The Wolf Of All Streets - DeFI TVL Drops, As Crypto Market Sinks. what’s next? #CryptoTownHall

Episode Date: June 24, 2026

In this cloudy Las Vegas morning crypto space, Dave and insiders unpack Ethereum’s Foundation shakeup and the rise of new decentralized teams. They break down the broad market correlation and 20% drops across majors, driven by macro forces and AI draining liquidity. The crew debates DeFi’s yield wins versus broken trading mechanics, the edge of perpetual swaps, exploding prediction markets, Binance’s Europe regulatory mess, MicroStrategy as a Bitcoin yield play, cronyism in finance, and privacy tech like Midnight that protects choice while opening institutional doors. A quick look at recent hacks and summer doldrums rounds out the candid chat. Learn more about your ad choices. Visit megaphone.fm/adchoices

Well, good morning, everyone. It's cloudy here in Las Vegas, weirdly. I don't see that very often, but that seems like a pretty good metaphor for the crypto market, which seems pretty cloudy. And, you know, not a whole lot going on. You know, there's stuff going on about Ethereum. So I thought maybe we would start there. The report of defy TVL dropping is completely unsurprising, giving the fall in the market itself. But curious, you know, if anybody else thinks that of that is anything more meaningful, more, you know, supposed to talk of whales selling Ethereum and foundation cuts and whatnot are perhaps more concerning. But, you know, so maybe we should start there.

But markets are certainly squishy on the speculative side, although I will tell you for anyone who cares, if you use poker as a proxy for speculative fever, the sizes of the, of how many people are here at the horseshoe playing in the World Series of poker is off the truer. is off the charts. So clearly there is money out there for people to gamble. That much is clear. And prediction markets are saying similar things. So, you know, interesting world we live in. William, how are you this morning? Are you behind the mic?

Yeah, I'm here. I saw you talking about it. Ethereum, obviously, it was in the news a lot yesterday. Yep. You want to wrap it up for us? Sure. Yeah, yeah. I mean, this wasn't surprising. Three months ago, I wrote a post saying that we have seen the peak of the Ethereum Foundation

because I knew being an insider that things were in the works in terms of shedding people. But this is all by design. It's all by intent. And, yes, there are people that have been let go. But at the same time, there are other organizations that are stepping up. fulfilling different roles that the Ethereum Foundation did not want to be involved with. So I think this is good in the long term. What this means is that the diversification of decentralization is happening. The Ethereum Foundation specifically said they don't want to be at the center of the ecosystem necessarily.

They want to be a node. They want to be one of many other contributors. Now, is this a perfect situation right now? It's not because these new organizations are new and they still have to show what they can do in the market. But in the long term, in the midterm, I would say, in the next six months, I think it's all going to unravel. And it's going to be good because these organizations

are going to be able to do the things that the foundation maybe was not willing or what. was not wanting or could not do in terms of being more aggressive. One of the criticism that the foundation would always get is that they are not competitive enough, that they don't have this mentality of winning, wanting to win in the market. But I can tell you for sure, as you can see the signs, the satellite companies around the foundation, they sure want to win. the Bitmine, the Sharplink, the Ethelabs, and the economic zone, the consensus, Argot, and so on.

There's half a dozen to a dozen companies that are now going to be the stewards of Ethereum. And I think the days of seeing the foundation as the only driving force are going to be behind us, they will still do significant work. they're still about 200 or so people and they will continue to work on the on the core aspects of the protocol which is a good thing but there will be other ones that will be contributing to other features and I think it's a good thing in the long term now the market always is a bit behind in reacting to this in figuring things out and there will be a lag in reality this, which is okay.

But as usual, I'm optimistic about where things are going to be going. Yeah. Well, I mean, the one thing that's interesting about the market in terms of price action, I just checked. And it's actually staggeringly consistent. If you look at the 30-day performance between Bitcoin, Ethereum, Solana, XRP, pretty much everything not named Stellar Lumen and Z-Cash, you're down roughly 20, 21%, 22% over 30 days.

BNB is down only 15, so I guess that's a star performer. Hyperliquids down only 4% over 30 days, so I guess that's a real star performer. But certainly of layer ones, it's the entire market. The correlations are lower. It looks more like what people talk about the stock market that it does about the crypto market because, you know, individual news on Ethereum or Solana or even Bitcoin seem to matter very, very little. It's just, okay, the whole thing's going down. And that's what it looks like.

You know, that's classic, I mean, obviously classic fair market behavior. You know, and this is coming from after it's right, had already fallen, et cetera. Now, whether or not we continue, I mean, there are a lot of people who believe that we continue. And there's a lot of people who think that, well, we're sort of bumping along the bottom here. I guess we'll find out, won't we? Anybody have thoughts on that? I think the Ethereum transition is probably bullish for Ethereum. I think that the Ethereum Foundation over the past few years has probably been the single anchor that people have, you know,

viewed dragging it down, whether rightfully or not. And even Vitalik saying, you know, that we're just going to become another node, whatever the language was, I think, you know, he's being very clear for once about direction and for better or for worse about them, you know, kind of backing off. I think the Williams point, you know, about deep labs, I think Midmine and Joseph Lubin and Sharpling all directly backing it kind of gives a more institutional stamp of approval for who will be, you know, I won't say driving the ship, but who people will view sort of as the leader. And that probably can only be a good thing. I just don't think it could have gotten much worse in this case, you know, for the theory of narrative. So I think that's generally good. As far as markets, I mean, I think you'd be able to. it. I don't know if you saw Dave, the story on Bloomberg that's kind of catching a narrative, which is that Warsh killed the debasement trade, obviously gold, silver, down bad, Bitcoin kind of

whatever. But, you know, I think that's an interesting kind of crypto narrative, or at least an aside, but I think the market's doing what the market does. Yeah, I think there's truth to the fact that that's the narrative. It's actually just, I mean, it's hysterically funny if you think about it. But that's besides the point. I mean, you know, Warsh could kill the, unless Warsh's goal at the Federal Reserve is to unwind the hyperfinancialization and watch all asset markets drop by, you know, 50 so percent and go into a global depression, then yeah, he's killed at the basement trade. But until, but Worse doesn't have any control over any of the G7 government deficits, including our own. And I'd like to see where the Federal Reserve can stop that.

The only thing the Federal Reserve could do is make it worse or provide some confidence for some of the things that happened. But honestly, it's funny. You know, I guess if you think that Trump was total and besent, because it was his pick, were being totally suicidal, then yeah. But of course, that's the narrative because, you know, narratives are what narratives are. But we'll see what the smart money sniffs out. Yeah, I agree with that. I agree with that. You know what I also find interesting.

I don't know if it's worth discussing, but it's kind of something I was just looking into is that for Bitcoins as an honorable mention, you know, SpaceX, I think we all screamed about it. If we want to talk about that and how the top was so clear, if you take a look when they launched options, obviously on SpaceX, of course, for the first four days, you could just buy it and there was literally nobody to sell because nobody had unlocked. So unless you had bought it for selling it, you know, and in three days of buying it, there were literally no sellers in the market. that well, you know, they launched options and that was the dead top because people could finally short it, even though they weren't unlocked. And, you know, I think it's hilarious because you look back when Bitcoin options were launched, you know, CBOE and CME was to the day the top of the 2017 bull market where we entered another major, you know, down cycle for three years. So like some of these things just so predictable when talking about markets, I think that's one we kind of got right here. Yeah, that's true. Although SpaceX is still, you know, look, Yes, the froth was real, but it's still above IPO price.

And the volatility over the last couple days has dropped. So, yeah, you're right. The, you know, 200 was insane. But, you know, 135 was the IPO price. We're sitting here at just under 158. And that's really not. Yeah, I think it actually launched about 155. But yeah, yeah, yeah.

You know what I mean. I meant the allocations were at one. Yeah, yeah, of course. Yeah. So a lot of the people who were flippers. just took their money and said, okay, thank you very much and move on to the next thing. But yeah, it's, you know, it's holding in well. What's more interesting is competing stocks in the same, because I actually look at a

couple of the other space oriented stocks. I'm not, I'm not trading them like you've been watching them. You know, ASTS, which is a space mobile one. You know, that's just been on a one way trip down, you know, since the SpaceX IPO. And, you know, a lot of people bought it because it was, I'm not one of them, by the way, But a lot of people bought it because people looked at it and said, well, wait a minute, it has better. It's way cheaper. Now, of course, cheaper doesn't mean anything in terms of growth, but it has revenues, et cetera. You know, and so, but the whole sector is getting pummeled. And the entire AI infrastructure sector has been taking a hit over the last few days while, you know, inside the market. And so there's definitely cross currents going on. It feels like the narratives that people in the crypto space are most interested in, or, you know, all the ones that are simultaneously being hit. And not hit hugely, but, you know, over time, of course, as it's at 20% in a month is significant. And it's been more of a slow, kind of steadyish sort

of fall. So that's how I view it. I mean, I don't know, you know, summer doldrums or summer doldrums. That's what we're seeing. But the Ethereum news is interesting because effectively every, maybe will this mean we won't hear about Ethereum as money because we now know it's more centralized being supported by Joe Lewis. Yes. And it'll be Ethereum on utility and let it sink or swim based on what its value is. I think even the bankless guys who maybe were the ones who, you know, patented super ultrasound money. Like I think the sold off as Ethan is done.

Cool. Lou, I see a hand. You know, I'm actually a believer that decentralized communities should be desecrised. communities should be decentralized. And so I think that's the plan. And it sounds like other people are stepping up. You know, and it's not just still moving in those guys. You know, the etherealized guys through an awesome copons recently, you know,

they're bringing institutions to Ethereum. So I think there's a lot going on besides the foundation. And in fact, if the foundation is shrinking, it's certainly always the plan. Well, all I'll say is the market. at this point seems to agree because it's not like Ethereum has sold off or rallied out of line with anything else in crypto. I mean, Bitcoin and Ethereum, and I said to all of them, you know, that they're all pretty much correlated during all this news cycle. And so, yeah, I think people tend to tend to look at it that way. I'm curious.

I mean, do you think, Lou, that Ethereum outperforms at getting, you know, clearing this, you know, this stuff when there is finally a change in the cycle? I'm not saying from what level, but when the next bull cycle is, because there will be. I mean, it might be from a lot lower than here, but it might be from here. I don't know. But when there is a bull cycle, do you think Ethereum outperforms because of this? I'm here for community. I think this is all about community. And I think Ethereum, by a wide margin, is the best community in crypto.

And I think that's where value is going to grow. Okay. William, I'm sure you agree with that. Yeah, yeah. I mean, unfortunately, everything is still moving at the same pace. And that's a clear sign that there is no differentiation and that the market is still driven by liquidity and macro factors. The only small exception today or the last day was Ave, because Standard Chartered had a positive report on it, saying it could do a 50X. to 3,500 in 2030.

So you see here and there anecdotal evidence that some tokens will react to positive research. But it's nothing to write home about. It's up by like 3% more than the others. So, and then tomorrow the day after it might equalize and everything will go up and not at the same time. But that's been the most vexing thing. think that I keep seeing day and day out in the crypto space.

I've been in it for from like day one, day zero, whatever. And I never thought that we'd still be at the same place where we are today, where there's no discrimination. There's no, it all goes up and down in the same way. There's no regard to any quality or like that sums it up. they're all moving up and down at the same pace, as if they're all in the same bucket. Yeah, well, that was my point. I'm reporting on it.

To me, that is a bearish factor. Let's be very clear about this, in my opinion, for exactly the reason that you're saying, right? You know, it's when you look at this, I mean, it's funny, though, inside of crypto people still get really upset, you know, when you insult their favorite token, right? you know, it's still funny. They get upset, they don't do anything because they don't have any money anymore, right? That's the Gary Cardone point. You know, it's like it doesn't matter if I upset. I guess I insulted Cardano the other day and they had a new update, which people are all

excited about in the Cardano community, but the coin isn't doing anything. It's not doing anything bad. It's just not doing anything good. We have FAMI here from midnight. I'm sure you can speak to that. Awesome. So that'd be great because it looks really interesting. But the tokens are all trading as a group.

So Fama, you want to talk good. I, you know, part of the goal of being a moderator is you want to see people raise their hands. Yes, go ahead. There you go. Well, first of all, thank you for having me here. So, look, look, I agree with many of the sentiments here. Ultimately, macro trumps the fundamentals of crypto, but it's sort of macro trumps, I come from an equity hedge fund background. macro when it plays its hand

often will trump everything else that's going on to your point around different ecosystems crypto is very tribalist and what we're seeing is liquidity being drained by the next best available sort of investment opportunity

like I was talking to somebody earlier today saying it's like when you go to a restaurant and you order your food and then you get food envy because somebody orders a better steak or the lamb chops or whatever, that's what's happening in the liquidity environment right now. AI is the new hot story. It's the new hit on the block. And liquidity where people haven't necessarily made money in the crypto space for a while

and they've seen the macro environment since October being very negative, money's going towards AI. It's where the projects are. You see the SpaceX story is an AI-driven story, as it is, and a data-driven story as much as it's about traveling to Mars. Across crypto, there are good technologies out there. I'm not tribalist. I see value in different chains. But when people release good tech, you don't see that shared in the crypto price.

You don't see that in the token price. So for now, crypto is stuck in sort of that basket. And what we'll see is as the institutions come into this space, the projects who align well with those institutions and get adoption and see flow or become anchored as part of the new sort of blockchain infrastructure will do well. And to an earlier point you mentioned, and foundations consolidating, shrinking, decentralising,

and trying to move away from their core central tenants in terms of being the core unit within that ecosystem. Many of these crypto foundations, not only is their token price down 90% from all-time highs, these all-coins, but also they spent most of the balance sheet. They've not invested their balance sheet in terms of projects, but paid away their balance sheet in terms of grants. So they're seeing very little returns back on those,

and therefore I think you'll see some of them disappoints, I think you'll see some of them shrink to places where they play a very small, much smaller role in the ecosystem. Yeah, I mean, look. I think Eos is going to be around for a while. Yeah, a lot of Bitcoin. Yeah, well, oh, you're talking about the foundation? He said Eos. I think it was a block.

Yeah, no, the foundation. Yeah, I mean, I'm laughing because, but one of the things that is interesting, it does bring up a point which matters. You know, considering so many people trade tokens like they trade baseball cards or Pokemon cards or lottery tickets, the difference between the stock is a company when it starts to lose money, goes towards bankruptcy, et cetera, you know, they fail. They literally get delisted and they go away. In crypto, a crypto token never has to die. You know, it has a circulating supply.

People own it. They either sell it or they don't. But there's no cost. It's still, you know, you don't not, there's no one paying the exchange. changes to keep listing it or defy to allow it to be swapped. So it just kind of fades. But that's why there's a lot of junk in the market because there's no natural penalty for any of these assets.

And my favorite poster shop for this is FTT, but there's obviously others. And it does change that. And so, you know, that discipline is lacking. The other thing that I'm curious, you know, about is it's the token economics. And what, what are the real, you know, Fami, what are the real, driving factors. When you talk about tribalism, there are so there are people who are convinced, I mean, literally convinced that if their token gets the TVL or the approaches, the use in transactions that they've been told it will, that their total will go up by a factor of 10,000 or

more when simple math tells you that it's not possible. Yet there are tens of thousands of adherence of in various tokens without naming them. don't have to where people are just completely unrealistic about what a utility token could mean. Now, utility tokens can have value. Don't get me wrong. They absolutely can have value and they can even have billions in value. But trillions in value at these, at today's dollar rates. Obviously, we're not talking about wheelbarrow full of cash, you know, kind of inflation. It's just unreasonable for something that is replaceable, right? Because every level layer one could be replaced by another layer one if it gets too expensive to use.

So, you know, I'm curious what you think about that because you come from that world. So, look, I think the stock market, the way it's behaved since for the last, I guess, 10 years or so, I think you've seen the advent of passive ETFs. And so Alpha is harder to capture. And you get these, you're going to see with SpaceX and Open AI and Anthropic. They've got this agreement now that they will get fast-tracked into the, into the indices, which forces pension funds, passive funds, to go and buy them. Even if the fundamentals behind the stories of those companies may not justify those

valuations or the inclusion in the index. Coming back to in the crypto space, again, what you've seen is just because you've got large TVL doesn't reflect that in the fundamentals of your tokenomics or your token price. what we will see more and more of is chains trying to align to this new to become part of the institutional rails you know banks are building their block chains financial institutions building the blockchains but how do they speak to each other so interoperability connecting them playing a service level will make some of these or the utility of some of these blockchains stand out from my perspective in the way I think about.

But so how do you embrace that, but still be true to your cause of decentralization of opening up finance and access to the disenfranchised and people like that? So there's a balancing act between, for foundations, for networks, to figure out how they embrace this institutional adoption, but remain true to their core.

But the tokenomics often don't work. You know, as a CFO in a form of life, what you want is certainty. You want certainty by the cost of transacting, the cost of investing in a technology. And when you have a volatile asset, you can't predict what the cost of your transactions will be. What is the capacity that you can commit or agree to within a network?

So these are some of the challenges, I think the sort of utility and use cases within crypto need to work and solve for. At midnight, we have, a two token approach. We have volatile crypto asset which is unshielded. It is listed across many exchanges, supported by many custodians, but that gives you free emission of gas fees. And the working assumption there for us is that by having that you can either decide to commit to fixed infrastructure costs by buying the token and guarantee capacity eventually, or you try and lease that

from large holders, large custodians. But yeah, utility and the token price often aren't matched in what we see in the markets. Yeah, no, that's a good point. I mean, look, it's like every market that has variable costs creates interesting issues. And every variable cost market that I know of with certainty now, because of the introduction of compute futures, end up with futures market. for people to hedge. And it's fascinating because if you think about it,

crypto in a sense has been ahead of that, meaning that markets have existed. Now, of course, the most of the crypto markets that for, quote, hedging are real speculative markets anyway. But the fact is the infrastructure exists for it. The one thing that I've always hated in the crypto market is that I have a very bifurcated view of defy. And I'm curious what you think about this. I think that Defi in the sense for what AVE did in terms of scanning for yield and being able to effectively increase competition by making it lowering the cost of price seeking is a very good thing.

And so for financing activities, I think defy, like, you know, stock loan is a clear one that will get that will be disintermediated at some point. And there are lots of others. And these are big, big markets. But at the same time, I think that the initial wave of defy trading using the liquidity pools is absolutely garbage. The notion that you can have gas fee arbitrage and insiders can take advantage of outsiders that requires all that expertise and cost for understanding where the price is. And you don't know the price of an order. You have no price certainty when you're trading.

it really, really hard to arbitrage. And there have been a lot of academic research on this topic, you know, in terms of order books and certainty. And effectively, you know, the current process within a lot of defy is to use where to use the British word is shite. I mean, it's complete garbage. And it can't survive in a world where certainty is needed. You know, that said, you know, Hyperliquid is probably the most successful defy platform. And it uses an order book. So obviously, the market is speaking here, but there are a lot of people don't understand this. And so it depends on the design. The certainty of price formation matters. I mean, it's true whether you're talking about how futures expire or what the mechanism of price is to link spot to underlying

perpetuals. We saw it on 1010. That mechanism broke. When that mechanism broke, all hell broke loose, right? And it broke because finances, you know, had technical issues. So, you know, it's kind of an interesting topic, but, you know, the overall technology has enormous promise. You talk about democratization, you know, that's the sort of thing that I'm talking about, right? You know, the ability for anybody to trade is a really good thing, whereas right now it's limited, but, you know, you have to deliver on it, too. Yeah, completely agree. Look, ultimately from coming from a finance background, finance is finance, when you're trading equity fixed income, you're trading crypto rails. What, in the world? What, investors look for whether they're doing it from home, whether they're doing it professionally,

they look for volatility. Volatility is good. What isn't good is uncertainty. We've seen that. Look at the economy today. You look at the impact of the war and the uncertainty. This space was downloaded via spaces down.com. Visit to download your spaces today. It creates around oil prices and the cost of living and your food prices and things like that. I know the US is slightly insulated relative to the rest of the world. obviously you have your own natural resources, but the impact then extends into the second order in terms of cash price sales are going down

and people aren't committing to buying a new car or investing in the next big project. So uncertainty around pricing, like we see in the macro world, has an impact. So take that into crypto where you have immense uncertainty about the price of access, the price of... So I'm all for democratization giving access. But at the same time, just because you can doesn't mean you should. What I see your biggest risk in, and we see this in the price for action of crypto, is leverage.

Leverage is if handled and used properly is a very effective tool. When you don't know how to use leverage and you don't know how to protect downside risk by having stopped losses and things like that, that's where you get those big blowouts in crypto, where you see huge volumes going through, people getting stopped out of different trades. So there's a whole jumble of things that I've mentioned there. But ultimately, demarcetizing access, giving people better price predictability, both in terms of access the network, utilizing network, but different sources of leverage, financing, all those things,

and being able to screen those will give people access. Fractionalizing, tokenization is a big trend. Fractionizing access to hedge funds, private equity, private credit, it is a good thing, but just because you can access it, does it mean you should go and own that? Because it might not be the right investment for you. So there's a whole jumble of things when you start opening up and democratizing access, you then get the people who know what they're doing will do well. The people who've come in new and honors educated are the ones who will actually provide the exit liquidity for the people who have done well.

Yeah, I mean, it brings up an interesting point because there's this lawsuit going on, the CME suing the CFTC for allowing perpetual swaps. And I mean, the core of their argument, I mean, forget the legal argument, the core of their argument in the back halls, not the ones that will actually go for a judge, is that, well, you know, perpetual swaps have our 24-7 liquidation. And there are a lot of clients who don't want to be wiped out. They want, you know, they like the current method where they can get credit, et cetera. and I've actually heard that argument, you know, from the CME folks.

Oh, well, the farmers, the this, that. It is literally the dumbest effing argument that has ever been made. Why? Because you can use perpetual swaps and limit your loss intentionally. And if you choose to, you can pay a broker to extend you credit to match and make sure you don't get liquidated and have the unlimited loss that you do in the futures market. The fact that they're so disingenuous that they think that the central counterparty is the only one who can provide it. And oh, by the way, when you use a central counterparty, you, of course, socialized losses, meaning you now have to have a socialization loss fund that everybody pays into, which is one of the reasons futures contracts are so bleeping expensive because they are way more expensive.

A futures contract that doesn't trade a certain amount of volume will always die because they have to because it costs of money to maintain it. or it's a perpetual swaps project that, you know, a future or contract doesn't have to die because it doesn't cost anything because there's no socialized losses. It's very disingenuous, but so many people, certainly the politicians don't understand this. To put this in perspective and what made me think about when you were talking is that, yes, stop losses are important, et cetera, but there are a lot of people out there who use perpetuals in a very simple way. They set up a perpetual swap with a lot of leverage for a tiny fraction of their portfolio and put it in a separate account. And if it gets wiped out, it gets wiped out, it's limited loss. Whereas in futures, you can't do that.

So what do I mean? Just so people, the audience understands. If you put in $50,000 worth of margin in a futures account and you end up, you know, let's say it's 20x, whatever, you know, which is fairly typical leverage. and it drops 50%. Well, guess what? You're wiped out. You think, well, no, it's not you're wiped out. You didn't lose 50,000.

You could lose 500,000. You know, they knock on your door in the middle of the night, and they say, or they call you, they say, hey, you owe us this margin. If you don't pay, you're going to pay. There is no limited loss with the futures market. It is the full size of your position. With perpetual swap markets, you just lose that account and you lose that account and you're done and you move on with life.

That is a very big difference. And I don't think that people in crypto, or I think a lot of people in these markets don't really understand that that difference matters. And by the way, I'm not saying one is better than the other. I'm saying that having the ability to choose which you want is better. And that's where, and a lot of crypto involves choice. So I don't know. You obviously understand that.

I mean, I don't know if anyone else cares on this topic. But I think that, you know, these sorts of stories where you have the legacy financial companies suing, using the courts, yelling, trying to go through Congress to block, you know, blocking the Clarity Act, because better to be dereg—better to have no regulation than to have good regulation doesn't play well, right? So they can't say it that way. So they always talk about their pet project. Yeah, Dave. Yep.

There's an interesting thread there as well. I don't know if you saw today. on one side meta announced prediction markets who cares but uh CBOE announced prediction markets today CBOE predict so just sort of this convergence of everybody doing everything guaranteed is uh yeah I mean it means so not you know you have obviously you have not like the tal cheese and such doing perpetual swaps those will also come to CBO and CME but now you have prediction markets coming to CBO where you'll be able to bet S&P above or below this number tomorrow Yeah. And of course, you know, who drafts who or in, you know, the whole notion of sports betting.

Oh, that's the other lawsuit. That's funny. And it doesn't apply here. But it's funny how the gaming companies, Caesar's Entertainment, I'm sitting in a Caesar's Hotel right now. Seasons Entertainment is suing to say, no, no, no, these financial markets can't trade sports books because that's sports gambling. And the state should be able to regulate that because they figured I had to navigate it. It really, I mean, it's really pretty funny. you think. Yeah, I do. I don't know if my mic got disconnected. I keep getting a connection, reconnecting. Can you hear me? Yeah, we hear you. Okay, good. Yeah, I agree. Listen, everybody's just, I think that we have this rare moment where literally every industry, Wall Street institutions, crypto, and then, of course, anyone who has a gambling platform prediction market, they're all just

stepping on each other's turf. Yep, that's true. Everybody is crossing over to do everything that everybody does, and it's going to be very interesting. Well, I mean, I want to, Jamie, I see your hand. I want to get to you, but I want to leverage on that. Matt Case sent a tweet at me before, and it actually directly applies to this. I think what we're seeing is late stage cronyism, and it is very important. Matt actually asked me to do a lot of writing, and it's a good homework assignment that maybe at some point, you know, in the next few weeks I'll address.

But the question was about incentives. We all know that socialism will fail every single time because it ignores human incentives. But that doesn't mean that what we currently have, the bastardization of capitalism that we have that I call cronyism isn't failing under its own weight. And the classic example of this is when companies are willing to spend more money on influencing the government and hiring lawyers than they will on making better products or making better services. And that is the ultimate perversion of incentives. And that is clearly what we are seeing. So I want to be really clear. I mean, people will say, oh, you're a shill for capitalism.

No, I believe in free markets. I believe in sound money. I believe in governments existing to protect property rights so that the strong can't take from the poor, you know, think from the weak, et cetera. And Matt, it's a really cool conversation. Maybe you and I could do a separate podcast on it. But this is this topic is exactly this,

is you have all these companies suing and using and or working with their pet congresspeople that they paid off or more likely through their NGOs that they donate to either the campaign ones, the issue ones, to influence policy. And that's where all this shit's going. Now, crypto played that game in the last election, too. It's sad, but it really is, it really is what's going on. Anyway, I'm sorry, it was just a perfect rant time, Jamie, but you had your hand up first. It's all good.

I just was jumping out. I saw the Scott's post on that, about prediction markets. are making sports fun again, you know, and just like in some of these spaces and there's a lot going on, but there's, you know, obviously the majority of things are dominated talking about sale and strategy, but maybe we need to have prediction markets on our own investments, and then we can make that fun again and we can make money while we're watching if we're gaining or losing value in our investments, and maybe that's something, I don't know. You have no idea. I'm sitting in this massive ballroom playing in this poker tournament yesterday.

And I don't want to, whatever. And one of the guys who's actually was doing really well at the table, and he's a good player. You know, he and his friends were talking as this World Cup match was going on. And they were talking about how he had X amount of money on the over on number of goals after the first, you know, which you put in, you know, 15 minutes into the match on some sports prediction market. I mean, it's like, it used to be, you know, people say, oh, who do you have in the game? Now it's like, it's esoterica. You know, another table, you know, people are talking about, oh, yeah, I bet on this guy scoring the first goal. And, you know, it's just great the amount of prop bets.

Of course. It's just, it's just beginning. I'm excited about, I'm opening up a prediction market for marriages. Okay, that's pretty cynical, Lou. I mean, speaking as a guy who's been married 37 years, I find that very funny. But anyway, Jamie, is your hand still up? I'm sorry. No, it's okay. No, it wasn't, but I actually do have a question. I had someone that came on a space, and, you know, because obviously we get focused on over here in the U.S., but

over there in Europe, they were talking to me about the Binance issue with the microregulations and, you know, they're concerned about getting their funds off of there, like, I guess by July 1st. You know, and I was just just thinking kind of like a little bit more broader and wondering, I mean, Binance dominates as far as activity on a daily basis. I mean, it dwarfs coin bases, what they do. And I was just curious, like when we look at different narratives come up, is this one that could have a larger impact if BNB price goes down, finance, into these, this bottom stage of the range that we're at?

And I'm just curious what you guys thought about that or if it's been discussed. Yeah, I don't know a lot. You know, I'm curious what people think too. I mean, Europe is effectively, the Binance thing has to do with, there's the tether side to it, there's the finance side to it, there's the trying to regulate away perpetual swaps, you know, where the money is moving, how many people in Europe, you know, either use VPNs and or move outside their country to trade. I mean, it's the same thing, you know, like whenever the regulators get involved,

there creates distortions. How much of a distortion, I guess we'll see, won't we? I mean, it could be a big deal. Frankly, you know, we'll see how the enforcement works. I mean, I just don't know. I mean, I'm curious. Are there any Europeans here who have knowledge? I mean, I just did a little dive, just trying to kind of just unpack a little bit of it.

I mean, it's like 18 months of working with compliance teams. And they're just, they're not meeting what the EU wants as far as their level of, you know, compliance. Specifically more to... That's the story that I saw. Yeah. The story that I saw was they had worked with, we were working with Greece and I guess Malta. And Christine Lagarde got in personally and said,

we don't want them here, which is the ultimate in cronyism, you know. But it's the same thing. Look, it's not just in the United States by any stretch of the imagination. This was a top down, not a compliance team. You can't get it to work. I mean, they had it all done and dust it. But, you know,

There's an old argument that good regulators say, if you ever listen to Hester Perth or Paul Atkins or a bunch of others who actually really want to do the right thing, they say that good regulation doesn't pick winners and losers. It just calls falls and strikes, right? It just, you know, whatever. But it's very, very clear that regulators in a lot of countries and a lot of different regulators, I mean, Genslow was certainly picking winners and losers. I mean, Christine Lagarde is certainly picking winners and losers. And that's bad for everything in many respects. How the markets will play out, though, it's a really interesting story. You're right.

Don't know. But, you know, anyway, so here we are. Markets are doing what they're doing. Honestly, I don't really see a whole lot to talk about. And, you know, unless people have a lot to say, I think we can call it early today. I mean, I keep wanting to wake up and say, oh, okay, we see big stories in the market. Are there any other stories that anybody else here think is worth discussing right now? I don't want to start calling on people, but, you know.

Same old stuff, Dave. Just, like I said, I'm sure Doomers will take these. I could have mentioned, I could mention micro strategy dropping below 100. Yeah, that's what I was going to say. Sailor strategy, you know, stretch. That's everything that's all over my feed. I'm sure space is going to run with that today. under 100, what happens?

You know, it's going to, you know, it morph into something bigger. Well, the sentiment for it to go lower, Dave, is just higher than ever I've seen. It's crazy. Right, which is why I keep saying the same thing. I mean, I sound like a broken record,

which is if you're buying stretch, it's high yield, fixed income product based upon your belief in Bitcoin's asset price to hang in here and or go higher over time. That is what it is. is no different than buying the difference in high-yield debt. I mean, if you want to understand the difference in buying stretch and buying Bitcoin, for example,

what's the difference in buying the equity of a growth company that is financing at 12 or 13 percent? And, you know, that's where their high-yield debt trades or you buy their high-yield debt. You know, if the company is successful, like you'll get your yield paid and that's cool. If the company is successful, your stock could triple. On the other hand, if the company is not successful, then you might lose all of your principle. The equity could go to zero. And at the same time, your fixed income probably doesn't go to zero because you're senior in the capital stack. And so you get at least recover something.

And so there's a different risk reward. If you could explain to me how Stretch versus MSTR or Stretch versus Bitcoin is any different than that, then I'll shut up. But most of people talking about it have these tribalistic, oh, this is going to fail, binary kind of approaches that's complete and total unadulterated horse shit. And frankly, there are a lot of people out there who, if I were cleaning up my ex-feet, I would unfollow just because they're proving to be ignorant. So, you know, I mean, Matt, you know, you were asking you about incentives and stuff. I mean, I'm sorry.

At some point, I wonder, you know, how do I get a bigger following, you know, saying the truth as opposed to hyperbolic nonsense? But most of this shit boils down the hyperbolic nonsense. Yeah, I would agree. Hyperbolic nonsense. I think that's the term of the day. I get so much out of coming to the spaces, and I just love to listen and learn and take copious notes.

And a lot of the stuff that folks in here share and submit actually sparks me on ideas and different rabbit holes that I want to go down in research. So I just got to give just the whole team. You guys don't get enough flowers. You don't get enough love. So kudos for the entire team. And the folks that show up regularly, day and day out, to take of their time, their talents and treasures to share to help inform and educate.

y'all do a great job you make me better so i'm just glad to be here and listen and take notes man yeah i mean i'm curious because you speak to a lot of people you know it like last night now this is not a crypto thing but since we have a few minutes i'm just curious how much do people make of the fact that not only does new york have a socialist mayor who embraces the quote and i and i quote him warmth of collectivism but we now have two new york effectively has two new congresspeople who also are very socialist in their approach. And this is the home of capitalism. Now, is there even a slight chance that boat blue no matter who ends in New York?

I doubt it. So at what point does this collapse upon itself? Or is it just the new trend or we just doomed to go down through a doom loop of collectivism, destroying innovation, et cetera, et cetera? Well, I can speak to that because here on the West Coast, I live in a city that has a socialist mayor as well. And we're seeing a lot of those same policies enacted. And I think to your point, Dave, I think it's going to continue in this doom loop until the pendulum, until society, until people have had enough and go, okay, wait a second.

Because I think that's really the way things happen in life. We've seen that whether it's in economics or politics or anything, that pendulum will go so far to one extreme, people will get so upset, it'll swing back. So I think maybe we have a little more pain to go. But I think to your point, I don't think it's over yet, Dave. Oh, no, clearly doesn't seem to be. I mean, the fact that we can't even get voter ID passed nationally and the fact that we can't, you know, stop ballot harvesting, you know, is just, to me, it's mystifying. Well, I think I think voter ID could actually be tied into what I've heard a bunch of other people on space is talking about is this tokenized digital identity, whether we're talking about children under age, trying to get on social media. I think that as we move into this digital dystopian world that they want to put us in with CBDCs and stable coins. And I know I say, down a little dumerous here, but I think that the tokenized digital ID is another piece of that, and that's going to come with voter ID, and that's going to come with your access to the internet

to verify that you are of age to get on some social media platforms. I mean, it is fascinating in a way. I mean, I always make the argument that people prioritize safety far more than freedom, and I personally think that there's a lot of truth to that, and there are a lot of people who love being in locations where they know they're being videotaped and they know that they have no absolute freedom to do anything. But they also know if they leave their wallet or credit card on the counter at a coffee shop, they could come back three hours later and find it again, right? You know, I'm talking about like Dubai and places like that.

You know, I wonder, you know, at what point does the need to make sure that elections are actually real as opposed to being manipulated? At what point does that get even the most diehard libertarian conservatives to say enough is enough? we need digital ID so that way we know that the only people who can vote are people who are actually eligible to vote, right? I mean, that may be the issue. And honestly, as a cynic, knowing that is that the plan all along to increase government power so they can enslave us all? I mean, I don't know. I mean, it sounds to me like that's what you're saying, and maybe you're right. You very well could be. It is, it is pretty, pretty sad to think about it because here we are

in a crypto town hall where the crypto technology cuts two ways. So on the one hand, DFI allows for peer-to-peer interaction and personal freedom. On the other hand, digitizing everything, whether or not you put your retina on Sam Altman's, you know, orb, you know, is literally probably the strongest single tool of potential government control that's ever been created.

Yeah, it's interesting what you say about DFI there. So one of the, so Midnight obviously is very privacy focused. It's about giving people choice about what they share what they don't share. Defy is a great tool about democratization. But what we have to be careful about, it is a surveillance tool. We talk about freedoms and the defy gives us freedoms, but it's a surveillance tool because anonymity does not give you protection and privacy.

So in next few years, AI bots will figure out who is behind those anonymized wallets. Everything you do, everything you say, even the ability to go and buy a gift for your wife. So it's great to hear. Congratulations to being married to 30. seven years. I'm a little bit behind you. I'm 16 years, but I hope to get to where you're at. Imagine buying a gift for your wife on a crypto chain, and she knows your wallets. You can't keep a secret anymore. You can't buy her something. You can't do something. Yeah, that much is overrated. I mean, it's very hard to have secrets and stay married that long.

Yeah, no, true, for sure, for sure. Yeah, I'm with you there. But the concept that, blockchains have to be fully public and that transparency is truth, I think we have to break that down. So for the libertarians out there, and I work with a very strong libertarian in Charles Hoskinson, who's, you know, the visionary behind me, and we're taking that vision forward, is how do you enable people to do this, make the choice they want to date, make the freedoms they want to make? Safety is part of that, you know. I have young children, so I want to make sure when they're on roadblocks that they are speaking to a 12-year-old and not some grown adult trying to pretend to be a 12-year-old. So how do you give people the right to have their identity locally stored owned by them

and for them to prove that they are the right person? So they're not tracked, but they do give you the comfort level. Your phone, everybody has a phone, your phone has a trusted execution environment that contains your biometric data, your credit card data. It can't be hacked in the way that the rest of your... phone can be. So again, we think about at midnight how we bring those kind of concepts into blockchain. So not everything has to be public. So if you do want to go down the voter registration, you can vote for whoever you want to vote for and you have the right to do so, but nobody has

to know that it was you who voted for the blues or the reds. Well, the thing is interesting there. I mean, look, everything you said makes enormous sense to me. And I think that that is a lot of what needs to happen. But right now, I mean, There are people, you don't know if your votes even being counted, right? So one of the thing about blockchain is, is at a bare minimum, even if people can't know that it's you, you should be able to know that it's you, right? And in fact, public-private key, you know, that's doable with blockchain technology. So it is interesting.

Anyway, I saw Jamie and then Matt. Yeah, no, it was just kind of piggybacking off of that and kind of into what you said too, Dave. Like I was talking with Charles, one of the spaces like a couple weeks ago before he took his leave. And he was explaining and kind of talking about the Midnight Project. And one of the things that I took from it that, you know, I found interesting and kind of relates to this topic is the idea in, like, in midnight, whereas you can kind of, you know, create these scenarios where, like, you know, what would happen with these voter regulations if you could or could not. And then it can also provide, like, a simulation in there. And then you can kind of like see what the outcome might be. And then you use that for your governance for states, countries and sovereigns like that.

Is that, am I explaining right? What Charles kind of was high level kind of talking about the opportunity within midnight? Yeah. Look, I think what we want to achieve in midnight is to give back the people that's freedom that, you know, Bitcoin originally promised is to be able to. the concept of smart contracts, LLMs, I know they seem to be new concerts. I was very fortunate. I worked for a hedge fund that was using this sort of behavioral technology

back in 2006 and building out on it. What we can get to is the place where the ability to shield your actions, your decisions, and the ability to then enable smart contracts, you can almost eliminate some of the frictional points that happens between cross-border, I don't know, cross-governmental sort of engagements, you can create a rule of law within that

that protects your freedoms, it protects your privacy, but ensures that people behave in a way that is consistent with that state, that country's sort of requirement. So we have the ability, again, in midnight, without making this an entire pitch for this community. Look, the ability to fully protect your data and your metadata, who you are, what you are, where you are, but then select a disclose. So you could issue a private

stable coin, but make the issuance public so people know exactly what stable coin it is, but the way you hold it and the way you use it can be fully private. Now, if you need to do something that requires compliant activity, you can make a disclosure to your accountant, to your custodian so that enables you to get into different gateways. Privacy is about freedom and choice. It's not about hiding. It's about protecting your human rights, your digital rights. And what Charles is trying to do, I think, with the Midnight City, particularly sort of environment,

is prove that pounds, communities, states can operate within this sort of space in a way that your, as I say, your freedoms are protected. And that, for us, is a very important compass that we kind of use to navigate how we engage with the community, but also with partners. Matt. Yeah, I just had a quick question for you, Fami. I noticed today already, it looked like yesterday, the Cardano ecosystem, that wallet second five had like, what was it, like almost 16 million in ADA, about 178 user wallets.

It looks like ADA down about 4%. Give me your thoughts on that. How serious of an issue is this? Is it fact? Is it FUD? Do we need to be concerned for folks in the ecosystem? Yeah, so that was a fishing attack, a sophisticated fishing attack. Again, I'm not directly involved in those, but I'm aware that that was a.

sophisticated fishing attack, potentially also involving a former disgruntled employee on that wallet. It was a wallet-level hack as opposed to a network. That's scary kind of. Yeah, but with all of these things, and we've seen this within the crypto space and with the advent of AI, it makes it even more prevalent, is that everything is public. Your smart contracts, how you deploy the code, how you use the code, is public. So again, within midnight, the way we have designed that tech is that the data never comes and change. Even the way you deploy the smart contract can be behind your firewall. So you get a

little additional element of security and protection because of that. Again, goes back to open source technologies tend to win, and they do very well. But the way you execute that open source technology in many cases today makes you vulnerable, makes that code exposed, makes the execution of that code through smart contract space. So again, at midnight, separately for the network, for our applications, for how we think about future sort of wallets, and we think about execution behind sort of in your trusted execution environment and then presenting that, you know, it's the old adage.

You know, you should be able to go to a bar or to a poker table, whether it's physical or digital. And without having to give away your driving license, details of your home address and your exact age, to prove that you are old enough to participate, that prove that you have the credits and the funds available to participate. And that's all that is required. So think of us as people tell the story of Zcash,

and Zcash are a wonderful story in this space. We're Zcash with smart contracts, with composed of smart contracts. That really, I think, is where the evolution of dot-chain goes, and we're happy to work with other networks and extend that privacy into that space. So, but yeah, look, it's a, it's that event in SACNFI is obviously just worrying, disturbing, concerning, as with any hacks in this sort of crypto space. But my understanding is that the issue behind that has will be solved.

I think in most cases, most people receive their assets back. Great, man. Thank you for the insight. Appreciate it. Thanks, Dave. Okay. Well, we're going to call it here because I need to get, get my day start. it. But hey, Matt, you know, if you do want to reach out and have a long-form conversation on that topic,

I'm happy to do so like the end of the next week or after that. So let me know. Otherwise, someone did a post talking about European regulation. I invite if we have an expert on that to come up on Friday, that would be good because I do think it's an important topic. I just don't know about it. So I don't want to spread foot one way or the other. So thank you all. And we'll see you again on Friday morning.