is like this bill is overwhelmingly positive um yeah i would agree with you i think what we've been suffering from for a long time encrypt is just too many regulators and regulatory bodies like trying to it's like that elephant thing right like five blind guys touch an elephant one touches the trunk one touches the tail

the and everyone says it's a different thing i think the the the most encouraging part that i love yeah you did you just love you you like that one i know you like that one i like that i use that one a lot just like my muffin joke uh but you know i like i think the best part about it is that it's pretty holistic right i mean there's a whole there's now there's a process to apply for uh you know like digital asset exchanges and actually tries to give some definition as to what that is there are safeguards for consumers crypto in the event that that those exchanges go bankrupt like these are good necessary things right i feel like sometimes in crypto we're like we don't like the regulators but like some amount of regulation is is good and i'd be curious this is one

that i don't have an enormous amount of conviction in so i almost want listeners to tell me why i might be wrong about this but i think one of the biggest things we're getting hamstrung up about is that we just don't call many of these token securities i almost wish we could just call them securities because it makes you behave and really weird yeah i'm about to get roasted but but so tell me why i'm wrong so here here's my thinking behind this right people are like dows are very dysfunctional a lot of the reasons why dows are dysfunctional is because the founder the founders of the the protocols can't be seen to have undue influence on what's going on in the protocol otherwise you're making an investment with someone else doing the work with an expectation of return so that means founders have to step out of

the arena way too early like way way way too early and rely on this community of people i think there should be a road to decentralization but like i think you and i both agree in the beginning of a small thing you need someone with a freaking vision you know and you need someone to push it forward accountability the buck has to stop with one or two people i think um and then there's also this weird stuff about you know now that there are actually somewhat mature protocols out there right like like a uniswap or something like that you know the the criticism of d5 is that it's very circular because all the rewards are generated in their native tokens when in reality they could just convert that to usdc and literally start dividending but if they did that then it would be you know for an

expectation of profit or whatever to fit the howie test so let me let me show you and maybe for listeners sorry because this is i'm going to share my screen about something let me show you the the application to basically have your tokens um in the right get get reggae exemption and i think i'll show you why everything can't be a security let me just show you this it doesn't the current framework just doesn't make sense uh this guy jeremy hogan posted this the [Music] the even just the form that you fill in to become a security it doesn't apply to these toke like it doesn't actually make sense right for these tokens yeah um so i think like that's i think that's

the big pushback on why they shouldn't be tokens or why they shouldn't these tokens shouldn't be securities is because like the securities test was built in what 1934 with howie or something like that like 1947 do you know what it was for oranges or something orange farms large tracks of florida land that he built yeah he planted oranges on there yeah so i think i agree with i think what ultimately needs to happen the best case scenario for crypto our version of a soft landing for this is that eventually we say look this this is a really old understanding of what constitutes a security crypto is big enough and it's not this dirty thing anymore it's a big enough new industry that we want a piece of it we will literally reconsider how we think about securities

laws in the united states because in other countries it's different by the way it's not like the howie test is the universally accepted way to classify security like in the uk it's done very differently and china is done very differently like it's not like we have the only answer here so i i think the best case scenario is it would make us reconsider our securities laws and accredited investor rules which are ridiculous in my opinion yeah um i know this probably isn't that big of news i just want to talk about or anything else on the on lumis i want to get into uh okay uh salesforce launched an nft platform uh called nft a new basically a new minting and sales platform called nft cloud pilots start this week and it's expected to be widely available by october 20 20 20 22 this year um there's

a quote from it that i found pretty funny which is nft cloud does not support energy-wasting proof-of-work blockchains um resulting in 99 fewer emissions i could not find anywhere in a single press release anywhere on their website what blockchain this is built on and i saw some speculation that this is built on like v chain i can't find a single place where where salesforce mentions what blockchain that they that they support and you got to imagine you know every single like web 2 partnership with the crypto company the crypto company publicizes the hell out of it right like if avalanche does a partnership with someone or or solana or polygon like you you see that thing plastered all over twitter

if salesforce had partnered with someone like polygon or avalanche or solana on this that would be a huge splash right polygon would be pushing the hell out of that news because they're not i'm just i just wonder if like they're even storing these nfts on a blockchain or if like the nft the nfts are basically stored in that in some database run by salesforce aka third not nfts so i don't know i'm skeptical of this one i have more positive views on it but i'm very skeptical on this one give me the positive views before i give you my also negative views salesforce is the largest crm platform um if you're a fortune 500 cmo and you see this news you pay closer attention to

nfts um it will bring it brings more credibility like just really try to remove yourself from crypto put yourself in the shoes of like uh someone who's been a cmo for 20 years and like you see this news dropping you're like oh maybe i got to take these nft things more seriously um i i don't know that's my positive view i just like you know how many times have we seen this before how many times have you seen this like this like be like oh bank of america is doing a proof of concept uh this company's remember the strawberries on the blockchain from walmart i don't know it's mangoes it's mangoes it's ibm and walmart i remember that of course yeah

i you know i don't have anything constructive to add to this i and i don't have anything constructive to add to the if you don't have anything nice to say michael don't say it at all sound like that you might not have said that that's what my mom would tell me you're channeling her energy right now all right um i but like i think just on the energy to be i mean people should follow the work of nick carter on this who's done a lot of good i think standing up to if if the expectation for a new industry is that it doesn't consume energy we're just not going to create any new industries i don't know it's a it's a completely arbitrary way to meet out which industry should art should be allowed to use energy and which one should not be i've stopped i've stopped

talking to folks about the energy debate because it's such a ridiculous debate in my mind it's such a ridiculous conversation in my mind uh you need energy to verify the blockchain just like you need energy to run google services or like it's a completely ridiculous debate in my mind so i don't think we need to even yeah well i think it gets at the heart of the you know if they if you view crypto as this speculative thing with no value then any amount of energy spent on it is a waste and i think i think that's the unsaid thing right that's what it comes down to it's there's no energy debate it's whether or not you believe this stuff is valuable if you don't think it's valuable then of course it's wasting too much energy if you think it's incredibly valuable there's no amount of energy that it could use that

that won't be worth it right so it all just comes down to do you think this stuff is valuable or not exactly and i have been surprised i i will admit i feel like i'm usually on the more pessimistic side of this thing but i i thought after this last bull market that we brought more people over that had fully gone but i think many people who like dipped their toes and got in in this cycle just kind of were like yeah i believe in it here's my money please go up please go up and now that it's gone down they're like i knew this was a freaking scam you know like i like all the people that i talked to in my life you know for the last 18 months i got used to this i was like oh you're working crypto oh that's very cool and

now they're like crypto well you knew it was gonna come down didn't you like wink wink nudge nudge and it's like all right all right well and ultimately like for folks who do have this is why you can't borrow someone else's conviction uh so what i'll say is thanks for two more years of head start yeah you know before everyone else uh comes back in um i forget if it was olaf or vance from framework who said this to me we we'll know one of them said we will know where we are in a bear market when people start talking about enterprise blockchain again and this is the enterprise blockchain we were waiting for this is yeah it is i saw someone tweeting like someone from ibm being like finally we can get rid of this web 3. now it's time

for the adults in the room to build like ibm come on i so i don't know i i i think enterprise blockchain will make a comeback as well oh you tweeted this there are three eventualities in this world death taxes bear markets renewing interest in enterprise blockchain we are back baby we're back yeah with that tweet uh you know what is one that really gets me too it's just the the nft medical records one it's like i just don't understand why we can't view nfts for what they are right now i actually what i would say because i know it's a and me you disagree with me a little on this is that the nft profile picture projects are like overvalued and i agree most of them are but what i would say is like a thought

experiment to those of you who are listening to this let's say you had ten thousand dollars to spend would you rather do it in a totally hypothetical scenario say you could buy a suit with that money or say you had to spend that money on a suit or you had to spend it on like a sick profile picture that everyone thought was really cool and it was across like your twitter and instagram and all your socials for me it's actually pretty easy decision i would spend the ten thousand dollars on a profile picture that made me look cool and like because what am i gonna do i'm gonna wear a suit like two times a year i don't need ten thousand dollars about how many times you'll wear it it's more about who the people that you want to see you as being cool like who what do they value right right

and how many people see you yeah right like how how many times is your boy like i could wear a rolex i don't own a rolex because i have no i don't have interest in a rolex but if i were a rolex around new york like thousands of people will see me on the streets but i don't care what any of those people think and even like if i went and hung out with all my friends and i wore a rolex my friends would be like why the hell are you wearing a rolex like you douche like take that thing off uh you know i agree it would make me look less cool i'd be embarrassed i would be embarrassed to wear a rolex i would be like super embarrassed about it yeah so maybe maybe the framework is just that younger generations don't like doing

what older generations thought was cool but everyone needs like something to spend money on when they have too much money and maybe that'll like maybe that'll be a big part of profile picture nfc it's exactly right for us um you know yeah maybe we'll do an i don't know uh i saw mel i was gonna talk i'm gonna talk about healthcare on the blockchain i melton also tweeted something about it like if anyone else pitches me healthcare data on the blockchain this week i will lose it please stop doing this um i saw a couple companies this uh this month got funded healthcare healthcare data on the blockchain so we are back they did last yeah yeah we're back um one day that'll work and you and i will just be wrong about it because it's been wrong yeah like decentralized social you know yeah wrong totally yeah

yeah but i'm okay with that um i'll take the under anything else to talk about here um optimism yeah optimism partnered so optimism did this big air drop we've talked about a bunch on the podcast they lost 20 million op tokens um here's kind of what happened and i wasn't i didn't actually participate in it so i this is secondhand obviously basically optimism partnered with wintermute wintermute is one of the biggest market makers in the space market makers provide liquidity so optimism partnered with wintermute to provide liquidity services like basically buy sell creating a market for the op token um and they uh it basically turned out that wintermute couldn't access the multisig

wallet where the tokens were sent the wallet was on an l1 as i understand it and needed to but it needed to be deployed on an l2 um and i'm not fully sure the specifics here obviously i don't work at winter meet up not at optimism um but this just shows me that like one of the most you've got optimism like one of the best tech teams in the industry you've got wintermute one of the best trading firms in the industry uh they like they're still having this stuff is still so complicated that they're still having issues with it oh and there's a second there's a second part here which is that um wintermute started a recovery operation to kind of gain access to the wallet but before they could do that an attacker was able to recover the wallet first they gained

access to the 20 million op tokens now winter mute has committed to buying these like quote unquote stolen tokens um as they're sold by the attacker's wallet um and i think uh optimism made another short term grant of 20 million op tokens to winter mute but man still like um we how long have we been doing this five six years however long it's been i still feel cautious when i'm sending a crypto transaction like i still send my like little ten dollar hundred dollar test transaction first if winter mutant optimism are still doing this yeah we need some improvements around uiux i'll say that yeah someone made this analogy a long time ago i think it's pretty apt if you think

about uh manufacturing and shipping hardware products versus software products there's a lot that you can learn for crypto so in a software product you're that's the reed hofmann if your product if you aren't more like horribly embarrassed about your product when you ship it you've waited too long because the incentive is you can ship something out get users using it collect bugs and then just pass it like you know update the code right and like pass out an update and it will fix it with hardware or something that you're selling that's like a good out in the real world it's the exact opposite incentive right let's say you manufacture six million dollar cars there's six million cars right you wanna make sure that those cars when they arrive at their owners when people buy them there's not a deficiency with the

brake otherwise you're gonna have to recall and fix six million individual cars right and that's gonna be enormously costly so crypto is very interesting in that it actually even though it is software it behaves more like hardware in terms of how you need to think about shipping stuff because you need to go and battle test and make sure that there aren't bugs so people don't lose all their money right right um and we didn't talk about the the robston test net merge but you know that's why ethereum is taking so much time in its in the merge in its transition from work to proof of stake that's why multiple test nets are being used they could actually ship this basically today but they don't want to put hundreds of billions of dollars at risk and risk the

trust of the network so ooh this is interesting this just happened live while we were recording um the ape dow just voted against yugo labs wishes ape to remain on ethereum for now this is interesting um actually i think because hugo labs wanted to move well from my understanding hugo labs wants to move on to their own blockchain or l2 or whatever it may be like create their own l2 or l1 or whatever it might be the community basically overwhelmed the creators um corporate like sell this is really interesting i need to think this one through but this is just interesting to see the community yeah overrule what like the the execs want to do you know

so that that interview that you did with vance i thought was really interesting here because there are kind of like two things i think the the over the prevailing framework for l ones is that people won't interact on the l1s it's too expensive so the natural customers of l ones are other blockchains that could be layer two blockchains if you went through like the the the kind of vision of like by the way ben jones founder of optimism i didn't mean that to sound negative about optimism at all like that the team that's building that in that community is like amazing they're great but like the you could one vision of the future is that there's l ones there are l twos that interact and borrow the security from l1s and buy block space essentially from those l1s and that applications will launch on each individual l2 there's another kind

of vision of the future actually where you you don't necessarily need that where each kind of project has its own app specific chain that's where you're getting app changes from and then they kind of plug into uh like and borrow security from the same thing that's like the cosmos sdk model so i just you know i think a lot of people viewed it as heresy i think yuga labs has come under a bunch of criticism for being too money grabby which there might be some legitimate legitimacy to that or they're just really good about financing they knew they needed to grab as much money as they could to get through the next bear market those are the two interpretations um i think a lot of people viewed it through an ideological lens of like do they support ethereum or do they not

and i actually don't know the best um what the best technical way to do it is because dude can you imagine if you and i were building one of these chains and it was like oh yeah i know you want to do this and you have the motivation and you got the team but due to technical problems with ethereum you're just going to have to wait a year to do what you want to do yeah yeah i mean come on there's some legitimacy to that viewpoint too that would suck so ideologically these guys might be very associate like very on the same page as the ethereum community but i don't know i feel like i understand people's point of view yeah no i do too i mean hugo wants to do it for a couple reasons right one is it actually then provides a use case for ape like state

it becomes a staking and a gas token now instead of almost just like kind of worthless token um that doesn't have utility um it also creates uh i mean they raised 450 million at a four billion dollar valuation there's nothing in the world more valuable if all this stuff works there's gonna be nothing more valuable than a layer one than owning the l1 so got to do something to fill into that valuation uh okay another benchmark for you here you go lab's valuation is the valuation that disney acquired lucasfilm for so at the end of the day i know there are some differences or whatever they have different revenue model internet whatever they're both in the game of building ip and communities right that's what lucasfilm was in the game of that's

what hugo labs is in the game of hugo labs to justify that 4 billion you can either say that star wars valuation was wrong or the lucasfilm which included star wars indiana jones all of that like monumental ip that got built or yooka labs is just like like theoretically hugo labs would have to create the same amount of intellectual property uh that that that lucasfilm had you know do you see what i'm saying like uh yeah so i don't want to pick on new glabs here but like they have a lot of biddling to do they got a lot of biddling ahead of them that they do um last thing is just an update on the merge uh i would really recommend people go listen to the bankless episode with tim baco that david and ryan did yeah i

think it came out this like a day ago um or maybe even today but it was really really good um but we'll just give a quick summary but i would if you want to get into it i'd recommend listening to that episode i'll give a little bit of context basically we're leading up to the ethereum mainnet merge right but before that there are a couple of different test nets that we have to go through there's the uh this is the rothstein test net so the rops intestine is what we just had after this there's the sepolia test net merge and then there's the guarley testnet merge why these names are so complicated i do not know um this is what happens when developers create the names of the of the things so basically the rob scene uh i'm sure this is actually yeah they're a reference to something but the

rob scene uh test that merge uh was a success there were some here's the quick overview it was a success there were some minor bugs a little bit of configuration issues uh those issues were quickly resolved participation reached 99 um there was like one known issue of a client timeout when building a block with zero transactions i don't fully understand what that means but um good it was good news across the board one step closer to the merge um the i think the most interesting thing here is just like when merge right that's what everyone wants to know here are the current odds for the merge on poly market 28 chance that the merge happens by september 1st 65 chance that the merge happens by

october 1st and a 90 chance that it happens by end of year so by september 1st 28 october 1st 65 and a 90 chance this happens by the end of the year yeah what what i would just say is you know this is where you you kind of have two prevailing schools of thought here and i think they're both right uh but there's the market school of thought and then there's the fundamentals long-term investor school of thought i think if you zoom out and look at this from a long-term perspective you can only look at this as bullish assuming that ethereum doesn't completely break which is not which is a risk probably a small risk uh but you know the merge is gonna first it's shifting from proof of work to proof-of-stake which just makes it more scalable uh you know

all this sorry it's very bullish in terms of what's actually gonna happen fundamentally with the merge makes a more deflationary asset all that good stuff um but then there's the market view which is in the short term this is uncertainty and in general markets tend to hate uncertainty and investors will hedge um so i i think there are probably pretty good arguments that and also our macro environment just sucks so badly i think that's overriding everything so i think i don't know i'd be cautious about people who are i think there's a way to interpret comments that they're very bullish on the long-term future of ethereum but i i wouldn't read those from those people as like you should be buying no eth at the particular moment in time not that i'm not that i have any

special insight but i think i just want to point out i think people talk about the merge from two very different viewpoints a market standpoint and a fundamental standpoint good call yeah how did we do cool i thought we did all right i thought we did all right yeah not bad um it'll be better than uh you know we should do this after your bachelor party in two weeks and see how much worse we do then pray for jason guys he's got his bachelor party coming up in two in two weeks in cabo pray for y'all pray for me please pray for me we need it awesome buddy well um enjoy the rest of your week i guess i'm sure we're on several calls i'm sure the rest of this week but i will talk to you this has been this is this has been yeah

this has been a joy uh thanks everyone for listening if you enjoyed it toss us a five star review subscribe follow whatever you gotta do uh and we will see you next week cheers cheers guys [Music]