Why Crypto Founders Are Leaving the West | Roundup

Transcript

maker is about to ship almost like three years of product that they've been developing and it's going to drive more die into the system which is going to drive increased you know DSR which is going to drive more distribution of the protocol itself which will drive BuyBacks the to the sky token now who's going to be the Arbiter of truth and how are we going to decide um if that needs to be something that's need needs arbitration in general or is this going to be an open platform I think it's completely valid to be worried about governments cracking down on what people can say and sending cease and assist letters to yeah Donald Trump and Elon Musk who are just having a Twitter spaces together I mean hey everyone this episode is brought to you by namada the

shielded asset Hub rewarding you to protect the multichain so not only can you protect your own data across any asset and any chain but you also get shielding rewards for strengthening data privacy protections for everyone so you can check them out at n.net and follow the main net launch stick around you're going to be hearing all about them later in the program all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the

episode all right everyone welcome back to another Roundup edition of el curve you got my one and two Vance else how we doing what's up doing well ha game strong Vance how's the uh how's the open last night it was good saw Carlos alarz lose in the second round which is pretty shocking but yeah I mean everybody's having a good time it's uh editing into labor day little tennis feels nice nice you're saying that name like I should know who that is but uh he's like the world number one tennis player right now he's he's wor just the best in the world he play sportsball right that's what he does uh that's awesome um well let's all right moving past Sports here let's uh

let's get there actually there's a bunch of stories this week uh why don't we start with the sky uh maker Rebrand so this is something that obviously run has been teasing for a really long time and this is a huge part of endgame which is the Rebrand from maker and die so I think from Run's perspective those Brands were a little bit confusing and probably for something like a stable coin we really wanted USD in the name so there's been a transition maker is now sky and there's a redenomination there so one mkr equals 24,000 sky I believe and then one die equals one usds and you can very easily transition over maker and die aren't abandoned you can keep your die or keep your maker but you can

opt into this new um system and the benefit of holding I guess usds versus something like d is that you're going to opt into to or have the ability to earn all this additional yield coming from what were originally called subd Dows and are now called Stars within the sky um that's pretty cool little alliteration there but yeah what what were your guys uh takes on the on the unveil we've known this is coming for quite some time uh we didn't know what the brand was um but we knew kind of the rough Contours of the plan um I think the the main thing is like this is the first step of probably three or four where you know the stars have their their farming points you know maker goes cross chain maker goes uh you know both

the evm and the svm um and there's a bunch of different kind of rwa style plays that are also going to be happening like I think the the the Lynch pin of all of this is that like maker is about to ship almost like three years of product that they've been developing and it's going to drive more die into the system which is going to drive increased you know DSR which is going to drive more distribution of the protocol itself which will drive BuyBacks the to the sky token now um and the maker token to your point still exists like you know we have not transitioned our maker tokens to Sky tokens yet we will in time um but I think this is kind of like a burn the boats moment for maker where everything that they built um and all the lessons

they've learned over the past kind of two or three years are culminating into this new brand in this new stable coin and you know maker and die will forever be kind of the uncensorable defi St coin that most people use um but usds is going to be more of a usdc competitor and you know once more of these plans get revealed it'll kind of make more sense but meer is is coming for for usdc and the whole Spirit of the plan is like how do we grow this thing 10 to 100x like there just was not any you know maybe there's like a two or 3x in die Supply growth that you could see you just from the bull market kind of getting going and people wanting to use kind of D like the D gen box for farming but in order to get to you know 50 to

100 billion of usds Supply or die Supply like this is kind of what needed to happen so you know like peanut gallery on Twitter definitely chirping at the moment but I think just check back when they when they're shipping product and that won't be too far from now uh all those things I completely agree with I think the other thing um frankly that is just a little bit U maybe it's obvious in retrospect but it it is something that I think a lot um is just the brand uh convention I think is something um you know sky with the different stars as constellations and you know all this coalescing around a universe of defi um I think maker and D itself were two separate Brands and so you had double

the work when you had to be able to try and promote both of them simultaneously and so now having everything toll us around a unified Vision um from a brand perspective branded marketing perspective I think is um a realization that Ru has said to us is is like a streamlining of effort um so the and then on the point of going after usdc keep in mind there are rules in the EU around Ma and um being able to work within the confines of that regulation I think is going to be extremely important to get the distribution in Europe there aren't going to be an infinite number of decentralized protocol stable coins that uh can get there um but usds with these upgrades will be one that

can yeah I I I think that's a uh a good framing as well of usds competing with usdc because as some folks noticed on uh noted on Twitter there's a freeze function on on usds and there's probably regul I would just guess that's a regulatory reason it's requirement yeah more so than anything else so but you can go automically from usds to die so here here is my inter you guys know way more of the backstory and the position of this than me but it seems like R has basically looked at some of the success of usdt and usdc and tried to take what he can from that but also layer on all this additional stuff that you can only do with a like more it's

kind of the superpowers of defi right so leaning into things like yield farming things like that the way that he structured it's it seems like what he wants to do is put usds at the base of this uh ecosystem of apps that are going to end up driving down and sharing some of the value um it it actually looks a little bit ethereum likee right you could either look at this and say uh okay this looks a little bit like if usdc could share some of the yield from the T bills that they hold to Holders of usdc or you could look at it kind of similarly to what eth is doing which is hey we've got this money at the base of our ecosystem and an economy built on top of it and that Acres value back to eth is do either of those analogies hit

with you guys or or am I off there I think that's exactly right like we're limited on what we can say given that we don't want to front run Rune and and kind of coming product announcements but it is kind of like like in our mind it's kind of like this mixture of going after a combination of of circle and tether and having that be the stable coin of record for people that you know want the regulatory guarantees and and you know to the extent that it exists scrutiny but they're also able to use it for things on chain and the other side of this is all the rwa plays that they're doing and the billion and a half two billion of t- bills they're now portioning out to kind of non Circle

providers and you know that will kind of Drive higher yields just through you know Circle right now just has such a commanding place in the market where they can say we're only going to give you four to four and a half% on T bills but you know that kind of relationship is also going to change as this thing gets more and more scale which frankly will happen with the launch of of the star and and sparked out kind of whatever want to call it farming um and again yeah we we know certain stuff about that but there's going to be some really exciting stuff coming in the next couple of months the other thing I'll say about regulatory or um you know taking this regulatory stance is that it's not just we're going to take the same thing that we've been doing and

we're just going to have to conform to these new regulations what it also unlocks is the ability to have it integrated into centralized Financial applications um you know the equivalent of venmo uh you know with revolute and Hood in in the EU like all of these types of Integrations are only possible if you're blessed by the regulatory authorities as one of these assets um and so the reach I think is something that is differentiated once you have the regulatory blessing and that that is it's not just a loss um by by conforming to all this stuff you actually gain a lot as well yeah uh fellas can we talk about the video I don't know uh we we got to get R

here some uh production equipment and and whatnot but uh yeah there was some funny like oh is he being held hostage type thing so maybe a little gentle ribbing for for our boy um but yeah it's kind of a funny announcement video yeah I mean look like was the announcement video pretty funny yeah it was kind of funny but like sure like that's like the first thing that in like a series of products being shipped that are going to kind of really Manifest this vision and I mean says something about the peanut gallery that you know anytime you ship something on Twitter you know they're kind of always up in arms you know what maybe the maybe the correct take here is that he got everyone talking about it so uh in that sense it was actually an extremely successful video I would say

so I talked I talked to r on the phone yesterday and he's like yeah it seems like some people really liked it some people really hated it but overall we got people talking about it thanks for the actually that is the that is the truth you just don't want people to feel indifferent about it so I say yeah big success so I know you guys are limited in terms of what you can say but it would be cool to see I think spark was the first uh you know sort of Public Sub out now they've rebranded as stars and you know hopefully we'll see more um as the year progresses so yeah shout out sky very cool hey everyone this episode is brought to you by NADA the shielded asset Hub protecting the future of the multi chain NADA is a chain that's near and dear to my heart because in previous

seasons of belur we've talked about how the Cardinal original sin of most blockchains is not thinking about privacy from the beginning but also because if we want to onboard a whole bunch of applications it doesn't work in a default transparency setting so NADA not only brings about a better future that we all want but it's going to help on board a ton of new applications so NADA introduces a novel shielding reward system the way that it works is if you hold your assets in the shielded set you help strengthen nada's data protection guarantees and collect nonrewards in return the model will initially support IBC and ethereum based assets but eventually the idea is for this to into a comprehensive hub for all assets really really excited about what the

folks over at NADA are doing I highly recommend that you go and check them out at n.net you can follow their mainnet launch which is zoom TM very exciting tell them that I sent you click the link bottom of the show notes all right we should talk maybe on a slightly less happy note about uh all of the things that are happening in the telegram ecosystem so couple things so there is the indictment in France of the founder pavl durav um and then also there have been a couple of outages on the ton block chain which I'd love to get your guys take on but I'm just reading From the Block Works report here so uh pavl has been held in police custody he was released from priest police custody but he did get indicted um and the charges that he's facing are uh complicity in

offering and selling narcotic substances and distributing child pornography um and I think 10 other uh you know 10 other charges as well so friends Authority French authorities alleg that DAV didn't Aid investigations I guess he has been getting a bunch of messages from French authorities that you know I guess he hasn't responded to appropriately um and yeah I mean I think there are a couple of different takes on this which is you know there's the sort of mainstream media take which is this is a guy who's been doing all these horrible crimes and then there's another take which is this is uh you know pretty pretty classic censorship um right here and I I would love to know like which side of the aisle you guys are are falling on here what do you think about all this I I think um one of the

scariest parts of this is um Pavo is not the only one who manages or runs extremely large social network platforms um Communications platforms um and if he is the one that is um not abiding by or not even not helping with authorities in their um seeking out of you know all of this malicious activity these are massive online communities massive online platforms there's always going to be nefarious stuff that happens on them and you're not going to be able to be 100% unless you lock everything down um but what is extremely scary in my mind is uh what this implies is that everybody else is is complicit in you know helping to back door helping to um

gain access to authorities and Regulators um without the knowing of um individual users and so that I think is is one of the questions that I have is like okay well if pavle is the one who isn't doing it does this mean that everybody else is or has to be um I mean I think we got a little little bit of a sniff of this when um uh uh Donald Trump went on X with uh elong and the EU commissioner sent this letter a couple hours before the interview said we were G to be watching and you're gonna have to you make sure no misinformation happens and I I think we're getting to a really kind of large question societal societally large question which is who's going to be the

Arbiter of truth and how are we going to decide um if that needs to be something that's need needs arbitration in general or is this going to be an open platform you have section 230 in the US which is um a a a standard that says if you're not interrupting or if you're not changing or um um if you're not um uh um um curtailing or create or curating any of the news then you are a social platform and you can't be held liable for the information that's shared on the platform obviously SE 230 does not extend to the European Union um but I do think that there are are going to be very large questions as to you know the

relationship of these social and Communications platforms uh the relationships of these platforms uh to users and and what role and what controls The Regulators will have over them yeah I mean it's crazy that those bureaucrats in Europe issued this letter after you know one of the Front Runners in the presidential race in the US appeared on one of the most widely used social media platforms it was before it was before it's just crazy I mean there's just a general effort you there's just like a war on decentralization from anything to the FDA wants to tell you what to eat and put in your body to you know social media platforms needing to have some sort of content moderation to any number of of things like these institutions are

just kind of trying to grab power and I think it's overall bullish for crypto because crypto is kind of the only thing that can really stand on its own and say like look like we are decentralized and here's how you measure it and as long as one note is running the software this is how it works unclear how we get to a decentralized social media Network that you know has some sort of moderation built in or if we can build something without it and the bureaucrats will be okay with it but you know if I was Elon Musk or if I was you know even Mark Zuckerberg or the rumble people like I I can't imagine you'd be going to Europe at any point in the near future and that's just so bearish for Europe like imagine being one of those AI companies in France that's raised all that money

right now like you definitely have The Regulators in government way up your ass and it's just bad for entrepreneurship and it's bad for the continent and I I personally I mean for me like have sympathies for for pavl and I don't know the full extent of the case and what exactly happened but I think the the Here and Now of like where does this leave telegram is is pretty interesting and I was reading this Financial Times article this morning um you know there's all this kind of like you know back room dealings with macron you know pav somehow a French citizen he had lunch with him in 2018 whatever yeah but telegram the company has 50 people apparently you know who knows if that's right but they say they have 50 people

30 of them are Engineers um they raised a billion 1.3 billion in debt 1 billion in 2021 300 million in 2024 with an option to convert the debt tox Equity at the time of a telegram IPO as long as it's before March 2026 so the company is heavily incentivized to get this IPO off because you know they won't have to pay back all this debt like maybe that doesn't matter to them but that's at least what this ft article was saying and you know telegram doesn't have a business model you know they don't sell ads they I guess they kind of do microtransactions in the ton blockchain but that's kind of separate from now but I would imagine their server bills are are Skyhigh like if

this is really being used by 900 PE 900 million people globally every month I don't know what would their server bills be 30 40 50 million a month like something crazy and then you kind of have now the main guys locked up and you know it's like you got the taon blockchain that that went down I think that was mostly technical issues you got telegram itself which may have emerging Financial issues and it's it's a it's a qu I was watching the uh the tong uh coin kind of Bounce Around It was literally like a real-time prediction Market on you know if he was going to go to jail for you know 24 hours or 10 years and I think the jury's still out but if he doesn't get out of jail in the

next five or 10 years telegram could be in in serious serious trouble and I think by extension the tongue coin itself you know um uh you know who actually kind of predicted this was David Sachs like back in April of this year I remember I remember I tune in all every now and again and he was saying because this was around the time that Tik Tok was talking about getting banned in the US and he specifically called it out on the podcast he was like the next one to go after would be telegram it's kind of like there's ties to Russia it's also a social media platform there's encryption on it I mean he was kind of right about that and here here you know to your point um I mean Vance I want to respond to a lot of what you just said there as

well but to your point uh Michael first of all when you Google this there's a couple things first of all are there more shirtless photos of anyone out there on the internet than this dude like no one has commented on this but there's many like very well-lit professionall looking shirtless photos of this guy so I mean no one's commented on that I feel like that's worthy of of notice but look at the look at the title of the one story here that's above the fold telegram CEOs arrest Royals farri users in us and this is just part of this trend of very frustrating gaslighting it there there's this trend of very uh you know I think it's completely valid to be worried about governments cracking down

on what people can say and sending cease and desist letters to yeah Donald Trump and Elon Musk who are just having a Twitter spaces together I mean that's crazy that's you know we're not like thought police here but that is that's clearly a slippery slope I that's not a fringe opinion um I think that's a very slippery slope and yeah it's you know it's in line with this whole you know Liz Warren tactic of of people are using cryptocurrencies for crime and you know we're going to do uh you know uh price caps in grocery stores I just feel like I'm constantly being gaset at the you know what I mean like I know that I know that doesn't work you know that doesn't work you know that I know you know that that doesn't work so why are you telling

me this uh and yeah it's this a little bit of a ramp but it's just I feel like that's the pervasive attitude from this one side of the aisle that's it's too much it's very frustrating so well well Mike there's only one answer November 5th one last thing on it though like the Ft I mean I had not heard this before but like the IPO of telegram itself they're targeting a valuation of 30 to 40 billion which is coincidentally basically the exact same valuation as the ton coin um and like is a telegram IPO bullish or bearish for ton coin it's a good question I mean the the the details here are that frankly nobody including uh

investors in telegram or t the toen have an idea of the details here which is we don't necessarily know exactly how the blockchain works it's not completely decentralized yes it builds blocks and yes there's a block Explorer but it's unclear how that works so it's unclear actually what happened when the software went down for six or seven hours the other day and we don't exactly know how many users are you know in the 900 million that are supposedly on this Telegram blockchain um we don't know how many users are individual app users we we just don't have all the information which I think also has you know if you're comparing this to even like a let's say Elon Musk or Mark Zuckerberg were in the same position in France

right now there's far more key risk with pavle as there as there would be with the either two other two just given the size of the organizations he has a lot more control he has a lot more understanding there aren't you there was an article from a couple weeks ago about how he was the only product manager that exists at telegram he's like the he is the product and so if he's not able to be with his team you know there's going to be real issues here but I think we don't know what you know the ownership structure is we don't know what the assets are we don't know where the value will acre in all of these ecosystems uh whether it be the equity or the token um it doesn't there there's just layers and layers and layers of obscurity here uh which makes

it even more risky I would say just given the uncertainty um so I I'm it it is uh unfortunate given all of the as we talked about the societal risk and and kind of the directionality that you can um potentially look at with moves like this from the EU but I think there's also in in specific risk in Telegram in telegram the chain in ton the token the the whole story before we get into ton the the chain it's a little bit of a larger than life story isn't it there are a lot of weird angles to it first of all apparently macron is like a power user of telegram which I didn't know and think is kind of funny and not encrypted Emanuel not encrypted yeah also something that I actually didn't know

this until a couple months ago but I had always just thought telegram was really well encrypted and it's not at all end to end encrypted so um that's another dimension here around I've heard people say if this was actually endtoend encrypted and they decentralized a lot of this maybe we'd get away from this I would be curious about what your guys take on that would be as well but it's just a little bit it feels a little and then there's the whole story of how he ended up going to France there's some crypto crypto gal who uh coach huh she's a crypto coach that's crypto coach okay yeah like a guru or a life coach or something like that whatever but she uh you know she took him to France the whole thing just feels a little bit out

of out of a movie or something like that um like was he getting honey potted there or something like that like what's up with that how how did that happen I from from perspective the closest comp here is going to be signal but what you gain in encryption and privacy you lose in user experience and that's that's basically the tradeoff that these two applications have made can you explain yeah so signal a signal encrypts on the client side so you have your messages are encrypted on your device if you delete the app you lose your messages um you have the ability to go and send messages and those are Inc cryed client side as well and so basically everything's encrypted on the client

itself um signal also has the ability for disappearing but they also have end and encryption signal can never know what information is being said and Signal the application cannot understand what information is being said in an individual chat based off of the individual encryption of you know the user as well as the chat whereas telegram to make things easier if you want to and you know some of the uh user experience enhancements would be like adding someone to a thread and then being able to see previous messages being able to have multiple um layers of security where you can invite someone uh if they have the link but they can't see it I mean there are um there just a

number of ways that telegram has enhanced um generally the user experience but in doing so they have to maintain you know unencrypted versions of this information it's the other the other one would be if you sign up on multiple devices can have you know a record of of your chat so you can be chatting on your desktop and then move to your phone and it's the same chat the whole way through um or you can have multiple phone numbers but the same username like there there are a lot of enhancements that make telegram I I think a a very usable and um actually seamless and and amazing application but what you gain with that you lose privacy okay so yeah just a bit of a I I didn't actually understand that that

whole trade-off before so it would actually be good to get I don't know if you guys have ever uh connected with Moxy Marlin bikee who's the signal founder but he would be good to chat with at some point so let's talk about the the ton blockchain here the first of all I I just don't know what I I poked around a little about this it was tough to find a connection I I'm a little bit unfamiliar with the architecture of taon the blockchain I'm not sure how decentralized it really is underneath the hood and there is a bit of a relationship we talked about this I think a couple episodes ago in between you know the app if you're not us-based there's a wallet and all that type of stuff like the ux looks entirely different than if you're you know geens here in the US and so there is a

connection between the telegram app and uh actually the the blockchain and actually the the episode that's coming out on bell curve the interview portion is this coming week is with Chia and imun um so they run Alliance and they've got a lot of access like very early stage Founders and there's been a lot of interest in building on T the blockchain that we'll discuss there but yeah I would imagine that I mean it feels like there's some kind of connection in between Pav's arrest here and the outages I be I don't have anything to substantiate that other than that just feels like too much of a coincidence um but folks who are listening please tell me why I'm wrong and then do you guys think that there is uh do you guys think that there's any you know platform risk like if you were building on ton right

now would you be concerned uh about everything that's going on I mean probably worth covering like what building on ton actually means and like the pctures that we've seen one of them last week was it's a gaming platform it's building kind of like you know you can think about it as like a forecaster frame within telegram but whenever anybody interacts with that frame you're using an e L2 or an e side chain or some other chain and like they're telegram users they're using your chain you've built an app on telegram but ton has very little to do with it and so I think our question about ton is like to what extent are the users on Telegram proprietary to Taun the chain and where we're getting to on

that is like they're probably not proprietary um and so that's kind of an interesting Discovery in the sense that you know any blockchain user is open to be targeted or retargeted by any other chain there's nothing proprietary there it's um there's still more questions and answers from us on Telegram and and what its kind of future is sorry ton and what its future is I don't think the outages were actually related to him going to jail like apparently it was just a lot of um a token called dogs being minted but TVM has a I mean it's broken at 300 transactions per second before so it's definitely not the best tech and it's

not kind of like a salana or polygon or an L2 style cost and fee base or throughput base so TBD but you know having the leader in jail when you need to kind of like answer all these questions scale the platform figure out how the telegram app and the ton blockchain are connected and get the IPO at the door and figure out how the token to cruise value it's like there's just a lot to to do right now there's not a lot of people to do it especially without the leader yeah I mean wholeheartedly agree with all that but um maybe just to like steal man it for a second um and this assumes a lot of things right but I think there is an argument that could be made around if he were to be released

let's say and I know he's on supervised release can't leave the country but and who knows how long that's going to take I I have zero understanding of the French judicial process um but the let's say he he leaves gets back gets back to working one argument could be made that this moves them further in the in the direction of decentralization where you know a lot of this a lot of the questions that we're talking about about like uh telegram the company telegram the token telegram the network like what and what is it and and maybe this is just the Catalyst that pushes them in the direction further of decentralization for all the reasons that we're talking about censorship resistance having it be more clear I do think in that point if that is you know

the the best case here for you know telegram the network telegram the token um I do think that that frankly still beges the question as to do these users know or want to be using telegram the blockchain you know there's 900 million users how many of them actually are you know aware that there's a wallet in um you know behind the scenes um how many of them actually want to be transacting on chain these little foraster frames that exist are called mini apps within the telegram ecosystem um you know and games have been popping off um you know as kind of the core category um but if you look at most of the games they're basically clicker games where you try to tap as fast as you can or you know try to hit it on the on the mo on the point

um and we were talking to another game company who found the source code for uh developing these clicker games um and there is actually a $500 service that somebody had um where they would reskin the game and it's basically the same core Tech um across all these different games and so the the diversity of application category is is just not there yet um and and I would say the user to advance this point portability or understanding that they're on a blockchain as opposed to a telegram application is really you know unclear uh in UNT Ed unproven um so even if there was a distinct Direction shift towards the blockchain I think the the major remaining question is do these

users these hundreds of millions of users know or want to be using a blockchain I mean it's also the same question with what's going on with like salana and uh Tron at the moment where you know people are just moving from one ecosystem to the next and you you think about stickiness of users and of assets and of use cases and what extent are they proprietary it does feel like over a very very longterm time Horizon like getting people to denominate in your native chains asset is probably the most defensible angle that you have of keeping those users as a persistent base on your chain because there's always going to be New Meme coins games apps Etc and people will leave your chain but it's just a matter of like what money are they taking with

them and what kind of are they are they using the native asset on other chains or is there any network effects from that that's kind of a major open question for at least of the emerging chains in the market in our minds I agree with that I also want to say by the way about the speculation around is pav I was I don't know anything I think apparently it is a more of like just a developer uh the the word that I've heard Ed is like a develop developer ecosystem in culture challenge there it's a new chain that kind of prioritized distribution over some of the tech underneath so I have no knowledge of whether or not pava was the rested just pure speculation um I agree Vance that I think that a huge portion of the way that l1's derive value is exporting their native token and getting

people to denominate um Assets in that so I actually think this is one of the things that l2s do super well um you know you basically export a bunch of eth up into l2s and then if you look at they're kind of these like liquidity syncs like base and arbitrum I think are doing a really good job of this at the time being uh at the at the current moment what do you think about the role of like rwa this is I'm I'm having trouble like circling the square actually uh which is if you have stable coins stable coins have kind of been up only but they sort of erode some of that the network effects of getting you know of denominating things in the native token um and you know when I really sit down and think about it in squint it's

hard for me to ignore the evidence in front of my face clearly usdc and usdt and usds are going to be super useful products people want them um but from an enduser benefit standpoint it seems like you're you're losing a lot of the value of using a blockchain if you know really what you're getting is settlement insurances so you know if I have an inbound trans action here the blockchain's not going to spit it back out at me um you don't really have that as much anymore either because that's getting choked off by the uh you know the issuer can always just freeze you so if you don't have the benefits of it's not really a benefit to the network like the rwa kind of erode the network effects of the Native token and the user loses a bunch of benefit as well how do

you just think about the the value proposition of rwa and stable coins more r large I feel like I'm just mid curving this but I what do what do you guys think I I feel like that's the other path for crypto where the stable coin is the is the dominant asset and and frankly like how do you play that things like maker or or other stable coins with scale and if you can export that that usds that di whatever you want to call it and get people to denominate in it like that is the Holy Grail of crypto business models like you use yield or you use the stable coins to invest in yield producing products use those yield producing products to buy your own token back which pushes the price higher which gets people you it's it's more reflexive

it's more interesting like that is a very different view than like having a Bitcoin uh derrive transaction fees from uses on chain or eth you know EIP 1559 and trying to get people to denominate in Defi and eth and I think it's just a it's a different path for crypto I think it to a certain extent it is cannibalistic to the underlying native assets like back in in 2017 like everyone was trading you know pairs against eth and and Bitcoin on the major exchanges MH I kind of wonder what it would still be like if that was the case probably a lot less efficient but probably more people denominating in these assets um and you can think about the even the ETFs is kind of like this same type of L2 construct where you're

exporting The Ether the Bitcoin to a brokerage account people are denominating on that in a different form so there's a lot of different paths to get there but you know stable coins are definitely one and I think if you're investing in crypto in a serious way and you don't have an allocation to one of the major stat coin products that's just a it's just a a path that could play out that would be very very different than what most people expect yeah I think so uh yeah I think that's really well said like it's just something that I've been sort of thinking and it's probably not binary one way or the other right we probably get a world where you know these the five or six uh Native l1s end up working or I don't know what you guys thought is in the long run on that and

then a bunch of stable coins and rwas and there's some kind of mix right it doesn't have to be like a binary outcome one way or the other but um all right last where I want to get your guys opinion on is the SEC has officially come out and sued uh openc this week and so now we are officially getting uh to paraphrase you know in my own words the opinion from Gary gendler that uh digital Pokemon cards are securities and you know the the backstory of this as well and why my heart goes out to openc see here is because I think they were I would put them in the coinbase bucket here of for whatever mistakes they've made from a business model standpoint I I think that they did try to do the right thing and operate in the US they had a really

difficult decision a little while ago do we when blur was coming out and doing all these dgen things to compete they decided not to launch a token which I know people really gave them a hard time for at the time but I thought that was a very hard it was a tough thing right like at least it was a bold decision right you made a decision and it seems like they tried to do everything the right way and they ended up getting sued anyway and so yeah I would just what do you guys think about this on level high level uh it seems like the desire to about face and shift Direction on crypto enforcement by action regulation by enforcement uh has really worked um and we've strides and moved in a totally new Direction uh in reality no it's just gotten much worse I

look the this is this is crazy I I'm very curious to see and and so what they've gotten so far as a well as notice they haven't received an official um It's usually the proceed an indicator that you're about to get a lawsuit we don't know the details of said lawsuit so there may be there may be things that in that they're going after that are um I don't know that are unobvious to the the rest of the general public um my guess is they're going to be you know you traded Securities um which ones are securities oh well you know which ones are securities the whole back and forth dance that we've seen multiple times with these different um with these different platforms and it's just brutal um it it is um it stamps out

the desire for entrepreneurs to build in the US to your point Mike it stamps out the ones that even with the most altruistic perspectives and the desire to to um you know tow the line and and do the right things um they still get hit at the end of the day um this is the most restrictive uh Administration that we've seen for uh crypto and crypto policy um and I think anything or anyone who thinks otherwise um is is trying to convince himself um of something that's just not true so we needed to change for this industry to proliferate proliferate in the US yeah we're the crypto pivot non-existent in my

mind yeah I don't really I mean I guess you're you're absolutely right Michael it's a Wells notice it's not a formal indictment yet but it's you know I don't know what the track record is of filing a Wells notice and then not suing so near 100% is is what follow through is so so that's definitely happening and nfts were even you know lawyers are very careful right and they always advise clients like B is risk averse as you possibly can but I don't think there were many even the even the crypto lawyers out there were saying yeah nfts there's not a huge risk that these things are securities and there's actually an old clip here I can actually try to find it there there's an old clip bankler shared of this week about Gary gendler getting asked uh in Congress whether or not Pokemon cards were a

security and then if you tokenize Pokemon cards are they he was like no Pokemon cards aren't a security but if you token them I need to know more context how does that make sense just seriously how does that make sense and and they will probably lose this case if people are going to just use those arguments it's kind of irrefutable like baseball cards Pokemon cards collectibles in in 1976 the the SEC came out and said that even in the instances where art or physical Collectibles are just being purchased for financial speculation or financial value the Brokers and the dealers and the institutions that are selling these assets are not therefore Securities Brokers and so I don't understand why

there's a difference between something that's physical versus something that's digital um or there's a change in perspective from 1976 to now but they're going to have to answer that when you know they they go to court over this situation so it it is it's going to be a tough case I think um for them to to pull off a w unless there like I said unless there's some Smoking Gun that nobody knows about that's underneath the surface that I which I don't actually believe is real if you remember there were um you know some issues with open SE and some people who were working there um who you know were fired and I think you know got in trouble uh because they were um you know front running some of the announcements I mean they they have been on the spot in terms of

internal compliance internal regulatory perspectives this is this was a massive multi-billion Deca corn level startup in the Heyday like it's not like they were Fly by Night you know ringy de operation they they had you know all resources to to be able to you know put the uh you know the the legal team in the room and figure out what the best path forward was but I I generally think that this um there's there must be something else going on here or it's just you know the same as we've always seen and you know any anyone who's expecting change um sorry to say it's not happening I saw there was a great tweet from Brian Armstrong basically being like hey welcome to the club yeah uh you know it's like that guy first time first time

me exactly so where are we gonna go because even I was I was thinking about this uh with with the whole pavle thing but I mean one of the biggest crypto conferences in the world ends up happens in France every year EC and I I have to imagine that this is actually going to impact crypto Founders willingness to go over there and talk about their products because it has in the United States it absolutely has if you if you look at okay so no one is going to get on this podcast and defend do Quan right but part of the uh the precedent that was set by that complaint was he was getting he was talking at conferences about tokens and y y and I mean you have to imagine that's going to be relevant for France also now um so it's just like where do you go where do you go

Asia Asia yeah and and hopefully the US in a year will be much much different but I think the prognosis for Europe is is much much worse well I we're we're conflating situations here you know there there's the whole like Doan getting served by the SEC at mainnet like that that was for unregistered Securities offerings what we're talking about with pavle I think is a completely different subject yes there are concerns around first uh um First Amendment censorship censorship in general compliance with Regulators that's a totally different subject than the crypto stuff but I I do think that you know there is a question um you know to what is the most friendly environment

and and to advance this point we hope that it's the us but right now it's definitely not yeah uh I mean agreement yeah I I I think that it's a I saw I can't remember I think it was maybe Victor bonan who tweeted this out I can't remember the exact phrase that he used but this is just part of the strategy of I think the SEC doesn't even expect to win this lawsuit necessarily not a legal scholar take this with a huge grain of salt but what you what you're effectively doing is setting the company back because it's a massive distraction the entire executive team is going to be focused on this now how you going to execute on product road map or whatever else you're doing if you're fight you know footing huge legal bills and there's so much on the line here not only for the company

but for these Executives personally I would guess well and and there you know it's it's sad to say but openc has has taken a pretty big hit over the last couple of years you know from you know the the volume numbers or you know the change in strategy and I think also you know they raised it a 13 billion valuation I think their secondary Market was trading you know somewhere below a billion so you know they've taken a massive hit in terms of you know the capital structure of the company as well but broadly what I would say is I I think that this is you know in an unfortunately nefarious way I think this is the SEC also picking on someone who they think that they can push over because of the direction of where you know the company is going and it'll be a

win for the SEC if they settle it'll be a win for the SEC if they don't look like you know they're arguing or fighting versus someone like I don't know a Unis swap or a coinbase who is thriving and who is you know pushing new alltime highs and who's ready and capitalized for a fight and so I think there's just a difference of you know maybe this is a less um uh um toothy kind of case but it's probably going after a more willing and able a less willing and able um you know defendant and if there's a new Administration in four months you know this is somebody else's problem right yeah I got drinks for the former regulator this week actually he

mentioned that even within the sec's office there's a ton of burnout in churn I don't know if you guys saw uh this guy David hirs who is pretty high up within the SEC uh the crypto division he's gone to a law firm okay here's a question for you guys not to I've actually talked to Dave before I actually thought he was completely fine guy but uh how do feel about these former Regulators then going into private practice and like kind of being on the enforcement side of things and my favorite example is Ben Losi I don't know if you remember him um the author of The bit license he's the guy he's the guy and ever told you his Ben lski story and uh Andrew Cuomo story no I don't know if I could tell this on the podcast

it's a pretty funny story we'll save it we'll save it for permission list where we do the Meetup in person yes yes exactly it's the alpha you got to come for but uh yeah a little plug there um but no the Ben Losi story is he started you know the bit license the most incredibly onerous uh licensing structure to be an operator of digital Asset Services within the the state of New York leaves the uh the financial regulator in New York and immediately starts a law firm and consulting firm to help people understand how to get bit licenses uh through the process so you you create the mouse trrap and then you lead people around the mous Trap and get paid for it it's pretty insane that this is this is how the system works um and I wouldn't be

surprised that there's going to be a number of crypto enforcement people at all of these different Regulators who then go and join law firms who help all of these companies that they were just trying to enforce work with or get around the enforcement that is being put down by The Regulators it's just it's it's all circular yeah I mean it definitely the Ben lki one seems particularly Beyond The Pale in terms of that just shouldn't be allowed and the cost what's the cost for getting a bit license it's in the T of millions or something right it's it's in the sandle of millions it's insane okay yeah so yeah that just feels not within the uh spirit of the law as it is that's probably intended I I guess maybe just closing out actually just as we're

talking about openc what are your guys thoughts on nfts long term it's been a while since we checked back in on this this was probably we we should go back and review our prediction episodes going into the Year this was probably my worst prediction around NF in general that one that one aged like freaking milk but uh yeah what do you what do you guys think on the nft front are they just dead do you think they're G come back in a different way or I look if you're a fan they're on sale yeah if you like them at 100 Grand you'll like him at 10 I saw that the punks floor got swept and was kind of moving in the right direction for a little bit I think there's a lot of for sellers of nfts especially the highquality ones just from the crypto funds that were like nft

funds for a while like they're still looking for liquidity but that will pass and I think the highest quality ones will do well I don't think they'll do quite as well as the native assets but you know I saw a hieroglyph yesterday that was listed for under or sorry an autog glyph for under 100 eth and then someone bought it kind of right there and like it took like an hour so I think there is some life to it but I feel like AI damaged a lot of these 10,000 you know pfp collections like when you can create these in five minutes like who gives a that that one's y also meme coins meme coins just really ended up eating that whole market

right like that's the other thing too we we should check back on Meme coins in a couple months but doesn't look much better for them at the moment got marad coming on the podcast I don't know if you've seen his uh tweets he's very bullish so we'll get the I mean we talked on this pod there's just too many of them they're eventually going to collapse um underneath the weight of that Supply it was really the pump. fun was the there is a history of this there is a you know it's the whole did blur kill nfts it didn't kill nfts but there was a very specific game that was getting played based on how much liquidity existed and if you give all of a sudden this massive incentive for everyone to sell at the same time people are going to sell so this happened with

h Sushi Swap and pool twos and then it happened with blur and and it happened with pump off fun and yeah there's probably a pattern here to take note of i' oh yes of course yeah um all right fellas this is a good one I think we can uh call it here see you guys next week thank you hey everyone hope you all enjoyed today's episode wanted to give a final shout out to namada again a team that is near and dear to my heart they are building the shielded asset Hub which is protecting the future multi-chain talk a little bit about how that works in the mid roll but for now what I would highly recommend that you do is go check them out they're in their main launch phad you can follow along with everything at n.net you can start rewarding Yourself by shielding your

actions and strengthening data privacy for all across the multichain so thanks again to M for all the great work that you're doing