On The Brink with Castle Island - Weekly Roundup 04/14/22 (FDIC stalls bank crypto activity, Bitcoin 2022 recap, Elon's Twitter campaign) (EP.308)

Episode Date: April 15, 2022

Matt and Nic return for a post-conference episode. This week we cover:  The FDIC asks banks to go slow on crypto integrations Blackrock is studying cryptoassets and invests in USDC Blockchain.com partners with the Dallas Cowboys Virginia will allow state chartered banks to custody cryptocurrency Balaji's decentralization inflation index winner is announced Why this current CPI print is misleading Blockstream Block and Tesla are mining Bitcoin with solar Celcius shuts down their retail-facing lending product in the US Is Peter Thiel wrong on Ethereum valuation? Will Elon be able to buy Twitter? Takeaways from Bitcoin 2022 Sponsor notes: Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Learn more at fireblocks.com Subscribe to the Coin Metrics State of the Network newsletter

Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And this episode is brought to you by Fireblocks, and it's also brought to you by Coin Metrics. Let's get into the Metrics Minute. Here we go. Coin Metrics has introduced brand new Dex data. Fun fact, on the product side, daily volume in the Uniswap V3 pool has ranged from 6 to 800 million a day in 2022. Their Uniswob v3, ETHUSD spot markets have seen higher daily volume than centralized exchanges, Coinbase, FTX, and Krakken. There's an eye-popping stat. And lastly, the Luna Foundation's treasury holds 40,000 Bitcoin to back its stablecoin UST.

That's worth about $1.6 billion at today's prices. That's the Coin Metrics Metrics Minute. I have two Coin Metrics-Related news updates. number one is we didn't record last week and coin metrics had a big announcement. So the company has raised $35 million in Series C funding co-led by Bank of New York Mellon and a crew, participation from Goldman and Fidelity and others. So congratulations to Coin Metrics, big milestone. And the second update is I have heard that Coin Metrics now has a soccer team that plays in South Boston. Were you aware of this? No, I know this is the first time hearing of it.

So I'm told that there's a soccer team. It's Boston-based soccer team for Coin Metrics. And that's Stephen Lynch's district. Do you think he's going to be happy when he finds out that crypto people are having fun in his district? Probably not. Not on his turf. What kind of, is it an amateur team or professional? It's a club team, but you know how these things work.

You start at the lower levels and you work your way up. So maybe they'll be a professional team at some point. Wow. Like everybody's getting sports sponsorships now. There are, there's some news on that this week for sure. The other big news is that, so we took last week off, we were both in Miami, you a little bit longer than me, obviously, and you came down with the Rona. Yeah, I have COVID.

Matt's making me record this podcast, even though I'm deathly ill. It's really not cool. I think for two out of the last four, you remember a couple weeks ago, I was deathly ill with something that probably was the Rona, but never tested for it. But now is your turn. And you also cut off your mustache. So it's a lot of updates here. I cut it off because I thought it would be like an inverse Samson and Delilah thing,

where, you know, his strength was in his hair. Yeah. And so I thought it was like maybe if I shave the mustache, I'll regain my strength. It doesn't seem to be working. You seem a lot worse for where. Yeah, I've deteriorated significantly. And, you know, if I die, I'm just going to need you to figure out my private key setup. It's very complex.

So I think we made that vow to each other a long time ago. I got you. Well, it didn't slow you down on the podcast front. So you did two podcasts this week. We actually did three on the week total. So you sat down with Andrew Myers and Brock Peterson from Satoshi Energy. And then you also sat down with Paolo from Socket Supply Company, which is a CIV portfolio company in the decentralized cloud computing space.

So busy podcast week for you. Yeah, we, you know, we slacked last week. We didn't do an episode. I think that's sort of our annual tradition is to not do an episode during the time of the Bitcoin conference. So we made up for it. Although what's funny is, remember last year, we actually actually. She did record an episode. We did, yeah.

We brought our recording equipment special. And we just forgot to release it. We did. It was the lost tapes. Yeah. Well, I think that was mostly my bad. There's a lot of good stuff in there. I mean, I think I still have it.

So maybe, you know, one day it'll be special release. We'll put it on GM. By the way, the on the brink community is just thriving on GM. It's going strong. In a world where Twitter is falling apart, GM is thriving. Yeah, so actually there is about, we have 150 GMers, Brink Nationers. Members of Brink Nation on GM. And the commentary is very good.

We haven't handed out any digital trinkets yet, mostly because we haven't really figured out what they are or what they will be. But, yeah, get yourself over there. probably the first 200 will be eligible for a trinket if I had to guess. Ooh, all right. All right. I like that. Another podcast this week was Ria. She sat down with John Adler, founder of both Fuel Labs and Celestia.

So that is part of our modular blockchain series. So we get a lot of blockchain series going right now. Yeah, the modular series has been quite good, I would say. I've learned a lot from both of those conversations. Golden age of podcasting on the brink these days. Golden age. Shall we get into some deals of the week? Okay.

There are a number of deals. We've already covered coin metrics. Congrats to them on their series C. Another SIV portfolio company Socket Supply with Paolo, who we just did the episode with. They raised $3.5 million from us, coin fund, Galaxy Digital, and others. Next one up is Pantera. Pantara is set to close on a $1.3 billion blockchain fund. So congrats to the Pantara team.

Then we've got Circle. Everybody knows them. They raised 400 million from BlackRock Fidelity and others. And apparently BlackRock will become their custodian for the underlying reserve assets back in USDC. Circle, just a monster raised there. So congrats to the Circle team. It's great to see them continue to grow. Another Boston coming.

I'm pretty sure that one's in Stephen Lynch's district. too. He might have pound for pound more crypto talent in his district than any other representative. Right. Next one up is Ava Labs. This is a primary developer of the Avalanche blockchain, and they have apparently raised $350 million at a $5 billion valuation. Congrats to the Ava Labs team. Then we have another fund announcement, Fabric Ventures. They're set to close on $245 million for two Web3 funds.

Next one is PolySign. So they have acquired M.G. Stover. This is the leading crypto fund administrator. A lot of the original crypto funds are running on the Stover platform. So congrats to Matt and the whole Stover team. Then we've got Ignite, which is the team behind Cosmos. They've formed a $150 million fund to fund multi-chain crypto projects. Next is Infinite Reality. This is a Metaverse Entertainment firm. They've acquired e-sports company wrecked global for $470 million. Then we have Leap, which is an non-custodial wallet provider for the Tero ecosystem. There is

3.2 million from Coin Fund, Pantara, and others. Genies, which is a digital avatar company, NFT company, they raised $150 million from Silver Lake and others, and that was done at a billion dollar valuation. So Silver Lake getting in the game.

Next up, Hwobie and Ku-Cola. led a round for the what is going on here. Toncoin, have you heard of this? I am glad you had to read this one because I, what is Toncoin? Oh my God. So Toncoin is like the new telegram coin,

but it's not, it's not related. It's independent from telegram. I thought telegram's coin got shut down. by the SEC. So it's being reincarnated. It's being reincarnated. And now has $250 million ecosystem apparently backed by who will be in Ku-coin. So apparently Telegram lives in the form of Toncoin. What are you just going to get tons in your telegram? Is this like going to, is it going to be compatible? I don't get this. No, I don't think it's affiliated with Telegram, but they're launching it anyway. All right. Well, why not?

Next one up is Rockify Labs. This is a lending protocol. They're doing on-chain credit scoring. They raised $2.7 million from Arrington and Golden Tree. Then we got Glow Labs, blockchain-based identity, and loyalty and rewards startup. They raised 4.1 from Harlem Capital and others. Blocks route, which is a defy infrastructure firm, raised $70 million from SoftBank. Then Shrapnel, which is a AAA game, being used.

built on avalanche raised 7 million from three arrows dragonfly and others next one is context this is a web three social platform i've been enjoying this one uh this is adam ludwin's company founder of chain uh they raised 19.5 million from variant and sam altam then three executives of left city banks digital assets team to start modus capital management they're looking to raise 100 million there was a big article about all the departures from city in the block a couple weeks ago it's apparently a lot of people are leaving city because they're frustrated that they're not doing any blockchain stuff over there yeah so i mean city has been very slow to act they've made some investments but beyond that i don't think they've actually done anything material in the space city has done nothing in the space yeah they put

out a couple like research reports that's about it uh they but yeah nothing going on over there um next one is loop. This is a company working on Web 3 payment rails. They raised $4 million from Andreessen Horwitz. Then we have Diffins. I think it's defense. DFNS. I think it's defense. Oh, yeah, I guess that kind of, that probably makes sense. I prefer to call it defense, which is, I mean, unsurprisingly, they're focused on crypto wallet security. They raised 13.5 million from White Star Capital and others. Speaking of White Star, they also announced the closing of $120 million fund focused on defy and gaming. Next up, we have Ethereum Push Notification Service, EPNS.

They're to centralized communications protocol. There is 10.1 million from Jump, Tiger Global, and others. I do think these push notifications on Ethereum, it kind of fits in that messaging layer. I mean, desperately needed. A bunch of teams going after this. But, you know, there's no way to get in touch with someone on a public blockchain right now. Like, what if you wanted to just say, hey, I want to buy that crypto punk that's in your wallet? There's no way to get in touch with someone.

So interested to see where that one goes. And the last one is SkyNet Trading. They're launching a $40 million fund to support defy on Elrond. You big defy on Elrond, okay? Didn't really know what Elrond was aside from the Lord of the Rings here. I'm guessing it's not about Lord of the Rings. It's probably based on that. Well, yeah, I mean, a lot of things that crypto are named after the Lord of the Rings, that's for sure.

It's true. Busy deal week, huh? Deal. Do you say that every week? Yeah. I think we should tell her in turn to give us like 30% less deals because this is actually too many. I mean, maybe just eliminate the ones that I've never heard of. Maybe that's what we'll do it.

for me. Yeah. So no shortage of news either. Yeah, all right. So let's get into some news. We talk about the SEC all the time. So let's talk about some SEC related news to start. So the SEC has approved another Bitcoin ETF, you know, not a real one, but a futures based ETF. So like the bad ones. This time it's a T-Crium. Am I saying that right? T-E-U-C-R-E-R. U.M to Creum. That's a hard one to say. So this is a futures-based Bitcoin ETF. What's interesting about this one versus the other futures-based ETFs that have been approved is that this one is approved under the 33 Act, which is in contrast to the other ones which are under the 40 Act. And Gensler has been pretty, I thought he was kind of clear that he was in favor of the 40-act

products, but not the 33 Act. And of course, Gray Scales product. is a 33 act as well. And so why this all matters is, as kind of James Seyffart from Bloomberg pointed out, that this might actually have implications on Grayscale's ability to get their spot product approved, since now there is a 33-act product already in market. And Grayscale is pursuing this APA, Administrator of Procedures Act argument that if you've treated, you know, the futures-based product one way, you can't treat the, the spot product the other way.

I'm kind of oversimplifying that, but Michael Son and Sean had a good tweet storm about some of the legal arguments that would support the application. So who knows if this is relevant or not, but it seems like this sort of opens the door to that gray scale argument being increasingly valid, I would think. And maybe we end up seeing like some sort of a lawsuit here

under the APA and, you know, maybe they end up having some SEC on the, Like on the record testimony is my guess, maybe. So potentially array of hope for spot ETFs. Is that the conclusion? I think if you were gray scale, you'd look at this and you'd say, this really makes our argument a lot stronger that this product should be approved. I guess for that matter, any spot Bitcoin ETF proposal that is going out under the 33 Act,

you know, you can point to something that's already in market that is operating. under the 33 Act. And like the pricing mechanics here rely on the spot markets anyway. So, you know, I think that this is a positive thing. But again, who knows? So on that topic, I did see Eric Balcunas toting a shirt that he'd made that says, and still no spot Bitcoin ETF, which is apparently wearing that to the conference here in Miami. In other regulatory non-SEC news, other financial regulatory news, the FDIC published a note last week saying that all the banks that supervises should notify the regulator of any crypto-related activities that they are planning. and they cited systemic risks from certain crypto assets and activities. This actually mirrors a note that the OCC published last November as well.

So we have the two top bank regulators now saying pretty critical things about their clients touching or using crypto in any way. So what is that? Do you leave them a voicemail? What's the notification? I have no idea, but you just tweet at them and say, hey, we're going live with that NIDIG integration because we want to make a zillion dollars here because all of our customers are buying crypto, but away from our platforms. The interpretations I've seen from the FDIC watchers, I guess that's a group of people,

has been that it's likely to have a chill. effect on banks using crypto. I don't know. Maybe we'll have to see how that's implemented, but a lot of these banks are already live with a number of these integrations with FIS and I dig and others. So hopefully it doesn't slow down the product side. We'll see. I took note of a couple comments this week and a couple personnel moves.

So Coinbase has hired Anthony Basile. He's formerly the head of Black Rock. U.S. pension team. So maybe this is a little signal here that Coinbase is going to move into that defined benefit space. That's a big chunk of capital in that category and likely very little penetration in terms of crypto assets. What did you make of Larry Fink's comments this week?

So the comment was that he is studying, that BlackRock is studying the digital asset space and there was some comment around. So apparently BlackRock is the. cash manager for USDC or in part in USC. So they are studying crypto assets. My take was that you should have been studying them starting in 2014. So you're going to have a lot of cramming to do for that test. You know, rivals like Fidelity have been studying for a lot longer than you, Larry.

Well, barely than never. One news item that I was particularly interested in was more footwork. news this week. So blockchain.com has announced a partnership with the Dallas Cowboys. They're saying it's the first ever partnership between an NFL team and a crypto company. So I guess the thesis if your blockchain is that you're going to get a lot of media impressions. You're probably going to get a lot of media impressions on Thanksgiving Day. That's when the Cowboys always play. And you probably get no media impressions once the playoffs roll around because they're never, they never go deep in the playoffs. So that's that's my prediction.

there. If I had an air horn button, I'd be pressing it. Why was that? Well, just because it was a good, well, it was an okay zinger, you know? It's a singer. I mean, they haven't been good since, like, Jimmy Johnson was there. Well, you could have said it, you could

have said it more elegantly. You could have said, like, you know, you're going to get no impressions in January. Yeah, I should have said it that way. Right. Early February. When the big game rolls around, you will be nowhere. So Virginia is apparently going to allow state charted banks to custody cryptocurrencies.

So it's a lot of state versus federal conflict emerging here in terms of actually utilizing crypto. There really is, right? There's a lot of this going on. You get a lot. This has become very political. Yeah. Speaking of federalized versus central. systems, the network state author, Balajasunovasin, he's announced, he announced a $100,000 grant

competition for a decentralized inflation index. The winner was announced, trueflation. They have won the competition. They're going to partner with Chainlink to provide transparent and untamperable CPI alternative data. CPI, by the way, stand. at 8.6%. So it's pretty damn high. True inflation, I bet's going to come in higher. I mean, CPI is, you know, this includes 5% inflation in shelter, which is based on a survey in case you're not aware.

It's a huge scam. The shelter component of CPI is based on a survey of random homeowners, and they just ask them like, hey, how much do you think your home would rent for? it's not based on actual data where you look at the market we certainly have that data you know there's plenty of aggregators of rental prices etc you know depending on the city it might be up 30 40% in a year but cpI doesn't take that into account so in case you're wondering if the 8.6% is a low ball the answer is yes maybe trueflation will have have a better answer i mean 8.6 that's staggering even if that's a right number that's a very high number

number. Like, when was last time there was a print like that? 40 years ago. And PPI, producer price inflation, is over 11% in the U.S. Yikes. And the thing that cracked me up this week was like all the Keynesians and the economists and the stooges, dare I say, for the central bank stooges, they were all celebrating because the core component of CPI was down month to month. Now, that's not to say that the price level was down. That's to say that the rate of increase in a specific subset of all prices declined on a month-to-month basis. But still, the price is increased, right? And they were celebrating this.

So they're celebrating the second derivative of the price level. You've got to find something to be happy about. So it's not that there's no inflation, and it's not that there's deflation. And it's not the prices are actually coming down. It's that the rate of price increase increased, but at a slightly slower rate than the previous month for a subset. of prices.

And that's what we're meant to be celebrating. It's very encouraging. All right. Doesn't it make you feel better about this whole 8.6% inflation thing? I was feeling that 8.6 down in Miami. Things are expensive down there, huh? Yeah. I did see that Arizona iced tea, which has been 99 cents for as long as I can remember,

is still 99 cents. And they're just kind of eating the cost. So God bless that guy. Good for them. Yeah. That's my true index of inflation. consists of one good. Yeah, can you go get something at the dollar store for a dollar?

I mean, those stores are kind of... They might be... It's not the dollar store. Yeah, I don't think they've been doing that for a while. When your business is scaling up and your portfolio is growing, you don't want to waste precious time on manual crypto treasury management or settlement. Fireblocks can handle that for you with smart custody solutions for your crypto business, along with industry leading security technology.

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So more and more of this from the interest-bearing platforms out there. Yeah, not at all surprising on the heels of the BlockFi settlement. I think Voyager was asked to shut down one of their account types and now Celsius as well. the U.S. government's pretty clear that it believes that retail facing crypto yield products are securities. It's not clear how anyone will be allowed to offer them to the public. That part hasn't been made clear. But the SEC has made it clear that they are prohibiting their offering in their current form.

Other news this week, Uniswap Labs, they are launching a venture unit. And this is going to be a unit that will invest in Web3 projects that are using, presumably that are integrating with Uniswap. And it'll be directly out of the treasury of the Uniswap project. In mining news, Blockstream and Block, formerly known as Square, are partnering with Tesla to mine Bitcoin in Texas using solar power. I believe it's a one megawatt installation, and there will be open sourcing the financials and the dashboard

to prove to people that it is possible to mine Bitcoin with exclusively solar. So what was your take? What was your take on that? It is an attempt to prove that 100% solar-based mining can work. It's a 3.8 megawatt solar array. 12 megwat battery and together they're able to provide full uptime to the miner. I think compared to the economics of a traditional miner, it's probably not competitive because you have overbuilt solar and over-provisioned solar and battery in order to maintain the uptime. Because the capacity factor of your typical solar installation will be maybe 25%

So I think what you're likely to see at scale is miners that are maybe co-located with a renewable asset, but they're also pulling in power from the grid, you know, in order to firm up the power supply. Although if you actually look at lots of the new solar installations, a lot of them are being built with batteries now on day one. So our assumptions around solar capacity factors will go up. So it may be the case that purely drawing from solar will be possible. But right now at scale, there's not that many batteries deployed next to solar. So switching gears a little bit here.

Let's do a little conference debrief. So you were at most of the days, I think. What was your take? What was the big takeaway from the Bitcoin conference? So I didn't actually see any of the panels The only panel I attended was my own And I was sick That's why I was watching it back

And I was like, wow, I sound really weak and frail Well hopefully you weren't patient zero Because a lot of people got COVID down there I mean look I I'm glad that the press isn't asking questions this year Like last year they accused Bitcoin 2021 of being a super spreader event. I mean, it unerotically was this year. I mean, a staggering amount of people had COVID coming out of there.

So many people have COVID. So I didn't know at the time, but yeah, I had COVID during my panel, which is why I looked so sweaty and sounded generally weak. I did later watch Peter Thiel's panel or talk, which I thought was really funny that he kind of aggressive that he took $100 bills and he threw them into the crowd

and then he made fun of the Bitcoiners for taking the $100 bills because it's Fiat He was like He was throwing flames I mean he called out some enemies of Bitcoin called out Warren Buffett Jamie Diamond Larry Fink

quite aggressive Good for him man Yeah I think he said yes G is CCP That's I think that's a balladie line. But biology has his tendrils all over the place. One thing that I thought he was wrong on Peter Thiel, that is, was actually his analysis of Ethereum. I don't know if you remember that part in the talk. Yeah, because he said it was a payment rail, right? Yeah, so he said it was basically the like kind of like the velocity thesis from back in the day. So he was basically saying like the

total value, you know, market size, Ethereum can really penetrate is like the market cap of Visa. And he thought that ether was like a high velocity sort of like payments utility token and that its value was really limited by virtue of the fact that it was really just for high frequency payments. And I just don't think that's how contemporary sort of Ethereum see it at all. Yeah, I mean, there's a, there's a, there's a equal equilibrium between ultrasound money and that, and it's, it's somewhere in between there. It's, uh, it's competing as a store of value for those people, for sure. Yeah, like maybe five years ago, if you'd said this,

Ethereum leadership would have been like, yeah, that's fair enough. It's like a computational lubricant. It's like gas, you know, you don't really need it. You don't need to hold it. Um, but certainly there's a big, big, you know, contingent in Ethereum land that see it as a like decentralized US Treasury alternative, something that's meant to be held, something that carries a yield. I mean, Ethereum design choices are going into trying to create reservation demand for ether. That's not a secret. And to create deflationary aspects, you know, with the fee burning, obviously the merge and then, you know, like staking yield and things like that. So I think he just had a

wrong assessment actually of the current sort of like dynamics around what eetherium is perceived as so i thought that was kind of a rare miss from him yeah it was almost like eip 1559 was not considered there which i don't know that's pretty or even the merge or even the merge i mean like or like uh you know whatever and this isn't like a defense of ethereum necessarily i'm just saying that like I think Peter's views around it are really antiquated. Yeah, yeah, it was a little bit surprising. I mean, maybe he's just being intentionally provocative. I mean, you have to have something on that payment rail category.

It would have probably better to have like ripple on there or something. Yeah. What other talks or panels caught your eye? I liked Bruce Fenton's. Bruce Fenton had a really fired up speech. I just recorded an episode with Bruce. It'll hopefully come out next week. He's running for Senate.

just a crazy thing to see Bruce running for Senate. He has a real shot. Do you think so? He's polling well. I mean, it's the Democrat Maggie Hassan only won by like 3,000 votes last time around. All right. So I don't know. I think he has a real shot.

I think the general takeaway from outsiders that visited the conference was they felt that it didn't really. have much of a theme. Like there are lots of celebrities there. There were, uh, you know, a lot of the sound money, sort of economics-minded people. There was mining discussion. And at least the takes I saw on the mainstream press just focused on the fact that they felt the Bitcoin conference didn't have a uniting theme. And it was kind of unfocused. But I think, you know, it might have become too big for for its own sake this conference now. I mean, there were like 40,000 people there. It's crazy. But also, how can Bitcoin have a single uniting theme? I mean, it's just a big thing now. It's not like one single cultural movement. So I think it might be unrealistic to expect that

there would just be a ton of, you know, one single sort of like type of person that attended this thing or one single viewpoint. the highlight for me no doubt was seeing the the two ocean trust guys our friends at two ocean trust put on a great event and send uh senator lumbus was there and so got to hear her say a few words just a unbelievable if you had told me three years ago that there would be a u.s. senator saying all of these pro crypto thing pro bitcoin things um i would have been shocked and that was just a surreal experience yeah i actually i got totally blown up on Twitter because I said crypto instead of Bitcoin when I did like the Sports Center Live Analyst desk.

Oh, you did? But whatever. I mean, I think people need to calm down a little bit. They didn't like that. They didn't like that. But yeah, it's just great to see politicians really leaning in on it. That's for sure. Yeah, I met a few candidates running for office.

and there seems to be very little downside to embracing Bitcoin politically, especially on the right. On the left, maybe more questionable, you know, not as clear where their constituents would fall. But I've even seeing some on the left breaking ranks with, you know, the warrants of the party and things like that. Yeah, who is it? Is it Rokana who's kind of the notable one that's broken ranks? Yeah, Rokana is super positive on Bidqana. Bitcoin and very informed.

And Roecona is a progressive in California. Yeah. It's kind of easier to be optimistic than it is pessimistic. It's kind of a weird, like, why be anti-innovation for the sake of being anti-innovation? You know, I think you'll see more people break with the war on wing. Yeah. I mean, I think that in their case, they see it as a threat to their agenda. It's not just, you know, mere technological innovation.

It's an idea with an embedded political sentiment, which I think is a correct analysis. I just think that the ideas that are embedded are good ones. Lastly, I guess, what's your take on Elon Musk? By the time we record this next week, will he have bought Twitter? So I don't think that he will be allowed to buy Twitter. Why wouldn't he be allowed? I think that Twitter is the most important media platform that exists, basically. It's the place where people make announcements.

You know, people go to Twitter first and foremost. It's the number one place where politics happens, in my opinion, more than, you know, live TV or competing social networks. And I don't think... GM. dot XYZ first, Twitter second, personally, but I hear you. So because of its critical importance, I don't think it's about the money. You know, and I don't know what the exact mechanism would be to defeat this. I mean, it might just be asking the shareholders and the board.

They might just say no. But basically, I think that, and I tweeted this, I think that Elon would represent too much of a threat, basically, be just sort of like the dominant sort of political interests that are very content with the way that Twitter is in terms of his moderation policy and that putting him in charge would be too destabilizing. And so I think he'll actually be unable to consummate the transaction. And I think that it'll be blocked one way or another. That's my prediction. Well, it looks like the board is enacting a poison pill.

The journal just reported that a couple hours ago. So I'm sure there'll be a new update tomorrow, but they don't want to go quietly here. Yeah. I mean, it's kind of interesting where there's one scenario where the stock price is much higher. And so, you know, your shareholders in theory should want to accept it.

But the other thing is that it does mean that the political nature of Twitter changes dramatically, right, towards being a more, apparently under Musk's leadership, it would be a more lightly moderated platform. And I think that, you know, it's not just dollars and cents at that point, you know, there's a lot of, like, political interests that have an interest in keeping the status quo. So I'm actually kind of pessimistic, as fun as it would be. to have Elon be sort of the god emperor of Twitter. I just don't think it'll happen.

I laughed out loud when I saw his tweet about the homeless shelter, when he said, should we turn Twitter HQ into a homeless shelter? Because no one goes to work anyway. I laughed out of when I read that. And one of the funniest things is that Twitter employees got like a week off, I think, to deal like a focus week where they're meant to be just chilling out and, you know, refocusing themselves because there's been so many distractions around Elon recently and their focus week has been absolutely ruined by this latest drama

is that right so everyone at twitter is on vacation right now maybe not vacation but i think they had like a week to like relax and chill out because they're stressed that doesn't what is that like that doesn't make much sense to me i mean i don't frankly i don't thing anyone at the big tech companies really does that much work that's sort of like the reports that i hear from the front lines it's like the silicon valley they're just sitting on the roof cashing paychecks pretty much someone's got to do it i mean how hard is it like it's not like twitter's had any product innovation when was last time they had a meaningful product innovation i mean that they should have bought that tweet maybe they did buy tweet deck i don't know but these

third party things that were popping up on top of it in the early days that would have been the move i mean those are so much better the tooling is just so terrible on twitter i will say that they did a good job with twitter spaces like that totally killed clubhouse remember club is club is club is club still a think? I don't even have it on my phone anymore. No, I haven't been on it in probably over a year. But yeah, it was so big. And then Twitter spaces really did kill it off. I just thought. That was actually a great product. Yeah. I liked the Twitter stories feature. I thought that was cool. You remember that? I don't. What was that? Well, they had an image sharing thing and it would disappear after 24 hours. Oh, so it's just a Snapchat type of thing? Yeah, it's like a

Snapchat thing. You can do that. I thought that was a great future. Yeah, there's been some good Twitter stuff. I mean, it's still just the network effect is unbelievable. It's just everyone's on there. So you have to be on there. Yeah, but they, you know, that's the problem also that the network effect is so good that the moderation policy really gets people, you know, fired up. I mean, I think part of the reason Elon Musk is doing this is because his favorite comedy account, The Babylon B got banned. Oh, really? I did not up to date on that one.

The Babylon B is a Christian conservative satire. It's like the onion, but on the conservative side. And they were banned. And that was the last draw for Elon. No kidding. But the Babylon B got banned. Yeah. I swear, if he, if he gets,

if he wins the battle, that'll be the first account that he reinstates. He just put out a tweet, taking Twitter private a 5420 should be up to the shareholders, not the board, and it's a poll, yes or no.

He has 85% yeses with over 400,000 votes right now. I mean, it is, it should be up to the shareholders, so I think it would be. Oh, it's up to both, really. I mean, the board represents the shareholders. But the adoption of this poison pill thing

is going to be interesting. And there's lawyers, going to be very busy here. Yeah, but I think an offer like this, a go private offer is something where shareholders do traditionally vote. Well, this will be a good one. There hasn't been a nice hostile takeover in a while. I love to see it. Yeah, it seems like an old-fashioned concept. All right, everyone. We'll have a safe and healthy weekend. We will see you on Monday.