On The Brink with Castle Island - Weekly Roundup 08/22/25 (SALT Jackson Hole, Wyoming Stable Token, Fed drama) (EP.659)

Episode Date: August 22, 2025

Matt and Nic are back with another week of news and deals. In this episode: Wyoming releases a stabletoken "FRNT" Matt's bear encounter Bowman and Waller's speeches at Jackson Hole Eric Trump's Bitcoin prediction Is there an example of a DAT that makes sense? Should DATs trade at a persistent premium? Figure is going public Bullish goes public Is Saylor cornered? Quintenz' nomination The DoJ decriminalizes writing open source code Is Polymarket cooked? Does a trial by a jury of your peers make sense? Content mentioned: Reducible Errors, Predicting our own demise

Matt Walsh and Nick Carter are partners at Castle Island Ventures. All Vees expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests and host may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only is an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees will be liquidated.

The federal government loans American International Group, AI, IG $85 billion. This is a different kind of market, and the Fed is a sleek. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars, and all of a sudden, people start to worry. So out of this worry, we have something called the Bitcoin. Welcome to On the Brink on Matt Walsh.

And I'm Nate Carter. Recording this one late on a Thursday. I just got off a flight from Jackson Hall. Sorry to make you stay up late. So you're not at the central banker part of Jackson Hole, but you're at the crypto part, but there were essential bankers at the crypto part. Everyone was there. And this was by far the most important conference happening in Jackson Hole this month.

I can tell you that. Right. The Fed meeting, what do they even say? They just talk about the long, they don't actually cut rates at that meeting, do they? No. What's the point of it? I don't understand. I mean, we have moved so much as an industry.

We had the chairman of the SEC at this crypto conference. We had two Fed people, a Fed governor. And then we had a vice chair of supervision. Michelle Bowman was there. Chris Waller was there. Two senators were there. I mean, you compare this to this time last year at that conference. And by the way, the guys at Salt do a great job.

John Darcy and Scaramucci, they put on a great conference. And the two ocean guys as well. The Wyoming governor was there as well, presumably. Governor of Wyoming. He was there last year. year actually so he's always been a believer it's really remarkable i missed it this year last year was so great and they made us do this run we run directly up the mountain for 10 kilometers yes did they have that this year okay yes i deliberately have not told you the story but so they had that they had like a fun run

every morning um and last year it wasn't really fun that was it was it was actually really really hard grueling i'm amazed and you finished it yeah so we had the same coach the same guide and he was like oh we're going to do the same thing we did last year. I was like, oh, man, this is going to be awful. And you're not to be me and you're in slightly worse shape than you were then. Do you think so? Oh, thanks for, thanks, Nick. Yeah, I mean, I'm.

You're a year older. A year older, get another kid. I haven't had as much time to work out, but, you know, who's keeping track? Anyways, we did the same run, but there was maybe seven or eight people doing it. It was the real hardcore people because I think last year just scarred people because we were. Because people knew not to do it. It was so hard. So we do the run.

We get about a mile and a half in. We go up the very difficult terrain. We cut across on the trail. There's maybe like seven people in the pack. And we run into these two hikers and they're just like, stop. There's a bear right there. And there's a little baby, I think it was a brown bear in a tree. And so we all kind of halt to a stop.

there's two, it ends up being two of them, plus you could see the mother bear, maybe like 100 yards away. So everyone stops and tries to take out their cameras to like take pictures of the bear. Meanwhile, I'm like walking the other way. I'm like, guys, I'm done for the day. Like I'm out of here. But we stopped. Did you see the bear? Yeah, there was three bears.

There's a mother bear. Baby? Two babies. So cubs? Yeah. But who. Were they brown or black? Unclear to me.

They were dark. well it's really salient information what color they were there's the rhyme yeah because if if they're brown you get down if they're black you fight back or something if it's white good night i mean we there's no polar bear risk here but so we need to know what color i i think a lot of people maybe thought that i was um a little sheepish around it but who needs to stick around and look at bears from short proximity like get out of it right that's how close were you i don't know maybe 20 yards from the baby, maybe 100 yards from the mother? I wouldn't chance it with the mother bear.

No chance. No. Maybe we just sound like, you know, east coasters. They just like don't encounter bears very much, but absolutely not. I mean, my survival instincts just kicked right in. I just took a look at who I was with and I just kind of sizing up where I would be in that pack on a sprint. It was. Yeah, that's the question is, were you the slowest one of the,

group or were there I think I would have fared okay there I think I would have fared okay there I mean there's two hikers they're walkers yeah so the hikers they would go for so what how you had to abandon the run so we ended up doing maybe two and a half miles as supposed to I think we did six last year on the same trail yeah there was a so we couldn't get down the trail because the mother bear was sitting right in the middle of that trail so it saved me a saved me a lot of cardiac stress I suppose oh so there's the benefit in the end yeah Then I went running the next day and saw a very esteemed member of the government.

I don't think I should probably say the name, but these government people, they work out. I'm honestly so upset that I missed it. Sounds great, and it's so beautiful this time here. What was your highlight of the conference? So I think Atkins's speech was really good. I don't think there was anything groundbreaking in it. That was a highlight. I'd say Bowman had a really good speech as well, just talking about removing reputational risk.

Waller had a good speech. She talked about payment systems. There's a panel that was kind of amusing with Scaramucci and Eric Trump in the HUD-A-8 guys. And so that was, I mean, that was probably the most people in the conference room for that, just because they were probably looking at the tension between Scaramucci and Trump. Yeah, I was going to say, is he, like, buddies with Eric, or is it the sins of the fall? No, it was very cordial, very cordial. I think there was a, you know, there was some comments here or there, but it was both of them shook hands and gave each other a hug. It was, it was nice. And then

Eric Trump gave a prediction that we're going to have 175K Bitcoin in a million dollar Bitcoin shortly thereafter. So 175K, I think, was his U-R-N prediction. And not too far after that, a million, he said. Oh, was the Chatham House, do you just violate the Chatham House rules? No, this was live streamed. This was all, okay. This is all out there. Okay. Well, if you trust Eric Trump's TA, there you have it. Yeah, I did like Mickey Bowman's speech. Well, she said a lot, but the main thing that she said that I noticed was the reputational risk is overdone. That was the big highlight, yeah. And they're taking it away. Yeah. Yeah. I think there's a little bit of a, maybe there needs to be a little bit of a truth and reconciliation committee for all the sins of the past administration, just debanking companies and people left and right. Yeah, and Waller, he loves stablecoins, you know.

I wrote a whole blog about this a while back. Chris Waller loves a stable coin. Yeah, so his thing was all about kind of the future of payment systems, and he's very wonkish on this, just in terms of how these things work and how they evolve. And spoke super favorably, I'd say, about digital assets and distributed ledgers, I think he called them. And he used the word public blockchain as well. do you think that he's the next chairman of the fed yes i think there's a very good chance he is i think it's either him or warsh so there's a lot going on with the fed also in in the outside world

uh this fed governor or lisa cook trump is trying to force her out have you been following this loosely what is this is something to do with a mortgage application or something yeah so apparently she made false statements that's the allegation on a mortgage application. She's recently appointed. She was appointed by Biden in 2022. The whole composition of the Fed's going to change, I think, sooner or later. Yeah, I think that's right. I mean, it'll be interesting to see what the tone is this upcoming week out there at these Fed meetings. You know, will they be dove-ish? Will Powell? If I was Powell, I'd probably just hold the line, do you think? What does he have to, he cuts rates? I don't know if that's going to help his

legacy. Yeah. So the other Wyoming thing is there is a Wyoming not stable coin, but a stable token. Stable token, because I guess it's technically not under the Genius Act. They didn't need the Genius Act to do this, but it's called the Frontier token, FRNT. So congrats to them. I mean, what a great accomplishment. Yeah, the logo's got a cowboy, I guess, on it. And it's a real thing. it's actually very very thorough i actually saw behind the scenes a little bit they were very nice and put me on the website i didn't do anything though um shout out to anthony apollo yeah and also i'd say that the whole committee there i think kately long joel revel the governor himself seemed very involved state treasurer so um i mean this thing's on seven blockchains already yeah it's audited

they just full suite of tooling built out very crypto native approach It's yeah on a whole bunch of blockchains. I don't know of any other stablecoin the launch on so many blockchains. So it has a website, stable token.wio.gov. We'll see what happens. But yeah, it's pretty cool to have a state issue

their own stable coin. And, you know, Cracken is now domiciled in Wyoming. Did you know that? Officially. Yes. Yeah. It's a nice place. That's a great place.

All right. Well, we had a busy podcast. Wyatt sat down with Luke, the co-founder of Satlayer, to talk about Bitcoin yield opportunities. And he also did a podcast with Cupid and Hercules. Those are pseudonyms, the co-founders of Groom Lake. That was an interesting one, just talking about cybercrime prevention and ways to stay safe if you're engaging in the crypto ecosystem. Some good tips on that one. Yeah, I was going to say, I'm guessing those are not.

They're Christian names. No, but I could understand why they would not want to use their real names. So light and deal week, but should we dive in before we hit the news? Let's hop into the deals of the week. First one up is Legion. This is a retail crowdfunding platform. They raised $5 million from Veneck Ventures, Brevin Howard Digital, Coinbase Ventures, and others. Then we have Hyperbeat.

They're a DeFi protocol on Hyper Liquid. They raise $5 million from Ether 5 Ventures, electric capital, and Coinbase Ventures. Zero One Exchange is a DeFi trading terminal. they raised 4 million from Coinbase Ventures and Alliance Dow. Iris is a decentralized data network. There is 10 million from Coin Fund, Hypersphere, and B.C. DigiFT, a defy exchange for RWA's, raised $11 million from SBI Holdings and Marana Ventures. Then we have low tech, a trading infrastructure company.

There is 5 million from 13 books capital, light speed faction, various ventures. 13 books. I've never heard that one before. I think that's new. That's a new fund. And it's not low tech. It's low colon tech, I think. Yeah, I didn't know how to pronounce it. Yeah. That's, that's so that's, yeah, that's it. And the last one is loop crypto. It's a stable coin payments company. There is two million from Fabric, Veneck, A16 crypto, and archetype. Sorry, I had to look at 13 books capital. I need to understand the meaning. What does that mean? We should probably know. that, right? Is that going to end up being like a biblical reference or something? I don't know. They're European. I'll tell you that much. They're European fund. All right. We'll find out by the end of the podcast. I'm going to look at their LinkedIn. It's a biblical reference. There's 13 epistles of Paul in the New Testament. Well, both of us should know that. We should both know that. It's been a long time since I knew that, though. Well, that's embarrassing. I don't know. That's it for the deals.

That's it. I guess this next one is actually a public market deal. So figure technology, which is a blockchain-based lending and infrastructure company run by Mike Kagney, who previously founded SOFI. They have publicly filed an S-1 this week. They will be going public soon. So I don't know. What do you figure probably end of the summer type of time frame, if I had to guess, based on this filing. But they brought the two companies back together. Remember they had separated the HELOC division from the trading and markets division. They're back. together with this S-1. Looks like they're profitable. So this will be an interesting one to watch. Yeah, I mean, these crypto IPOs have been ripping bullish, when public, did very well, actually. Made $1.15 billion in IPO proceeds in stable coins, apparently. They took the proceeds in stable coins, which is kind of cool. It's a brave new world out there.

So, yeah, IPO season. Even though the Figma IPO didn't go too well, I may have personally been affected by that. That's all right. They have plenty of Bitcoin on the balance sheets, so they've always got the DAQ player. They can make it all back. That's right. You've got to talk about DATs in this podcast. Yeah, so when I heard from you in Wyoming, you were muttering dark things about

Dats. Has their view changed? There's a lot of Dats. I mean, I wouldn't say I'm categorically against Dats. I think that there's a world where there are multiple successful debts. I guess I should get that out there at the outset. I also think that there's a school of thought that I think Marco Centauri of Pantera probably articulated the best out of anyone who's been talking about this.

And that school of thought would be this idea that layer one blockchains raise capital into a foundation and investors put money into that. And then they also buy this token warrant and all the value accrues to the token warrant. And the foundation effectively just manages a treasury and eventually trends to zero over time. And there's no value for investors there. What if the future of this industry on the capital raising front post-market structure bill had a debt attached to a layer one blockchain out of the gate? That's an interesting thought experiment.

That's not what I'm seeing in the market, to be clear. But you could actually see that as an interesting angle for a debt, potentially. But why would you need the administrator with the blockchain to be a publicly traded company. I don't think you would strictly need it. I just don't know if these like offshore came in entities that just sit on piles of tokens and make grants actually make sense. And so almost anything else would be.

Well, that was back when we were doing decentralization theater. Right. And so. And we don't need to do that anymore. And so if you're not, maybe you just end up with a company that theoretically could go public that just holds a boatload of tokens of the project and does things to keep the project going. I'm sympathetic to learning more about that idea, I would say. But again, those don't exist yet. I'm trying to think to myself the circumstances in which I really think that that that makes

sense. Also, I don't like dat as a terminology. I tried to popularize, well, initially Bitcoin access vehicles. I think that makes a lot more sense as a term. Dat is not good. Digital asset treasury. Treasury what? Like, that's incomplete. So I Everyone calls some dad saying that's wrong and stupid, but I guess I'll do it. I think the case in which that makes sense is one where there's no ETF for the coin. There's no efficient instrument publicly for the coin on that market in that country, you know. So Bitcoin dat doesn't make sense. I'm sorry.

Doesn't make sense. Why? So how can you sustainably grow Bitcoin per share for the, doing some sort of Oroboros perpetual motion machine thing. Well, I don't get it. Yeah, let's talk about, I guess, the reasons why a debt could theoretically trade above net asset value. I think number one would be what you've seen with micro strategy where there's just, you know, significant access to the convertible bond market, significant access to the preferred equity market.

I think that's probably. But I still, I don't really get it. So you're saying there's market participants in those markets that want Bick, exposure and it have been an insatiable desire for Bitcoin exposure and they need it to be structured in that specific form. So I guess to just finish the bullet though, I think this only works if you have a business with cash flows, probably. And yeah, I think you could make an argument that Saylor has really just been spoon feeding Bitcoin to people in the convertible bond market that otherwise wouldn't have exposure. And so it's just an interesting financial instrument.

that has more upside than the average convert because it's volatile and has this conversion mechanism that is tied to the price of Bitcoin. So if another debt had that level of access to capital markets and had a cash flowing business behind it to get off the ground, maybe it could trade a premium. I don't know if that's a sustainable premium, to be clear. So that's one. I would say the other reason why maybe a debt could trade above Nav would be the existence of an operating business that is directly tied to the success of that protocol.

Now, what would that be? I don't know. I mean, like, none of these dats have that. But if you had... That's, yeah, that's what I thought would have emerged by now is that's where you're not just holding the coin, but you're actually doing stuff that makes the coin be worth something. Yeah.

And I think that would have to go beyond staking, which is my next point, which is you could do capital markets or on-chain activity to just boost the yield. of the underlying token in a way that you wouldn't just by holding it. And so you could be staking it. I don't know, like selling calls and doing all sorts of financial derivatives seems risky, but theoretically you could produce more yield on the underlying. And I think that's the big rationale for a lot of these debt issuers. So that's my laundry list of like why it could work, maybe.

I don't think selling volatility is a real kind of a yield. I don't think it is. you're just transforming the risk of the instrument. You're taking it from one format to a different one. I don't think writing calls should be considered a yield strategy. I'm troubled by them. I think people think we're the loudest critics of Dats. I don't know why they say that.

Yeah, people are definitely coming up to me saying, I know you hate Dats. I'm like, I don't know if that's probably a little bit too strong of a phrasing. I just am super skeptical. I mean, so let me run you through why I think a debt should trade below NAV, I guess, is the other end of that. And so- Well, that's the default for any close-end vehicle. That's the default, right? So number one is, I guess, that's just how close-end funds work.

Number two would be lack of access to equity markets, lack of access to the debt capital markets. You think you're just going to start a debt for like the 45th ranked coin on coin market cap and get into the convert market? There's just no chance. Legacy shell company liabilities is another huge one. So you know, you're taking over these crappy companies that just have all these lawsuits embedded in them. They've got HR issues. And so I think there's a lot of issues with the shell. We talked about the asset management agreements last week, but that's a huge problem in this industry.

I mean, you have these crypto hedge funds that are just making tons of money. That should detract from how these things trade. I mean, these things should trade at like 0.8x in some cases, maybe even lower just based on how much they're paying out to certain crypto funds on the back end. You know, the other thing is that there's tremendous illiquidity, I think, in some of these things. We have VCs that have put locked tokens into the debt. And so illiquidity would signal to me that that should trade a discount, right? Like these things you can't sell them. So why would they trade anywhere close to par?

and I'm rambling here a little bit, but I think the other thing that's becoming clear to me is that the CEOs that are going to step in to run these things are going to get paid a lot, but they can't get out. And so I think you're going to have like management instability where these CEOs in order to get out have to resign and then sell their shares, which creates this like management issue. So that that would be on that list of why this probably won't work in most cases. well that's a pretty long list pretty much agree with you on all the above just looking at the data blockworks of course is the good dashboard

the sole dats have actually been trending up on a MNAV basis BTC's been consistently selling off still above one though the ETH dats are almost exactly at one there's been a BNB dat that just got added in last week. It's trading it five times. 5X now.

So, yeah. So the Bitcoin premium is plunging precipitously, I will say. I think Sailor is actually a little bit cornered. Yeah, do you want to talk about his? Did you see what he did this past week? He revised guidance. So they did change the guidance. They had this like rubric for.

based on certain thresholds of MNAV, multiples, you know, what they would do. And then he changed it to basically give himself more scope to issue. Yeah. At the low multiple, right? Yeah. I think that this is a bad idea for him. He's basically signaling more likelihood of dilution. Yeah, you basically just call out a number that, you know, you basically call it to the market,

your weakness. It kind of reminded me of Caroline L. was saying like I will buy all the FTT at 20 cents or whatever that famous thing was because he's basically pointed out that 2.5xMNAV is where he's active you know what I mean yeah I mean it's I mean it's never going to trade over that again happy to put money on that it won't trade up into the higher realm anyway and yeah he only has one trick which is issuing equity so like you can either do it or not do it if you don't do it the market starts a panic and free freak out because you're the only buyer. So you can't not do it. But if you're issuing equity and

you're close to par, you know, MMS, TRS shareholders don't like that. He's actually kind of cornered right now. And what he has to eventually do is commit to selling Bitcoin to buy back his shares. But he'll never do that. He'll never do that. And so he. So he only has a tool to work in one direction. And so I guess if the price of that point goes up, that maybe that takes a little bit of the pressure off, but right now, in this kind of sideways two weeks,

and it's going down over the past week at least, I think there's just going to be a, he's in for some choppy water. How about Tom Lee, though? I'm a Tom Lee guy now. He's a machine. Yeah, I actually, I'm very impressed by him

and what he's doing is BMNR, bit mining. What do you like about that one? I mean, I just, I like him better than Sailor. Tom Lee's been out of for a while. He's a nice guy. He was one of the first people ever do our podcast. Long time in the trenches. Yeah, he was in the top 10 episodes, right?

He was in the initial cohort. He used to come to our office when we're in Cambridge. Yeah. So the ETH Dats are going to flip in the Bitcoin Dats in terms of share of the asset held pretty soon. Yeah, some of these ETH Dats, though, they're just, the dumpster fire on the asset management agreements. See, I asked for a standard set of disclosures around that and an easy to consume dashboard because I'm not like you.

I can't leave through all these Edgar filings. No one's done it yet. Blockworks has a pretty good one. They've been evolving it. But the issue is that some of these asset management agreements have fee schedules that are actually not filed. And so they're redacted fee schedules. How can you how is that allowed?

It definitely should not be allowed in my opinion. I'm sure there's a legal loophole. All right, well, that's enough debt belly aching for one week. There are other pieces of news, pretty notable Bo Hines, who had the advisory role at the White House. He's joined Tether as a strategic advisor. Interesting move, huh?

So, I mean, definitely a good career move, I would say. Yeah. without a doubt. The Federal Reserve has ended their novel activities supervisory program. So if you were bank doing crypto stuff, you were in a different category and had to suffer a little bit more scrutiny that has officially ended. So that's good. Good to have that.

And also on the banking front, notably the OCC has dropped their consent order against Anchorage in 2022, to stating that Anchorage is compliance with laws and regulations does not require the continued existence of the order. It's great news for them. That is great news. We actually, we co-hosted a Happy Hour with the two Ocean guys and the Anchorage folks. So that was a lot of fun. Congrats to Anchorage on that.

That's a weight off their shoulders, I'm sure. Yeah, the Happy Hour, it's actually a sushi restaurant, and you'd be surprised because it's an incredibly good sushi restaurant, but it's in the middle of the country. I think it's the best sushi restaurant I've ever been to, actually. And it's in Jackson Hole, Wyoming. And I think they fly the sushi, the fish in every single day. Sounded by, what is it, the founder of Ballyasne or something? Yeah, it's called Campa.

Like, he needs a free ad. After the happy hour last year, I did a very comprehensive blood test. And they said that I, I didn't have mercury poisoning, but I had very high mercury levels in my blood. Oh, wow. Did you have a lot of sushi? Was that what that was? I think I had 200 pieces of sushi. Oh, wow.

That day. I just, I was a machine. And they kept bringing it. And it was, it wasn't free. Someone paid for it. Yeah, I mean, we paid for it. We split it. You know, felt free in that moment.

And yeah, I basically gave myself mercury poisoning. Wow. Well, I guess you won't have it this year, but you got to come back next year. I mean, it's just, it's the best. Yeah, shockingly good sushi restaurant in Jackson Hole. It really is. All right. What else happened?

this week. Oh, this was interesting. So the Winklevoss Twins, they donated $21 million worth of Bitcoin to a pro-Trump pack. You know, they kind of spell out what their key issues are. Not surprisingly, it's a lot to do with the cryptocurrency industry. What was notable about this is that it's just explicitly an anti-democrat pack. And so they're not even playing the fair shake, hey, we're going to support pro-cry people on both sides. It's just, no, we're going for Republican people that like crypto. That was sort of the gist of it. Yeah, I mean, that's honestly fair game. You know, I think some people got a little whiplash from Fairshake donated Democrats.

Yeah, I mean, Fairshake's playing one game. But it's interesting with a backdrop of this Quintens thing at the CFTC. Yeah, because he's going to get it now for sure. Do you think? I don't know. Yeah. I don't know. I think so.

It's interesting timing because you have a lot of people in the industry that are rallying behind Quintens. The word on the street is that the Winklevoss twins do not want Quintens. And I think that has something to do with the fact that when Quintends was at the CFDC last time, he stood in the way of the DCM application for Gemini. And $21 million is $21 million. Yeah, but I haven't heard anyone other than the Winkelvi criticized the Quintends nomination. I've heard some, I mean, I haven't directly heard it, but there's a lot of murmuring that the gambling associations don't like Quintens. because the casinos want people to come to the casinos to bet and quintons is not go to calci yeah and so

i think there's a i think there's an angle there with the native american tribes and the um the casino operators uh don't want them that's where i have to go to place my bets in the state of florida which i am always winning these days by the way really so i'm feasting at the tribe's expense what do you get what's your angle. Just UFC. Yeah, okay. Just, you just, if you just know the sport really deeply, you can win. That's all there is to it. I put in, I think, $100 to Draft Kings, like when it came out, when it became legal a couple

years ago. And I just managed it down to zero, I think, over two years and just kind of lost interest. It's all about table selection. You know, you just have to sit down to the table or you have the edge and don't play it at the other tables. I feel like the sports betting. is just so addictive for so many people. Yeah, it is. Actually, personally, I think it should not be as easy to get access to.

I mean, there's a whole set of these modern vices that I think should not have been deregulated, sports gambling, cannabis, I mean, probably other things. People are going to get on you for that. Yeah, for sure, but we need to put the toothpaste back in it, too. my other thing about these prediction markets is every exchange is doing them now robin hood is launching sports betting prediction markets powered by calci it's going to be very competitive i actually wonder a little bit um you know how polymarket's going to do every brokerage is going to do prediction markets this is something that's going to be interesting to watch because i i think the way this works or the way this will work is

that the CFTC would almost have to approve every market, I think. And so I would think that a decentralized platform, whether that's polymarket or not, because I think polar market might go in the more regulated path. But I think you'll always have this wild west on-chain prediction market, product market fit, where you'll have a project that has a token that does well. But I agree with you that I think eventually the end state here is that Robin Hood will have one, probably Schwab will have one. I think a lot of retail equity brokers will get into the prediction market business. So I read an interesting blog post from Agostin LeBron, who I think was a former trader at Jane Stry, if I'm not Mr. Rembranding.

So his blog is called Reduceable Errors. He wrote a prediction market blog, or a blog was very critical prediction markets, called predicting our own demise. And he made a bunch of points for why he thought they wouldn't work. the main one was that there's no natural hedgers on a prediction market. That's interesting. Yeah. So like in many other markets, you have people that have to be takers because they're hedging, right?

So like commodities, of course, there's like natural buyers, there's two sides of the trade. And that's how you get the market. But in a prediction market, you don't necessarily get natural hedgers. Wouldn't it be the casinos that are just off-laying risk? Wouldn't those be the natural? Yeah, but you kind of want there to be, well, that's like unnatural hedging. It's like paid hedging, you know? Is it paid, though?

Because what if in one state you have a lot of people that are betting on the Red Sox and the other state you have... Oh, yeah, I see what you mean. Would there be just natural retail flow on both sides that needs to be offloaded to a like a DCM? Sports betting is a different category. Sports betting is different because there are different opinions. and like there's already a vibrant market around that, yes. But this stuff, I guess if it's like, if prediction markets only end up being good for sports betting,

then why even have them? Well, I guess politics would be the same way, though, wouldn't it? Because you'll just have opposing views. Maybe. I'll share the blog post in the show notes, you guys, and let me know what you think. I thought it's pretty compelling. All right, there's an interesting remark

from the acting head of the DOJ criminal division today. So I know people are not happy about the Roman storm tornadoesh thing. But this one is interesting. There's a long quote. I won't say it all. But they said, generally developers of neutral tools with no criminal intent should not be held responsible for someone else's misuse of those tools. If a third party's misuse violates criminal law, that third party should be prosecuted, not a well-intentioned developer. This is the DOJ basically saying if you're writing a smart contract with no malicious intent, you're basically not liable for what users the smart contract do, which is the kind of rational take, I think.

Interesting. Yeah, I wonder if that'll have an impact on whether or not they bring that case again against the two charges where there was a mistrial. Was that a possibility? Yeah, I think they could do that, right? Because he was convicted on one, it was a hung juror. on the two and three. So I think they could.

The notion of juries is just really weird to me. I don't like them, to be honest. That's a hot take at this hour in the podcast, this hour and the night. Just don't like, you know, democratically. Trial by peers doesn't appeal to me. Have you met your peers?

Have you hung out? Like, it's like, it's not just like people we hang out with. It's like, go to Denny's at three in the morning. board a flight to a spirit airlines flight yeah those are your peers in group eight those are your peers okay you would rather just a just a kind despot I'd take my chances it with like trial by combat or anything other than that I don't think my peers are gonna especially if it's like a white collar crime which is like the one I'm most likely to face right are they really going to understand you know,

complex financial concepts? No. It's not a bad point. It's a hot take. I don't trust my peers in that case at all. All right. So we'll get some more feedback on that anti- What would you say?

That's like an anti-judicial process point of view? Yeah. Yeah. I mean, I don't have an alternative that's better. And I mean, I guess in some countries, they just have judges. Like other countries like that? You just, the judge just decides.

Yeah, I think you'd do so much better with like Gary Gensler coming back as a judge. That would be great for you. I think if we invented trials today, you know, the legal doctrine. If you propose jury of your peers, people would laugh you out of the room. You're more of like an Aaron Burr type of guy is really what this comes down to. I do think there should be more duels. Yes. There should.

Yeah. There should, we currently have zero. That's not the socially optimal amount of dual. Yeah, it's probably not what it was back then, but it's definitely not zero as the optimal number. If someone insults your honor, I think you should have the right to challenge them. Speaking about insulting someone's honor, I would be remiss if I didn't just say it is hilarious to me that State Street is back in the game of press releases about their blockchain pilots. Have you noticed that? I did notice it.

They had a press release this week, that they're the first three, the first three, party custodian to launch on JPMorgan's private blockchain digital debt service blah blah blah the funny thing to me is that they don't even have a head of digital assets to put in this press release they just have like a chief product officer they don't even have blockchain people at state street this is just a comedy of errors for the past decade seems to be seems like you have some severe animus against state's i don't even really i i mean we've we hires actually some great people when i was at fidelity from state street but i just cannot get over over the largest, I guess they're the second largest custodian.

And then they have one of the largest passive asset management franchises in the world. And they missed the ETF and they also missed Bitcoin custody. It's just management incompetence. They needed a visionary leader. Not everyone has that. That's true. That's true. But anyways, they're dusting off the 2017 press releases.

Some hot takes to end it. This is what happens when you record late. I just think maybe people don't listen to the end. So we kind of have a little bit more editorial freedom. You just say whatever we want about dats. We'll start a new section of all the dats that we know about that haven't been publicly announced and who's going to go run those dats. Maybe next week we can try and each say one nice thing about a dat,

dad of the week. That's what I tried to do this week. Yeah. You did try. I mean, I'm sure there'll be a debt that we like at some point. Yeah, they're not all bad. It's just kind of like the ICOs in a lot of ways, right? Is that the right analogy?

Is that when the ICOs were happening, some people went full bore, took it way too far. But some of them ended, like Ave was an ICO. Yeah, I mean, you had Dentecoin, and then you also had BNB, which was if you bought and held that to today, you made approximately one gajillion dollars. Right, Ethereum was an ICO. So was Dentecoy. Yeah, I mean, I think there's a time and a place for a debt. I think there are conditions under which a dat makes sense. like if the asset is not otherwise available

and there's a public market appetite for it, then that does make sense. All right. Well, it's a good place to leave it. Everybody have a safe and healthy weekend and we'll see you on Monday.