On The Brink with Castle Island - Weekly Roundup 11/07/25 (Balancer hack, DATs are suffering, Zcash rally) (EP.684)

Episode Date: November 7, 2025

Matt and Nic are back with another week of news and deals. In this episode:  Tom Brady's clone dog We reminisce on the Nic Carter v Mike Green debate Is the government shutdown draining market liquidity? The trouble with Opendimes  Balancer hacked Stream finance's xUSD collapses DATs are selling coins Why is Zcash rallying? Are stablecoins the lightbulb of crypto Content mentioned: JW Verret, Comment Letter to Treasury GENIUS ANPR  

Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these 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 as 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, $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 into Britain's ailing economy with a new round of quantitative easing. And 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 Brinkum. Matt Walsh. And I'm Nick Carter. We really have to do this on video because you're wearing some really exotic red shades right now.

You have red sunglasses on. Yeah, these are to block out the blue wavelengths of light. How do they work? Are they good? Honestly, I don't know. I read online that they were important. We're going to have to... We really should.

We have to be putting this on YouTube. I guess so many comments, like, why don't you guys just put the audio file on? I'm like, well, we don't have time. I don't know what to tell you. A lot of work. Because the responsibility falls on me, Matt. I would do it. I mean, if you show me how to do it, I'll do it.

They're not missing anything. They're just, why would they need to see us talking to each other? I think the thing is a lot of people listen to these things on YouTube and we're not on YouTube. I just, I don't get why you can't use the podcast client. Like, the customer is always right, but in this case, they're wrong. No, I think they're right. I think they're right. I had a guy reach out to me a couple weeks ago,

said put them on YouTube, just put the audio file up, just put a picture of the logo, and then put them on X, which that's a good idea too. But I mean, we're clearly not optimizing in terms of growth and distribution here. No, I think the right type of people listen to this podcast. People, yeah, people that need to receive this podcast still get it. That's right. We don't need to go after the mass market. I had a good listener compliment towards our podcast yesterday.

someone who said that they heard you debate that hedge fund manager. I was totally blanked on his name, but I believe he was referring to Mike Green, that epic debate you had. I mean, I've been in like two debates in my life, so that's probably it. That was a really good one.

Whose podcast was that on? Oh, Grant Williams. Is it Grant Williams? He was a great one. I didn't know if it was Demetri's. Many people say that I won that debate. I think you were the more measured person in that debate for sure.

I think it was more relaxed. Although, there was no video in that debate. If you'd seen me, I was going bright red at certain points. Oh, really? Yeah, I could feel my face getting flushed because I was upset.

Because at certain points he came for tether, there's a big part of his argument. He thought tether was bogus. It's unbacked. It's like Bitcoin is inflated by tether. And he also accused me and the bickorners of like, I actually like Mike Green

after this we became friends and I went to go speak at his conference and stuff and we're actually on great terms but at that time he did accuse the bitcoins of like funding our nation's enemies because you know north Korea the bitcoin Iran was mining the bitcoin and that just that genuinely pissed me off actually yeah that's that's a ridiculous thing so I didn't like that but yeah I think the debate aged well I don't know. I mean, it's been like five years or something. I'll go back and listen to it.

People still talk about it. It's crazy. It was like a real cultural moment. It was. I mean, what was the price of Bitcoin back then? I mean, I don't know. This was then maybe was it 2020 or was it 2021? I think it was during COVID.

Yeah, it was before FTX, right? It was probably in the 10,000 range. Yeah. I think you had the right answer on that. You know, Bitcoin is. is worthwhile. And the tether stuff didn't age very well. Tether not being a fraud. Yeah. I mean, at a certain point, I would like, I don't know, some recognition for dunking on the Tether Truthers for the better part of a decade.

I mean, it would have been nice if we owned a little bit of Tether, I guess, on the other side, right? That would have been great. You were like their number one supporter. Yeah, I've been here for Tether this whole time. Love Tether, man. It's totally unacquited. It's just a dollar. I mean, it wasn't always backed one to one, I think, but it turns out they're definitely not frauds. Yeah, we close two eyes.

We see the bad, but we close two eyes. Well, the other thing a lot of people are asking about this week is our take on Tom Brady. Did you see this story this week? Yeah, so he cloned his dog. Is that it? He liked his dog, and then he cloned it, and now he's a new dog. Is that right? Yeah.

Yeah, he cloned his dog. So you're kind of the one. world's number one Tom Brady defender. So what's your stance on this? I mean, it's just like, why do you have to keep on doing this weird stuff? It's kind of like everyone loves you, Tom, but cloning your dog, like, how does that even work? So he had a dog that passed away. How do you even recreate? Like, what is going on? How do you, how do you reanimate a dog? The thing is you're not getting the same dog. It's a different dog. Different personality. Different personality. What is it? You take the DNA and then you do some like in vitro thing. Is that what we're talking about here?

I don't know how it works. I know we've been able to do it since the 90s with Dolly the sheep, right? Yeah, Dolly the sheep was the first one. And now we have Tom Brady's dog. I think it's not just about the genes, you know? It's about the upy genetics. Right. It's, there's no way that dog is coming out. And it's, it's, it's, there's no way that dog is coming out. It's like the same. And even if it was, that would just be so weird. Like, the whole thing is just so weird to me. It's not like the dog has the blood memory of its clone compatriot. You know, there's nothing carried over. The soul is not transferred.

I don't think so, at least. And the whole thing is he invested in this company. It's the company that's trying to bring back the woolly mammoths. It's the Jurassic Park company. Oh, it's colossal biosciences that did it? Yes. Yeah. Oh, well, I support them. I actually now this I support this whole thing I'm so in favor of bring back the Lully

mammoth this is the whole thing he invested in that company and they're like hey do you want your dog back here's your dead dog is now alive oh well if it's in support of the saber tooth tiger I will allow it I mean these people have never seen Jurassic Park this goes this starts off fine and it just gets really bad but it's you know it's fictional so I don't think it counts as a cautionary tale. I mean, if they start bringing back dinosaurs, you don't think there's going to be some problems? I think we should do it in a controlled manner.

Frankly, on an island, that makes total sense. You don't want to do it on the mainland. No. Obviously, it should be somewhere remote. That part, it makes sense. I don't know. Tom Brady and Belichick,

it's just like, guys, can we just come back and like, let's relive the glory days? Let's just stop doing weird stuff. like dating 18-year-olds when you're 70 and bringing back your dead dog. Brady's always been weird. That's true. All right. Well, that's our take on Tom Brady.

He can still do no wrong in my eyes, but we got to just stop doing weird stuff. I mean, it's just like a little bittersweet, you know, because you have something that presumably resembles your deceased beloved dog. Right. But it's a different critter entirely. Go adopt a dog at a shelter, right? So it's like it's the ghost of your old dog, but there's something missing.

It's not insold. No, I don't like it. Yeah, it's kind of dark. Apparently that company has like a $10 billion valuation though. Yeah, because who else is bringing back the woolly mammoth? That's true. Yeah, they're a one-of-one company. There's abundant ways to monetize.

Stakes. They can do woolly mammoth stakes. Imagine that. I didn't know what we call that Mammoth Fetison There could be big game hunting I'm sure some people would go for that And amusement parks

Parks yeah Las Cropters Yeah that's a big idea Guarded and fortified amusement parks All right well transitioning to Castle Island content White had a busy week this week A big podcast episode with Keone

from Monad Talking about everything Monad Talking about Keone's history That was one one of our most downloaded episodes in a while. Oh yeah, well done, Wyatt. And he had another one with Giovanni Vignon, the founder of Octane Security. So double week for Wyatt.

On the board. All right. Also, busy deal week. Yeah, first up, in the Castle Island portfolio, we have ARCS research. They're a hardware wallet and payments infrastructure company. There is $6 million from us, Castle Island, Inflection, Placehold of Risi, and others. they announced a stable coin point of sale payments hardware. There's probably a more elegant way to say that,

but a thing that lets you accept payments with stable coins at the brick and mortar. They also have a very cool, basically like a physical Bitcoin or stable coin wallet that's in a kind of a gift card modality. I've used those. Yeah, I don't know if we've talked about arcs on the podcast before, but it's a very good gift coming into the holiday season. Put some cryptocurrency on a wallet like that. Yeah, the old version of that was, you know, the Open Dime,

which was a really bad way to give Bitcoin to people, which I used to give people Bitcoin on the Open Dime. And it's so hard to get it off. Very hard. The way to get it off is to plug it in your laptop, break off a piece of the device, and then you have a text file, and there's a private key on the text file. Yeah, not secure. And then you have to sort of somehow manually get that on to a different wallet, reconstitute the private key without being compromised, and send it. That is a nightmare.

Let me tell you. Yeah, yeah, that's a hard one. So, yeah, Burn a wallet's a lot better. Burner. Brunner. Pro. Yeah, check, check that out. Very useful for stable coins. Basically, turning cryptocurrencies into cash. I like that we have physical digital or digital physical cash again. It's like we came all the way full circle. Yeah, they're both good. It's a physical way to send digital cash. Yeah. It's great. It's an apparent contradiction, but it makes sense. Don't worry about it. Don't worry about it. Next one, a big deal. Ripple, company behind XRP, they raised $500 million from Fortress, Citadel, Pantera, Galaxy Digital, and others. Next up we have Palisade, their wallet as a service platform, they are required by Ripple.

And then here's the name for a company, FOMO, which is a social trading app for meme coins. They raise $17 million from benchmark. Donut is an agenetic crypto browser. They raise $15 million from BitCraft, Makers Fund, and Hack. Then it's Lava, which is a Bitcoin-backed lending company that raised $200 million in a mix of equity and debt capital this week. Then we have Liquid, their mobile trading out. There is $7.6 million from Paradigm and General Catalyst. Zinc is a stable coin payments infrastructure company. There is $5 million from hive mine capital, coin-based ventures, and the Alliance Dow. Future holdings. There are a Swiss Bitcoin Treasury Company. They raise $35 million from Fulgar Ventures and Nakhine.

Macaumoto Holdings. Then it's Harmonic. This is a Solana infrastructure company that raised $6 million from Paradigm. Standard money. Their decentralized stablecoin protocol raise $8 million from YZI Labs, crypto.com, and animoka brands. Then it's Sprinter, which is a bridging protocol. They raise $5 million from Robot, Topology, VC, and A Capital.

And lastly, our friends at CMT Digital, they are a crypto venture firm. There was $136 million for their fourth fund. Congrats to CMT. Yeah, congrats to the CMT team. That's awesome. All right, busy week. I mean, the price of the coins are going down. It doesn't feel like people in broader,

outside of crypto, really, you know, phased by this whatsoever. But there's been a lot of just crypto-related incidents this week. Yeah, and I think something's happening broadly with risk, too, don't you think? I mean, it's not just coins. the equities as well for the most part of down. I think that's right. Yeah, it's a little, you know, people taking some chips off the table.

Government shutdown probably not helping. Some people think the government is, shutdown is withdrawing liquidity for the markets. I don't understand the mechanism. The TGA account. People keep on, if you want to sound smart, you just say, you know, the TGA account's going to get replenished and then liquidity is going to come back. You have to use the acronyms that they have over there. Treasury and Fed. You know how we said the government shutdown hadn't affected us and we didn't even know the government was shut down?

Yes, but it's about to. We know now it's affecting us. The coins are down. The planes are falling out of the sky. Are we going to be able to get anywhere for Thanksgiving weekend? No, this plane situation starts tomorrow. Yeah, I mean, cut some flights. Already, already certain airports are having outages. They already said they're going to do Logan. Logan's going to be in back. I don't like that. Yeah, I mean, there's like five airports that matter to us and they're all impacted. So we're not going to be able to go anywhere. I would be in favor of reopening the garage. So yeah, if they can just stop arguing about whatever it is, that would be great.

Open it up. Let's take a look at the legislative calendar and let's figure out how we're going to pass the Clarity Act, all right, with the time we have left this year. I get the feeling that the distinct feeling that the Democrats are going to win in the midterms if the recent elections are any guide. So we have less than a year to pass clarity. Yeah. But you know what?

Here's the thing. Even if we don't get clarity, we could get rulemaking via the SEC that will get us most of the way there. And then you're going to see all these big asset issuers come into the market. it's going to be really hard to roll back rulemaking is my view so things are kind of not well in crypto the dats are all basically trading before below par except for micro strategy almost every other dat some dats are doing share repurchases so they stop buying the coins and they're buying back their own shares uh so that's happening we won't trouble you with the details there was a huge hack of a blue chip defy protocol.

Yeah, Balancer, which is a decentralized exchange. It suffered an exploit this week. It led to $128 million in losses. It looks like in the preliminary report, Balancer pointed out that there was a rounding error in its smart contract logic. This was an older piece of software that was in market for a very long time.

So kind of not great, I guess. I mean, this is one of the earliest, DeFi protocols first went live in 2018. The V2, the one that was exploited, went live in 2021. So this was just out there for a while. And some of these other networks that are very tied into balancer, Barrettchain included, actually halted their chains to deal with this and they initiated a hard fork. Yeah, I mean, this has been out since 21.

So normally we think of the Lindy effect with smart contracts, but just, Turns out there's lurking monsters in the deep no matter what. I mean, you kind of hope that certain platforms like Uniswap don't have some hidden flaw in their logic. Yeah, it's like you remember in the early days of Bitcoin, you actually had VCs that were appraising Bitcoin in the 2013-2014-10 period, and they would actually hire audit firms to go in and take a look at the source go to Bitcoin to make sure something. bad wouldn't happen. And, you know, it's not like those things don't exist in smart contract lines. So this thing was audited by many different audit firms.

Yeah, this is, this is extra troubling, I think, for that reason. And it does make me think that we have to move away from reactive maintenance to preventative. somehow we need to get ahead of these attackers and define conditions for transactions that are valid they're not valid. I just don't like the current paradigm. We have this huge upfront fixed cost of audits. And then even then, no matter what things get missed. Well, this is the whole idea with like formally verified blockchains, right? This is like the whole Tezos premise. Yeah. You know, now that Zee- Ccash is back, or are we going to bring back other legacy blockchains? Yeah, I don't see why not.

I don't see why not. Everything aside from Zcash has said the worst week, Zcash has done a 30x from the bottom. What is the next ancient blockchain to go? There's got to be another one. I might, yeah, Veritasium maybe. Oh, man. You know, Dash, do you remember Dash? Of course.

One of the original privacy coins. I mean, it wasn't very good at being private. No. But they would do all these marketing campaigns. They would put like ads in planes and, you know, like old school marketing. And they really tried to, they would like pay a bunch of chicken restaurants. So like accept them as payment solution and stuff. Yeah, dashed.

And they also had the front of coin market cap for quite a while. Oh, yeah, that's right. This, yeah, the Zcash rally is really awakened a lot of ancient memories. Like who is buying Zee? cash right now. This is just this chart is unbelievable. I've never seen anything like this. Meaningful meaningful capital. We have some sovereign nation that is just out there buying Zcash every minute of every day. Meanwhile, we're seeing, there's another news item this week, you're seeing the samurai while developer is getting sentenced to sentence to five years in prison. So that's the one thing I don't

quite understand is if Roman Storm and the samurai guys are going to literal prison. I don't know. Are they going to go after Z-Cash next? No, I don't. Why didn't they? I think the facts and circumstances are pretty different with Samurai versus a layer one blockchain.

But I don't know. What do you make of the Zcash move? Do you think this is just a, people are anticipating that more centralized exchanges will add it again? Or do you think people are viewing this as the actual kind of non-sovereign value store? it's puzzling I mean

the privacy is pretty good I think I was always a Monaro fan I remember that yeah you had the Monaro

what was our first holiday party you had a Monaro sweater yeah yeah I was a big

ton minora guy but I you know I had a good relationship with the Zcash people

I went and spoke at their conference I think in 2018 2017 and my issue was I thought

if there's an inflation bug you wouldn't note it because it could be hidden in the shielded pool, which is true, still true, by the way. So I didn't, and we've had inflation bugs in Bitcoin more than one. So if there was a shielded pool, it could have been exploited. So there's a problem. And then the other issue I had with Zcash was most transactions are actually not in the shielded pool. Right. So there's this issue with de facto, the privacy wasn't that good because kind of like a lot of effort to get ever everybody into the shielded pool.

But, you know, it seems like they've, you know, rolled out in V3 privacy mechanism. They have done some work in terms of quantum proofing the blockchain, which is really important. You know, everyone's talking about quantum now. I think that's probably part of the narrative that, you know, they were pioneers of cryptography with snarks and maybe they'll be pioneering. again for post-quantum cryptography. I think that's part of the narrative. But it is a little strange.

I mean, privacy coins have been unloved for years, years and years and years. And there was this general acknowledgement that privacy was just going to happen. You know, it would be built into a theorem, you know? And I guess that didn't really happen. I mean, tornado cash, no one uses that anymore, right? but and Ethereum hasn't really made any strides towards protocol level privacy either. So privacy had become forgotten as a core value blockchain. There's definitely something people cared about much more in 2017.

Yeah. Yeah, I think that's all right. I don't know. It's mystifying to me why people have all of a sudden changed their minds and now consider privacy of paramount importance. It does feel like the market over the past couple of weeks has just been very PVP. So it's not a lot of fresh capital coming in since the debts have slowed down. ETF flows are a little bit muted. Winter meet a winter mute actually put out a good piece on this

just around liquidity in the crypto ecosystem and you know Zcash goes up like crazy, but it's almost at the detriment of everything else in the crypto market. Yeah. I mean the hot ball of money is in rare earth stocks and quantum stocks. Yeah. And Tesla. and Nvidia and AI data set of stocks. It's just not in crypto, and you can feel that. So the only rallies in crypto come from people reallocating from other parts of the crypto space. Yeah.

Well, it's funny how quickly this can turn. Another story this week, Extreme Finance, I'd never even heard of this thing, a D5 Vault Manager, they announced that they lost $93 million in user funds tied to the liquidation events of 1010. And apparently they had this yield-bearing token called XUSD, which is purported to be a stable coin. Obviously, it's not a genius compliance table coin, one of these things. But what did you make of this one? Yeah, I mean, it's incredible how you hear about the collapse of some D-Fi protocol,

and that's the first time you've ever heard about it. Yeah, I'd never heard of this. This was not on my radar at all. So, yeah, I mean, was XUSD was a kind of synthetic stable coin? It's like a yield-bearing stable coin, it looks like, but it looks like it was backed by some crypto-native hedge fund strategy. Maybe some of it was happening off-chain, but sounds like a lot of people running that type of thing got liquidated on October 10th.

So yeah, XUSD was backed by, quote, market neutral strategies to earn high yield. The strategies vary from lending ARB to incentive farming to dynamically ad-hedged HFTE to market making. One of the fund managers running their book lost $93 million. I mean, so it kind of looks like this is like an LP interest in a fund that's doing crypto activities. And that interest was kind of intended to trade at par. Yeah. and that's not how that should work. You certainly shouldn't call that a stable coin.

It reminds me I'm totally blanking on the name of the company, but a centralized lending company well before all the carnage of three arrows got blown out because they were taking their client's deposits and they were putting them with Chinese hedge funds. Did you remember this one? CRED. That's right. How could I forget?

We have so much scar tissue. It's insane. Yeah, this. is like the D5 version of CRED. Yeah. So a lot wrong with this. A lot wrong with this. So yeah, I guess, I mean, the problem is it's also going to give to the opponents of stable coins some ammo. It doesn't. It doesn't. I mean, it's like, hey, that's not a genius compliant stable coin. Like when we're talking about stable coins, let's talk about the ones that are treasury-backed. Let's not talk about this thing. It is why I'm grateful for genius, actually, because now we can just say, well, anything within the genius perimeter is fine right those are the ones we like that's that's exactly right so speaking about stable

coins uh coin base is reportedly in talks to acquire stable coin infrastructure company bvnk for up to two billion dollars that would be a big deal wow so hang on zero hash was mastercard is that right zero hash was acquired by mastercard who was also rumored to be looking at bvnk oh they were looking be yeah it's a stable coin acquisition season so in that world uh micro strategy formerly knows micro strategy they announced a purchase of a measly 397 bitcoin this week they really haven't bought very much lately they don't have a lot of room their mnav is 1.1 roughly so but they did issue new preferential stock thing called Stree.

Does any, called Stream. So you noticed we just talked about stream finance, the D5 protocol, and then same week. Yeah, bad timing. This is a Euro denominated perpetual, uh, with a 10% annual dividend. Stree. How long would it take you to actually explain to someone the cap structure of strategy? I mean, we've been on top. of this literally since the beginning.

I know, but there's so many different levers. We're lost. We got European denominated preferred securities. They don't have to pay a dividend. What is going on here? Yeah, can you name them all off the top of your head? There's strike, strife, stretch, stream now. I think there's another one.

He's running out of words to start with STR. This guy's a banker's a dream. I mean, how many words left are there in the lexicon? Stromboli. Stromboli. Yeah. Do you think Sailor likes the fact that there are other Bitcoin debts? I mean, I think they make him look better by comparison because they're all being crazy.

Right. So probably. It's like being the tallest midget, you know? They're taking capital away from him, though, right? Like there's, he hasn't been able to be as a crescent. with these Bitcoin purchases. But they're all just getting wild. I mean, you have,

what was the one this week, Sequin? Oh, yeah. Was that last week? They'd sell Bitcoin and buy back shares. Yeah. I mean,

Ford, the Salana one, they, instead of taking the raised capital to buy Salon, that they, I guess, had to buy back their own shares.

ETHZILA had the same thing last week. I mean, they're going to be acquiring, each other merging, giving the money back. It is as we predicted. And as we said back when we predicted the collapse

of the debts, it's not going to be a happy day. There'll be no vindication because it just means that the coins are rapidly going to zero. Well, it's not that the coins are growing to zero. It's just that they're being chucked in the open market, right?

Yeah. So they you know, what goes up is to come down and we suck up a ton of the coins into these dats and now they're getting all spit out again. The dats were not perpetual buyers as it turns out. You know, you can't cheat the laws

of financial gravity and they do have to sell them occasionally. So. It's like Ethereum with the ICO run up in 2017. Just gobbling up all the ETH at the ICO projects and then ICO projects slowly run out of money. Yeah, and then they spit it out. Whenever your

investment case for an asset is based on, you know, some like sort of exogenous source of demand that's sucking up a lot of the supply, you have to consider that it can spin it out. Could go down. That's right. So it looks like Metaplanet, speaking of debts, so they obtained a $100 million Bitcoin-backed credit facility in order to fund future Bitcoin purchases.

This is what I don't like to see. These are the types of loans that I think can get really dangerous when you're putting up your Bitcoin as collateral. Yeah, you know, the dots didn't tack on that much leverage. before the whole dat concept started to collapse. That's right. And in a sense, we kind of got lucky maybe that the market lost faith in these before they were able to get hyper-levered.

All right, so maybe onto some happier things. You know what was a really good podcast this week? The Cheeky Pint podcast, which I'm enjoying. It's with John Collison at Stripe. So he had Zach Abrams, formerly of Bridge, and Henry Stern, formerly of Privy, both companies acquired by Stripe, talking about all sorts of things in stable coins.

A lot of talk about Felix Pago, one of our portfolio companies, U.S. to Latteam remittance company that's working with Bridge. And Henry Stern might have stolen some of your content on this. I'm not going to lie to you. Yeah, I mean, I'm not going around trademarking phrases. Maybe I should. The stable coin is the Starlink for money thing. That was 100% me.

You said that first. It sounded really good coming out of his mouth, though. Well, he might have said it better, but I said it first on this podcast, and then I wrote in a bunch of blogs and tweeted it. The historical record is extremely clear. That's my neologism. I pride myself of my neologisms. Well, the best artists steal.

I think we saw that with the Rogan podcast with Mark Andreessen using a lot of your chokepoint topics. Yeah, I mean, like I don't. want to, you know, embiggin myself, but I am frequently plagiarized in this industry. Like every stable coin chart I've ever made has been stolen.

Frankly, by other venture funds. Yeah, it's funny to get a look at some other funds, pitch decks, and they have charts that you designed.

Some of the, yeah, some of the most best known funds in the industry. And you know what? I've just chosen to be extremely gracious about it. And not at all upset.

So, but I notice it. I did notice it. I did think this was a really good podcast. We put it in our newsletter this week. I'd recommend everyone check it out. It's funny. Like once Stripe leaned into this space,

so many people outside of crypto started to take stable coins more seriously. Yeah, I have a new chart that I'm working on, actually called the three areas of stable coins. Please don't steal it. And the third era is when Stripe buys bridge. That's when it starts. That kicks off the third era.

a great acquisition. That'll be like the Facebook, Instagram. Yeah, I think so. There was another good knowledge I heard, which I, I apologize. I forgot who wrote this, but she said stable coins are the light bulb moment for crypto, because light bulbs were not the first application of electricity. Apparently the telegraph was, do you know that? That makes sense. I knew that. Yeah. The telegraph was before, yeah. I mean, even before the telegraph, they had, like, ways of doing it analog. I think, you know, they had, like, wooden platforms with rods that would move. I don't know, whatever.

So the telegraph was the first, but not the best. And then light bulbs came along, and everyone was like, oh, this is what electricity was all about. Yeah, this is the thing. Like, this, I get it now. Yeah. You don't have to convince me. Like, it's incredible. And I think that's it with stable coins, you know?

Like this is what crypto is all about. Like I really didn't get it before. It's funny. The way stable, someone needs to write a book about stable coins. Because I remember back in 2014, I mean, at Fidelity,

we were talking about, what if you could get securities on blockchains? And we kind of map this whole thing out. Like, all right, let's say you have a corporate bond or a fund on a blockchain. How would you actually settle this? And what we kept on coming back to is,

well, this won't work if you have to, to do it offline. So we're going to have to have some issuer put cash on a blockchain. And we spend a bunch of cycles trying to think about who that issuer could be. Like it would have to be a pretty big one, we thought. Maybe the DTC consortium of banks and asset managers. Meanwhile, totally orthogonal to the securities industry, you have this use case at Biffinex where traders just want to hold dollars on the nights and weekends and they basically invent stable coins with tether. And then that comes into the main. stream now. That's the craziest thing. Stable coins were not invented to be what they are today.

No. It was just an accident of history because Bitfinex couldn't get reliable banking. Yeah. If the banking sector would have actually just given bank accounts and allowed for deposits to crypto exchanges from the get-go, we probably don't have stable coins today. Or wouldn't have grown as fast as it did. No, definitely not. Definitely not. Yeah. Which is why I get a kick out of the American Bankers Association. now really railing against stable coins and we need everything in deposits.

It's like, buddy, you wouldn't let us have deposits for the last 10 years. Yeah. What is that? Also, the law is the law. And, you know, I really resent the fact that they're trying to go and rewrite genius now after it's passed, you know, to write out the purported loophole. It's just the law is the law. The version you wanted didn't pass. And you're going to deal with that.

Yeah. what you're referring to is the American Bankers Association wrote a comment letter this week to the Treasury Department calling for a prohibition of indirect interest payments, which is what Coinbase is doing with Circles USDC. What I would recommend people read is George Mason Law Professor J.W. Verrett's comment letter

rebutting the bank lobby and also Coinbase and Paradigm had similar letters, basically encouraging Treasury Department not to do anything. We'll put that in the show now. All right, everyone, that is it for the week. Everybody have a safe and healthy weekend, and we will see you on Monday.