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 roller gun. The one thing that's missing that will soon be developed is a reliable E cash. Everybody, thanks for tuning into another episode of Final Settlement. We had a awesome podcast this week covering everything related to the Thailand banking crisis, bit chat and Nepal's usage, a lot of the adoption across global markets, the NASDAQ taking a investment in Gemini as well as we have some big travel plans. This week. We will be in Nashville, the team from On Ramp, Early Riders and some of our portfolio companies. We're going to be hosting events, private toker tournaments, poker tournaments, as well as meeting with prospective clients and investors. If you're interested in, you know, meeting us, shoot us a note or hit us on Twitter and we'd love to connect in person. Hope you enjoy the show. All righty, Welcome back to another episode of Final Settlement. Today is Monday, September 15th, 9:38 AM Eastern Time Zone. Gentlemen, how are we doing? Liam, Michael. They're bad prices ripping you guys. I haven't even looked. I mean, I guess like relative ripping, we did a lot, you know, a little touchdown in 107 and everyone was calling end of, you know, the, the bull market or whatever and we, we went back up to like 1. 60. Yeah, obviously gold, gold ripped and gold's that you know, kind of leading indicator, but also we have a big week here in Nashville. We're going to have folks from Cross, early, riders on ramp, Acropolis, other portfolio companies. So it's going to be a big week. Hopefully we will see. Some listeners in person. Yeah, big week. Let us know if you're going to be in Nashville and want to meet any other team. Talk to us, chat with us. We will be there, but they're going. To have a very high signal allocators poker game we still don't necessarily know the buying it's more than likely going to be a tournament Thursday night. So I know a lot of you guys think you're never going to need on ramp self custody till to the Max and we'll eventually be a a client. But until then, you probably want to reach out to, you know, play poker with us and and maybe during the poker game, you might actually get multi institution built and realize they the multi institution light. And so we'd love to. Have it wouldn't be the first it wouldn't be the first time Michael that someone's gotten MIC pill during a poker game. So there's there's some it's the. Same as Bitcoin pills like as as individuals start to understand, you know the value prop of Bitcoin, it's very hard to not, you know, 8 bit in the very same way, once somebody deeply understands multi institution custody, the ramifications not to have a tiny little bit of exposure is generally not not the smartest thing. Correct. Well, we've got a big list, not many deals, but a good amount of news and a list to get to. So we're going to start. Michael, I think you brought this one, but a banking crisis in Thailand, What? What's going on here? Yeah. So, you know, I've been just checking our facts. A lot of things float around on Twitter, like Amazon hiring a crypto expert. Couldn't find anywhere near that or what it meant. And I saw this is 21, so it didn't include that, but I did, you know, this is an independent source referencing, I don't really even know the total number of a banking crisis explodes across Thailand. They're referencing or leveraging citing that there was some kind of like nefarious activities with certain accounts and that they just like kind of dragnet across the board have halted seized capital from moving. But you can imagine, you know, that's a very easy out when it comes to capital flows in, in referencing, you know, any kind of Ponzi or just nefarious activity. I think we just had been brought up either on last trade or final settlement a few months ago when the Iran attacks were happening and they had leverage that they got like cyber attacked and they had to like halt payments or halt capital. And it's like, well, isn't that a very convenient way to, you know, reference like, you know, your clients can't fold money. Where I think this matters from the business side or just, you know, in general, building is obviously for better products and services that can be centrally controlled is paramount. But I think the thing that matters even more than that is ultimately the the whole outside money notion and theme, because I think what's happened over the past couple of years is with the proliferation of ETFs, digital asset treasury companies that are publicly traded among other vehicles, all of those products and services have one throat to choke ultimately. And so you effectively have an IOU. I don't think anybody debates that. And I think as we go to this world and we're in a bull market for kind of authoritarian overreach, censorship, everything that we see and we continue to see in the market. We'll talk about Nepal after this point being is you may want actually money that doesn't have a single counterpart or single point of failure. And this is a very easy case of that. Even when banks start, you know, holding BTC in the US, we'll naturally start seeing we're talking with them, you know, leverage multi institution custody. So I think I thought that was just like a really good kind of thing we need to not forget in the West because we get lulled asleep and the reality is there's no bailouts in Bitcoin. So if your counterparty is insolvent, even their Bitcoin doesn't have to be missing. But if there are other Fiat obligations, right? Like I think maybe that's a core theme that I know you guys will like to touch on is it's like the version of crypto but accelerated. So all these companies are generally insolvent. I think it came out this past week, the amount of real unrealized losses banks have on their books. Well, what happens if they have a hole there? There's a bank run and now they have $50 billion in in BTC. Whose BTC is that? And it may not be yours. Yeah. But I mean, what stood out to me of this is this last line here. As a result, honest people have been caught in a net net for criminals. And I think to me that's like that's kind of the inevitable end state of all of this. When you have dependencies for your money, for your net worth, for your livelihood, even if you are not conducting criminal activity, the sort of, you know, clamp down from an authoritarian regime or even just a regime that perceives some, you know, scam network proliferating. So they need to, you know, shut down the Internet or shut down access to accounts. You will not be spared for not being, you know, quote, UN quote, a criminal like as these, all these forms of dependencies sort of metastasize you, you will always have some basically way to be captured in a system like this. And so it speaks to more broadly just, you know, forms of, of money in forms of wealth that can be preserved outside of of systems like this without dependencies. And so that was the kind of the big take away for me is this last line there. It's like, you know, even if you're doing everything right like that doesn't mean that you know your money in the bank's OK if something like this is to occur. Yeah, there's they're always just going to manufacture emergencies or use emergency powers to justify actions like this in any scenario in which they aren't actually in solvent and or do not want to give all clients their funds back at a single point in time. Yep. Yeah. There's actually one thing to call out here that I think gets missed is this is where maybe it sounds it'll pick up seam over time, but the whole notion of proof of reserves being a fallacy. And this is another example of that. Because just because the bank or exchange shows you the assets, the underlying sit there. Well, their obligations specifically at a bank or something like this doesn't necessarily mean they can have to let you withdraw or make you you be made whole. And it's a very subtle, unique thing. I think it actually came out this last week for anybody that's not paying attention Swan. I guess I shouldn't misspeak. I think swan is is either exposed or actually starting to be sued from previous users of prime trust that got caught holding the bag of the like 21 million plus that was left, you know, known secret in the space. A bunch of exchanges that leverage prime trust had taken their clients assets before off and some were left on what being is in bankruptcy recorded received this with Genesis FTX Prime trust. You get left holding a bag, pennies on the dollar or ultimately holding nothing for years hoping to get your BTC or you know dollars out with multi institution. It's very unique at least in its current iteration because the individual client is not only the title owner but the key agents are work on behalf of the individual client. So God forbid exchange goes down, it goes into receivership. It does not prevent any of the assets from being moved. They move in independence, not on the request to the others. And I think it's very subtle, but very important as we start going to a world where, again, you don't want to be exposed to somebody else's, you know, whether it's technological failures or just asset management, risk, risk management. Yeah. And and if you are going to be exposed like distributing that exposure to multiple parties potentially who are in different jurisdictions is a massive benefit and advantage. This also directly ties into as banks start to get into the space too and they're sub custodians because that's essentially how Swan works. Prime Trust, their sub custodian where clients actually hold assets. It appears that clients of Swan that withdrew assets from the platform and the final few, I think 90 days or so before Prime Trust was, you know, known to be insolvent or they're trying to claw back those types of assets, which are are going to be difficult. But we'll see how everything plays out. But for banks that sub custody Bitcoin to other large places to it, even if you take the Bitcoin yourself off of these types of platforms, it doesn't mean that you're going to be not liable at all or or at least dragged into this lawsuit with other sub custodians too. Yeah. Somewhat related story that we alluded to earlier, what's going on in Nepal? I mean, this is a, this is a wild story. I think it, you know, it first crossed my radar because there was a headline around bit chat, Jack Dorsey's Bluetooth messaging app. There was basically a spike in downloads there as the prior government, the now former government in Nepal had basically, you know, tried to curb social media usage and then, you know, the Internet itself. And so people were turning to freedom tools, open source tools such as bit chat to communicate and coordinate. They were also using Discord. And they ended up, you know, this was, you know, multiple days of unrest and riots and, you know, burning down of parliament buildings and people in the government. And they ultimately the sort of Gen. Z protesters, the youth of the country overthrew the government and picked a new Prime Minister via a Discord vote, which is just like such a microcosm of the world we live in today. And we're really where we're headed in terms of just the usage of the Internet and sort of, you know, youth collaboration via these these tools and these networks. And it's just a pretty remarkable story of, you know, if you think about the sort of the long history of these types of regimes, they're, you know, the, the reason that they persist and continue to occur is because it's often difficult for the, you know, whoever is being oppressed to actually revolt and do anything about it. And I think what we're beginning to see is intelligent leveraging of these tools in order to collaborate and coordinate in a way that previously just wasn't possible. And so it now gives, you know, shifts the balance of power a little bit towards the individual, towards the populace if they are able to coordinate in these ways. As we know, you can coordinate with outside money like Bitcoin, but increasingly, tools like Bit Chat Noster will enable people to communicate, message each other and coordinate in these types of ways. So any thoughts on this? Yeah, Brian loves taking the links. I I pull up and then just going off and all. It's great to be. Fair I I shared this with you last week before you shared it with me. You know, you shared it on a podcast. I obviously saw it as well, but I had anyway, it was a great, great recap. I think, I think the main reason I pulled this up was there was a few, there's a few angle angles 1 is, you know, Jack, Jack Dorsey being behind bit chat is very interesting because, you know, call it 10 plus years ago, there was the Arab Spring in Cyprus and Twitter was heavily used there. And you kind of Fast forward close to, you know, 10 to 15 years and you see, you know, his new tool being implemented, you know, across the world again to overthrow effectively manage governance. The Discord thing was also interesting from, from social media. I think where this becomes fascinating is really we already see the kind of writing on the wall when it comes to TikTok, the past few years, the Internet, what China's done. You can feel the like grapple of censorship, authoritarian overreach, communication, free speech. Europe is very heavily here going that way. And to Brian's point, these tools will naturally start to proliferate. Where I think makes it really unique is the ability to in this ties back to crypto versus Bitcoin that you're going to naturally need some kind of unit of account that's globally recognized that everybody wants to make it all work together. I don't necessarily know exactly how other than it's going to be the incentive model for the upload and download like with nostril and relays versus applications. This kind of like I stumbled or had this thought like years ago with this notion of how a torrenting system is completely different in a Bitcoin world. Because ultimately in a, in a traditional Fiat world where you have a throat to choke, like, you know, Visa, MasterCard or even banks, you can't really transmit value. So there's always kind of there's a market that will be checked off, especially if you just go to the the worst example of anything that is would be censored. Any kind of document, any kind of video in, in Torrentine. If you were going to be the the cedar, you're naturally exposing the the article. But if it was banned, you're going to be very hesitant to do it. Point being as a market would naturally be created, especially if you're trying to pay over Visa or whatever, like Stripe will cut you off. They saw you getting traction, but with BTC, there's always a market to be formed on a bit ask on anything on the planet earth, because somebody will always be interested. It's like mining. Somebody's always going to be interested in taking and integrating or putting that transaction block. So where that comes back to all this is like all these different primitives that couldn't be couldn't exist or once it got to a certain scale would have been choked off because of you need natural flow of capital for a number of reasons where that's the last piece with us. In my understanding, bit chat has like a implementation of E cash among maybe Lightning. I think it's going to be fascinating to see like encryption, open source tools, and then also the incentive model to like put a unit of account that everyone globally is going to naturally want together. And that's when shit gets kind of crazy with some of these tools. I also think the other thing that we should keep in mind is there's going to be some crazy crackdown coming down between what's happening there, people, this doesn't happen in a vacuum. It was like rumored that the guy with the Charlie Kirk deal like went on Discord and literally said everything he did. So he like the guy like got, you know, we won't go deep there. We're like got out of there, went on Discord and explained like word for what he did, which is like our little suspect. The point being is like these tools are going to naturally start to get really demonized and vilified. And I think that's kind of a positive because most people have been asleep at the wheel on all this stuff. And it's like the banking stuff, like people when the best way to build something is when you need it. And I think more and more people are going to be needing them. Yeah, it's a it's a really good point and why this is like such an interesting case study because you have effectively like both forms of tools being used here on sort of like the centralized could be throttled side of Discord and then something like bit chat emerging, which is more permissionless, more difficult to to throttle. And you saw this example where you know, both of these things are being used. But to your point, Michael, like it's it's, you know, probably to be expected that the more centralized avenues for this, this type of stuff will be throttled. And so to your point, like that could be looked at as a positive in the sense that it will catalyze future adoption of things like the chat of Noster of Bitcoin in general, because people naturally will have to migrate towards more permissionless, openless open source tools that can't be as easily throttled. Basically, and the whole impetus for this entire shutdown of social media was because they were essentially filming the sons and daughters of the top prime ministers and rulers of the Nepal government who are living these incredibly lavish lifestyles. And just showing the stark corruption between the millennials and Gen. Z type people who feel like they couldn't get ahead. Because there were those people at who are running the show that essentially we're trying to implement a Communist Party, but living incredibly lavishly while nobody else felt they could get ahead. And I don't know exactly what Nepal's monetary policy is, but if I had to guess, I would guess that they've probably had some pretty stark inflation, just like pretty much everywhere else in the world over the past 50 or so years and leaving many of the poor out of the financial system and feeling like they don't need it. And yeah, to both of your points, I think that younger generations at a whole, pretty much all across the world, they're just feeling the impacts of inflation and crackdowns on monetary policy and are really feeling the impetus more so than they've ever felt in order to necessarily build better tools, which is a really exciting time. Agreed. Anything else on that, Michael, you want to shift gears? Let's do it. All right, so Liam, you brought this one from Harvard, Harvard Business Review. Does Bitcoin belong in your balance sheet? An interesting article given what we talked about a week or two ago around Harvard endowment making a allocation to both Bitcoin and gold in their endowment portfolio. But what was the main takeaways in here, Liam? This was an incredibly well written article and they essentially had almost every single point that I would write. It was probably better written than than I could do. And they've they went through all the adoption principles from start to finish. But the take away was a little bit nonsensical to me that it's only 1 to 3% of your treasury portfolio. And I think that's essentially just because that's what's politically palatable of being able to identify like cover your ass essentially if Bitcoin is as volatile as it has been in the past. But they did a really fantastic job of understanding the entire Bitcoin thesis, showing why it's a better gold that pulled downside risks, et cetera. But the take away was only 1 to 3%. But essentially we're at a point where it's become almost mainstream to have Bitcoin as part of your financial portfolio both as a a corporate and individual at this point. And it's just another great data point to see. Well, you know who wrote? This right, it's just who is that? It's the Co founder of Spark. Oh, I did. Not know that. Yeah, I was going to. I was going to caveat that in the beginning, it doesn't really change any of it outside of spark has a shit ton of money and HBR is probably up for grabsters. So this is probably like paid sponsorship. Maybe not. It doesn't take away that it's probably well written or it is well written to Liam's point, because those guys are smart over there. They were former, you know, Christian was with David at Meta Facebook at the time for Libra. He actually had a really good threat of breaking down a lot of the the whatever it's called tempo stuff. But anyway, I think it's the core point still stands. Harvard, no name breaking it down to the zeitgeist to your point, political palatable, but I just wanted, I felt it'd be good to know that there's an actual like Bitcoin person that wrote this. It wasn't Harvard or anybody. Played yeah. Now that that's that's often the case with with these types of things. There was a report last week that was more of like a formal academic white paper that was talking about sanctions of risk and the the sort of place for Bitcoin in a portfolio to hedge against hedge against seizure risk. And it was written by a guy who I believe went to Harvard. And so it was being sort of portrayed as Harvard economist says XYZ about Bitcoin. But that guy, similar to the scenario is someone who's been around Bitcoin for many years. And so it wasn't all too surprising to see takes from that individual. But yeah, just just something to be wary of when you when you see stuff like this. Yeah, the other thing that's worth I know we have a limited time so we can go on, but they're just worth calling out is like he may actually be like 2 to 3%. That's the the careful part about everyone showing anything in the space, including us is kind of like take you with a grain of salt and then understand what is incentivizing the discourse. And it doesn't make it wrong or right. It just makes it, you know, biased and and people naturally talk their book and then ultimately just discern if it's the right thing for you. Because the reason why I bring this up is because, you know, MIT, I think, you know, he's definitely an Ivy League guy was at Libra believed in what you know, Libra was doing with the basket currencies. Point being is like you may look at Bitcoin of software for movement of like data and money, and maybe it's like there's somehow the goal will be, you know, the reserve currency or treasuries. Like I don't necessarily wouldn't put it past. That. Like the, the, I know it sounds crazy, but the connection from movement of capital in a more seamless way versus like storing all the world's value, it's not just like intuitive for everyone that those two things can be simultaneous. Yeah. No, it's a complaint pivot to let's talk a little Gemini. Liam, I think you you brought these links, but Gemini going public. Winklevoss founded crypto exchange NASDAQ, made an investment of 50 million and I believe Gemini popped a bit on its debut. I'm not sure where it is today, but Liam, what are your thoughts here? Yeah, I mean, just shows one all public companies are at least virtue signaling that they're doing something in the digital asset space just because it's the hot industry, just like with AI. Interesting that NASDAQ invested $50 million into them and there are some synergies in terms of other of their clients just wanting to sub custody with Gemini's custodial services. And then just another interesting data point despite their losses financially that we've discussed a few weeks ago at Gemini, I think that they upped their IPO price and then ended the day up 15%. So it's just another positive data point that the industry as a whole, like there is significant institutional demand for it and everybody across the space is looking to at least get into it a little bit. Many people will make make mistakes early on, but right now the the space is being looked at fairly closely I would say. Yeah, it's a good point. I would say we're a little early in the virtue signaling aspect. I think we're still tempered in the sense of like nobody what was the back in 17 when they were putting like the iced tea? Yeah, but but you're. So I think and I mainly say that because we're to share where we're at in the cycle and also $50 million is pretty material. I think it goes to, you know, your point of sub custody and then also in general, something I'll touch on for wrapping on this point is just trading in a round trip. You know, trading on blockchain sounds funny. I think, you know, the, the broader theme is the merging of digital assets and Tradfi. We saw the Franklin Templeton and Binance news. We've seen this, there's a lot of others. And I think to your point, the balance sheet and their revenue is kind of like immaterial because when you think about like Franklin Templeton as example, 1.6 trillion, like they need, they need a viewpoint, they need to express in a certain way and they need a team and they need it fast, right? Because it's all just like flipped on a dime. And so NASDAQ is another example. They're also in New York and Gemini be New York. They probably have had a relationship for a while. Point being is the revenue is immaterial. I always joke because there's a lot of companies like you can fall forward in this industry by just staying alive, right? You know, you need the team. You need kind of like the tribal knology wallet architecture. The one that I'll say is not necessarily be interesting to say play out is a lot of the collaborative custody providers. And the reason why is because it's always been a common theme that oh, like, well, a bank will buy them or a Tragify firm will buy them. But I don't think unless they're just completely unsophisticated when going to Dillon, going through diligence like, well, what am I buying here? And then you have to realize, well, I'm inheriting, you know, 5010 thousand, 3000, whatever the number of clients that were holding these plastic devices that are spread all over wherever they have to figure out how do you manage it? You have client services, there's high operational OpEx and CapEx. And then it almost can be a liability if it's in the right way, if you have billions of dollars or a client and the assets are lost. And so there's going to be certain business models like I think that financial institutions will shy very far away from. But then there's going to be a lot of others to leave point that may not necessarily have the revenue that you would expect in an acquisition, but it's not really going to matter when you're a multi, you know, trillion dollar asset manager needing to get into the space. Yeah, the learnings alone are going to pay for itself no matter what the actual financials of this firm are assuming that NASDAQ does want to get deeper into the industry and they're going to try all their crazy things with tokenizing stocks, etcetera, especially based on what Sachs and everybody else who is high up in the administration is saying at this point. So yeah, it's more so about just trying to get in early and learn more than anything else. Brian, do you have anything here? Because I do have something kind of spicy to share. No, you can go for it. The only thing I was going to say is this is one way that the try to find comments are getting involved. And then the other headline that we have was capital groups that on Bitcoin treasuries, which is another Ave. of of you know, getting involved in the space. But go ahead. Hi everyone, I hope you're enjoying the podcast. Wanted to do a quick shout out for On Ramp in one of the core new products we released Guardian Core. Ultimately, clients love that honor has distributed custody across multiple institutions access the best in class financial services. They don't have to worry about, you know, going deep into you know their their secret cave or wherever they're holding, you know, their hardware device or C phrase. If they want to sell a little Bitcoin, take a loan against it. But on top of that, clients have increasingly been asking for additional permissions. And so not only do we have a deep fake protection using liveliness checks to make sure that the individual is, you know, an actual human withdrawal delays to create real buffers and controls, something that really exists in the traditional financial system but doesn't exist in Bitcoin ultimately, which leads to bad actors believing they can attack individuals for their Bitcoin. Different types of freezes, obviously the Lloyds of London insurance and then also additional permissions for our private clients. If you want to learn more about that, you can find it on our website or you can reach out and book a consultation. Lastly, we will be in national this week hosting multiple meetings and events. If you'd like to reach out, meet the team, please shoot us a note. All right, hope you have a rest. Good rest of the show. Good week and we have a big guest this Thursday along with some big announcements so we look to look forward to hearing from you at some point. Yeah. So back so we were talking about Gemini and stock like you know, tokenizing stocks and and block chains for stocks. And I think if you take a step back, there's a whole, I forget the term, but it has to do with a register that has been the the fragmentation in private markets when it comes to and there's a lot of people that have been working on this for a very long time, seed invest in circle. That was their acquisition. It was basically trading around private equities in the issuers. And I do think that there's going to be some interesting fundamental value, not necessarily need a blockchain, but a standardization that can be created because it can allow. I think that's one of the markets that have been a little bit not only fragmented, but just kind of, you know, haven't been lubricating, for lack of better words in the right way to get flow. But what what hit what hit me today because there was another thing on the list and will knock it out as part of this is it was Solana and you know, or Galaxy issuing their their Class A common stock on the salon of watching. And I just like stumbled into hearing Alex Thorne talk about why they pick Solana versus Ethereum and these others. And, and he was referencing about the, the validators. And I guess it just broke down about like, if you have to issue on a different layer, like outside of the, the, the L1, again, I'm going a little bit out of my depth, but it's just a point of like, how do you actually roll up and then you have these different validators and you can't feel confident that it would do that. And then from a securities perspective, it would cause a big problem. And that's where Solana was able to to make it work. Why I'm bringing this up was like, I did think it was interesting. If this is the world where it goes from trading and really the one that like at some point it's going to exist. I don't even know if we'd invest in it because it could be, you know, 10 years. But imagine how fascinating it would be for you, me, anybody to invest in a company and it generates its cash flows in BTC and it programmatically on a monthly, daily, whatever dividend basis gets like passed back to the individual. Like that's kind of like very interesting. And you could see it going that direction over long enough time horizon. And I think like a lot of these, I don't even know how the validators would ultimately like work, but you know, whether it's side chains or, you know, lightning that if any of this stuff has validity, it'll ultimately go to the the most liquid and kind of viable technology. And yeah, I guess the last part of why I was or maybe I'll pause there. Is there any comments that I just thought of that was like very interesting because at the notion of like the crypto stuff is always fascinating to me because there's so many intellectual people working on it. And it's like they got halfway to the problem and they didn't realize like these things are inefficient and they won't like actually scale to get any real deal. But they have good ideas that will ultimately port it be ported over to Bitcoin. Yeah, I mean, I, I thought it was interesting. I, I listened to Bourne's clip where he was articulating why they chose Solana. I did think it was interesting because it's sort of to a certain extent like confirmed a lot of my current assumptions around like why people will choose not to build on Ethereum because of the sort of embedded tech debt and complexity that exists there in terms of all the L2's that they've sort of pushed activity towards. And I think part of what you were trying to describe there in terms of why they pick Solana is that there's just less dependencies if you are issuing, you know, a real world asset on actually in a layer 1. And so because the layer 1 of Ethereum is generally fairly slow and expensive relative to a Solana, the thinking was that, OK, you would do it on the L twos like a base or an arbitrum or something like that. But then that that creates complications in terms of like if something were to go wrong, then basically where's the source of truth has to come back to the L1 and that and that just creates some various complications. And so I think that is part of why they chose Solana. But to me, it's just like confirmatory of like people don't really care about decentralization when it comes to this stuff. People don't care about, you know, the fact that Solana has been, you know, down multiple times over the past several years and has to be like, you know, the chain has to be restarted basically by, by a foundation or a team. And so I think it's, it's very just confirmatory to me of like, yeah, these things are just going to be built on the cheapest, fastest centralized thing and no one's going to care about, you know, marginal decentralization benefits on a, on an Ethereum L2 or something like that. Yeah. And and to your point, I think that's all right. But taking a step back like there is significant there. They do work on very interesting things in the broader crypto space including just breaking, building out new technologies. But I always think that they get distracted by trying to attach a token to it, and then they get more distracted about bringing the token revenue or distributing it to different channels and trying to pump the token in order to bring more employees there. And then the token grows too fast and then it dumps hard. And then all the people leave and go and work on a different project. And many people haven't really been interested in in the broader crypto space and working on Bitcoin because the transaction volume hasn't been there yet. But it's, it's starting to be so large that people are going to come back to it hopefully in my view. And I I do think that working on a project like that of distributing dividends via Bitcoin and taking a small fee is significantly more interesting than many of the other projects that the space is working on. Yeah. And I think like, you know, if anybody's curious, because I would be like, or maybe not, I mean, you find it intellectually interesting, like we talked about this stuff because I don't really know how many, like I don't even know for a Bitcoin podcast, but how many people would talk about it is what I found is if you're going to play at the highest levels and you're going to want to work with these individuals and show them how Bitcoin can be the thing, you have to actually understand what trade-offs they're making and why they're making them and like articulate to them. And then they kind of can sit back if they're clear headed, pragmatic and self aware and say, oh, that makes sense. Or they can look back in retrospect. And I think it doesn't really even matter if it's on today. If it would be on, you know, however it'd be managed on Lightning or Salon or whatever, because the main idea is nobody's using any of this stuff. It's all gimmicks. It's very interesting because like, you know, it's been rumored galaxies by a bunch of Solana. They just issued the thing. Like it's very reflexive kind of old Fiat way to do it. But the main point is as if the direction it goes, and let me convince it does, because there's still an underlying custodian of the title of the equity or whatever that ultimately is. The is the owner where it sits and you still have to manage like the underlying to where that that ultimately lies the transfer. But the point being is that if it does, if it does, it'll naturally be the most efficient distributed protocol that will win, which will be Bitcoin. And then, you know, lightning as we're seeing built out, because there's just so many other use cases and people are using that as money. And where this kind of maybe ties in to wrap up the crypto stuff is the hyper liquid. I thought it would be interesting just to to share. So native markets. I don't even know who native markets is. I guess it's like a new team. They're like he was the guy was using hyper liquid before, but we're there's two fascinating things that I thought stood out. So we talked talked about for hyper liquid, like top ten volume, I think #1 like descent quote, decentralizing top ten volume globally in exchanges. They issued this kind of like public RFP. They're in the two fascinating things with one is all the way up to PayPal and Venmo. We're basically like boot kissing, boot licking, trying to get like the, the dollar, like, you know, issue there. And the core idea for anybody that's not familiar with this is hyper liquid, you know, decentralized exchange. They have like 5 point or $6 billion of USDC sitting on there that they're not monetizing USD CS monetizing. And they, you know, wanted to get a request for if they were going to issue it on the hyper liquid or native hyper liquid token. And then what would be the incentives or the economics that would get kicked back to hyper liquid and the people that hold the token? Point being is, well, the, the, the crypto or Fiat side was, it turns out that it was like a marketing stunt or directional marketing stunt. That native was the people that went it the whole time when they like went to go talk to all these like, you know, node validators or whatever. They were all getting pitched by all these firms and they weren't taking the pitches because there was already going to native. So it's like just proves, you know, the centralization theater and all that. The thing that I thought was the most fascinating with this is that this is going to happen to all stable points because all the block chains, even if you don't have to do it, they can basically go back to the stable coin issuer and say, look, we're going to do this unless you share more of your revenue with us. And it ultimately means there's a commoditization of stable coins. And not only commoditization, but like any margin compression that will ultimately happen. So that's one. The other one was realizing, will that also happen when you start to see interest rates lower and think about like already the level of kind of craziness we're seeing and just like this lack of signal and focus in this industry, specifically crypto, but also that. Well, what happens when interest rates go lower in the amount of, you know, printing of like these tokens, USDC or whatever, but also people going further on the risk curve like this is how we're going to blow everything up is because there's going to be so much capital just flowing around on chain in this next cycle. That's going to get crazy. Not much to add there Lim. Do you have any thoughts on the on on hyper liquid? That was a crypto recap for the week. Anyway, listening, if you don't like it, comment and we'll never talk about hyper liquid stable points ever again. Hey guys, I hope you're enjoying the podcast. We've been going a little bit deeper into the digital asset markets and think it's important because of how it's going to ultimately relate to value accrual around Bitcoin. Quick word from Onran, I'm sure everyone's familiar. Onran provides multi institution custody and financial services. Ultimately our goal is to provide Peace of Mind for investors. We've had no shortage of inbound from different investor types from individuals all the way to institutions. The one I'm going to call out today is individuals. It's very often comes up the difference between self custody, collaborative custody, third party exchange and there's no shortage of different angles we can take in explaining multi institution custody, the level of permissions, video verifications, multiple institutions holding keys and there is no shortage of feature set. But I think one of the core things that comes up often why clients end up choosing on ramp is because of the Peace of Mind we provide them. A lot of clients just are getting increasingly uncomfortable with single counterparty risk, whether it's themselves and how they figured out their distributed custody and ultimately as the price goes up, being attack vectors for bad actors as well as potentially, you know, creating problems around inheritance. And so we just wanted to call that out because I think that's a common trend we're seeing clients come to us really so they can sleep good at night knowing that their assets are taken care of. They have access to best in class financial services like trade, Victoria Bank, Bitcoin back loans, dynasty trust planning if they'd like, as well as the ability to really safeguard those assets for multiple generations. So if you'd like to learn more, I'd encourage you to book a consultation or sign up. And our self onboarding flow is very unique and quick. Hope you enjoy the rest of the show. No, I think that was well said. All right, Liam, you brought this. I admittedly have not read this, but I'm familiar with what Versal is. But what are they talking about here? Open protocol payments. So Versal essentially AI, they do a bunch of different things, but a lot of AI cloud and they offer AP is for and they're essentially trying to create a agentic native protocol and have partnered with Coinbase for X4 O 2X4O2 formerly held for HTTP://AS the Internet native money, but that never really necessarily happened. But they've essentially created an SDK for anybody to offer agents the ability to pull from APIs to offer certain like small micro payments paper paper service and will allow for micro transactions using agents essentially to pull from all of their products and services that they offer. They partnered with Coin base. And so essentially they're going to use based on USDC, I would assume for most of these, especially for micro payments as is, but it's interoperable with any protocol. And so anybody can I use Bitcoin on lightning or whatever else, I would assume that people, you know, we live in a dollar world. So it's I'm not going to say essentially that in the world today, everybody's going to adopt Bitcoin all of a sudden. But it's really interesting to see the CEO came out and said this was essentially what I thought Bitcoin was going to be back in 2013. And you know, obviously takes 10 minutes or so for on chain transactions to settle. So it doesn't necessarily make sense for small micro payments in every scenario on the layer one. But eventually everything is this is really interesting to see and essentially how a lot of new transactions are going to work. It's interesting that they're not a Bitcoin or crypto native company coming out to do this. And it's, it's great to see. But eventually I think all of this will naturally be done with a Bitcoin or or E cash type of token rather than USDC on base that's naturally centralized. But yeah, I was curious if you guys had any thoughts there. That's it's super interesting, but so at all at any point do they reference, you know, Bitcoin or lightning or or other block chains or is this really primarily being built to work with base? It's interoperable with any coin, token, etcetera, to my understanding. Interesting. Yeah, I don't like. Agentic APIs that allow you to touch blockchains efficiently quickly. Like, is that that kind of the idea? Yeah, it's, it's essentially used for model contacts protocol for anybody to use their APIs, request, pay per clicks, everything like that. So but it it can be for AI or agentic agents to use in the future. Yeah, this is probably an oversimplified version and I hope I don't like kill myself. And what I'm about to say is it's basically like if you think about a paywall or you remember like there was a lot very heavily on paywalls online and you could pay, obviously you could pay with a credit card. And then they started to put like sats and you could pull it up and you could pay and imagine like the paywall popping up. And it has like 4 different ways to play. And you could pay with like USDC or you could play like that API and what it hits can be very, but this, I mean, I don't know if you guys, I know Brian, you probably saw it, but run to be very similar. And it's probably like inspired with what came out by Lightning Labs I think maybe six months ago, which was the L4O2. He's enlightening over HTTP. And I think this is probably 1 is we think orders of magnitude larger on John and Replit. And I think they already kind of do stuff like this and they're probably all in Silicon Valley and San Francisco talking and seeing like this, this version and to the point we talked about earlier at all aggregate and people want to barter. So Bitcoin will naturally be that layer. But what I think the most fascinating from all this is the notion of like Bitcoin becoming ubiquitous in society was never going to be 1 or the other. It was going to be both when it comes to price goes up and then also as price goes up in parallel to it, the utilization on the Internet, but not from a novelty perspective out of pure like to the point of microtransactions. If you're able to load up a wallet and you're going to be hitting these agents to build out whatever you need from a coding perspective, and those microtransactions are running well, if that's your first experience, and then you see the number go up because it's going to naturally have ABTC or SAT's price with USDC or USD. You're wondering what that is. And then similarly, like you're just kind of like it'll just grow with society and the culture. And then you can almost take a step back and squint how it's like, it's just the thing like people just use Bitcoin. Yeah, that's not like a taboo or just like a weird like novelty. It's just the thing that you use when you're natively online. And yeah, it's very cool to see because generally, I think we're all very bullish or positive. It's very hard to see like how we're going to use it. How is my parents going to get like comfortable with this? It's very similar on the banking side where it's like you can actually have a savings account. The savings account goes up over time. You can have like a module underneath your checking account. The savings account will be there. And it's like if you, you know, decided to deposit your savings account over X time frame, you can see how much it'll just be the price of Bitcoin moving. But it's in dollar terms. And it's like just like you move it there and people are like, well, I kind of want a little bit of savings in my account. And you'll just park it there. And then it just becomes ubiquitous. Yeah, people will realize, damn, I this guy used Bitcoin instead of USDC or, or USAT now and and he created the same exact model as me for half the cost. And so maybe I should start to use this asset that actually goes up and over in time rather than just continues to depreciate. And it'll just be another touch point for people to get into the industry. But this is obviously oh, sorry. No, no, sorry, I didn't mean to catch you up, but it was it was based on that point. It's like this stuff is like the most Fiat like when you think about building like on USCC, on Coinbase, on Ethereum, like all you have to do is just build on Bitcoin like sparks making and there's more companies creating these open source tools. It's interoperable. You net settle in the best form of money. It goes up over a time. It's not like rocket science that where this all ends up and it's kind of like a beautiful thing because everyone else is talking about all this other stuff. And again, it's that's where the like there's a truth in every lie. It's like, well, they kind of get it. Like we're inefficient in moving capital. What they just don't get is they miss the like main part of like, oh, it's just Bitcoin, It's just the money. But when they wake up and it's like, why am I doing all this? And whether it's like USDC. Oh yeah I forgot, wouldn't even add. Yeah, this is where I was going to go is you don't you don't want to use Fed coin. Michael, Tether unveils USUSAT it's planned US regulated stablecoin. I'm assuming this is going to run on their stable chain, but TBD on that. But yeah, any any thoughts as it relates to to this new stable point? Man, I don't, I don't even know. I guess the biggest one maybe is it'll be interesting to see who competes and it will come. I just don't know where and I don't think it's from USDC, but where the competition comes from global flows because I think to the point we were talking about earlier, that's kind of part of the reason is the stable coin markets will really matter. We talked about it from like US, you know, reach and control and Tether has such, you know, liquidity mode and that allows them. And it kind of is like even as interest rates will lower, naturally their revenue will lower, but they'll still be outpacing everyone else. So they can undercut a lot of people to maintain that market share. So maybe there won't be as much competition because this is effectively like like the deeming of the US government. Right. That that's what I was going to say. Like there's yeah, there's a lot of interlinkages here with obviously bohines with the Lutnik and Cantor connection. There's just a lot of intermingling here. So this is probably as close as we're going to get to a quote UN quote fed coin. I would I would imagine is is USAT. Yeah, they can just absorb losses for so long, just given how much gold, land and Bitcoin they have. I, I, I was going to say, if I would, I could see JP Morgan, all of those guys paying an arm and a leg to try to own a very small percentage of the business just to similarly to what we talked about NASDAQ earlier on, trying to understand how the largest player in the space really operates. But I have no idea why Tether would let any of them in. I think they're, they're just going to operate kind of by themselves how they have over time. And it looks like Anchorage and Cantor are their perspective partners for issuance and custody. But yeah, I, I don't necessarily see them working with the, the JP Morgan's etcetera, unless they actually provide real value on their side. But we'll be interesting to see who they partner with and why. Yeah. I mean, yeah, I don't think they would let them further, I don't think either one would actually want because to get an inside seat on what Tether is doing, Tether wouldn't want them to see that. Like I think as big as Tether is ultimately the capital flows specifically US when you think about the big banks. And this also kind of like sheds light on like Fidelity's big kind of plans or they've been, you know, rumored to be launching, you know, stable pointing amount of assets that they custody that I think that's probably the closest you end up is like some kind of consortium because of the liquidity profile and also economies of scale and just like distribution with all these banks and they have like the underlying banks, right? So like you think about sub custody and then going out to like merchant banks, like that's probably what sparks this deal. And so you, you know, tethers just go in like, you know, just all in and before these guys wake up to it. But if you can't, you can't imagine. I think one other thing I was going to share is this kind of further shows how these they're dead unless they figure something out. Because what Tether understands is banking is effectively all digital. Now when you think about in cyberspace, you can have, you know, your wallet, multi institution, your own self custody, whatever. And then if you need dollars, you can actually have a digital wallet for your USDC or USTA or USAT. And like how much like banking do you really need in rails? Do you need for that if you're depending on the exchange, maybe if the UKYC, which you can effectively do almost everything without the notion of a quote UN quote banking license. And so if they don't figure out that like mode with capital, they're going to see more and more capital flee. And then you're going to actually have a native like financial products that are built in that version of it. And it'll take time, but yeah. Yeah, I'm, I'm really bearish on the consortium too, just because it's a it's a start up and trying to get a bunch of slow moving bureaucratic compliance first banks to try to create new products and services. Though they obviously have the distribution that will allow them to to get significant benefits especially out of the gate. But I just don't think that they're going to iterate meet their customer needs nearly as fast as the company has actually done it before. All said. All right boys, I know we have to wrap. Any final thoughts? Parting words. Can we just pull up that fragile economy deal thing real quick? Yeah. I thought it was interesting. The Wall Street Journal. Yeah, I think it'll just pop up the the main headline. So America's buy now pay later economy signs of emerging debt crisis over from credit cards and mortgages to government budgets. This was written last week and this kind of like coincided with the revisions to the employment. I think it was like close to 1,000,000 jobs and like 900,000 or whatever. I mainly call this out because, you know, I, I've found naive and I was naive to this that most people are very underweight Bitcoin, even people listening to this and, and following along and, and definitely if they are their families, there's never been a better time to understand just how asymmetric the trade is, right? Like most people think of asymmetric just upside, but it's also protecting your downside and and a lot of individuals naturally hesitate because of the custody situation, making sure nobody like again, I always joke people would rather hold negative yielding bonds and have their, you know, Bitcoin evaporate if they put a large percentage of their wealth in BTC and they don't feel comfortable with self custody, collaborative custody, third party custody. So I think it's just an important time to to go deep and figure out the why the value prop, you know, learn more about what we're doing and it doesn't have to even be with us. I prefer if somebody just gets Bitcoin exposure and gets comfortable with custody in any way versus holding bonds or you know, over inflated equities because it's just going to get messier from here. People are just getting in and out. You got to see this with this data. Yep, very well, said Liam. Anything else? That's it for me. You sell your bonds, Liam. Let the audience know. I have no bonds, Bitcoin only do. Your parents have bonds. Do we have to save them? Yeah, they don't have enough Bitcoin. Just send the clip, this last clip for them. Just be like you guys, just just listen, read some of the content. Brian produces great content. It helps every little like share goes a long way. I'm not even talking about us. I'm just thinking about like how many touch points? It took me like 5 years sitting at the dinner table with my mother-in-law before she just turned into a spike coiner because I was just like, look, you're, you're, you're, you're retired and it's not going to go far enough because you see this, you know, happy with inflation. And she just had to finally, you know, kind of ape in. But the point being is. If you really can still get some, might make sense to get some. And if they don't get some, just share the info, just share the data, share the information, share the podcast. It's going to click eventually and then it's going to change everything for them. So it's important. And just share the pods is a good way to track what's going on and feel like they're invested too. Yep, just get a little little starter position and then continue to learn more. But yes, please like subscribe, share the pods, check out our new podcast Bitcoin for Businesses released this past Saturday and subscribe to our research newsletters and we'll see you guys next week. Thank you. All right. Thanks, Chris. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that Onramp Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit Onramp Bitcoin com contact to schedule a consultation with one of our private client advisors.
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