Transcript+
It all comes. Down to computers communicating the information superhighway can be a confusing mix of on ramps and off ramps. Bitcoin is worthless artificial gold. Is it still rat poison? Probably rat poison squared. We need to get into the world of OK, this is actually foundational technology. What the Internet of Money does is it creates a single network which can do a microtransaction to a giga transaction the Internet is going to. Be one of the major forces for reducing the role of gun. The one thing that's missing that that will soon be developed is a reliable E cash. All righty, gentlemen. Welcome back to another episode, Final SETTLEMENT. Today is Monday, April 6th, 11:10 AM Eastern Standard Time. Joined as always by Liam and Michael. Michael's in an elevator or somewhere? Yeah, I'm a little jealous. I'm in a new place, new studio station, better Internet. Not an equinox anymore. The equinox era is over. Thank God. Michael, where are you? Well, it's an undisclosed location, but I will say that, you know, when you do a pod a week or multiple pods a week, you run a business, you have family on the move. So I don't think it's unsurprising that somebody on this pod is in a different location. That is not a home environment. So I'm very happy for you that you're in a stationary place. You got some art, nice Wi-Fi. You take these luxuries for granted until you got to make family trips and then you realize, oh shit, I would love to be back in my Home Office. Exactly, exactly. The pod. The pod does not sleep. We will not miss a week. People sounded off in the comments last week when we asked if we should just stop doing the show if we're still in the 60s. They said no, keep doing the show. So we will. We will press on. And it's a big show. Big, big topics, big list. We'll get right into it. We have a little less than an hour, but we're going to start with a few sort of security related incidents that broke last week towards the end of last week and over the weekend. This first one is related to a crypto protocol called Drift Hand up. I'm not familiar with what Drift is or what it purports to do, but it's some sort of D5 protocol and it was exploited for $280 million. So not, not, not anything to scoff at. This is a pretty, pretty big hack in terms of the the magnitude. And I'll just read this sort of quote tweet of the incident because I think it's relatively unique in the space and of sort of security incidents in the sense that it looks and feels a little bit more similar to what we saw with by bit about a year ago in terms of pretty sophisticated sort of long dated attacks in terms of sort of going steps beyond just simple social engineering. So says so let me get this straight, $200 million drift hack took six months of attending crypto conferences, meeting the team in person multiple times, depositing 1,000,000 of their own capital to build trust, sharing a GitHub like the biggest DFI exploit of the year started at a networking event with complimentary Drake. So this was some real like infiltration in terms of like trust building with the team of Drift and between the team of drift and the the eventual attackers. So Michael, maybe I'll hand it to you. This one feels like a relatively novel in in terms of the world of of hacks, but it it tracks in the sense of it's just getting more and more sophisticated in terms of how these things are are occurring. Yeah, 100%. A couple immediate thoughts in no particular order. 1 is like just the crypto markets in shambles. When you think about Defy and bridges, there's no shortage of opportunities out there for Tradfi to get involved. The problem is that they're all built on this kind of like quicksand and you never know where, you know, capital's at risk. And I've been doing, I don't want to call it soul searching, but just thinking deeply more about this whole notion of, you know, obviously, I, I, I, this is not a financial advice or investment advice because it's volatile. I've been all in Bitcoin for a very long time and never always thought of it as the best performing asset, the best money. And that's true, but the reality is most people aren't there. And so they have to think about where do they go out on the risk curve? And so they have to think about, OK, treasuries, equities, private credit. They go into D5 and I've started to realize, like maybe treasuries aren't the worst move in the sense of if you're in a cash environment or in a volatile environment, you want to hold cash, you have the sovereign backing. So you're getting at least your three to five 6%, whatever it is, think about like that delta risk adjusted versus like losing all your funds here, right? I'm not saying to go to treasuries. I'm just trying to explain like from the average investor, they're in a real pickle because there's risk everywhere. And so D5 had this promise of higher yield, etcetera, etcetera. And you keep having these hacks. Now the other side of this, independent of like the philosophy on investment or managing investments is the notion of, I believe this was Lazarus Group from North Korea. This is one of their main. Most people think it's just pure technology. What they really are great in is social engineering and social engineering comes in and manifests in different ways. Some of it is here is infiltrating organization. We saw this at vibe it. We saw this here or others are when you think about like the Ledger emails that are going out or letters that are going out or the emails that go out across the board. If anybody here is listening, I'm sure you've had different crypto or Bitcoin exchange accounts and now you get these notes to like go and do XY or Z. And so this is only going to continue to pick up the the last 1A1B thing to call out is this happens across the hardest core like bitcoiners. This came out about a week, no, about a month ago at this point, where across Telegram and other small group chats, there were individuals sharing the Zoom links, getting people to jump on calls. And then it's not apparent right off the bat, but later on you find out there's malicious code on your computer able to extract seeds if you have anything connected to there. The last thing to call out is really that this will only continue as the amount of capital aggregates into these digital assets. And this really is the the long game, I think in a large, larger central honeypot. I don't want to say Coinbase because it's the biggest and it's scary if that happened. But I always anchor back to the larger the honeypot or the more successful Coinbase is, the more successful they are to fail or be infiltrated. Because think about if you have a honeypot today that is 500 billion and it's going to be 1.5 trillion, will the ROI on infiltrating and playing that game for three years, five years is there? And so part of this infiltration was they like met met them. I think it had to do with like wash trading. They were spoofing a like coin they created and then they wash traded it to get a certain amount of liquidity to use for like a back end for a protocol or for for a defy kind of bridge. And then they're obviously were working with them on some other integration. And then between that and some other things, they were able to get one of the admin keys in a 2O5. They switched the like, I think it was maybe a three or four O 5. They switched it down to two O 5. They got one of the keys, but the main point in all of that is less around the mechanics. It's more of that you can play the long game when the amount of assets able to be captured is so great. And there's no reversible actions where you can't do that at Fidelity or Morgan Stanley because there's nothing to steal. It's, it's, it's all in the computer. So yeah, those are just some initial thoughts on like seeing this and how the, the, the crypto market's like freaking out and they, they keep asking or they keep thinking about they, they want better solutions. And it's like, well, you keep, you want better solutions, but you're building on this like false premise of these other crypto currencies. And then you're ultimately leaving yourself vulnerable because they don't have the security profile that Bitcoin does. Yeah, lots to impact there. I mean, it's, I'm glad you called out like the sort of first layer of all these things is digital bearer assets in general, the attack surface and sort of the mechanics at play are just very different than other assets. And then sort of the second layer on top of that is with stuff like this drift protocol, it's like layering on top of those sort of foundational issues with the the assets themselves. You're layering on all this sort of smart contract risk where things could be exploited, socially engineered, etcetera. Another story from just last week if sort of the the drift and buy bit thing. Think of it as kind of like AB to B attack. There's still lots of like B to C attacks in terms of just wrench attacks, people going up after individual people with crypto holdings. So this was a a story in the SF Chronicle from last week. A violent crime ring appears to have hacked DoorDash and other app data to target wealthy crypto holders in the Bay Area. In LA, armed drivers posing as delivery drivers arrived at the victim doorsteps carrying an item the victim had just ordered. And then somebody quote, tweeting this, attackers use data leaks in their targets. We can reuse e-mail password combos. Then they logged into apps like DoorDash and new breeds to identify home, home addresses, ordering habits and more to set up real world attacks. Your digital security is extremely important to protecting your in the real world. So we, we've talked about this as well where it's like you can't assume really any privacy in the digital realm at this point. You should be assuming you should be working from the standpoint that all your information's out there, whether you hold Bitcoin or not, your address can be easily sleuthed as evidence here just by you ordering DoorDash or Uber Eats at various times and that getting hacked, your authentication there getting leaked or infiltrated. And so, you know, not only do you have to worry about sort of entities being targeted in these sort of, you know, 6 month long duration types type infiltrations, but it's also just your data as an individual that can be attacked and sleuths and then you can be targeted individually. So there's sort of multiple vectors to be thinking about here, whether you're managing assets in self custody or you're just holding it on an exchange or some other third party. Yeah, there's a real problem here that just hit me with, I mean, one that's interesting is we've obviously been talking about a lot of this. Sometimes there's pattern recognition and instincts and you can't fully articulate them at the time. So anybody listening and and you guys know, like I've been referencing that with these, the proliferation of AI tools, it's going to make it so easy to triangulate on the balances. But now you can actually just pinpoint exactly how it would happen, right? Because if you have these leaks from third party apps, whether it's your DoorDash, whatever you have the Ledger leaks, you have these other exchanges that are giving up the data. And if you load that data into Claude or open AI like it to ask you to find you what you need, it's probably not going to do that. It just doesn't act in a malicious way. But you can now download these open source models. You can retrain them. You can ingest the data or input the data and it will give you back what you're looking for. Like this isn't some far fetched North Korean thing. This is something that anybody can do on a, on a local MacBook. And so that point being is you have this problem where full stop, like I would anybody that has an able mind would say self custody in any respect is better than an ETF. But the problem is any form of self custody. But the problem is that once this starts happening and it's becoming whether it's increasing in frequency or increasing in the the perception of frequency, normal people don't want to die for a trade or their Bitcoin. So then the logical thing for them is to go into an ETF. And we know that also has its own second and third or problems, whether it's the centralization of the asset, the reassurances of it, or just the natural problem with third party counterparty risk. And so I just think that this is naturally a big problem. I think it'll work itself out. It's obviously why we're, we heavily focus on from an investment perspective and building on ramp around this new market structure. But it's a real problem because most people still don't even they know we exist and they know this exists and they know ETFs exists. And so I think we kind of see this trend grow in self custody problems, third party custodial holes problems. And as that happens, the market will have to naturally find better solutions if they're going to want exposure to the asset. Because the other side of it's like, I don't want anything to do with this. But then you go back to the Triadfy world and then all we talk about is air pockets with private credit, you know, seizing of bonds, everything else under the sun, over inflating multiples with public equities. And so you really just as an investor in a really, it's a precarious time across the board. Yeah, that's ball side. It's going to be increasingly easy to track literally every single thing that you do in the world when you go to the grocery store, et cetera. And even if you think that you do a really nice job with packaging up all of your data in a in a neat way and making sure it's not available to everybody, you know, there are going to be increasingly but a greater number of vectors in order to find that data. I mean, just over the past week, I don't know exactly what their security looks like, but it was interesting to see that the entire Claude code base got leaked. And so even if things haven't necessarily gotten leaked by the Ledger data, etcetera, there will increasingly be different parts of just people's lives that are out there and easier to map every single thing that people do in the future. Yeah, that's a good call. I know we're going to transition, but like, we didn't even mention just a proliferation of these tools. I don't know if we're going to get to it, but like, Sam Altman just came out and asked to us explaining how, like, you know, these tools are becoming increasingly dangerous. Whether he's just, you know, talking up his book or not, the reality is now everyone has access to this. And the amount of digital bad actors and sophistication that's going to come with it, we're just not ready for in the regular world, forget about digital bearer assets. You add that there and you just have a recipe for some real pain coming forward, moving forward. Yeah. I would say scratching the surface of what's to come in terms of both of those realms. But like you mentioned, let's switch gears here a little bit. Digital assets meets banking, banking meets digital assets. It's often hard to disentangle which which way it's going. Are are banks eating crypto? Is crypto eating banking? Maybe a little bit of both, but a few headlines to to sort of walk through this first one. EDX markets files OCC application to establish Trust Bank doing delivering regulated custody and settlement infrastructure. This is on the heels of a bunch of people being awarded OCC charters. So I think EDX maybe felt a little left out And so they've applied for one to establish a Trust Bank. You know, maybe I'll hand this one to you. Anything worth noting on this one? I think it's just more of what we continue to see. There's there's a related headline of Coinbase receiving conditional approval for National Trust charter from the OCC as well. Despite everything that's and Ed access there. They're a large institutional focused exchange backed by Citadel. And I just think it's more of the same of what we continue to be seeing of, you know, more exchanges checking the boxes. So that as the bull market ends up coming back, whenever that is, there are going to be easier and easier ways for institutional allocators, compliance, risk management teams to really get comfortable with going to a variety of different spots for different digital asset exposure. And we'll just continue to drive adoption. Yeah, I think there's a few things maybe I'll rattle off and then tie them all together. There was a so the EDX news Cross River, a bank that's been friendly to the digital asset space. Just raise some capital, Coinbase, OCC, Charter and then also Schwab set to finally release their their trading, their spot Bitcoin buying, selling. So on the EDX markets. EDX is interesting. They've been interesting for a while now because when they launched, I want to say in 2223, what the market found fascinating was they were backed by Schwab, Citadel and Fidelity. They operate more like a clearing house than anything. So they're sitting in the traditional kind of like finance seat. They looked at Triadfi and saw how you had different forms of market making and there was still, it was fragmented and also still had counterparty risk based on who's net settling or who's sending and, and settling the dollars or B to the crypto. And so to Liam's point, I think it's natural that a lot of these firms know that they want to sit A in a regulated seat. When you think about becoming a bank, it gives you a lot more autonomy from the, from the, a national perspective. You don't have to go state by state to get your licensing. The other thing to call out, which I thought was really fascinating was there's been a lot of rumors. There's this is, there's nothing confirmed here. But I think the, the, the thing that has been confirmed is that Coinbase was standing up the Clarity Act bill. And I had heard months before that part of Coinbase's big push was to become effectively a bank. And I think it's a little bit different and maybe this is the role for all of these firms. But specifically for Coinbase, it was bank, a bank in the traditional sense of fractional reserving. Because when you think about the stable coins and really the amount of Bitcoin that they're holding, it opens up the ability, maybe not in this first iteration of being a Trust Company bank and being able to lend 1 to one against your stable coin or or back 1:00 to 1:00 and stable coins and BTC deposits and collateral. But over time, you naturally start to look more like a fracture in Reserve Bank as bank banking license become embedded into digital assets. I think it's something worth calling out and watching because that naturally we know there's a lot of fragility in that system already in a Fiat world, let alone in a digital bare asset world where there's no bailouts. The only other thing to call out is just time back to the the last combo there really is We sit in this interesting spot. Anybody listening thinking about building businesses, US building and investing where the multi institution value prop while it sounds niche, it is used by some of the most sophisticated participants in the market today. And we talked to some of the most sophisticated participants in the Tratify space. And why I call that out is because ultimately these large institutions, the Fidelity's, the Morgan Stanley's that manage anywhere between 5:00 to $20 trillion in client assets, their very careful and they're being very prudent about the market. What is the blue chip, what isn't and what is infrastructure and what's infrastructure that'll stand the test of time. And they have sophisticated clients that will also demand this. And so they're not necessarily looking at the Bitcoin price of 70K and saying, oh, this is all that'll need to be built or acquired or whatever the case might be for their firm. They're looking at it when the price is 350,500 thousand, where is it going? What will their sophisticated clients demand? They understand that ETF is not the end state. That is not how their traditional $100 million plus client manages their assets. And so I do think that as these things happen that we talked about whether it's a third party hacks or the individuals, these participants will naturally because they're competing against other market forces will adopt. Products and services like we talked about with multi institution, just because they're better products for sophisticated investors that are looking to retain that underline without putting it at risk. Yeah, it's, it's all related, right, In terms of what we were referencing earlier in terms of just the unique nature of these assets that I guess most people still don't really recognize. Like, you know, it's whether you you want to just say there's no bailouts in Bitcoin, but it's it's, it's more than that, right? Like it's there are no fail safes if you have a single counterparty, even if you are leveraging some form of multi sig, if you have an entity wide infiltration or compromise, then you can lose assets entirely. And we've we've talked about this in the past, but like that is a unique situation for institutional allocators or even just high net worth folks that are, you know, looking to allocate to the space. Like it's not something that they are comfortable or willing to tolerate in the sense that an, you know, an investment could go to 0 effectively because you picked the wrong custodian. Like that is not how other asset classes work and it's not palatable. And so you need to have some sort of redundancy or fault tolerance in, in terms of the architecture of how the the assets are actually custodied and, and stored. Otherwise, you're never going to get a vast majority of these unallocated pools of capital to get over the line because it's not a risk they're willing to take that, you know, they could pick the rod in custodian and have the, the allocation go to 0. Now, if they, if they got the investment thesis wrong and, and the, you know, they lost money in that sense, then that's one thing. Like you can deal with that as an allocator or investor, but to have an operational sort of failure in terms of the custody is just, it's not something that exists for other assets. And that's why it's not palatable. Yeah, and, and it's a great point, Like two other things to call out are the the truest sense. It's a meme, but it's true. It's like it's easy to buy Bitcoin. It's insanely hard to hold it long term. And that could be because of the volatility getting rugged in different respects or your third party just putting you in different assets. And so why bring that up is because I was listening to the head of Schwab's digital asset research team. And he, to his credit, was right about the Bitcoin thesis. Where it plays today is not necessarily risk off, but has the properties of that and and the hedge against the basement. But the the second-half and I didn't fully listen to it, but they started to go into how do you like breakdown relative value in token world, right as you compare it to equities. And I just can't help but think that there's a big component of well, so you get the infrastructure, right. They still don't necessarily have that. But then you're still putting your sophisticated clients into this like slew of products because they're looking at you. That's your, that's your, that's your value as a firm is what are you putting in front of and how are you representing it? And so you not only do that, so you're delegitimizing yourself because we understand and you don't have to take our word for it. You can go look at the volume and you can look at the amount of traction that these tokens have there. There really isn't any there outside of speculation. And then to Brian's point that he brings up when he joined Coinbase for that roughly a year is like, you're just pushing all these, you know, assets, but it's also increasing your risk surface area. So you have this just whole jumbled mess. And it'll work in the short term, but it's completely against like if you want to build a long term generational businesses, you have to be very conserved and prudent. And that's across the board. That's with the underline all the way to how do you message and articulate and talk about how do you manage the the volatility? And then to Brian's point, like people may come in at 1%, point zero, 1%, but if this isn't solved, they'll just de risk or they'll take chips off the table or rebalance. When in reality they should be pressing their winners. But there's no solution for them to do that without not going to bed at night, not being able to sleep at night because they're worried that they went into a third party that lost all the assets. How do they go back to their borders, their wife and say I got fired because I picked the wrong custodian? Check out earlyriders.com for all the latest in Bitcoin investment research. Now back to the show. Yeah, there's like there's the reality, the hard realities of what we're describing from an architecture perspective. But then there's also like the perception, right? Like, you know that that was something of a large learning from my days at Coinbase and sort of post is, is recognizing like there's real perception hurdles for this industry as a whole, call it crypto, digital assets, however you want to lump everything together. There's real sort of ingrained perception issues with, you know, really emanating a lot from FTX and everything that happened there. But just generally like, you know, as you're describing a lot of these tokens that don't really serve a purpose, they're they're really speculative in nature. And then even on top of that, like the MicroStrategy stuff, which, you know, we've probably harped on enough, but like there's perceptions around that too. It's like, you know, Sailor is this interesting character, to put it lightly, who's creating AI slot videos to market his 11 1/2% yielding product there. It's just it's difficult for serious allocators to take this industry seriously. And, and I don't really blame them, frankly, because there hasn't been a ton of companies outside of a handful that have given them any reason to take it seriously. So I think that's also just a reality. It's sort of an uphill battle that we're going to continue to be faced with. Yeah. And on that too, it wasn't on the list, but I think it's just worth bringing up because it seems like it was talked about on that all in podcast too and elsewhere. It seems just every every week or so or every few weeks now there are going to be more and more news articles that come out about something Quantum related. And that's going to be the only negative thing is going to be about like how it's going to break Bitcoin and versus everything else. And honestly, it's above my pay grade. I can't. I'm not going to pretend that I really understand what exactly the risk is going to happen there. There are a lot of. Computer one. No one does. Yeah, exactly. Everybody acts like they do, but it's way above my pay grade. And ultimately there are going to be some folks out there and I know everything. You know, if you're in specific address types, you are much less at risk than others. Like Satoshi's coins and original, I think it's the original script types, but it's just going to keep institutional allocators out of the space, even if they think it's a 0.5% chance that this is a real thing. Because they don't necessarily have the time bandwidth to really go in, understand what the real quantum risk is and understand the nuances of it too. If it's just like 1% of their portfolio or 2% too. And I just think that that's something that a little bit of the Bitcoin community risk misses too, of just thinking generally how, what, what's the realistic timeline. And it's going to keep some folks who are individual investors out of the space, too. So I don't. Know that was just something that I was thinking about over the weekend. Yeah, we got to be careful on the pods and the quantum stuff because it's so there's so much preamble to go through it. My biggest thing would be, I don't necessarily agree with that. I would say I encourage you to listen to anybody listening the best probably 60 minutes breaking down how non issue it is in like making it a layman's term. I actually was working on like a children's book to break it down to like 12 like a 12 year old via Claude to do it. I'll share with you guys after. But is a Brandon Black recorded with Marty last week? And the the level of theory embedded into what quantum is is so insane that if you listen to that pod and you just have open eyes, like open ears, you just like what is going on? Like this is a concerted effort to fight Bitcoin. This is not something that's relevant. So I mean, it's relevant to your point. Like it is definitely relevant to institutional allocators because all they hear about it and there can be better ways to combat it and articulate it. But it's like it reminds me of crypto, right? Because crypto obviously is noise, but it still has so much capital behind it that I think the, I mean, the, the real way is all of this is price. And so why I said about the Quantum, because it ends up taking up 10 minutes and it doesn't really do much. But it's like, is the price? Because if the price runs to 350 and nothing happens with Quantum institutional allocators, like what did I, what was I worried about Quantum for, you know, And then because in parallel that, and it's the same with crypto. It's like Bitcoin runs at 3:50 and they're holding a bag of Cardano that just got delisted or the guy decided to work on something else and you're like, well, what did I do? And so the price is going to force everyone to understand like where the risk is right now. It's easy for everyone to do it because we always go back to the point that it's embedded in our psyche. We don't actually want Bitcoin to work. It's the same way we kind of want AI to work because we're humans and we can only like see within the barrier of like everything we've known. And so something that's new and foreign, like the Internet when it came out and e-commerce when it comes out, it's like, but now This is Money and you're telling people, well, this is a different form of money than anything. You know, people naturally just don't want it to work. And quantum is the latest reason for you to get into the internal meta of somebody and be like, oh, this thing isn't going to work. But there's no rooted like reality that it's anywhere close to. I mean, like what Brandon said, and I don't necessarily know if it's right or wrong, but he's like, I don't even ever think we'll see it in our lifetime because of the theory as it relates to the actual physics of being able to create a computer to actually manage the algos that are like, all that they're talking about is algorithms. They're just changing the algorithms on the amount of like qubits. I had to go down a rabbit hole like, what's a qubit? You know, like, what's a, what's a qubit, right? Like a qubit is like there's one in zero in atoms, and then a qubit is effectively like it in a like 3D form. So yeah, it can be like virtually use any side of it. But then you need all those qubits to work. So if you do like a 10,000 qubits, well, there's all this like dispersion or pushing against it. So only a fraction of those qubits actually would work in a quantum state theoretically like it's so. Funny, Yeah. Then we don't have to spend too much more time on it. But I think you're both right in the sense that I agree with everything you just laid out in terms of the engineering feats. How? How theoretically based a lot of the even the progress coming out of, you know, Google AI Labs, whatever it may be, but there is a perception issue because most people aren't going to dig into that. And there's a natural sort of incentive, particularly for people who aren't allocated to Bitcoin, right? Like if you have 0 Bitcoin exposure, you've been waiting for the thing to tell you that you were right to never buy any, right? And so this is just the latest and greatest version of that. There's been, you know, different examples of this in the past, but it's the way it's it's ways for people to rationalize never owning the asset and still not allocating to it. And that's the vast majority of people on earth that are looking for that. So it's this, it's this attractive narrative in that sense. And it's honestly his asinine of like, well, if somebody said, well, how do you know there will only be 21 million? And it's like, Oh, well, you know, let me walk, let's walk through how Bitcoin works. So it's like, let's walk through how Quantum actually works. You know, it's just like it's that's, it's very easy to say it. So anyway, then and then refuting it turns into its whole thing. If the Bitcoin price double tomorrow, would you feel good about how it's being secured right now? Most people have not really pressure tested that. And I get it. I have talked to people who have self custody for over a decade and others who've stayed on exchanges because they could never get comfortable managing their own keys. Both camps have real concerns that is why we built on ramp multi institution custody so no single company can lose it, move it or use it. Lloyd's of London insurance inheritance planning built in and a team that can walk you through the entire setup. Get started in 15 minutes. Book a free consultation at on rampbitcoin.com on ramp secured by three controlled by me. All right, enough, enough quantum, enough quantum talk. We have one more sort of tried 5 digital assets link I wanted to get to Open FX raised 94 million to scale cross-border money movement. This is on the heels of, you know, we may be in a bear market for Bitcoin and and other sort of tokens generally, but we are in a bull market for money movement payments, stable coin deals. Seems like every week there's some sort of announcement along these lines. So this is Open FX, the FX infrastructure company revolutionizing the rails powering cross-border money movement Analysis $94 million Series A funding from Excel, Atomico, Lightspeed, Faction, M13, N Zone and Pantera. Founded in 2024 by Falcon X Co founder, connects traditional banking systems with digital native infrastructure leveraging stable coins. Any thoughts on this one, either of you? I know we're doing TVPN, but we'll do this and then and then the the this. Was kind of relate. This is more related to the other things we'll we're getting to T. Yeah, I mean, I think disco has been, we've been talking about this a lot. I would encourage, I finally got a chance to listen to it. It's only 20 minutes. The Western Union CEO breaking down just how visceral or how like tangible the changes are across border and and you he's a boomer. So he's coming at it from like 50% of the way there, how he's referencing the efficiencies that are gained. The thing that the thing to highlight here is that you can start to squint and see how companies that have some level of Moat when it comes to the because the real value prop is around the liquidity pairs. And as you can get the licensing in these other markets. It's where Bridge, I think part of the acquisition of what the work they did, but similar here, similarly here that the rails now exist and there's really like 2 angles. There's one is how do you actually, it's almost like consulting, even though they don't call it that is like how do you on board a traditional firm from their dollars or their Fiat to stable coins? And how do you leverage the movement of capital And then especially in AB to CB to B to C relationship where they need to get their clients on, on boarded. But then the other side of that is the regulatory licensing globally. So then you can get those Fiat pairs off and on. And so I think we're just in the early innings of this. And I, I also think it warrants the amount of fervor investment because when you think about it like dollars are the global reserve asset as far as like denomination when you go into almost any market and maybe the net settled to gold, but people denominate their liabilities in dollars. And the point is that if you have capital flowing via dollars will that touches almost everything on the planet Earth. And and if that's the case, well, it's been an inefficient system for a very long time. And so this just adds an efficiency level. So there's no shortage of different ways. It's like the Internet, right? It's like, well, how many places the Internet touches, like they touched a lot of things that it created a lot of efficiencies and then net new companies were built. And so I think of this in the same respect and it so this would tie directly to that. For sure agree. And yeah, it's, it's a pretty large series. I when you think about 94,000,000, but it's a kind of as Michael mentioned, I think it's going to be winner take most with a lot of the scale and volume that comes to cross-border FX payments. And these guys are already doing 45 billion annualized volume and have a lot of folks that are signed up with that and the market just only going to grow really big and a lot bigger and faster from here. So yeah, I think this is interesting to see and something to keep an eye on. I think that it's just really going to be, we're going to see an acceleration of US domicile companies with just business arms all across the world really go more towards having additional dollar exposure. And then other folks who are globally just doing any more business with the US as it relates to either keeping additional U.S. Treasuries just because their own local currencies are inflating faster or just more of their partners are increasingly keeping U.S. Treasuries just because, you know, it's got the most volume and movement. But I think this is going to be an interesting one to see and watch moving forward. Agreed. OK, Michael teased it. We're going to get to it. Big headline from last week, TPBNTBPN has been acquired by Open AI rumored alleged that I haven't seen an actual number on it, but people are saying 9 figs, 9 figs and above acquisition price for a new show, podcast, kind of both a lot of different ways we can take this, a lot of different angles, but bullish everything that we've been doing at on ramp and and early riders in terms of new media in the sense that, you know, I think from very early on the on ramp days, we knew podcasts were going to be a big part of sort of our marketing engine and awareness arm. And, you know, I think these guys did a particularly good job in terms of the live streaming angle. I think they're live, you know, five days a week for three hours each day. And they're really good job of, of creating basically segments and easily clippable sort of segments of the show that could then go viral on socials. And so they grew this thing pretty rapidly. I think it was they only started it in like 2024 and now they're selling it to to open AI. So crazy story, crazy deal. Michael, what do you got? Yeah. So I have a one of those hedge of like signal and noise. I think, I think, I think the, the noise just at a high level and I'm going to sound like I'm contradicted myself, but it's just kind of, I don't necessarily have a, the take I've been able to come up with is a signal noise. There's no like bullish or, or bearish anything. It's the noises. I, it took me back to my Wework days of like just acquiring everything with a stock because you can and you don't, you just have so much craziness going on. And so you have open AI out there and relative to their valuation, you know, I think the $100 million is, is really nothing. And then you start to make the case like is the value of TBPN being the autonomy? And I saw a clip about like just seeing the ads and it was like part of the appeal. And so now you have this firm that's under that roof. There's a lot of questionable things with just like open eyes philosophy or ethos. So that's kind of like the noise of like there. But then the other side of it, other side of it is obviously like anthropics been on this heater and then what is a small, you know, 9 figures compared to their, especially because it was most likely purchase in stock where in the world today distribution matters, especially in an AI world. And so there was a couple interesting things on the TBPN front is that my understanding is they had a relatively small like cohort of overarching followers, listeners downloads as relates to a larger podcast, but the amount of quality of those listeners. So the people do it and it kind of thought about with your point to the 100 media because there's a few parallels of the things. One is that we just naturally have a more sophisticated listener. It's somebody that is either been in Bitcoin a while and it's kind of tired of the number go up, you know, discourse every week. So they're really looking at what's the lens, how do we bridge tratify and then it kind of translates also our client base. But then also. Early on, realizing if people were going to learn about us, it's less so is marketing. Like I think marketing is the it's almost like sales, like everything's sales, everything's marketing. It's that in 2026, and especially in financial services, but almost any brand, you have to develop some kind of relationship with your client base because that's what a brand effectively is, is how do you make them feel? What do you stand for? Because people, especially with their money, want to know that actors are going to behave in certain ways and they're going to do certain things. And it's really hard to fake that if you're out there in front of people week after week. And so it's easier said than done because a lot of people either naturally don't think they want to get in front of the media landscape or they have to. It's a real grind, right? You got to show up week in, week in and week out. And so it's a real testament to showing where the market truly is going as far as media. And there's no shortage of interesting creative opportunities out there. And that open eye felt like they needed to to make a move here. So I just thought it was fascinating all around. And then, you know, there's the, the bullish side and then the bear side of just like, it's how a testament to how crazy the the landscape is that, you know, this firm that started less than 20 months ago sold for about $100 million. The only other like random thing to call out is I think where their success came from. And similar to All in, and it was always like the vision of what we're doing here was that people want to listen to operators also be able to talk about the industry because it you can't fake the not only the authenticity, but the relevance because if you're not in the middle of it, then you're generally you are just pontificating and people can smell that in 2026. And so I think that's the thing that like successful look more and more like is like operators naturally stepping in to share that. And I thought that's where All in is always been very compelling. And then similar with TVPN, those guys were like venture scouts at Founders Fund. They had been in the day-to-day operations in Silicon Valley and then they had a deep network there. So they were able to like 360 bring that in. Travis Kalanick was a great example of like the pod they did with them. They're able to kind of play back at the individual on what their experience was in the heyday when he was running Uber. And that's compelling media versus somebody that's just like interviewing an individual and there's different flavors for different people. But I thought that was a big part of their success as well. Yeah, I agreed. I the TBPM deal was profitable last year and 5 million in revenue and on track to hit 30 million this year. And so you know, that's a big testament to those guys and they built something that is important and successful. Obviously distribution really does matter nowadays, especially when the cost of actually creating things is increasingly going to zero and then we can see where the pocket is moving there. But on the other side of things, as Michael mentioned, I just don't think that Open AI has any real strategy in order to how this actually increases their their enterprise value. Similarly to Open Claw, both of these tools and had just massive audiences where people were getting a lot of value, but it's not necessarily clear to me how there will be any real value derived back to Open AI. They have a lot of capital that's they just need to spend and going after these ideas doesn't necessarily always have a clear way to bring back more enterprise value. At the same time, I think it's probably a testament to just the strategy overall too. I saw that their CFO after raising that 100 billion or $120 billion round was just no longer reports to the Sam Altman and she was moved down the chain of command, likely bringing up some of these ideas about like, wait, we're, we're not profitable. We're going out and spending money on these podcasts and shows and open Claw and don't necessarily have a really clear way to profitability. And so I'm just guessing that Sam Altman thinks, OK, it's fine, we'll be able to raise more capital. And we don't necessarily need to get to profitability right away. But it's just something that we've been talking about for a really long time that too much capital really does just drown out the sound fundamentals. And while distribution does matter, these guys just don't understand like real opportunity cost and money because it's just so plentifully everywhere around them. Yeah, that's well said. I mean, where my head immediately went when I saw this headline last week was like, to some extent being owned by Open AI hurts the credibility of the show in my mind. And maybe they maybe they can avoid that and stay as neutral as possible. But like a lot of what they talked about was specifically in the AI space. So now they're owned by one of the companies in the AI space and so are they going to be super critical of open AI at any point? Maybe, but maybe not. And maybe they aren't going to be as neutral and sort of credible on the topic as they historically were. Remains to be seen. Maybe they can maintain some of that. But I I think it from a even just from a perception angle, I think it's a little odd. And and Liam, I totally agree with everything you outlaid. It's like, how does this actually help Open AI in a material way? I guess it buys them some audience, but again, like if that audience is looking for information on the AI sector, are they going to keep going to this show if they know that the show is now owned by Open AI? Yeah, I, I would say to play it out, I don't necessarily agree with this, but it's just a lens to look at it through. Is that A, there's a specifically trying to go to the B to B side, right? I think that's my understanding. We're enthropic has really thrived on a revenue perspective is that you, you have to race to keep the content high quality, right, because of the, the content's qualities there and their perception of influence is minimized. Then it's the natural order for those C-Suite and people that are going to theoretically be using your product to continue to listen. And then that's how it potentially benefits them. And it's asymmetric because again, the amount of capital, the equity they're about valued at compared to what they bought it for it, It could be worth like the moon shot. But to your guys's point, like that's a pretty, you know, big if the quality stays there and all of it. So it's a it's a double edged sword. And I could see the angle where how many assets are like TVP and how many assets sit within that area of the market. I'm not saying that for it. I'm just explaining like I could see how you could justify it, but also I could see how it's very hard to. It's easier in theory versus practice. Yeah, I think that's fair. All right, moving on, this was a interesting headline on the list. I mean, Liam, I think you brought this one, but this was reported maybe a few months back that New Hampshire was working on a Bitcoin backed municipal bond. And then the latest headline from last week was that that bond cleared a hurdle with Moody's rating, BA2 rating for Moody's Investor Services, which is 2 steps below the lowest level of investment grade. I think you know the, IT says their plan here is to to sell 100 million of this taxable Bitcoin back bond through two series. No official date yet. I do find this stuff interesting in the sense that like you got to start somewhere in terms of test cases for these types of products, these types of instruments. So bit back Bitcoin back mini bonds, I think is sort of an interesting space for that to happen. So we'll see where this goes. But any any thoughts on this Liam? Yeah, I just brought it because it was similar to Coinbase's mortgage product. I don't think it's, it's far from an optimal product. It sounds like they're actually using the proceeds in order to, you know, give the collateral to Cleanspark. So I'm not, I don't necessarily think that this is going to be the end state, but it's interesting to see states out there trying to use different ways incorporating Bitcoin to actually raise capital long term. It's good to see New Hampshire's obviously very freedom oriented. So I mean, outside of that, I just thought it was worth watching. And it doesn't seem like they have an exact date when this is going to go live. But yeah, I mean, just interesting to see that they're actually valuing Bitcoin as like a strategic asset and you and understanding that this can be used as something to raise capital at lower rates than they would have otherwise. Yeah, I don't, I don't have much on this one. All right, we can move on then. Michael, you brought this one Paradigm moles prediction market entry with trading terminal market making desk Fortune reported that major calci backer. So Paradigm invested in calci I guess and is now thinking about developing their own prediction market, which is interesting. Maybe just doubling trebling down on this idea. What do you got here, Mike? Yeah. I thought the most interesting part about this is, you know, Paradigm, they're spending a little more in the AI, but in the crypto world, they are looked at as one of the more sophisticated venture shops. And I thought the notion of incubating opportunities, we've seen this with Tempo and Matt Hong moving over to Co found that. I didn't actually know this. I was listening to Charles Casca, Realist. I believe that's how you pronounce his name. That firm was incubated out of Liberty City Ventures that were him and Emil Wood were the GPS. And the main reason I'll call it out, it's less about the prediction market stuff, although they think it's a big market and it's non competitive, is more of this notion that you're just going to naturally see more of this. And so it was always embedded into what early writers was doing and that you, when you're in the day-to-day trenches building businesses in the market or investing, you naturally are going to spot these gaps. And whether it's finding the right team. You, if you're working alongside individuals already that you've worked with them, you understand their ethic, you understand their philosophy. And then you have the ability to change the economics from a fun perspective. And the trajectory of the firm at the foundational level, it is going to increasingly just make more sense, especially as like these crazy valuations. We just talked about that FX firm that raised like close to $100 million in their either their seat or Series A. So I thought that was the main concept that was interesting as I think we're just going to see more of this where firms are going to, you know, create the the companies that they end up backing in certain respects. If something happened to you tomorrow, could your family access your Bitcoin? Not, Probably not. They would figure it out with certainty. I thought about this a lot. You may feel confident managing your own keys, but are your loved ones? Billions of Bitcoin have been lost already because someone died without a plan. With On Ramp, inheritance planning is built in directly into your custody setup. Your Bitcoin stays segregated and in your control, insured through Lloyd's of London and accessible to the people you choose when they need it. Get started in 15 minutes. Book a free consultation at on rampbitcoin.com. On Ramp secured by three, controlled by me. Gotcha. Yeah, I don't have much to add there. Let's move on to AIAI corner. We've got a few links related to AI here to walk through this first one. I haven't seen this Michael, but I guess this is just a a vibe coded website where you can just track layoffs in real time. So I guess this is since January. I guess all these numbers are year to date, but 100,000 layoffs, highest since O 9. Anything else to to look through here, Michael? No, that was really it. It was basically close to 100,000 layoffs so far this year. That's what's reported. I think we're going to continue to see more of this and it kind of ties into a little bit of the block stuff where I actually haven't read through it. I don't know if you guys have, but Jack Dorsey put out, you know, kind of like open source their their model of building a business and the size. And I think last week we talked about Owens Jennings, who leads their product went on the A16Z pod and it's a good podcast for anybody that's just like operating. It was only 25 minutes, but just breaking down pretty logical things once you're in the middle of it, right? Like if you're in the middle of operating your middle of being needing to be lean for whatever reason, then these things are pretty straightforward. But as you sit on the side of these firms that are heavily bloated with headcount and bureaucracy and inefficiencies, the natural order is now you have air cover to let people go. And so I think this will only persist and it'll be interesting of the next like call it 18 months to see the level of this and what happens. Yeah, the Block blog was interesting, and Jack Dorsey and Roloff went on to, I forget what the name of it is, so HubSpot Founders podcast. But essentially Jack went and went through the history of all organizations in the past and why there needed to be chain of command in order to optimize for information flow. But now just given the fact that they're remote, they have all the systems that are capturing all the information, they can have fewer lines of command. And so Jack, right now I think they're only 5, these five people away from the bottom people in the company at any point in time and wants to get that down to. So everybody reports to him within a few years or so, which I think is honestly actually doable just given the amount of information that you can get from the machines. And it was essentially going into they're going to be different edge cases where folks can get information faster from the actual data set that's captured everything from operating in the space for 15 plus years. And so they don't need to have quite as many meetings or obviously there's some folks with taste information flow that's a little bit more specialized and maybe the machine won't necessarily have. But it was essentially putting the machine at the center of all of the data ideas for the future. And then having the human in the flow to help with idea generation, actually speaking directly to products, although a lot of that will come from financial transactions to get the signal. And then how at some point there are some folks who are just focused on cross organizational outcome. So I would check out that podcast and also read this too. Yeah. And, and two things like from an actionable or if you don't listen to like make it more contextualize is there's a notion of like the harness when you think about like open claw or some of these other tools where you're able to feed them data. And then it can like effectively harness the like, I don't call it metadata, but the other outputs that you've provided as relates to your business. And then it can go out into the world via agents and find what it needs. And they were early, I think in 24 to develop this internal harness, which I think since recently they've open source or put out on GitHub. And the point mean is so they developed this harness that is internal to them. So anybody in the organization can ask certain questions and there's natural controls within security. So that's how you can get all that information as like this brain. But then the other part of that is like, once you start thinking in that way, you start thinking about on the edges on how does AI change the consumer behavior from a like uniqueness perspective. And so one of the examples is I think it's called Money Bot, where in Cash App now we can like give you back your finances, like how you're spending, different trends, how to think about your finances. But then ultimately their vision is that every time you open up that application, there's like a unique experience tailored to you as an individual. So just sharing it because I know we could talk about a lot of these things that seem theoretical, but just breaking down how an organization would go from those like internal to external. And that's just like one small example. Yeah, super interesting blog here. Definitely recommend reading the whole thing. I think the historical context was interesting to me around just hierarchical, hierarchical structures in general and sort of how we got to this place where middle management became such a thing in in corporate America, which naturally led to bloat. And basically like, you know, to me, the signal was people saw the headline around block a few weeks ago that they laid off 40% of the company. And I think at a surface level, you can look at that and say, oh, you know, they were very bloated. This is just a reduction in headcount. But it it to me, this blog was sort of like a more formalized and detailed, like why around they, why they did that and how they're going about doing that in the sense that it's not just cutting headcount, it's really effectively replacing the function of middle management. And, you know, if you look at the various, you know, ways that people and companies are interacting with AI these days, you know, I think there's certain areas where AI is rivaling or exceeding human intelligence. And I think probably one of the clearest examples is like the middle management role, like AI can do way better than humans ever could at sort of aggregating and gaining insights from basically an entire organization's data. And what they point out in this blog, as well as like if that data happens to be like financial data, it's even more powerful in the sense of there's just better, better market signals and price signals from that kind of data. So this is super interesting. And it was good context for sort of the headline from a few weeks ago. 100% one thing to call out and I have to jump, but is the Macroscope deal and the main reason to call it out is because I've been thinking about this. He's been, he's been pretty on impression with a lot of his calls, but it's something I've been thinking about and everyone we, we talk about it. So it's nothing new about AI and Bitcoin, but I've been thinking that ultimately that convergence is going to happen much faster. Like I don't necessarily know if it's not, it could be 6 months from now, but or it could be, you know, 16 months from now. But it, it feels like the time's compressing. And as AI continues to proliferate all the different utilization and the tooling, the synergy between Bitcoin and AI is going to just hit like. Big agree. All right, Liam, you got anything else? I think that's it. Thanks guys. All right, later. See you next week. Thanks for listening to this week's episode of the show. 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