On The Brink with Castle Island - Weekly Roundup 11/05/21 (Do stablecoins need bank charters, Mayors taking salaries in Bitcoin) (EP.257)

Episode Date: November 5, 2021

Nic and Matt return for deals and news of the week. In this episode:  The President's Working Group report on Stablecoins comes out Should stablecoins really require a bank charter? Would a red wave in the midterms be good for the crypto industry Two congressmen ask the SEC to approve a spot Bitcoin ETF The TungstenDAO buys the Midwest Tungsten 14 inch cube Where was the Neeraj kitchen photo taken Tarantino is auctioning off uncut scenes from Pulp Fiction as NFTs Miami Mayor Francis Suarez will take his salary in Bitcoin Tungsten's industrial uses Should you count native tokens as an asset on your balance sheet? Sponsor notes: This show supported by Coinbase Prime, an integrated solution that provides advanced multi-venue trading, custody, and prime services for institutions. For more information see coinbase.com/prime Corporations and institutions can allocate cash into Circle Yield to gain crypto lending exposure and earn superior returns compared to traditional markets. It's secured, overcollateralized and built on the leading dollar digital currency. Visit circle.com/yield to book a meeting

Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. 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 to Britain's ailing economy with a new round of Concentive 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 a Bitcoin. Bitcoin.

Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. This episode is brought to you by Circle and Coinbase Prime. More on those companies later in the episode. So it feels like it's all-time high season around here, huh? It's going higher. The number's going higher. We're recording this on Wednesday.

So as usual, something big is going to happen on Thursday. But yeah, the number's creeping up. Are we going to release this on Thursday so that we don't? don't avoid the same problem that we always face when we record on Wednesday. Maybe. Maybe we should record, maybe we should release it on Thursday. Well, only the people from the future will know. Did we wait till Friday to release? Who knows? You know, there could be a huge announcement. There are, I'm aware of a few big announcements on the horizon. Well, it was by all standards of this podcast, it was actually a quieter

week than usual. Is that fair to say? Yeah, it was a little bit of a quieter week. Still a lot of deals though some huge deals got done this week yeah monster so i guess we can just dive right in big deal right off the bad digital currency group everybody knows them they sold 700 million worth of shares at a 10 billion dollar valuation of soft bank g ic rivet and capital g so the crazy thing is here this is um it sounds like from the reporting of this this is all secondary so no new money going on to the balance sheet, but, you know, buying out early shareholders in DCG, just an incredibly impressive company, obviously. And it tells you they don't, they don't really need the money. Yeah, no primary offering there, but obviously just a stalwart business in the crypto space

with exposure virtually everywhere. I mean, completely ubiquitous. So congrats to them. I've always thought that the best business model, I mean, I'm obviously biased since we work there, but probably one of the most elegant business models of all time in financial services is Fidelity. It's like a mastermind business model where you have an asset management franchise that is just high gross margin business. And then you distribute that asset management product through the 401k channel, the retail brokerage channel and the institutional channel. And then you also have this back office custody and clearing business that you kind of need for those other businesses, but then you monetize that. And so it's a really great business. And DCG reminds me of that in the crypto context, where they have a trading and lending business unit with Genesis.

They have an asset management business unit that can rely on some of that trading infrastructure. They have the mining business that plays nicely with it. And so it's just a really well-designed business there. Obviously, the venture side, which is just seeing every deal in the entire industry making some bets. So you've got to tip your cap to Barry. It's just an incredibly well-thought-out franchise. And speaking of Foundry, which is their mining staking business, Foundry USA, their Bitcoin pool is officially, or at least for a period of time, was the number one Bitcoin pool. So congrats to them for hitting that number one spot, getting on the podium there.

That doesn't happen, right? Like that just came out of nowhere and popped on the scene. Historically, we haven't seen that type of growth in the mining pool space. I mean, just it's remarkable that a U.S. pool was at least temporarily number one. It just, you know, it's been all Chinese pools really for most of the history or European, actually, with slash pool. But yeah, pretty cool story. I mean, foundry hasn't been around that long. You know, they've built a great business there.

So DCG, what a business to be in. DCG, they invited me to the Masters and then it got canceled due to COVID. It's just all-time bummer. Could have been enjoying the Masters, but freaking COVID, man. So here's an interesting deal. I'd never heard of this exchange before. I don't know how that's possible, but SCB, which is the oldest bank in Thailand, they acquired 51% of BitCub, which is the largest crypto exchange in Thailand.

for $536 million. I will confess I'd never actually heard of Big Hub, but apparently it's a billion dollar business. I mean, some of these regional exchanges are just money printing machines. SCB has just been super, super active in the crypto space. So they've had all sorts of venture investments or investors in BlockFi, investors in funds. They hold cryptocurrency directly, I believe.

And this is a big signal to have the oldest bank entirely. hopping in and getting behind the largest exchange in that country. That's a pretty forward-thinking move. Yeah, I just really interesting deal there. Also in asset management platforms, Voyager, which is the, I believe, Canadian crypto brokerage publicly traded. There is 75 million from Alameda research. Yeah, that's a big deal as well.

Next one up is osmosis. This is an automated market maker. They raised $21 million via a token sale. The token sale was to paradigm, robot ventures, nascent, figment, and others. Next up, and this is certainly a pain point. Coinbase has acquired Agarra, which is a customer support platform. Yeah, that deal looks like it was in the tech crunch reported that in the $40 to $50 million range. So, you know, Coinbase continues to acquire a great clip there.

Nidig as well on the board with. an acquisition this week for bottle pay, which is a payments company building on lightning. It was reported that this deal was in the $300 million range. So really interesting kind of infrastructure play there for Nidig. Next up, we have Ardana, which is a D5 protocol, building on the much maligned Cardano. They raised $10 million from three arrows, mechanism capital and others. So I suppose this is indicative that maybe smart contracts are indebted. indeed coming to Cardano after all.

You know, so we record these deals every week, and you don't see a lot of entrepreneurs building on Cardano. I was actually talking to someone earlier today about how few entrepreneurs are building in that ecosystem, but maybe this is a sign of things to come. You know, it's a better Ethereum, you know? I think my reaction to an asset being universally reviled is there's probably something interesting there.

But despite all that, I've never thought to myself that I wanted to own Cardano. Now, next one up is Umbrol. So this is the Bitcoin Node Company. I think you have an Umbrol. They raised $3 million. I used their guide to build a Bitcoin node from Raspberry Pi off the shelf parts.

But yeah, very cool. And just always-on node and lightning channels and they provide a great interface to manage that. So pretty great company. Next up we have Spermion, which is a fund, focus on NFT and Metaverse-themed investments. There is 100 million. That's a great time to be doing what they're doing.

We had Andrew Steinwald on the podcast a couple of months ago, and so the Metaverse and NFTs, Facebook has really accelerated that movement. So great time to be doing what Andrew is doing. Next one up is the crypto trading platform Ascendex. They raised $50 million. Beckers included Alameda Research, Jump Capital, Uncorrelated, Atcheron Trading, Palm Drive Capital, and others. And then we've got Spruce.

They're a sovereign identity startup. They raised $7.5 million from Ethereum Ventures and Electric Capital as well as BitCraft and Coinbase Ventures. So Busy Deal Week, seems like they're all. busy deal weeks, the later stage funds are getting more and more active, which is great to see. Another kind of thing to talk about this week, though, just to jump into some of the news, is the long awaited, and I'd say the long dreaded, but didn't turn out to be that bad, the U.S. Treasury report on stable coin risks. So the backstory here is that the U.S. Treasury has been putting together this report on stable coins and studying, you know, whether or not

the government should do things around stablecoins. or not these stable coins present systemic risks. And the report came out. It was put together by a group of people that included Gary Gensler, included the CFTC chair. It also included the interim chair of the OCC. And I guess the long and short of it is the report recommends that Congress starts to enact some regulation. So, you know, recommends that stable coins should be something that new laws are created around to essentially say that they should be issued by just. depository institutions. So it sounds like the recommendation here is that banks should be doing this type of activity and that in the interim, the CFTC and the SEC should do enforcement actions

where necessary. It also raised the idea of financial stability designation, but it didn't overtly recommend it. So all in all, I'd say pretty good. I mean, this could have been a, we recommend banning stable coins and their tools for criminals could have been pretty bad. And in general, I think it's just, hey, my overall takeaway is that the recommendation here is that the elected official should have a role in shaping policy here, and we shouldn't rely on career bureaucrats to do this. Yeah, I think it could have been worse, certainly. I am still generally resentful of the idea that issuing a dollar deposit like product ought to require a bank charter. That's just not the way things work in the traditional financial system.

And so this seems like particularly onerous in terms of a way to approach these new products is to demand that they be issued solely by entities that actually have bank charters, which is highly regulated and also difficult to obtain. I thought Matt Levine had a pretty good take on it where he said, you know, there's a bunch of dollar deposit. products, quote-unquote stable coins that are not issued, that are, you know, not issued by insured depository institutions. And great examples of that would be the dollars held in, you know, that depositors could redeem held in PayPal or Venmo or Square or even Moneygram for the duration. And none of those are banks.

Additionally, Matt Levine pointed out that there's a bunch of sort of maker style or dye style stable coins that exist in the traditional financial system that are non-bank issued, basically creating dollar denominated exposure based on barring against some non-dollar asset. So, you know, I find it odd that you can do what is known as shadow banking. out of, you know, an normal, you know, established financial services business without being a bank. And yet, when it comes to stable coins, the regulatory demand is that it be intermediated solely by a bank. Seems pretty harsh. It does seem pretty harsh.

I guess there are some differences, though, between that PayPal Venmo model versus an open public network where you can actually send money not on a closed-loop basis. And so you could see there being concerns around if, for instance, stable coins were allowed to issue or allowed to buy commercial paper. Like if this tether model and how USDC used to be run was something that was proliferating, then you could see stable coins getting so big that they could essentially be these money market mutual funds that could break the buck. So you could see why they could be perceived under a different regulatory umbrella versus like a PayPal because they have the potential to get just so much bigger. I mean, PayPal can put, you know, they're regulated on the MTL regulation. And that's a state-by-state basis. And it really just depends on the state what asset you're allowed to hold.

And so in some states are restrictive, like Texas, for instance. You can only hold sovereign debt, I think, or, you know, extremely high quality liquid assets. And then other states don't really care what you're holding as you're holding as collateral under the MTRL regime. And that is how USDC is currently regulated. And so, you know, very similar products in my view. I don't know if this, I guess you could argue that the scale is what's different or that these are interoperable and that introduces some difference. but frankly if you look at other stable coins like paxos and gemini dollar those are issued under the new york trust charter model which is more restrictive actually more heavily regulated

there's more oversight than using the mtl model additionally if you look at kobe their stable coin or true usd those are issued under the nevada trust model, which is similar to the DFS one where, but the distinction being that DFS explicitly has carve out for stable coins that they acknowledge, whereas Nevada doesn't make that explicit, but it's still, you know, there's just like a pretty significant degree of oversight. And those four stable coins I just mentioned are generally holding treasuries. So that's pretty safe, you know, it's like a full reserve bank. and that was my takeaway from the president's working group paper was they're not acknowledging

that these other models exist and are pretty safe all things considered. I mean, with all those four the Nevada and the NYDFS models, you're a fiduciary, so you can't really go for high yield because your duty is to the depositors, first and foremost. And in a case of a liquidation, if the company, the parent company were to fail, the creditors or whatever, the note holders, the people that held the stable coins, would have that senior claim, that privileged claim. So you're very well protected from all angles there. And, you know, reinterpreting this whole thing and saying, you can only do it from the perspective of a business that engages in maturity. transformation. It's like, well, what about what's actually currently happening and working? Well, I guess where the rubber meets the road here is on actually putting legislation to work

and writing laws to define this. And the way things are going right now, Congress, good luck. I mean, what are the chances that someone actually puts pen to paper here and can get a bill through on this topic? Right. And given the election results, I guess yesterday, I wouldn't be surprised if Washington was very gridlocked after the midterms. So that's kind of a bit of a, I think, a bull case for cryptos that Congress just won't be able to really do much. Yeah, I guess for better or worse, there's things that they should be doing. But it doesn't seem like much is going to get done.

I mean, this infrastructure bill still hasn't gotten past, which I guess you could say is a good thing for crypto, since it's a complete dumpster fire, what's in it as it relates to the classification of a crypto broker. Yeah, although it does look like that's going in. most likely. So we'll see. But yeah, I mean, I, you know, not that legislative torpor is ever a good thing, but for the sake of the crypto industry, it might be. Did you see that switching gears a little bit, Tom Emmer and Darren Soto, both members of the U.S. House of Representatives, they wrote a letter that came out Wednesday to Gary Gensler, basically calling on him to approve a spot Bitcoin ETF. It's just super clear that they're understanding the tradeoffs here and they think that it would be a better product than the future based ETF.

They think the facts and circumstances on the ground support it. It's not surprising. They're both huge crypto advocates or in that blockchain caucus, I guess. But SEC doesn't really seem to be in a hurry to do that. Yeah, and I think ultimately the SEC understands that a spot ETF for Bitcoin would be the biggest ETF for a commodity at least. ever without a doubt. I think it would have over 100 billion in assets within six months or so. And frankly, I think it's a political restriction because, as we've said many times on this show,

a spot ETF would be better for investors. Tom Emmer and Darren Soto understand. Interestingly, Darren Soto is Florida Democrat. Tom Emmer's Minnesota Republican, so bipartisan letter right there. So good to see. Crypto is a uniting force, you know. One hopes, one hopes in practice a little more partisan, but always good to see folks like Rokana and Darren Soto saying nice things about the crypto industry. Did you see that MasterCard has partnered with BACT to offer cryptocurrency services on the

MasterCard network? I don't really know what to read into this. I guess we'll see what actually hits production. And, you know, obviously MasterCard's been behind Visa in a lot of ways. But it would be interesting to see where they go with this. Yeah, kind of unclear. And Visa, of course, definitely the frontrunner there in terms of the large credit card companies and getting active with stable coins and crypto.

You don't see much from like Amex or Discovery in this market, huh? Not a Pete. Discover cards still exist? Has anyone ever had a Discover card? Is that a thing? I'm more of a blockfied card myself these days. That's definitely what I mean, obviously. Pump those bags, disclosure investors.

But my block fight card is getting worn out. I'm using it so much. It's using it and getting the Bitcoin backer awards is really causing high degree of high time preference because you get whatever it is, 2% back in Bitcoin. I just want to refinance my house on a block fight card. that would be the way to go. But of course, the BlockFy card's on the Visa network.

It is, Shadow Visa, see? Next up, we have an interesting story on Polly Market, which is under investigation from the CFTC. They are a crypto predictions market. Yeah, I think that's a fair designation. It's sort of like, do you remember that company in, It was it called in-trade where you could just bet on the, you know, would Iran nuke a country by, you know, 2012 or something.

Like that was the type of bet that was on that site and it got shut down. I think it was called intrade. I think it was based in Ireland. But probably markets kind of similar. Yes. And the CFTC considers them under their Aegis. And we will see how they deal. one interesting thing that I learned a while back is that

so I think we've talked about this on the podcast before but it's I think the SECC considers it illegal to have a predictions market for box office receipts. Is that right? Yeah, I think that sounds familiar. So you can't sell futures on movie theater or movie, like specific movie releases. And I think actually Bruce Fenton, well-known Bitcoiner, was sort of tied up in this.

I think he might have had a platform that was involved there and received a rebuke from the CFTC. So there's a few commodities that are, you know, it's illegal to make a market. And one is box office receipts and another is onions. I was just to say onions. Why onions? What's wrong with onions? There's the story of the onion king who tried to corner the market in onions, I think unsuccessfully, but he basically hoarded all the onions and tried to profit from the scarcity.

And so after that, you know, onion-based futures were eliminated. It's like the Hunt Brothers with Silver. Well, that's what I was going to say, but like silver is still, you know, very much a financialized thing. Some people think that we're doing like cornering the market on tungsten. I can assure you we don't have enough cubes to corner the market. Yeah, Bloomberg even did an article about it. I think there's enough tungsten produced every year to make 35 million two inch cubes. I mean, I'm going to buy as many as I can, but I can't buy that many.

Yeah, we're accounting for only, you know, single digit percentages of that. Yeah. Um, all that said, the, the cube thing has not died out like I sort of thought it might. I mean, why would it die out? I mean, unless you have osmium cubes emerging that are just more dense, which I think is definitely a possibility. I think that could happen. And I think this Midwest osmium company that we're hearing like murmurs about an incubation, like that might be a factor there. So we'll see. People have also pointed out that platinum is denser than tungsten, but it's probably not economical to get a two inch cube of platinum if I had to guess.

I just don't think it has the network effect. Like it might have better technology, but are there people really building cubes around platinum? Like, does that happen? I mean, yeah, and there's already, you know,

tungsten-denominated liquidity on blockchain. So what are you just going to substitute new metal in? That doesn't make any sense. It's impossible. People have been on planes espousing tungsten for the past two and a half years. You think you're just going to drop like a corporate, alternative in and people are just going to adopt it? I don't think so. There's even a tungsten Dow now. So the tungsten Dow's crowning achievement thus far as buying the 14 inch cube created by Midwest

tungsten sold as an NFT redeemable for the cube should you want it. So that's successful auction. But yeah, I mean the tungsten related press coverage continues to Roland, I will note with some concern that I am being written out of the history books here, despite being, in my opinion, the Tungson Pioneer. Now you know how Craig Wright feels, you know. You invent something and other people, you know, take credit for it, you know. I'm seeing other people being credited for starting the memes, specifically in Nourage. He was a good friend of mine, but he was just responding to my memes with memes of his own.

He was not the originator. CMS holdings, Dan, of course, of on the brink fame, you know, probably really strapped a rocket ship to the whole thing by, you know, being the biggest tungsten buyer on the East Coast. But, you know, he didn't start it. Now, have we gotten to the bottom of where that photo was taken with NRAGE? Was that like a kitchen of a restaurant or some like industrial scale restaurant? Or was that his actual home? I can't comment on that because, you know, I think the mystery is more important and it's just an iconic photo at this point.

Okay. All right. Well, that will just live in mystery. This show is brought to you by Coinbase Prime. Coinbase Prime offers trading, custody, and financing tools for institutions. With trade financing, you can trade from cold storage instantly and acquire margin for lending and shorting. Coinbase custody is battle testing. with dedicated on-chain addresses and industry-leading insurance.

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Visit circle.com slash yield to book a meeting with one of their experts. That's circle.com slash yield. There was something, speaking about auctioning off things this week other than tungsten cubes, there's a bunch of NFT stuff going on. So Quentin Tarantino, he's apparently auctioning off seven uncut scenes from Pulp Fiction as NFTs. I bet that's going to be pretty popular. So what I want to know is, is there a scene in the deleted footage that he's going to resurface here

where we find out what was in the briefcase? Oh, maybe. Because we never actually, they call it. It's a McGuffin, as they say in film school. So we know that what is in the briefcase in Pulp Fiction is an object of desire. However, we do not know what it is. But we know that it's heavy and it's shiny. which leads me to believe that it might be a certain metal with a density of 19 grams per square

centimeter. Can you imagine? Can you imagine what that would do the price of the cube? So look, I don't know what's in the deleted scenes, but I think we might have answers with these NFTs. The other thing that's being auctioned is so the economist had a recent cover called Down the Rabbit Hall, which was really awesome. and they auctioned this thing off for $99.90, $420,000 to an anonymous, pseudonymous buyer.

And they donated that to charity. But whoever came up with that idea over at the economist was probably like, oh, this will be cute, $420,000. Yeah, let's not encourage the press here by giving them subsidies, guys. I think, you know, we should be supporting independent creators, not the corporate press. I like The Economist. I think the Economist, they haven't always been right on crypto, but they've been covering it a lot lately. Yeah, they've been less worse on crypto than other outlets, so I'll give them credit for that. They had the best initial iPhone app out there. I remember when I first got the iPhone, you could listen to the Economist on the app, and it was like the best thing going at the time, very early days. So in Futures News, the CME is launching Ethereum MicroFucurial.

features, which are sized at one tenth of one ether. So $40 approximately. So for all you small and medium sized fish that trade on the CME, there you go. Go get that beque wet. Go get that beque wet. And kind of fast food news, I guess I would call this for the week. So Burger King, they're partnering up with Robin Hood Crypto. They're going to give away a range of prizes. includes $2 million worth of cryptocurrencies that you could win. I guess you have to, I don't know if there's like a puzzle game or something, but Bitcoin, Ethereum, and Dogecoin. And I will say, I think Burger King has the best fast food burger on the market, the Whopper.

I've never eaten Burger King, and I never shall. You've never had a burger. You've never had a whopper. I mean, I'm not like a regular eater of that. But like if you're on the road and you see McDonald's or Burger King, I think you have to go Burger King. If I had to eat a burger, I'd be more, I would go for five guys probably. Yeah, but they're not like fast food. They're not ubiquitous.

No, they're not. But, yeah, I've never had Burger King. Wow. Nor shall I ever. You learn something new every day. You've never had a Burger King. Have you had Chick-fil-A? Yeah, it's incredible.

Yeah, but I only ever want to go on Sundays. So I'm always frustrated. It does, yeah, when you land in a place that has Chick-fil-A and it's a Sunday and you're like, oh, man, I wish they were open. It's the thing that's surprising about Chick-fil-A is that the quality of the chicken is amazing, and it's always good. It's just you never get like a bad chicken there. And the service is always good, too. I mean, I think Chick-fil-A should be put in charge of, frankly, the supply chain, the Port of Los Angeles.

I think we would clear that up in a moment if Chick-Fillet was in charge. Yeah, they are, they're super friendly at Chick-fil-A. So in Miami-related news, our beloved mayor, Francis Suarez, has announced that he's going to take 100% of his salary in Bitcoin. It's just a speculative attack on the dollar down in Miami there. He's just accelerating the demise of the dollar. My congratulations to our cherished local mayor, who is certainly the greatest mayor in the United States, in my opinion. I think this guy is amazing. Is this guy going to be higher office soon?

What's going on with the political ambitions down there? I think that he should stay mayor because selfishly he's a good mayor, in my opinion. But I wouldn't be surprised to see him glowing up. Did you see Direxion, who last week we talked about they had filed an application for a short Bitcoin futures ETF? They yanked that. Apparently the reason they yanked it was SEC staff asked them to withdraw it. Probably because SEC staff knows that shorting Bitcoin is a terrible idea. It's a terrible idea.

Yeah, I mean, talk about, you know, the SEC actually in this case is fulfilling its mandate of investor protection by not allowing this product to come to market. Because it's just morally wrong to short Bitcoin, if we're going to be honest here. You're just going to have a bunch of boomers just get their absolute doors blown off by shorting Bitcoin. Yeah, it's just not a good, good life decision to do to short the question. especially in Upvember, I think, is the name of this month. We had Uptober.

Really? Upvember and then Upsember is coming next month. Do we have memes for that? Well, we're just inserting the word up into the name of the month. That's about as, it's all we got. I haven't seen as good. The October memes were really good.

I think we need a refresh on the meme generation. I haven't seen as much coming out this month. We've been stuck on tungsten for a while, and I'll be the first to admit it's getting stale. It's not getting stale. No, it's not getting stale. I mean, we've been on the tungsten grind, on the grind set here on the brink, on the brink for years.

We have. I don't even remember what the first mention was on this show. I was late. It took me a long time to get off zero on my PA on tungsten. But you're like, you know, it's kind of like the equivalent of me Vatalic in 2015 and not buying Ethereum. I mean, you've been proximity to tungsten forever. I know. I've been chilling you on tungsten for years. I said to Mike Alfred, it's like being a

private blockchain guy. It's like you were in the red zip code and I was, I was a private blockchain guy for a hot second too. Luckily I was still a Bitcoin guy, but you know, you can be on the wrong side of history in some of these categories. Now, so many people are asking, will there be tungsten fud dice? And the answer is yes. Yes. The answer is yes. Is it yes?

The answer is yes, but we need like there. There's a lot of complications there. It takes a lot to engrave on one of those things. I mean, it's not cheap. It's not cheap. Tungsten supply chains are stressed right now. You know, they're probably industrial uses of tungsten that are unable to get their raw material because of the crypto-cubers.

It's true. It's true. I've started to see the tongue. lash as in the backlash against tungsten it started to emerge i didn't know it was possible to be upset at uh at our innocent fixation here but yeah i've started to see the tongue lash what so what are some of the most common use cases outside of cubes for tungsten because it like it strikes me that there's there's probably some like if you want to sink a ship really quickly tungsten cube like a Ballast, correct, ballast.

I mean, I made a fact sheet about tungsten, remember, to answer this exact question, but the answer is there are numerous industrial uses of tungsten, numerous. It has many applications. It has the highest tensile strength of any metal naturally occurring. Doesn't really melt at normal temperatures. I mean, you've got to get it to 6,000 degrees. Tungsten carbide, there are various alloys of tungsten, which have a better durability. because tungsten itself, elemental tungsten is very brittle.

But tungsten carbide would be something used in drill bits. You get tungsten used in various weights. Certain kinds of ammunition contained tungsten because of its density, you know, like armor piercing rounds, things like that. There's tungsten filaments in certain kinds of light bulbs. So it casts a, you know, particular. pallid orange glow is how I would describe it. And yeah, there's just a whole bunch of industrial uses.

It's used in welding. Well, I have a pickup truck and I put sandbags in the back of the pickup truck in the winter because it gets a little bit tough to navigate in the ice. I'm thinking that that might be a use case. Yeah, I mean, you can even get firearms with tungsten in the grip to add weight to it in a space-efficient manner. So there's all kinds of uses, really. A lot of stuff you can do.

Well, changing gears a little bit. Coinbase rolling out subscription service for trading, which this just seems like something that's going to be very popular, if we're being honest. Subscribe and just trade like a lot. No fees, no fee trading. Is that the idea? That seems to be the idea.

It's not live yet. But yeah, you'd be no fee trading with a subscription. That just strikes me as there's going to be a lot of takers for that. For sure. Although, I guess even more in the direction of the fee compression at these exchanges. Yeah, I guess. But, I mean, if you're making it up on the subscriptions, I guess, you know, I'm sure they're not doing it to lose money. Right.

So in other exchange news, FTX continues the hiring spree. They have hired the former chair of the CFTC, Mark Wedgin, who I believe he was at DTCC. as well before. So he's come on board to lead their policy and regulatory strategy. They announced that on Tuesday. So they continue to hire like crazy. And it sounds like that Bahamas campus is somewhere that, you know, maybe we need to establish a presence.

Well, that's only, you know, something like a couple hundred miles to the east of me right now. I think we should, I mean, might get to put an office there or something. I think they'll come a day. and SIV is obliged to expand into the Caribbean. Did you check out Hasu's latest post? It's called a new mental model for defy treasuries. And I thought it was really thoughtful. It kind of talks about how you should think about your treasury

if you're a defy project and that you shouldn't really think about your native token as a treasury asset. It's a little bit misleading to look at that uniswap treasury, for instance, and call it whatever it is, $13 billion. dollars it has like you know 85% of that is the uni token so pretty thought-provoking piece as usual from hasu yeah i mean from a accounting perspective you don't consider equity as a balance sheet asset at all um so it makes perfect sense that you wouldn't consider your native token which is effectively a form of equity especially if it gives you a claim on the cash flow

as an asset just from a trivial accounting perspective. So also it's not really an asset because you have to give to give to control if you're releasing equity, if you're selling equity. You're giving up ownership and you know future entitlements to cash flows. It's not uncorrelated to the nature of your business like ideally, your asset would be something that's stable. Your equity or protocol equity or whatever

is obviously correlated to your business success. So if times are bad, it's the worst time to sell it. Yeah. Which is not really what you want in a treasury asset. It seems like, and I'd love for a listener to point me in the right direction on this towards maybe a platform that monitors this, but it strikes me that a lot of these treasuries that are sitting on a ton of money aren't really spending it that quickly right now.

You know, you'd think that there would be more things getting funded. And I wonder if part of that is just there's a lot of eyes on this from a regulatory perspective and people are trying to be cautious and maybe there's like subpoenas flying or whatever in the space. But you'd think that there would be more grants happening than there are. And I know there are some, but it doesn't seem like there's a ton of activity coming out of those treasuries. I just haven't seen much real. kind of institutional architecture supporting the deployment

of those grants in a kind of socially scalable way. Right. And that's, I think, one of the major problems with DAOs is how do you do something from within a DAO and have perceived authority and legitimacy in doing that thing?

And so that seems like kind of an unsolved problem is taking action decisively from within a DAO and not having people grumble about it. Right. And I think that will come, right? We're we're investing in things at that intersection. So maybe that like infrastructure unlock propels more spending. I guess the other thing is just how do decisions get made? And that's just an evolving landscape in terms of it. It's different project by project sort of who has influence, who has the ability to push through a proposal.

Well, we have an episode in the mining series. coming out next week. So the mining mini series, that's an official mini series on our website. That continues. We're looking forward to that. We had a great episode this week

with the founder of Matrika, Nicos. So that was a fun episode. Got some good feedback on that as well. And the mining picks back up on Monday. Nicos wins the title for the longest last name of any guest on the show. I'm notorious for botching names on the show.

watch them all the time and you notice i just didn't even try to say that last name it's a very long one it's greek but uh nicos from matrica was he was an awesome guest us greeks we got to stick together are you greek yeah quarter i didn't how did i not know that i don't know you should know by looking at me greek wow well learn something new every day yeah don't have to use sunscreen on account of being from the mediterranean oh is that what it is well and sunscreen is also a huge scam but we won't get into that oh that's a story for another episode that's the music playing you off the stage that deserves its own episode two hours long all right everyone we will see you on monday have a safe and healthy weekend we'll talk to on

monday