Why Investable Tokens Need Real Disclosures | Roundup

Transcript

Hey everyone, quick disclaimer before we get into today's episode. Nothing said on Bell Curve is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only and the views expressed by anyone on the show are solely our opinions, not financial advice. Our guest and I may hold positions in the companies, funds, or projects discussed. All right, everyone. Welcome back to another episode of Bell Curve. You got me, Miles, and Zev. Miles, I will see you in T-minus 24 hours. This is the pre-bachelor party podcast. Yes, this is like uh last real uh brain energy I plan to exert for a couple weeks.

>> next podcast recording will be on Monday next week, hopefully. >> [laughter] >> Oh god. You If you want the lowest energy podcast of all time, we absolutely have to record on Monday. We'll bring some photos of Miles over the weekend uh as as like a little teaser for the audience. >> Oh great. Yeah, perfect. Um [snorts] That'll be a lot of fun. Actually, I'm looking forward to getting out of it. It's cold here and it's going to be like mid-70s, 80s in Florida. Got to get you know, this Italian genetic heritage working for me here. Got to get some tan. Got to get some tan on. Got to get the first layer on for the summer, you know? Yeah. You know, I actually got that There was like a pond skin out

here. You You actually kind of get roasted on a mountain cuz all the sun bounces off the snow. It's strong. Um All right, guys. Uh so, we are going to be talking actually about the uh This is a a Blockworks initiative here, so I'll just put my hand up and say I'm obviously biased about some of this stuff, but the um we we put together a uh a disclosure framework for tokens called the TTF, uh token transparency framework. Um a couple of base about a year ago um and shout out to uh L1D and Thea. We worked with them um in this on the beginning. Since then, we've got about 40 uh protocols that have signed up and voluntarily disclosed information, which is awesome. Uh but we

were thinking about it this week because uh actually, Zev, you were the one who pointed this out, but Turtle Club um friend of the pod slash Blockworks in general here actually disclosed and their token ripped like 20%. Um now, you know, not financial advice. This is a small-cap token, all that good stuff, but uh I think that this is indicative of the market just wanting better disclosures uh and more transparency about how these things actually work and what investors are buying. I'm curious though cuz I'm kind of obsessed with this idea of tokens and making them better and more friendly uh writ large, but I'm curious when you guys look at the state of the market today and tokens as an asset class,

well, how would you score it, you know, out of 10? Um do you think things are working? Do you think they're not not working? And if so, what are the most broken parts about the current ecosystem? Mm. Um yeah, and I will say like uh we Zev and I did want to do this podcast. This is not just a uh a Blockworks shilling podcast uh cuz it is interesting and it's it's finally like starting to have a real impact on the the success of these projects. Um you know, as as reflected by by Turtle this week. So, yeah, I would say I don't know if I I have like a a ranking out of one out of 10 for tokens because I think at this point you can very clearly see they are not all created equal, right?

Um but I think we're like even similar to equities, like the the the bar has been raised in terms of what investors need to see um to for an asset to be like super investable. Um and that means, you know, PMF with revenue, that means trust via something like this transparency framework. Um and then, you know, I think I think it's like that second piece is is coming into shape really well. Um And it's good marketing, frankly, right? Like people see that uh they learn about your project. Um They [clears throat] learn about it in a positive light like when you get a good score obviously.

And um I think that spreads, you know, market awareness um and just gives people a reason to be bullish. So, yeah, I'll pause there, but Zev, curious to hear your two anything down. >> Yeah. [clears throat] Yeah. Uh correct me if I'm wrong with any of these numbers, Mike, but uh I was doing a bit of research and yes, as Miles suggested, we did actually suggest this podcast ourselves because I think that Turtle News, full disclosure, Turtle is a portfolio company of Fractus, but I know SC, the founder of Turtle, holds himself to some very high standards. And I think for me, like the token transparency framework is about founders holding themselves to high standards, being transparent, and being accountable. And I think what you're seeing in the space

right now is there's two buckets of founders. There are founders that are very serious about their products and their token long-term, believing that sort of like tokenized equity is sort of where the world is moving and therefore we need standards around how to actually engage with investors holding this kind of tokenized equity. Like that's a very serious founder and project to me. From what I've heard, uh shout out to Blockworks as well here and the other funds that worked on this with Blockworks, Blockworks' standard right now is really the industry standard and that's exciting, I think, because it's very early days, but we're kind of seeing now Blockworks engaging with regulators and it's becoming a very serious framework that it's unlikely for other kind of incumbents to uh get into the sa- same market and try

and do themselves. Like if anything, I could see them working with Blockworks long-term. So, I think what Blockworks is doing now for the industry is is huge and I think teams that are actually adhering to these standards uh in a much better place long-term and even for this upcoming cycle. I think what you actually might end up seeing is like I mean, I don't I don't want to like speculate here, but I do think that fundamentals matter and when it comes to investing going forward and most liquid investors, institutional investors, you know, especially in this upcoming cycle that are coming on chain, they're not going to be investing in tokens where no one has any idea like why the price is going up or down. No one And another stat I want to bring up, which I'm pretty sure was also a Blockworks kind of disclosure and announcement, I think

it's like less than 1% of tokens disclose their market-making agreements and all of that as well. And Mike's first question was like, what is broken in this industry right now? I would maybe argue that one of the most broken things about this industry is potentially market-making of token projects where it's very unclear what the actual value is in the first place. And so, if we can make that more transparent, all of a sudden, you actually flip the incentive. The incentive becomes about becoming a proper team that's accountable, transparent, working a bit more towards the kind of tokenized equity future, real cash flows. These things can actually be valued and hopefully as well, you can see what the market makers are doing, you know, like what are the bids, what are the asks, how does it

impact the price? And as an institutional investor, you're going to get much more comfortable with underwriting these kinds of assets. So, I'm very, very bullish on teams like Turtle and others that have worked with Blockworks actually working closely with them and then being scored. I do think one interesting challenge potentially, and I don't know, Mike, what you think about this as someone that obviously is very close to the standard. I guess now there's kind of two buckets the way that I see the ratings. There's one bucket which is just so far off of where they get like it's out of 40, I believe. So, like one bucket is they get four or five out of 40 and it's pretty terrible, the disclosures and then but, you know, right now the industry like ex- centralized exchanges are still listing these assets even after they're being ranked five out of 40. So, is that a

problem long-term? I'm curious to hear from you, mate. The second problem potentially as well I could also foresee is like if everyone starts moving to the standard and everyone gets ranked kind of 36, 37 out of 40 and that's the new status quo, like does it still have that same value and like can maybe people slip through the cracks of like following this like playbook to get that 37 out of 40, but then actually it's still not entirely the most transparent thing of all time. So, I'm curious to hear, I guess, like how you sort of solve those two things. So, on the So, also, just to say what this is and what this isn't, this is not an endorsement to buy any particular token. This is just one of the issues uh the two issues that have gotten conflated here is one, there's the kind of natural strength of

a project. Good team, does it generate revenue, have a business model that makes sense? And then and then it and then in addition to that, are there things independent of the operations of the business, like the ability to produce profits, that might uh be negative for token holders, right? This is why you have both. This is why you have things like S-1s and, you know, quarterly earnings in TradFi. Um in terms of the exchange the exchanges are highly motivated actually to fix this problem. Um and everyone responds to their incentives and the incentives of the exchanges used to be when the people were willing to buy and sell this stuff without any of this information because everything was going up. Why would I go through the extra

hurdle, cuz it is extra work, of doing this? Doesn't make any sense. Five years later, the whole asset class is down. People aren't trading tokens. If you look at the percentage of Bitcoin and ETH that makes up uh trading volume on centralized exchanges, it's growing. So, what that tells you is no one wants to trade things that aren't Bitcoin and ETH. That is unequivocally bad for the business model and that's why they're actually incentivized to fix this stuff. In terms of can this get gamed? Ag- again, this isn't a this is one tool in a tool belt to at least say, "Hey, we've disclosed this stuff." and then the market can do what it wants. Really, what the standard is trying to avoid some of the bad behavior that's happened in crypto so far is just I mean, token

holders have been screwed on things that are independent of business performance. Um and to just give you a list of some of the greatest hits that that uh this framework addresses or like some of the things that you see very commonly still. I mean people talk about buybacks. You know, the amount of um uh the amount of uh Sorry, I just got a message from a mortgage thing. Got to reset mentally here. But the the the amount of times that you see a project announcing a I don't know, like a very limited amount of buybacks and then they haven't disclosed uh what the actual inflation is of the project. The

buybacks don't even cover 5% of the and they're lauding it like it's this, you know, super impressive thing. There have also been protocols that have had the entire IP stack bought out, um you know, from the token holders. The token holders get nothing and suddenly you realize there's this weird corporate structure with the labs entity and the Dow and the foundation and you just assume token holders owned all this stuff. But you didn't. These are solved problems. This This is not We don't have to adjust our mental framework even in even one bit from how this works in the US stock market for instance.

Instead of saying, "Hey, there's some new framework that we should shove this into." we should be thinking, "How can crypto rails and all of this existing in a transparent real-time way improve the way that we do disclosures and lower the barrier and make it easier for teams." Instead of trying to think through some new thing. Like the the Blockworks B-1 filing mimics an S-1. You know, it just is a little bit lower and left and it makes it a little easier and it leverages some of the superpowers of crypto. So, that's what it Yeah. I mean it makes a ton of sense and like this is not a new idea. Um, so like the timing of why now is kind of interesting to talk about. Like we've been talking about the need for disclosures or something like this since

I don't know, like the 2018 cycle or post that. Um, and then the you know, there's like some progress made in bear markets because we have nothing to do and we try to fix things during bear markets and then a bull market comes back and nobody gives a again. Um, and a whole bunch of people It's largely because they they just, you know, a lot of people make money and then retail investors pour in as exit liquidity and everybody's like, "Okay." That's fine. Is it Do you think it's finally happening now? One obviously because of the bear market in the majority of the space but also because of clarity coming in and like just in general I'm curious to hear like the relationship between like the actual regulation that's coming and some of these, you know, transparency frameworks. Um

Like I know there's going to be like a commodity class. There's going to be like a more of a securities class. I think we've always thought there is something There's need for like a equity light, which is what like a token could be. Um, but I'm just curious to hear like is that part of what's driving like the adoption of this now? Uh that is. Yeah. Um, there's two uh potential catalysts here, which is one clarity's market structure. So, that's going to answer There are a bunch of political questions that have been hand-wringing this. So, there's the yield question, which is the banking lobby and basically Coinbase, you know, battling that out to decide what ends up happening there.

Um, there's also uh DeFi developer protections are wrapped up in this bill. Um, and then a huge part of this as well is how tokens are going to be classified and what they're going to have to do in terms of disclosure. So, the basic outline of this is that tokens are going to get like a safe harbor period um where they can launch and they'll have some period of time before they, you know, a lot of token projects are going to want to get classified as commodities. Um, although I'll put a pin in that cuz I don't actually think that's the way. Um, but even even during the safe harbor period they're going to need to do disclosures. So, clarity is one catalyst. Independent of clarity, if clarity were to not pass, the regulatory agencies in the United States, the SEC

and the CFTC have publicly come out and said, "We're embracing this technology. We want tokens. We want capital formation here. But also the SEC has come out and said, "We're not inventing a new asset class. All of these things are going to be categorized within our existing structure of how we categorize different types of assets. Tokens are just a wrapper." So, what that means is either these disclosures are going to be enforced through legislation or through rule-making through the regulatory bodies. So, and you know, it's interesting to follow this stuff but they're one in one way or another they're going to end up being enforced. And >> Right. And this And this matters like during the exemption period too, right?

Cuz they don't get actually classified for like 3 years. And so, you know, probably going to launch a token and then have 3 years to kind of at least show the market that you're trustworthy before landing in one of those two buckets. Um Yeah, I guess the other thing I wanted to touch on here is like I think for an asset to be investable it needs obviously to be a good business that's making revenue. It needs to be a trust like trust is a component here that or that's really like the topic of this episode. Uh and the third is obviously need to be bullish on the growth prospects of the of the business, right?

And I think the trust as it relates to tokens and protocols and DAOs has um typically been two things. One is like all these disclosures, but two it's like the operating structure of the protocol or of the DAO and how, you know, unruggable it is, right? Um But that comes with a bunch of tradeoffs of like needing committees, multi-sigs for everything, needing to put things to votes uh in governance and and sometimes you it like it's so unwieldy to operate these DAOs. There's like look at Ave. It's been, you know, an absolute show.

Um, but that's when you start doing like buybacks and burns just because you don't want to deal with like the transparency issues or like the org structure, you know, complexity of of actually investing back into growth. So, I guess the broader topic is like can we all Does this, you know, also mean that we can um maybe like centralize control of these protocols um if they can earn trust through like transparency frameworks? Maybe we can get back to like delegating a ton of authority to the leadership of these projects, but um I don't know if that's already happening or not.

I I mean, I was this framework doesn't endorse one structure or another. The only thing the whole principle is just sunlight is the best disinfectant here. So, look, if you want to have a The only thing that I think should exist or needs to exist is you need to disclose what the structure is and how it actually works and who owns what. Because what's not acceptable or or it's going to lead to continuously down only prices because people won't trust tokens if hey, I have this token.

It's aligned with you know, the you know, picture XYZ project. So, I assume that you know, the DEX is aligned to this protocol, but there's actually a weird like the labs entity owns the IP and the DAO doesn't own anything. That's not going to That's not going to fly anymore. You you you can choose as the administrator of that business or that protocol to have that structure and but just disclose it and then the market will decide if they want to buy the token or not. Um, so I This is This doesn't solve the whole problem, but I tend to believe like just get everything out in the open and then people will decide. Then we can figure all this stuff out, right? Like as opposed to saying, "Hey, I don't think that this should exist." Just if you

have a dual equity token structure and you have three different entities with distinct ownership, you should just have to say, "This is my structure." And then the market will get to decide and we'll see what the market actually cares about. But, you know, I saw this Um, the word should is just a very dangerous kind of silly word especially when it comes to mar- I don't know if you saw there was um there was a a debate about what yield should be in crypto this week and Yeah, I saw that. Yeah. It's just kind of like, "What do you mean what they should This is what they are, right?" The market is giving you the answer. It's telling you. Um so, that's But the market hasn't been allowed to function because it's been allowed to operate in a state of opacity and that's just not ideal. For any I mean I think

one thing worth mentioning which we've had a few conversations about already in this show is around the token versus equity kind of like value accrual thing. So, I know for someone like SEET total, for him he's always been very bullish on the token. He's a crypto native and you know, he's bullish on the token for different reasons cuz it has different properties to what equity would give him. But now is as good a time as ever to kind of get like tokens that actually accrue value. So, now it actually makes sense to have value accrued to tokens. Cuz what we're seeing in the industry right now is actually a lot of people doing the reverse. They're kind of more raising with equity now and there's less talk of tokens. Tokens have this bad sort of stigma around, you know, being hypie or scammy or like, you know,

non-transparent like ultimately like what Mike was saying before. And so, I think actually what this standard does is is it actually kind of encourages founders to now think more about a token again. And I think again here like the best tokens will be transparent and you know, will be held accountable for what they're doing outside of things happening on chain itself. Like where are the revenues coming from? From what I understand about this framework as well, you can kind of see how the value is accruing to the token. And the best founders want value accruing to the token. And I think what you're going to see which is interesting now probably some teams Some will have equity and token both, which we've talked about in the show. I think it doesn't make a lot of sense. I think it makes a lot more sense to focus on on

one structure. I like look, I I think tokens have a lot of great properties and I think it's actually very very nice that founders now have a way of convincing the market why the token has value. Like imagine if the standard didn't exist. They like how would you convince investors that this token is worth investing in when the investor has no idea where the revenues are going, how to accrue to the token, it's not transparent, this token stuff token deals being done on chain. Like another thing we haven't spoken about which this framework also has is like advisory kind of like token allocation, who's holding the token in the first place like invest like crypto investors are best sometimes going blind. Imagine like an institutional investor like they're going in blind times a hundred and when

trying to bring in more investors into this asset class which we're trying to grow as an industry like overall and I think the only way we can do that right now with institutions is to give them transparency and to also give founders a framework that they can adhere to in order to convince these investors that they've got a durable business. So, I'm very bullish on this as like the new era for what the best teams and tokens will do. I think Blockworks has done a phenomenal job being sort of like the main player here. I know there's been one or two players in the past which have also tried and credit to Blockworks around their own credibility and their own network and also teams it's like a network effect thing. Teams want to work with Blockworks because it's a good look and Blockworks also works with investors.

And so, one question I pose to you now Mike which is also something I'm personally interested in as a more pre-seed investor. I guess at later stages investors in liquid tokens etc. How are they approaching Blockworks right now in terms of like IRR? Like I know you had a few announcements I think maybe Gito was one around like you know you're working with investors now looking at these tokens they have these kind of dashboards data like what do institutional and liquid investors want to see from projects and how should founders think about what to how to approach you and get on the Blockworks platform? Okay, I think there's there's multiple dimensions to this program or to this that question and one which hasn't been thought about in a super sophisticated way in crypto yet but I think as now people are thinking

about much more deeply is what is the right stage of development to launch my token. And I think historically there was pressure both from honestly probably from a lot of investors in the space to get liquid sooner and I think projects mostly just thought about well, I'll get my token out as soon as I can. And the I think instead the operating philosophy should be you in the beginning stages of your project you are only doing product market fit. Like you should only be focused on finding product market fit for your business your company or protocol or whatever. Um as soon as you launch a liquid token you now have two products and you need to do two things.

You need to continue to make the business and your demand for your product and service grow and you need to treat the token as its own product its own thing. You need to sell it talk about it get it into people's hands. You just need to do both. The problem is so in a in an ideal world what should happen is you should be you should not have a liquid a publicly traded instrument. You should find PMF. You should wait a couple years and grow and then launch, right? And then do both things when you have the infrastructure and the ability to do that. The problem is we're working through a period of time where a bunch of very immature companies pre-product market fit launch a token.

So, now you're in a pretty difficult position. What I feel confident saying is that if you don't talk about it and if you don't do IR like things your token's not going to go up. But I also understand if you don't have product market fit you shouldn't focus on that. So, I don't have great advice there. It's a really difficult spot to be in. >> I mean the good news is this basically. Um he these projects like thought legally that they had to launch tokens when they launched their products or else they would like the SEC would come after them for being an unregistered exchange or something like that, right? Like or because you need to be the token this is the utility theory utility

>> like yeah, exactly. Even like a a brand new L1 um that is, you know, completely empty block space. Like typically had to or at least like the the the precedent was that it launched with a token that was like, you know, the utility token, right? Got a bunch of exceptions because it's a utility token but that sucks. Like you also like again that doesn't give you a chance to do this like the right way, right? To actually like focus on the second product and be able to pitch it legitimately like to investors at the right stage. So, I guess back to the good news.

Doesn't feel like projects really worry about that anymore. Like L1s are launching as POA you know, almost every like smart contract protocol or like app level project is launching without a token. And they're not going to jail. So, that that that is now an option and maybe that's also part of why I like the timing of this is all making you know, it's very healthy. Yeah. Okay. Let me get back to also Zev the second part of your question which is how should founders So, there are two levels to the data and the information set that investors require I think to underwrite an investment decision. So, let me actually just show you guys what just an

example of what this actually is. Um so, if you go to the TTF portion of the Blockworks site um you know, you can just see the the rankings here and if that's all you want to see that's okay. You can also download and actually look at um what the filing say for something like Meteora and again this is this is a very it's very basic it's just table stakes stuff. It's a description of the project you know, known the known team and investors what the rough structure looks like. High level details about the token supply and allocations so, you know, literally just what the tokenomics are officially airdrop processes and then this honestly ends up being a big one the transactions at like

the market structure or sorry you know, market structure like details so, agreements that you might have with sexes or dexes and market makers. That's often times the most sensitive part of the agreement but I mean how many charts do you guys know in this space which are painted and you're looking at them like how is this token trading like this? Because of some weird market making agreement that's like sort of like kind of legal but weird incentives. There's a lot of that, right? So, that you know, again it should just be out in the open, right? If you're doing everything within the bounds of legality that's fine. You just need to get things out into the open.

Um So, investors need basic that's just basic blocking and tackling but then outside of that they want to be able to slice and dice data and metrics and fit into their own framework, right? So, you need it's kind of the equivalent of Edgar plus you know, a fact set or Bloomberg on top of it. You just need both. You need both things um to be sufficient here. So, I think those are the two the two levels. And you know, the other thing that I would say is it's an advantage for token projects, right? Like if you disclose this stuff once then your data can be right. Right now if you're a token project you have to go to Blockworks and DeFi Llama and Token Terminal and talk to all of those teams who each have their own methodologies for how to

calculate data or like you know, fundamental metrics. If you disclose it once and you attest that it's accurate and honest and you're not committing fraud by you know, putting fraudulent numbers out there everyone can just have your data with far lower overhead for you. So, I actually think it's a it's a friendly thing for token projects to do because once you disclose this stuff you don't have to interface with a bunch of different teams to make sure data requests are right. There's like individual data team leads of protocols who are vigorously nodding their heads because they're talking like I they talk to us. I know they talk to all the other data providers, too.

Um And this this is the fix for that. Until you have the disclosure foundation layer you're you know, your lives are going to continue to be extremely difficult. And Mike, I guess two follow-up questions there. One, I guess that information is public and free for investors to check out or do they have to subscribe to Blockworks platform? Public and free. Cool. I mean yeah, that's that's fantastic. I mean again like great work with the effort from teams from Blockworks and the fact that that's public and educational for investors I think is again like a fantastic play. Um another question I have actually is around I don't know how much you can disclose this podcast but like centralized exchanges those conversations I think this becomes very real because a lot of founders are

driven and motivated to get listed on like Binance. Like let's say they have a a token like we will know that that's what founders want. Is there a potential like gold path here where founders need to work with these standards and Binance is working with you and Binance says like you need to adhere to this then we can't really list you. Like are you having not with Binance maybe specifically but do you have these kinds of conversations they want to adopt it and what time frame will this happen? Like is this the future of token listings or like how do you see this? I would say check back in a couple weeks. I can't I can't talk about that immediately but yeah, I would say look what I would say is that entities in the space that at one point did not have an incentive to enforce

these sorts of norms and behaviors do have an incentive to enforce norms and behaviors and I think that this is just a moment in time where people have wanted this for a long time but the conditions haven't been in place. Now in between tokens literally a market force which is investors choosing not to allocate to tokens because of these long understood issues that's finally coming into the fore and you have regulatory bodies that are saying, hey, we are accepting crypto but you need to do this these bare minimum things. That's the that's the difference here.

And one one thing two conversations that I see get tangled up all the time that I don't think really deserve to be tangled up. Whenever we talk about this framework people just say, well, what we actually need are products and services that people want and revenue." And my answer to that is you need both. What Imagine if you had a great company and it was, you know, getting ready to get listed and they're like, "Well, why do you need an S-1? I'm producing all this revenue." You need both. Um and the way that I would the way that that's going to show up is in the multiples on revenue or EBITDA that projects get. Look at um there are great companies that operate in Russia or actually South Korea or Japan. They get discounted. You can You can buy You can buy um like amazing oil

companies or uh you know, conglomerates in South Korea for like a 3x multiple, you know, 25% or a third of what you do in the US. Why is that? Because there are these weird structural governance problems around the revenue that make it less valuable. And that's That's exactly what's happening here. Like you can generate all the revenue you want, but your multiple's not going to go up until people are assured that they own some slice of the revenue or they understand what their rights are. So, it Yeah, it's totally insufficient to have a bunch of shitty companies and uh or sorry, with with perfect disclosure, but it's equally insufficient to have great companies

that they don't have to disclose anything because the space is never going to grow that way either. You just need both at the same time. Yeah. I mean, I think it just makes sense if you think about it like the institutional investors who I speak to, they're interested in some of these projects which are revenue generating, which are transparent, and which are real businesses. If you tell them, "Hey, like read this document," they want to learn and they want to be educated on how these tokens work and how it's similar to what they already know on the equity landscape. So, Mike, I completely agree around multiples et cetera, future prospects. It just makes sense that like multiples will kind of increase here because people are actually Not saying for every project, but if it's a project that is growing into a great market and it's defensible et cetera,

it makes sense that potentially there could be a premium here because you can actually kind of see like why it's growing and what's happening behind the scenes, and you can actually underwrite that. If you don't see that, like again, I want to just flag Turtle here. You know, of course, we work with numerous teams. A few of them have listed. I just think you have so much more confidence in the team itself if they actually adhere to this framework. If you If they don't adhere to this framework, I'm kind of thinking to myself, you know, why? And what do they have to hide to some extent? I'm like, do they have an actual business there or like It's a trust thing. It's like, I'm trusting them and what they're

telling me, but we've seen in crypto in the past, unfortunately, you know, a lot of trust There's mistrust between sometimes exchanges and founders and investors and and the community and retail and so I think this framework brings together a lot of counterparties and stakeholders that actually can align on something together and feel good about moving in a similar direction together. The other point I want to make quickly, also just like flag Turtle cuz this is the team I know the most which is uses framework so far. They care deeply about kind of investor relations, liquidity, you know, potentially matching buyers and sellers of different time frames and like they have a product that's working, they're making money, and now the token is live, it's public, and they're on exchanges

and so they've already done the work. Now the next chapter is like, how can we make more investors realize what we're doing is like fantastic to continue growing the business? And they care about this and and they want to share this document and this framework with investors saying, "Hey, check this out. Like what we're doing this. We're going to have like a monthly town hall call saying like we're going to go over everything and so what like public company CEOs do." And it's like, this is fantastic. Like I might not necessarily go to every month being like checking in to see how it's going, but and the fact that anyone can and it's transparent, I think builds a lot of confidence from investors and therefore the asset itself. So, I think you're going to see teams again here which start taking investor relations, public market

liquidity, private market liquidity as well a lot more seriously, and institutional buyers are going to really eat this up. And I think it's exciting that Look, I think we've all expressed that we're in sort of a bear market right now and this is what it feels like, but I think when times are better, it's going to be awesome, I think, to see some of these projects use this framework and investors come in in size and like we can attribute that and attest to the fact that that's come from, you know, alignment of stakeholders through potentially this framework. So, I think it's fantastic for the industry and cool to see founders move in this direction. Yeah. One one one point there I'd just to circle back to the the comment on like why maybe like Russian equities get like a deep steep discount. Um Yeah, it's definitely about like rights

and like token holder rights and disclosures. I think like protocol security is another area of like where these protocols can differentiate and also like get that out into the open because Yeah. you know, you can disclose everything 40 out of 40 and, you know, it runs on a one-of-one like multi-sig or something like that or I have like up admin rights to upgrade the whole protocol or to rug everything or or even like, you know, really low security on let's say like the the foundation's treasury. Like you can We're seeing like the hacks pick up significantly over the past couple months. And so, I think now is also the time to invest in, you know, security infrastructure and services around like, you know, those the most

critical parts of your protocol. And then that can also like give investors confidence that that's an area that like an axis of, you know, potential like competition um that is coming. But yeah, just to call that out. And and do this without like putting on, you know, so many so many like blockers to actually moving quickly. Like that's the, you know, as an up like upgrading the protocol and things like that. So, like that's kind of the the trade-off here. You know what I would just say is to respond to both of what both of you just said, uh I think crypto is supposed to be built on Crypto is built on should be the most transparent industry and technology in the history of man, right? This is

That's the whole That's a huge part of the value proposition. And yet we are so significantly worse than at least public companies in the United States. We should you know, not to be too critical, but we should be embarrassed about this. This is an embarrassing state of affairs for the industry. And the opportunity here is not to just match TradFis, to do it way better. Way cheaper. Like I Crypto is part of the story which is making public companies great again.

I think being a public company in the right context is a super powerful thing. The The problem is um because of actually a tech issue which is all this stuff happens in an off-chain way. It's kind the combination of AI plus being on-chain is going to make all this stuff super easy. It should be trivially easy to get all of this information. Um you just have to have the right tech set up to do it and that's what crypto is. So, this is part of a long journey to get there, but I think, you know, we've been talking a lot about the rubber meeting the road and some of these ideological debates getting settled. The market's going to settle all these these debates.

And this is a part of crypto growing up. And people just need to realize we're not going to It's like what Balaji used to say, you know, post-COVID. We're not going back. And that's what We're not going back. We're not going back to these shitty pump and dump, you know, bad behavior, everything's behind closed doors. It was bad behavior, guys. It was bad And I understand why there were lots of There were some just bad actors, but there were lots of really good actors and good people that had poor incentives. That's all changing. We have to realize that it's changing. Meet the new world cuz the new world's exciting.

The water's warm. And there's there's a There's a bright future here, right? I I would just also so encourage everyone. We do not need to reinvent the wheel on all of this. Like literally, I I think you could almost not touch in many like even some of these buyback discussions in crypto are hilarious. It's just Guys, this is like settled literature here. We We really We don't need to debate this that much. The The framework exists. It's just does it apply to crypto like apply to crypto companies? And I I would say that we're not reinventing the wheel. What we do have is a tech stack which should make a lot of this these settled ideas and discussions easier. And we should be focusing on making it better as opposed to saying, "We don't need this." Yes, we do. We need it.

We need it. >> [laughter] >> What's kind of interesting to think about is like, you know, think about us back in like 2017 looking at all these coins being like, "Oh, this is sick." and doing our own research, reading the white papers et cetera. If you think about where we're at now, like not just institutional buyers, but like dudes like us who are maybe like, you know, 10 years younger now, >> [laughter] >> um they they will be like looking at these documents cuz they're like kind of TradFi bros, I guess, and they're in finance and they're wanting to not just learn about the tech, but actually learn about the asset itself and research the asset. Like I think that's really cool to think about like in this next cycle, onboarding new people in finance that are actually like kind of younger

people, not just learning about the tech, but now also learning about the frameworks and the assets and how they work and why they work in certain ways. And I could see that a new wave of investors actually like getting started in this in this next cycle that comes up through using these frameworks. So, I think that's really exciting to think about. Here's Let me just paint a picture for what this could look like in the future, right? Cuz part of the reason people don't like doing this stuff now is because it's such a pain in the ass. The average cost for a public company is like $2 million just to do audited financials, reports, and all that kind of stuff. It's just a huge pain in the ass. No one likes doing it.

In this world of where you have a combination of LLM's and live data on public chains. Think about what you could do. There's a super simple Claude hookup where I'm not It shouldn't take very much effort. It should take no effort, actually, to just who are the officers of the public company, what are their publicly disclosed wallets, and what is the current org structure and ownership rights look like. That should take, honestly, a couple hours to set up once, and then it should be done in the future. Then you also have data which streams live.

Live, and it's on chain. Crypto companies should get And by the way, you should be able to ask an LLM or some kind of AI chatbot any single way that you want to slice and dice this data, that should be available to you. That is so so so much better That is a step function change better than what currently exists. Pay a bunch of people to do a bunch of busy work, way too much money, and then has static dated information, and you know, I used to be an analyst. I used to have to look at I used to have to pull quarterly reports going back a couple years to get different revenue profile and check the footnotes. That should be like that. And it should be live. It shouldn't even lag. So, I don't know. All of this stuff is

We're like a year away from this. We're We're a year away where we could be so much better. So much better. >> Mike. Like, have people tried doing this before, and has it worked, has it failed, or like why is it working so well with Blockworks, you think? It I just don't think people have tried it. There's a one There are two technologies that haven't been ready for this, which is one, crypto's maturing to the point where this is possible, and then LLM's on top of it. But also, people haven't really innovated on the structure of investor relations for a long time. That's outside of disclosing all of this stuff.

You know who's leading the charge on this is Vlad Tenev, who's got a great collect I can link it in the show notes, but his He's like a you know, I'm listening to my own uh earnings release, and I'm bored. Um And if you look, Robinhood just had their Q1 earnings release, and he's modeling it right now after like a post-NBA game interview. Like, he gets asked questions, they're doing it outside. It's like, why am I only bringing sell-side analysts? I'd like some buy-side analysts here, too. Conditions have changed Basically, I think once the data becomes more live, and also in this new environment of investing, think about this proactively. Like, your quarterly earnings shouldn't be some BS you know, box-checking compliance exercise. This is a touchpoint you have

with investors. You should start the year looking, this is how many investors I have. You should end the year saying I've got four scheduled touchpoints. I'm going to convert X amount of investors per touchpoint. Think of it like a marketing campaign. You're acquiring new investors, you're acquiring new capital. These are I think that the whole discipline of how people speak to the market and and do IR is going to change and get updated. And crypto's going to be a core part of that. Um because it's using data to tell stories. That's That's how this world is going to change. Also, like, I don't know, Zev, I remember I think my first like product roll at Fidelity was building what We were trying to make the Bloomberg for crypto, just like every other data company that's been started in crypto for the last like five or 10

years. The data was so scattered all over the place with these different specialized providers. Um it was really really hard to consolidate. And we didn't, frankly, even know what the shape of these projects were really going to look like, right? And we didn't even know all the things that we should be disclosing. So, we kind of had to like go through the pain of learning what should be disclosed because it wasn't, and every you know, people got hurt because of that, to now finally like get everybody rowing in the same direction.

Um In in terms of like, I don't know, tokens had an existential moment, and everybody I think is now trying realizes like, oh we need to rally behind these things. Um And yeah, if there's only like 40 or 50 tokens now that have the stamp of approval of transparency, like that's an opportunity, right? That makes it so much easier than looking at CoinMarketCap with 2,000 tokens, and they're you have no idea what these things are. But I do know I I do I'm curious to like obviously we're in the US, right? Um this is a global market. I am curious to see like, you know, um how quickly this spreads. Uh cuz I I I assume that it's largely like, you

know, we're talking about US and maybe European investors right now. I think a huge part of this is the exchanges. Um The The thing is the US is the largest It's the biggest capital market in the world. And there's not an exchange, even the big Asian exchanges, for the most part are thinking about their entrance into the US and what that strategy looks like, and they know that this stuff is going to be necessary. So, I am American, so international listeners take that with a grain of salt, but they're in the driver's seat for what the rules are going to look like. Just because it's a global market doesn't mean there are going to be any rules. Someone needs to take the lead, and then I agree US regulatory bodies are going to be

you know, and hopefully Blockworks plays a part of that story as well. But that's I think that's what's going to end up happening here. And I for what it's worth, I know crypto's a global market. Um it's not totally global, though. I mean, there are there are bigger sections of the market than others, I would say, as well. Um But Anyway guys >> Asian exchanges are big. That's kind of what I'm wondering. >> They crushed it. And and how quickly that, you know, this this like sort of transparency >> They're all moving They're all trying to move into the US. Yeah. It's probably a pretty good time to be an Asian exchange. Like DeFi's going through a crisis of confidence at the moment. You know, they have such great businesses, uh so many users.

Yeah, and the US wants you know, they want to welcome this industry. Probably a good time to be an Asian exchange. All right, guys. Uh this is I think all the time we have here. We got to hop, but this was a fun one. Dammit. I know. We're going to apply this same standard of transparency to Miles's bachelor party over the weekend. >> [laughter] >> God, no. What do I do? Yeah. Getting a zero out of 40. Miles, you could run for office one day, man. Oh, yeah, exactly. Let's keep those cameras away, boys.

>> [laughter] >> Love it. Love it. Well, we'll see you. Hopefully I'll be feeling in, you know, fully recovered, or at least 75% recovered by next Wednesday. We'll see. >> [laughter] >> Uh All right, guys. Have a fun time. See you, guys. Enjoy the party, boys. Thank you.