SPEAKER_00: all right everybody big show today we spent all yesterday talking about crypto we're not done we got our two favorite crypto fellas back for a crypto round table vinnie lingam and sunny madra joined to talk about the eth merge martin shkreli's new crypto project how anybody can be rehabilitated as long as you don't have to trust them in the crypto universe gary jensler's comments about compliance and regulation on exchanges and more it's a great show tons of lessons and super

Jason Calacanis: interesting information and even some projects out there with some actual value that's the thing we keep asking for it's going to be a great show stick with us this week in startups is brought to you by

SPEAKER_03: revelo looking to affordably scale your product development with global tech talent in u.s time zones hire vetted remote developers in latin america with revelo get 20 off for the first three months at revelo.com twist the microsoft for startups founders hub helps all founders build a better startup at a lower cost from day one open to anyone with an idea you'll get up to 150 000 in azure credits technical advisory access to mentors and experts free dev tools and so much more there is no funding requirement and it only takes minutes to join sign up today at aka.ms slash this week in startups and user testing with user testing you'll understand it from your customer's perspective by seeing how they interact with your products apps or messaging get real-time feedback real fast put yourself in your customer's shoes visit usertesting.com slash twist for a free trial user testing

SPEAKER_06: real human insight all right everybody it's time for our crypto round table this is the second time we're doing it last time molly was on vacation but she's back so she'll be here for this great round table with sundip madri you can call him sunny he is the co-founder of definitive intelligence which lets users view on and off chain data to understand their web 3 user base and of course vinnie lingham co-founder of civic uh the original uh partner and investor in solana and his startup encrypts identity information on the blockchain welcome back gentlemen thanks jason thanks for having us again yep good to

SPEAKER_12: be on with molly this time yeah i know i'm stoked well molly you you told me that vinnie handed you the bag on solana he liquidated his solana to you you bought 300 worth of solana and lost

SPEAKER_00: what happened is i drank a little too much of chamath wine and then listened to vinnie for an hour and

SPEAKER_24: then went and spent 300 on solana so how'd that work out for you i'm sure it's gonna be fine i'm a holder it could be worse you could have bought bed bath and beyond there we have it folks there you

SPEAKER_27: go also i'm obviously quite impressionable so thank god we didn't talk about bed bath and beyond anything

SPEAKER_29: could have happened all right well speaking of scams uh and bag holding farmer bro martin shkreli

SPEAKER_30: has is out of jail if you weren't following you remember him he was the most hated man on the

SPEAKER_06: internet for i don't know three months or something he has a new web 3 project to create drug discovery software it's called druglike.com seemed like a reasonable idea i wanted to get everybody's perspective on if this is crazy or not it's a computational chemistry software startup and what he wants to do is take this very expensive software and uh the resources it takes you know gpus i think and make it much cheaper for people to use here 77 seconds of shkreli on the milk road

SPEAKER_05: show from july talking about this new project and i'll get your feedback after

SPEAKER_32: if you're going to make great software it's that's sort of independent of like what modality you use so for me drug like's main goal is to make great computational chemistry software if we can help solve the compute problem great you know if we can't it's still great computational chemistry software like right now there is no web based comp chem software so if you want computational chemistry you have to call the company that makes it you have to sign a license agreement it has to get installed in your c drive you are not getting any web access to anything and you have to get trained right you have to like this is whole like craziness and it's not particularly user friendly either so we made software that we wish we could use as chemists and as drug developers when we were at those companies so we're able to sort of get something that you can just up and get running and could you imagine if you needed a license agreement to get on google you know it would be a disaster and and that's sort of the problem with comp chem is that you're shutting off 80 or 90 percent of users that could use your software maybe more on the flip side you know you are gating it to a pfizer and america that will sign enterprise license agreements of millions of dollars so i think there's there's sort of that sales model and there's our sales model obviously um you know to some extent i i have no problem with sort of just this becoming an open source software that's free to use and provide your own compute i do think that compute challenge is something that we hope we can help on we think there's some other sort of tools we could do like democratizing the reward as well um you may want to get a whole bunch of expensive compute for free well why not give up a piece of your you know um ip for example in in return for that compute so maybe i'm willing to provide my compute but you got to give me half of the intellectual property if you inevitably file a patent maybe i can get half of that and i'll give you compute and that's a fair shake so maybe no money has to change hands what's your take on uh

SPEAKER_36: this concept uh sunny alpha fold right is something you guys spoke about in the all-in pod and and it's

SPEAKER_37: kind of what it's done for society and i kind of viewed this as a decentralized alpha fold so i

SPEAKER_38: thought the idea was actually quite strong and it's probably getting mixed up in martin's background and everything that's happened there but i i thought the idea is quite powerful and maybe i'll throw to vinnie because he's been a big fan of these decentralized compute um resource plays that leverage

SPEAKER_37: the uh you know blockchain and crypto economies to do it and so i i thought it was a really good idea you know make it available to everyone and and uh decentralize the compute for it vinnie so i mean

SPEAKER_41: i think we all know his reputation and and i would say can you or should you separate the reputation from

SPEAKER_43: the content here so if it wasn't a pre-mine in other words the network went live and anyone could add compute resources to the network and mine for the coins directly and martin screlly and his cohort of whatevers um i want to use too abusive a name to it but those people actually you know participated in the network on a peripassu basis with everyone else so in other words i could go and rent gpus i could add it into the network i could mine coins and it was a fair a fair launch really of the network i think it's brilliant i think it's this is the sort of stuff i like i mean it's it's the pre-mine stuff can work with people with at least decent reputations and you know like you know if you look at some of the big projects we've had file coin solana you know render etc these are guys who haven't been in jail you know like you can trust the intentions there right the moment it's a pre-mine it to me it'd be like wait this could be a pump and dump and we're all going to get rugged and that would be my concern so so given given the just the background of the team and i'm not talking about the i'm talking about sort of the the morality of it not the intelligence of it because they're obviously very smart guys they know what they're doing from a morality perspective i would like to see them

SPEAKER_44: launch this thing and say look we're going to compete with everyone else here's the spec the network goes live on this date anyone can use it it's compute intensive it needs gpus you can go and

SPEAKER_45: buy all the theorem gpus you can plug them in you can rent power from from render whatever the case is and you can mine on a peripassu base everyone else and we're just going to help maintain this network and and build a token around it that's the token version of it on a non-token version basis i don't know how they scale this because how do you get the distributed compute in the platform so it's probably a compute play um but this is this cannot be a a venture capital vc funded

SPEAKER_46: thing where they go raise money from andresen or whoever else and they get to i mean what you're

SPEAKER_47: talking about here is everybody's starting at the same start line right like yeah the vcs don't get

SPEAKER_35: to buy the coins at some fraction of a penny exactly they just just they drop them all at the the same time

SPEAKER_44: in terms of fairness exactly so you publish the white paper the road map and you tell everyone this is the spec everyone gets the same starting point and if if andresen wants to go fund them to go mine coins faster than me or jason or sunny good for them but that's fair because it's all about it now like there's no pre-mine there's no we're holding this back but that's a regulation convicted

SPEAKER_00: felon like it can't be good it can't be good for the industry when this is the guy who's like oh yeah

SPEAKER_45: i want to get in here well i'm not i'm not sure i agree with that notion that like you know i think that the the the the veracity of the idea should stand on its own two feet like separate from what he's done in the pot like he if martin came up with like hey this is how you do fusion or something or like he solves a very tough problem in in the world and just because he's a convicted fellow doesn't invalidate his idea right so like your past shouldn't invalidate science like these are two

SPEAKER_44: separate things you can have a really bad guy like if i told you today satoshi is a criminal behind bars

SPEAKER_66: that doesn't invalidate bitcoin yeah i mean i think it's a i think it's an interesting question like

SPEAKER_00: it's clearly not to your point a bad idea even but it's pretty hard to consistently separate the artist from the art in a case like this like especially where you're talking about a project

SPEAKER_68: that is built on some level of trust fundamentally but that's the whole point it needs to be trustless

SPEAKER_44: that's my argument it needs to be this is an open spec if big pharma wants to use it if there's demand for the compute power if i'm adding compute power and getting tokens from it my actions are independent of everyone else's it's a coordination sort of rally point for everyone there's no pre-mine me adding compute power to the network doesn't pump up martin's bags of coins that he pre-mined before

SPEAKER_73: it went live for me that is the critical point okay interesting yeah it's interesting molly when you think about it because people do not want to put their reputation on the line with somebody like that

SPEAKER_75: right so like they've basically been excluded from venture capital or funding because of the past right i mean it would take pretty strong conviction to give somebody right out of jail money in a way it's

SPEAKER_06: like crypto becomes this back to permissionless like okay my reputation doesn't matter it all all that matters is people buy into my idea for better or worse i'm not saying that's a good thing or a bad thing but it is interesting that if you have a bad reputation crypto becomes a platform where nobody can stop you from engaging in it well i guess to follow up on your point just now vinnie like what is the

SPEAKER_00: chicken and egg part of that because i see what you're saying it makes perfect sense that as it grows it is trustless so you don't have to worry that much about the origin story if you will but you do have to have buy-in in order to create this thing from the get-go right the buy the buy-in is purely

SPEAKER_44: capitalistic view right if i'm a big pharma company and there's this way of like uh reducing the cost of new drug discovery and research and i can produce it 90 cheaper than i can today using this network and the network is very fair in terms of distribution of tokens or compute power or whatever if i don't use it and sunny goes and starts up a biotech company he comes and does drug discovery at one tenth the cost he's going to kick my butt and then for like you basically it's an economic discussion like this is the whole point of like removing the people from the science right as long and but this is why for me it's very very important that it's not a pre-mine where he owns some part of the network up off the bat this needs to be if you if he really believes in the idea if he really believes in what he's building and like the good for humanity it should nobody should have an advantage over this it should be open game open seasons for everyone and if he winds up being the smallest stakeholder in the network after a year that's his problem but it shouldn't be where you know it's it's a pump and dump that and that so for me it's all about the science like if the science is good it shouldn't matter who discovered someone's if someone discovers the cure for cancer and they're a convicted felon mass murderer whatever it shouldn't invalidate the cure for cancer you should still use

SPEAKER_00: the cure to be clear i'm not even trying to say that as like a morality or value judgment specifically although punchable face for sure what i primarily mean is given the opportunity to do business with screlly i would 100 believe that there is a way that he is finding a way to screw me well this is

SPEAKER_44: my point if it's an open permissionless network you're not doing business with screlly but you're

SPEAKER_58: saying yes do we know that it is like we know that's why mine like it's under construction yeah

SPEAKER_51: it's under construction that i'm just giving i'm just telling you how i would do it so you're saying

SPEAKER_00: this is the universe in which you would be you would feel okay about it yes it's almost what the actual

SPEAKER_44: yeah open source code open source everything open spec like anyone looking in can say this is a and you know what they're they're they're watchdogs out there okay those guys like really smart comp side guys are gonna look at this and say hang on there's a catch this is the catch and that'll

SPEAKER_88: be exposed and then no one will want to participate in the network it would be as if like wordpress was

SPEAKER_30: the wordpress open source project was the person who created instead of being matt mullenweg who's the nicest guy on the planet what if it was like a serial killer so like literally i'm just doing an

SPEAKER_06: extreme case here the serial killer creates the best publishing platform for the web but it's completely open source and then people can use it and they have no control over it but then you have

SPEAKER_91: to live with the fact that a serial killer made it it's really like a great mind i don't even test

SPEAKER_94: it only matters if he benefits directly from it in a disproportionate way that's all i'm saying too is

SPEAKER_00: like i don't have to like him but vinny is doing a great job of laying out the conditions under which you would be like you can't screw me here and so this could be a good thing all in exactly if this

SPEAKER_67: was a company i wouldn't touch it and this was like martin's crazy's new company they're raising

SPEAKER_94: a seed round at a 500 000 pre-money valuation it's free equity you know like and he wouldn't be able

SPEAKER_75: to i don't think you know like that's the that's the interesting part about it isn't it sunny is that like crypto and open source and the nature of this under the conditions that vinnie puts out would

SPEAKER_103: would make it like possible for him to do that if you're looking for highly qualified elite international developers but you don't want to deal with the crazy time differences i feel you that's why i use developers who are in my time zone and that's why you need to know about revelo revelo is your answer it's a talent platform and it matches you with vetted full-time remote developers in latin america which is where i have my developers they work on us time zones so you're talking to them for eight nine ten hours a day and you can collaborate in real time not play telephone and you're going to spend less compared to hiring in the us and i will tell you that the developers in latin america are as good as the developers in america you're going to get matched with your candidates in three days or less they're going to handle the payroll the taxes the benefits and more you get to hire internationally without all the headaches revelo engineers are full-time and embedded in your team just like normal employees okay and they're proficient aws rust ruby react python node.js all of the great technical platforms out there they do here's your call to action go to revelo.com twist and mention twist to get 20 off your first three months very significant when you think about it r-e-v-e-l-o dot

SPEAKER_105: com slash twist they offer a hundred percent risk-free 14-day trial period if you're not satisfied you pay nothing r-e-v-e-l-o dot com slash twist have any of the other projects that do distributed compute

SPEAKER_05: hit any kind of scale i remember there was the rendering one i forgot the name of it i know there's render coin it's called render it's called render it's called render there was wasn't there another name though for another one that was doing like animation projects that was render still like

SPEAKER_38: another one right there's another one that has scale on the supply side is helium and so what they they have like a network of uh you know 4g and 5g hot spots and that's been an interesting one they have i think you know anywhere like 900 000 plus hot spots around the world now so that's one that's

SPEAKER_113: really kind of taken off in in a similar capacity of course so there's a coin is a classic three of

SPEAKER_115: these has have have those three hit any kind of user adoption so file coin file coin has got scale

SPEAKER_55: which i think people don't people don't appreciate how much scale file coin has per day it's like

SPEAKER_43: it's pretty big now users are not using the stuff remember this is a very low level protocol so the people using file coin are not uh you know it's it's not the end user it's the services that are built on top of it so you've got things like estuary.tech and other services that build on top of file coin file coin is the base layer infrastructure right now file coin is storing i need to double check the latest numbers it's got like 17 exabytes of storage capacity on the network and like that's like 200 times netflix's archive or 300 times it's a huge amount of storage that

SPEAKER_45: file coins got and they're storing um i mean there's 4 000 miners i mean look up the stats but it's

SPEAKER_121: pretty big okay but usage maybe not there yet so no usage is there no usage is there so if you look

SPEAKER_45: at like if you look at our weave our reef store is about 70 i think it is 70 gigabytes a day and i think uh file coin stores like a terabyte a day so it's like 17 hours a day there's these like two

SPEAKER_38: interesting curves that come together on these you know jacal which is uh one is when they're early and like how much distribution do they have and how much can you trust like how much storage do they have and then as they continue to grow the centralized services initially have a lot of advantages

SPEAKER_37: because of their centralization it's only when these things reach a certain scale that their price

SPEAKER_38: gets cheaper so i think right now file coins not cheaper than s3 or glacier probably glacier is a

SPEAKER_127: better example right and so it's cheaper it's cheaper than glacier it is cheaper than glacier okay

SPEAKER_38: but um and so like there but there's a point at which those things kind of cross over and then you know the other thing that factors into this sometimes is in we touched on it a little bit before is when the the token that represents its utility gets mixed into the speculation and so that becomes problematic

SPEAKER_37: because where you know something is meant to power the economy just to drive the scaling of it people

SPEAKER_38: start speculating on it i think that breaks that breaks these things sometimes as well and so that's two curves that you really have to watch with these utility token based um services that are popping up

SPEAKER_75: all over the place yeah can the distributed one beat the centralized one in terms of cost and ease of use and all of those things that consumers would care about you sent this link uh the starboard link yeah

SPEAKER_134: so vinnie here you you explain to us what we're seeing here so this is dashboard for filecoin how

SPEAKER_55: much uh how many how many deals we're getting per day in the network so in the past 24 hours 1.4 petabytes of data was stored on the network that's 1400 terabytes every day look at the daily deal

SPEAKER_135: statistics like this is this is not cumulative this is per day every day look at these numbers going up

SPEAKER_15: so what is a deal in this content yeah thank you i'm glad you said i'm like what is the deal

SPEAKER_55: a deal is basically a a vendor asking a story provider to store amount an amount of data got it

SPEAKER_139: so if i wanted to store the archives of this week in startups 1500 episodes i could do that on filecoin

SPEAKER_52: and pay some amount yeah and that would be a deal and then i would pay in cryptocurrency or file coins to

SPEAKER_133: do that you pay in filecoin so there's about every month would i pay it or do i pay it one time you

SPEAKER_55: you pay for the period of time let's say you want to store it for 18 months you you have a contract for 18 months and then they have to provide proofs that they're storing the data constantly and then you can choose where how many copies of it you want on the network so if a provider goes down it's

SPEAKER_147: still there can i make it public available to anybody

SPEAKER_148: oh yeah yeah you can have public data so joe rogan could put his whole archive up on filecoin make it publicly available for anybody to download wikipedia runs on filecoin so yeah so that so

SPEAKER_55: i didn't know that it went turkey so when turkey one wound up uh banning wikipedia they moved it across to ipfs which is built by protocol labs and i think it's running on filecoin now as well but it's

SPEAKER_152: basically censorship resistant you can access filecoin anywhere in the world you can't shut down

David Friedberg: the server for oh wow so maybe wikipedia that we all go to is stored wherever they store it on regular servers exactly but there's a backup copy mirrored on filecoin think of it as a guys as a persistent

SPEAKER_70: cache everywhere that you can access but i mean so if you don't if anyone like viewers want to go check

SPEAKER_55: out dashboard starboard adventures like this is one of these crypto projects that very clearly i mean like 16 exabytes of storage capacity on this network is mind-bobbing i mean netflix i think has got not

SPEAKER_159: even an exabyte and i think sunny what do you think netflix is sitting on yeah probably yeah

SPEAKER_37: i think close to probably one maybe one yeah it's tough to compare because it is providing storage for everyone but i you know probably better comparison is like s3 or glacier or something is

SPEAKER_88: there a point in time where a netflix could conceivably use this they could use it right now

SPEAKER_05: well i mean i mean not technically they can but could they practically with the number of users they

SPEAKER_55: have with the network support it you think yeah eventually that's the whole point right distributed storage at scale uh they have to there's a retrieval market that's coming soon um you know the idea is that you can like look the cost of moving data from one place to another is pretty high right so if you have localized storage in a sentence if you want to store local videos for south africa in with a south african provider that's a lot more efficient than storing it in with a cdn in uk and then streaming it across to the local provider and you can actually get it very granular you can get it

SPEAKER_45: down to someone in johannesburg storing the data and then you pay them for streaming or whatever it is uh delivering it it's going to get there we're not there yet we're probably three years away from

SPEAKER_152: that sort of thing or five years away right but this is super impressive when and when you say it's

SPEAKER_68: censorship resistant and censorship proof it's because it's distributed compute it's like the seti

SPEAKER_166: of storage bang on yes exactly exactly yeah and if 4 000 providers worldwide currently in the next

SPEAKER_55: you know and if the price of falcoin rises so let's go it's like six bucks right now let's say it goes to back up to 100 bucks or 50 bucks that 4 000 is going to go up to 7 000 10 000 more more providers worldwide because there's more revenue in the network there's more value in the coin and so to mine those coins the same way you mine bitcoin more providers will come on the network so the issue that falcoin has right now is it actually has i'd say too much storage right now 16 exabytes but if you look at how much storage the world needs over the next 10 years that's nothing so there's going to be this point in time where there's a flip over we don't know when it is it could be three months six months two years where falcoin becomes the most valuable decentralized global storage platform and the key the key thing about like the way i look at falcoin in a very simplistic way is falcoin is the amazon storage infrastructure the software for that but everyone runs their own hardware so right now amazon has a centralized data center and they've built all this from all the software you know from a very low level to abstract it all the way to the front end for developers to store data but amazon owns the stack they own the hardware and they own the software filecoin is basically here's the software and you can go plug in your own data and create your own data centers pay for your own electricity your storage your security and people can store wherever you are and we'll give you software to run it so it's kind of like a it's like it's like hotels and hotel

SPEAKER_38: software that's it well and and the way i kind of think about these things uh you know it's like building off like jeevin's paradox right if you're familiar with that it's like the more of a you know kind of a it's something you make available more people will consume it so then you know airbnb and hotels like one didn't wipe out the other one there just became more use of of people wanting to do like use of that utility and i think we're seeing a lot of another great one you know as we're talking about things is hive mapper i don't know if you're following that one

SPEAKER_37: no and they're basically building like a maybe nick can pull it up it's like a decentralized google maps with the street views that everyone can use so it's not owned by one company everyone can contribute to it and so it's really really that that's another one that's kind of out there that you can imagine if you're building anything that's location based or something like that you don't want to be at the mercy of google is the only person you can get this data from um it's it's super powerful

SPEAKER_75: so with hive mapper you put a camera on your dashboard and you drive around and then you

SPEAKER_38: contribute to it and get paid a token yep it's what's called honey that's their token huh yeah and basically you contribute to this decentralized google street view which you know it's an awesome thing it's like everyone owns it and everyone can can use it but they're making the hardware so

SPEAKER_187: they're the the actual hardware you you have to buy it to then contribute to it personally you'd have

SPEAKER_30: to buy a server pretty good price yeah hopefully it does pay off for you to do that that's actually

SPEAKER_190: a brilliant idea as well yeah but this is helium do the same thing and that's uh it's kind of the helium

SPEAKER_30: model yep the thing about the helium though i saw a tweet that went viral uh this is from this guy

SPEAKER_75: laran shapira yes so this guy laran shapira is a bit of uh i don't want to say troll but he's pretty

SPEAKER_30: critical all the time he was ripping a bunch of clips from the different pods and i had to tell him like hey pump the brakes you can't take the show every week and then yeah so i stopped him from doing that but he says here helium often cited as one of the best examples of a web3 use case has received 365 million in investment led by a16z regular folks have been convinced to spend 250 million dollars behind hotspot nodes in the hopes of earning passive income the result helium's total revenue

SPEAKER_196: is 6.5k a month i don't know if that's true or not what do you think of that critique uh we can

SPEAKER_38: double check about i think one of the things that's happened here is you know this is one where the supply and demand curve didn't match and the utility of of a wireless network is tougher than something say like a file coin because if you're going if you're let's say you're a company whether you're a scooter company or an automotive company that says hey you know what i want a lower cost alternative i need some constant connectivity i don't want to be um sort of tied to the big networks that's a great concept that you'll get this distributed network to do it but you can't really make that switch over if you don't have 100 coverage so this this adds like an extra dimension to like a seti at home or a file coin where you have the dimension of location so in order for this

SPEAKER_37: to work they need like a really highly distributed network and you can imagine where these nodes pop

SPEAKER_38: up they pop up in a very kind of clustered way where you know you could see you know huge huge clusters in the east coast and the west coast and not coverage anywhere else and then that makes it much harder for say a company to jump on this network and start consuming it with that sort of odd distribution and that's something that these projects sort of have to balance out and the other thing which we were just mentioning earlier when the utility token becomes a speculating token then a lot of times and in this case you know people were buying the hardware to mine the token

SPEAKER_37: so you end up with lots and lots of supply because people are speculating on the token and you're not you don't have the appropriate demand coming in on the other side

SPEAKER_29: if you're running a startup you know that every little bit of help counts between running your team building the product getting compliant hiring people studying customer support everything it's overwhelming i know that i work with you all every day but the microsoft for startups founders hub is here to help you they're going to help you build a better startup from day one whether you're plugged into silicon valley or not the microsoft for startup founders hub is a digital platform created by founders for founders and they give you amazing benefits the first one right off the bat unbelievable up to 150 000 in azure credits and then one-to-one technical advisory on scalability best practices security your tech stack all that stuff and you get access to a huge mentor network plus free dev tools like github enterprise access to partners like open ai bubble and others free microsoft software including outlook and teams and much much more the program is open to everyone there's no fundraising requirements you don't need to know somebody they want to support all founders it takes just five minutes to apply and startups get all these massive benefits immediately so learn more and sign up for microsoft for startups founders hub today act you're going to write this down right now stop what you're doing get a pen get a paper aka.ms slash this week in startups that's simple aka.ms

SPEAKER_203: slash this week in startups yeah we talked about this a little bit yesterday and we'll talk a little bit

SPEAKER_00: more about the sec in a minute but um this idea that once you that basically like once you start to financialize a product before it actually has value you've sort of inverted the process right it should have built value and then maybe you build some financial instruments on top of it to make it more valuable but it's this kind of inversion that seems to be you know muddying the waters i guess is

SPEAKER_68: the best way to put it about the industry for people right now the issue that crypto struggles with

SPEAKER_43: is that everything is subscale in terms of market depth and liquidity so when you have when you have like any of these projects that come out there and everyone sort of piles in to start mining or adding coins the moment you get the point where there's just no bids like people just dump the stuff and and so there's this interesting view i've got on crypto which i think it's it's it's definitely

SPEAKER_45: developed over time i mean bitcoin has the the deepest liquidity pool by far and then second is ethereum and then over time you're going to see more pop up with deep liquidity pools the real issue is the rate of inflation at the beginning and then how it declines over time and there's a lot of players actually the best way to make money quite frankly is to ob the intermediate step okay and so that intermediate step is what we saw in bitcoin in the first eight years where there's this you know before the halvings came along every time there was a huge spike in bitcoin people just dumped it and they dumped it down and made their profits they short they short of the market but eventually the inflation like tapered out it's like whatever four percent right now and you can't you just can't do that anymore it doesn't work bitcoin you know it's down from 60k down to 20 it's not down to three you know it's a it like it's got a new high and a higher high every single time or or you're saying

SPEAKER_30: in plain english means a lot of participants when you get a lot of participants the volatility comes out

SPEAKER_45: yeah so things like let's talk about falcoin for a second falcoin pumped like to 230 bucks at one point because it was a low liquidity and everyone started mining the coins you had you know exabytes of data come stories come in the network miners are borrowing coins to stake and whatever else and they went through the cycle and then they mine these coins out the falcoin inflation on day one so it was 15 million coins were released by the time the network went from testnet to mainnet um yeah there you go and so there was this huge pump but but go and look at the market cap so that's price now look at market cap so the market cap went up to 10 billion and then it started going all the way back down to where it is right now so that's 1.7 billion market cap now go and check where the price right now is at at 6 30 okay yeah and look at what it was at the previous market cap at the start of the uh so at six

SPEAKER_213: bucks last time you're saying when was it last six bucks not even there but like a little further back

SPEAKER_44: because only when it listed it was like 20 bucks so got it so the market cap has changed dramatically

SPEAKER_45: because the inflation has gone from 15 million coins to like 300 million in the past two years so what you see it's hard to overlay you have to probably have two screens to show it but the the point

SPEAKER_44: i'm trying to make really is the the liquidity of falcoin has actually increased dramatically we've gone from 15 million coins to like nearly 300 million coins in the float the market cap is sitting at 1.8 billion it was a lot higher but now the inflation has gone like so the inflation from 15 to 300 million is like you know 20x it's the same in bitcoin had its first million coins we're now on coin number 19 million or something in bitcoin it's at 19 times expansion falcoin has just gone through that same phase in two years and now falcoin's inflation is like 20 a year and dropping dramatically because

SPEAKER_45: it's just the law it's the law of large numbers combined with the actual caps of crypto coins so you have this like this this evening out and now you can't really dump it as some as easy because you can't mine it as fast and so the people who are holding it long term i think have much better returns but the problem that all these crypto projects have is you have this gap and sometimes it's three years sometimes it's eight years between where it initially starts and and call it like um some sort of terminal inflation or a terminal infection point where inflation drops to a reasonable level like 20 10 a year or whatever it is and and so there's a lot of arbitrages out there guys who are mining in china or wherever where they don't care about the project they see most of the miners don't actually they don't care about what whether it's bitcoin or ethereum or falcoin they just want to arb the so so the way the arbitrage works is this the coin pumps up to like 60 bucks they short it they borrow they pay some interest rate 20 they short the coin they buy the hardware they mine it and they got locked in guaranteed profits because they know the mining costs are a fraction of what they shorted it at so so that's why crypto by and large looks like a pump and dump across the board for most projects and

SPEAKER_218: most projects there are a pump and dump but for the really good projects once the liquidity pools deepen it's exactly like that's not the case so you're saying i should j trade file coin right now

SPEAKER_220: well i mean follow follow coins once one is another one he's got the glasses ready he's ready to go

SPEAKER_75: what's your take on that uh sunny this rings true to what vinnie's saying is that as the the percentage of new coins generated every year starts to fall down to 10 percent of the total float the total number available you start to get the stability and you have a deeper liquidity pool yes you do but i'll

SPEAKER_38: just go back to what molly said i think if if the things are financialized before there's like product market fit all of that will just kind of fuel speculation rather than actual utility and i just think back to you know startups for the longest time we in the financial markets gave them the flexibility to not worry about you know financial returns you know profits or anything like that as long as they were searching for product market fit and growing i think here when that gets inversed and people are starting to trade on it all of these you know financial mechanisms that you know vinnie's touching on that you're talking on come into play whether you have deep liquidity of a project or not but if it doesn't it hasn't kind of found its core core actual utility to folk or its service i think you're in a really really dangerous spot with these projects you like founders selling

SPEAKER_30: molly their equity in a startup before they have product market fit right which is the exact same thing has happened exactly and it always winds up you know as my grandmother would say it's gonna it's

SPEAKER_00: gonna end in tears right because then it's gambling chips right it's not it's just chips and there's no

SPEAKER_219: cash in the back room let's say well so but also you're not you know the other thing molly is now

SPEAKER_30: you bring it up you think about the distraction level of you know extreme wealth or quick wealth or quick money it's very distraction distracting well you know what i see when founders are able to

SPEAKER_05: liquidate um people are talking about like hey how much secondary should we allow the founders to take how many should we buy from this is like very thoughtful conversation in in the best cases where

SPEAKER_06: they say 25 million dollars is going to make this founder start looking at planes and second homes but two million dollars or four million dollars they're going to pay their taxes they're going to have one to two three million dollars left they're going to pay down their mortgage or have some money for their kids 529 it's completely different right and i think we've all seen that up close and personal

SPEAKER_05: unfortunately is that these big checks can really distract the founder experience what your customer

SPEAKER_103: experiences with user testing whether you're launching a new product a prototype or a marketing campaign you'll get video feedback straight from the people who you want to reach most your customers the user testing human insight platform lets you understand it all from your customer's perspective and it allows you to target your exact audience ask any question or request to perform tasks and most valuably get a window into their world and unlike focus groups which can take weeks or months to deliver results with user testing you get to see real reactions and hear real opinions really fast you'll get responses in real time and at the speed your business demands so get insights into what's working and what's not so you can adjust your message refine your user interface and understand exactly how people are responding to and interacting with your product service or brand the result you'll feel what your customer feels so you can build the best experience imaginable for a free trial visit usertesting.com

SPEAKER_139: slash twist usertesting.com slash twist user testing real human insight i want to ask you guys

SPEAKER_00: about the ethereum merge because that was a big that's a big topic on your list and it's a big topic in general it seemed like it was maybe going to happen on august 15th now it's sort of tentatively scheduled to happen september 15th it's interesting for a lot of reasons one is the goal it sounds like of this merge is to make ethereum less harmful to the environment which is near and dear to my heart

SPEAKER_68: also though provide additional security to its network and faster transaction speeds when the ethereum network switches from proof of work to proof of stake can one of sunny you're nodding so i'm going to call on you like can you sort of explain to us what this merge is about and like why it's such a big deal because it sounds like people have been snapping up ethereum ahead of this

SPEAKER_178: event yeah and i'll just try to distill it to like its simplest form like i think what it will do

SPEAKER_38: like one you said it's reduce its like computational intensity for you know making the transactions like cemented into the blockchain but more importantly it reduces the cost and one of the things that we've seen in the last few years especially as a price of ethereum and the whole you know crypto markets were really kind of pumping up is that things became quite expensive so you know these this notion of gas fees and the transaction cost to to do anything on the blockchain became quite expensive and so from there you know we saw a few different things happen we saw a lot of like new l2's emerge for ethereum trying to compete to solve that problem i think what this will do is it'll actually push back innovation into ethereum and that's why there's the excitement and that you know people were going to avalanche or polygon and they'll continue to do that for specific use cases but i think this

SPEAKER_37: allows more innovation to come back into ethereum which is why i'm excited about the merge and that that come into reality yeah the gas fees got too big right well yeah it's funny because the chat now is going

SPEAKER_00: crazy being like nope does not provide extra security it's a consensus layer change gas fees will stay

Jason Calacanis: the same help us understand like concretely how it will create extra innovation well like i i i tend to

SPEAKER_38: disagree i think yeah i don't mean to facilitate that yeah i know i mean i i think uh basically by lowering sort of the compute intensity required for that consensus layer to solve those problems the gas fees come down right it's right so sort of everything boils down unless we all go to first principles right you make it simpler it's less compute intensive do something it's going to cost less money right we

SPEAKER_37: don't have to get into the you know the code by code what's happening there but i think we'll start

SPEAKER_66: to see that happen vinny uh are we supposed to be buying ethereum now um i would be like don't seem

SPEAKER_43: that interested you're like yeah it's fine no it's not that i i think there's a substantial amount of risks in this merge that's underpriced by the market i think that my price target for ethereum is around 2000 pre-merge so i think it rallies to 2000 and then i think that if it goes well it comes to 2500 or 3000 and it goes badly it dumps to a thousand i think 2000 is kind of my like

SPEAKER_45: equilibrium point so at the 1600 level you're gonna see i think you're gonna see another surge going to 2000 but i'm i'm i'm betting on that i don't think that we have a lot of steam in it like the merge has been so overhyped already for so long i don't think you have enough momentum for a 3000 run pre-merge i think if everything goes well and like there's a lot of arguments for esg investors sort of coming into ethereum that couldn't go into ethereum pre-merge they can't go buy it post-merge um because now it's more environmentally friendly and you know etc etc but that's assuming things go out i mean there's gonna be a fork we know this there's gonna be a proof of work fork that goes off and

SPEAKER_218: does their own thing there's a little bit of confusion you know and it totally was on a pod he was on a podcast the other day and he said something which i think is is very fair is that the surface area for attack on ethereum is very large and so it's very hard to say that this thing is entirely safe now they've done it like think about this way okay if you're if you're a hacker or you're trying to do some nefarious activity are you going to expose some vulnerability that you know during the test net mergers or you're going to just hold back and wait until it goes to mainnet and then you know claim your victim right right the test you never gonna you i mean you're never going

SPEAKER_45: to release a like a zero day vulnerability on a test net you just keep quiet and you wait until

SPEAKER_00: until the final merge is complete and that's this is where we should explain that this switch from proof of work to proof of stake for those who don't know is a switch in the way that these and

SPEAKER_68: the way that basically miners are compensated proof of work uses a lot more energy uh as we know there's there are reports that this this merge if ethereum switches fully to proof of stake could cut electricity used by 99 but is much less tested to your point vinnie right like we just don't know if this will be as bulletproof and it's hard to hack and so you're saying there are plenty of people out there who are probably just like i know exactly how to bust into the system the second you make this switch which is why there are some miners saying that they might this is where the fork idea comes

SPEAKER_00: in some miners are saying like we're just going to stick to proof of work like we're going to keep

SPEAKER_45: doing well that's a little bit but it's a it's a law of unintended consequences as well like we don't know what i mean i think and it totally is just a really smart guy who understands it's a lot of founder yeah yeah like you know understands it better than me and anyone else and his point stuck with me where he was just basically saying the surface area is very big it's it's a non-zero chance it's not like no one can go out there and say there's a zero percent chance of something going wrong like the

SPEAKER_80: smartest people in the world cannot say so what is this exactly happening uh 15th of september 15th

SPEAKER_56: of september yeah wow oh wow so we'll definitely keep track why was it why was it variable there was

SPEAKER_258: some no is that just the community being like we're not ready yeah yeah okay yeah it's just amazing

SPEAKER_30: that an open source project can coordinate such a big change i mean that's to me the fascinating part about this with so much money on the line i mean it is pretty extraordinary like uh we're talking about billions of dollars are at stake here and they're making the switch and nobody's in charge

SPEAKER_250: you know like well so here's the database merge or a date yes like there's a couple of issues here like

SPEAKER_45: for example can you imagine jason and i signed a contract and i i promised to pay him you know ten thousand dollars in usdc you know for on a contract and now the merge happens and now there's you is usdc on on ethereum proof of work and if they're in proof of stake and i give him ten thousand dollars worth of useless tokens ten thousand useless coins because the one chain is you know circle says we're not honoring the usdc on that chain but we are honoring on another chain or you have like you can have these weird anomalies happen where even an nft it would be like a great time to just

SPEAKER_75: get off the chain get into fiat and wait to solana well okay whatever all right listen on friday sec chair gary gensler i know crypto's favorite person wrote an op-ed in the wall street journal where he indicated that a lot of defy products might actually be securities there is no reason to treat there's a quote from gary the double g there is no reason to treat the crypto market differently from the rest of the capital markets just because it uses different technology across the decades of cases the supreme court has made clear that economic realities of our product not the labels determine whether it's a security under the securities laws that block fi had borrowed crypto wasn't the issue here in fact you could replace crypto with any other asset the issue is what it did with the borrowed assets

SPEAKER_139: and what it didn't do as a firm provide the required disclosures to investors he continued compliance with our laws protects the investing public unfortunately some platforms that offer crypto lending aren't complying with the applicable requirements sunny what's your take on his piece

SPEAKER_38: what's fair and what's unfair yeah i had a long chat with someone about this yesterday and i think it's kind of too i break it into two areas if you are a crypto project trying to in any way shape or form

SPEAKER_37: replace what you know traditional banks do in our financial ecosystem you are really going to be impacted by the statements that he made because whether you're lending you're um you're you know giving people interests you know use different words whatever you want or anything that looks

SPEAKER_38: like what a traditional bank does you are going to be under the purview of the sec and i think there's lots of projects across all different elements it could be exchanges they could be coins they could be all over the place so i think for you know using that lens as as a you know say a consumer buying

SPEAKER_37: these things or an investor putting money into these things those folks are going to become highly regulated because they're doing what banks do and banks are regulated and banks are going to make noise on the other end say hey why are we subject to all these rules and why aren't these folks i think on the flip side if you're like an nft project for like some of the things we were talking about before you're not really replacing what a bank does you're probably on the outside of this that

SPEAKER_38: that's the way i'm kind of translating it right now and i think that's where a lot of the noise

SPEAKER_37: is coming from and if you look specific to what he talked about with block fi and what they were doing it was very much bank centric so that's my view on how this is um coming up did the op-ed read to you

SPEAKER_00: like gensler was saying to these let's say these exchanges are like black five right like you should have known you should have which i think we have said many times on the show that's true your your you know security like product looks like a duck walks like a duck and quacks like a duck so it's probably security but is it a little weird that he seems to be coming along saying like after the fact we're going to tell you you should have been complying with these rules all along or is it fair to say

SPEAKER_68: like you guys knew you were setting up a basically a parallel you know investment banking system and

SPEAKER_38: of course this was always going to happen i think these are like the ebbs and flows of innovation right even last time we talked if you go back to 2000 in the dot-com bubble right look at all the rules that we had to bring into place just around regulation of stocks or what companies could

SPEAKER_37: do to ipo and so these are the ebbs and flows of innovation right something gets ahead of it then the government has to come in because a bunch of people get hurt which you know is really terrible and the government has to step in and fix it so i think i you know it is probably a little bit backwards looking saying you should have known but i i feel like those are the same comments that led to sarbanes oxley and all that kind of stuff saying well hey you know we shouldn't let companies you know create sub companies and then price them themselves and use that to to basically pump up their stock uh you should have known better right this feels like well he

SPEAKER_30: does tell you he does molly have like a reconcilia reconciliatory is that a conciliatory

SPEAKER_75: regulatory approach here at the end which he says fortunately there is a path forward i encourage platforms offering crypto lending to come in and talk to sec staff getting these platforms into compliance with the securities laws will benefit investors in crypto market in the meantime the sec will serve as cop on the beat as with seat belts and cars we need to ensure that investor protections come standard in the crypto market so it does seem like he knew that he was saber rattling and that

SPEAKER_06: he wants to saber rattle people you know down a certain path was my take on it vinnie what do you think

SPEAKER_250: look the the the big issue here is that regulators don't move at the same speed as crypto not even close so it's it's it's called always like it's trying to you know catch catch the the horse after it's left the stable type of thing and it's it's it's a constant game of like i mean three years ago i

SPEAKER_45: could have told you this is gonna i mean i've even sent you the clips like this is i already said this years ago this is what's going to happen and the the issue i i guess is when you're on the ground so at civic we we tried actually integrating with our when we launched our wallet a couple years ago which wound up not we couldn't make it work because of a theorem gas fees eventually we tried actually integrating directly with these d5 protocols we spoke to celsius we spoke to cred a couple others we wound up not launching the product for one simple reason none of them could guarantee us the funds would be available when there's a withdrawal by our users because they were rehypothecating funds earning interest and we thought they were taking undue amounts of risk and not disclosing it to their users and we didn't like it we didn't launch the product we had so much work gone into it and we couldn't find any one of these dpipe providers who could give us any assurances that our users wouldn't lose their money so we never did it and we and you know like i've got probably the email threads with celsius and a whole bunch of others we had all these calls and i'm looking at this and we're looking at two years ago like we're probably going to miss the boat as a company on d5 and we did um because we just we you know like i have my reputation to uphold you know i don't want to have like hey i want to be like celsius like hey we just lost all this money for our users and you know vinnie i trusted you with all my bitcoin and now it's gone you know in your wallet and it's

SPEAKER_218: locked up in celsius like we couldn't have that happen so we didn't do the product very simple and

SPEAKER_46: then then i watched block fi and all these other guys take off and i was like i'm an idiot i should

SPEAKER_218: have done this you know because like you know you feel bad at the time and i'm like well then you know

SPEAKER_80: you sit back and you go oh boy i hope this doesn't end badly and then as it gets closer to ending i'm

SPEAKER_35: like oh boy this is gonna end badly yeah this is what happens when you have to make hard decisions about doing things correctly doing things right being good to your user base and and sleeping well at night jason sleeping well at night like like i don't want to wind up in jail right no no you don't like

SPEAKER_301: it's not nothing like someone you would not do well in jail no i wouldn't i wouldn't not do it so

SPEAKER_218: someone put out a nice jail no but like someone put a tweet out the other day and they were like they get you know they reply to one of my tweets they were like oh you know i can't remember what

SPEAKER_45: they said but there was something along the lines like i've already made money in crypto so whatever and i'm like you realize like i only go into crypto after like selling companies and but like yeah it was like the latter part of my career right lightning round here we go rari tribe

SPEAKER_38: mess what is this this was a project that um you know had a had a failure and they had kind of uh

SPEAKER_37: and this kind of shows like sometimes these dows right uh what we all expect you know you guys have talked about it separately these dows are meant to be organizations where you know it seems open we talked about it even in the beginning right and uh this group had kind of promised uh the holders of their token the returns of some of the assets from from the treasury and then they basically just backed out of it and and they said well you know what forget that vote we're going to just take a different decision and so this is kind of one of the kind of scary things of crypto is that we look at these uh structures and organizations say oh it's meant to be idealistic but we see them fall back into place that we've seen it before so that's a scary one where we've not seen the dow structures

SPEAKER_234: work the way we anticipated them to work somebody can just run off with the bag and say we changed our mind we changed our mind we don't like the way that vote landed let's do something else and it was it

SPEAKER_37: was all triggered by a hack right that's what led to sort of all this happening and but so it's kind of fascinating can i make one more comment on the eth merge thing because i was just reading through the comments as molly brought it up and there's a lot of a lot of interest there in terms of gas fees yeah the merge doesn't lead to it in like the first phase but the merge sets up east for like a whole bunch of new features like one of them is like called sharding that leads to ability to have more transactions per second which will then lead to lower gas fees so just for hopefully that calms folks down in the chat yeah sure the old database oh nothing ever will

SPEAKER_75: yeah but thank you pseudo swap what's the story there or blue chip nft price drops what are those

SPEAKER_317: let's do blue chips first vinnie why don't you talk about that yeah this weirdly seems related to the

SPEAKER_00: ethereum merge right people are all of a sudden buying tons of ethereum but not nfts and now even

SPEAKER_68: bored ape and cyberpunks are that's the technical term for the prices dropping by the way a fart noise

SPEAKER_43: i'm just a child there's a dow called bend dow and so bend dow is a dow that you go to if you own an ape you can borrow money against your ape when bored apes are trading at hundreds of each each and you go to bend down you put your ap and you can borrow like you know 100 eth 200 whatever it is convert it to dollars uh usdc and you can do you know you could basically spend that money and so you have

SPEAKER_45: all this wealth that was created all these bored ape holders and they live they live it up guys like if anyone is listening to this call the one thing i do not like i recommend people do not do is add

SPEAKER_324: leverage to crypto okay volatile enough yeah crypto is leverage in kerosene on top of your gasoline

SPEAKER_166: no exactly exactly so it's it's just you just don't do it okay just don't do it anyway so they

SPEAKER_45: so they go lever up they go put their asset down there if you need money sell your board ape okay if you need the money sell your assets lever up like the the most you should do is like one or two percent if you need some leverage that's it like you should not be doing 20 30 on any asset anyway long story short is a lot of these apes that the price has come down so much that these there's a margin call that's about to happen and and because the floor is dropping there's a liquidation event that can happen so if it drops a certain point there's going to be hundreds of apes sold at the full prices to get the money back for the people lending to the dow that's going to crash the price of aids then you

SPEAKER_218: have a you know you have a downward spiral you have a cascade and you know that's what happened with

SPEAKER_29: bitcoin right people were margined at 60k because they're like i bought my bitcoin at 30k it's at 60k i'll take half the money and spend it it's house's money what they don't realize is when they hit that 32k or whatever they get liquidated to pay back people now they have nothing so so this is this

SPEAKER_43: is the issue now everyone the issue everyone is struggling with is the people who in every cycle

SPEAKER_45: you get so you get let's say i came in cycle number two with bitcoin like 2013-14 then you had cycle number three which is like 2017 cycle number four which is this recent one every cycle the people from the previous cycle learn not to use leverage the people from the new cycle don't

SPEAKER_44: so all these bored ape peoples are all bunch of crypto noobs that are just using and so the next cycle once they get liquidated and they lose the apes the next cycle they'll be a bit more

SPEAKER_45: conservative and hopefully over time as a global community we get smarter about using leverage as crypto but for now that's the problem is that this leverage and so the floors keep dropping because everyone's waiting for the liquidation like if you have a bored ape what do you do you probably sell it now you drop the floor a lot more and you wait for it to collapse so you can buy it back cheaper

SPEAKER_210: all right everybody this has been an amazing crypto roundtable we'll do another one in two weeks thank you vinnie thank you sandeep aka sunny madra sunny give a shout out to your company i know that

SPEAKER_29: last time you got a couple of new customers tell everybody what the company is yeah we uh definitive

SPEAKER_38: intelligence definitive io uh we basically focus on helping web3 teams uh understand users and grow their user base and so if you have a project and you're going back to what we were talking about earlier and you really want to drive actual function and services and and maybe even a good from your

SPEAKER_37: project come talk to us and we'll help you grow your user base all right shout out sunny i'm an investor

SPEAKER_250: okay and uh vinnie uh you know i'm i'm working on two things really is one is civic.me you can check

SPEAKER_46: it out it's an explorer for your nfts and we've got some really cool features coming to predict nfts it focuses more on solana right now but you can do ethereum as well and then i'm working on

SPEAKER_45: weightroom.com which is a yes platform it's yeah rapid fire conversations gary gensler should get

Jason Calacanis: on waitlist and then use that all these crypto questions and then he can take all these crypto

SPEAKER_44: questions about compliance boom we fixed it virtual virtual press conference is the perfect use case you get like 30 journalists give them two minutes each you go online and there's a clock that counts down and the next person goes in so you know we'd love people to try it out it's still very new early

SPEAKER_350: tech but it's some feedback it's in bed all right everybody we'll see you next wait room.com i said

SPEAKER_351: waitlist but it's not wait room wait thanks everybody see you next time bye