It's Still a Bull Market, But Not The One You Wanted

Most of the people who came here are not coming to this conference to figure out what

token buy, differing on how to develop a strategy, how to become crypto-enabled, maybe

hear some regulatory concepts.

I'm seeing less and less of OG builders too.

For better or for worse, a lot of those themes have just faded, but it doesn't feel like

a bear market at all.

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You know, I feel like this is, have you seen the address on Thunopoulos video, 2011,

Bitcoin?

That's how I feel right now.

I feel very much like there's...

There's this video on Thunopoulos.

He's speaking in a room.

I think it's 2011 or 2012, and there's three people in the audience, but they were the

real believers.

They were the real believers.

You know, we've been scammed.

We brought in Rob, hoping that he would bring on more of a trad-fi crowd right now,

Tory crowd.

No one's here.

So, I saw Jason earlier, for the first time in a month and a half, maybe two months,

right?

And he comes up and he hugs me, and he says, listen, since I haven't been on the pod,

the listeners have been gone this way, right?

He blamed you though.

You haven't had a year?

That's not true.

So, Yano tells a story that when I joined listeners did, went vertical, and Rob, I guess,

since you joined, it's...

No, no, when I joined it went up too, and then we lost our Jason Coconis, so that happened.

Never compared me to Jason Coconis again.

All right, guys, I want to hear your guys' takeaway from, from DAS.

I'm curious if there's, yeah, maybe Rob's starting with you, like, just big, big takeaways

from this conference, big takeaways from, maybe, I mean, you know, I think a lot of people

here saw the stuff that was happening on stage, but maybe some of your private meetings

behind the scenes.

What do you...

Learned anything new?

What are the themes?

What are you talking about?

I don't know if I learned anything new, but what I did...

Rob's, I already knew everything.

I knew everything.

No, no, but what has happened is that you just continued to see acceleration of stable

quantum adoption, tokenization.

I think, you know, there was, I was at a dinner, maybe two nights ago, and somebody said,

okay, you know, 20, 25 was the year of stablecoins, and 20, 26 is the year of capital markets.

And I think it's still the year of stablecoins, but I think it's also very true that we have

seen so much interest from every traditional financial institution on figuring out ways

to bring capital markets activity on chain.

And that's both for, you know, call it, or what it was originally for, like, saying, okay,

I'm going to issue some token, or I'm going to take one of my off-chain assets, and

I'm going to then bring it on chain, and I'm going to sell it to crypto-natives.

But now it's not that.

Now it's, okay, well, I'm going to enable trading for all types of assets on chain, because

I know that it is a better infrastructure to do 24-7 trading on the weekends.

I cannot do collateral management on the weekends without it.

And that realization, that interest, I think, is just the thing that continues to get driven

home.

It's a very institutional conference, and so we've seen a lot of that.

And I think we've also seen, I mean, you've had several regulators here as well.

And it's clear that, you know, on the regulatory side of what's happening in Washington, despite,

you know, what's happening in the Senate right now with clarity, like, there is real support

and real understanding that this is happening.

So I think it's just more of an exclamation point than, like, net new things, but that's

great.

Yeah.

Well, I'll just fire off a couple things.

I agree a lot with Rob said.

I was shocked.

I arrived like 9 a.m. on Tuesday, and the line was longer than TSA, the airport.

I mean, it was in all suits.

I was wearing just a sweat.

I felt really out of place.

I mean, we always know Douse is an institutional conference, but it was just pretty amazing

to see.

I think I caught up with you separately, but the stats of the conference are pretty revealing,

like, you have mostly financial institutions that are, whereas prior years, they would

send four people or two people, they're now sending teams of 10 to 20 that I think is indicative

of, like, just the hiring spree that has happened.

So I think that was just really exciting to see.

And I think we're just a reflection of where we are, like, adoption is continuing.

It's just not where you wanted to, meaning in the token price.

So I was just at a panel with some really good investors, including Ben from Bareify and

a couple others.

I don't think anyone disagrees the issues with tokens.

Some here and there are excited to invest in tokens.

But some of these conversations are happening because token prices are down.

But I think it is a healthy debate to have so that we don't make the same mistakes in

the next cycle, in the next bowl.

So it was just a good discussion, but really exciting to see.

Every time I come to a new conference, I see less and less familiar faces, and maybe

that's my issue.

What year was your first crypto conference?

2012?

Yeah.

But it was 2012.

2012.

You were in that picture in 2013, the Bitcoin picture.

The sweater.

Yeah.

So funny enough, I think that might have happened in New York.

And so I still remember the days where Galaxy was had an office in Soho.

I think Galaxy was the Thursday parties.

They were hosting the Thursday parties.

Now I was working at a health startup that had like across the street, so I would pop

in there.

But now my first one was like a just a small gathering.

And I still wore a suit and tie, it was a JP Morgan at the time, and I felt totally

out of place.

Yeah.

It's just kind of surreal to see this.

Yeah, it's crazy.

So the final stats on this event, so we've been, so block works have been around.

We started December 2017.

First event we had 200 people, our second event with 13 people, yeah, it's not as tough

event.

We had just quit our jobs.

We quit our jobs may first.

And then 10 days later we hosted an event and 13 people showed up just a little more

than what's in the audience.

I thought I made a grave mistake.

It was a practice where I won.

20 people in the office was like, can I come back?

Yeah, and then first DAS ever was 500 folks.

That was May 2019 is the one day event.

I think the final numbers, I haven't got the final numbers from the team exactly, but

I think it's somewhere around 2,900 people.

We projected it like, I think it was 2,000 people, bear market, you know, bear market,

bear market's usually dip, but there's still institutional interest.

So we thought it'd be 2,000, yeah, 2,900 people, which exceeded even our most optimistic

bull case budgets.

So it's a really good event.

We also measure things by how many allocators come to the event.

So first ever event we had one allocator.

Last year we had 22 allocators come, like real allocators, like sovereigns or endowments

or pensions.

And this year we had 130 come, which is, I think a sign of just, now I'm not saying all

of them are allocating and all, but yeah, real, real interest.

Real interest, yeah.

So that's a good way to measure, I think, the success of the industry.

So I'm kind of curious because the, it was such a weird event for me because every time

we've hosted an event in my head, I'm like, that was a bear market conference or a bull market

conference.

That was a bear market DAS.

But I have no clue at this point what is, what, like time of the year it is, is a bull

is a bear.

I mean, tokens are a bear, but this is obviously an institutional bull market.

How are you thinking about this contrast?

I don't think anyone, most of the people came here or not, we're not coming to this conference

to figure out what token to buy, differing on how to develop a strategy, how to become

crypto enabled, maybe hear some regulatory concepts.

I'm seeing less and less of like OG builders too.

You know, for better or for worse, a lot of those themes have just faded.

And I'm seeing just, you know, a lot of this, you know, few companies that continue to

come and show up, but there's definitely folks that just are no longer showing up.

I think it's just a normal evolution, but it doesn't feel like a bear market at all.

Like, I've never seen a line in a crypto conference like a check-in line other than maybe token

where it was, is this a very different crowd?

I think the crowd that goes to token is more looking for like, you know, a lot of, a lot

of BD happens there too, I've appreciated, but it's a lot of retail, but this does not

feel like a bear market at all.

We had this, I think it was October, we had a podcast where the title was, it's a bull

market, it's not the one you wanted.

And I continue to come back to that.

Yeah, just like, I think that's exactly where we are still to this day.

And, you know, I do believe that the market's a pendulum and I expect that tokens will

come back and maybe not, you know, in the same, you know, kind of correlation where everything

goes together, right?

We'll have more dispersion, but I don't expect it's the end of all tokens, even though,

you know, Santi continues to say that.

I do believe, though, that the amount of acceleration that we are seeing on stablecoin adoption

from real businesses, from tokenization, from the capital markets, folks who are inches

in the space, like, that's not going away.

And that is only accelerating right now.

Did you guys have a meeting of the week or a quote of the week that you heard on a panel

or anything like that?

Oh, really?

Well, on my panel earlier, I think it was the, it was Luke Tuttle, who's like the chief

technology officer and the chief product officer at MoneyGram.

And he essentially said, use stablecoins or get the find.

And this is not, you know, a stablecoin founder.

This is MoneyGram.

Yeah.

I guess I have one, which is someone said that 25 times revenue was cheap.

Goddamn.

I mean, I don't know.

I think we've been very, you know, like, you come to quit, though, and you have, as soon

as you have the 10X, as soon as you have one 10X, and maybe you're lucky to have like

a 20, 30, 100X, you're hooked for life.

And, and, you know, I think this is just, it's a bit funny, but it's a reflection of,

for better-for-words, retail is just moving on and chasing the lottery ticket.

And I think that continues to be a segment of crypto that will always, like, even in

a recession, like, people actually gamble more because they want to, like, win it all

back.

But it's, I think, sometimes it's just important to reflect, like, okay, this is not a normal

return profile.

Like, I should not be expecting to get, you know, a 10X or 100X, like, you know, 10% on

your capital compounded year-over-year is massive.

And very few investors actually do that.

And so I think, like, I think we're in a state where my view, not to get too much in

macro is that the world over the next two years is just going to become quite, like, my

probability of a recession is much higher over the next two years, and I'm adjusting

that to how I hire, how I am patient, and what I will into pay for companies.

But I think of that, I talked about it maybe in one podcast, but my view is that the

risk curve has changed quite a bit.

And so when you go talk to someone, you say, okay, typically if you're a fund or you're

a family officer or just an investor in general, you say, I want to target this type of return

per year.

So if the stock, if treasuries give me 4%, if the market gives me 8 to 10%, well, I'm

targeting maybe 12%.

I think the difference where you can really lose your money is not adjusting however much

risk.

So the difference between getting 10% and 12% return, maybe a year or two ago, was not

as much.

The difference now, I think you're taking a whole lot more risk going a little bit more,

like every incremental percentage point that you're hoping to get, you're carrying a lot

more risk given everything that's going on in the world.

And that is something that I feel that encrypto for better or for worse, we're just used

to the 10x, the 100x, and you know, it's, are there any tokens that look appetizing to

you right now?

Maybe we'll nibble out of.

Sky is pretty interesting.

I mean, not what I thought you were going to say.

I just like, from, I mean, they just announced something interesting, I think Parker from

Framework was here.

We've interfaced a lot with him just from the, like, when they were maker, maker now

sky, like, you saw a public company, you think better, trying to originate, like, basically

they had a facility from them.

That's really exciting.

We continue to monitor public companies that are coming and using on chain for some part

of their business.

And sky is just an interesting credit facility on chain.

And so, like if, if sky can provide credit for better, this, like, home provider, then

I think this is the crypto backed mortgages.

Right?

Exactly.

So it's just, no, but the opposite is a traditional mortgage originator.

Tradition?

Now they're doing crypto backed loans, I think, through, oh, that's the, that's the

point-based thing today.

But better is a, and I think better maybe is doing some crypto backed stuff as well,

but like, they have a facility through Sky now.

Sky is just lending, like, in four, they're, they provide a, they provide a credit line

to this mortgage originator and, and the calculus for them is quite simple, which is they can

lower the cost of capital by using sky, then customers didn't see any of it, better

just lowers or, they, they think they can squeeze out 100 basis points, which is pretty

material.

We'll see.

There's obviously governance risk.

There's a couple of things that they're not from one day to the other, going to totally

replace their existing facility, but they're going to supplement it with on chain sources

of capital, which is pretty interesting, I think.

Are you guys, are you made, how many angel investments have you made in crypto?

Since I left Parafi, I was actually putting all this into my CIO, which is cloud, 256

I mean, 256 angel investments, are you still, are you still making angel investments?

So I tweeted about this CIO date, no, part of it is I'm just very focused on inversion.

But I still, I still get ping quite a bit.

I haven't done that many investments, like my pace of deployment this year, like dollar-wise

is roughly the same as prior years, but it's very concentrated.

So I've either invested in a couple of fund managers or things that are not crypto-related,

like AI or, you know, I'm known a founder for four years, he's turning something new.

But certainly, number-wise, like no.

And I've talked to a lot of EC's about this, like, is this an issue?

Like maybe founders just don't want to reach out because it's not long, long investing

or two bearish on tokens or whatever.

But I don't know, Rob, you know, I talked about this to the podcast, like, feels like

the quality of founders is not that high, and I haven't seen, I think, truly not.

Well, I've seen, like, the 10th prediction market, but I'm not going to invest in any of

those.

I have explored part.

That was one of my thoughts is, I actually think there's really interesting, really solid

companies at the, I feel like all the good companies, a lot of the good companies used

to be pre-seed, seed, like there are all these hot companies, early stage.

And now, actually, a lot of the best companies have kind of matured and reached that series

be kind of, maybe late A, early C stage, but the pre-seed and the seed stages are, they're

very dry right now.

And it's talking to an emerging manager, it mainly does pre-seed at this conference.

And he's like, look, the bar to get funded as an early stage pre-seed founder is higher

than it's ever been in the 10 years I've been investing in crypto.

And I think there's many reasons for that.

There's like the LP risk, like LP's kind of want you to allocate to AI, not crypto

right now.

But I do think a lot of the good founders, it, yeah, it feels like it's dried up a little

bit.

Yeah, I mean, I do think, this all kind of flows downhill, so your point about LP's,

there's less money in, crypto funds right now, there's, not for Dragonfly, well, $600

million race, $650, $650, come on, I only said that because I need correct me.

Yeah, well, I mean, no, but you know, and then obviously there was, I think, an announcement

that injuries in and paradigm are out raising funds right now, although, you know, the

last, I think, you know, maybe five or six deals that paradigm has announced have all

been non-crypto, there's, is that, is that bad for the space?

Okay, so paradigm, biggest crypto native fund in the world is not the six of the,

well, it dreams into the biggest crypto native fund in the world, but second biggest

then.

Yeah.

I just think it because paradigm doesn't do.

Yeah.

Well, there are last six deals are not crypto deals, is this, this is a bigger problem

than we're letting on to be?

I mean, to, to, Sunday's point earlier, right, there, it is very clear that there are

a couple things that people want to fund right now, they want to fund stablecoins, they

want to find token, a fund tokenization, they want to fund prediction markets.

Those are probably the core categories.

There's a lot more and we're doing this as well of leaning into the things that are working,

right?

And so, you know, my panel earlier, I had fruit from rain on next to me, we've put more

money into that business than we've put into any business ever because we've taken

the perspective that we want to look at what we know is working really well.

We want to lean into it and we want to continue to support polymarket same thing.

We've done a lot of that through four or five rounds now.

And so, we're seeing a lot more of that at these, at a lot of the funds because there

is so much dispersion right now.

And I think broadly in venture, not just in crypto, but there's a lot of bunching at

the top, right?

Because like these names are working, we have to get exposure to this, so we're going

to bunch into this thing.

But then when you think about, call it the pre-seed space, well, the things I just talked

about, the verticals just talked about are getting funded, but the crypto native stuff,

you know, DeFi is not the thing that a new Stanford grad wants to do right now, right?

The building in the new L1 is not also what a new Stanford grad wants to do right now.

And so, when we look at the founders coming out of, or building in their spaces, it is,

you know, a different quality than it was necessarily the last few years.

And also the funds, because of the fact that, you know, other than the few people I just

named, have not raised new funds.

I think Parapai also just announced a new $125 million fund, but you haven't seen a lot

of new funds announce new fund raises.

And I think a lot of people are looking around and saying, there's existential risk to

my business.

If this token market doesn't come back, and I keep investing in these things that are

crypto native, how do I think about my future, right?

So there's a lot of risk.

So a couple of things that were around a lot of one.

I think paradigm is smart, they, I mean, obviously, no, there's smart in the sense of

like, like, if you're, if you're mandated, it's only crypto.

I've always felt that like, yeah, we talk about crypto in Fentec and that line's blurring,

but like, if I were to raise a fund again, which I won't, I would want to have maximum

flexibility to invest in whatever, like no one complains, your LPs won't complain if

you make them a boatload of money.

Well, no, but I do think there's a point here, which is that yeah, you've got to stay

disciplined and you got to tell them that you're, your, your core competency.

Yeah, because every GP wants as much flexibility as possible, like, that's obvious, right?

But you also have to go to market and say, this is my story, this is how I'm differentiated,

this is how I can go and, and win a deal.

And so there is that, that kind of natural tension that is, I can tell you, it's very

liberating for us as an version to be a hold co because I don't have to have all can

window dressing of, you know, I've got to have a big team page and I have to, I'm like,

I'm in the business of figuring out how to use technology and I'm long, I'm positioned

in a way where the curve for infrastructure is only getting better for us.

The cost for block production and block inclusion is going in one direction.

The cost of AI, which is venture funded is like, however, like, what you get from

Claude is remarkable, used to have to pay 500 K for a glorified investment banking

person.

And now you can use Claude and your, your judgment is what ultimately LPs are giving you

money for.

So I think from that perspective, so, so that's point number one.

I think paradigm is smart and saying, okay, we want to just capture AI in that bucket.

As we go on and try to invest in businesses, I mean, the natural conversions of AI and crypto

is real, I think, like agents will use stablecoins.

So, you know, you kind of want to traffic in both.

Topology is probably the first one to kind of do this.

The second is like, I'm not too alarmed this idea of like the winners like end up capturing

most of the dollars, like like FTX did this like in prior cycles.

The point that Rob made around the end, the quality of founders, I think is real, like

because in prior cycles, you didn't have AI and the Stanford engineer would eventually

come in a crypto.

I don't think you're going to come back for a while.

Yeah, it's not just the talent.

I think AI is sucking up a lot of the capital.

Yeah, it's just like also the, I mean, SpaceX IPO at 1.5 trillion dollars, that's sucking

up a lot of your IPO money right there.

The last thing, just around one thing I want to say is like, so I did probably one of

my largest investments.

And I know this founder for a while, Thrive backed business and they were doing, they were

a Fintech company.

So I put in some money.

Stripe?

No, no, no, no.

It's called rent app, visible.

So Thrive, CoSLA backed, they're basically trying to like, you know, that team sold their

business to Square.

So really good Fintech guys.

In the evolution of like, they are now interested in using on-chain financing and using stablecoins.

Whereas like six months ago, it wasn't in the picture.

But I said, hey guys, have you looked at what figures doing?

Have you looked at like Sky?

Because they're paying a pretty high rate for, you know, credit facility.

And so that, to me, is interesting, like, they're very smart Fintech guys and I'm hopeful

that more of, Rob, you talked about in this spot, like Fintech companies will start thinking

more closely about using crypto.

I mean, every single one is doing it.

It's happening right now.

Yeah.

I mean, the, to your point earlier about, okay, well, AI is sucking the capital and a

second the talent.

It's absolutely sucking the talent.

I mean, on the capital side, it's also true.

But stablecoins, it's really mostly stablecoins, is the one place where I see traditional

investors still.

So, you know, when I go in, I talk to a new D5 founder.

It's very seldom that they tell me they were talking to, you know, name your traditional

fund.

When I go talk to the best stablecoin founders, all of them are talking to the best traditional

funds.

So it's actually gotten more competitive on that side of the market.

And then when I spend time now in the Bay or in the Valley, there are a lot of founders

who are now saying, especially on the Fintech side, who are saying, I actually hate crypto.

I think crypto is terrible.

But stablecoins, like, I'm going to build my business on that.

I mean, look at what we're seeing that by.

Look at what, maybe talk about what WAP did today.

Yeah.

I mean, they announced that they're going to do 6% cash back using stablecoins.

WAP is one of the fastest growing.

Yeah.

So, maybe we can back up.

So, WAP is a marketplace business and it's an infrastructure and sort of, you know,

a platform business that allows people to build small businesses on top of small e-commerce

businesses.

And so a lot of these businesses are things like a lot of small e-commerce, a lot of people

are building, you know, call it like net new training videos and I'm sure there's a

bunch of other stuff and someone will yell at me.

But they have about $3 billion of annual GMV that happens on their platform from these

companies that are currently on there getting paid by, you know, their customers.

And it's growing very, very quickly.

They took an investment from Tether at a $1.6 billion valuation.

I think they announced it a couple of weeks ago.

And then they announced today that, or yesterday, that they're going to offer 6% cash back

if you hold stablecoins.

Right?

Now, I think there's a lot, and I understand there's a lot more to come there and other

thinking about their stablecoin strategy.

And that's a marketplace business, traditional business, saying we're going to do a bunch

in stablecoins.

And I will tell you, the marketplace businesses, every single one of them will probably have

a real announcement this year about stablecoins because they have global, you know, they have

global customers both on both sides of the marketplace who want to be able to have US

dollars and who also want to be able to get paid without having to go through local bank

accounts.

And that's happening.

If you're KPI internally, your company is GMV, you are looking at stablecoins.

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All right.

Back to the episode.

I want to talk about Western Union.

Not to call off because when Rob and I entered into a bed in November 1st,

months running of Western Union,

How far up is Western Union stock since we did that?

2.86%.

Okay.

Solana is down, and I know this because I'm a Solana holder too, much to my demise, 56%.

Rob, I think you're going to have to buy me dinner some time.

You wanted to bet money, and I said, like, how?

Rob was trying to bet Santi 10k that Solano would outperform us.

No, no, I tried to bet.

I tried to bet it.

Just get us a nice dinner.

I tried to bet it's Patek.

It's Patek, yeah.

Are you going to give me your watch, Rob?

Yeah, we'll trade.

Mine's worth a quarter of yours.

Sorry.

I'm going to win anyways, but look, you had...

This is interesting.

I want to talk about Western Union because you've been at this moment.

Yeah, let me share the Western Union store.

So I interviewed the Western Union CEO on Tuesday, and it was very...

I was very skeptical going into it because I think maybe like a lot of you guys in this room,

I've heard all these CEOs of these financial institutions say these things are going to happen,

and then they never happen, including Western Union, right?

Western Union partnered with Ripple in 2018 to go launch this thing, and then it never happened,

and then two years later, they did it with Stellar, and it never happened.

And so I was like, all right, let's figure out if this guy's real.

He basically went as far as to say, you know, doesn't like crypto.

Doesn't think that, you know, maybe crypto investors are the smartest investors,

but things that stablecoins are the most amazing thing that he's seen in 20 years of working in payments,

as a payments executive, before he was at Pfizer.

And he walked through basically, he said, look, all you crypto people,

you think that real-time payments, real-time settlement is a new thing.

He goes, I've had real-time settlement at Western Union for 20 years, right?

You walk into a 7-11, you get the Western Union thing, send it to your mom and Guatemala,

take out your WhatsApp, send them money, boom, goods, they're in three seconds.

He goes, we've had real-time settlement for, you know, 20 years,

but the way that we have real-time settlement is I'm floating $3 billion a day to make this possible,

or $2 billion a day, or $4 billion, I forget the actual number.

He goes, my stock is trading it, someone here can pull it up.

I forget if he said $3 billion or $4 billion or $5 billion.

So let's make up the numbers here, $5 billion stock.

$3.6 billion now.

$3.6 billion stock.

He prepared.

Yeah.

I put it in a position.

Locked in.

$3.6, but do the math, $3.6 billion stock.

Let's say he's floating $1.8 billion a day to do real-time settlements.

Boom, he now gets all that $1.8 billion back, and he's going to buy back their stock.

So, and then not only this, so the customers of Western Union are the individuals,

they won't know this is happening.

They won't even know they're on stablecoins, but then to take it a step further,

he's always wanted to launch bank accounts.

It's too big of a pain in the ass.

It's too much of a hassle, the regulatory stuff.

He's got, you know, customers in every single, you know, 190 countries all over the world.

Can't roll out bank accounts, but now with stablecoins, they're working with Rain,

the company that Rob was mentioning is their portco, to roll out stablecoin-backed cards,

debit cards, to all 100 million customers, and boom.

All right, now he just saved $2 million in the float daily.

Starts buying back the stock.

Stock starts going back up.

You know, he gets more cash flow, and he can roll out, you know, now essentially bank accounts to use.

You know what I think is interesting about this, though, too, is so,

and the panel we did earlier, we had the money grant, CTO and CPO,

and so money grant is kind of the biggest competitor to Western Union.

And they talked a lot about this kind of float point, too,

and it's better for capital efficiency.

But the other thing that he talked about was we have always seen our customer as the sender.

So the person in the U.S. who is sending capital to an emerging market and to a family member.

But all of a sudden, we see stablecoins, it's stablecoin wallets,

and cards, and if you let it get yield on chain,

as a way to make the receiver a customer as well,

and the way to monetize the receiver.

So it's not just the capital efficiency point.

It's now this person can get U.S. dollars.

They can keep U.S. dollars in a wallet, and then they can do things with that wallet

that they couldn't do otherwise.

And that's the key thing.

Those things that I had from the beginning.

I mean, we looked at a business that Western Union and Oracle Intermax,

and they were smaller size for us.

But I mean, Rob, if I were you, I'd put some of the 650 million

and get a board seat in Western Union,

because for me, the real opportunity going on what you were saying is,

so if you actually look at the PNL Western Union,

they pay a ton of money in commission.

So when you talk about just in time,

movement of money for them, instant payout,

they're paying a lot to facilitate that,

because they're not sourcing,

in order for them to source of liquidity,

they need to convince all the bodegas in Guatemala

to have Western Union,

and to use part of their working capital to provide that.

In exchange for that, they pay them a 40% to 60% commission.

If you were smart, he wouldn't just stop with the float.

He would say, huh, I can now become, I can have a digital wallet,

and that the receiver doesn't necessarily have to cash out.

They keep their money.

But they're not going the step further.

If I were them, or if I were Elliot,

just take a board seat and be a little bit more transparent.

To take a step further, they have 17,000,

not to make this a long Western Union podcast here,

but they have 17,000 employees.

Half of those are agents, not AI agents, like agents,

like, hey, thanks for sending...

The people like Rambo Degas and stuff like that.

Yeah, yeah, yeah.

No, no, not just bodega people.

The people you call, people you call to be like,

hey, my payment got stuck.

Yeah.

And at the AI, get people out of there.

AI that.

Yeah, that.

I think there's, again, not the harp on Western Union.

The key messages, most businesses that have distribution

and are marketplaces can become banks.

They can further entrench their relationship with a customer

by offering higher margin financial products

in the form of a stable coin.

And then you attach rain if they want to cash out,

and then, of course, you get interchange.

And so, to me, like, Western Union,

if they end up executing in it or not,

I'm still going to win the bet, Rob, sorry.

But I think there's a lot of time left.

There's a lot of other businesses that are going to start

basically enabling what airlines have woken up to this idea

which is they make more money off of the cards.

Yeah.

There's not to continue to harp on this stable coin topic

in Western Union, who is a secret advertiser

for block works, apparently.

Western Union, yeah.

Speed us.

I've not gotten a dollar out of Western Union

or pumping them.

Yeah.

But there was another marketplace company,

which I can't say their name yet,

because they haven't announced anything.

But one of the largest marketplace companies in the world

who said to me, not at this conference,

but at a conference was out a couple weeks ago,

that what they were thinking about doing in stable coins,

what they saw stable coins doing,

and then what they thought that they could do with stable coins

also with the card attached,

was the most interesting thing happening

in FinTech anywhere in the world right now.

Rob, what's a, let's invert.

What's a bearish case for stable coins?

For a year from now, we're going to be sitting here

pontificating about some other stuff.

Where would we have been terribly off the mark?

Because we keep rehashing in every pod.

This is a stable coin pod.

This is a stable coin pod.

This is a stable coin pod.

But where can we be very, very wrong?

And I've tempted to say, don't say regulation.

Things that we can't control.

I know you're now going to DC quite a bit.

It's putting regulation.

What are the things that could be terribly off the mark?

Well, I mean, the thing that has happened, of course,

is like, we got genius.

Genius was incredible.

It was very good for getting every single boardroom

to say, I need a stable coin strategy.

I think it was Kai Shafield who says that all the time.

It's like, last year was the year of the stable coin strategy.

Right?

This year is supposed to be the year of stable coin adoption.

But the thing that is true is every single conversation

we're having about whether it's Western Union or Money Gram

or this WAP or these other people I'm talking about,

every single one of them are implementing this right now.

But most of them are actually not live in production, right?

Not in at least like real scale.

And so, OK, regulation is of course a concern.

But you want to tell me what the, or you,

because if you ask what is the risk between now and then,

is that as people start to scale,

it doesn't actually operate in the way they think it will.

It's not as actually, you know, they still have to do some pre-funding

because there's still a lot of, you know, call it friction at the edges

and they can't get people to actually hold the stable coin,

so they keep wanting to offer AMP.

And when those things happen, they just,

they don't get the consumer behavior they expect.

And so, they have to put, you know,

not as much of their business into stable coins possible.

So, that's the risk still.

So, here's an idea.

I listened to a podcast by the founder of column.

He was a co-founder of Brex.

And he kind of made a dig, not a dig,

but he was just talking about like, you know,

there has been very skeptical of stable coins for a long time.

But I do think that he, he made an instant point and said,

look, we've had the ability to do a lot of the stuff

that stable coins report to do.

The reason why we don't do it is because,

for other reasons, like fraud prevention.

So, for instance, instant payout.

Well, you know, sometimes it's good if your bank account call,

if your bank manager calls you,

so you don't get scammed, right?

Your grandmother, you know, may not be as sophisticated.

Where I'm going with this is, this year,

we've seen a spike in hacks.

I think it's, like, DeFi is now, you're seeing that.

It was dormant for a while.

Most of the issues, like, I think it's been over 130 million

of lost capital.

We're in March.

It didn't, the same issues keep coming up,

which is there's an oracle problem.

But more so, vaults have become,

real world assets have become this topic of conversation.

And I feel like as an industry,

we hopefully don't make the same mistakes

that TradFi has done week.

But again, like, if you look at some of the issuers,

like RWA protocols, they have brought low quality stuff.

And you kind of have this, like, redemption,

like asset liability mismatch.

But that's just, that's just a V1.

Like, I think you've got to have the crappy assets first.

It's like, yeah, I don't know.

I think it's like DeFi summer, like, the craziness of that,

like, did lead the path for Ave and Uniswap,

which then turned into Morpho.

And like, you've got to have some of the chaotic stuff

to act with the crappy products.

Yeah, like, like, chaotic innovation,

I guess it will always be a thing here.

But what I'm trying to say is, I think that, yes,

we're in a bear market, but RWA is, I think,

or a bit overhyped.

I think that, you know, I'm cautiously, skeptically,

like, optimistic about RWA's.

But I see a whole lot of issues that I'm hopeful

we don't kind of run through the same issues

that Trafi has had to learn the hard way.

Well, I think that it's like so,

it's not even V1 or VZ-

Okay, so like, let's use tokenized stocks for a sec.

Like, nobody right now can do tokenized-

is doing tokenized stocks.

Like, Kraken's not doing tokenized stocks.

On does not doing tokenized stocks.

Yeah, if you mean like, direct issuance, right?

There's a lot of these like, raptors.

They're just pointing.

They're a price feed.

Yeah, they're, well, I mean-

They're a tokenized price feed that goes to stock.

Sure.

I mean, it's an SPV, like-

Yeah, exactly, so it's, but it's like,

it's so, eventually, you got to actually tokenize these stocks.

Yeah.

Like, okay, so not like, we just-

I mean, this was, but this was the nice,

the nice, the nice, the nice, the securitized announcement

was that they're going to do direct issuance.

This is obviously-

This is what SuperSace tried to do.

Like, it's just really early days right now.

And so there's all these issues.

Like, I agree, there's all these issues with-

The problem with early days and then, like,

maturing a little more is that there's a lot of damage.

Yeah.

And a lot of capital loss.

Yeah.

And it's unlike, like, move fast and break things

in the Zuckerberg coin.

You shouldn't move fast.

There's a bug in Facebook.

Maybe your photo doesn't load.

If there's a bug in a protocol, you lose billions of dollars.

Yeah.

And that hurts us to onboard users and with regulators

and in that conversation.

I'm just- I'm hopeful that we avoid some of those.

I agree.

I agree.

We've got a couple minutes left.

Anything else that you coming out of this conference

that you guys are thinking about?

Listen, I mean, this was the conference, right?

It was tokenization of assets.

It was stable coins.

It was, you know, prediction markets.

Like, those are the things everybody's talking about.

Agentic payments.

Agentic payments, which is not a thing that exists today.

Even though we keep talking about it.

Like, you know, I think X402 did, like, $600,000.

Yesterday, MPP did, like, $300.

More than that, too, is making money, you know.

That's definitely not true.

Ten dollars.

Yeah.

Okay.

What was the best panel?

I mean, for me, it was the Western Union fireside chat.

It was the most enlightening and eye-opening conversation.

He's been, like, if you go back a couple earnings quarters ago,

he was quite, like, he did a whole 180.

Very anti-stable coins.

I mean, he told me backstage.

He's, like, the only reason we could do this is genius.

And I think, I mean, I actually think clarity was, like,

an under-discussing at this event.

Because it's kind of been talked about so much

that people are sick of talking about it.

But...

Well, also people don't want to talk about it.

Because I think most people feel, at least what I feel,

which is that it's, like, probably not going to happen.

And...

Yeah, what?

Yeah.

Yeah.

I mean, it's still 60% on polymarket.

So clearly there are some people who feel that it is going to happen.

How bad is it if clarity doesn't happen?

What is it if clarity doesn't pass out?

I think it depends, right?

So if you go talk to the banks right now,

or you go talk to a lot of the asset managers,

they're telling you they're going to go and push forward

with all of this tokenization stuff.

Anyways, both the SEC and the CFTC put out joint guidance.

I think it was a week ago, maybe two weeks ago.

And that allows for a framework and a taxonomy

for continuing to push forward on these efforts right now.

But the risk is, of course, that in two and a half years,

there's a new regulatory regime,

and that regulatory regime versus course,

and that because, and without clarity,

it's not kind of cemented into law.

But if you go talk to the banks,

I think a lot of their perspective right now is,

well, if we build this thing for two and a half years,

and there's like real world activity that's happening

from real clients on chain,

it's even if there's a lot of concern

about some of the long tail stuff in crypto,

there's no way that a net new event, like very anti-innovation

regulatory regime would try to reverse course

and shut down all of these markets.

And so I think people feel that there's enough time

to get ahead of it, even without clarity.

But I do think it is bad that it doesn't happen.

It does create a lot of ability for things to get changed

at the edges that are bad for at least a lot of the startups.

I mean, we'll say like, again, regulations,

something that we necessarily can't control.

Well, we can't control as delivering extreme value

to the young customer.

And so like Uber, like look at Uber,

like Uber is able to get these licenses

and fight one of the most fiercest lobbies,

the taxi lobby because the consumer,

the constituents, loved it.

And they would call on their congressmen

and say, why all of a sudden,

like you're banning Uber,

like this provides extreme value.

So I still think that like when you go and talk

to a regulator, when you go and talk to,

you know, you're just familiar with,

most people hate crypto.

Still, it's not popular.

You go and walk in the street.

They're like, oh, you know, like.

I don't think most people hate crypto.

I think most people are indifferent to crypto.

No, people hate, like.

There are people who hate it.

But most of the reason is like, you know,

they're, they're, they know so like someone

that has made a lot of money and they hate that.

And, and you know, it's, it's real.

It's like, oh, my cousin.

Yeah, he's dumb as a break.

Everyone hates something.

What are he saying?

He's upset about it.

Yeah, like when you said he's like,

I was too successful.

No, I mean, but it's a reality of things like,

you know, you see this in bull markets,

like, people just don't take us seriously,

because it's not relatable.

Like, I get that stablecoins are very relatable

when you can earn in dollars and get paid in dollars

and, you know, we need more of that.

And I, I'm encouraged.

You know, I had a discussion around like,

what is something that we can do as an industry to improve that?

Like, prediction markets are all the rage.

Like, I see, did the seed round and probably market.

I have a lot of stake.

But I wrote about earlier, which is,

why did it take so long to be reactive

to something like update your terms of service,

make a disclaimer in any market,

say if you have insight information,

you shouldn't be training that.

It's against our terms of service.

If we find this out, we'll kick you out.

Rob, do you have a secret?

Do you have a secret?

No, I'm encouraged to see,

but by the way, I'm encouraged to see.

Did you live in the pod last week?

I didn't listen.

You didn't listen to us debate this.

We had this debate again.

No, we debate it.

And then I wrote about it.

And then I was like, why is it?

Call, she actually did have it.

I was surprised at Polymarket.

It's like, why don't you have in your terms of service?

And I get the chain as much as I love them.

He said, oh, look.

You know, these are true seeking machines.

So this is actually good.

But I'm like, I don't think we can agree that like,

if you get hurt.

I think this is a sideshow.

This is like, it's a complete sideshow.

Like a sideshow?

Yeah, because it just like the,

whatever's happening in terms of service,

terms of service doesn't really matter.

You know, it's an auto sideshow for the prediction markets

is sports gambling.

It's definitely not a sideshow for calcium.

I mean, not for Polymarket.

They're doing the exact same thing with sports gambling.

It's like 80% to 90% of both of their revenue.

No, that's not true.

So for Polymarket, it's about 40%, 45%.

For calcium, it's about 90%.

So, yeah, so I mean, follow my Twitter.

You'll see some good content.

But they actually a lot of the,

the Polymarket volume right now.

I mean, they own all the politics markets.

They're doing a lot of these crypto markets,

which is like kind of what will Bitcoin be,

crypto down markets, stuff like that.

And then they, they're actually getting a lot of volume right now

like the Danish election.

And so they, there's a, it's much more varied at Polymarket.

But calcium, yes, is primarily sports.

We're also in the middle of March Madness,

which is a big time in the year.

But I think the reality is,

and I have this discussion with people all the time

because we spend so much time talking about Polymarket these days,

which is that there's a,

sports was the easiest market to serve first.

But it's, I think, very clear to a lot of people.

And you know, you've had ice running around here

and they put a bunch of money into,

in the Polymarket.

It's very clear to a lot of people that this is a real

financial innovation for that can affect equities,

that can affect, you know,

broadly, you know, business exposure can affect hedging,

it can affect commodities trading.

And there's an expectation that these markets will get a lot bigger.

It's just that, hey, we, sports was easier to serve on day one.

We haven't, we just had an announcement this week

from both CalShi and Polymarket that was,

FIS is going to plug in to,

or allow for CalShi contracts to be on their accounting system

for the hedge funds.

We also just had an announcement from Susquehanna

that they are going to allow you to post USDC collateral

or Fiat collateral at Bitcoin,

and then they are going to do an OTC trade with you,

and then they'll probably offload the risk on Polymarket,

because this is a Susquehanna crypto.

And so those are the first two things I've seen,

where there's like, oh, well,

we can make this for an institution, right?

I know one of the big GSI banks was telling me this week

that they're thinking about trying to offer

these types of OTC trades as well.

And so we're seeing that happen.

And it's just, it's going to be slower

at the big institutions.

I'm not, like, I'm not, I'm not disagreeing.

Like, my thesis is prediction markets are phenomenal,

truth machines.

They can help us with insurance markets,

discreet markets around, hey, like if you have a home of Florida,

you want insurance, hurricane insurance.

You can price that risk in real time.

You don't get an insurance to do that for you.

So like, we can get there.

All I'm saying is, I don't think we can disagree

like most people look at prediction markets today

and say, yeah, that's gambling.

That's, that's Vegas.

And, and that's like 60%.

If you look at the latest data.

Again, I'm not disagreeing on the data.

I'm disagreeing on the perception of the industry.

What you could do if you're in that seat as a founder,

I think it's, it's a really hard choice.

To do like, you're not, I'm not suggesting that,

like, these guys shut down sports.

Sometimes you got to do these things

that will fund the other part of the business.

And, but I do think that, again,

I don't want to talk too much about regulation,

but as an industry, it will serve as well

to make sure that the consumer is protected.

And, and it's not perfect.

I don't think you perfectly ever get there,

but I do think you need to stand for something

and you need to make sure that the perception

of this industry, whether genius pass,

like whether clarity passes or not,

I think that we can still, as an industry,

make sure that we continue to level up

and raise the bar around consumer protection.

Disclosure, transparency, all that.

Yeah, we're a time here, content of the week.

Did you guys stop doing content of the week?

No, no, of course not.

I haven't, I haven't listened to you guys once.

Yeah, I cannot believe you haven't listened to once.

I haven't, I haven't tuned in at all.

Yeah, but you're the reason that, you know,

the, the, the show was good.

I know.

What you should have done is put us in the background

and the baby would have slept much easier.

We're very, very sad.

I will, I will tell you, I, uh,

I did a fireside chat with Amy Oldenburg yesterday.

Oh, Amy's great.

Yeah, she's the, the head of digital assets at Morgan Stanley.

And she starts the, the fireside with, you know,

it's great to, to be doing this because I fall asleep

to your voice all the time.

And I was like, does that mean, are you, are you,

are you nagging me?

Like, is that, is that mean the podcast is bad?

Like, I didn't understand.

I think she's trying to be nice.

Yeah, I don't know.

So, um, but can I give you one suggestion for the live pod next year?

Yeah, don't do it the last day.

Yeah, exactly.

Do not make it the last.

We've lost.

We've lost.

You guys have a good desk.

Nice.

How many people in here work for block works?

How many people?

How many people?

How many people?

How many people here work for inversion?

So I've debated all of his employees here.

I hope three of them.

How many percent of inverters represented in this room?

Keeman Risken.

Before we wrap, anything you guys want to know?

Thoughts, questions.

I think identity passporting is obviously going to need to be part of the way we do all

of these tokenized assets.

But it's unclear to me why that needs to be decentralized and it's unclear to me that

the people who are going to be controlling the ins and outs of these markets are going

to care about that.

That's kind of the 30 seconds.

The first thing, well, decentralized identity like Saviak and all these experiments

before have not really worked as much.

I think your wallet is your identity in some ways if you want to extend credit.

And I think as more traditional institutions that have KYC, their user base start plugging

in on-chain, you will stitch together transactional data on-chain with a KYC person that is-

But their identity is the KYC?

No, I understand that.

Well, if we want to extend credit, like-

You have to.

Part of your-

If you want to scale it in.

You want to like underwrite, like, you know, you place a lot of value on that.

But I think proof of humanity is going to be more and more important and you obviously have

a cryptographic- like the only way you will be able to prove that you're a human is with

your cryptographic keys.

And that, I think, is something that is not talked about enough.

But in a world of deep fakes and AI just becoming more sophisticated, I think that's

where crypto really can fit in to prove, you know, that's actually human.

I think it'll end up being a big theme, actually, of the next couple-

I mean, you look at what the, I don't know if you guys know Snowflake, huge software company,

the Snowflake Founders now working on, is this video real or not real online, right?

So this whole concept of like, is this video real?

Was this article written by AI?

Is this person real?

Like that whole theme, like what world called-

That's very different than just essential identity though.

Like I think we all agree that like there's a lot of like, agentic or AI power, the deep fakes

and things like that, that we need to have some ability-

It's not just deep fakes, it's like, is this person-

Yeah, no, but-

Is that what decentralised identity really is?

Is this person a credible human being or not?

No, I don't think that's what he's asking.

Well, I will say like if you want to, in a world where you have-

No, yeah, it is because it's-

No, it's just well-

For me, so I guess we're disagreeing with decentralised identity is, but

when I think about it is like, so as an early investor in Filecoin, distributed

file storage is important in a world where if you want to preserve mission

critical documents and files, you want to probably do it in a system of record like Filecoin

where you have sufficient guarantees that that data is there, it's charted

and you-

Because, you know, pretty much every company has or will be hacked

and so your data is exposed.

If you want to store stuff, I think you're going to want to do that in a system of record like Filecoin

because you can have real cryptographic proof that your identity or your document

is charted, meaning, you know, not a single node can have access to the full document

and can't piece it together and you have enough economic guarantees that if you want to retrieve

that file, you can very quickly do so.

So for me, that's what I mean about, you know, if you want to preserve your identity

and you want to store mission critical stuff, we will start using something like Filecoin.

So I'm just starting to talk about Filecoin and I walked out of the room.

Let's do content- let's do content of the week.

Rob, what do you got content of the week?

I'm going to go back through all of the live streams of DAS and watch all of them.

That's my content work.

And we're going to watch every single one.

You know who does that?

You?

Kyle Simony.

Wait, he does only does that for Solana Breakpoint.

It's a lot of breakpoint.

And then he quits about it.

But I don't know if we'll do that anymore.

Yeah, sure.

I'm going to cheat because I talked about it last week.

Born to be wired.

John Malone.

Yeah, cable guy.

Legend.

So there's a book about him.

Acquisition a week.

Acquisition every two weeks for like a decade.

Yeah, cable industry is fascinating and then net neutrality and all that.

Now of course he owns a Formula One tracking stocks.

Really interesting instruments.

Great book, fairly recent too.

I'd read cable cowboy.

A while back.

Also a really good book about him.

But this this book he wrote it himself.

So really, really good book.

Yeah, fascinating.

Dang, I have a TV show in Hulu.

It's not as informative.

It's called Parasite.

It's pretty good.

So I'm you sort of broke the trend here.

I was hoping to get a thriller.

Yeah, so that I can.

Well, I did see I did see Project Hill Mary.

Project Hill Mary.

Yeah, it's a good book.

It's a good book.

And it's that was it's no movie.

All right, I'm wrapping us.

Good, that's everybody.

Appreciate you guys.

Thanks for sticking around.

Thank you.