SPEAKER_00: all right we got a great show for you today kyle samani from multi-coin capital is on the program they made a massive bet on a crypto project called solana and that has become one of the greatest investments in the history at least at this point i don't know if they're liquid on it uh in the history of all investing in the world because they bought solana which has now become an ethereum competitor coexister and this guy has got really strong feelings about bitcoin and a bunch of other crypto projects he's a very honest guest who's done incredible incredible in crypto investing we really double click on a lot of important issues you're going to love this as an interview and he's got strong opinions uh but first we're going to talk about the end of 996 at byte dance the makers of tick tock as you know 996 is the moniker for 9 a.m to 9 p.m six days a week basically the working style at chinese tech and finance companies which was modeled after how we used to work in the 70s 80s and 90s here in america but we kind of deprecated that a bit well now byte dance has mandated that employees only work from 10 a.m to 7 p.m monday through friday no more weekend work they have to ask for permission to do overtime some weird stuff going on

SPEAKER_01: in china and we're going to drill down double click and go deep on it stick with us this week in

SPEAKER_03: startups is brought to you by squarespace turn your idea into a new website go to squarespace.com twist for a free trial when you're ready to launch use offer code twist to save 10 off your first purchase of a website or domain drata don't let requests for sock 2 compliance reports slow down your business use drata to stay ahead of the curve go to drata.com twist for 15 off and micro acquire the startup acquisition marketplace start the right acquisition conversations at your own pace get free and instant access to over 100 000 trusted buyers with total anonymity say goodbye to brokers and meet your ideal buyer today go to try microacquire.com twist okay china's bite dance the makers of tick tock

SPEAKER_00: has killed the 996 work schedule and it's mandating that employees only work between 10 a.m and 7 p.m monday to friday 996 if you don't know was what people in china in the tech industry were working that means 9 a.m to 9 p.m six days a week which by the way when i was coming up in new york in the media world specifically were considered the hours if you wanted to work at condé nest or the new york times or any magazine you're expected to get in in the morning stay until late at night you would eat at your desk you would order dinner in most nights of the week or you go out to dinner you might come back to the office afterwards and you were expected to come in on a saturday or sunday do four or five hours and get ahead for the next week uh the world has changed obviously and in china specifically xi jinping has got a different world view and he's de-emphasizing you know these celebrity ceos like jack ma he's hasn't left the country in a long time i think it's two years or so and he is charting a new path for china which is certainly more insular and part of that is really getting into the social fabric of how people live their lives we saw their video game changes and how much people are allowed to use video games and now we're seeing work hours come in bloomberg reviewed an internal document from byte dance according to the article the document would make byte dance quote one of the first tech companies in china to officially mandate shorter working hours some of silicon valley thought the 996 schedule would push china ahead of the us sequoias michael moritz the greatest venture capitalist of all time according to many and the statistics uh so it's pretty close to true it's definitely top four of all time out rushmore he wrote a financial times article back in january 2018 which was vilified by some on the uh woke far left uh silicon valley would be wise to

SPEAKER_04: follow china's lead because uh if we're going to be competitive and there are entrepreneurs there who are working those kind of hours on very important projects whether they're space projects or their ai

SPEAKER_00: projects or healthcare related biotech projects we do need to keep pace and now we're seeing something different out of china the bloomberg article noted under the new policy employees can apply to work overtime no more than three hours on a weekday or eight hours on a weekend according to the document they will receive extra extra compensation of up to three times their normal wage for the overtime permission to work overtime must be requested at least one day in advance the article also notes that earlier this year by dance quote canceled an alternating system where employees just take one day off per week every two weeks which is crazy 13 days of work every 14 that sounds like a recipe for disaster on october 13 bloomberg reported the workers lives matter movement currently occurring in china that's an interesting co-opting of black lives matter the movement included a spreadsheet where chinese tech and finance employees shared quote what time they start in their work day as well as how many days per week they work as of october 13th the article had 4 000 entries or i should say the spreadsheet had 4 000 entries right now the spreadsheet links to a blank page was probably deleted appears that this

SPEAKER_04: grassroots effort is working across a lot of uh other big companies the sheet called working time has been viewed more than 10 million times according to the south china morning post reporting so very interesting workers getting workers getting a say and uh maybe yeah it's hard to know what's going on in china and hard to know how this will play out but definitely china is charting a new course and everybody who is an expert on china did not see the decapitation of their top tech ceos or the limiting of video games the limiting of working hours as what china's new strategy would be in fact everybody thought the opposite they

SPEAKER_00: thought china would out hustle us work harder maybe be more entrepreneurial take more companies public so

SPEAKER_12: this certainly is something very weird that's going on there uh and so we'll keep an eye on it but uh for

SPEAKER_04: me in america i tell everybody in my companies uh if you want to be at a startup company a finance company i think a fixed 50 a solid 60 hours a week is what will get you ahead in your career don't want people working 78 hours a week at this point in my career i'm successful enough the companies are successful

SPEAKER_16: enough that people i mean there are some people who i'm sure work 78 hours a week who just love

SPEAKER_00: it and are obsessed with their work and are super go-getters but it is a recipe for burnout and for me

SPEAKER_01: at this point in my career i'm trying to get people to stick with me for five or ten years

SPEAKER_04: and grow and build their careers if you want to keep people for five or ten years especially when they're working from home and all this burnout culture you know if people want to punch a clock they're probably not gonna you know if they do 40 hours a week i don't think you're gonna move forward

SPEAKER_01: in your career uh you're gonna maybe fall behind if you do a fixed 50 or solid 60 is the way i phrase it uh you put that extra 10 20 hours a week in self-improving that could be reading a book that could

SPEAKER_04: be taking extra meetings you know catching up on the weekends on some email for an hour or two while you drink your coffee you know those kind of things are what got me ahead in in my career and different strokes for different folks if you don't want to move faster in your career than other people totally get that uh i wouldn't work at a startup i work at a big company because at a startup that might might make you an outcast if you're not keeping pace now some people are super wildly

SPEAKER_07: efficient i've seen people work 40 hours a week and do more than somebody doing 60 or 70 hours a

SPEAKER_04: week where they're just hanging out at the office but that's over now work from home changes this whole game so you know work from home people can just see when you report on what you did this week or you talk about in the staff meeting what projects you're completing and everything's written down so you kind of see in people's weekly or daily reporting what they're getting done so i think the performative nature of staying at the office all hours which i do know some people did uh i certainly did that in my early days i would come in early and i wouldn't leave until my boss left a lot of times i was there and it's like six or seven o'clock i know my boss is going to leave at nine and i'd say what do i do for the next two hours what can i do and i go find a book about novel networking or banyan vines or document management i would just teach myself a new skill but i would never ever leave before my boss or my boss's boss now my boss would leave at exactly five you know oh one they would literally be at the elevator 459 551 to catch like the train to long island at 525 but i always looked at my boss's boss who was mike savino and i said i'll leave when mike savino leaves i'm not leaving until he leaves and he would work till eight or nine o'clock and then once in a while he'd say hey what are you doing here kid i'm like oh i'm catching up on this and i show him what i'm working he goes hey you want to go get a bite to eat we go around the corner manhattan get a bite to eat and that's

SPEAKER_25: how he started a lifelong friendship and he mentored me and my career made huge jumps because of that work ethic so think it through if you're an entrepreneur okay next up my interview with

SPEAKER_00: kyle samani of multi-coin capital they've made a fortune probably one of the best bets in the history of investing with solana but we also talk about how he has absolutely no interest in bitcoin and that it's irrelevant pretty uh hot take there uh stick with us it's gonna be a great interview

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SPEAKER_31: team hey everybody uh next up on the program is the co-founder of a uh firm called multi coin capital and they were started in 2017 and they are currently uh according to my sources uh one of the highest performing if they were a venture firm highest performing uh venture firms in the history of venture capital because they made an incredible bet on solana uh which is a platform that's competing against

SPEAKER_04: ethereum and has done incredibly well it's according to my sources which you know are likelihood billy and david sachs who talked about solana on the all-in pod uh it's 100x fun so uh with us today is kyle samani to talk about all things crypto welcome to the program kyle jason pleasure to be on the show long time fan oh thank you oh that's that's very kind of you um so um i know that a number of my besties uh were early supporters of uh multi coin capital my friend vinnie lingam i guess is one of your partners he uh introduced you guys to the famous bill lee that nobody knows uh who's actually the greatest investor angel investor of all time the true goat but since he's underground i get to claim that uh title and then uh my friend david sachs of course from craft where anchor lp is in

SPEAKER_01: your fund so tell us about what was multi what is multi coin tell us about that first fund and the

SPEAKER_39: thesis for how you're investing uh sure so multi-win capital is an investment firm based in austin texas we

SPEAKER_42: have 15 employees a few billion and assets across various funds we have two primary fund structures we manage a hedge fund and a venture fund craft is an investor in both of those vehicles um and uh we invest in crypto things we invest predominantly in tokens we do invest in equity from time to time but are definitely token focused investors um we have kind of three mega theses that we've outlined on our website and those have been there for a few years and continue to guide our investments and i expect these will uh theses will continue to compound indefinitely um those three theses are open finance which is kind of a superset of d5 uh the web3 and the opportunity for non-sovereign money i think out of everything we we have done falls into one of those three buckets although i will admit web3 is a little bit broad um a little all-encompassing um today between our hedge fund and venture fund uh although the the legal structures are mechanically different um they're the same investment team manages both of those um and it's the same core theses across them and in fact there's a lot of name overlap as well between them um our venture funds are typically higher risk higher reward more concentration in newer names our hedge fund is a larger later stage entity um then holds but ends up holding a lot of the same names because we like to hold stuff that we like and we like to hold as much of it as we can um and that's kind of how we do things and uh part of the idea is that you

SPEAKER_01: will run one of the nodes on these new networks so you get to understand it so you're actually participating in the formation in some way of these new projects i guess is what we call them today not

SPEAKER_42: companies they're projects correct people use the term project tune protocol um collective dao i mean

SPEAKER_46: there's there's a lot of weird names for these things um running nodes is part of of you know being involved in these systems but i would argue it's actually some somewhat of a commodity um we

SPEAKER_42: don't run nodes in-house ourselves we work with probably 15 different firms externally to do various node operational things um and we work with 15 and not one uh because we want to be decentralized and help these networks stay physically um and organizationally decentralized um i think the the real value add we bring when we work with portfolio companies portfolio protocols whatever

SPEAKER_50: you'd like to call them projects yeah projects projects protocols and platforms i guess the three p's i'm trying to understand this myself but i get it um but i mean it comes from i'd say

SPEAKER_44: stuff that looks more like what vcs do so helping with recruiting helping with messaging

SPEAKER_42: helping uh with strategy um and then i think a couple of things that are particularly unique to crypto um the most notable of which i would highlight is what i'll call engaging in crypto capital markets um capital markets and equities both public and private um they evolve over time but they're relatively static at any moment in time um and because they're quite regulated um it's hard for them to change probably for example the largest change that's happened over the last decade has been the the length of time which private companies stay private um and in crypto you have kind of the exact opposite phenomenon that's happened um which is these things go public you know at one month or maybe like six months old um and and that's a very different set of things that that happens in the life of building something of value um it changes how you have to think about messaging and and uh to constituents groups so customers versus users versus speculators um those are different constituencies and like it's not always obvious um how to think about balancing those different stakeholder groups um in particular there's even the venues in which people trade these assets are obviously different these are not trading on the new york stock exchange or the nasdaq um and how do you you know again like even messaging right you don't have quarterly reports or 10 queues or any of these things so figuring out the right kind of communication and uh cadence and format and strategy um thinking about exchanges thinking about countries like thinking about languages like this is just a very different set of problems um right even most american publicly traded companies i would venture to guess have extremely few chinese retail investors as owners of their their at their equity um in crypto that's probably not true and so um you know young uh groups of people working on these interesting hard problems have to deal with you know these kinds of things and it's very non-intuitive kind of go about thinking about messaging and communicating and coordinating in this new capital market um folks like us you know who've done this 30 40 50 times um have seen what works and

SPEAKER_56: what doesn't work and can help those teams kind of figure out the right capital markets engagement strategy um i think that's a one of the things we do that's that's particularly unique and it takes

SPEAKER_57: years of doing this to kind of figure out how to really do it so 30 or 40 times you've met a founding

SPEAKER_01: founding members of a project a company a team a crypto project and then been the first investor or amongst the first investors who buy those tokens in the initial token sale is that correct correct

SPEAKER_04: and so how do you find those companies uh are they all hanging on a telegram or is it you know uh on discord servers or is it just in the just a crypto community writ large yeah i mean

SPEAKER_42: that's the way we source deals and get deals done is pretty similar to how most vcs do it so we have networks obviously in the crypto community other investors other entrepreneurs people are sending us stuff all the time uh we know a lot of people directly obviously and they just cold news message us and and we chat i love cold emails my twitter dms are open for better or for worse um so stuff comes in that way um you know there's hackathons which you know again we attend and they're kind of involved with in various forms so the actual mechanics of sourcing are pretty pretty standard um in terms of getting deals done i would also say it's pretty standard the only difference really between i'd say deals we do and um traditional equity deals is these token provisions that are added to them um the token provisions are unfortunately not as standardized as i would i would like um and that's just the reality of teams being in different countries um llc's versus c corps um some warrants and other things there's a lot less standardization there than than um so with a project like solana

SPEAKER_01: how did you find them and then how did that initial token offering go down how much did you put

SPEAKER_25: in how many tokens were released when did all that happen tell us the story of solana yeah so

SPEAKER_46: um i actually don't remember who introduced us to anatoly vinny but uh vinny may have introduced

SPEAKER_42: us so uh met with anatoly at some point in april of 2018 while i was in sf for some other reason um i recall a few things about that first meeting um one the title slide the subtitle of the title slide said nasdaq for blockchain and i was i remember thinking this is very corny and like overplayed but like okay you're making a very pointed argument or claim um and then two anatoly um had a very different background than all the other layer one founders i had spoken to what does layer one mean to for people who are neophytes yeah so i mean bitcoin is a layer one ethereum is a layer one um polka dot was kind of a layer one uh phantom buying a smart chain probably one what what is it sorry a layer one blockchain so these are this is the actual physical network of nodes that are maintaining a database that can run smart contracts of some form got it so when people launch a project they

SPEAKER_76: can launch on a layer one platform and that's where their tokens reside and they don't have to build the

SPEAKER_22: infrastructure over again correct yes committing to security and compliance is vital for startup growth

SPEAKER_01: and proof of security has never been more important as you scale you might start to receive more sock to requests from customers of course and that's where drada comes in drada is a compliance automation platform used by some of the world's leading cso's ciso's you may have heard of it chief information security officers a lot of early state startups don't have a cso despite the obvious importance of security and compliance with drada you can easily meet requirements support enterprise deal flow and track compliance drada helps customers prepare for and clear sock 2 and other audits go from zero to audit ready in a matter of weeks take it from philip martin chief security officer at coinbase he called drada solution well ahead of other market players and said drada provides users with the most advanced automation available so here's your cta check out drada's five-star reviews on g2 and coi companies like clearco and smart recruiter work with drada for their compliance needs twist listeners can get 15 off and waived implementation fees at drada.com twist drata.com twist so so bitcoin was kind of sort of the original one but bitcoin is quite limited in

SPEAKER_42: what it can do ethereum is uh substantially more flexible and programmable um but has serious limitations around scaling and some other things um solana is kind of an attempt at at bringing uh the last 20 years of of computers high performance computer science and distributed systems to a layer one blockchain um and the second thing that struck me about i remember my conversation with anatoly is he's like all i've done in my whole career is make things go fast he's like worked at qualcomm at dropbox at mesosphere a few other places and did that and he was not academic at all um and was just like i make things go fast and uh that struck us as like yeah these distributed systems like those problems in computer science have been understood for quite some time um and here's a guy who has been building various distributed systems for for 10 15 years and really understands them um and is just applying kind of this new crypto economic paradigm on top of that um and and uh that struck us as

SPEAKER_25: like a very differentiated kind of founder and we had anatoly on recently episode 1302 for those of

SPEAKER_01: you who want to hear from him from solana's uh ceo you guys then participate in solana's initial coin offering or their initial token offering not sure what the term of art is today uh i guess coin has

SPEAKER_04: been uh is not used because ico's were kind of uh have a negative uh spin to them but these uh tokens are released you buy them for four cents and you buy a hundred thousand of them or a hundred thousand dollars worth or two hundred fifty thousand dollars worth you know i don't remember how much we bought

SPEAKER_42: on the initial token sale um which was in may of 18. um they did a subsequent round in august of 18

SPEAKER_46: um which we led and then uh in the company or in the tokens we all the solana labs has never sold equity

SPEAKER_42: it's so all all uh we're just token sales got it um we led the round in august of 18 in early 19 after the market crashed at the end of 18 a bunch of investors uh wanted to sell and get out we bought out a whole bunch of those investors we led another round in june of 19 uh and then bought out more investors after the token launched in april of 20. wow um so we've been accumulating soul across various entities at various prices from four to four cents to a dollar twenty um and we've been buying more

SPEAKER_01: recently in the public markets as well and then uh you are buying these it's a token but it's kind of a

SPEAKER_04: security you then i guess get to distribute them to your lps and your fund like i would an lp and the

SPEAKER_01: launch funds and then they can sell them if they want to if they can find a buyer and then uh lock

SPEAKER_04: in a reward without ever having bought into a c corporation a delaware c corp correct um i'll

SPEAKER_42: agree with most of that other than i'm not sure i'm going to call solana security but directionally everything else you described i would say is accurate right so how does one determine well it kind of

SPEAKER_01: acts like a security in terms of the lps right they have this asset that's gone up in value so i guess

SPEAKER_04: that's one of the big questions here um and uh so then they get you get you distribute them and they get to sell them and get a gain if they want do you how do you take how do you have custodianship of

SPEAKER_01: all of these and make sure that you don't get to act or something horrible doesn't happen and then when you distribute you actually send somebody's wallet a bunch of soul uh or do they have like a custodian and then how do you mechanically make sure that this stuff is safe yeah so uh that's a

SPEAKER_95: stupid question or a really important question because we don't have this question in startup

SPEAKER_97: investing because it's just a cap table and some cfo somewhere will you know make a change in it and

SPEAKER_99: it's all paperwork etc this stuff just moves on solana is really fast um i actually i think it's funny

SPEAKER_42: you made that last comment about the cfo because even in that there's a lot of trust involved um in that system and it's like who kept all the pdfs and like made sure the excel document got updated

SPEAKER_103: correctly yeah um wilson cincini right a bunch of law firms who get paid 1200 an hour yeah generally a

SPEAKER_42: good theory rule of thumb is if you can unbundle a function of a law firm and turn it into software that's usually a good good business to be in yeah they like they like doing that too yeah yeah um but yeah so look when we started it was it was a lot worse we self-custodied a lot of stuff back in the day today if you read our lpas our lpas do say we can self-custody because whenever new assets are created sometimes there isn't an institutional custodian provider at the time of the network launch so from time to time we do have to take self-custody and there's a whole set of processes we do around that um but at this point you know 98 99 of our firm's assets are custodied with uh primarily with coinbase custody um as well as with bitgo and copper who are institutional sec qualified custodians so those custodians will hold yourself and charge

SPEAKER_01: you one percent of the assets a year or something i heard or no basis points it's much lower than

SPEAKER_42: that i i'm not sure i'm allowed to disclose their pricing but it's got one one percent would be

SPEAKER_04: extremely high so uh it acts just like a venture firm except these tokens uh can be used in the real world uh so you explained the framework before you have people who are working on the project you have speculators investors uh and then you have people who use the tokens is that right those are the general uh constituents in these groups i think that's about approximately correct yeah and so uh

SPEAKER_01: with solana specifically what it was the value what's the value proposition because it's not nasdaq for blockchain right now it's something else what is it today or did they actually meet that uh original

SPEAKER_04: vision and why has it all of a sudden become one of the top six or seven crypto projects what was unique

SPEAKER_46: about this one yeah so um again anatoly's original vision was i want to run an order book on chain this is well before defy was even a term um defy as a term was coined in about october or november of nine of eighteen um and anatoly kind of understood that blockchains are financial engines primarily

SPEAKER_42: first and foremost and that you should design a system from the ground up to enable price price discovery is the foundational function of capital markets and the way you have price discovery is you have an order book obviously this is what nasdaq and izi and plenty of other people do um so that was

SPEAKER_46: the goal from day one the solana blockchain launched on april of 20 of so about a year and a half ago and uh conveniently right around the same time a guy named sam makeman freed who's the ceo of ftx started to get real excited about defy um and and realizing it was going to change his his ftx business um as a centralized exchange started hacking around on ethereum was extremely unhappy with performance of the system and looked elsewhere and ended up picking solana to kind of uh go all in on uh for two reasons primarily one was um the the under the understanding the importance of the

SPEAKER_42: order book as the fundamental technical primitive that underlies all the finance and two the focus on intra-shard scaling as opposed to inter-shard scaling which is more or less what everyone else has focused on in crypto other than solana um and uh that led him to build this thing called serum

SPEAKER_46: on top of uh solana which is a decentralized exchange and an order book um on the son of blockchain um and that kind of had launched in august of last year and since then uh that's kind of sparked a real growth

SPEAKER_42: in a defy ecosystem around solana and which has then led into nfts and all kinds of other really

SPEAKER_01: interesting uh things so when you look at nfts nft some nfts were uh are now trading on solana because it's much cheaper to do that there's less fees and it's faster solana's a hundredth or a thousandth

SPEAKER_76: the amount of time and money as ethereum is that directionally correct yes well that's approximately correct and then usdc i just had jeremy allaire on the program because this is this week in startups

SPEAKER_01: is turning into this week in crypto uh jeremy allaire on he's doing usdc a stable coin that's basically following the rules he also is on solana correct so these two major use cases were a big part

SPEAKER_42: of how this thing grew recently yeah those two things really helped to get off the ground jeremy's background is not as much of a trading background but he's really focused on payments and again he understands that absolute hard requirement is sub second sub one penny transactions like and and if

SPEAKER_118: you're a payments guy thinking about enormous payment scale those two things are paramount and

SPEAKER_01: so that really drew him in this corner micro acquire is a startup acquisition marketplace that cuts out the middleman basically that means they help startups get acquired efficiently if you're a founder looking to sell micro acquire is free private and involves no middlemen you know how it is you try to get a deal going there's somebody in the middle they don't care about the parties involved in some cases they just want to close a deal and you really have to wonder who are they working for right you're always wondering about incentives there well you don't have to worry about incentives at micro acquire to date micro acquire has helped hundreds of startups get acquired and they facilitated hundreds of millions in closed deal volume their platform includes over a hundred thousand buyers including me i'm paying for the service it's pretty great there are thousands of startups currently listed for sale and hundreds of successful acquisitions have occurred so far founders get free and instant access to over 100 000 trusted buyers while staying totally anonymous on the other side of the marketplace buyers like me simply play 290 a year for access to deals on the platform which means yeah you're getting rid of the looky-loos right unless you're serious about this you're not going to pay the 290 so micro acquire helps startups find buyers it's as simple as that they'll help you start conversations that can lead to an acquisition in just 30 days for free just go to try.microacquire.com twist once again try.microacquire.com twist is solana overtaken ethereum at this point in terms of where developers want to build or is that and where speculators want to speculate on a token those are two different groups of people but i'm curious your thoughts on each one because it does seem we talked about the ethereum bitcoin flipping they seem like two different use cases from everybody

SPEAKER_04: i talked to one's programmable and you know one is a sort of value but ethereum and solana feel like they're they're actual competitors and people have been speculating hey when do these things flip and what would be the case for that flipping so well i mean obviously you have a horse in this race but give me your best um impression of when solana overtakes it because it looks like usdc is going to overtake tether so the idea that these crypto projects were going to maintain their positions

SPEAKER_76: is kind of ridiculous as a premise to begin with so let's talk about first ethereum versus solana yeah

SPEAKER_42: and i also want to revisit the bitcoin question too right after that um so uh in terms of speculation and just dollars i mean it's no question ethereum is substantially larger both eth versus soul and then also the ethereum based assets versus solana based assets that's primarily a function of age um and uh you know i think solana ecosystem is growing at a much faster clip and i think i venture to guess if you look at the prices today the price of soul versus eth in terms of market cap is like i don't know 15 or 17 percent kind of range so call it a fifth or sixth the size um so still has a long ways to go but but is pretty obviously compounding at a much faster rate for now and i expect that will continue indefinitely um in terms of developers it's harder to measure unfortunately there's no perfect way to measure these things um what i can say and what i think most investors who are focused on the space will say is there's a lot of developers they have spoken to in the last 90 120 days who have gotten excited about crypto who want to build in crypto they look at ethereum they look at solana and they're just much more drawn to solana um because of the performance characteristics of it the fact that it's built in rust and and a lot of there's just so many developers around the world who are big rust believers solana is every single line in salon is written in rust and rust is the flagship language for the sdk um and so solana is piggybacking on you know that mega trend in computer science um in a big way gaming people in particular seem to love all that stuff because they're performance you know performance nerds um and so game people are quite attracted to it uh the other group that is extremely attracted to it is ours wall street and trading people um all of the wall street folks again this started with with sam and alameda and ftx but you know jump trading has gone very very big in building on solana um jump is one of the largest high frequency trading firms in the world um and they've been quite public about a lot of the work they're doing um and in the last six months or so you've seen um various other large trading firms you know publicly acknowledge solana and they're kind of implicitly buying soul and doing other things um and so at a minimum gaming groups and wall street trading firms have gotten quite excited and that's really led to a lot of this developer activity especially of spin outs of those firms so

SPEAKER_04: what's your position on bitcoin then everybody the bitcoin maximalism and the bitcoin toxicity movement are you know on twitter which is not a real place as dave chabelle will remind us um it's pretty crazy like they really are of the belief that there is going to only be one true and uh if you don't buy into that thesis then have fun being poor what's your thought on where bitcoin has you know sort of carved a

SPEAKER_46: space for itself in the ecosystem yeah so um among my peer set i am almost certainly the most bearish on bitcoin um why uh i don't think bitcoin will be relevant in five years um it won't be worth zero i just

SPEAKER_133: don't think it will be relevant um so if it's not relevant why wouldn't it be relevant yep so uh

SPEAKER_42: uh two reasons reason number one the value of having a million developers building stuff doing cool things onboarding users for various weird apps um today a reasonable person can look at ethereum and solana and say this is a bunch of nonsense there's a bunch of d5 speculators and people trading shitcoin images of jpegs and like this is dumb and i understand how normal people can come to that conclusion at the current moment in five years it is so plainly obvious to me that there is going to be hundreds of millions of people doing really interesting cool things with nfts d5 and who knows what else it's going to be um and everyone in the world will acknowledge that and recognize there is some fundamental value there meanwhile bitcoin and then all that action will be happening on ethereum and solana and who knows what else but it won't be happening on bitcoin in five years i'm pretty sure bitcoin will look approximately as it looks today because the point of bitcoin is that it does not change like that is the defining feature of bitcoin um and uh like i get why that has some resonating value it is simple there there is some comfort in knowing that it's not going to change but we don't live in an era of mean reversion we live in an era of exponential software um and every year that goes by the the older folks are passing and the younger people are controlling more and more wealth and like that doesn't feel software native um the world is clearly moving toward that digital native uh you know uh software defined kind of venture type thinking and so um i expect with a very high degree of probability that in five years time any rational person is going to look at bitcoin they're going to look at ethereum solana and it's going to be like one of these is irrelevant and there's nothing and one of these is the future

SPEAKER_01: so it's the feature set of the platform that will define its ultimate um you know role in the world and if bitcoin doesn't change yeah that's a feature but if it doesn't change and it doesn't increase in price and these other platforms are being used to create the next level of apps it's almost like having an operating system with no apps and then solana and ethereum are like ios and android and you're like well why would i want to own this you know whacked out app this platform that doesn't do anything

SPEAKER_46: in the world correct so that that that's uh lens number one and then lens number two is uh and this is where the bitcoiners again really missing a few key things all of the layer one blockchains

SPEAKER_42: bitcoin ethereum solana etc all of them have a native asset in their systems that native asset is used to pay fees to pay gas um and that native asset has some defined monetary system some monetary schedule supply schedule in bitcoin it's 21 million and it's obviously very famous and very simple to understand ethereum's has been undefined and is evolving but is not perfectly defined um solana's is actually i'll argue much better defined than ethereum's um it was 500 million at genesis with a defined inflation rate and so far it's they haven't modified anything and i don't think they will um the importance of the 21 million meme of bitcoin is not the 21 million the importance is that humans cannot change the supply schedule right that that is really the key thing that you're optimizing for um and then secondly and relatedly there's you don't need perfect precision bitcoiners would tell you that if you don't have nine nines of precision on the future of the supply schedule the asset is worthless and like that's just like obviously wrong um every asset in the history of the world up until crypto has had like at best one nine of precision like maybe two lines of precision but like not even three nines or four nines and the bitcoin people are like you must have ten nines and it's just like like no um and so yes i agree ethereum and solana's supply schedules are not as credibly neutral as bitcoins um just because the assets aren't as old and that what are a whole bunch of obvious social

SPEAKER_04: reasons with a new group of coin with uh solana has this inflation and i don't know what percent it is

SPEAKER_42: but you tell me what it's like seven it's like seven or something right now and it'll go down to

SPEAKER_76: one and a half so if they that means they're going to put more coins out there to be sold at the market rate or how does that work or it's going to be given today yeah it's it's it's the validators who

SPEAKER_125: are running the network are receiving the inflation they're earning them earning them

SPEAKER_04: so it's not like there's going to be another coin offering that the project gets but even if the project was getting something wouldn't that be good for the project to have more resources or does

SPEAKER_01: the projects not need any more resources because that's the one thing that i think is either

SPEAKER_04: inspiring or scary about these projects which is who's in charge okay it's decentralized nobody's in charge okay it's become really big uh kind of would be good for somebody to be in charge if something went wrong so we haven't seen something go wrong all that often of course zelana famously

SPEAKER_76: went down for a little bit because it got a denial of service attack of sorts somebody flooded the network and went down for 12 hours or something so yeah for non-crypto people who worry about no central authority um what's the answer there um yeah i mean like that's that's the kind of defining thing

SPEAKER_42: is that there there isn't a central authority are humans a feature or bug i don't know you tell me um most people would say feature i can make an argument bug yeah um but but even that i i'll say it's not a it's too simplistic of a framing um unless you let's use solana's network outage on september 14th is actually a good case study here um there was a bug in the system it was actually a known bug that actually had a patch was written but not had not been deployed um and nonetheless someone spanned the network network went down at that point uh yeah the course salon engineering team obviously was trying to diagnose the issue a bunch of people all over the world were also trying to diagnose the issue issue is diagnosed patch is released in a matter of two or three hours um at this point you just need a bunch of people all over the world who have to run these nodes to know what's going on download the patch install it and reboot their computers more or less turns out that took like 14 extra hours to do um and so you know again is that a feature is that a bug um if the world depends on solana that's kind of a bug because 14 hours is longer than three hours uh on the flip side it also proves the point that the solana team does not control the network

SPEAKER_158: right because they couldn't get the people to restart their damn computers and install the software

SPEAKER_01: right and but if there's enough of them it should be create more redundancy and there's a financial

SPEAKER_04: incentive for them to get their nodes back up and running which is they're getting fees for doing transactions etc so correct it's it's not just similar to isps if an isp goes down they lose customers to another isp and they work to keep the internet running at verizon or comcast or aws or whatever service you use and yeah i guess we've had some issues with you know different infrastructures in the internet but it's gotten better and better over time let's talk a little bit about this key issue that keeps coming up are these things tokens are they securities um and i know one of your portfolio companies got sued and listen anybody can sue anybody for any reason uh but definity um you know has been specifically sued by a california resident saying they violated the 1933 securities act basically saying these are securities etc yada yada without going into that specific case what is the best practice today in putting these tokens out to make sure you're in compliance and is

SPEAKER_42: the sec done enough to make it clear what's going on here yeah um so for definity real quick um we are small passive investors and we don't we're not close to the team i have no insights as to the case or

SPEAKER_56: anything else can't say anything more than that um sense yeah i mean when you're buying this it's

SPEAKER_99: not like you're on the board of the company there is no company there is no board in most of these

SPEAKER_63: cases yeah i mean we were just a very small investor a long time ago but anyways um so second

SPEAKER_46: comment i'll say is um you know investor protection rules are a thing um the substantial

SPEAKER_42: majority of investor protection rules in the united states were written um in the wake of the great depression yep uh because during the great depression people got desperate for money and started conning and scamming people to make money um hence most of the laws were written in 33 34 and 40. um and then the howie test which is kind of the test that really has created the the bright line litmus test in the united states was i believe 1950 something right um and and more or less all the laws that are being used uh around investor protection in the united states for the most part were formulated in that in that period um the world has obviously changed a lot since then most notably the internet and and just general information awareness and ability to do to do due diligence and all those kinds of things um i i generally am a fan of updating world views on these things given how the world has changed um but obviously i'm not i'm not in a position to uh what do you think would

SPEAKER_04: be if you could wave your magic wand and say hey here's something that balances investor protections kyc money laundering etc what would be a fair use of this or or a fair proposal here in terms of trying to qualify these things because we all know that yes they can have the function of token but as we were discussing earlier there are people speculating on the token so it's almost like an open you know it's basically like an open cap table where anybody can participate freely but it's not doesn't

SPEAKER_01: have the protections of the nasdaq or the stock market not that those are perfect either um what

SPEAKER_171: what would be a reasonable way to do this if you were in charge do you have you given any thought

SPEAKER_42: of what you would like to see so kyc aml stuff i am in no way qualified to comment on counterterrorism bank secrecy stuff i have not the slightest clue um so i will i will reserve no judgment there um on investor protection stuff i think again the the primary question you have to ask i say meta question is what is the time horizon on which you were optimizing for um at the social level so um if you optimize for maximum increase in overall economic output for the economy as a whole over an indefinite time horizon which i think is the right time horizon to take at the social level then you should be probably something that looks like close to no investor protection formally um if you want to go to that extreme the question is how do you balance the cost of introducing those protections on all of the good actors um against the the the uh the deadweight loss of theft and fraud from the bad actors right um and that's like a fundamentally difficult thing to reason about because it's all counterfactual kind of stuff yep uh my intuition is if you multiply any efficiency gains in the economy you know 10 basis points 50 basis points over you know a base of a trillion or something the answer is almost always just maximize economic productivity growth and economic value created so i i kind of tend towards that extreme i realize i am not um you know normal and how i think about these things um but that that's how i would approach the problem uh the i'm curious what you think of

SPEAKER_04: my simple proposal which is you know maybe there's a sandbox when you're under x dollar amount in which you can operate freely and then when these things become larger 100 million a billion 10 billion we add in some staged um compliance that needs to be done so that if there was a bad event if there was a bad actor um like i would say tether to me seems like a very bad actor given the fines they've been given i think you probably agree or anybody in crypto would agree that they haven't acted with a lot of transparency um you can't get a project to 70 billion without transparency uh so what do you think of that sort of basic proposal of a staged amount of regulation so that people can you know have a a

SPEAKER_01: playground a sandbox if it's under 25 million or something yeah so i mean again it's one of those

SPEAKER_42: things that that sounds good in theory the problem is like how do you do it in practice because like again a network like solana is very different than a network like helium which is totally different than a network like graph or audius and like yeah there's elements of these things that feel like companies like obviously you do have a core group of people who sit in the same room and talk to each other and like build software and like yeah but also there's a lot of elements of these things that are really external to the court to the core team and the work output of those people both labor and financial capital and intellectual capital is fundamental to the long-term success of whatever the thing is um i find that securities laws today are too inwards facing meaning they they seem to assume that the of the value that a team will create the vast majority say 95 or 99 of it is being produced by some small group of people um and it crypto is fundamentally about trying to flip that and say what if the core team only produces five percent of the value and 95 of the value is produced by x outsiders and captured by outsiders yeah it produced and captured by outsiders and like again none of these things are 100 zero in either direction but like if you believe that that ratio can be flipped which i i really do think it's possible then it it really makes it difficult to even like what what transparency do you want from who like the data is on chain whatever's on chain is there um there's lots of great data visualization pools stuff like dune stuff like nansen and others out there um what disclosure requirements should there be for the team and even what objectives are you accomplishing it's not

SPEAKER_65: actually clear how to reason about a lot of these things let's talk about dows then uh decentralized

SPEAKER_00: autonomous organizations sometimes referred to as dax decentralized autonomous corporations these seem to

SPEAKER_04: have captured people's imagination i'm getting hit up all the time hey create a dow for your angel investing yada yada uh create j coin or you know angel coin or something and um i think for a starting point why don't you tell us what you think why you think dows are important if you in fact do and what

SPEAKER_01: would be an application that you think could be a killer application of a dow yeah um so i think the

SPEAKER_46: the simplest mental model of dows um is that they're just llcs they're just digitally native llcs

SPEAKER_07: um which limited liability corporations where you have partners in them

SPEAKER_42: correct um and i think that that model gets you like 90 of the way there it's not fully complete but it's actually pretty close um the biggest difference between dows and llcs is it's a lot more easy to transfer ownership rights obviously in a dow than an llc again all the lawyer fees go to zero just click a couple buttons um and then it's also very easy to prove that you own some part of this llc or a part of this dow so to speak and therefore you can do things like uh privilege privileged access tiering hierarchies community token gated discords whatever um but it's really just an asset you can own right and that other people also own and then you can work together um the notion of capital formation is not new um we had the you know the precursor to the llc was like the what are those things called from the 1400s um like uh joint ventures or whatever yeah like that was kind of the first you know real notion of like capital formation i would argue in the economy um really something that kind of represents modern capital formation anyways and like dow's are just reducing friction um increasing access making it easier to transcend borders and payment rails um between countries and then ability to get capital all forms of capital together financial intellectual whatever

SPEAKER_01: to achieve some greater good how does one mechanically start a dow is there an amazon web services

SPEAKER_04: of dow creation you know if you form a venture firm you just go to a law firm or assure and carta and angel list of course now have a platform for creating a a fund and they've abstracted and made it like

SPEAKER_01: amazon web services where somebody can just go create the registration documents fill out a form and you know basically they've taken half the work out of it maybe 75 out of it and the expense how does one create a dow today do you need to have a bunch of developers to write this code

SPEAKER_04: um and it's bespoke or is there an amazon web services yet of dow creation yeah so uh the angelist

SPEAKER_46: example you brought up is instructive where angel is really focused on a specific type of of fund entity

SPEAKER_42: thing yeah um legal zoom is like another interesting kind of comp here where they make it easy to create llc's of various forms and shapes um there will be different dows for different quote unquote type types of functions whether they're investing or collecting or whatever else um and and so like there's a group of of dow's creation and management things focused on managing an on-chain fund so that actually is very nicely comparable to angelist um as you just described it um there's groups of these things that are general purpose so things like moloch dow which you need to be more dev to use um and there's uh people working on other types of dow creation tools for guilds for these play to earn games and other things of this nature today you still need to be a dev-ish to create one but like it's just like copy paste some code and like throw it on a blockchain it's like you know doable in an

SPEAKER_194: hour kind of a thing um so when we do this example okay go on in in 12 months i think there will be a

SPEAKER_42: lot of people creating a lot of dows who don't know anything about software engineering at all yeah i'd

SPEAKER_04: like to be one of them and so uh when you because i have been so critical of icos and that sort of chaos

SPEAKER_01: but what i'm seeing now is actually very serious people doing things by the books and being thoughtful about it and legal frameworks starting to catch up with the technology with the technology and then maybe some way to abstract and create some stability here so let's go through an example here of a dow has there been a dow that's been successful to the best of your knowledge investing in non-crypto assets because it seems like a lot of the dows are hey let's all put x millions of

SPEAKER_04: dollars together and then we'll vote on which crypto kitties and you know angry apes or whatever monkeys and and crypto punks to buy am i correct that those have been kind of the pools of capital

SPEAKER_46: that have come together so far so so most of the data yeah so i think what you're describing is

SPEAKER_42: generally accurate of most of the dows but i think your framing of dows might be a little too narrow okay um dow i called it an llc which again is is useful but in complete framing um decentralized is somewhat clear autonomous is actually i think the more interesting uh most interesting three of the three letters an interesting letter of the three letters autonomous almost none of these things are autonomous but some of them are um so bitcoin is the first dow i would argue um where the dow specifically is a game between people who are buying btc because they believe in the 21 million meme and miners who are mining btc if and only if the cost of mining it is less than the current price um otherwise because you wouldn't mind btc otherwise you would just buy it right right so you don't

SPEAKER_205: need servers right but but but bitcoin is the first decentralized autonomous organization where

SPEAKER_42: there are rules in the system that define how the system works and then people are just acting according to those rules um right so in some sense you could argue bitcoin is the world's largest dow and i i think that's it's a little bit stretching it but you can kind of see where i'm going

SPEAKER_01: with that i do see where you're going with that basically who you know satoshi set up a framework that cannot be changed but then the people can operate within it in a collective to achieve goals

SPEAKER_04: but because it can't be changed as we talked about a little bit earlier the bitcoin maximalist may come to find a day when other platforms own all the apps and why would you buy an operating system that

SPEAKER_12: doesn't support the the breadth of apps that the other ones do with your m salon or whoever

SPEAKER_46: so continue yeah yeah so so so that becomes the first dow arguably the the biggest problem with

SPEAKER_42: bitcoin dow is the output of the dow is nothing it's it's you waste electricity on proof of work hashing um the next probably most interesting dow at scale is probably helium um where helium again you have this mining concept and like similar to bitcoin but you have people who have built a physical network um all over the world there's i think more than 250 000 hot spots today uh you can see the network live at network.helium.com and for people who don't know this is a share your wi-fi router earn

SPEAKER_01: cryptocurrency and you people are paying to get onto that wi-fi network and they now have thousands of

SPEAKER_04: nodes buying these specific wi-fi routers so if you had comcast at home you plug it in and now you're earning cryptocurrency whenever outsiders pay for that kind of like imagine a decentralized boingo am

SPEAKER_42: i correct yeah so directionally what you're describing is correct uh it is not a wi-fi sharing network today it is a iot network so different set of radio frequencies um but generally

SPEAKER_56: that's the idea you can think of it as decentralized boingo oh there's another one that's doing wi-fi but

SPEAKER_01: this one is to do iot devices so if an iot and this is an acute problem for iot if you wanted to

SPEAKER_04: put into your iot device something small like a radio a watch or something connectivity you'd have to go cut a deal with at&t to be on their little slurping network and pay per device a dollar or two a month and it just makes it not worth it yeah there's all kinds of problems with the at&t and

SPEAKER_42: verizon wireless networks um and helium is interesting but coming back to your original question about

SPEAKER_217: dow's the helium there is no helium dow in the sense that like there are other named dow's on ethereum and solana um but if you think about helium as a whole what you have here is a set of rules about uh the rules primarily define uh the rate at which inflation is handed out and who inflationary tokens are handed to people who are then buying hot spots to maximize the number of coins they can get um and that thing is autonomous like the rules are there um now there is some governance and the rules have changed a few times based on on global input but like it's a dow i mean like these people have

SPEAKER_125: built a wireless network where no one owns that work yeah so then if the verizons of the world or

SPEAKER_04: what's really interesting about this if somebody decides they're going to sue because they feel like you know they're competing which is what a verizon or a comcast might do in these kind of situations it's like okay who are you suing some individual node owner there's nobody responsible uh and everybody has started doing this it's like a vast protest and they're going to do 5g devices so this is going

SPEAKER_225: to get really interesting really quick yeah helium 5g just started rolling out like a week or two ago

SPEAKER_04: oh did it start real oh wow so in this model i would buy one of these 5g routers i'd plug it into my comcast at home comcast would never know and then i'm letting people connect to that 5g and i earn these tokens for providing it correct bingo boom and then uh audius which i think you also invested in is doing something similar with music and sharing of mp3s and trying to make a distributed spotify

SPEAKER_217: essentially yeah i think today audius is the six million monthly act is but it's a primarily i'll call the music nerds so to people who are really into like discovering the latest tracks and like following artists and djs today it's it's long tail discovery um we did not underwrite the investment assuming it like rivals spotify and apple music that that seems pretty difficult to do that may end up

SPEAKER_205: happening in five or years but yeah i mean wikipedia was told they would never get there versus

SPEAKER_231: britannica ask a 20 year old what encyclopedia britannica is they've never held one yeah but

SPEAKER_217: but even even like you know assume the music nerd populations i don't know one or two percent of the population that kind of feels right like tens of millions of people yeah that's still a great really cool thing so um we would like stuff like audius because it's enabling a new form of of discovery and

SPEAKER_233: curation yeah uh so there is no aws of dow creation that to me seems like an incredible startup that

SPEAKER_236: should exist i mean it does exist in various ways fun fun focused ones um other no doubt multi-sig stuff

SPEAKER_217: party party bid there's one they're not as easy to use as they should be yet but i promise you there's

SPEAKER_42: 20 teams fiddling in adjacent spaces around that since you're an expert can i pitch you my idea and

SPEAKER_239: get your candid feedback let's do it jason okay here's my tank let's go it's kind of like jayquin i

SPEAKER_01: haven't rehearsed this but uh imagine uh you know i'm an angel investor i invest in 100 plus companies a year i set up a dow i say to the dow listen i've been doing this a long time i know what

SPEAKER_04: i'm doing uh you can look at the track record here's all the proof i'm gonna uh set up a coin uh token that uh will i don't know uh have a hundred million of them come out a year for a dollar each and then i will deploy them into buying secondary shares uh being a fund to fund into venture funds i have access to and companies i have access to and i will do all that administration you don't have to vote on the companies but you can vote when we liquidate the assets or you can vote if you want to take your money back or get more coins and then every year we plan on selling up to a hundred and it's a rolling fund and you basically have access to this class of investments without ever having to be an lp and go through that process what do you think it's crazy i mean no i get this

SPEAKER_217: this should exist this exists today in very small ways some dow is called like pleasure down so then go down and others are doing stuff like this now very small scale but i mean people have been dreaming about this for a long time what's the name of it the one you mentioned there's one called pleasure dow it's a group of guys doing this there's a call flamingo dow there's a few and i'll call them investment club dows some of the members there's the lao there's meta cartel ventures i forget the names of all of them um but there's already people doing this today some members are voting some members are non-voting they all have kind of unique structures um people have been dreaming about what you described for a long time you've got funders club you've got angel of syndicates

SPEAKER_147: um mine is the syndicate with 9 000 accredited investors but i don't have a token associated

SPEAKER_01: with it so they all my what my accredited investors are always asking me is hey you know i invested in calm.com with you i want to liquidate my position other people are saying i invested with calm with you i think it's going to go 10x from here i want to double down and i don't have a way to let people trade it but i would love to just say like hey just put it into the dow and say you want to liquidate at this price and if somebody wants to buy your coins all of the returns would then be abstracted into the

SPEAKER_217: coin price yeah i mean l l p uh what's it called l lp secondaries in funds i'm sure you've seen them

SPEAKER_183: happen over the years they're not super common but they do happen i've gotten pitched on them like a

SPEAKER_01: fund what you're talking about is a venture fund will wrap up like when 500 startups started wrapping

SPEAKER_04: up their funds because they had issues at their firm leave it at that um they were saying hey we're selling off my interest in 500 i don't want to be associated with anymore or hey i'm i've had i've

SPEAKER_76: retired and i'd like you to buy my you know assets in this other acme ventures or something

SPEAKER_217: so yes it does happen from time to time yeah but but but the process of doing it is is extremely difficult a lot of lawyers a lot of paperwork tens of thousands of dollars in legal bills at a minimum at a minimum i mean what's amazing about crypto is all assets get the same interface which is in the case of ethereum the erc20 token standard in the case of solana the spl token standard and you can trade any asset on any piece of infrastructure whether it's on serum or uniswap or whatever else and and so you just reduce the administrative and operational complexity of asset transfer and trading by like 100x um like it really is that much of a reduction and naturally by doing that it should become easier for people to trade lp positions in all kinds of all kinds of right um ventures and such so yeah this should exist the world will eventually get there um a lot of friction

SPEAKER_00: between here and there but it will be really interesting and it is you take a market that is illiquid for a decade and you would instantly turn it into a 24 7 marketplace like if you think about

SPEAKER_01: that swing my lps could be on the weekends having lunch with each other and trading their positions

SPEAKER_230: you know yeah they could i don't think you'll ever go to that extreme but certainly um like a lot of

SPEAKER_217: things that are unnecessarily illiquid should become more liquid not like millions of dollars of daily volume but like you could get it from it takes one to two quarters to exit such a position to it

SPEAKER_00: takes one to two days to exit such a position amazing it'd be super amazing uh what do you think

SPEAKER_01: about tether you see all these fines you see all this craziness do you think that's everybody says is a systematic risk for crypto you take down the whole thing um when you see them getting banned in canada from being trading you see them getting the new york attorney general's fine now this 41 million dollar fine you see the way they kind of behave sophomorically on twitter and attack people who are

SPEAKER_04: being basic questions to attestations from the cayman islands all this stuff put together and then you see usdc doing it really buttoned up with a publicly traded company with a banking license and all this other stuff they're putting in place and being dollar for dollar what do you think yeah what

SPEAKER_01: is that what is that what is the not only what do you think i think of even more thing is what do crypto people when the press isn't around you're having drinks at a bar what are they saying about this

SPEAKER_260: do they believe it's a house of cards do they believe it's fugazi what's the back channel yeah look so i i

SPEAKER_236: don't have i'm not close with the tether team um don't know them personally people have been making

SPEAKER_217: broad-based accusations of all kinds of nefarious things for four or five years now um basically all those accusations have been either outright false or they were technically correct but actually like practically incorrect um at this point uh enough people have done enough business with them um in enough volume meaning like trillions and trillions and trillions of dollars of volume yep that like it's hard to imagine there's any meaningful uh fraud here um have they misrepresented things at times for sure um did they do so in the interest of the market i would actually argue yes i can't prove that but but based on my understanding of what they have and haven't done they did it to protect the market which i know is weird and has its own set of problems but but it's not totally crazy um they clearly struggle with pr and comms and like have all of the wrong marketing instincts in every conceivable way yeah um yeah um so i i would not encourage their endorse their marketing strategies um but they have built a product and service that people want and like americans generally don't like it non-americans generally do like it um there are a lot of people in the world that love the idea of having a u.s dollar without having any counterparty exposure to the united states government um and uh i don't know if tether actually delivers that product or service or not but there's a perception among millions of people if not tens of millions all over the world that usdt provides

SPEAKER_234: exposure to the u.s dollar without a counterparty exposure to the u.s government

SPEAKER_99: uh yeah it's interesting as a value proposition but as you say who knows if they live up to that

SPEAKER_04: with six percent of their holdings in actual u.s dollars and the rest being in these wacky

SPEAKER_217: commercial paper they won't actually disclose yeah again they've done a bunch of weird things and i'm not sure that i agree with them or not but they've been doing this for so long at such incredible scale um it's hard not to imagine like they are fully buttoned like they are solvent um i realize

Chamath Palihapitiya: that would be bernie madoff operated for three decades yeah so there are there are counter

SPEAKER_217: examples in history yeah uh everyone i know who has done but they don't tether does not directly face that many entities they only face a handful of the largest trading firms in the space the offshore ones right yeah yeah but i mean even even like for example um sam from ftx and alameda i mean he has publicly said uh on the record well alameda has done many billions and billions of

SPEAKER_113: dollars of volume with tether and gotten dollars out of tether yeah um and other people also have done billions of dollars business with them i'll say the same thing um so you know to the extent that

SPEAKER_250: that people have tested the system i mean it has stood up to those tests there's a theory that i've

SPEAKER_01: heard um which is yeah they may have done a bunch of funky stuff but and they placed bets which they shouldn't have placed but the bets turned out so good because they were so early so if they took your

SPEAKER_97: usdt and they bought you know crypto at you know five years ago ten years ago my lord they could be

SPEAKER_01: doing all kinds of crazy stuff because whatever the dollar amount is over the 70 billion is theirs so if they bought bitcoin at two three four five six thousand dollars after the 20k crash and you know after that when it went down to three thousand i guess my lord they could be sitting on 20x returns they could have 200 billion dollars in a bank account that they've swept so nobody can complain because they're over collateralized even though they're doing all kinds of fugazi stuff that if they showed it to you you'd be like oh that's like my money manager going to vegas and 10xing our money like you're not supposed to do that but they did it and worked out therefore okay we'll we'll pay the fines who cares what do you think of that theory and have you heard that theory i mean i think

SPEAKER_217: that's that mental model is has some some truth to it for sure basically even what they publicly disclosed like that is at least to some degree true is it five percent true or is it eighty percent true i i don't really know um but like yeah like they've looked they are so i i'm fairly sure they are solid now i'm not going to make any claims about future solvency um but by all accounts they are they are solvent now they have been solvent for the better part of their history other than a few weird moments in time where there was a hack and some other money was stolen for yeah weird

SPEAKER_234: separate related reasons um do you hold tether no multi-coin is not holding any tether would you

SPEAKER_147: hold tether would you feel safe holding your investors money into other no i mean multi-coin is

SPEAKER_217: by definition counterparty exposed united states government because i live in the united states

SPEAKER_234: and i have an llc here and other things i have no interest in avoiding counterparty exposure to the united states governments um so now yeah it'd be a good idea for you to be as compliant as

SPEAKER_275: possible given the changing rule set listen you've been an amazing guest uh would love to have you on

SPEAKER_01: again congratulations on your amazing success thank you one fund manager to another and uh what's the next deal i hear there's another deal coming next week i hear you guys are closing in on a big one and uh we can hold this episode to the moment after you invested so if you want to you have my word we'll keep it confidential here and uh you will uh you can announce this next deal you're doing and we'll

SPEAKER_100: launch it the day you announce uh we do have a bunch of deals in the pipeline there's a big one

SPEAKER_281: coming i know there's a big one there is a few big ones in the works i uh i don't know when they're

SPEAKER_183: gonna drop so i'm not gonna make you wait here indefinitely for the news to drop well listen if

SPEAKER_00: there's a way i'm i'm ready to start experimenting now i feel like the crypto like crazy period is

SPEAKER_01: ending and the legit period is beginning so i'm ready to start experimenting and dip my toe in things so if you have something that's interesting i want to dip my toe and kind of start learning now

SPEAKER_12: so let me know and then whenever you announce come back on the program and let's talk about whatever the newest project is and have that founder or founding team on uh you've been a great guest as i said and uh continued success and you're in austin and you're hiring or not we are doing a big 250 million dollar fund i heard it's going to be wrapping up this year so what are you hiring for what are you looking for in professionals at your organization um investment team we are hiring right now um

SPEAKER_42: our job application process for the investment team is write an essay about anything in crypto

SPEAKER_156: uh and email it to me um the only requirement is it has to be as good as what is on our blog

David Friedberg: um okay so beat the blogger better and then your email is you can guess it first name first name at

SPEAKER_04: it's pretty easy uh kyle in the mail room didn't get your email address okay that's always my note too far just like can i get that person's email i'm like first name at multi coin dot capital

SPEAKER_50: might work i don't know i like that i like that hiring model write some of the uh thesis a couple

SPEAKER_12: pages that's better than a blog post we have yeah are you into the writing culture like the did you get into the writing culture as described by amazon the right first culture we are heavily right first culture i'm getting into it too it is so much better why is writing first culture better with distributed teams and in 2021 explain why it's so good yeah so specifically for investment team it's

SPEAKER_217: particularly useful because we have people across three or four different time zones um and uh uh the great thing about a google doc is 10 people can comment concurrently but 10 people can't talk into a zoom concurrently um and so it actually accelerates the overall pace of the conversation because multiple people can talk to each other concurrent better throughput better throughput um and then it forces specificity and forces clarity if you make it's much easier to make hand wavy dumb claims while you're

SPEAKER_298: talking and ranting than it is while you're writing something down you papered it you have to have

SPEAKER_01: clarity and you have to take a position as opposed to the theatrics of some powerpoint or just speaking

SPEAKER_42: on zoom jason crypto is going to change the world we're going to decentralize all of the things okay

SPEAKER_195: that's that's how this is going to work i love it all right listen continued success and we'll see you all next time on this week in startups bye bye