Uniswap vs SEC: The Bull and Bear Case | Roundup

Transcript

for every team in crypto that fails it gets 10 times at least 10 times more press than a successful one and as an industry I think we could all just Embrace a little bit more of that mentality where it's a really small pie right now we're all in in the game of expanding that pie and I think that type of behavior should be called out on should be called called out and also you know discouraged yeah so what Ian did yesterday I think is complete [ __ ] it's like guys like if you're really believe in your Tech if you believe in what you're doing like just stick at it like why F if you are an Empire listener hopefully you've played around on chain and if you

have done that you know that transferring assets across different chains is a pain to put it nicely that is why we are incredibly excited to have the Wormhole Foundation as a partner of the Empire podcast Steward of the Wormhole protocol supporting over 30 different blockchains and six different run times stay tuned later in the show we have a cool thing that you can claim which is a wormhole nft just for Empire listeners this episode is brought to you by moned which has not only the highest performance evm L1 architecture ever built but also the wildest and craziest community in crypto mad's internal devet is live and public test net comes out soon so make sure you join the monad community today at

discord.gg slad m o n a d monad what's up everybody uh welcome back we it's Marathon week so we have a SI Santi an injured Santi uh a complaining rambling Santi so uh yeah welcome back folks the tldr is the Shanti is getting [ __ ] old like you know this is like I'm facing my own demons in reality but anyways GM GM GM so we got the uh can you say which Marathon it is Boston Marathon Boston Marathon baby I've qualified number of time over the years and this is the first time I'm actually doing it I went to school here today I uh it's really it's the first marathon

in the US so it's like uh you need to qualify so it's the most prestigious so anyways I'm excited it will also be uh you know there's like six World major marathons this is my six so I'm going to get the you know Run Chicago Boston Chicago London Berlin New York too this last Boston so the hard part what makes Boston Boston is like there's just like The Break um heartbreak kill so today I actually went and ran the last 12K of the course uh it it's it's pretty uphill I got to say so I'll be I'll be needing all the Good Vibes is that is that at the end of the race yeah it's like the second half the race last like mile 192 onward it's like so just legs have given out people

are like crawling up the hill yeah anyways uh many times I I wonder why I subject myself to this pain and misery but I also wonder about the crypto too many yeah many ways of your life this way this week has been really interesting I think we um there's been a lot of news stories right so I think we can just do the regular round of just covering a lot of the the news be plenty of content yeah let's do it let's do it yeah news of the week by the way we have two really good podcast episodes coming out so Tuesday we've got one with Steph Federer or goldfeder um from our the CEO of offchain labs and you know kind of the co-founder of or and stuff like that um I don't know what his title should be but yeah really good episode um

basically we on the last round up we were talking about l3s and just kind of rambling on about these l3s and Stephen came on and kind of gave the bull case for l3s and I thought it was a really good succinct argument and yeah I mean I kind of took a backseat in in the episode but folks should stay tuned that comes out on Tuesday then there's one with uh Jake Brookman and um Seth who runs the liquid book at coin fund and Jake brookman's the co-founder of coin fund and that was a really good episode J Seth is about as bullish as you can possibly be um he's yeah he's yeah calling for a I mean you'll have to listen to the episode but like it's probably the most bullish podcast we've had of the year um we we missed you obviously but okay so new

news of the week we've got uh Unis swap received a Wells notice from the SEC we've got margin F's co-founder kind of Rage Quit um we've got the Bitcoin having in about a week we've got K Rock uh the reaking protocol competitor to igen layer launched uh Circle and black rock did a thing and sui launched a phone where do you want to start I think that order seems fine great un swap let me give the high level for people who missed it um hopefully if you're working crypto you didn't miss it but yeah Unis swap received a Wells notice from the SEC this week um the wells notice I'm going to kind of ramble

through my understanding what just happened but Wells notice is uh something that precedes a formal enforcement action um it wasn't really a surprise from what I've when talking to other lawyers in space and talking to some people at unisoft it wasn't really a big surprise um but yeah still still like not not great I'd say so the pending charges my like I couldn't really figure it out but it seems like the pending charges are a bit unclear there were a series of posts from un swap exacts no one really spelled out the allegations that the SEC made um something I think it seems like something maybe about Unis swap being a broker uh maybe something else about I think it was um their Chief legal officer Marvin amori said that

Securities Regulators have an argument that unisoft is operating as an unregistered exchange and a brokerage um and that's very if you remember the coinbase and binance cases it's the same argument that they that they lost already yeah yeah I would also I would assume there's something about the uni token um if they're real like you don't go after Unis Swap and just kind of like half asset like I would assume if you're going after Unis swap a you're making a like you're basically making a decision to go for the jugular you're trying to take the biggest swing that you can possibly take right they've actually gone after a bunch of smaller D5 protocols and they've and they've actually won some of those but it doesn't do anything and so I think here they're like boom gidy up importantly they've lost against the the

the players in crypto that actually have the resources to fight and not C Ripple Ripple coinbase grayscale grayscale so I would bet the I would bet that they're also CLA claiming or are going to claim that uh uni is a security um in a blog post Wednesday night Unis swap Labs put out something that declared that uni is quote not a security it does not meet the legal definition of any type of security I don't think they would put that out if there wasn't something there um I would also bet that they're going to take the strategy they took a while ago which is the SEC in the case is probably going to name other tokens in the case too they did that in the complaints against binance and coinbase um and uh if you

think about timing so they just got this Wells notice if you go back to when coinbase got their Wells notice the SEC filed their lawsuit about against coinbase about two months after coinbase got the wells notice so I would assume maybe they get the official lawsuit maybe comes in end of May ear early June um and yeah well it's also interesting about uh you know the what would happen with the feast wtge which was uh obviously something that came to light and was brought you know caught people's attention I think it was like over a month ago so it would be interesting to see how that all plays out um and also kind of trickling down into the I don't want to jump too far ahead but the margin five drama a lot of it is related

to the token and probably disagreements within the team I don't think it's a coincidence that it it all happened the day where the wells noticed was public I think emotions running high and if you're by founder it's not it's not easy being a Founder in crypto days like yesterday probably really um you know make that obvious right but I thought I thought Hayden's response you know he said something to the effect of I'm not surprised I'm more so angry disappointed but ready to fight uh which is something you said which you know is I don't think I don't think this Wells know as um catches anyone by surprise um you know they've we've talked numerous times in the episode

about you know sec in in inquiries in many defi protocols over the years defi is one of those things where they paid a lot of attention to it's probably closest on the regulatory kind of chopping block if you will and so unisa being the the largest or one of the more prominent protocols it's really not a surprise yeah um yeah presume presum presumably Unis swop Labs turned down either refused to engage with the SEC or or turn down the like turn down the SEC uh like a settlement agreement um because if you remember I'm just only basing this off the coinbase case but if you remember when coinbase they had their lawsuit and their public comments I think Brian Armstrong basically said that they were told to kind of shut it

down as part of the settlement um and yeah so I'm assuming Uno's just like yeah they're they're not going to engage there but um yeah Co the coinbase chief legal officer Paul wall had a good had a good post he's I mean he basically said look Regulators at this point if they're claiming that Unis swap is an unregistered broker Regulators have no like leg to stand on here um the federal judge in coinbase's case last month ruled that coinbase wallet could not be conducting brokerage activities as the product doesn't make investment recommendations or hold customer funds um and that is nearly identical I think to to unisoft here exactly is a Paul is one of the best people that I literally have notifications on as I want to like

stay on top of it and he usually has very clear uh and good interpretations what's going on and yeah people should go look at his tweet and just follow whatever he has to say yeah he's one most important people as it relates to regulatory matters yeah um okay maybe the the F okay I'll give out the bull here's how I'm thinking about there's the fud case and there's the bull case I'll start with the I'll start with the fud maybe I think the fud is probably that I forget who tweeted this I'm sorry that I'm not citing them but it's something along the lines of the so the Unis swap amm smart contracts are not run by the Unis swap company if somehow they ended up being deemed a Securities Exchange and not like you know just an

orderbook then that exchange is owned and operated by ethereum validators or the LPS not the Unis swap company which then starts to raise uh the question of like okay where does this end right would if they're saying that that is a broker a broker dealer or whatever you know whatever claim that they're filing here which which we don't actually know yet like where where does that end like would ethereum itself not be an ex u a Securities Exchange if Unis swap smart contracts are like where do you draw the line so that's like now I'm trying to F like this is if I were trying to FUD and be be the most concerned person possible there well there is defi regulation or like there have been like uh the one of

main the traveling rule is something that has been brought up time and time again um from like critics of of defi uh us Regulators like um and the point that they make is like uh you know when you're depositing money into a liquidity pool and you don't know who the you're not KY seeing everyone in the pool you don't know who's in the pooling these assets then it's problematic so the you know I guess I wouldn't go as far as saying e theorem it probably stops in like if you're if you're a liquidity provider then are you are you acting as a broker do you need to register and do some sort of like really burdensome um you know filing requirements um is is kind of the challenge right um the probably the most

negative case is that something happens in this in this particular case with uniswap being the largest amm that sets a precedent for broader defi regulation which makes it very difficult uh for large players even small players to be liquidity providers uh particular around this traveling rule particular around like you know um pools of liquidity uh and so that would be challenging it might uh one of the things that you might you might start looking at is how are these pools especially large players like institutional players like the market makers of the world like what are they going to do and what are they doing in response to this well notice because if you see a big drop off in in in in

TBL for these protocols I think you're Unis swap then you know it might give you some insight into how um you know institutions are like thinking about it right I I have heard for instance funds have stopped engaging in voting for instance of dows after the bzx case that was a big like that they're delegating to us they're delegating to B yeah yeah exactly so they stop like voting on Dows right because then you don't have the same guarantees like if you're effectively engag in a dow then you don't have the you don't have the prot protection of like an LLC you're kind of piercing through that so that was like a big ramification even though it's not policy but people got scared the second now that I'm looking at is if if all of a sudden you know funds in a similar manner stop providing liquidity or stop

engaging then that would be you know the the sad part of um these type of actions that scare away a lot of participants especially those that are based in the US right that they just stopped engaging in defi uh so that's something that I would look at just monitor yeah I mean I it's a real bummer right so I have a buddy who is starting a company that should be a crypto company like by all there's a lot of transactions that happen online and this thing and there's kind of like they people bet against each other a little bit and I won't go into too many details because it's about to launch but like it it should be a crypto company like it should it there all signs point to it being like a crypto company but either the the

decision that he has to make is I'm either going to not do a crypto company and I'm G to stay in New York or I could do a crypto company and go move to Dubai and he's like he's he's American he's you know born in New York like all his friends are in New York so he's like yeah it just it just sucks like he's like I don't you know I don't want to move to Dubai uh now he might have to if he want if he thinks that crypto is like the most important part of the company but he's like I also might just launch it not as a crypto company get it off the ground raise the money get some cont traction and then you know hopefully like if we get some better regulations then I'll like even I I don't he's like

I'm fine with even worse regulations as long as there's regulatory Clarity he's like I just I want to build a company but I don't want to go to jail so yeah this is just like you're you're just pushing the best Founders offshore it's it's it's really a bummer it has been going on for a while uh you you had a great tweet about it you remember that episode with Athena that we asked a question okay you you're basically running we asked Arthur like why didn't you do it as bitmax right basically this token tokenized HED fund model he's like well you needed to have a neutral party that was like from a regulatory standpoint would be probably easier to get off the ground than if we bit bitx as an exchange were launch this and that was like that tells you everything you need to know about the how hostile the

regulator environment has been you know obviously he's no stranger to how that um and dealing with Regulators for VAR but it's just sort of interesting um there's there's a lot of regulatory Arbitrage Happening Here and I think the smart you know jurisdictions like Singapore Hong Kong Dubai like the Emirates uh even even places like the United Kingdom like you guys decided to do Dallas and London like you know London's been way more proactive and friendly towards um just being sensible crypto regulation uh which is really a shame when you think about the us as kind of the the leader in innovation in many other fields yeah let me give you the bull case what is the bull case the bull case is that I think I think Unis swap will win

I think Unis swap will win this case and this will end up bringing a lot of clarity for the industry in the US and if you look at like if you look at why we have Bitcoin ETFs today it's because grayscale like grayscale fought back and won their case and that opened the floodgates for Bitcoin ETFs like these things have real ramifications when you win or you lose and I think unisoft is really well positioned to win and that could I think that could completely open the floodgates for like I think this could be the I think like today this week this could be the bottom for for defi or at least for like the OG eth D5 players um who are like in the spotlight for for you know from

Regulators I definitely agree with you like uh I mean I we were sort of again I don't think anyone was surprised that unisoft got this Wellness notice it probably would have been better if it gotten two years ago uh so the fact that it got today to your point I think is I agree with which is you you compress the time to get reg to Clarity like what else is needed you you won the ETF battle coinbase is like winning a lot of the different allegations Kraken is also fighting back this we need we need a big case on as it relates to Defi and we haven't had one and this will be the big case that paves the way for Regulators for everyone to really say all right we got

to get our act together and put out regulatory Clarity and and guidance and policies in place and I think this is just a necessary prerequisite in that in that sequence and you almost want to like I don't think anyone can disagree you'd rather it happen now than like five years because if it happens in five years just means like Clarity for defi just gets delayed more and more and I don't to your point any regulatory Clarity whatever it is is better than the current um environment which is um you you know uh regulation by enforcement without any Clarity or rules which is uh really exhausting and uh stressful and anxiety inducing um for

many anyways so we'll see we'll see I was also interesting uh Doug what's this man's name I forget the guy's name Doug something the CEO verto came out and supported he he actually it was kind of crazy to see this so verto is one of the largest market makers in the world there's like you know Citadel drw Jane Street Sus goana Hudson River uh and verto like I think those are those are probably like the five to seven biggest market makers in the whole world and Doug he got oh Doug sefue he said uh best of luck to you Marvin talking to the chief legal officer at unisa best of luck to you Gary is a politician not a regulator as is his head of enforcement who is just as awful as the New Jersey AG we wouldn't come

settle with them either when they demanded unsupportable Ransom demands pulling for you guys so now you've got like think about how crazy that now you've got the you've got one of the largest market makers in the world collaborating and saying hey we support you guys you you know decentralized amm over here um it's just cool I mean what unisoft basically allows just anyone to be a market maker and it's actually pretty interesting I don't think anyone can disagree like the novelty of amm like anyone that I talk to in traditional finance and explain unisoft they're like wow that's pretty cool and it is sort of a very novel piece of technology that allows anyone to be like sort of like levels of playing field anyone to be a market maker so it's one of the bedrocks of defi I don't think it's going away so um

yeah it's really nice to see uh traditional Finance people come out and support of Unis Swap and I'm also happy that SF is no longer in the fold because he was one of the largest critics of def5 for obvious reasons like he was a very toxic forest in in DC now that he's not here I'm I'm happy that it's happening now not when he had way more influence in DC uh before FTX collap so yeah really good stuff I think yeah all right moving on um margin F margin f is a bar and lend protocol in salana they'd gotten to be the biggest one of the biggest top three maybe I think at one point it was like um scholand margin Vine Camino they were

all kind of buying I think uh Mari at one point was had over a billion in tvl now it's gone down over the last 24 hours since uh so Edgar pavlovski is the was the CEO of margin fi and he basically pretty abruptly resigned on Twitter um there was a kind of tweet exchange that I think kicked things off there's always been kind of disagreements it sounds like internally and also big big push uh on the commun like they have a points program but they've kind of gone back and forth in terms of um I think it also internally in the team of like should they release a token obviously day like yesterday when Unis swap received the wells notice definitely kind of contributed to kind of Feud of the fire but then there was also a drama within a

um a protocol in terms of the rewards I think that they were recruting to the to the soul Blaze Soul Blaze that was probably nail in the coffin the kind of like open Pandora box if you will yeah I think so so soulblaze basically on Tuesday or Wednesday had start to like laun launch some accusations against margin 5 basically the they reward holders of its B soul and Blaze tokens with more tokens these are called emissions depositors of the Soul Blaze tokens on margin fi also get reward payouts um but for the last eight days the payments via margin fi hadn't been getting to the Bol and Blaze token holders um and so they kind of came

out against them or something something like that so then there's this tweet and then there's this Tweet someone said dropped the token and Edgar said after today it feels right to maximally push off any kind of token we'll see what I can do internally to Brick this sat D who's kind of big Twitter guy said common margin Fiel grow up and Edgar said you grow the [ __ ] up you dirt sack and that was kind of the beginning of the end and then a couple hours later Edgar announced I resigned from margin today from working on margin 5 from the research arm from all of it it's a world class team it really is I but I don't agreee with the way things have been done internally or externally I've said

it many times I'll say it again but those of us who are privileged enough to get to choose what we work on every single day etc etc something else something else you're an investor in margin F so what do you think of all this like okay so if I ever quit block works right like here's what would have to happen first off like you just can't really quit your own company um but second I guess you can you have to have a have to get a CEO lined up or I'd have to tell Mike Mike would have to take the CEO role um and then you have to definitely tell your investors you got to call all your investors like I doesn't seem like this happened at all um I don't know did Edgar reach out to

you guys uh no not to me the chat was pretty quiet and then there was just links to tweets and I think I was just kind of following from the sidelines um so telegram chat for margin F invest there's a telegram chat for most in like most investors it was just it was just kind of bit of a surprise um I don't have the inside story I'm sure there's Merit to both sides and not really going to comment other than I support you know margin fi I think the nice thing about protocols is that you know smart contracts are smart contracts and I think um you know it's s it's sad

I also I also think it's sad to see some other people dancing on the grave and really uh you know coming out and taking advantage of this situation um you know there was a vampire attack by Soul end I understand that there's competitors there's rivalries I just don't think it looks well when you and this will tie into the kak Ian layer discussion later on there's just ways of conducting yourself and I I understand this space is kind of crypto Twitter is important but just like don't don't react like respond that will be a common theme that I'll keep saying over and over it was it

was in my mistakes episode like you don't have to react the mob will like pull it out from you take your time like there's no like what was the benefit of being so public about it and like being and then like and then like it felt like a downward spiral like there was just like a number of threats kept going around like just the responses and the level of aggression and just keep going going up and up and you can get caught up in that so anyways it's just uh people need to be more professional in this space we want to be taken seriously and you know uh it's both a beauty and a curse that this space is very open every founder has one company that they

despise and it's usually your biggest competitor or the person you feel most threatened by and at some point or another yeah a never let them know that b at some point or another something bad is gonna hopefully for you something bad's gonna happen to them they're gonna you're going to out execute them they're going to Fumble the bag you're also going to make your own mistakes when they do inevitably fumble the bag like every company does at some point in their long story history like you just don't want want to dance on the graves not at all not at all it's so bad form yeah you don't want to punch below your weight I I so whenever a Founder comes to me and I ask and they're like

very focused on the competition I'm like it's a distraction it's a weak founder I will not invest in that most of the time um sometimes I learn that after the fact other times I'm like I may do investments in a particular vertical and and and I always ask the hey what do you think about this company they're like oh you know they're trying to they're trying to do what we do um if you want to invest in them and and burn your moneyy I won't tell you no but we're we're just better I was like okay that's what I want to hear from founder it's always like a bit of a red flag when the founder says oh you know yeah like they're trying to do what we do like definitely don't invest in them like I will I'll kick you out of the I'm like

again things another lesson you can't control what your competitors do why focus on what they're doing in open source the only mode is can you out execute can you out ship your competitor go and I think like you mentioned the episode that we recorded with Steve from arbitrum stepen from arbitrum talk about a world class team I think arbitrum top to bottom is one of the best most well stacked technically and also just professional teams in crypto um and they just like Embrace that and they they're in their Lane they understand their strengths and I think like they just play to that they're not focused on you know we asked them about you know optimism we ask them other competitors like you know it we asked

him about fraud proofs and optims like we hope that they're they figure this out that's that's the right type of like founder I think that's the best class best-in-class founder not the guy that's trying to vampire attack and [ __ ] on uh you know a Founder that just quit and you know is taking advantage of that like really bad look really really bad look and I just like just don't do that and I had the opportunity to invest in in in in soand I'm happy I in I'm very happy I didn't and I will not touch that I will not even deposit in that and I'll stick through margin fi I mean it's it's good team it's contined

to build like sort of these things happen so I don't have a full picture I obviously want to understand what the continuity is but you know things also move on do funds have that same Dynamic like I I promise you if you ask any company founder they have one company that they're like internally they're kind of like they they try to compete with would you say funds have that as well you know who's winning deals when you're losing for sure um I never paid too much attention to it I knew what my weaknesses were and I just knew other funds had better um were better at certain things

that I wasn't and I would always be of the mind that like when I talk to a Founder i' be like yeah we want to lead but also we'll leave space for other funds that are going to compliment because I don't even today I don't pretend to be good at everything I know what I'm good at I'm not also good know what I'm not very good at and I know who else is better at me than certain things I'm not going to waste my time trying to like be the most technical person in crypto that's not going to happen I know who's really technical so I'd rather be hey go talk to Paradigm because they have you know a one of the they have Sam they H which is they have Georgios they have uh Dan like they're very stacked in

that front go talk to them bring them in the cap table like I want to make this a self-fulfilling prophecy or hey go talk to the framework guys or go talk to Pary like I think what you don't want to see is certain funds have this Dynamic where they think they're the best at everything they block they take out most of the rounds and I think it's at the detriment of companies because I understand fund sizes are getting bigger and bigger and you want to maximize your allocation but at the same time there's a balance between rounding out the cap table maybe not with another fund but definitely Angels there there are funds that even go as far as leaving a very tiny sliver for angels that happened in the optimism round I didn't get the chance to invest with an angel and I was

like okay then I went out and invested arbitrum I'm happy I did but at the time I was looking at optimism and I wanted to invest I couldn't uh because you know um there was no space and I thought that was a that didn't make any sense at all so I'm sure it does happen like there are funds that um end up taking too much credit for what they do and Founders really resent that and it's very well known which of those funds actually are um you never want to be that you never want to be a fun that sings your Praises let Founders and other people sing your Praises just don't just no yeah it's a really bad look yeah it's cringe hey everyone wanted to give a big

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go follow them they're on Twitter @ monad m o n a dxyz and also join them monad Discord it's discord.gg monad big thanks to monad for sponsoring Empire we got Bitcoin having nine days is it priced in is it not priced in is it priced in has been priced in no I'm gonna show you I I'm gonna show you a chart oh we love CH porn we love CH porn here's your here's your fullblown part chart porn hot phas down having hot phase down having hot phase down having you're

saying hot phase incoming yeah yeah yeah well it's also the rainbow chart I'm happy you didn't pull that one out but I love the rainbow chart Rainbow's just like it's amazing so this is Bitcoin it's showing Bitcoin performance since 2013 even before then and the RSI what is the RSI for people who don't know this it's like relative strength index but it basically Meers like C they trying to see if something's overbought or under bought yeah yeah okay great so basically this would predict that uh Bitcoin is um based on the drawing of this box which is probably not the scale and I don't know this a lot this is definitely a log chart by the way you should always look

at charts in in in log function because if you don't even if you look at the S&P like non-log you're like wow this is this is gonna pop but if you look at it in a smooth log uh scale which this one is then it it makes things uh I guess you less less anxiety so this would predict that Bitcoin would probably hit what is this say 700,000 this is a Kathy Wood that says 13 oh yeah yeah okay we're going 700k based on stock money lizards trading view chart okay well the Box may not be drawn a scale but if you infer and I'm just going to you know play with this it

would be like Bitcoin could go up to like 500,000 and you wouldn't blink because this would be like how it normally has I will sayy wood you're saying what is it over over a million dude should you should have been there for Seth Gins from H coin fund that man is bullish I mean I recorded a podcast with Jake uh in another venue and he was talking about like World coin being like big on the Empire pod listen I gu invited other pods dude I know anyways crucify me now anyway I was he forget he said that like these guys are like pretty bullish it was like

all right like fine but yeah I was I want to drink that kind of Kool-Aid because here's what here's what I'd say what is bitcoin's price today thing still above 70k we've got the SEC suing Unis swap we got still coinbase lawsuits we've got gbtc having big old outflows like we've got we're like we're a week out from the having that's going to remove 12 billion dollar of annual BTC Supply and has the potential to be like another ETF like Catalyst over the long term like yeah have Bitcoin L A Lot talking about news we have Bitcoin l2s like these my portfolio announc actually that by the way I was talking about this in December one of our predictions year predictions

was Bitcoin is going to have its moment where orals like the tap rout update it was 2021 really has paided the way for more accessibility like ordinals has just been a huge thing right where miners just wake up to the huge Revenue potential um there's all this excitement um and now you've had obviously stacks and Babylon a few others but like this week meso announced so shout out to Matt and the thesis team they were the guys behind uh or the team behind um you know keep and um tbtc they've just been building the in the in Lai there's a team that's built like a lot of products around Bitcoin and uh I let the round uh when I was at Pari investing in

thesis in the studio uh just think they're a really good Builders and now I had the privilege of investing in in meso this particular like um L2 for Bitcoin so I'm really excited about that that was the one that I was talking about like at the beginning of the year when I was like when I made that and people like what is it what is it I couldn't because it was in stealth and obviously we record a podcast with Matt from Arc Arch Arc Arch um so people should go listen to that because both you and I investors there so um yeah it's uh it's really exciting I mean I think it also is coinciding with uh this happening event which is pretty pretty exciting um so yeah it's good to see the the amount of activity when I think about Catalyst of Bitcoin like you know

bringing more Capital like making that you know dormant Capital base more productive whether by allowing Bitcoin holders to invest in orals like now two out of the two out of the three largest nft collections are in Bitcoin yeah yeah just the purchasing power of Bitcoin holders is huge and that's disordinal like now you're going to see hopefully more um more economic possibilities that's whole thesis from meso and in Arch people go listen to the episode is just as opposed to an L2 this is just like at the native layer um you know bringing paraliz and um and just more functionality without having to bridge over into an L2 environment which is um really ambitious

but I think think um anyways I think uh it's nice to see Bitcoin like just the community itself like um just more Innovation there so yeah I think is it crazy when I think about like okay what needs to happen obviously this is supply and demand but like I I get I guess I am more of a believer in Bitcoin today than before because you're seeing all this Innovation all right remember when you sold all your Bitcoin I did I do did you buy back into Bitcoin or no I'd rather invest in these teams I I for me it's higher beta do you own any spot Bitcoin nope do you own do you own much spot

e some farming and stuff yeah but but uh I own more spot salana you don't say well you don't say um look at this this was kind kind of cool so this is uh this is TD Bank putting out a literal [Music] ad in early 2024 bitcoin's price reached new all-time Highs but what's the cause well bitcoin's price is determined by demand and Supply just like a stock if there's more demand from buyers than Supply from sellers the price goes up

but if the opposite is true the price goes down and recently the new US spot Bitcoin ETFs have increase demand significantly but there hasn't been a significant increase in Supply in fact there's another event happening in April of 2024 that will reduce the supply of new Bitcoin entering the market it's called Bitcoin having Bitcoin was designed so only 21 million coins can be created but instead of flooding the market with all the coins at once a supply of new coins is slowly released into the market every day as the name suggests having cuts the supply of new coins in half roughly every 4 years this will continue until around May of 2140 when all 21 million Bitcoin will be on the open market so how has the price of

Bitcoin behaved after previous having events well following each having prices climbed up significantly although history suggests that bitcoin's price is ready for more new highs in 2024 it's not a guarantee there are other factors that could greatly impact demand and Supply which ultimately determine bitcoin's price for more information about investing in Bitcoin with TD through ETFs what watch our video and to open an account online with TD direct investing click the link in the description but it's crazy like TD Bank is one of the biggest banks out there the hundred billion dollar bank and uh yeah yeah they're out here like running an ad for the having it's just like once once Banks

and once financial institutions realize that they can make money off of crypto they will push that thing and we've seen it at blockworks like we're now getting like we used to make on the adver in sponsorship side of our business it used to be like coinbase or Unis swap or someone else reaches out to us and they want to buy ads or sponsorships or boost at a conference now it's like yeah now it's traditional financial institutions who have Bitcoin products and they're like hey we want to go reach these big hedge funds are you gonna push uh commoditized ETF or are you gonna push the Bitcoin ETF where you can earn uh you know way higher fees right how about incentives um all right let's talk reaking okay okay KAC launch they want to introduce Universal reaking for everyone um it's

designed by the Andalusia team um which I think previously built what did they previously build risk Harbor I think it was it was risk Harbor yeah R in Risk Harbor that was my first Ste out Pary that was 2021 yeah so myself there bunch of others in the mix yeah so my understanding here is like it's kind of like Igan lay but you're saying that you can uh you can do reaking on on any protocol you can do reaking on salana you could do reaking on maybe Celestia whatever whatever it is um by taking those deposit like those tokens and restake them you mean yeah yeah exactly so I don't know I mean

you're a I think pretty big investor in Croc would love to hear your thesis for this and your thoughts on it well I mean the I think these are one of the more thoughtful guys that have thought about insurance that's why they reached out to me because I and and risk people no surprise I've been thinking about that for a long time I think there's way more opportunities to introduce just more risk management and Security in the space and that was my thesis investing them way back when it was risk Harbor over time I think the strategies while they rebranded to labs and then now they launch KAC which is um you know a a L2 purpose buil to like um as you as you mentioned like take in um a lot of other assets beyond eth for retick um a lot in the conversation that

I've had with Drew and Ro like I think one of the things when people think about risk they think in very binary terms whereas like this goes back to like portfolio construction like MOS like Moscow Theory like a portfolio construction back in the the 80s we're like there's this idea that like you can introduce riskier um Assets in the portfolio and actually make the agre portfolio safer um because those assets may not be correlated and so you um and so that obviously like was a huge like Breakthrough moment for allowing pensions and other investors to invest in Risky Rass class like you know Alternatives like real estate and H funds and your know private Equity Funds and I think it's Sim matter like when

you think about like there's a purest Camp within reaking that says only e because that's the most pristine collateral and fine I I I I hear that argument that's sort of like I at the moment these guys come in saying don't like why would you stop dis Rel presumably you could take in other assets the question is not so much should you or should you not it's not like a binary um decision it's like what is the appropriate amount of other assets that you should be introducing and I think that's at the heart of what the founders and the company sort of aspires to do to to make crypto more a safer environment like a more I don't want to say antiag but a more robust environment and like I I believe that I

think that there's a time and a place to allow other assets for reaking and um the the Nuance is to what degree it also reminds me a lot of the the difference between fundamentally between compound and a in the early days of defi compound if you look at the the assets they support was very purist was very like Bitcoin and ethereum and then a few of the major ones a on the other hand took the approach of being way more agile and focusing on the risk parameters and saying no we're actually going to be agile and supporting a lot of these assets that you know new assets it's just the ratio the parameters that you set and I think that's why a like really

took off and and and today is is um you know just by virtue of TBL and number of the metrics is the kind of the leading money market in in a theum defi at least um and I think that I think that's that's my thesis for uh for kak is will be a far larger opportunity to allow reaking for other assets um particularly saana uh you know some like Celestia some of these other assets and so I think that's the opportunity in the market that they're carving out um let me ask you this ATI so what do you think about this is like this strategy to me is just a go to market strategy e uh igen ler dominates eth and

they're saying look if we just did like E3 staking yeah but if they just said we're just doing E3 staking like what's your different Ator so their differentiator here as I understand it is um I mean this is they I just realized there's a blockworks article about KAC and it says um uh we I guess we asked one of the founders like what are the similarities between Ian L and KAC he said in the sense that both teams are building a staking protocol that enables other products or projects to access Economic Security to infrastructure layers yes we're similar similar to Igan layer KAC has its own version of abss dubb validation as a service or Vaas however unlike igen which enshrines itself solely on ethereum Gro introduces this idea of universal security or reaking for

everyone which uh where anyone can provide crypto economics with any asset on any chain so when I read that I'm like super smart that's that's basically at some that that was a but that was a go to market that was like a that was a strategy to try to gain market share historically in crypto that strategy actually doesn't I'm I have an argument why that will work but historically that won't that hasn't worked right the the infrastructure uh folks who have had the most success focus on just one ecosystem Lio ethereum jto salana tensor salana uh Magic what about magic now Bitcoin so that's why I think okay so that's the one C that's the that's the

counter uh but metamask ethereum Phantom salana I think one of the best product decisions in the last couple years by a crypto company was magic Eden La support for Bitcoin yeah and I didn't think much of it at the time but if you look at it that decision is now helping them win back market share in salana yeah I you're just capturing the user right yeah like like there are users that hold both multiple assets and it just makes me think like are we moving to a world in cryp like I think this is just an example of crypto developing we used to be in a world where there were the salono users there's the East E users now people are like I don't give a damn where I'm using my stuff and I think like magic Eden was

the first example but I think you could probably see it with kro like if I hold and uh Mike block Works Mike had a good thread on this like if I hold soul and I hold eth maybe I'd just rather go to a platform where I can restake both than do igen layer plus something else you know what's one of the biggest themes that I think we can all agree on chain obstruction yeah so I think for for in that manner the customer acquisition cost might be lower for someone like karak the funnel is just wider yeah and so you're it's sort of like a a bet also that these other non ecosystems continue to grow if you believe in a multi-chain world yes I mean that happens on a relative basis there's just more growth there and so I think it's a smart move on their behalf

doesn't mean that I ler can't be successful I mean I think ultimately also like this Market is going to be big and so um which is like kind of surprising the response that uh you know you saw from uh the aen layer team like a lot of it was very hostile again don't understand it um there's a lot of criticism there I'm obviously biased I'm an investor in kak uh I also know the Igan team um and so I just it was uh was a bit perplexing to see that it was odd the response that you saw from The A Team I was like stay in the lane like what you know you are the dominant leader today in terms of assets and I'm clearly biased here but uh

uh yeah I also I didn't understand it yeah pretty immature in my from my perspective what what do you think about the I I I don't really know much I remember risk haror but didn't follow anything about it but I saw people saying like uh people like you know talking about KAC like no one realizes they're the same team as the people who rugged risk Harbor um and I guess like RIS harber that's why I'm I'm literally reading a tweet it's like Risk haror exited Terror with seven I USD from an underwriting fund like blah etc etc I know truly nothing like what what what happened with RIS but I mean uh SP them right after I SP them yesterday and this was something

that came off it's like literally it's uh it's it's fun oh they make it seem like the founders took this money it's like h no oh Victor Chang is the CSO oh wow that's cool um ah yeah okay he posted the actual story um okay yeah never mind cool yeah no short of f no need to spread fud Santi like you usually do I I usually do I'm kidding I'm kidding I don't pay attention it's just like childish games I I love the the founders of uh karak just I'm pretty close with them I talk to them on a regular basis especially now and I was like how you feeling guys I'm like we just keep chucking along like again those are type

of Founders that I back yeah um I don't I don't wish any team in crypto uh like not success I hope every team in crypto is successful because every team in crypto for every team in crypto that fails it gets 10 times at least 10 times more press than a successful one and as an industry I think we could all just Embrace a little bit more of that mentality where it's a really small pie right now we're all in in the game of expanding that pie and sometimes just feels incredibly childish and nearsighted to focus on and in in having these tribal battles and like

going even as far as like thr throw shade and fod on other teams building in crypto where it hurts the industry more so than it hurts um or benefits them and I think that type of behavior should be called out on should be called called out and also you know discouraged yeah so what I did yesterday I think is complete [ __ ] it's like guys like if you're really believe in your Tech if you believe in what you're doing like just stick at it like why fod why um have this coordinated attack against karak if you have claims that they're stealing your code which is absolute nonsense they built the

contracts from scratch then fine but anyways I just think it's um it's really childish and immature Last Story is uh circle circle announced um actually okay so Circle announced Circle obviously is thiss usdc they announced smart contract functionality that allows holders of black rocks USD institutional digital liquidity fund Biddle to transfer their shares to Circle for usdc so as a reminder bid because I was mouthful as a reminder so Biddle is the um tokenized so tokenized fund that black rock Black Rock launched

in March 2024 last month that operates on ethereum and it just offers US dollar yields so someone bidd allows investors to purchase tokens that represent shares in the fund and the fund invests in US treasury bills like a rwa yeah but I don't think it actually was like either it wasn't on Main net or it wasn't it didn't actually like have it wasn't really on ethereum the plan was for it to be on ethereum and everyone's like ah this isn't actually going to go on E now it's actually on ethereum and so and you could actually see the you could see the contract on uh can can anyone purchase it or does it have SC on on um on um Black Rock and be us person

kyc I don't know I see it on their website right now I think it's just an I don't I see it on their website doesn't there's no disclaimers so youc 20 token or that's a good question I don't fully know actually okay yeah that's interesting but B okay so so so what's that what's really happening here I mean this is a big big big thing like a big step forward for tokenization um so bid if you look at the market share on rwa doxyz the market share of tokenized us treasuries bidd has 25% of the market dominance there if you so the people who

are ahead of that is like Franklin Templeton um which is built on Stellar so it's really interesting you've got like Franklin Templeton on Stellar competing with black rock on ethereum I'm like oh my God this is it's yeah it's happening so interesting anyone here's the here's the prediction yeah if the world ever sees a us cbdc it is just it is the US government putting the stamp of approval on Circle and saying Circle we will give you our Federal Reserve accounts nice go do it on eth we're fine with that but that'd be big yeah yeah uh yeah it' be great I mean I

think uh stable coins sharing a lot of the yield is something that will continue to persist and that um that's gonna be ultimately good for stable Co holders native like you earn you get a k you get part of the yield that's what they were doing right on the back end like coinbase look at coinbase earnings um they'll uh they'll continue to they started breaking it out last quarter they're going to continue hopefully keep breaking out the amount of interest income that they're getting from deposits for the usdc product so they're obviously taking that and depositing like super lowrisk instruments like treasuries yeah and part of that yield is they're sharing that with users

depending on how much deposits you have on their platform but uh that percentage I think will continue to grow uh particularly as other stable coins like start doing this and um you know just compete against usdc so yeah yeah good all right when will um have you really interesting maybe for another episode or some of your analysts to look at like if there's surveys of like what percentage of the US population or the world population holds stable coins and what capacity like Tron for instance like I think that's one of the most the most popular one in like emerging countries but like if you were to take a bet I think one of the Best Bets you can make in crypto is that over the next 10 years the percentage of people worldwide that hold stable coin is going to grow

more than any other crypto asset in the world and then take a finer view on like which stable coin but I think just broadly speaking like that that is like a bet that I if I could express one bet about crypto with huge conviction depending on the payoff of course but I think that's like a very clean bet to make what just more and more the world will yeah like option stable coins in circulation like if you have a prediction Market or like if you could buy options on like um the total stable coins in circulation I think that number grows far more than any other metric in crypto yeah um it's interesting so we're back to so total stable coin the stablecoin market cap

is50 billion we're still under under a million weekly active addresses of stable coin users though yeah that's what I'm saying pretty small yeah yeah yeah that will explode yeah dude good luck on the on the marathon we're rooting for you thank you what's your what's your time Target what's your goal uh I'd rather not say because it puts pressure but uh you know I'll be happy I ran Tokyo a month ago so I like this is a harder course uh sub three would be nice that's how you try to do SUB three and all of them so I'm not going to get greedy I'm probably not going to PR I'll run the

first half which is net downhill Boston's really tricky because I try to like conserve energy and then run the second half faster but you can't do that in Boston well because you have Hills so it's my first time running it so I'm just going to be conservative and probably run the first three quarters like holding back a it and then if I feel good I'll unleash I'll unleash it and try to like go for it that's full [ __ ] send get that get that motivation put on the Empire podcast and up only up only baby shout out to everyone who's listen uh subscribed to the Empire newsletter we have over a thou we're growing by 100 a day so we've got over a thousand subscribers

um subscribe show notes you know what to do good good pod appreciate you guys tuning in I'll see you guys Tuesday for Stephen the stepen episode and then next Friday um round up and then the week after that we got uh Jake and Seth from coin fund I'll be in Dubai 20149 I will record an episode there with uh the move Aptos and movement Labs rousi which we've had on the Pod so that'll be really exciting for people to get a um another perspective on that ecosystem just move in general boom stuff thanks everyone for listening cheers hey everyone Thanks for tuning in to today's episode don't forget to claim your free wormhole F exclusive to Empire listeners

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