The Wolf Of All Streets - From Pro Poker Player To Crypto Guru | Success Story Of Haseeb Qureshi, DragonFly Capital

Episode Date: December 2, 2021

Haseeb Qureshi isn’t like most people. At just 19 years old, Haseeb established himself as one of the greatest self-taught professional poker players in the world - his future was set. Unsatisfied with his accomplishments, Haseeb reinvented himself and gave away nearly everything he won. From pursuing an earn-to-give lifestyle to finding his way into cyber security and crypto, this episode unpacks one of the most interesting success stories we have ever shared. To top it off, sprinkled throughout the episode are some incredible analogies built around Haseeb’s current investment ideas. -- Arculus: Arculus is the new crypto cold storage wallet that combines the world’s strongest security protocols with an easy-to-manage app. Store, swap, and send your crypto all with a simple tap of your Arculus Key™ card.                                     Order the safer, simpler, smarter crypto cold storage solution today at: https://thewolfofallstreets.link/arculus  -- Kava: Kava connects the world's largest cryptocurrencies, ecosystems and financial applications on DeFi’s most trusted, scalable and secure earning platform. Kava lets you mint stablecoins, lend, borrow, earn and swap safely and efficiently across the world’s biggest crypto assets.   To learn more visit https://thewolfofallstreets.link/kava   --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by Blockworks. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworks.co ーーー Join the Wolf Den newsletter: ►►https://www.getrevue.co/profile/TheWolfDen/members

This podcast is sponsored by Kava and Arculus. Stay tuned for more information about both of them later in this episode. What's up, everybody? I'm Scott Melker, and this is the Wolf of All Streets podcast, where two times every week, we talk to your favorite personalities from the worlds of Bitcoin, finance, music, art, sports,

politics, basically anyone with a good story to tell. I think it's fair to say that maybe today's guest has the best story to tell of anyone that I've ever interviewed on this show. He started playing poker professionally as a teenager, decided that all that money didn't make him happy, then retired from poker, never played another hand at 21, became a coder, writer. The list goes on and on. I don't even want to give you his background. I'll just let him do it because it's incredibly interesting. And now he is just a self-proclaimed annoying blockchain guy, just like the rest of us. So we're happy to have him in the community.

Hasib Qureshi, man, it's a pleasure to have you on today. Thanks for having me, Scott. Thanks for having me. So talk a little bit about your background. I went through your sort of resume, but you know, most people's resumes are all their jobs. Yours are just sort of like achievements and things that you tried and things that you quit and things that you hated and things that you love. So talk to me a bit about how you got to where you are now. Sure. Yeah. I mean, I think when people end up hearing versions of your story, it tends to sound super linear. Like, oh, I did this in order to achieve this in order to achieve this. And you know, there's like two versions of your story. There's the version of your story when you're trying to impress people, in which case you like make it seem really linear. And

then the version of your story when you're just like telling the truth. And in reality, like it was very, it was very random. And most of the things that I've ended up doing were a result of just me being in the right place and jumping on an opportunity that was in front of me. So as you mentioned, before I ever got into tech or crypto, I used to be a professional poker player. And I played poker professionally from when I was 16 years old till I was 21. When I was 19, I was ranked one of the top 10 online no limit holding players in the world. Made a lot of money at a young age, traveled around. I was sponsored by Full Tilt Poker, which is now part of PokerStars, if anyone in your audience is familiar with that world.

I used to play on both. Oh, did you? Okay. Yeah. Perfect. And so eventually I quit poker. I gave away most of the money that I made as a poker player. I went back to school. I studied, I didn't study anything technical. So I studied English and philosophy in school, the University of Texas at Austin. And then I wrote a book about poker

called The Philosophy of Poker. And eventually decided that I wanted to get into the tech industry because I ended up becoming fascinated with this movement called effective altruism and the notion of earning to give, which is this idea of going and earning a high income career in order to donate a bunch of money to high impact charities. And I knew from my time as a poker player that I wasn't somebody who was intrinsically motivated

by money, which sounds very ironic that somebody who's like a professional poker player and then eventually becomes an investor, like doesn't care that much about money. But I'm just not somebody who, you know, I remember having this feeling when I was like 18 years old that I made a bunch of money, like more money than anybody I was going to college with and um you know it's like you buy you buy a big tv and then you buy a car and then you just like at certain as everybody just like run out of things to get satisfaction out of and you're like okay what what well the things that i care about as as especially as like an 18 year old like i mostly can't buy them you know it's it's like i want to be cool. I want to have the

right friends. I want to like get in good shape. I want to like, you know, I want to meet girls. And money doesn't really solve almost any of those problems. And you also see it when you look around and see people who make a lot of money really young, you notice how many of them are unhappy. And it's a really obvious thing that you see again in an industry like in crypto, where like a lot of young people make a lot of money really fast. And you see very clearly how many of them are very deeply unhappy. Almost like it seems like a result of making a lot of money at a young age. And so I saw that and realized like, no, you know, money isn't really what I want out of life. And it's precisely why I quit poker was that I, although I could still make a lot of money as a poker player

when I quit, it just wasn't what, it clearly wasn't what I wanted to do with my life. So when I found this notion of effective altruism, I thought, okay, well, one thing I think I can do is I think I'm good at earning money. You know, I don't know exactly what cocktail of skills it is that makes one good at earning money, but I think I probably have it more than anything is I think I'm good at earning money. I don't know exactly what cocktail of skills it is that makes one good at earning money, but I think I probably have it more than anything else I think I can do to be helpful to other people in the world. So I decided to go down this path. I'm like, okay, I'm going to earn money. How do I do that? And the most obvious path was like, okay, go to Silicon Valley, go get into the tech industry and go make something. And so I came out to Silicon Valley. I learned how to code. I went to a coding bootcamp called App Academy at San Francisco.

At the time I had no skills. I had this liberal arts degree. I had a background as a professional poker player, but I ended up doing really well in the coding bootcamp. They ended up hiring me as a instructor. And then I became director of product at the school. And then I decided I want to get a job in the industry. Applied to a bunch of companies, ended up getting a job at Airbnb as a software engineer. And I worked there for a little bit over a year until I caught the crypto bug. So this was early 2017 is when I first started really getting into crypto. This was before, like, you know, 2016 was when the market was starting to build up.

And then 2017, obviously, it went into kind of full flush. And I ended up leaving Airbnb, working on some crypto cybersecurity research. So me and a buddy of mine developed a front-running vulnerability against Bancor. Then I went to 21, which got acquired by Coinbase, became earn.com, got acquired by Coinbase. Then I worked on my own startup. And then I joined the first crypto investment firm, which is called Meta Stable Capital, which was founded by Naval, the founder of AngelList. And then I ended up coming on board to Dragonfly, where I am today. So Dragonfly, just very, very briefly, we're a global crypto fund. We manage, at this point, a couple billion in crypto assets.

And we invest into early stage projects. Whether it be equity or tokens, we kind of, we do everything mostly in the early stages. I love what you said about the circuitous path, because we all, as I said, sort of have this resume and my history is very similar. It's like I left out probably 19 epic train wreck failures when I tell people about what I did and all the things that I've sort of fell down, but forward, you know, on my way there. So it resonates quite a bit. You talked about obviously, you know, earning money to give it away to charity. Sam Bankman Freed, I think in this industry is sort of the biggest name for

doing that. He said from the very beginning that he just wants to give it all away. And that was his motivation for making billions. You talked about being at a younger age. You literally gave away everything you'd made in poker till you just had $10,000 left, right? That's right, that's right. Was that an experiment? Like, or were you convinced that would bring you happiness? Because that seems the extreme of that, obviously, because there's a balance moving forward.

Yeah, it's an interesting question because at that time, that was before I knew about affectionate altruism. And so I didn't have this concept at the time when I gave away my money when I was a poker player. That came from a very different place. The reason why I gave away my money as a poker player

was that I realized, so I knew a lot of people who tried to walk away from poker. Especially if you're like a very, very high level poker player. It's like, it's like, you know, it's like being a trader or something and having, you know, having just like an amazing track record as a trader and then being like, great, I want to quit trading and like, go get a job as like a, you know, a data scientist or something. Right. And it's just like, okay, well, you're not going to make anywhere near the amount of money

and it's going to be way harder and you're going to suck at it and you're going to be at the bottom of the totem pole. And so most people who try to go through that transition who are very high-level poker players, they end up coming back because it just ends up being too easy. It's such a deep part of your identity to be this really accomplished

person in this community that like really reveres you for what you do. And instead to like, just leave it all behind and to go somewhere else, it's very hard. And so I realized that if I, if I kept the money that I'd made as a poker player, just as like this giant nest egg, then I would, I would just have no pressure to force myself to go become a different kind of person and to like really feel the fire underneath my feet. And I just instinctively knew that about myself is that I needed to feel like it was do or die for me to redefine myself as a person after I quit poker. And so it was almost instinctive that I was like, I can't keep this

money. I have to give away this money and start over in a way that I have to succeed. Like I have no choice, but I have to figure out the new version of a seed. And so that's what I did. And it was 2013, which was, this was two years after i quit poker that i came across effective altruism and um at the time so i actually ended up meeting sam bankman freed in 2014 this is before this is when he was at jane street um i actually it's funny enough you talk about me entering paths that i don't talk about um i actually applied to jane street in 2014 i like i didn't know anything at all about trading but i I knew that I, you know, okay, it's one path to make money. You know, a lot of trading shops, a lot of prop firms like professional poker players because they're kind of smart. And so I applied to Jane Street, did not

get anywhere, no interview. But I met Sam because he was part of the Effective Altruism community. And I ended up meeting him in person, I think in 2016, when he was still at Jane Street before he got into crypto at all. So like the effective altruism community is, there are a number of us who've gotten into poker. And I think probably the third pillar of that is Vitalik. Vitalik is also pretty big into effective altruism. But we've all, the three of us have expressed in our own ways. Obviously, I'm by far the least successful of the big effective altruists. That depends on the metric.

But it's good company to keep, I guess. Yeah. If money is the metric, those two are very hard to compete with. But clearly, money has not been the metric in your life. Do you think that you were so successful and accomplished as a poker player because you had that sort of general indifference about the money? In my experience as a trader and a poker player, the hardest part is the emotions of taking a loss, right? It's accepting a loss and moving on, taking the small loss, throwing in your cards when instead of committing more.

So, you know, that's an ego thing. It's not really about the money, but perhaps not caring about the money as much or being so attached to it could have led to that success. Yeah, I tend to agree with that. I think that a lot of what poker trains you to do is to become detached from the outcome. Like if you're a poker player and you feel these huge emotional swings every time you win or lose money, you're like poker is just not, you're not gonna be able to make it as poker. It's the same as trading. Yeah, exactly. Exactly. It's a hundred percent the same is that you have to be able to look objectively at, did I make a good decision? Did I make a bad decision? And if you're not letting, if you're letting the ups and downs of random swings condition you,

as opposed to your own evaluation of, did I make the right call or did I make the wrong call, condition you, then you have no shot of becoming a great poker player. And the same is true in trading. It's not true in anything that involves volatility and randomness, is that you have to make sure that you are your own captain when it comes to deciding whether or not you made the right decision. Such an important lesson for traders. And we have a lot of them, obviously, who listen to this podcast. And I talk about that idea, the idea of random reinforcement often, right? The market generally tends to reinforce your bad decisions and not reward your good decisions. And so you need to play it out over tens of thousands of trades or tens of thousands

of hands to see your system work. Did you ever end up giving a shot at trading? I didn't really, you know, it's funny. I, one of the, one of the paths that I sort of looked down and didn't end up following was trading. I just didn't have, I think, you know, if I got into trading, knowing what I know now, I feel like I'd be better predisposed towards it. But the time I was, I was like 21. And I was like, Oh, I'm gonna, you know, I remember actually, there was this guy who was a trader at a Chicago prop firm. And I ended up having a coaching trade with him, where I coached him on poker, and he coached me on trading. And he, I mean, he was a very nice guy, but he was just so uninspiring. It's just very boring.

And so I just found trading the most boring possible thing. And, but I think, I think now I have so much more context around it because I've been poker full time. It's supposed to be boring, but that's the idea. Poker is probably more exciting because at least you're like interacting with people trading. Well, if you're, I guess it's kind of true.

But trading it's like you and your screen and waiting, right. And they say that, you know, a good trader, it should be like watching paint dry. It shouldn't be as exciting as you talk about. But I would imagine also poker is very different in person than it is online. You're playing, you know, four hands at a time and or even more. I know for some of you guys, what's the craziest poker hand you ever had that you remember? Craziest poker hand I ever had. So it's, it's funny because now many years later, I forget almost all of the biggest hands I played. But when I do, I do remember the hands that I thought I played the best. Those are the hands I remember. I don't remember like the big $300,000 pots, but there's one hand I played against this guy.

I don't know if it'd be useful for me to like actually recount the hand, but maybe I can like describe it. I've had it. I would love to hear it. Okay, okay. So I'm trying to remember the exact situation. It was something like,

so I raised this guy pre-flop. We're playing so uh i i raised this guy pre-flop uh we're playing heads up i raised this guy pre-flop uh he calls uh i'm on the button so the flop comes down there's something like i think nine six three and um i bet out i have i have like uh i think i have like jack seven so i have like jack high so i bet out the flop he calls uh turn comes out uh nothing part like a two or something uh i i he checks to me i bet again he calls uh then river comes out a king uh and no flush no anything he bets out on the river and i think he like goes all in um and i end up calling him down with just jack high with just jack high he has a miss straight and he ends up going like ballistic we're we're we're playing um

we're i think we're playing online we're playing heads up online and he ends up going ballistic accusing me of cheating right just how could you call that how could you possibly call jack what did you know about him you can't even look at his eye you can't even look at his eye exactly mystic, accusing me of cheating. How could you possibly call Jack? What did you know about him? You can't even look at his eye. Exactly. And so I ended up, it's funny because I ended up posting this. And when I was a poker player, this was like, this ended up becoming like this legendary play of me calling this guy down with Jack Hyde to the point where now, even now as a crypto investor, I get people who like ping me talking about like, wow, that's amazing. Wait, you're the Jack high guy.

I called everyone down with Jack high. And so, yeah, that, that is probably the most memorable hand from the time that I've, I was a poker player. Was that a mathematical decision with a pot odds? Just, I don't know how much you guys were betting pre pre river. You just knew that the guy was. It was, it was both, both. It's always both. Knowing the odds of,

I have to be right here maybe 35% of the time in order to make this call. How often do I think he's just full of shit having missed straight? A lot. This is not a line that you would take if you had a great hand. How would you hit a king? It wouldn't have checked aces to you the whole way, right? Exactly. You would have checked it to me if you had a great hand like how would you hit a king it wouldn't check aces to you the whole way right so exactly you would have checked it to me if you

would hit something great on the river uh because you were slow playing up till now so the only thing that makes sense that you miss something if you miss something probably my jack is good i i mean just unbelievable so you have a pin tweet yeah you have a pin tweet which i love which says not work harder. Can you talk about that as a piece of advice for people? This is something that I have noticed in so many of my friends, because I have a lot of very type A friends. And I feel like there are a lot of people who think that when things are going wrong and you're not accomplishing what you want to, you should work

harder. You should stay up later. You should, you know, cancel your engagements. You should like pour more things, buy more subscriptions, like work harder on your productivity routine or whatever. And like most of the time, the answer when things aren't working is pretty simple. So it's, it's one of very few things. One thing is stop doing fake work. Two is, you know, talk to your mentors. Three is get more sleep. Four is plan. Five is, you know, remove distractions. Like there are a lot of just really, really simple things that most of the time are the actual way you will solve the problem in front of you rather than some, some vague exhortation of work harder, hustle culture, like, you know, the, the what's like a David Goggins

kind of energy of like, Oh, just, just if you, if you want it hard enough, you'll like pour enough energy. Just run 700 miles. It's fine. Yeah, exactly. Just run 700 miles and that's how you'll do it. Your leg fell off. Exactly. And I think that's like almost always the wrong advice. I think it's almost always the wrong advice. And the right advice usually is like, calm the hell down and pay attention to what you're doing wrong and fix that. And most likely that doesn't involve you working more. I love that. So why did this all lead you to crypto? Well, you obviously had a lot of interest, had a lot of different things that you could have done, clearly could have been successful at almost anything. That's

the thing that, at least for now, I will say, you don't seem like this will be your last act, probably. But for now, why is this the thing that's grabbed your attention? So crypto for me, it was, so I was familiar with crypto. You know, I'd known about it since like 2015, 2014. Obviously as a poker player, I had a lot of friends who got into crypto because of course crypto, you know, a lot of online gambling after Black Friday in 2011 ended up, you know, there were a lot of sites that basically allowed you to play poker that settled in Bitcoin. And so I had a lot of friends who got into Bitcoin quite early. But I ended up really getting, you know, I sort of bought my first Bitcoin in 2014,

but I didn't really get it, right? I sort of thought it was, you know, a way to buy drugs online. Okay. Way to settle gambling debts. It was. Makes sense. Right. I mean, that's basically what it was. So I didn't see the broader vision. It really took Ethereum for me to understand the bigger vision of what crypto was about. And so I was at Airbnb at this time, and I was working on the payments fraud team. And working on payments at Airbnb, so Airbnb is a very global company. So you pay people in like 30 plus countries around the world. And looking at the way that payments works, from the perspective of a consumer at Airbnb, you put in your credit card and then magically you just pay somebody across the world

and it just like works. It's awesome. It's just purely digital, seamless experience. And you realize when you're actually working on the backend for a system like that, is that that experience you give to users is a fantasy. That is not how international payments works, right? International payments is an absolute freaking nightmare. Like it doesn't work. There's no global system that just pays people everywhere in the world. There's a bunch

of disparate systems that are sort of loosely connected with like, you know, chicken wire. And, you know, there's all sorts of just horrific things on the back end when you're actually looking down the barrel of one of these systems. So there was all sorts of stuff like people manually reconciling CSVs that get emailed at midnight of transactions that are going cross-border. There are places where you can't pay people because there's no domestic payment system that's digital enough. So you end up having partners who mail checks into PO boxes and then hit an API to let you know that the check is in the mailbox. There's all sorts of just absolutely crazy hacks to use to create the semblance of having this

global payment system. And looking at this system, you realize like, oh my God, this was all developed for a totally different world. Like people, this was all developed like in the 70s and 80s. Nobody realized that we'd be using the internet. Nobody realized that we'd be living in a digital first global real-time world, like the world that Airbnb lives in. And your first instinct when you look at this as an engineer is like, oh, we should just throw this all away and we should start over. We should start over with a system that is actually

catered to the needs of the world we live in today, the needs of a global internetized world. And it clicked for me. They're like, oh, that's what crypto is. Crypto is a bunch of computer scientists and cryptographers and economists and philosophers who got together and said, knowing what we know today about money, how would you build it differently? Well, maybe you would use our knowledge of peer to peer systems. Maybe you'd use our knowledge of cryptography and distributed systems and monetary policy and all these different algorithms that we bake into this stuff. And all these different cryptocurrencies were different answers to this question of how would you build money today if you were starting from scratch? And I realized that the stuff happening in this industry is absolutely going to change the

future of money. There's no way that the way we do money in the year 2070 is the way that we did money in the year 1970. There's just no way. And right now, it basically is. All these systems are basically the same things that we were doing 50 years ago. And that, like, I'm not one of these people who believes we're all gonna be paying each other in Bitcoin anytime in the future. But I am convinced that this will inexorably affect the future of monetary technology. And so that's when we decide, I want it to be all in in the crypto industry. And it was something that, you know, it comported with a lot of my previous interests because I'd always been interested in cybersecurity. I'd always been interested in cryptography.

I'd always, you know, obviously from my time as a poker player, I knew a lot about game theory and adversarial systems, you know, working in anti-fraud. It's the same thing. It's all about thinking about adversarial environments where, you know, they're trying to exploit you. You're trying to remain robust, but you have other goals you're trying to accomplish. And so it came very naturally to me. It was very much the way that my brain functioned, is a way that naturally comported with thinking about crypto. So that's why I started doing some cybersecurity research and then ended up coming more into the product and application side.

So that's how I ended up getting into crypto. But kind of every step along the way, again, to your earlier point, it was very random. I met a person who ended up telling me, oh, why don't you go do this thing? I was like, OK, I guess I can go do that thing. And I ended up meeting Naval very randomly because I was actually working on a startup. And we had a bunch of acquisition offers for the startup. And I was chatting with a bunch of people trying to get advice about this acquisition. And that's actually how I ended up getting introduced to Naval. I asked him for advice on how to navigate this acquisition. And he was like, hey, what do you think about becoming

an investor? I was like, what? I don't know anything about investing. Like, why would I become an investor? Like, I'm a builder. And I remember at the time he told me like, well, look, the hard part about investing is not the investing. The investing part is easy. The hard part about investing is judgment. Like if you have good judgment, if you can think clearly about what makes something good, investable, youable, promising, then the actual investment mechanics part is easy. Anybody can learn that. But the hard part to learn is judgment. And so he was like, look, as long as you understand the crypto part, if you understand what makes for great technology and great teams, I can teach you the investing part. That part is easy. It's

not going to take you that long. And so that's how I ended up falling into the investment side. But it was completely random. It was not my intention to end up coming into investing. But that's kind of been the story of most things that I've done in my career is that most of the time I end up orienting myself in a direction. But the actual thing that I find myself doing is, you know, it's pure happenstance that I end up coming across that particular opportunity.

And, you know, crypto, I was very intentional about. But then everything that happened within crypto, I feel like was just me being in the right place and putting myself in front of the right opportunities. Guys, unless you've been living underneath a rock for the past few months, then you've definitely heard me talk about one of my favorite platforms, which is Kava. Kava connects the world's largest cryptocurrencies, ecosystems, and financial applications on DeFi's most trusted, scalable, and secure earning platform. They have borrow APYs as low as 0% and reward APYs as high as 200%. They let you mint stable coins, lend, borrow, earn, and swap safely and efficiently across the world's biggest crypto assets with a simple and intuitive user experience and the full confidence of institutional grid security and quality. Guys, if you have not checked out Kava yet, then what are you doing? You can check it out at thewolfofallstreets.link

slash Kava. Do it now. You can store, swap, and send your crypto all with a simple tap of your Arculus key card. And if someone were to get a hold of your card, it doesn't even matter because they have three-factor authentication, ensuring that the only person with access to your crypto is you. Guys, you can check out Arculus at thewolfofallstreets.link slash Arculus. That's A-R-C-U-L-U-S. Secure your assets. Sec secure your future with Arculus. Such an interesting story because a lot of people would conflate that with luck, right? They'd say you're very lucky, but you would say that you had intention and were in the right place at the right time to allow that luck to sort of happen, right? And drive the course. And I think

that's a powerful idea. So you became an investor. I did. Right. You learned how to invest. What do you look for specifically in investments in the crypto space? What compels you? What's interesting? So at a high level, when you're looking at investment, I think it's very simple. It's to the point of being almost uselessly intuitive, is that if you want to find a great investment, generally you need a great team and a great idea. That's pretty much it, right? So when you're looking at later and later stage investments, obviously it requires more traction and more robust numbers in order to prove that out. But at the end of the day,

it just comes down to those two things, great team, great idea. Sometimes you don't have a great idea yet. It's just a great team. And that's also fine when you're very, very early stage, you're investing pre-seed, just a great team is enough because you can bet that they're going to find a great idea. They have the right DNA to iterate until the great idea shows up

on their doorstep. But at the end of the day, investing is fundamentally about people and opportunities. So now if you want to ask more specifically, what are some promising areas of investment in crypto? The thing about crypto is that it's always changing. It's one of the most rapidly changing sectors. Yeah. I'm sure.

I'm sure you can, you probably feel this pain as well. 24 seven and you can't keep up even week to week. That's right. That's right. And look, I'm a full-time investor. This is all I do. And even I feel like I'm drinking from a water hose all the time so the uh the i think i think the biggest things that we look for or the most of those promising opportunities i would say um if i had to boil it down probably one of them is um there's a lot going on in crypto gaming that i think is going to be more and more interesting and compelling.

Future of NFTs. I think right now we're seeing like sort of the Gen 1 NFT experience, which is pretty simple. You know, a lot of sort of profile pictures and like, you know, kind of really obvious kind of gamified experiences. But I think there's gonna be more and more complexity behind the tapestry of NFTs that people are going to be interacting with. DeFi 2.0, I think right now we see DeFi 1.0, which is like, okay, it's AMM slash trading and then borrowing lending, right? Those are basically the two things that are working in DeFi 1.0. But I think there's going to be a whole new generation of DeFi 2.0 that's really going to take off. We're going to see more things like synthetic assets. We're going to see on-chain credit. We're going to see more and more primitives. And then of course the rise of derivatives. DYDX, which we were early investors

in, is one of the platforms that kind of shows the rise of derivatives. But I think there's going to be a lot more than just DYDX. We're going to see a transition just like we saw in regular crypto markets that derivatives end up overtaking spot markets just like we saw in regular crypto markets, that derivatives end up overtaking spot markets, which right now in DeFi, it's mostly spot as opposed to what you see in traditional markets. So other area, we invest a lot in infrastructure. So we're early investors in a lot of the kind of layer one, layer two interoperability solutions. So I seeded Avalanche,

I seeded Near Protocol, you know, I seeded Cosmos, but there are a lot of really important solutions that still need to be built in order to scale blockchains to where they need to be, right? So we talk a lot about layer two and roll-ups. You know, I was a seed investor into Matter Labs, which builds one of the biggest ZK roll-ups on Ethereum. But there's a lot more that needs to be done

in order to scale blockchains to where they need to go for the next 100 million users that are going to be onboarded onto public blockchains. And then, of course, there's sort of the traditional centralized infrastructure. So, you know, the exchanges, the brokerages, the custodians, all that kind of stuff. And especially not just in the U.S. Globally, it's a huge market and it's a rapidly developing market. And so one place where we also invest a lot is investing a lot in Asia.

So Dragonfly, we're very global. We have a big presence in Singapore now. And we try to invest in a lot of the infrastructure that's going to expand. Because of course, crypto is a global phenomenon, right? The whole point of crypto is that it's borderless. It's not just in the US. If anything, the US is probably the minority of crypto adoption because people in the US have the most financial access. We have the most financial freedom. But crypto, yeah, crypto has the most product market fit in places where they don't have that. Because it is sort of like, you know, it's like a financial

infrastructure in a box. And in places where you don't have a lot of financial freedom, that's where crypto is like, well, holy crap, that's amazing. Yeah, exactly. Of course I want that. So that's one place where I think over the next five years, you're going to see the most growth for crypto is going to be in developing economies. And so that's one place where we're also paying more and more attention. So that's investment university in a nutshell. I think what strikes me about that laundry list, and I think most people would sort of agree with that, right? I want to have exposure to each of these. How do I do that? That is up to each individual investor. But what strikes me is that

each and every one of those came with the caveat of, but it's not there yet, but it's not there yet, but we still need to do this. Doesn't that just prove how early we still are? Oh yeah. Oh yeah. Because a lot of people think we're late and they missed the boat, right? Right. It reminds me of a great quote by Mark andreessen uh he talks about when uh when he when he was when he was really young uh right after he built mosaic and then decided to come out to silicon valley to work on what would eventually become netscape um he when he first arrived in silicon valley this was like 1993 i want to say 1993 1994 um when he first arrived in silicon valley he said i was really worried that I was already

too late and I'd missed the whole thing. And this was like before even the dot-com bubble took off. Every generation looks at what came before and they're just like, shit, am I too late? Did I miss the whole thing? And the answer is pretty much always no. You are probably right on time because there's so much more that's going to happen from here. And that's, that's basically what I tell to every entrepreneur is because entrepreneurs have the same worries. Like, crap, am I too late? We're like, we're all the great companies, all the great protocols, all the great inventions already made. Like, no, not at all.

Almost always like there's so many more valuable things that are about to get created. And you know,. And crypto is very interesting because it kind of moves in between these two different kinds of phases, between infrastructure phases and application phases. And I think right now we're in one of these application phases where we just got this sort of new prong of infrastructure. We've got the new side chains, the roll-ups, the new layer ones like Avalanche and Solana and Near Protocol and whatever. And as a result, there's a lot more applications that can be built now. You've got this new infrastructure around NFTs and gaming. And so people can build new experiences, but we're

pretty close to hitting the limit for what we can do with the current infrastructure. And I think probably what you'll see is that over the next couple of years, we'll move back into an infrastructure phase where suddenly it's like, okay, kind of like what happened in 2018, where it's like, okay, we kind of did everything that we could with what we had on Ethereum 1.0. And it's now time to like build new infra so that we can go to the next, you know, the sort of the next prong up. And that I think is where it's kind of like what happened in the dot-com bubble, where

dot-com bubble people had these big grandiose visions for what they wanted to build and they realized that like oh we're just not ready for this like we don't have any of the infrastructure we don't have any of the logistics or any of the they just aren't enough people online there there isn't enough buying behavior people don't know how to use credit cards like all this stuff is just not there people are scared to swipe credit cards on the internet. Very basic behaviors we haven't solved for yet. SSL was still pretty nascent. And so it took 10 years to really build the infrastructure. But then eventually, we had Amazon, we had Instacart, we had all these things that people talked about being these generational companies in the dot-com bubble, the same thing

in crypto, right? Like, you know, one thing that venture capitalists always note is that almost every idea that people suggested during the dot-com bubble eventually happened. Yeah, they're just too early. Almost everything eventually happened. I mean, Uber was a thing in like 2002, but there were no cell phones, there were no phones to use Uber on, right? I mean, not Uber itself, but there were no cell phones. There were no phones to use Uber on, right? I mean, not Uber itself, but the idea of, yeah. Exactly.

Same thing. Same thing in crypto. Same thing in crypto. Almost every pitch that I get, like when I see it, I'm like, this is probably eventually going to happen. But it's just a question of when. It's a question of, is the infrastructure there right now? And is this the team that's going to execute this vision? Right.

But the rapid growth of any technology now is even so much exponentially greater than it was in the dot-com bubble or any of before. So is there a fear that we sort of get this hockey stick of adoption with crypto, but there's no way for the infrastructure to catch up? I think a lot of people really do believe that, you know, sort of superficially we have the tools like Solana's fast enough or Avalanche is fast enough, but none of them are fast enough for 2 billion, 3 billion people to be using them concurrently. Yeah, of course not. Of course not.

Of course not. So I think right now, like I think there is a, there's a natural kind of sort of slingshot that, that happens when it comes to looking at investing in infrastructure, where people start to believe their own marketing claims. And they start to believe that we're way farther along than we actually are. And I think we've made a ton of progress. Like where we are is orders of magnitude more than where we were in 2017, 2018. But the world is way more orders of magnitude than where we currently are. And so I think there's much more for us to build. I mean, just looking at like Axie Infinity, right? Axie Infinity is like 2 million monthly actives and

no blockchain can handle 2 million monthly actives. It's just not possible. And the game is somewhat infantile, right? I mean, we talk about it, just it's just not possible it's not and the game the game is somewhat infantile right i mean we talk about it but it's not like you're playing call of duty out here for money i know i know i know it's incredibly simple it's incredibly simple and they cut a lot of corners because they had to in order to make stuff scale so they they're completely running their own side chain that is not decentralized in any way it's not you know it's barely a blockchain and that and that just tells you like look that's what you have to do if you want to onboard 2 million users, you have to like basically have a centralized like server that runs all.

Yeah, exactly. Exactly. And so the, the, you know, getting to that end state where we actually have public blockchains for all the stuff it's going to take a lot of development from here, but we will get there. It's just going to take more time than, you know, the thing about crypto is that I like to say it, it, it's going to happen sooner than the doubters think, but it's going to take longer than the believers think. Like, like anything, that's a great, great, probably,

probably expectation to live by. You mentioned that, you know, you obviously bought your first Bitcoin in 2014, but it was Ethereum that really sort of grabbed your attention and sent you down the rabbit hole. Ethereum obviously is behind at this point, right? They were the first mover, but they hire fees, lower transactions, all the sort of problems that people complain about with Ethereum. Do you think that they can catch up and that 2.0 will solve a lot of those problems? Catch up to whom? Well, I should say catch up in terms of speed of transactions and fees, reducing fees.

They're way ahead, I should be clear. They're way ahead as far as development and usage. They're still the leader. I just mean that obviously we're seeing sort of these pitches by lighter, faster blockchains, and that's what Ethereum is lacking at scale. Yeah. So I would push back on that notion that Ethereum is falling behind. I think rather,

Ethereum has defined itself as being something else, trying to accomplish a different goal than these other blockchains are trying to accomplish. And I think that goal is a really important one. So I would argue Ethereum is like Manhattan in that it is the most valuable per square foot place on earth when it comes to blockchains. And it's almost like what you're pointing to is like, look, well, look at these other cities. Look at Detroit. Look at Jersey City. Look at LA. They're so much more affordable. They're so much cheaper. They're so much bigger. They can take a lot more people in. And it's like, yeah, that's true. That's not what Manhattan's trying to do. Manhattan is trying to be the most valuable place where the biggest players in the world and the most money goes to roost, right? That's Manhattan. And yeah, it's congested. Yeah, it's expensive. Yeah, it's super annoying to get across town.

It sucks in a lot of really annoying ways. But if you want to play in the biggest games, you go to Manhattan. If you're trying to start a bank, yeah, it's expensive, but you go to Manhattan. That being said, in order to build a country, you want more than one city. You want different cities that have different properties, hit different price points, have different levels of affordability, specialize in different things. And I think that's a good description of what you're seeing with all these different blockchains. They're all trying to hit different points on the centralization to performance trade-off curve. And so Solana is trying to be like Houston. And maybe Avalanche is trying to be LA. And so Solana is trying to be like Houston and, you know, maybe Avalanche trying to be LA

and maybe, you know, this other blockchain is trying to be Denver. So, you know, I don't know. But I think the, you know, the reality is that every one of these blockchains has physical constraints and to alleviate some of these physical constraints implies a different point on the trade-off curve in terms of security, robustness, right? Like if you did launch Ethereum 2.0 today, a lot of people would use it, but they'd only use it because of the fact that Ethereum 2.0 is being treated with the most absolute, like, you know, space shuttle launch carefulness, right? And these other blockchains are not. And that's okay.

Like that's intentional. You know, it's like, look, we're creating we're, we're creating these, these you know, super fast, high innovation zones. And if you want to sign up for that, awesome. Like, you know, stuff's going to break. Sometimes we're going to have bugs, like things are going to fall over. Like, you know, Solano was down for like 17 hours, but it's okay. Like people understand, look, this is new software. It's, you know, we're, yeah, we're, we're, we're coming to this new city. Sometimes buildings are going to fall over in the middle of downtown. Hopefully nobody gets hurt too badly. But like people, you know, there's going to be, there's going to be mistakes.

And that's okay if you're willing to live on that side of the trade-off curve. But Manhattan, like, look, it takes like, you know, a decade to build anything. But, you know, you know that your morning commute is always going to be fine. I'm a massive Ethereum bull, just to give the caveat. And I talk about it all the time. Why I giggled when you made the equivalency of Ethereum to Manhattan is because I had Michael Saylor on my podcast. And the second time that he was on, he introduced the idea, which went wildly viral, that Bitcoin is digital real estate. And he gave the equivalence of Manhattan as his argument for why Bitcoin was digital real estate. Different

argument. The argument was basically that if you owned real estate at any point in Manhattan, you would never sell it, right? You would hold it forever. You would take loans against it. You would do whatever you had to do to make sure that you own that indefinitely because it would always go up. Granted, it's solid. And it's funny to hear Ethereum because I actually enjoyed your sort of argument and the equival maximalist. Because you know that the core argument that Bitcoin maximalists have is when people have called Ethereum hard money, they freak out. Right? Right. And so, you know. I mean, look, I try to stay away from religion.

And I think that's where you start wandering into the world of religion. Exactly. So, I mean, I think, you know, Saylor's analogy there, I mean, obviously, you know, calling it digital. Well, it's, you know, calling it digital gold. It's like, well, isn't owning a piece of Manhattan like owning digital gold? Like, yeah, sure. It's kind of like that. Fine. But it's very clear that, like, Bitcoin is more like a commodity that is very scarce. And Ethereum is more like a city. It's more like a network. Right. It's valuable not because, like, oh, there's only this many ETH.

It's valuable because of the network effects of everybody who's on Ethereum, which is what cities are. Cities are not valuable because like, if you look at Manhattan, it's not valuable because like, look at all this granite. There's only gonna be so much granite in the floor. No, it's valuable because the people who live there. And if there were a nuclear bomb that went off and everybody would leave Manhattan because it'd be just radioactive hellhole, nobody gives a shit about

the granite. In the same way, Bitcoin is Bitcoin because of the scarcity. It's like gold. Even if you bomb a bunch of gold, gold is still super valuable. It doesn't have anything to do with the people who live there. So that's the reason why I think when we talk about blockchains as networks, we talk about Ethereum as a network and Avalanche as a network, I think it can be almost a little misleading because network almost implies like Facebook or the internet, which are arbitrarily scalable. But the reality is that networks like cities, I think it's a better analogy because they're physically constrained, right? They're almost, blockchains are the same way.

They're physically constrained, right? You can only fit so much into a block. That's the whole point of a blockchain is that it's not just like, you know, spitting out data through a stream. It's everything is physically constrained by a block size. And within those physical constraints, you create the same kind of forcing functions that you have in physical geography is that cities can't be arbitrarily big. They just, they just stop working. They stop becoming cities. They just like become suburbs and other, you know,

like, you know, if you look at, you know, Houston, for example, there's tons of suburbs around Houston, but then there is one Houston that is at the center and that's like the blockchain, right? That is the, and then you have, you know, things like layer twos and other, other, you know, sort of satellite side chains that end up becoming connected to you. But so I, you know, when you think about the menagerie of scaling I think it's useful to think in terms of physical analogies, because they, I think they tend to track much better than thinking in terms of pure software where you don't have those same kind of physical constraints. Okay. So we'll give the Bitcoiners the granite, and we'll give the Ethereum people all the people and the activity that lives on top of it, and we'll call us all

in agreement, right? Is that, I mean, that vision sort of that you just laid out, you know, that viewing it as an entire country and each blockchain is a city. Is that why you were so early on investing in these platforms you talked about that focus on interoperability? I've always believed, you know, I hate the notion of the Ethereum killer. I think it's stupid for all the reasons you just said. One chain could never do everything and one chain is never going to rule them all, so to speak. So did you very early notice, hey, we need all these chains to exist and we need them to talk to one another? Yeah. I mean, I think that was very obvious since 2017 was that Ethereum was not going to scale. It was not going to get there in time. And the demand for the stuff was going to

go vertical at some point. And we did, we saw it very briefly with CryptoKitties. And then we saw it again with Fpoint. But then, you know, really it was DeFi summer last year that we started to see these super long sustained levels of activity on Ethereum. Just clear Ethereum wasn't going to scale. And so you needed other approaches that, I mean, you know, to Ethereum's credit, like they were the first. They built this, you know, it's like, it's like Rome or something, you know, to Ethereum's credit, like they were the first, they built this, you know,

it's like, it's like Rome or something, you know, it's like you build this when nobody else had built a city like that before. And so you messed up, you made a lot of mistakes, you, you know, tried your best. And obviously once it's there, it's really hard to like sort of go back and fix things because, you know, there's just so much money riding on everything and it's hard to do surgery while you're already in flight. But all these other blockchains get the benefit of hindsight of seeing how Ethereum messed up and building newer consensus mechanisms, building sort of cleaner architectures,

optimizing a lot of the stuff around block generation and compression and blah, blah, blah. So it was just very clear to me that there are going to be many more scalable blockchains than Ethereum. And that is going to be a part of the future scaling story for crypto. And they're going to need to talk to each other. Because if you're going to have a bunch of cities, obviously, you need highways. You can't just have two disparate countries that never talk to each other.

That very much goes against what blockchains are useful for, which is transferring valuable things. I love that. I love it. So we have this beautiful future of interoperable blockchains in a world where blockchain is ubiquitous and it's the underlying technology for everything. I think anyone who's down the rabbit hole, we believe that. What if that doesn't happen? What could stop it? What could stop it? It depends on what aspect of that you're pointing to because I think there are parts of it that are not going to stop. Bitcoin is just going to be Bitcoin. At this point, Bitcoin doesn't scare any, nobody gives a crap about Bitcoin. Everybody's like, oh, Bitcoin, it's like gold. I'm not scared of gold. Like, that's fine. If you look at some of the stuff happening on Ethereum, I think there's more existential

risks there. It threatens everyone. Yeah. It threatens every big system where there's any intermediary that's a toll collector, right? That's right. That's right. That's right.

So, I mean, I think eventually, like right now we're not there yet because it still looks like a toy. But there will be a point where the biggest enemy to Ethereum are banks. But right now they don't see it. They don't actually feel threatened. They're like, oh, this is like a cute little thing. We can get our innovation department to launch some bonds on Ethereum or something. But at some point, this stuff is going to become so real and so global that they're going to start being scared that Ethereum is going to eat their lunch. And then, of course, the same thing is true for governments that try to enforce capital controls or that have tight regulatory grasp over their citizens. They're going to realize like, oh, DeFi is just going to be like the world's biggest candy store where you can buy anything you want

without an intermediary from anywhere in the world with no government intervention or oversight. And so you'll be able to buy any currency, any commodity, any equity, anything that you could possibly want to get your hands on through DeFi. And that's been very threatening to a lot of people. Tokenize everything. Eventually everything will be tokenized and be able to be exchanged in a decentralized manner outside of all these legacy systems. That's right. That's right. And I think that's where the biggest existential threats ultimately come in because, you know, like, or not, I think, I think there's,

there's a healthy respect and then oftentimes a unhealthy dismissal of the power of governments and regulators. But it's, it's, it's very clear that like at the end of the day, look at China. I mean, China's most obvious example most recently is that if the government is convinced that it's in their long-term interest to squash this stuff, they will. And they will do so in a ruthless way. And that is, I think, the number one thing to be afraid of, which is why it's so important that we tell the story of the economic opportunity and the freedom that gets enabled and the efficiency and the cost savings and all the other things that blockchains are good for.

But then also we make sure that we... I think there's another thing that the blockchain community doesn't talk about and think about seriously enough, is building the right institutions and the right culture into crypto to begin with, so that we end up building the kind of community and system that people want to welcome. If crypto primarily looks like a bunch of Ponzi schemes and a bunch of opportunists, then people are not going to want to welcome it. They're not going to want to usher it with positivity. But if they see people being mindful, self-regulation, people deciding to do the right thing and build the kind of community that's welcoming to people and that rights its own wrongs. And I think actually a lot of DeFi has done a great job. You see how many hacks, just like the community

jumps on it and just goes and tries to ameliorate it and get the money returned. And like people will start working together to solve these problems internally because they know that no one's, there's no government's going to come in and fix these things. The FBI is not going to help you. You have to go fix it yourself. And crypto community does that. I think there are a lot of really amazing things that the crypto community has done. And, but so much of how crypto develops is very sensitive to what is the culture and the institutions that we end up seeding this community with. And I think that actually matters more than most people appreciate to the longevity of the industry. If you're going to replace a system, you should hopefully do it with a better one. certainly, right, an inclusive one. I guess that lends the question of whether,

you know, governments, but also banks and other institutions that obviously are threatened by crypto, whether they will fight it or adopt it. And so I don't know which side of that you're on, or if it's a bit of both. I think probably, well, I'd say right now it's underdetermined. I think what I'd like to happen is that they embrace it. I think that's not going to happen. I think my second favorite route is that they fight it until they are forced to embrace it like they did with the internet. And that would be great. And then the third and scariest outcome is they fight it until it gets banned. Right, they win.

Yeah. And I think that, I mean, in some sense they win because the reality is that crypto is going to be used. In the same way, we talk about peer-to-peer file sharing as being a precursor to crypto. And obviously there were a lot of powers that be, especially the record labels that fought peer-to-peer file sharing very, very aggressively in the late 90s, early 2000s. And there's a perception that they won, but they didn't really. The thing that actually won was iTunes and then Spotify. Right, digital music. And digital media in general, streaming and all this stuff.

That's what really won. The reality is that, and a lot of people don't know this, the largest source of uplink in the world today is Bitcoin. Like Bitcoin is still absolutely freaking massive. None of this stuff has gone away, but the economics have just shifted around them in order to incorporate them. Right. And I think the reality is like, even if crypto gets banned, it's not going to go away. Of course it's not going to go away. It's just going to, it's going to move to different places and it's going to become very similar to peer profile sharing, where it's still going to go away. Of course, it's not going to go away. It's going to move to different places and it's going to become very similar to peer profile sharing, where it's still going to be absolutely enormous around the world, but it's going to be more difficult to get access to. It's going to become underground. It's going to go into these different corners of the world where it's

most needed, which is still okay. I think crypto will still be enormous even in that version. It might become more like Swiss banking than it becomes like everything banking. But crypto is not going to go away one way or another. But the trajectory, especially in the US, is going to depend very, very much on the reaction of the powers that be, especially banks, to the evolution of crypto from here. So are you threatened by the current state of regulation, the infrastructure bill, any of those things, or are they just-

No, I think right now we're- Yeah, I think that right now we're in speed bump phase. I think we're still in act one and like no one understands this stuff yet. They will understand this stuff. Like I know that people, like they kind of laugh at, you know, the octogenarians who are setting policy,

but they will wrap their heads around this stuff. It who are setting policy, but they will wrap their heads around this stuff. It'll take a while, but they will, because this stuff is too important. It's going to have too big of a global impact that they're going to come to understand it. And when they do, it matters a lot what their constituents think about it. And so I think this is one of the things that actually makes me really heartened about US regulation. One is that we have this notion that it really matters that we want to be the center for innovation for crypto, because they realize it's going to be global technology. It's going to be fucking huge.

And they want to own it. And that's great. I think that's absolutely the right approach to take. But then second is that they realize how popular it is. And this is also huge, because popular things tend to win. So, you know, that's just the first order, best way you can predict what's going to happen in a democracy is that, particularly in our democracy, is that popular things tend to win.

So if you can just make crypto extremely popular, it'll probably get regulated more favorably. I know, it's such a pessimistic view because that's about politics, right? It has to become popular enough that a politician has to form their opinion on it based on what will get them reelected. That's the real story. If opposing crypto has no threat with their constituency, it doesn't matter. But if all of a sudden they're up in arms and 70% of their constituents are using crypto, it'll be very favorable, right? That's what's going to push the needle is the threat of losing their job. That's right. So everything that we're doing, especially in this cycle to make crypto more and more mainstream is absolutely amazing

for the long-term trajectory of this industry. Incredible conversation. Thank you so much for having it. Where can everybody follow you and keep up? And can they invest in Dragonfly? Is that possible? Well, so we only allow accredited investors, unfortunately, because it's just the way that venture funds work. But you can follow me and a lot of our work on Twitter. I'm at Haseeb. You can just Google my name, Haseeb Qureshi,

and you'll find me. And we publish a lot of research at Dragonfly. You can find a lot of it at bcp.capital. So if you want to follow. And we publish a lot of research at Dragonfly. You can find a lot of it at bcp.capital. So if you want to follow us, we welcome it. And if you're working on something new and interesting in the crypto space, we'd love to hear from you. It's funny because you're H-O-S-S-E-E-B on Twitter, Haseeb. And my good friend Haseeb Iwan is H-A-S-E-E-B on Twitter. He has the other Haseeb, like one word name on Twitter. That's right, that's right.

I didn't say that I know both of you. It's amazing. Well, thank you again for taking the time. I offered a lot of insight. And I think that I'm going to be playing that Ethereum is a city clip over and over and over again. I think that might be one of the most valuable and compelling things I've heard on this podcast yet.

So thank you very much for that. My pleasure.