The Pomp Podcast - 317: Soona Amhaz On The Future of Crypto Outside The US

Episode Date: June 18, 2020

Soona Amhaz is a Co-Founder of Token Daily and General Partner at Volt Capital. In this conversation, we discuss open finance applications, the failure of the Lebanese Lira, end user infrastructure, crypto's opportunity in African countries, and inflationary vs deflationary shocks.  =============================== BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. https://www.blockfi.com/pomp =============================== Our second sponsor is choice, a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp  =============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Suna Amaz is a co-founder of Token Daily and general partner at Volt Capital. In this conversation, we discuss open finance applications, the failure of the Lebanese lira, end user infrastructure, crypto's opportunity in African countries, and inflationary versus deflationary shocks. I really enjoyed this conversation with Suna, and I hope you guys do as well. Before we get into the episode, though, I want to quickly talk about our sponsors. The first is BlockFi. I'm an investor and a super happy user. They've got three products.

The first is they let you buy and sell crypto. The second is you can deposit crypto and get a US dollar loan. And the third is an interest bearing account that pays up to 8.6% interest to anybody who deposits crypto or digital dollars. No brainer. Go check out blockfi.com slash pomp to learn more. Our next sponsor is Choice, a new self-directed IRA product that I'm really excited about.

If you're listening to this, you are likely part of the 7.1 million Bitcoin owners who have retirement accounts with dollars in them, but not Bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys

and using tax advantage dollars to do it too. Absolute game changer. Choice, a self-directed IRA product that lets you hold real Bitcoin with your private keys in tax advantage dollars. Head on over to retirewithchoice.com slash POMP. Again, retirewithchoice.com slash POMP. Lastly, don't forget that I write a daily letter

to over 50,000 investors about business technology and finance. I break down complex topics into easy to understand language while sharing opinions on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. All right, let's get into this episode with Suna. I hope you guys enjoy it. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his

guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got Suna here. Super excited about this. Thanks so much for taking the time to do it. Thanks for having me. For sure. So for like the 10 people on crypto Twitter who don't know who you are, let's start with your background. Where'd you grow up and what did you do before you got to San Francisco in technology? Yeah, sure. I got into Bitcoin

when I was in college. I went to University of Michigan. I was part of the School of Engineering there. And all of us were on Reddit way too often. At the time, Bitcoin and Dogecoin were the biggest memes. And at the time, the biggest conversation we had around it was whether or not the government would let Bitcoin happen. And it was incredibly early. Most folks weren't going into the crypto industry we went on to join startups i did that i joined elation it was just close at series a it's a data cataloging startup and so it's pretty similar to blockchain actually because you get transparency into how data transforms who's doing what and so i think just thematically that's always been something important to me is integrity of information and democratizing access to it

we scaled the company out quite well um you know the series c was just co-led by salesforce and Sapphire Ventures. And at the time I was doing elation by day and crypto by night. I was helping a lot of folks get set up with wallets and learn, you know, who were the followers that they should focus on. You know, I think at the time it was only Coindesk and Reddit that really gave anybody crypto information. Of course, there are a lot more resources now, but I set out to be this source of truth for crypto and like high quality information in this space. And we grew pretty organically to over 16,000 readers. I did no marketing because I wanted it to stay high signal in terms of who's part of the community and what they were building. And we just had such great people come through,

like Lolly launched on Token Daily, Compound, just a really great crew of super ambitious builders. Got it. And so in the beginning, when you started Token Daily, was it more focused on kind of filtering and curating other people's work? Or were you guys trying to actually create more original content yourselves? So we were doing more curation. And so we started as a newsletter and a platform for launching startups. And that's why, you know, Lolly had launched and compounded a plethora of others. And we also curated, you know, thought pieces around the space and other updates around different protocols we started then doing deep dives into different tokens and different projects and telling people what the trade-offs were we were very

sensitive to and intentionally uh you know did not classify things into binary good or bad we would just illustrate trade-offs like here's the vision that someone is after here are the trade-offs we foresee uh will allow you to moralize for yourself and i think that you know the best curators and, you know, hubs of information allow the reader to, you know, get all the facts and make those decisions for themselves. That's a very rare idea these days. I think there's a lot of opinions floating around. And then so what kind of has evolved since then, right? So that's kind of how you guys started. What does Token Daily look like today? Yeah, so, you know, we saw a lot of great entrepreneurs super early on, and we were helping them with distribution in terms of, you

know uh the newsletter and our platform for launching um you know helped a lot of great companies source talent that came in through the token daily community we acted as sounding boards for a lot of entrepreneurs that wanted advice or feedback in terms of the roadmap and what we were seeing and so i wanted to meaningfully help you know outside of you know just providing a community and a lot of these resources and also align incentives and put capital behind these great founders that we think should have a chance and really you know um bring their projects to life So we spun out Bolt Capital, and that's the venture arm, and the community arm is Token Daily. And, you know, we're just backing really great founders from the Token Daily community that are building pretty cool ideas.

And we, you know, we can jump into the thesis if you'd like, but, you know, our actual community comes in from a slew of different places. So we have, you know, super ambitious engineers from Amazon and Google and Facebook, but we also have, you know, repeat founders that we're increasingly seeing now. Folks have sold their companies to Microsoft or Docker or, you know, successfully exited and we are, you know, backing them now. In fact, I actually was taking a step back and I want to know if you similarly think this. I was realizing that the wave of entrepreneurs that come about are different with each bull run. So I think the first wave were kind of like the entrepreneurs that had nothing to lose. they were super fringe, they were building mining companies, you know, even though a lot of them had unsavory interests, it was, you know, just the thing to do. And then the second wave were really

ambitious engineers at these bigger companies. And of course, the pinnacle example being Coinbase with Brian Armstrong being at Airbnb. Then in this third wave are repeat entrepreneurs who have successfully exited or safely landed a company and that are now building in crypto. And I think more importantly is that these are companies, these are entrepreneurs that didn't necessarily build a company in crypto before and had a successful exit and are now looking into the crypto space and thinking there's something here in terms of users, in terms of volume locked up, in terms of, you know, use cases. Yeah, I definitely think that there's kind of waves as you described the other thing that's really interesting to me is how people can kind of

transition between those right so you may get an engineer who when they're starting their first company is just a engineer who's excited and has kind of really powerful ideas and they go and they build well by the time that three four or five years goes by and they want to start something else like by nature they have now transitioned into the repeat entrepreneur bucket right so it's actually the same person it's just that over time they're able to gain more experience and so you're starting, I think, to see now a couple of people who have started their second or third company within crypto. And if you look at their journey, like the first company they started, they were actually considered, you know, one of those other two groups. And so what I think it gives us kind

of excitement about is like, you want to find those people who they just continue to have hit after hit after hit. And they really, really understand the space. And you see this outside of crypto as well, right? And there's all kinds of people who just, it's like, you know, I won't name names, but there's literally people I'm like, I think that's the third time they're building that company. Like they built it, they sold it, they built it again, they sold it to somebody else. And it's like basically the same company they're building a third time, which is good for them, but they just really understand something and are quite successful with it. Totally. Yeah. I think the lesson there is always invest in Stuart Butterfield starting a gaming company and

you might end up with a slew of other companies that do incredibly well. Yeah. I think that's a great point. Tell me more about Volt Capital. So obviously you guys, it sounds like are kind of leveraging early access and kind of information there, but what's the thesis, kind of how have you guys constructed that and what's the plan moving forward? Right. So Volt Capital, like you said, is a community driven firm. We spent years investing in and building out a pretty robust community of super brilliant entrepreneurs and builders that are looking to do their next thing. In terms of our thesis, it's pretty contrarian for the space, but I would say pretty unsexy in terms of traditional investing where, you know, we are investing in companies with pretty traditional business models that are leveraging digital assets. So these are the companies that I believe are going to help crypto cross the chasm.

There are three directional bets this falls under. So the first one is end user infrastructure. And that's not to be confused with, you know, developer infrastructure. These are end user facing. These are primarily top of the stack. They look like, you know, data and analytics tooling. They look like identity solutions, like our recent investment in Magic. and the second directional bet we're taking is in digital asset intermediaries so these are the on and off ramps that you're seeing around the world a recent investment we made here is value which is of course servicing latin america and allowing folks to pretty much access what looks like fiat on the front end but you know charged by bitcoin backend instead of ach or swift and then the last bucket which you know uh is i guess more um of the moonshot or the you know it gives us a little bit of more flexible mandate is open finance applications. And these are generally

anything that carves out a traditional asset intermediary. And one example here that was pretty fun that I scouted earlier on in my career was Matrix League. And this is a company that's building the Robin Hood layer on top of esports and allowing, you know, these incredibly loyal esports fans to go from passive observers of tournaments to active participants. So that's generally what we focus on. I think the space is still incredibly early, even though that's been said a hundred times. And if you look empirically to companies that did well in these super early internet days, you know, you're looking at Oracle or Bloomberg terminal, you know, products and solutions look like that. And they weren't internet native, but they became more valuable

as more people came online. And so that's what we're looking for. Got it. And so the first two, I think are pretty self-explanatory, right? But on that third one, open finance, there's a little bit of clarification, I think, that hasn't been done across people working in that space. And so I've previously, obviously, as long as everyone else heard decentralized finance, right, which is literally the decentralization of the services. I personally have used the terminology automated finance, where some of automated finance is decentralized, some of it's not. You're using a term open finance, maybe just kind of elaborate a little bit, like open finance, does that include automation? Does that include decentralization? Is it something completely different? Like,

how do you think those three terms, maybe they're just redundant, or maybe they're actually talking about different things there? Yeah, I view it as open finance being the top and automated finance, as well as decentralized finance, you know, falling underneath that. I think with DeFi, the risk you run is that many folks think protocols and we are not you know you're not trading we are not active traders and uh you know with automated finance i think that that is more so uh traditional finance or you know what some people classify as web 2.0 um and so i think open finance then allows you to group both of those underneath that and you know speaking of in terms of protocols we do have a staking arm called td labs uh you may have noticed that we

are in the top 10 or 11 validators now on sello and you know the focus of the fund is not to invest in tokens but we do like to run scripts and understand protocols better and generate insights that way um it's just a complete no-brainer we do it you know outside the nine to five and are still doing incredibly well in terms of optimization. So. Very cool. And then in terms of the fund itself, like you guys are obviously taking a very different approach than let's say anyone who's buying the liquid protocols or, or trading, what type of investors do you feel like you guys kind of match up nicely with, right? So take somebody like us, who's doing kind of traditional venture capital, very heavy infrastructure. That's pretty much it. That

lends itself for the institutional world. For you guys, is there a certain LP group that you feel like is a good fit? Or is it more of kind of you're really working across the spectrum? Yeah, there's a mix. I'm finding that more and more, you know, these larger funds are realizing that it's probably more judicious to diversify into equity and liquid positions. And that wasn't the case before uh when i had to you know draw a similarity between us and other funds it would always have to be outside of crypto because most people were taking advantage opportunistically of you know speculative activity and often had no business being traders to be frank um but you know that's changed that's changed since and a lot more funds are now are looking at equity

companies and looking at picks and shovels and looking at the companies that we generally invest So I would say it's across the spectrum at this point. Got it. And then let's back away from crypto for a second. And obviously there's all this chaos going on in the world, one being COVID-19, but also some of the economic shocks that have been happening. Let's start with COVID-19. Like, what have you guys seen on the ground at the very earliest stages of these companies being formed? How has that impacted the entrepreneurs and the things that they're building? yeah that's the thing is it hasn't and i'm glad you distinguish between earlier companies and later companies uh you know early stage investing is trucking along as usual and if anything you

know um earlier companies are absorbing uh you know market prices are probably changing so rounds are probably cheaper uh we've seen you know terms that are you know better for obviously the investors uh but you know for companies that can continue doing well uh they're holding off even you know if they're profitable or their cash flow positive and they're waiting out the market and then we'll go and you know raise the healthy uh series a or b uh you know down the line instead it's just not worth it to them to sacrifice those terms um for seat extensions or whatnot um but you know i think later stage investing is where you're seeing a lot of the change because a few things are happening. One, a lot of these larger funds are turning inward and making sure their companies

who are close to successfully exiting have runway to get there. And what you're finding ironically is that a lot of these larger companies that were already incredibly profitable were going to co-spy on profitability, which is a great thing to coast on in regular markets, but they didn't have much in the way of runway in terms of VC funding because they weren't going to rely on that, they, you know, probably thought they were going to IPO. And so they have to do emergency rounds now and get more runway and VC funding. So you're seeing some interesting things there where all these bigger companies that had, you know, presumably achieved escape velocity or were on their way to IPOs actually raising, you know, emergency funding rounds.

It's the old analogy of like building the plane while in midair, literally finding out that you don't have some of the parts, right? And say, we really need some help. And then on the economic side, one of the big things is, you know, I can see you say this is like the number one debate in finance right now, inflationary or deflationary environment in the short term and then inflationary versus deflationary environment of long term. Where, one, do you come out on that? And two, how do you think that affects the market? Yeah, that's a great question. And definitely the question of the, I think the year, you know, just from an economic standpoint, I mean, you're looking at 20 to 30% unemployment. Retail spending has been the lowest it's ever been on

record. Factory output, I think, hasn't been this low since World War II. There have been state and local government shortfalls, travel has been decimated, and the S&P is slightly down, if not up. And so we're obviously seeing massive spending. The Fed has expanded its balance sheet. you know, $9 trillion plus. And so what that tells me is, for those that are familiar with the Cantillon effect, is a lot of this just hasn't been circulated into the economy. We haven't had, you know, prices reflect this fresh supply. And it may very well just be absorbed and, you know, show no changes. Like, Japan has been printing forever, and they're still in, you know, deflationary stagnation. And the reason is because even though we try to illustrate economics

through, you know, various equations like mv equals pq, we can't apply physics equations to the economy. It is not the problem with economics that tries to present itself as physics, is that there are often many solutions to market problems, and the inverse is also true. One solution can work for a variety of different markets, and the reason is because the relationship between, different parties within the market are not readily apparent or understood. And so you see a lot of exotic derivatives. You see a lot of interesting reshuffling of balance sheets and just a lot of things that are not readily apparent. So to think that it's going to be a seesaw where you have one movement cause something else on the other end, I think is naive at best, if not

ignorant. But there are speculations that we can make in terms of what will happen short-term versus long term. Short term, prices are going down. People aren't employed. They can't spend, even if you're giving them a 1200 check for a month, it's not going to stimulate the economy the way you think it's going to. And so that is, of course, what we know is deflationary and as a deflationary environment. And, you know, we haven't applied this to Bitcoin just yet. But to give the Bitcoin angle to this, you know, if prices are going lower and like, you know, you can go to Hawaii for $50, and I'm exaggerating, of course, but the US dollar is stronger. Your purchasing power goes up in these environments, right? And so Bitcoin's narrative as a store of value,

all of a sudden, is not as enticing. But what we foresee is that a lot of the printing that we're doing now is going to have ramifications down the line. These things compound, And that's when Bitcoin becomes, you know, a more attractive asset class, at least in the U.S. Now, this isn't the case for weak sovereign borrowers that are, you know, have their debt denominated in U.S. currencies, you know, who have to stimulate their economy in order to just maintain supply chains and as a consequence, experience hyperinflation. This is happening now, regardless of whether or not the US is going through a deflationary, you know, period. And what are they going to do rely on swap lines, they don't even have a reserve currency, like it's absurd. So I'm just happy that, you know, Bitcoin at least gives a lot of these folks the ability to exit or, you know, reset. Yeah, one of the things that I think people are quickly waking up to that cracks me up is, well, there's two things. So one is the stock market obviously is completely dislocated from any economic reality. And a lot of that has to do with the central bank actions. But two is home prices. So I did a recent kind of dive down the rabbit hole. And exactly what you described,

right, you would imagine that, hey, there's this economic shock, people lose their jobs, there's all these issues, home prices will come down, people want liquidity, you know, yada, yada, yada, whatever the kind of theory is. But actually what you see is because the Federal Reserve acted so quickly and they dropped rates, now you have cheap capital flooding the market. Everyone and their mom is literally borrowing money and trying to buy homes. And so you see a house on the market, it's got five bids in 72 hours and people are overpaying for even what the asking price was. And you're just like, okay, in hindsight, that makes sense. If you would have asked me this back in January, I would have told you there's very little chance

of that happening. And so it's kind of just, it's such a complex thing that I think to your point, a single equation just makes it almost nearly impossible to actually evaluate what's going to happen. Right. Absolutely. Yeah. I completely agree with that. People become pretty irrational. You know, they're just things you can't anticipate or you'll have an idea of what will happen going in. Or even ideas that seem nonsensical at the time, like V-shaped recovery, everyone laughed at and all of a sudden people are taking seriously. So I think someone had tweeted something to the effect of, you know, if there's one thing that's true about the market, it will always find a way to make you look dumb or something to the effect of that. And I've said this before, but people

are waking up to the fact that, you know, the stock market is divorced from the economy, is divorced from money. Yeah. And I guess part of that is, do you believe that that will be true or is true in crypto, right? So kind of, is there kind of a dislocation between the prices of various assets and actually the quote unquote fundamentals, right? So if you, Bitcoin being the easiest example, all of the things that somebody would look at

as kind of the fundamentals of Bitcoin that drive value, do you see kind of that dislocation seeping into the crypto markets as well? Or do you feel like it's somewhat sheltered or insulated from that? You know, the hope and the answer you'd want to say is that they would be tied together and everything would make sense

and there wouldn't be room for a forward-looking market versus the underlying economic engine. And that's just not the case. And we see that. And the reason that's not the case is because there are derivatives being built on top of this crypto system. And that's, frankly, what always happens.

Since the beginning of the stock market, since the beginning of currency, people find creative ways to open up options for different ways of making money, for different ways of leveraging, for, you know, vetting. And so, you know, we're seeing a lot of DeFi projects create derivatives and create different ways of lending and borrowing. The difference, though, this time is that there's transparency around it. There's more transparency. You know, there isn't this double spend problem. And so, you know, it's fine for markets to look

forward. It's just not fine for there to be, you know, quite literally white collar crimes in terms of what's going on with the balance sheet in terms of what's going on with um you know printing and not and you know i can sort of personally think it's you know um a financial um a horrible decision which is why i'm a bitcoin but you know um some people think it's what you have to do at the time but i think it's a crime to be devaluing devaluing a currency at this rate um anyway so in terms of DeFi, though, and in terms of these derivatives being built, it's actually this uptick in activity around that is why we launched the Chicago DeFi Alliance recently. And Bolt Capital launched that alongside Jump Trading, which is the largest, you know, partner for Robinhood, or I believe the only for Robinhood crypto. And, you know, they're looking at DeFi and they think it's interesting.

And, you know, they're increasingly saying, you know, stable coins enter, you know, FX markets. They're saying that that's increasingly the payment rail through which money flows around different countries. And we also launch this alongside, you know, Cumberland, DRW, CMT Digital, and a few others. and you know the problem that we find with a lot of these defy projects is it's kind of a cold start problem where defy projects are looking for liquidity and market makers want to go where there's already volume so then the question is you know how do you get partners who will take that leap of faith with you and convince them that you know sure short-term upside probably isn't here yet but you're you know playing the long game and going to capitalize on more of this like long-term upside. And so I think it's pretty positive that a lot of these traditional firms are looking to DeFi as, you know, an interesting way for a lot of, you know, traditional finance to be

done in a system where it's more accessible to everybody, where you're able to access the same types of crediting system, loaning system, borrowing, whatever, across different countries without the need to have, you know, a bank. And so when you see those large firms, right, everyone from jump trading, you described to literally, we saw filing where Renaissance technology wants to kind of trade Bitcoin, whatever they're going to do. What do you feel like is the big obstacle? Because it feels like, in many cases, this is one of the things that they're doing, right? So it's a small portion of their overall capital base, they're intrigued by it, they're dipping their toe in the water, they're testing, they're learning, they're doing

all that stuff, how do we get them from kind of that dipping their toe into an area where it's 20, 30, 50% of the assets under management that they're actually participating in the ecosystem, similar to what they do in other markets, right? The stock market or whatever there. Right. That's an excellent question. And there are a few reasons. One, headline risk.

Two, technical ease and just where we are technically in terms of user experience is not quite there yet. and the amount of resources you need to dedicate in order to integrate these products and to be able to get engineers up to speed oftentimes is just a sunk cost for a lot of these firms that frankly don't understand it at this point. And then thirdly is any regulatory risk that may come with it. And these things are not new to crypto. These are problems with any paradigm shift. There are a million reasons why certain companies wouldn't operate with the internet or use HTTPS when that was becoming, you know, privacy preserving protocol for e-commerce websites. And,

you know, it's just, these are going to, in hindsight, will be problems that will almost seem negligible or trivial, but seem big right now because we're tackling them. Once we get those, you know, nailed, I think that a lot more are going to be coming in. And honestly, I think it's going to be driven by user demand. So we're going to have more of a bottom-up type of pressure. You know, the more people that use it, the larger it gets, the harder it is to ignore. Yeah. And I guess one of the things I've been really interested in is kind of this element of trust. So especially in like the decentralized world where there's an, it's really supposed to be kind of trustless. If you're a large asset manager, you still have to have some level of

trust, whether it's in the protocol, whether it's in the developers behind it, it's the company that maybe that you're going through, whatever it is, to go put, you know, let's say hundreds of millions or billions of dollars at stake. That is very different than, you know, Paul Tudor Jones, I think was a great example. He put 2% of assets or 1.5% of assets. It's still like four or 500 million bucks, right? Like it was still a big, big number. And so that's one thing to go and just get exposure, whether he does it through the options market or he actually buys and puts it in custody. That's kind of like the safest, most conservative thing to do in the space. But if you want to go put, you know, even half a billion dollars to work in DeFi, I just

don't know that's possible yet right and so kind of how do you think through um is it something where it just takes time is it something where uh we need kind of the courageous you know asset management firm that's the first through the door and they're the ones who who risk it all and put you know a big sum of money in like like how does that kind of sequentially play out in your opinion yeah it's many things um you know all of the above you know the first part is like look it's like what 8 billion locked up in stable coins right now um like sitting on the sidelines these are still pretty small numbers and so putting in 500 million to a billion is a large chunk of money just relative to where the space is at it's time but it's also intention what you need are

um you know high net worth uh individuals and companies and firms that you know for them to take the sleep of faith and to actually engage with um you know these emerging crypto systems for it to be a rounding error for them if they're wrong and for it to be career defining if they're right but the thing is that a lot of people you know that are up and coming or emerging the ones that are really enticed by this may not be wanting to take that um career risk because you know if they're right they're really right and if they're wrong um you know the market isn't kind it punishes uh you know people for taking uh chances early on in their careers so what you need are more established people thinking, look, this is clearly what millennials are into. It's clearly

where Gen Z is going into. I don't think, you know, the future of finance is always going to be Chase and JP Morgan and Visa. So I definitely agree with you on that. Somebody said something to me recently, and I can't get it out of my head, which is that Bitcoin is actually hurting DeFi. And I asked them to kind of elaborate on it. And what they meant was that kind of career defining move, right, that asymmetric upside, if you will, So the people who are seeking that and convinced that that exists in the larger crypto blockchain ecosystem, what they end up doing is they just buy Bitcoin, right? And that's kind of like the really risky thing that they do. When you then go talk to people who are obviously building this stuff, operating in the ecosystem, they're like, Bitcoin's like the conservative boring thing, right?

Like that thesis is so boring compared to, I think, what you and I are talking about. And so how do you think that happens? Like, do we actually need to see these folks who are at traditional firms leave and go start their own kind of crypto focused firms? Or do you feel like we will actually see DeFi seep into whether it's through market making, lending, you know, kind of the types of businesses that they understand just in this new ecosystem? right that's a really good question so what will likely happen is you know so so one the reason that you see this dichotomy in terms of people within this space thinking bitcoin is the old or conservative story we'll select parties thinking that and you know folks on the outside thinking bitcoin is super high risk and very like emerging right now is just simply you know information velocity and information asymmetry of course so you know being into it day in day

out, you're more sensitive to changes. On the outside, it seems like a monolith and as though it hasn't changed really at all. In terms of how we get people in, look, the thing is, you know, the future goes from being incredibly, you know, seemingly impossible to being inevitable. And similar to the companies that missed out on, you know, early internet days, similar to, you know, Blockbuster making fun of Netflix. I mean, these people just get left behind and the ones that do take the risk in terms of starting their own firms, in terms of integrating with with crypto companies and helping them get their leg to get you know uh escape velocity or to get you know off the ground are the ones are going to stay at the forefront of um you know the space in

the future of finance and what looks like increasingly will be the future of the internet and so it's going to be a mix uh with most things um that start out organically like this it's going to be bottoms up it's going to be a lot of users demanding it it's going to be nimble and smaller companies, and this goes back to the innovator's dilemma, being able to sense that, integrate it, expand users, and then have incumbents, you know, cave to the pressure if it's not too late. So that brings me to somebody like Square, right? Which I think is probably the only, I'll call it a traditional technology company, which is somewhat of a slight by accident towards them because they're definitely not traditional. But they have chosen to go all in

on Bitcoin, right? And kind of the, what I would consider more like the Bitcoin ethos and what you and I would believe is like, okay, that is quote unquote the right way to do something versus we've seen lots of other either technology companies or even in the finance world, they want to create their own tokens. They want to do all kinds of all this other stuff, which is really kind of the corporatization of this technology, this space. Does that seep in to other people or is it really like a hey you need a jack dorsey running it and unless the leader buys in you'll just never see these other companies um kind of jump in and they'll actually get disrupted so going towards your like blockbuster example like literally the large banks they'll just never kind of get in uh

through the open protocols and things like that and they end up getting disrupted yeah um it can be a mix of them it actually reminds me of you know the open source versus closed source wars uh you know in the early uh what i've read in the early 90s and you know mid-90s and, you know, Microsoft versus a lot of these other open source projects that wanted to keep things open source and not corporatize them, there are different speeds and different flavors that people have. And you might end up with bifurcated systems where, you know, some people prefer iPhones, some people prefer Androids, and there are different, you know, ways they integrate new technology and different implementations. And, you know, there's another story where it could

just seamlessly charge the back end of a lot of products and we don't even notice the difference as users but you know folks that were too slow to you know really leverage and harness the technology just become you know names in history that you don't really remember yeah yeah and then uh you've got a very interesting thesis on africa um maybe talk through just like what's the interest there and kind of how does that play out? Yeah, so I recently did an essay on just the potential of crypto in Africa. I think specifically the essay was titled,

why Africa is poised to be the next hub for crypto development. And I do think it's massively underlooked and I don't think people really understand how huge these tailwinds are. The most common story is, yes, there's rapid inflation historically, zimbabwe nigeria now a select few other countries are experiencing rapid inflation um and you know

there's also the narrative that's also pretty commonly known is that this is a mobile for first continent so they got to skip the legacy infrastructure like landlines and are instead jumping into mobile first types of behaviors and the second or third most popular thing they do on their phones is payments. But the kicker and the part that really shocks people that I don't think they really fully understand is that the average age on the continent of Africa, the average age of the population is 19 years old. And so the IMF extrapolated this out and just based on, you know, birth and death rates for countries around the world, by 2035, there will be more people joining the workforce from Africa than the rest of the world combined.

So it's really important to think about and, you know, learn what are, what's that half of the population thinking about building, learning, like what are they doing with their time and what did they spend their time on? And so that's really important in terms of trying to figure out where the future is headed in terms of mobile payments and fintech. Fintech and crypto are some of the largest investments that foreign investors make in, you know, African countries. And so, you know, I think that it's incredibly important to look at the behaviors there, the companies there. There's a great company called ByCoins, and they provide a on-ramp, off-ramp for crypto. And they're essentially bringing this pretty informal economy and making it more formal. They're, you know, matching parties in terms of, you know, getting folks to switch from fiat to Bitcoin. And I think they're doing excellent work.

And they became, you know, they're scaling really well. I've been really impressed with their growth. Got it. And so as part of this, Africa across the continent has mainly leapfrogged, I think, US, let's say, in mobile payments or mobile finance. They went from having no access to banking at all to today, things like M-PACE, et cetera, are well-documented. Do you feel like there's this natural blending between crypto and that type of innovation that they've already seen or is this a separate thing right because in the U.S. right now it's pretty separated there's very few things like a cash app where you can do both it's either like I've got a mobile you know

application that can do crypto and I've got one that does my traditional banking I think people are trying to close that gap but in Africa is that the same type of work or is this much more kind of organic and people just have one app on their phone and it does everything right that's that's also a really great question so the way I view it is I think this is an incredibly poignant line, you know, a lot of people view crypto as the last leg of fintech. So you've been able to unbundle all of these financial services that banks traditionally did into, you know, niche products and solutions. And the last unbundling is, you know, monetary transmission, essentially, like separating the state from money. And it doesn't make sense as much when you're in the US

and you can reliably, you know, use the dollar versus places where there is rampant hyperinflation. And then fintech and crypto, I think, you know, converge to one, whereas in other countries that don't, you know, suffer from this rapid hyperinflation, it doesn't make as much sense or they're all alternatives. And so when we see that, you know, even in behaviors, it's largely speculative in the US, which is fine. Most technologies need to be speculative, similar to early internet in order to have people look up from what they're doing and realize that there's something going on here and that they could get in and not miss anything. So this inducing FOMO is nothing new and actually needed for any, you know, new technological innovation. But then,

you know, looking at even, I mean, I'm Lebanese, my entire family is Lebanese. My parents did not understand this until the lira lost peg to the dollar. And it used to be 1500 liras equals a dollar and it was that way for, um, I believe decades. And, you know, just last week, 7,000 Liras now equals a dollar. And the first text I got were my parents saying, we finally get this Bitcoin thing. We understand what this means. And so, you know, they're the first folks that experienced hyperinflation are the first to understand it, uh, on a really visceral level, uh, and, and, you know, won't distinguish FinTech from crypto because it's one of the same. It's their finances. Yeah. So I didn't know that you were levities. Uh, I got a million

questions. Uh, and so feel free to kind of answer what you want and what you don't, but, uh, explain that a little bit more because I think that part of my perspective, and again, this is coming from a guy who's lived in the United States his whole life is, uh, most people in a country where the currency is failing. So it hasn't kind of fully, you know, broken for them, but, but it's just beginning to fail and you're starting to see that high level of inflation, they probably don't understand finance. They don't understand monetary policy. All they know is that, hey, groceries are getting more expensive and I feel like I'm losing part of my savings, right? And I just can't buy things. Is that accurate? Or do you feel like as they're seeing prices rise and there's the

community talking about it, they actually get up to speed very quickly on monetary policy and finance? Oh, 100%. Lebanese people are incredibly smart Lebanese people. The civilians, the bank's actions do not reflect what the civilians know. They are very well aware of the fact that their monetary policy is bullocks. And they're well aware that, you know, this, to put it in context, they're being paid in lira, their salaries are being paid in lira, which is, you know, rapidly declining against the US dollar, and they are forced to pay for food and merchandise with USD. And they understand that because they're, they probably understand that better than we do, because they're seeing it day to day. You know, you get to the point where there are ATMs

in Lebanon, and these are, you know, anecdotes, of course, that don't have cash, and you open them up, there's no cash that you can actually extract from them. And you're realizing the stories behind that is that people are taking greenbacks and going to the border of Turkey in Syria and selling them at a premium. It's so valuable to them. And they understand that it's, you know, monitoring fiscal decisions. And that's probably why they, you know, are doing things like if you've seen, you know, the coverage of protests and burning banks, it's because they understand the root of their problems, and they want to opt out. The problem is, and I've had many texts come in with people asking me how to convert their wealth, little that they do have into Bitcoin

in Lebanon. And the problem is, a lot of these services are geo blocked in Lebanon. And so even if you do access something like local Bitcoins, you'll probably have two sellers that are selling Bitcoin at egregious premiums. And the question is, what are the services they can use? And I've directed folks to HODLHODL and BISC, but it's different when there's support in your language and it's incredibly seamless to use and you have education around it. And so that's something that I think should be rapidly explored because people are really smart and they know this probably better than we do. Yeah. What I read that was really interesting about Lebanon specifically is people could go and we've seen capital controls before in other

countries where they basically say, hey, you can only withdraw X number of the currency, right? So whether it's $500 worth, $1,000 worth, whatever. I think people are kind of used to that. But the thing that was really interesting is that they would not let you withdraw on anything other than the lira. So you couldn't withdraw in dollars or any other currency. And to me, it was just like, wait a minute, if you're sitting there and you understand any piece of this, the red light's got to be going off saying, wait, they're locking me in the currency and they're doing it intentionally. Right. Yep. Trust me. They know that through and through that's a, that was exactly the reaction that they, for the first time, they really realized they had no other options outside

of Bitcoin. Like that is when it dawned on a lot of people. And that's why, you know, major news outlets like Alayah Dean finally started covering Bitcoin. I remember flipping on, you know, the TV when I was visiting my family, uh, you know, mainstream Arabic TV news and seeing the Bitcoin logo behind the news anchor. And I remember thinking that was a moment I have never been more bullish on Bitcoin. I remember thinking like this, this is absolutely the future. Yeah. And so like, what does somebody on the ground in Lebanon do, right? You mentioned that they kind of understand the problems. They know that there's services out there. Obviously your family and friends can reach out to you and say, Hey, you know, direct me to what really are kind

of more obscure platforms they don't have the marketing budgets to kind of reach people like let's say a coinbase or some of the other international things do like what are they doing are they literally just trying to find anyone who can give them some information are they kind of out of luck like what happens yeah that's precisely it they're scrambling for information they're seeing you know who are friends in different countries that can send them um you know they can pay them with whatever u.s dollars they have and get bitcoin in return it's very um you know ephemeral and kind of brute it feels like they're brute forcing the con the conversion of you know their fiat currency like the lira to to bitcoin and you

know frankly for a lot of folks that don't even have much in savings it's tough to you know even think about converting to bitcoin when they're you know trying to figure out how to put food on the table right or they can't even hold on to anything to save in order to convert and that's whole other issue as well. Yeah. It's really interesting that you noticed, it's almost like in the United States, take the media as an example on obviously an overgeneralization, but Bitcoin's this awesome thing that you can poke every once in a while. It has tons of social engagement by all the people who are fanatical about it, but it's kind of the butt of the joke, right? It's like, oh, that's that Bitcoin thing. But in a country like Lebanon, as soon as the

currency starts to fail, everyone looks around the room, realizes the value, and then you literally get the news actually like it sounds like maybe not promoting it but trying to educate people trying to help protect absolutely right i think that's very different than the way it's treated here by the media and some of that it's just you know the dollar works pretty good for you know majority of people yeah absolutely i mean any any problem that you're distanced from doesn't seem as serious until you're experiencing it and i think that's exactly the case with what's going on with you know, their actual currency. If it's primarily speculative here, and a lot of people view it similar to buying a share on Robinhood, then that's how they're going to treat it. But, you

know, for a lot of folks around the world, I mean, not just Lebanon, Latin America, it plays in Africa, you know, Iran, like, this is life or death, this is savings, this is food on the table for them. So it's certainly not a joke, or, you know, speculation for a lot of people, the reality is just a lot different. And I think that's what a lot of people don't understand when they say, well, I don't get why we need Bitcoin. And, you know, they're sitting in the U.S. with, you know, U.S. dollars and a lot of debts are, of course, generated in U.S. dollars around the world and they're unable to pay with their own currency. And it's like, you know, it probably wasn't, it's not, frankly, it's not designed for you exactly. And it's not to say that there aren't

many underbanked folks. I think in New York, the stat was actually pretty astonishing. It was like in New York City, a third or something, you know, roughly of people are underbanked. And, you know, the center of gravity there is around the Bronx, I believe. But, you know, for people that just don't get it, and we'll always be at speculation, that's fine. This is more of a grassroots movement. And I think that we aren't used to currency directives coming from the bottom up. We've only ever seen them from the top down. And this time, it looks like it's going to be different. Yeah. And last question on Lebanon. I think this is true for every country. If the Lebanese government came out with another currency, do you think your parents or friends or

people you know would trust that new currency? Or do you feel like it's a kind of a one-shot deal where, hey, you had a currency, you screwed it up. I don't care what you bring up next. We don't trust you as the owner or controller of the currency? Yeah, they would absolutely not trust it. I mean, if they're forced to use it, they're going to use it. But at this point, I do believe just based anecdotally on what I've seen, Bitcoin has, USD, of course, the greenback is the one that everybody wants to get, but Bitcoin is as of now the next best thing. Yeah. It's just so interesting to me because I think Bitcoin actually falls in the same category of everyone trusts the sovereign nation that is in control of the currency that

they use and everything is denominated in. If that sovereign nation screws it up, then they go look elsewhere and they won't trust whatever comes next. But actually, Bitcoin from a currency standpoint feels similar in that we get kind of one shot to separate state and money. And if for some reason, Bitcoin was to fail, do something technical or whatever, I always wonder, would people kind of write off the idea of separation of state and money, right? And we don't know, obviously, but it's just something, it's a really interesting kind of mental exercise to go through. Yeah, I mean, historically, looking at, you know, the digital currency attempts that came before bitcoin actually received significant adoption i believe eagles is probably like the most popular

and just because it was shut down didn't necessarily um you know based on bitcoin existing obviously didn't cause any irreversible damage um it does feel like it's a one-shot type thing especially based on the momentum we had uh we have but here's the thing is similar to how you know they say like science advances one death at a time um the thing is generations forget and And so, you know, I'm long Bitcoin, most people are. I don't think it's a one-shot type deal though. I do think that, you know, over time, if something is supposed to happen

and the tailwinds are there for it to happen, you know, you'll figure out a way. But I'm an optimist in that regard. Absolutely. I want to finish up talking about kind of consolidation and mergers and acquisitions in the crypto space. Maybe talk a little just about what you guys are seeing there. You talked earlier about some of the larger companies

having to raise these emergency rounds of funding. Obviously, if they can't get that, the next best thing is to figure out, who can we go buddy up with? But just kind of, what are you guys seeing in that space around M&A? Right, so the token data actually had an excellent report on this.

I mean, as of end of last year, there have been 350 acquisitions today in the crypto space worth four billion in value, which was surprising to me as well. I didn't realize it was that big. But in terms of being in more of a bearish market, you generally see horizontal mergers. These are usually used to acquire talent or technology or licensing. But in bull markets, you see more financial M&A happening. And these are companies

that can be vertically integrated and are acquired based on their returns as opposed to talent tech or licensing. So we're seeing more horizontal M&A right now, which is indicative of what market appetite is like, but do think it's going to improve just historically on how Bitcoin has moved in the next 12 to 15 months. So it sounds like one of the kind of obstacles or friction points is actually just the balance sheets of companies that would be the acquirer, right? There's only so many companies that can actually have enough money to acquire given, it's relatively small, but I would never have guessed 350 plus acquisitions. That's a very high number. Right. Yeah, absolutely. You do see these bigger exchanges driving a lot of

them. But, you know, we'll see where this ends up going. I think there have been a few attempts at decentralized M&A, which I do think is almost nonsensical, if not counterintuitive, because if it is a decentralized project, there should be nothing which can be acquired or merged, perhaps merged, but certainly not acquired. But, you know, they've been botched, as in the case of Steam recently. But I do foresee us having a few horizontal mergers based on how the market goes, maybe a few more than a few. But once we're in a bull market, you'll probably know because we'll see a lot more of these financial M&As happening. And I guess, so decentralization, I'm in complete agreement there that that's kind of an oxymoron. But do you feel like we'll start

to see kind of acquisitions or mergers of networks? So maybe they're not actually decentralized, but do you feel like we'll see networks actually coming together in some way or even centralized corporations that are for-profit, traditional private companies, trying to acquire some of the networks? Yeah, I guess that would look like something similar to, oh, I don't know, Microsoft acquiring GitHub. Something akin to that could probably happen. Of course, you'd probably lose a lot of ardent followers in the network, especially if it was under the pretext of it being decentralized. People never fail to find ways to surprise you. So I wouldn't rule it out. I love that. That's a good perspective to have. I finished up each interview with the

same two questions. The first one is, what is the most important book that you've ever read? Most important book I've ever read is definitely colored by recency bias, but Space Barons. It's about Bezos and Musk's journey to colonize space. And, you know, of course, there's a lot of symmetry or you know a lot of metaphors that people make about us mooning and us you know we have a lot of metaphors that are in common with like a lot of space stuff but just the the story behind why they started their companies and the sheer resourcefulness that they had to each do in order to one afford to build space companies to do a serious upheaval of a sector that had incumbents that were giving kickbacks to former employees to start companies

that were zombies and kept them afloat. In order to break that up and allow the private sector a chance to compete in space is so inspiring. And I think that every person in crypto should read it because you see this in finance, you see this in education, you see this across industries where people are trying to fundamentally move something from the ground up and uh it's been the most inspiring book i've read so far yeah i haven't even heard of that so i'll definitely go read that um the other one is uh much more fun and actually related to space aliens believer or non-believer like i said will never fail to be surprised believer and i think it was actually in fact verified right didn't they say there were ufos or something earlier this year in the middle of

covid everyone's like yeah aliens sure why not at this point bring more away so it's even scarier than that so the ufo thing when i saw it i at first i didn't understand why no one was freaking out and then i guess that the videos had already leaked on reddit and stuff like years ago like you know yeah yeah they had and this was just kind of confirming it but uh the one that i saw recently uh that just you know you kind of look around the room you're like am i the only person reading this is I think a year or two ago they found a I'll call it a radio signal I don't know what the right scientific terminology is but it was repeating on like a 16-day pattern so every 16 days they were getting this signal that they were getting from you know quote-unquote deep

space whatever that means and so just recently they discovered a second one that is repeating every 157 days and so you sit there and like I got a lot of questions right like what technology are we using how do you know it's real like whatever all the normal questions you would have but when you start to think through this you're like all right maybe there is uh an improvement in technology that we've had where like you know we're just now able to detect things in space that we previously weren't able to but they're going to be explained in some natural phenomenon you know in the future but like if we find enough radio signals like you're telling me none of them are gonna be alien like come on if we find a thousand of them right it's kind of like planets uh when

you and I were in school there was nine planets like when I was in elementary right there was nine planets right there's Pluto dirty well now there's over I think over a thousand planets that they've identified and you're like you're telling me that on a thousand there's not life maybe but yeah I like our odds of finding something I guess absolutely yeah no that's I mean there have been you know many paradoxes you know after this i it's um i do think it's incredibly it'd be it's more unlikely that there isn't any other life form um and you know why not throw in daughter universes and metaverses and while we're at it yeah no space is severely underexplored i'm really excited i think that musk and bezos made space like cool again it's cool to watch rocket launches

again and um i'm really optimistic about where space is going to go if you want to go down a rabbit hole that will uh will leave your head spinning uh if you google two galaxies colliding right now supposedly somewhere in the you know millions of miles away there are two galaxies that are colliding and as you read the articles it will then say in like two or four billion years our galaxy is going to collide with this new one and you start to like man we really don't matter right like we are so inconsequential to this place i don't even know how we know that galaxies are colliding, what that means or anything, but it's pretty humbling, frankly, right? It really is. Quite the pale blue dot.

You could ask me one question to end this. What question do you have for me? Are you an alien? No, I'm kidding. It's generic, but I do like to see how people's thoughts evolve. So I like to ask it over time. It's not necessarily the one answer. I like to see how people's thoughts evolve over time so you know what are you most excited about in crypto um my thoughts on this have definitely changed over time uh i've become much boring over time and um the answer uh without a doubt emphatically is bitcoin but i think the reason why is what has like changed my understanding of it and um the thing that i am now absolutely convinced of is the separation of state and money is one important, but it has this ripple effect across

so many aspects of our life, right? You were saying earlier about kind of the quote unquote crime of devaluing money and kind of all of the impacts of that. And as you learn, I think more like not only what is money, but why is money structured the way that it is, you begin to realize, Marty Benz had a great line. He says, fix the money, fix the world, right? And it's kind of like this core unit of account. If you can go at that and you can drastically improve it, you actually can create a much more fair, equitable world. And so people give me shit when I say it, but like, if that happens, and again, it's an if, right? I think you and I are convinced it will happen, but it's an if. I actually think that Bitcoin will do more to

create that fair and equitable world than all like philanthropy combined. Right. And so when you start to like think of things like that, you're like, that sounds crazy unless you've spent way too many hours to admit, like thinking about this stuff, learning about it, whatever. But the level of importance of a thing that even has the, you know, 0.1% chance of doing that is just so undervalued. Right. And so one of the things I started to think more and more about is like actually if you take the most bullish people in bitcoin they're likely to be underestimating what's possible here right and so when you start that it's like that's pretty cool right i think that's a great answer absolutely i've only had a couple hundred uh opportunities to uh

a little practice don't give me too much where can we send people to uh to learn more about you uh token daily and volt capital Yeah. So, you know, the Token Daily Twitter account, T-O-K-E-N Daily, my Twitter account, Suna or later, S-O-O-N-A or later. And also just drop me a line at my email address, which is Suna at Volt.Capital. Awesome. That Twitter account is a, that's a pretty good name there. Thanks. Yeah. It's quite the vanity handle. I love it. All right, Suna, thank you so much for doing this. I'll do it again in the future. Yep, definitely. Thanks for having me.