Should I Buy a Punk? | Roundup

Transcript

foreign folks welcome back to another episode of Empire we got the Roundup today uh for anyone watching on YouTube I'm sorry that I don't have the nice background as usual I have been uh relegated to the side room the side podcasting room because uh Mr Jack Farley from forward guidance is recording in the main room and the rule of blockworks is Whoever has the uh the most downloads gets the main ruin unfortunately Santi we got we got some work to do my friend that's okay you know well we like being The Underdogs anyways yeah exactly exactly so how you doing man it's been great really I just after that discussion with um 0.6259 um six five two sorry fantastic episode uh we just let him talk because I mean

he has just so much Insight but one of the things is if I were to like summarize because it's our longest episode but I wanted to summarize or attempt to summarize the key highlight is he kept saying over and over as as a crypto industry we have got to get better at The Narrative of explaining the reason of explaining that like why all of this matters to people this goes far beyond Bitcoin ethereum this this goes to the heart of like owning property and now it's digital property and and that I think everyone can relate to and I think it will become more and more obvious over time that you know government or anyone should really not interfere with your ability to to own and self-custody property in the same

way that you buy a car you buy a house like property rights are fundamental for any developed economy and if you don't have property rights to go look at Hernando de Soto's Economist he talks about like why certain countries develop the way they have is because they have sound property rights and that allows for the formation of credit and a number of things and I think that's really the heart of the matter here is forget about crypto put that aside for a minute just think about you know your ability to own digital stuff and custody and I think that's really important and that's a narrative that we should continue to drive home and um I think it'd be right for for a bunch of people that are doing great policy work to just really Hammer that home so that was really my my takeaway I mean

there's a number of things but yeah yeah no I mean one one thing that stood up to me is like just his basically definition and vision for the metaverse because I want even when I say the word metaverse it almost feels very cringy right but I think his his vision of this is right we have this we have this internet today it's actually very tax based still um but if you look at the internet in you know five seven ten years the internet is basically the the metaverse is basically just the internet with better visualizations and these persistent visual objects and coming on the back of the Apple uh what they call the Apple uh Pro or the Apple spatial Computing product you can really clearly see a future where the metaverse is this kind of mix of AR and VR and real size in

real life and as the internet becomes more visual then you can very clearly see a link between uh the these persistent visual objects and the value that those persistent digital objects have in that space so to me like I think this world is kind of funny laughing after that episode talking about things like the zookies or even or punks or or apes or any of these nfts they're just these kind of still objects in this this really text-based internet that we have today but in the future you can really imagine uh an Internet that is much more visual uh yeah you can imagine I mean like a lot more value from an investing standpoint you have to fundamentally understand like what

fundamental like core human desire are you triggering in the particular investment that you make and anyone that is dismissive of nfts misses the point because humans what do humans love to do throughout the history of time humans love to differentiate that's it and that extends a luxury Brands and anything that allows you to differentiate to express your individuality whether it's art or collecting or you know buying luxury codes or whatever it is but humans love to do that and if you don't think that nfts will be big then somehow you're predicating that thesis on the fact that humans will not

want to differentiate into digital context combined with the fact that every Trend that you look at suggests that humans are spending more and more time in the digital world and as you layer on AR or mixed reality it even becomes more important and your ability to as he said a public said you know very few people can go to even the best museum look at Art now they may now be able to do that in a kind of a you know in the metaverse if you will you put on these goggles and you're in the MoMA or the met or Louvre or whatever but creating your digital persona is uniquely enabled by like digital property the scarcity of that and that

that's really all nfts really are right you open your closet today you have a bunch of stuff you know you're wearing a horrible yellow shirt Jason I don't know what this is it's out waiting for you to call it hold on I'm not sure please stop it's about to be July 4th weekend in New York what are we doing we're in a little black gold I always I always wear blue it's a blue black blue anyways I'm not here moving along uh I just generally think that like when you open your digital closet like what do you have and nfts are that right they don't have to be you know 100 000 you know pfps no in fact I'm more bullish on the category of having like earned nfts

the nfts are represent you know culture meaning you go to a concert you know you go to fret Again concert which I know you love and you get an nft like that that's important to you right because you wanna it's a it's a representation of time and space and a test of the of what you've been doing and so I think that's really cool and so that's really why it's important to listen on that episode because those are the highlights and I think he's a fantastic probably the best spokesperson to crystallize and talk about this in a way that I think is more relatable to people normal people and so I would really encourage folks to go and listen a lot yeah agreed um let's get into something that we briefly talked about on the episode

which was uh which is actually just punks so I'm seeing more and more in kind of these just in group chats that I'm in I so you're you know you're a punk holder he's up on colder um you know a lot of group chats people are asking the question like look in the bull market you know no fall of 2021 I really wanted to punk punk sit what like 110 I think it was some some very high number um now they're sitting at like 45 or 50th floor gotta imagine this is like near the bottom of the market is now the right I really want to punk is now the right time to buy a punk so I'd be curious to hear how you think about like for those for people who don't have a punk let's start there for people who don't have a punk who are

thinking about buying a punk and maybe and do have obviously maybe like the net worth and the liquidity to do it how do you think about like whether or not now is the right time to to get their first Punk it's a very difficult question to answer because like certainly we can talk about why punks are relevant because they're arguably the first real project at least in the ethereum blockchain and that has a lot of meaning they're also really simple like you know the the I personally aesthetically I find them quite pleasing just sort of pixelated really kind of speaking to an area of the internet which is like raw but like cool I guess and historically they've just been one

of those collector items of people that have been in the space gravitate to but the question of should you get a punk is very specific to a lot of things and the question is hard to answer because are you collecting are you investing my kind of framework for nfts and collecting these things is purely collecting like I don't pretend to sell and I don't think of them as best of course I did a survey on Twitter which was why do you collect and the options were because you just like it because you think other like it or because you think it's going to make a great investment or

other category and a lot of people said well like the fact that other people like it makes it a good investment which I sort of don't agree with necessarily because things change fairly quickly um but I personally just collect stuff that I really like my thesis for hoodie punks was quite simply at the time I thought there was a very unappreciated attribute of a punk because hoodies really represent kind of hacker culture and that's why I started collecting hoodies because I just sort of thought this kind of has beard it has mirror glasses like kind of like it resembles me and so I want that to be my public pfp but hoodies is a category I thought was something that I really

liked and so I think it's should look arguably some person looking from the outside inside these guys are crazy I mean they're like talking about these pixelated art pieces that are being you know being offered for what's the floor on this 45e that's 85 000 dollars like guys like get your head out of the gutter like like there's a there's a part of that I'm always aware of that you know these things are not cheap and like we it's hard to when I'm trying to get out it's hard to understand like the value of these things and I think in that episode with um we talked about the ringer right which he bought for six and a quarter

million bucks it's either gonna be a great buy or maybe not art is very subjective so it's really hard to think about these things from a valued perspective and but you know my I've helped a number of people buy punks over the years and you know I think if you're serious about collecting I've always felt that this is like probably like an icon like this is you know a Grail in your collection maybe this is somehow like in the traditional art world if you're a serious art collector you have

like a a Warhol or a Picasso or a van Gogh I'm afraid to say this because someone's just going to tear apart what I just said you know I mean it and we talked about like who was bidding for the ringer right sorry the goose I mean yeah uh and he seemed to think that there were like traditional art collectors bidding for this and the second highest bidder that pushed it up was like apparently it's someone who comes from traditional art world and so yeah I don't know like you have to be really patient for these things I feel really comfortable buying stuff that collecting stuff that I know I'm never gonna sell I collect a number I'll collect so much [ __ ] but punks have been probably when I think of the nfts that I have I've

gotten a number of like I've just gotten things um from projects or from folks but when I think about buying I've only really seriously like one meaningful dollars at stake it's just punks for me and I'm but I'm biased yeah how many um I'm not gonna answer that um let's put it this way I have earmarked and bookmarked ten punks that I would want to buy more guns all right so that that's really what I am it is an interesting time yeah anytime there are liquidity crunches some people just got in hot water right because they bought with leverage or

they bought speculating thinking that they were going to flip and you and you see it what's nice about the crypto on the lava lapse um interface and they're kind of you go on you know lava labs and crypto punks and you click on a particular crypto pumpkin you can see the entire history right of who's spotted transfers but also it's very interesting when you look at certain punks where they're bought and then they're very quickly re-listed now a lot of punks are not realistic none of my punks are for instance people can place bids on them but that's fine a lot of other punks you see this you see this trend where maybe they bought at the beak a year ago and then

they quickly relisted and then they've lowered that like offered for maybe 400 each and then they go down to 350 and they go to 320 and 300. and you also look at like at the time where eth was trading out so you look at the dollar basis so in my in my mind when I'm thinking of going shopping I look at these type of punks and I find it quite interesting sometimes I want to understand kind of this behavior of hey maybe this guy maybe this person bought it for 300 000 bucks and at the time it was corresponded to x amount of e if I offer the same amount of eth or if I offered the same amount of dollar amount he's at least going to

break even you know and so these are some of the things that I think about um strategically and the other thing that I've tweeted about but I didn't get a really good answer was like there's this punks OTC that they've like been involved in a number of Trades I don't really fully understand like what they do or how they do it or what the value of it is we're satisfied you don't use Punk's OTC you just buy it straight yeah like for instance I pick I just wanted I I ping them about a particular point that I liked it's like oh we know the we know the owner and he's is this a pug that is currently listed or huh it's kind of nice to it so if it's currently listed why wouldn't you just buy it on the marketplace yeah yeah I know I could

I was just curious because he's it's one of these puncts where it's had like a history of like offered and yeah certain bids close to what he's been like what it's offered at but you know you could snipe it yeah and then and there so I personally would not do it go again because I was docs and like apparently like a few other people ping me like I was in certain channels this guy wants to buy your punk and like I don't know uh when I'm buying stuff uh I probably use a fresh wallet stuff yep um and how do you think about so I think it was so when I was first I think it was uh buying crypto dick butts Melton told me you either buy a Grail or a floor you never go in between and and I think and I think her like applied to any

question right um and I'm curious yeah it's an interest I've had actually this discussion a lot in the early days of blur with Pac-Man of how because you're right like I think of because you're a vote like you're yeah of course I think I have I think I have Grails I may have a couple of floors but it's the stuff that I have I consider to be fairly unique it's not an alien Punk maybe maybe not but it's uh or like a zombie but I you know I guess what I'm trying to it's sort of this like what is it the endowment effect or like the was this idea that

once you buy something you're so attached to it you think it's a girl yeah um but look like I guess it I'm trying to get out like trying to understand what Melton was thinking when she said that because if you're buying floors if you're sweeping a floor doesn't that mean that it's more of like a Trader mindset because in blur a lot of the activity is tied to floors right people sweeping floors and they're making a bet that like the floor for a particular collection is going to go up like miladys and stuff like that like I feel like it's a more speculative buy wanting to flip at some point and it's more of the investor type that says hey on a relative basis punks have

really come down a lot at their Peak they were like three times more it's kind of like a levered East bed you know it's hold it's value fairly well you know there's a lot of buyers out there that will hold the floor and unlike you know unlike um board Apes this is more of a you know connoisseur like cook collection if you will yeah it's not about punks right it's about like I think this is about all nft purchases in general yeah yeah I think the floor the floor sweeper is an investor especially later the Grail one I'm not so sure I think it's more specific um yeah because you could buy a punk right now for I think the cheapest one is this

one with the green hat thing for 85k yeah 45 eight yeah yeah but maybe you see uh but maybe you see something else where it's like oh this blue bandana with uh you know sunglasses for 55 feet so it's like how do you think about spending that extra 10 each to get something that you really love right I guess that's all for it oh you know at the end of the day you don't want your wild Litter with [ __ ] you don't like buy stuff that you like it's gonna be easier you know it's like sometimes you I I just found it that's my approach to collecting I never want to buy stuff because someone tells me it's worth a lot now again it's it's a it's a difficult decision because if that incremental 10K is going to make you

uncomfortable then then reconsider right but if you can do it go for it in in nine out of ten times where I've like help people like find the right Punk for them and look I'm not like Punk advisor or not but dude I don't know like people that are close baby I'm like what's which one speaks to you and they send me five or six I'm like oh you know like I feel like you know this or that and the ones that I bought have been like thoughtful buys which is like this Punk represent X or I want this Punk to be here if I were to display it or this Punk yeah in many ways like people buy watches and jewelry to commemorate certain moments you know maybe that's like a yeah a good way to approach it yeah so yeah I don't

know it's a it's very subjective man because anyone out there could be listening to this these guys like are way out of their like these crypto people have no sense of what art is and you know they for them it like I'm who am I to you know they're all worlds so subjective like there's so many artists look look I've watched it I've always walked in certain museums like in Paris I remember pompadu Museum and like in the top floor next to the cafe there's a canvas it's just blue like like the back of my my here I'm looking at that I'm like this is probably you're wondering like why is it here and it's probably worth like

40 million or something you know and like I don't know apparently the guy invented that color of blue so you know but I didn't know that you know and so unless people told me that I wouldn't have appreciate them like this is this is ludicrous like what like there's so many other things that like street art is better but I think isn't that part of the like let's say you're buying R for like the flex basically there it's really all about who you're trying to you're almost your target audience on the flex or it's like the so in in that case for example there's a you might not know that this guy invite and created this color blue but yeah for

if you if you own your punk you're basically target audience but you're like your friends who are in crypto or whatever recognize that that is a cool punk so whereas someone on the three might just be like I don't know absolutely I will say though the punks that I've shared this with people that like are not in a crypto a lot I'm like oh that that's that's kind of cool looking like I like it whereas board Apes like you don't get similar response um does it matter on the margin for sure the other thing is you got to be mindful like my hoodie punk I'm Never Gonna Let Go like it's not gonna sell that it's but uh one of the things that you know people are critical of in all of this is

is the flex component just like oh you know you're just buying this because you tell people you can literally Splurge 45 youth you know a car on a you know right click save image like what is that like you're just so vain and like what type of person you are and you know what teaches on I've just learned don't judge like people are so quick to judge like you have no idea yeah and so but you're it is a con I guess whether it's a concern or not it's more of a personal basis but you know just be mindful people are going to know exactly what you bought it for and so you know all as it relates to buying a lot of

times you know buy with a clean wallet you know so people don't know who it is or or it's you know tied to other stuff that you're doing and you know sometimes it's just kind of good to collect and just keep your head down hey everyone quick break from Empire to tell you about another blockworks Channel that I know you're gonna love I've been in crypto full time for five years and have always struggled with one thing which is keeping up with the next big Trend as soon as I wrap my head around MVB Rhonda app jeans as soon as I wrap my head around aptrans we're on to liquid staking derivatives I'm sure you've been there blockworks research hasn't solved that problem for me our team puts research data governance proposal updates models and more into one really

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platform if you are ready to subscribe right now I got you guys with a little hookup Empire listeners get a 10 discount for the first 50 people who use the code empire10 got your back check out the links in the in the description to find out more let's get back to the show let's talk about an NFC that did not go so well um so this week uh azuki's launched new newest revolutionary really differentiated collection so for those who weren't following um Suzuki's I would call one uh I would call them one of the tier one nft projects from the from the height of the like nft boom so it's like I'd put like a zoo Keys

punks board Apes Murray Birds School cats like these were the like hottest projects and um a lot of them were actually able to uh raise some money so like Yuga um raised with board Apes Rays Doodles had a big raise Mizuki actually tried to do a fundraise around the same time that poor Dave's raised but they weren't able to get the fundraise done as my understanding of it um they launched this new project um everyone's really excited about it basically if you haven't seen it it's a brand new project that looks pretty much identical to the original azuki's you can I was flipping between them on on blur you can barely tell the difference uh it and it what it did is

it tripled the number of azuki's um and right away the price of azuki's about 40 so I think uh oh that's what you'd call a dilution event that's what you call a dilution event but they were so they got a lot of [ __ ] but um I was trying to play Devil's Abby I guess let me try to play Devil's Advocate to this which is if you're a company you need and you need money really what they did is they diluted I think they I don't know they sold probably like I'm making this number up like roughly 60 of the shares to get 40 million bucks and if you were a company that was really really struggling and still maybe hadn't found product Market fit they clearly haven't nailed their business model um all they I mean they minted out 40

million so The Devil's Advocate was like you could either go down or you could raise this money and keep going I understand that but I think a lot of people are expecting this to be a little bit more differentiated that's that's the that's the thing that I'm concerned about because look it's more of a narrative and what you're telling people like I think my understanding was a lot of people were expecting this to be a fairly kind of unique collection uh like like okay um like me bits for instance like not tied to punks but you know me bits or like uh you know the board Apes had the mutant Apes like they're fairly different like you could tell them apart

and the kernels and like these things are very different right this was not different so I just think like it just felt like a cash grab like fine like if you want to raise money just do it right but on what promise and what basis yeah yeah um I mean it really brings into question the business model of nfts right there is none you can go art with royalties you can sell well it's just interesting to see what's happening right Pudgies so are selling merch on Amazon uh apes are trying to build this game Doodles are like are trying to build this new age Media Company um I am in your boat that I think the best model for this is not having any sort of

road map I mean look at the folks who had a road map moon birds that fell to [ __ ] cool cats that went to [ __ ] zookies I mean jury's out here but it doesn't seem like it's going too well so it's like I'm not being dismissive enough business models like what is it the penguins have been selling their their like uh you know what do you call these for like pushy like uh what do you call these things yeah but like you buy these things like uh I don't know it's a real life no you buy them on Amazon right it's like a um blame my God anyways I'm not dismissive of like these things like if you want to buy like a

real life representation of your punk like or a print like yeah there's like a Jason revenue streams you can tap into I think that it was where I'm on Morse what was that they're called plushies plushies yes this is the work so anyways plushies yeah yeah if you want to I I would buy a plushie of some of these things like these cute little penguins yeah that's right the question more is like how far do you like thread the needle like oh this utility narrative and we're building a game or Reinventing Disney like it's gonna take a lot of time yeah and resources some of these projects have raised a lot of resources and and so anyways I'm not like dismissive of that I'm just

I think uh this is why again I go back to punch because they don't pretend to be anything other than or yep yep all right let's get past nfts let's talk about um funding right now so you mentioned to me uh you said deal flows up a lot yeah looking at some of the numbers so uh the deal flow if you actually look at the numbers of companies raising is down so let me just run through these numbers January 66 fundraises February 95 March 68 April 60 May 61 June we have two days left in June 46. so that number's the lowest of the year however the interesting thing is an incred the most amount of seed in series a companies uh on previous in

June so 80 39 seed deals in in June already uh seed in series a I think it was so you're seeing very little larger deals yeah the other thing this this is a lagging indicator because you're going by the announcement and sometimes oh I've closed the deal and it takes three or the team doesn't want to announce or it takes three months to announce and therefore they're tying that announcement to some sort of other strategic there's always some lag I will say I'm now like looking at 12 different opportunities there was a time where I was like looking at for one or zero for what felt like April

May it was like very soft even February it was it was just slow um the new a lot of it is New Deal flow certainly like the deal the deals that I saw earlier this year felt more or were more in the camp uh projects that I've I was an investor in looking to raise more money under the realization that they were under the liquidity crunch some of the deal flow now is a combination of that because look some companies are doing actually very well and they're executing and so they would just want to buy more they don't know if you know you go back to that episode of each one

and hasib and above them I think especially if each will said look uh we're on it could take another one or at least one and a half two years of this bear market and liquidity is going to be really dry and so you know I think if you're a Founder a lot of them realize that and so they want to extra insurance and buffer um interestingly though three projects that I'm an investor and have returned capital this week which is great to see actually return Capital like they're they're done yeah like 60 50 60 70 cents on the dollar they're like look we raised around last year we either one of our founders of lost conviction or as a team we haven't really found part of Market fit and we just would rather return Capital we may

come back later and I think that's uh in most cases nine out of ten I think it's it's probably more teams should be doing that kindly and I respect that a lot and so anyways that's been that's been fairly interesting too but yeah a lot of the composition of the rounds mixed bag a lot of them have been um still still a lot of infra like a lot of infrastructure ZK slap ZK on something you know CK BM CK yada yada AI of course is your crypto AI like this it's like for for a while has been like you know circling and a lot of times

they come attached with a slightly higher valuation but just categorically evaluations for seed and series a are down a lot and I'll tell people like this is a great environment to be deploying Capital if you have it because uh a seed or series a but deal is getting done at a fifth of the price so fairly compelling like seven million bucks 10. um 15 20. uh up to 30 which 30 is now rarified like a lot of people now are very very sensitive and it's a lot of times the investors that were not very sensitive uh like not very evaluation disciplined then the last cycle like or like now

over corrected um but but yeah yeah what um what types of companies are these are these D5 companies are these gaming they're a combination less gaming now I would say out of the 12 like two or two are gaming um for like infra stuff uh like a lot of interest in like launching new l2s for instance from like three new altitudes I just think there's okay are they l2s or are they do you see what's async launched this week is it like ZK stack

where you're basically giving someone the infrastructure to go launch their own l2s or is it the new ah no it's a new world too I don't get that game is it like everyone launching out what it's the l2's the news yeah I mean the I could see why because you control the stack you control some parameters a lot of them are building on top or for you know the Opie stack yeah um and some are I'd say the more interesting ones and differentiated ones are those that like no surprise and continue to explore the banking idea a lot of people have told me hey shut it down like don't waste your time like

there's some folks being like Sasha should not do that yeah a lot of people like it listen man like I like you but I think on this one let me save you the headache and I was like I've had a lot of headaches in crypto like I could just be like maybe doing something going to be a professor somewhere or just I don't know I don't know what I'm good at um but I met some really interesting folks and the reason I mentioned this is because I've had two conversations with like Founders that and teams that have been building a lot of financial infrastructure to like Robert's new thing you're plugging like off-chain world not real world assets but kind of like off chain world with on-chain stuff

um one of them is a particular like a new L2 that is like kyc permission like you know to make it easy for financial institutions it's kind of operating in a very safe environment um but still settling with like you know in a kind of like a on ethereum so um and some companies which is really interesting have built a lot of products of really good teams and just need another jump start like they've been kind of doormat and they haven't gone traction and those companies like like this reminds me a lot of the prior cycle like you looked at Ave for instance like they weren't they were not going anywhere not because they weren't doing stuff because the market was just not paying attention and it needed like a Kickstart so they

rebranded to Ave they changed the cut token economics kyber did this too synthetics did this too and in crypto unfortunately if you're not on top of the top 20 like in that first page of coin of coin gecko good luck and this goes again go back to the discussion with avicho and haseeb it's like the question to them was would you rather invest in a new project or an existing project that's been around for a while but doorman left for dead I don't know like the market historically I think the data would show the most you would probably skew towards a new project because people like new shiny toys but from a absolute return perspective I would argue sometimes you can get a fantastic price for really good assets that are more

de-risked meaning they're not just a white paper they're just not not a slide you don't really know the team you've actually seen them out in the wild and those are fairly interesting I'm looking at one which is like Financial infrastructure like net settlement to really minimize like counterparty Risk like for instance when when ever in moments of like Crisis like when when Luna went down when um three arrows had these issues and was going down like you would March of 2020 doing code good like your number one immediate thing is can I trust my counterparty Genesis or whatever and when you're doing these trades it's like you don't even know they're going to settle like they're going to send it back and so

it's an issue and this company is like trying to solve that like they've been building for like four like years now and they have great backing there is a really high valuation last round and so it's you're they're kind of stuck they're they haven't they need a jump start they're willing to like lower evaluation and kind of have this go but they need the right partner to get that attention in the market because they've also talked to customers when they didn't have that much of a product so these are like some of the deals that I'm really excited about because it goes back to the idea of a bank which is people might say like okay you've really gone crazy you're telling me you want to start a bank when Silicon Valley Bank signature silvergate all these banks are going down

but I actually think it's the best time because I forget who told me this but it's like the second Brawn at a at a good idea is probably the best investment that you'll make not the first and I think we're in that environment where a lot of people don't have money have done stupid things the capital's really dried out which means you can get stuff way cheaper you can invest in very decent valuations but also get teams like it could be in the public markets it could also be secondaries it could be recapitalizations of entire businesses where you can just pick stuff up for pennies in the dollar really good assets of teams that haven't given up and all they need is another jumpstart and you come in you give them a fresh Capital

injection and and and you get it off the ground yeah because I don't want to talk about the ETF but I think I think there's a lot of momentum there and and I think a lot of what the approval of an ETF could mean from and the the effects that that could have the second order effects around regulation and really clearing the path for other stuff and what you're seeing in Europe like all of these things again I don't want to talk about it that specifically I want to talk about the the Catalyst because momentum changes really quickly especially in crypto and so I think um you got to think about okay if that happens then all of a sudden an

investment that you may have thought would have taken years because traffic moves slowly you say no actually this might be the right time to do this and and so yeah what do you think I've seen a lot of deals for um Bitcoin only companies and I really don't like that that strategy or like a Bitcoin only wallet or a Bitcoin Bitcoin related you know Bitcoin only related uh exchange I'm I think I'm uh I'd love to hear those yeah I you know I have maybe people reach out to me because big people probably don't reach out to you because you're you're this is such an I mean I'm I I've look I have a lot like we had yeah I don't do I don't do any of them because it's a it's a losing strategy because look what look what happens when

you try to scale so let's say your Bitcoin and you have a really successful Bitcoin only uh custody product for example like take Casa do you remember you know Casa like Casa Hotel um they're a Bitcoin only then they launched after like four or five years they launched eth and because the Bitcoin Maxes are so so like stuck in their ways when Casa launched e they I would the the pushback was tremendous from the from their core customers so um and I think like this was the thing that you remember in 2017 when coinbase dealt with this coinbase just had I think Bitcoin and eth and they were debating it was the debate between Brian and Balaji about whether or not they should list long tail of assets

um and it shouldn't be a debate if you're building a Marketplace business you need as many assets as possible like look at NASDAQ like NASDAQ create freedom to transact you know that's it like you should yeah I don't understand yeah I know like it's a go to market strategy right so like yeah right and he and look I think it's interesting what they're building ordinals have like really taken off and whatnot but is actually kind of interesting like Stacks is a is weird has weirdly become a levered bet on bitcoin right now because they did their token raise but it was one of the only compliant token raises you remember that um I don't talk to some some funds who are buying Stacks because it's kind of a not investment advice et cetera et

cetera but buying it because it's a leveraged bet on bitcoin right now and it's actually really it's really cool to get levered bets on bitcoin right now or just exposure in general if you are yeah coinbase coinbase is what I I really pay attention to what's happening in kuami's because I think it's just a general like proxy of the overall Market's understanding of crypto and appetite uh of course that was rallied like 50 in the bottom because Balboa's came out like this is Seth clarman saying oh he yeah we're not thinking of you on the company we're not bullish on the company but we think these things are mispriced which you know tells you the market pendulum as Howard Mark says swings to

extremes right and sometimes things are left for dead and so yeah I think this is the environment where ver there's a disorderly Shakedown in markets you tend to see me as price things all around people just flock to safety and they're willing to to trade a lot for perceived safety and those are the moments where you you know you hear Stan drug Mill you know all these folks talking about like these are the fat pitches or whatever you want to call them but generally like you never really kind of knew I think like bands push back and said like I don't really feel like I've ever felt that I've done a like had a fat [ __ ]

but I'm like I feel like you start intuiting like when you look back and you say it feels uncomfortable feels like you shouldn't be doing it but you see other people being forced sellers like for instance like Robin who's liquidating a bunch of like alts because you know that's what they're doing like you have certain like uh bankruptcy uh proceedings happening and fire sales and so to me I look at that and that's generally combined with negative headlines like the Box literally ticked off the bottom ticked the bottom of their headline like this is the worst time for crypto crypto is dead these deadlines generally come with four sellers definitely coincide with Market bottoms or at least really good moments to take a long term view in the space yeah last last thing I want to discuss here

pretty light Newsweek I'd say but I think we should discuss One news item is uh is prime trust so let me just um give the overview of prime trust for folks because I think it's helpful to lay out all the details so the background here is prime trust is an infrastructure provider for a whole bunch of different crypto companies in the space so let's say you re let's say you want to build a um a consumer app for example and you let's say you want to build a consumer app for crypto you raised five million bucks instead of having to build all the infrastructure yourself the kycaml the onboarding all that kind of stuff oftentimes what will happen is you build the front end and everything else sits on top of prime trust so there are a lot of series seed series a and some series B though by

series B you start kind of hacking away at the stack a lot of seed in series 8 crypto companies that have built their entire stack on top of prime trust so June 7th uh three weeks ago Prime Trust it kind of leaked out that Prime trust was in trouble and that they were doing a they were doing an emergency 25 million dollar rate so that was June 7th June 8th bitco announced that they were acquiring Prime trust that the deals of the term weren't disclosed but it looked like bitco is going to acquire 100 of the equity of from prime prime core who is the parent company for entrust that was June 8th June 13th uh bank b-a-n-q which is a prime trust subsidiary filed for bankruptcy protection in Nevada and according to the filing bank had it has

had a little over 17 million dollars with total liabilities of five and a half million so folks thought that you had you know 17 million liabilities um uh 17 million assets with little over five and a half million liabilities fast forward a couple more days June 20th about a week ago Prime trust Holton deposits and withdrawals um sent out an email saying that they're halting both Fiat and crypto withdrawals and deposits day later uh Prime trust seeks receivership from Nevada after it receives a cease and assist from the Nevada regulator a day later no surprise here bitco terminated the pla their plans to buy bitco they said in the tweet that they that uh that after a

considerable effort and work to find a path forward with prime trust they move to make the hard decision to terminate the acquisition and then earlier this week June 27th we're recording this on June 29th and a Tuesday Court filing the state agency asked the court to impound the assets and related properties of prime trust immediately it also moved to enjoined Prime's employees from removing Prime Property without the permission of the Court mandated receiver Prime trust per the Monday filing was only 861 thousand dollars short of paying back its outstanding crypto-based obligations to clients however here's the kicker FID allege that Prime trust lost access to Legacy wallets in 2021

and in order to make up from the for the customer uh for the shortfall there they use customer assets to buy back their crypto so if you actually look at the numbers for for crypto Prime trust owes 69.5 million to clients and they have 68.5 million so they're like they're like a million dollars short however in Fiat they have 2.9 Million dollars but they owe customers 85 and a half million dollars so that's the kicker right there is they owe clients over 80 million bucks right now they use customer funds to try to dig themselves out of a hole and they lost access to Legacy wallets all the way back in 2021 which is a real

bummer because I know I invested in like six different companies that built their businesses on top of prime trust yeah starting after 2021 so that means the CEO of prime trust whoever was back then knew that they were onboarding folks when they were when they were in solvent yeah that is a that is a scam let me ask you two questions one like who watches the custodian and attest to this stuff and second if you're a client and you're looking at your custody assets wouldn't you be able to see this flow of funds and misappropriation funds or I guess like the funds are still I guess the funds are stuck in a wallet

right someone tagged the wallet on Twitter I saw it the funds are there but they just have lost access so I guess what you're saying is people the funds are there right yeah um and by the way there's one more kicker which is uh I think it was Arkham Arkham intelligence uh kind of a wallet tagging tool similar to nanson 88 of the crypto that Prime trust holds is this is audio token so they have 69 million in crypto but is this audience not it's lit I've never heard this thing audio um 61 million of the 69 is is audio token so oh yeah it's a bummer I mean I got a couple investor updates like

you know one of them said it bluntly they're like Prime trust was insolvent ever since we started working with them brutal so yeah I guess we at this point we wait to uh to hear how the fjc uh how it plays out here but I'm hoping that for some of these smaller companies um you know some of them only had maybe 250k in a in a set in a in like a settlement Omnibus account maybe another 250 or 300 and like an ACH Reserve account so hopefully because those are it's pretty small dollar amounts hopefully the fdsc figure uh you know gets that money back but yeah go ahead I was gonna say that there's obviously one implication here at TUSD it's like the fifth largest uh dollar pack stable coin

3.1 billion market cap I believe yeah so um you know I'd say like nothing major but are you still big it's obviously people got wind of this and it's it's important because they said that they had no exposure the prime trust but then they sent an email uh to their customers saying there's no more no more minting and redeeming due to Prime trust so I mean like you know we'll follow what's happening on chain and never trust what people are telling you it's sort of the moral of the story but you know I like a lot of people are shorting it there's uh you know obviously look at the py navi it's 50 over 50 people are like borrowing to USD and then selling in like basically shorting it um so yeah it's uh it has a whole host of like effects yeah but I think USC I

think Nick Carter had a good tweet on this it looks like to you it's just below dresses it's like 26k so it's why why would they like uh why would they then Halt minting and redeeming that's where it's a little not sure that one that one didn't make sense yeah maybe from uh they had to somehow figure out the back end flow in some ways you should for example how this works but maybe the mint the mint and maybe in inside of how that infrastructure works yeah Prime trust possibly that's not I guess but yeah be wary folks if you're transacting trafficking to USD just be aware make it sound like this legal thing if

you're like trafficking into us today I use the word uh trafficking quite a bit but if you're choosing touching TSD exposure uh last thing is uh you see lescher launch a new company so yeah customer care if I investing it out so yeah yeah talk to Ben about that a little while ago um uh I think it was parify 1kx Cumberland coin fund and I think that was one more distributed maybe um yeah I think so yeah yeah so um it's very cool to see on tying this all back together to your conversation about investing in batters who have been at it for a little while in crypto it's

very cool to see some of these defy ogs like leshner take another swing at it so Rob Rob is building super State uh their mission is to create regulated Financial products that bridge traditional markets and crypto uh as he put it the primary limiting factor to Defy is that crypto native assets that the only interoperable assets eventually hundreds of trillions of dollars of offline assets will find their way into blockchains we plan to facilitate that migration on Monday we filed a preliminary perspective with the SEC for the super States short-term Government Bond Fund um it's pretty cool to see well we'll have to have uh we'll have to have him come on to talk about what he's building here yeah absolutely Rob's always been when you you remember like when compound like launched a treasury

solution and then they were thinking about going to polkadot and building their own kind of chain like real chain yeah I think this is always in the back of if you kind of read between team lines it was always kind of in his mind and now I think this is a way to express that thesis just cool to see agreed what else man nothing I think this is a light week go out and listen to that episode um uh on with Punk 6529 I think that was great um any interesting books or uh movies that you've seen recently did you finish that poverty one God damn it yeah yeah I I'm my new one I'm committing to uh finally read the three

body problem which is I think the most popular book in China um this is am I this is a three body problem shushan Lil okay it's very good what's it about I don't know I'm only half I'm halfway through the first book there's three there's three books there's uh I think it's like the Harry Potter of China or something two friends who love it one of them Mike loves it I think it's one of Mike's favorite favorite books um okay nice it's not like physics meets sci-fi I don't know I didn't I can't talk to too much I'm only yeah like a third of the way second Neil Stevenson's kind of thing like black but it seems like but I'll tell you once I read the first book okay I'm reading the

jellyfish what's called jellyfish age backwards this is a great book on Aging uh I love aging as you know the prayer life I invest in aging startup work there um did research um so this is a nice book to just talk about like everything that's going on in the Aging world isn't that actually a thing jellyfish do age backwards man there's a there's a type of jellyfish there there's like fascinating thing about certain animals that just behave in a very different way that makes you think that like if you understand all the different processes that go on in their organism then you could probably think about okay how does that how do we eat right some species like literally shut down as soon as they have birth they die immediately like like octopus yeah you want to say

give birth like they're done like their mission is completely spiders have that too yeah certain flies like um certain whales never die alligators like some sharks like it's kind of crazy yeah there's some sharks that are like 400 years old right now yeah you know yeah oh big time so it's yeah I love this stuff so I I so far it's been good you follow Brian Johnson you know Brian Johnson yeah the guy who's like trying to like do all these crazy things and the blueprint guy mm-hmm I do um yeah Peter attia and David Sinclair and a bunch of like I actually wanted to have a longevity panel at provincialists this year but it got got mixed I thought that would be fun yeah well

uh maybe the best we can do is you know put our brain in a have the train AI train itself to like understand like our Consciousness or so like how we operate and then just create a digital app I mean Ryan Johnson looks about as close as you can imagine what I would look like if it was like it was like an avatar like pale yeah yeah honestly no like yeah um go get some sunlight go get some sunlight or whatever anyways man this is a great episode uh good to see you um thanks for tuning folks and uh yeah we'll be here next week [Music]