This Week in Startups - Bytedance bans 996 + Multicoin Capital’s Kyle Samani: The 100x fund | E1317

Episode Date: November 2, 2021

First Jason briefly covers TikTok owner Bytedance's restriction on overtime working hours (2:14). Then Multicoin Capital partner Kyle Samani joins (11:07) to discuss how they evaluate products, why they prefer to invest in tokens over equity, the Solana blockchain (19:17), Helium (57:05), Decentralized Autonomous Organizations (DAOs) and much more.

All right, we got a great show for you today. Kyle Samani from Multi-Coin Capital is on the program. They made a massive bet on a crypto project called Solana, and that has become one of the greatest investments in the history, at least at this point, I don't know if they're liquid on it, in the history of all investing in the world, because they bought Solana, which has now become an Ethereum competitor, co-existor,

and this guy has got really strong feelings about Bitcoin and a bunch of other crypto project. He's a very honest guest who's done incredible, incredible in crypto investing. We really double-click on a lot of important issues. You're going to love this as an interview, and he's got strong opinions. But first, we're going to talk about the end of 996 at Bytance, the makers of TikTok. As you know, 996 is the moniker for 9 a.m. to 9 p.m. 6 days a week, basically the working style at Chinese tech and finance companies, which was modeled after how we used to work in the 70s,

80s and 90s here in America, but we kind of deprecated that a bit. Well, now Bight Dance has mandated that employees only work from 10 a.m. to 7 p.m. Monday through Friday, no more weekend work. They have to ask for permission to do overtime. Some weird stuff going on in China, and we're going to drill down, double-click, and go deep on it, stick with us. This weekend startups is brought to you by Squarespace. Turn your idea into a new website. Go to Squarespace.com slash Twist for a free trial. When you're ready to launch, use offer code Twist to save 10% off your first purchase of a website or domain. Drata.

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Go to try microacquire.com slash twist. Okay, China's bite dance, the makers of TikTok, has killed the 996 work schedule, and it's mandating that employees only work between 10 a.m. and 7.m. Monday to Friday. 996, if you don't know, was what people in China in the tech industry were working. That means 9 a.m. to 9 p.m. 6 days a week, which, by the way, when I was coming up in New York in the media world, specifically, were considered the hours. If you wanted to work at Condé Nast or the New York Times or any magazine, you're expected to get in in in the morning, stay until late at night, you would eat at your desk, you would order dinner in most nights of the week,

or you go out to dinner, you might come back to the office afterwards, and you were expected to come in on a Saturday or Sunday, do four or five hours and get ahead for the next week. The world has changed, obviously. And in China, specifically, Xi Jinping has got a different worldview and he's de-emphasizing, you know, these celebrity CEOs like Jack Ma. He hasn't left the country in a long time. I think it's two years or so. And he is charting a new path for China, which is certainly more insular.

And part of that is really getting into the social fabric. of how people live their lives. We saw their video game changes and how much people are allowed to use video games, and now we're seeing work hours come in. Bloomberg reviewed an internal document from ByteDance, according to the article, the document would make BytDance, quote, one of the first tech companies in China to officially mandate short of working hours. Some of Silicon Valley thought the 996 schedule would push China ahead of the U.S. Sequoias, Michael Moritz, the greatest venture capitalists of all time, according to many, and the statistics. So it's pretty close to true.

It's definitely top four of all time out Rushmore. He wrote a Financial Times article back in January 2018, which was vilified by some on the woke far left, Silicon Valley would be wise to follow China's lead. Because if we're going to be competitive and there are entrepreneurs there who are working those kind of hours on very important projects, whether they're space projects or their AI projects or healthcare-related biotech projects, we do need to keep pace. and now we're seeing something different out of China. The Bloomberg article noted,

under the new policy, employees can apply to work overtime no more than three hours on a weekday or eight hours on a weekend, according to the document. They received extra compensation of up to three times their normal wage. The overtime permission to work overtime

must be requested at least one day in advance. The article also notes that earlier this year, Bytdance, quote, canceled an alternating system where employees just take one day off per week every two weeks, which is crazy. 13 days of work every 14. That sounds like a recipe for disaster.

On October 13, Bloomberg reported the Workers' Lives Matter movement currently occurring in China. That's an interesting co-opting of Black Lives Matter. The movement included a spreadsheet where Chinese tech and finance employees shared, quote, What time they start and end their work day, as well as how many days per week they work. As of October, the 13th, the article had 4,000 entries. Or I should say the spreadsheet had 4,000 entries. Right now, the spreadsheet links to a blank page.

It's probably deleted. It appears that this grassroots effort is working across a lot of other big companies. The sheet called Working Time has been viewed more than 10 million times, according to the South China Morning Post reporting. So very interesting, workers getting a say, and maybe, yeah, it's hard to know what's going on in China and hard to know how this will play out, but definitely China is charting a new course

and everybody who is an expert on China did not see the decapitation of their top tech CEOs or the limiting of video games, the limiting of working hours as what China's new strategy would be. In fact, everybody thought the opposite. They thought China would out hustle us, work harder, maybe be more entrepreneurial, take more companies public. So this certainly is something very weird that's going on there. And so we'll keep an eye on it.

But for me, in America, I tell everybody in my companies, if you want to be at a startup company, a finance company, I think a fixed 50, a solid 60 hours a week is what will get you ahead in your career. Don't want people working 78 hours a week. at this point in my career, I'm successful enough, the companies are successful enough that people, I mean, there are some people who I'm sure work 70, 80 hours a week who just love it and are obsessed with their work and are super go-getters. But it is a recipe for burnout. And for me, at this point in my career, I'm trying to get people to stick with me for five or 10 years and grow and build their careers. If you want to keep people for five or 10 years, especially

when they're working from home and all this burnout culture, you know, if people want to punch a clock, They're probably not going to, you know, if they do 40 hours a week, I don't think you're going to move forward in your career. You're going to maybe fall behind. If you do a fixed 50 or a solid 60 is the way I phrase it, you put that extra 10, 20 hours a weekend. Self-improving, that could be reading a book, that could be taking extra meetings, you know, catching up on the weekends on some email for an hour or two while you drink your coffee. You know, those kind of things are what got me ahead in my career and different strokes for different folks. if you don't want to move faster in your career than other people, totally get that. I wouldn't work at a startup.

I work at a big company because at a startup that might make you an outcast if you're not keeping pace. Now, some people are super wildly efficient. I've seen people work 40 hours a week and do more than somebody doing 60 or 70 hours a week where they're just hanging out at the office. But that's over now. Work from home changes this whole game. So, you know, work from home, people can just see when you report on what you did this week or you talk about in the staff meeting, what projects are completing, and

everything's written down. So you kind of see in people's weekly or daily reporting what they're getting done. So I think the performative nature at staying at the office all hours, which I do know some people did. I certainly did that in my early days. I would come in early and I wouldn't leave until my boss left. A lot of times I was there and it's like six or seven o'clock, I know my boss is going to leave at nine and I'd say, what do I do for the next two hours? What can I do? And I go find a book about Novell networking or Banyan vines or document management, I would just teach myself a new scale. But I would never, ever leave before my boss or my boss's boss.

Now, my boss would leave at exactly 501. They would literally be at the elevator, 459, 501 to catch like the train to Long Island at 525. But I always looked at my boss's boss, who was Mike Savino, and I said, I'll leave when Mike Savino leaves. I'm not leaving until he leaves, and he would work till 8 or not o'clock. And then once in a while, he'd say, hey, what are you doing here? kid. I'm like, oh, I'm catching up on this. And I show him what I'm working.

He goes, hey, you want to go get a bite to eat? We go around the corner of Manhattan, get a bite to eat. And that's how we started a lifelong friendship. And he mentored me and my career made huge jumps because of that work ethic. So think it through if you're an entrepreneur. Okay, next up, my interview with Kyle Samani of multi-coin capital. They've made a fortune. Probably one of the best bets in the history of investing with Solana. But we also talk about how he has absolutely no interest in Bitcoin and that it's irrelevant. Pretty hot take there. Stick with us.

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Hey, everybody. next up on the program is the co-founder of a firm called Multi-Coyne Capital. And they were started in 2017. And they are currently, according to my sources, one of the highest performing, if they were a venture firm, highest performing venture firms in the history of venture capital. Because they made an incredible bet on Solana, which is a platform that's competing against Ethereum and has done incredibly well. It's according to my sources,

which you know are all likelihood Dillian David Sachs, who talked about Solana on the all-in pod. It's 100x fun. So with us today is Kyle Samani to talk about all things, crypto. Welcome to the program, Kyle. Jason, pleasure to be on the show. Long time fan.

Oh, thank you. That's a very kind of you. So I know that a number of my besties were early supporters of multi-coin capital. My friend Vinnie Lingam, I guess, is one of your partners. He introduced you guys to the famous Bill Lee that nobody knows, who's actually the greatest investor, angel investor of all time, the true goat, but since he's underground, I get to claim that title.

And then my friend David Sachs, of course, from Kraft, where anchor LPs in your fund. So tell us about what is multi-coin. Tell us about that first fund and the thesis for how you're investing. Sure. So Muldoan Capital is an investment firm based in Austin, Texas. We have 15 employees, a few billion and assets across various funds. We have two primary fund structures we manage, a hedge fund and a venture fund. Kraft was an investor in both of those vehicles. And we invest in crypto things. We invest predominantly in tokens. We do invest in equity from time to time, but are definitely token-focused investors. We have kind of three mega-theses that we've outlined on our website, and those have been there for a few years and continue to guide our investments. And I expect that these will, uh, theses will continue to compound indefinitely. Those three thesis are open finance, which is kind of a super set of defy, uh, the web three and the opportunity for non-sovereign money.

I think out of everything we, we have done falls in one of those three buckets. Although I will admit web three is a little bit broad, um, a little bit all encompassing. Today, between our hedge fund and a venture fund, although the legal structures are mechanically different, the same investment team manages both of those, and it's the same core theses across them. And in fact, there's a lot of name overlap as well between them. Our venture funds are typically higher risk, higher reward, more concentration in newer names. Our hedge fund is a larger later stage entity than ends up holding a lot of the same names because

we like to hold stuff that we like, and we like to hold as much of it as we can. And that's kind of how we do things. And part of the idea is that you will run one of the nodes on these new network, so you get to understand it. So you're actually participating in the formation in some way of these new projects, I guess is what we call them today, not companies, their projects, correct? People use the term project, tune protocol, collective, DAW, Dow, I mean, there's a lot of weird names for these things.

Running nodes is part of, you know, being involved in these systems, but I would argue it's actually somewhat of a commodity. We don't run nodes in-house ourselves. We work with probably 15 different firms externally to do various node operational things. And we work with 15 and not one because we want to be decentralized and help these networks stay physically and organizationally decentralized. I think the real of value add we bring when we work with portfolio companies, portfolio protocols, whatever we'd like to call them. Projects, yeah. Projects, protocols, and platforms, I guess, the three pieces. I'm trying to understand this myself, but I get it. But, I mean, it comes from, I say, stuff that looks more like what VCs do, so helping with recruiting,

helping with messaging, helping with strategy. And then I think a couple of things that are particularly unique to crypto, the most notable of which I would highlight is what I'll call engaging in crypto capital markets. Capital markets and equities, both public and private, they evolve over time, but they're relatively static at any moment in time. And because they're quite regulated, it's hard for them to change. Probably, for example, the largest change has happened over the last decade has been the length of time at which private companies stay private. And, and, And in crypto, you have kind of the exact opposite phenomenon that's happened, which is these things go public, you know, at one month or maybe like six months old. And that's a very different set of things that happens in the life of building something of value.

It changes how you have to think about messaging and to constituents groups. So customers versus users versus speculators, those are different constituencies. And like, it's not always obvious how to think about. balancing those different stakeholder groups. In particular, there's even the venues in which people trade these assets are obviously different. These are not trading on the New York Stock Exchange or the NASDAQ. And how do you, you know, again, like even messaging, right, you don't have quarterly reports or 10 queues or any of these things. So figuring out the right kind of communication and

cadence and format and strategy, thinking about exchanges, thinking about countries, thinking about languages, like this is just a very different. set of problems. Right. Even most American publicly traded companies, I would venture to guess, have extremely few Chinese retail investors as owners of their, their equity. In crypto, that's probably not true. And so, you know, young groups of people working on these interesting hard problems

have to deal with, you know, these kinds of things. And it's very non-intuitive kind of go about thinking about messaging and communicating and coordinating in this new capital market. But folks like us who've done this 30, 40, 50 times have seen what works and what doesn't work and can help those teams kind of figure out the right capital markets engagement strategy. I think that's one of the things we do that's particularly unique. And it takes years of doing this to kind of figure out how to really do it. So 30 or 40 times, you've met founding members of a project, a company, a team, a crypto project,

and then been the first investor or amongst the first investors who buy those tokens. tokens in the initial token sale. Is that correct? Correct. And so how do you find those companies? Are they all hanging on a telegram or is it, you know, on Discord servers or is it just in the, just a crypto community writ large? Yeah. I mean, that's the way we source deals and get deals done is pretty similar to how most VCs do it. So we have networks, obviously, in the crypto community, other investors, other entrepreneurs. People are sending us stuff all the time. We know a lot of people directly, obviously, and they just cold news message us and we chat.

I love cold emails. My Twitter DMs are open for better or for worse. So stuff comes in that way. You know, there's hackathons, which, you know, and we attend and they're kind of involved with in various forms. So the actual mechanics of sourcing are pretty standard. In terms of getting deals done, I would also say it's pretty standard. The only difference really between, I'd say deals we do and traditional equity deals,

is these token provisions that are added to them. The token provisions are unfortunately not as standardized as I would like. And that's just the reality of teams being in different countries, LLCs versus C-Corps, some warrants and other things. There's a lot less standardization there than... So with a project like Solana, how did you find them? And then how did that initial token offering go down? How much did you put in?

How many tokens were released? When did all that happen? Tell us the story of Solano. Yeah. So I actually don't remember who introduced us to Anatoly. Vinnie. Vinny may have introduced us. So met with Anatoly at some point in April of 2018 while I was in SF for some other

reason. I recall a few things about that first meeting. One, the title slide, the subtitle of the title slide said NASDAQ for blockchain. And I remember thinking this is very corny and like overplayed, but like, okay. you're making a very pointed argument or claim. And then two, Anatoly had a very different background than all of the other layer one founders I had spoken to. What does layer one mean for people who are neophytes?

Yeah, so I mean, Bitcoin is a layer one. Ethereum is a layer one. Pocodot was kind of a layer one. Phantam, buying a smart chain, polygarten. A layer one what? What is it mean in the industry? A layer one blockchain. So these are, this is a,

add the actual physical network of nodes that are maintaining a database that can run smart contracts of some form. Got it. So when people launch a project, they can launch on a layer one platform, and that's where their tokens reside, and they don't have to build the infrastructure over again. Correct. Yes. Committing to security and compliance is vital for startup growth, and proof of security has never

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twist, d-r-a-a-com slash twist. So Bitcoin was kind of sort of the original one, but Bitcoin is quite limited in what it can do. Ethereum is substantially more flexible and programmable, but has serious limitations around scaling and some other things. Solana is kind of an attempt at bringing the last 20 years of computers, high-performance computer science and distributed systems to a layer one blockchain. And the second thing that struck me about, I remember my conversation with Anatoly, is he's like, all I've done in my whole career is make things go fast.

He's like worked at Qualcomm, at Dropbox, at Mesosphere, a few other places and did that. And he was not academic at all and was just like, I make things go fast. And that struck us as like, yeah, these distributed systems, like those problems in computer science have been understood for quite some time. And here's a guy who has been building various distributed systems for 10, 15 years and really understands them. And it's just applying kind of this new crypto economic paradigm on top of that. And that struck us as like a very differentiated kind of founder market fits. And we had Anatolia on recently episode 1302 for those of you who want to hear from him,

from Solana's CEO. You guys then participated in Solana's initial coin offering or their initial token offering. I'm not sure what the term of art is today. I guess coin has been, is not used because ICOs were kind of a, have a negative spin to them, but these tokens are at least, you buy them for four cents, and you buy a hundred thousand of them or a hundred thousand dollars worth or $250,000 worth? You know, I don't remember how much we bought on the initial token sale, which was in May of 18. They did a subsequent round in August of 18, which we led.

And then in the company or in the tokens? Solana Labs has never sold equity. So all, all, we're just token. We led the round in August of 18. In early 19, after the market crashed at the end of 18, a bunch of investors wanted to sell and get out. We bought out a whole bunch of those investors. We led another round in June of 19 and then bought out more investors after the token launched in April of 20. So we've been accumulating soul across various entities at various prices from four to four cents to a dollar 20. And we've been buying more.

recently into public markets as well. And then you are buying these. It's a token, but it's kind of a security. You then, I guess, get to distribute them to your LPs and your fund like I would and LP and the launch funds. And then they can sell them if they want to, if they can find a buyer, and then lock in a reward without ever having bought into a C corporation, a Delaware C corp, correct?

I'll agree with most of that other than I'm not sure I'm going to call Solana security, but directionally everything else you described, I would say, is accurate. Right. So how does one determine, well, it kind of acts like a security in terms of the LPs, right? They have this asset that's gone up in value. So I guess that's one of the big questions here. And so then you get, you distribute them and they get to sell them and get a gain if they want. Do you, how do you take, how do you have custodianship of all of these and make sure that,

who don't get to act or something horrible doesn't happen. And then when you distribute, do you actually send somebody's wallet a bunch of soul? Or do they have like a custodian? And then how do you mechanically make sure that this stuff is safe? Yeah. So, I don't know if that's a stupid question or a really important question

because we don't have this question in startup investing because it's just a cap table and some CFO somewhere will, you know, make a change in it and it's all paperwork, etc. This stuff just moves on Solana. as really fast. Actually, I think it's funny you made that last comment about the CFO because even in that there's a lot of trust involved in that system.

And it's like who kept all the PDFs and like made sure the Excel document got updated correctly. Wilson Sincini, a bunch of law firms who get paid $1,200 an hour. Yeah. Generally a good theory, rule of thumb is if you can unbundle a function of a law firm and turn it in the software, that's usually a good business to be in. Yeah, they like doing that too, yeah. But yeah, so look, when we started, it was a lot worse.

We self-custody a lot of stuff back in the day. Today, if you read our LPAs, our LPAs do say we can self-custody because whenever new assets are created, sometimes there isn't an institutional custodian provider at the time of the network launch. So from time to time, we do have to take self-custody, and there's a whole set of processes we do around that. But at this point, you know, 98, 99% of our firm's assets are custed with primarily with Coinbase custody, as well as with BitGo and Copper, who were institutional SEC qualified

custodians. So those custodians will hold yourself and to charge you 1% of the assets a year or something I heard or 50 basis points? It's much lower than that. I'm not sure I'm allowed to disclose their pricing, but it's one percent would be extremely high. So it acts just like a venture firm, except these tokens can be used in the real world. So you explained the framework before. You have people who are working on the project, you have speculators, investors, and then you have people who use the tokens. Is that right? Those are the general constituents in these groups? I think that's approximately correct, yeah. And so with Solana specifically, what it was the value, what's the value proposition, because it's not NASDAQ for blockchain right now, it's

something else? What is it today, or did they actually meet that original vision? And what Why has it all of a sudden become one of the top six or seven crypto projects? What was unique about this one? Yeah. So, again, Anatoly's original vision was I want to run an order book on chain. This is well before DFI was even a term. Defi as a term was coined in about October or November of 18. And Anatolia kind of understood that blockchains are financial engines primarily, first and foremost,

and that you should design a system from the ground up to enable price. Price discovery is the foundational function of capital markets. And the way you have price discovery is you have an order book. Obviously, this is what NASDAQ and NISI and plenty of other people do. So that was the goal from day one. The Solana blockchain launched on April of 20, so about a year and a half ago. And conveniently, right around the same time, a guy named Sam, Bankman Fried, who is the CEO of FTX, started to get real excited about Defi.

and realizing it was going to change his FTX business as a centralized exchange, started hacking around on Ethereum, was extremely unhappy with performance of the system, and looked elsewhere, and ended up picking Solana to kind of go all in on. For two reasons, primarily, one was the understanding the importance of the order book as the fundamental technical primitive that underlies all the finance, and two, the focus on intrashard scaling as opposed to intershard scaling, which is more or less what everyone else has focused on in crypto other than Solana. And that led him to build this thing called serum on top of Solana,

which is a decentralized exchange and an order book on the Slana blockchain. And that kind of had launched in August of last year. And since then, that's kind of sparked a real growth in a DeFi ecosystem around Solana, which has then led into NFTs and all kinds of other really interesting things. So when you look at NFTs, some NFTs are now trading on Solana because it's much cheaper to do that. There's less fees and it's faster.

Solana's a hundredth or a thousandth the amount of time and money as Ethereum. Is that directionally correct? Yes. Well, that's approximately correct. And then USDC, I just had Jeremy Aller, on the program because this weekend startups is turning into this weekend crypto, Jeremy O'Learron. He's doing USDC, a stable coin that's basically following the rules.

He also is an onslauna, correct? So these two major use cases were a big part of how this thing grew recently? Yeah, those two things really helped to get off the ground. Jeremy's background is not as much of a trading background, but he's really focused on payments. And again, he understands that absolute hard requirement is sub-second, sub-one penny transactions. And if you're a payments guy thinking about enormous payment scale, those two things are a paramount. And so that really drew him in the slana. Microacquire is a startup acquisition marketplace that cuts out the middleman.

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Once again, try dot microacquire.com slash TWIST. Is Solana overtaken Ethereum at this point in terms of where developers want to build or is that and where speculators want to speculate on a token? There are two different groups of people, but I'm curious your thoughts on each one because it does seem, we talked about the Ethereum Bitcoin flippinging. They seem like two different use cases from everybody I talked to. one's programmable and, you know, one is a sort of value, but Ethereum and Solana feel like they're, they're actual competitors and people have been speculating,

hey, when do these things flip? And what would be the case for that flipping? So, I mean, obviously you have a horse in this race, but give me your best impression of when Solana overtakes it, because it looks like USDA is going to overtake Tether. So the idea that these crypto projects were going to maintain their positions

is kind of ridiculous as a premise to begin with. So let's talk about, first Ethereum versus Solana. Yeah, and I also want to revisit the Bitcoin question too right after that. So in terms of speculation and just dollars, I mean, it's no question Ethereum is substantially larger, both ETH versus Solana versus Solana based assets, that's primarily a function of age. And, you know, I think Solana ecosystem is growing at a much faster clip.

And I think I venture to guess if you look at the prices today, the price, the price of Seoul versus ETH in terms of market cap is like, I don't know, 15% or 17% kind of range. So call it a fifth or sixth the size. So still has a long ways to go, but is pretty obviously compounding at a much faster rate for now. And I expect that will continue indefinitely. In terms of developers, it's harder to measure, unfortunately. There's no perfect way to measure these things. What I can say and what I think most investors who are focused on the space will say,

is there's a lot of developers they have spoken to in the last 90, 120 days who have gotten excited about crypto, who want to build in crypto. They look at Ethereum, they look at Solana, and they're just much more drawn to Solana because the performance characteristics of it, the fact that it's built in Rust, and there's just so many developers around the world who are big Rustlevers. Solana is every single item of Solana is written in Rust, and Rust is the flagship language for the SDK. And so Solana is piggybacking on that mega-true. trend in computer science in a big way. Gaming people in particular seem to love all that stuff because they're performance,

you know, performance nerds. And so game people are quite attracted to it. The other group that is extremely attracted to it is, is Wall Street and trading people. All of the Wall Street folks, again, this started with Sam and Alameda and FTX, but, you know, jump trading has gone very, very big in building on Solana. jump is one of the largest high frequency trading firms in the world

and they've been quite public about a lot of the work they're doing and in the last six months or so you've seen various other large trading firms publicly acknowledged Shalana and they're kind of implicitly buying soul and doing other things and so at a minimum

gaming groups and Wall Street trading firms have gotten quite excited and that's really led to a lot of this developer activity especially of spinouts of those firms. So what's your position on Bitcoin than everybody, the Bitcoin maximalism and the Bitcoin toxicity movement are, you know, on Twitter, which is not a real place, as Dave Chappelle will remind us,

is pretty crazy. Like, they really are of the belief that there is going to only be one true. And if you don't buy into that thesis, then have fun being poor. What's your thought on where Bitcoin has, you know, sort of carved a space for itself in the ecosystem? Yeah, so among my peer set, I am almost certainly the most bearish on Bitcoin. Why? I don't think Bitcoin will be relevant in five years. It won't be worth zero. I just don't think it will be relevant.

So if it's not relevant, why wouldn't it be relevant? Yep. So two reasons. Reason number one, the value of having. a million developers building stuff, doing cool things, onboarding users for various weird apps. Today, a reasonable person can look at Ethereum and Solana and say, this is a bunch of nonsense, there's a bunch of defy speculators and people trading shit coin images of JPEGs. And like, this is dumb.

And I understand how normal people can come to that conclusion at the current moment. In five years, it is so plainly obvious to me that there is going to be hundreds of millions of people doing really interesting, cool things with NFTs, Defi, and who knows what else it's going to be. And everyone in the world will acknowledge that and recognize there is some fundamental value there. Meanwhile, Bitcoin, and all of that action will be happening on Ethereum and Solana and who knows what else. But it won't be happening on Bitcoin. In five years, I'm pretty sure Bitcoin will look approximately as it looks today, because the point of Bitcoin is that it does not change. Like, that is the defining feature of Bitcoin. And, like, like,

Like, I get why that has some resonating value. It is simple. There is some comfort in knowing that it's not going to change. But we don't live in an era of mean reversion. We live in an era of exponential software. And every year that goes by, the older folks are passing and the younger people are controlling more and more wealth. And like, that doesn't feel software native.

The world is clearly moving toward that digital native, you know, software-defined can a venture type thinking. And so I expect with a very high degree of probability that in five years time, any rational person is going to look at Bitcoin, they're going to look at Ethereum Salana, and it's going to be like, one of these is irrelevant and does nothing, and one of these is the future. So it's the feature set of the platform that will define its ultimate, you know, role in the world.

And if Bitcoin doesn't change, yeah, that's a feature. But if it doesn't change and it doesn't increase in price, and these other platforms are being used to create the next level of apps. It's almost like having an operating system with no apps. And then Salon and Ethereum are like iOS and Android. And you're like, well, why would I want to own this, you know, whacked out app, this platform that doesn't do anything in the world? Correct.

So that's lens number one. And then lens number two is, and this is where the bitcoins are getting really missing a few key things. all of the layer one blockchains, Bitcoin, Ethereum, Solana, etc. All of them have a native asset in their systems. That native asset is used to pay fees to pay gas. And that native asset has some defined monetary system, some monetary schedule, supply schedule. In Bitcoin, it's $21 million.

And it's obviously very famous and very simple to understand. Ethereum's has been undefined and is evolving, but is not perfectly defined. Salinas is actually, I'd argue, much better defined than Ethereum's. It was 500 million at Genesis with a defined inflation rate. And so far, they haven't modified anything. And I don't think they will. The importance of the 21 million meme of Bitcoin is not the 21 million. The importance is that humans cannot change the supply schedule, right?

That is really the key thing that you're optimizing for. And then secondly, and relatedly, there's, you don't need perfect precision. Bitcoiners would tell you that if you don't have nine, nine, nine, of precision on the future of the supply schedule, the asset is worthless. And like, that's just like obviously wrong. Every asset in the history of the world up until crypto has had like at best one nine of precision, like maybe two lines of precision, but like not even three nines or four nines. And the Bitcoin people are like, you must have 10 nines.

And it's just like, no. And so, yes, I agree Ethereum and Solana's supply schedules are not as credibly neutral as Bitcoins, just because the assets aren't as old and that, whatever, a whole bunch of obvious social reasons. If Solana has this inflation and I don't know what percent it is, but you tell me what percentage is. It's like seven or something right now. And it'll go down to one and a half.

So if that means they're going to put more coins out there to be sold at the market rate, or how does that work? Or it's going to be given to the, yeah. It's, it's the validators who are running the network are receiving the inflation. They're earning them. So it's not like there's going to be another coin offering that the project gets. But even if the project was getting something, wouldn't that be good for the project to have more resources or does the projects not need any more resources? Because that's the one thing that I think is either inspiring or scary about these projects, which is who's in charge?

Okay, it's decentralized. Nobody's in charge. Okay, it's become really big. It kind of would be good for somebody to be in charge if something went wrong. So we haven't seen something go wrong all that often. Of course, Zalana famously went down for a little bit because it got a denial of service attack of sorts. Somebody flooded the network and went down for 12 hours or something.

So for non-crypto people who worry about no central authority, what's the answer there? Yeah, I mean, like that's the kind of defining thing is that there isn't a central authority. Are humans a feature or a bug? I don't know. You tell me. Most people would say feature, I can make an argument bug. Yeah. But even that, I'll say it's not a, it's too simplistic of a framing.

And lastly, let's use Salonah's network outage on September 14th. There's actually a good case study here. There was a bug in the system. It was actually a known bug that actually had a pass was written, but not had not been deployed. And nonetheless, someone spanned the network, network went down. At that point, yeah, the core Salon engineering team obviously was trying to diagnose the issue. A bunch of people all over the world were also trying to diagnose the issue. Issues diagnosed. Patch is released in a matter of two or three hours. At this point,

you just need a bunch of people all over the world who have to run these nodes to know what's going on. To download the patch, install it and reboot their computers, more or less. Turns out that took like 14 extra hours to do. And so, you know, again, is that a feature or is that a bug? If the world depends on Solana, that's kind of a bug because 14 hours is longer than three hours on the flip side. It also proves the point that the Solana team does not control the network. Right. Because they couldn't get the people to restart their damn computers and install the software.

Right. But if there's enough of them, it should be create more redundancy. And there's a financial incentive for them to get their nodes back up and running, which is they're getting fees for doing transactions, etc. Correct. It's not just similar to ISPs. If an ISP goes down, they lose customers to another ISP. and they work to keep the internet running at Verizon or Comcast or AWS or whatever service you use.

And yeah, I guess we've had some issues with, you know, different infrastructures in the internet, but it's gotten better and better over time. Let's talk a little bit about this key issue that keeps coming up. Are these things tokens? Are they securities? And I know one of your portfolio companies got sued and, listen, anybody can sue anybody for any reason. But DFINITY, you know, has been specifically sued by a California resident saying they violated the 1930s Securities Act basically saying these are securities, et cetera, yada, without going into that specific case. What is the best practice today in putting these tokens out to make sure you're in compliance? And is the SEC done enough to make it clear what's going on here?

Yeah. So for DFINITY real quick, we are small, passive investors and we don't, we're not close with the team. I have no insights as to the case or anything else. Can't say anything more than that. Makes sense. Yeah. I mean, when you're buying this, it's not like you're on the board of the company. There is no company.

There is no board in most of these cases. Yeah. I mean, we were just a very small investor a long time ago. But anyways, so second comment I'll say is, you know, investor protection rules are a thing. The substantial majority of investor protection rules in the United States were written in the wake of the Great Depression. Yep. because during the Great Depression, people got desperate for money and started conning and scamming people to make money. Hence, most of the laws were written in 33, 34, and 40.

And then the Howie test, which is kind of the test that really has created the bright line litmus test in the United States was, I believe, 1950 something, right? And more or less all of the laws that are being used around investor protection in the United States, for the most part, were formulated in that period. The world has obviously changed a lot since then, most notably the internet and just general information awareness and ability to do due diligence and all those kinds of things. I generally am a fan of updating worldviews on these things given how the world has changed. But obviously, I'm not in a position to... What do you think would be if you could wave your magic wand and say, hey, here's something that balances investor protections, KYC, money laundering, etc.? what would be a fair use of this or a fair proposal here in terms of trying to qualify these things?

Because we all know that, yes, they can have the function of token. But as we were discussing earlier, there are people speculating on the token. So it's almost like an open, you know, it's basically like an open cap table where anybody can participate freely, but it's not, doesn't have the protections of the NASDAQ or the stock market, not that those are perfect either. what would be a reasonable way to do this if you were in charge? Have you given any thought of what you would like to see? So K YC-A-M-L stuff, I am in no way qualified to comment on counterterrorism, bank secrecy stuff.

I have not the slightest clue. So I will reserve no judgment there. On investor protection stuff, I think, again, the primary question you have to ask, I say meta question is, what is the time horizon on which you were optimizing for? at the social level. So if you optimize for maximum increase in overall economic output for the economy as a whole over an indefinite time horizon, which I think is the right time horizon to take at the social level, then you should be probably something that looks like close to no investor protection

formally if you want to go to that extreme. The question is how do you balance the cost of introducing those protections on all of the good actors against the dead weight loss of theft and fraud from the bad actors, right? And that's like a fundamentally difficult thing to reason about because it's all counterfactual kind of stuff. Yep. My intuition is if you multiply any efficiency gains in the economy, you know, 10 basis points, 50 basis points over, you know, a base of a trillion or something, the answer is almost

always just maximize economic productivity growth and economic market. value created. So I kind of tend towards that extreme. I realize I am not, you know, normal and how I think about these things. But that's how I would approach the problem. I'm curious what you think of my simple proposal, which is, you know, maybe there's a sandbox when you're under X dollar amount in which you can operate freely. And then when these things become larger, 100 million, a billion, 10 billion, we add in some staged, uh, compliance that needs to be done so that if there was a bad event, if there was a bad actor, like I would say, Tether to me seems like a very bad actor given the fines they've been given.

I think you probably agree or anybody in crypto would agree that they haven't acted with a lot of transparency. You can't get a project to 70 billion without transparency. So what do you think of that sort of basic proposal of a staged amount of regulation so that people can, you know, have a playground, a sandbox, if it's under 12. 25 million or something. Yeah. So, I mean, again, it's one of those things that sounds good in theory.

The problem is, like, how do you do it in practice? Because, like, again, a network like Solana is very different than a network like helium, which is totally different than a network like graph or audience. And like, yeah, there's elements of these things that feel like companies, like obviously. You do have a core group of people who sit in the same room and talk to each other and like build software and like, yeah. But also there's a lot of elements of these things that are really external to the core. to the core team and the work

output of those people, both labor and financial capital and intellectual capital, is fundamental to the long-term success of whatever the thing is. I find that securities laws today are two inwards facing, meaning they seem to assume that of the value that a team will create, the vast majority, say 95 or 99% of it, is being produced by some small group of people. And crypto is fundamentally about trying to flip that and say, what if the core team only produces 5% of the value?

And 95% of the value is produced by outsiders. And captured by outsiders. Yeah, it produced and captured by outsiders. And like, again, none of these things are 100s, zero in either direction. But like, if you believe that that ratio can be flipped, which I really do think it's possible, then it really makes it difficult to even like, what transparency do you want for? from who? Like the data's on chain, whatever's on chain is there. There's lots of great data visualization pools, stuff like Dune, stuff like Nansen and others out there. What disclosure

requirements should there be for the team and even what objectives are you accomplishing? It's not actually clear how to reason about a lot of these things. Let's talk about Dow's then, decentralized autonomous organizations sometimes referred to as Dax, decentralized autonomous corporations. These seem to have captured people's imagination. I'm getting hit up all the time, hey, create a Dow for your angel investing, yada, yada, create J-coin or, you know, Angel coin or something. And I think for a starting point, why don't you tell us what you think, why you think DAWS are important if you, in fact, do?

And what would be an application that you think could be a killer application of a DAO? Yeah. So I think the simplest mental model of DAO's is that they're just LLCs. They're just digitally native LLCs. which is limited liability corporations where you have partners in them. Correct. And I think that that model gets you like 90% of the way there. It's not fully complete, but it's actually pretty close.

The biggest difference between DAOs and LLCs is it's a lot more easy to transfer ownership rights, obviously in a Dow than an LLC. Again, all the lawyer fees go to zero. Just click a couple buttons. And then it's also very easy to prove that you own part of this LLC or part of this DA, so to speak, and therefore you can do things like privileged access, tiering hierarchies, community, token gated discords, whatever. But it's really just an asset you can own, right? And other people also own. And then you can work together. The notion of capital formation is not new.

We had the, you know, the precursor to the LLC was like the, what are those things called from the 1400s, like joint ventures or whatever. Yeah. Like that was kind of the first, you know, real notion of like capital formation, I would argue in the economy, really something that kind of represents modern capital formation anyways. And like DAOs are just reducing friction, increasing access, making it easier to transcend borders and payment rails between countries and then ability to get capital, all forms of capital together, financial, intellectual, whatever, to achieve some greater good. How does one mechanically start a DAW? Is there an Amazon web services of Dow creation. You know, if you form a venture firm, you just go to a law firm or Assure and

Karta and AngelLis, of course, now have a platform for creating a fund and they've abstracted and made it like Amazon Web Services where somebody can just go create the registration documents, fill out of form, and basically they've taken half the work out of it, maybe 75% out of it and the expense. How does one create a Dow today? Do you need to have a bunch of developers to write this code and it's bespoke, or is there an Amazon web services yet of Dow creation? Yeah, so the Angelus example you brought up is instructive, where Angelus is really focused on a specific type of fund entity thing. Legal Zoom is like another interesting kind of comp here, where they make it easy to create

LLCs of various forms and shapes. There will be different DAOs for different quote unquote types of functions, whether they're investing or collecting or whatever else. And so like there's a group of. of Dow creation and management things focused on managing an on-chain fund. So that actually is very nicely comparable to Angelist, as you just described it. There's groups of these things that are general purpose. So things like Mollock Dow, which you need to be more dev-e to use.

And there's people working on other types of Dow creation tools for guilds for these played earn games and other things of this nature. today you still need to be a dev-ish to create one but like it's just like copy paste some code and like throw it on a blockchain it's like you know doable in an hour kind of a thing so when we do this example okay in in 12 months I think there will be a lot of people creating a lot of dows who don't know anything about software engineering at all yeah I'd like to be one of them so when you because I have been so critical of ICOs and that sort of chaos but I'm seeing now is actually very serious people doing things by the books and being thoughtful about it

and legal frameworks starting to catch up with the technology and then maybe some way to abstract and create some stability here. So let's go through an example here of a Dow. Has there been a Dow that's been successful to the best of your knowledge investing in non-crypto assets? Because it seems like a lot of the Dow's are, hey, let's all put X millions of dollars together and then we'll vote on which crypto kitties and, you know, angry apes or whatever, monkeys and crypto punks to buy. Am I correct that those have kind of the pools of capital that have come together so far? So most of the, yeah, so I think what you're describing is generally accurate of most of the DAOs.

But I think your framing of DAOs might be a little too narrow. Okay. Dow, I called it an LLC, which again is useful but incomplete framing. decentralized is somewhat clear. Autonomous is actually, I think, the more interesting, most interesting three of the three letters, an interesting letter of the three letters. Autonomous. Almost none of these things are autonomous, but some of them are.

So Bitcoin is the first Dow, I would argue, where the Dow specifically is a game between people who are buying BTC because they believe in the 21 million meme and miners who are mining BTC if and only if the cost of mining it is less than the current price. otherwise because you wouldn't mind BTC otherwise you would just buy it right you'd be lose money right so you don't need servers right but but but but but Bitcoin is the first decentralized autonomous organization where there are rules in the system that define how the system works and then people are just acting according to those rules um right so in some sense you could argue Bitcoin is the world's largest Dow and I think that's it's a little bit stretching it but

you can kind of see where I'm going with that I do. do see where you're going with that. Basically, you know, Satoshi set up a framework that cannot be changed, but then the people can operate within it in a collective to achieve goals. But because it can't be changed, as we talked about a little bit earlier, the Bitcoin maximalist may come to find a day when other platforms own all the apps and why would you buy an operating system that doesn't support the breadth of apps that the other ones do with your M-Salana, whoever. So continue. Yeah. So, so the Bitcoin the first Dow arguably.

The biggest problem with Bitcoin Dow is the output of the Dow is nothing. You waste electricity on proof of work cashing. The next probably most interesting Dow at scale is probably helium, where helium, again, you have this mining concept

similar to Bitcoin, but you have people who have built a physical network all over the world. There's, I think, more than 250,000 hotspots today. You can see the network live at network.hilim.com. And like- For people who don't know, this is a share-your Wi-Fi router, earn cryptocurrency, and you people are paying to get onto that Wi-Fi network, and they now have thousands of nodes

buying these specific Wi-Fi routers. So if you had Comcast at home, you plug it in, and now you're earning cryptocurrency whenever outsiders pay for that. Kind of like imagine a decentralized boingo, am I correct? Yeah, so directionally what you're describing is correct. It is not a Wi-Fi sharing network. Today it is an IoT networks. A different set of radio frequencies but generally that's the idea. You can think of it as decentralized Boeing goes. Oh, there's another one that's doing

Wi-Fi, but this one is to do IoT devices. So if an IOT and this is an acute problem for IoT if you wanted to put into your IoT device something small like a radio a watch or something, connectivity you'd have to go cut a deal with AT&T to be on their little slurping network and pay per device

a dollar or two a month and it just makes it not worth it. Yeah, there's all kinds of problems with AT&T and Verizon wireless networks. And helium is interesting. But having back to your original question about DAOs, the helium, there is no helium Dow in the sense that like there are other named Taos on Ethereum and Solana. But if you think about helium as a whole, what you have here is a set of rules about, the rule is primarily defined the rate at which inflation is handed out and who inflationary

tokens are handed to people who are then buying hotspots to maximize the number of coins they can get. And that thing is autonomous. Like the rules are there. There is some governance and the rules have changed a few times based on global input. But like, it's a Dow. I mean, like, people have built a wireless network where no one owns network. Yeah.

So then if the Verizon of the world or what's really interesting about this, if somebody decides they're going to sue because they feel like, you know, they're competing, which is what a Verizon or a Comcast might do in these kind of situations. It's like, okay, who are you suing? Some individual node owner, there's nobody responsible. And everybody has started doing this. It's like a vast protest. And they're going to do 5G devices. So this is going to get really interesting, really quick. Yeah, helium 5G just started rolling out like a week or two ago. Oh, did it start real? Oh, wow. So in this model, I would buy one of these 5G routers. I'd plug it into my Comcast at home. Comcast would never know.

And then I'm letting people connect to that 5G and I earn these tokens for providing it, correct? Bingo. Boom. And then Audius, which I think you also invested in, is doing something similar with music and sharing of MP3s and trying to make a distributed Spotify essentially. Yeah. I think today, Audius is, that six million monthly act is, but it's a day primarily I'll call

the music nerds. So people who are really into like discovering the latest tracks and like following artists and DJs. Today it's long tail discovery. We did not underwrite the investment assuming it like rivals Spotify and Apple music. That seems pretty difficult to do. That may end up happening in five or years. Yeah, I mean, Wikipedia was told they would never get there versus Britannica. Ask a 20 year old what encyclopedia Britannica is.

They've never held one. Yeah. But even like, you know, assume the music nerd population is, I don't know, one or two percent of the population, that kind of feels right. Like, that's, like tens of millions of people. Yeah, that's still a great, that's a great, really cool thing. So, um, we would like stuff like Audius because it, it's enabling a new form of, of discovery and curation.

Yeah. Uh, so there is no AWS of Dow creation. That to me seems like an incredible startup that should exist. I mean, it does exist in various ways, fund, fun, focused ones, um, other, no, multi-sig stuff, party bid is one. They're not as easy to use as they should be yet, but I promise you there's 20 teams fiddling in adjacent spaces around that.

Since you're an expert, can I pitch you my idea and get your candid fee back? Let's do it, Jason. Okay. You're going to the dark tank. Let's go. It's kind of like Jay Quinn. I haven't rehearsed this, but imagine, you know, I'm an angel investor.

I invest in 100 plus companies a year. I set up a Dow. I say to the Dow, listen, I've been doing this a long time. I know what I'm doing. You can look at the track record. Here's all the proof. I'm going to set up a coin,

token that will, I don't know, have a hundred million of them come out a year for a dollar each. And then I will deploy them into buying secondary shares, being a fund of fund into venture funds I have access to and companies I have access to. And I will do all that administration. You don't have to vote on the companies, but you can vote when we liquidate the assets,

or you can vote if you want to take your money back or get more coins. And then every year we plan on selling up to 100 and it's a rolling fund and you basically have access to this class of investments without ever having to be an LP and go through that process. What do you think? It's crazy? I mean, no, this should exist. This exists today in very small ways. Some Dow is called like Cleeseer Downs, Flingo Down and others are doing stuff like

this now, very small scale. But I mean, people have been dreaming about this for a long time. What's the name of it? The one you mentioned? There's one called Pleasure Dow. It's a group of guys doing this. There's one called Flamingo Dow.

There's a few, I'll call them Investment Club Dow's. Some of the members, there's the Lao, there's Meta Cartel Ventures. I forget the names of all of them. But there's already people doing this today. Some members are voting. Some members are non-voting.

They all have kind of unique structures. People have been dreaming about what you described for a long time. You've got Funders Club. You've got Angelous Syndicates. Mine is the syndicate with 9,000 accredited investors, but I don't have a token associated with it. What my accredited investors are always asking me is, hey, you know, I invested in Com.com with you. I want to liquidate my position. Other people are saying, I invested with with Com with you. I think it's going to go 10x from here. I want to double down. And I don't have a way to let people trade it, but I would love to just say, like, hey,

just put it into the Dow and say, you want to liquidate at this price. And if somebody wants to buy your coins, all of the returns would then be abstracted into the coin price. Yeah. I mean, LLP, what was it called LLP secondaries in funds? I'm sure you've seen them happen over the years. They're not super common, but they do happen. I've gotten pitched on them. Like a fund, what you're talking about is a venture fund will wrap up.

Like when 500 startups started wrapping up their funds because they had issues at their firm, leave it at that. They were saying, hey, we're selling off my interest in five, I don't want to be associated with anymore. Or, hey, I've had, I've retired. I'd like you to buy my, you know, assets in this other Acme Ventures or something. So, yes, it does happen from time to time. Yeah, but the process of doing it is extremely difficult.

A lot of lawyers, a lot of paperwork. Tens of thousands of dollars in legal bills at a minimum. At a minimum. I mean, what's amazing about crypto is all assets get the same interface, which is in the case of Ethereum, the ERC20 token standard and the case of Slana, the SPL token standard. and you can trade any asset on any piece of infrastructure, whether it's on serum or uniswap or whatever else. And so you just reduce the administrative and operational complexity

of asset transfer and trading by like 100X, like it really is that much of a reduction. And naturally, by doing that, it should become easier for people to trade LP positions in all kinds of, all kinds of ventures and such. So yeah, this should exist. The world will eventually get there. A lot of friction between here and there.

But it will happen. It's really interesting. And as you take a market that is illiquid for a decade and you would instantly turn it into a 24-7 marketplace. Like, if you think about that swing, my LPs could be on the weekends having lunch with each other and trading their positions, you know? Yeah, they could. I don't think you'll ever go to that extreme, but certainly, like, a lot of things that are

unnecessarily illiquid should become more liquid, not like millions of dollars of daily volume, but like you can get it from, it takes one to two quarters to exit such a position, to it takes one to two days to exit such a position. Amazing. It would be super amazing. What do you

think about Tether? You see all these finds, you see all this craziness. Do you think that's, everybody says it's a systematic risk for crypto, take down the whole thing? when you see them getting banned in Canada from trading, you see them getting the New York Attorney General's fine, now there's $41 million fine, you see the way they kind of behave sophomoricly on Twitter

and attack people who are being basic questions, attestations from the Cayman Highlands, all this stuff put together. And then you see USDA doing it really buttoned up with a publicly traded company, with a banking license and all this other stuff they're putting in place and being dollar for dollar. What do you think?

What is the, not only what do you, you think? I think of even more thing is what do crypto people when the press isn't around, you're having drinks at a bar, what are they saying about this? Do they believe it's a house of cards? Do they believe it's Fugazi? What's the back channel? Yeah, look, so I don't have, I'm not close with the Tether team. Don't know them personally. People have been making broad-based accusations of all kinds of nefarious things for four or five years now. Basically, all those accusations have been either outright false,

or they were technically correct, but actually like practically incorrect. At this point, enough people have done enough business with them in enough volume, meaning like trillions and trillions and trillions of dollars of volume. It's hard to imagine there's any meaningful fraud here. Have they misrepresented things at times for sure?

did they do so in the interest of the market? I would actually argue yes. I can't prove that, but based on my understanding of what they have and haven't done, they did it to protect the market, which I know is weird and has its own set of problems, but is not totally crazy. They clearly struggle with PR and comms and have all of the wrong marketing instincts in every conceivable way. You think?

Yeah. So I would not encourage their, endorse their marketing strategies. but they have built a product and service that people want and like. Americans generally don't like it. Non-Americans generally do like it. There are a lot of people in the world that love the idea of having a U.S. dollar without having any counterparty exposure to the United States government. And I don't know if Tether actually delivers that product or service or not,

but there's a perception among millions of people, if not tens of millions all over the world, that USDT provides exposures to the US dollar without a counterparty exposure to the US government. But in fact, it's like a fundamentally interesting. Yeah, it's interesting as a value proposition, but as you say, who knows if they live up to that with 6% of their holdings in actual US dollars and the rest being in these wacky commercial paper,

they won't actually disclose. Yeah, again, they've done a bunch of weird things and I'm not sure I agree with them or not, but they've been doing this for so long at such incredible scale. it's hard not to imagine like they are fully buttoned like they are solvent I realize that would be

Bernie Madoff operated for three decades yeah there are there are counter examples in history everyone I know who has done they don't Tether does not directly face that many entities they only face a handful of the largest trading firms in the space the offshore ones right yeah

yeah but I mean even like for example Sam from FTX and Alameda I mean, he has publicly said on the record, Alameda has done many billions and billions of dollars of volume with tether and gotten dollars out of tether. Yeah. And other people also have done billions of dollars of business with them. I'll say the same thing.

So, you know, to the extent that people have tested the system, I mean, it has stood up to those tests. There's a theory that I've heard, which is, yeah, they may have done a bunch of funky stuff, and they place bats, which they should be. have placed, but the bets turned out so good because they were so early. So if they took your USD T and they bought crypto at, you know, five years ago, 10 years ago, my lord, they could be do all kinds of crazy stuff because whatever the dollar amount is over the 70 billion is theirs.

So if they bought Bitcoin at two, three, four, five, six thousand dollars after the 20K crash, you know, after that when it went down to three thousand, I guess, my lord, they could be sitting on 20 extra returns, they could have $200 billion in a bank account that they've swept. So nobody can complain because they're over collateralized, even though they're doing all kinds of Fugasey stuff, that if they showed it to you, you'd be like, oh, that's like my money manager going to Vegas and 10xing our money. Like, you're not supposed to do that, but they did it and worked out. Therefore, okay, we'll pay the fines. Who cares? What do you think of that theory? And have you heard that theory? I mean, I think that's, that mental model has some truth to it for sure,

based on even what they've publicly disclosed, like that is at least to some degree true. Is it 5% true or is it 80% true? I don't really know. But like, yeah, like they've, look, they are so. I'm fairly certain they are solvent now. I'm not going to make any claims about future solvency. But by all accounts, they are, they are solvent now. They have been solvent for the better part of their history other than a few weird

moments in time where there was a hack and some other money was stolen for weird, separate related reasons. Do you hold tether? No, multi-coin is not hold any tether. Would you hold tether? Would you feel safe holding your investors' money in tether? No, I mean, multi-coin is, by definition, counterparty exposed to the United States government

because I live in the United States and I have an LLC here and other things. I have no interest in avoiding counterparty exposure to the United States governments. Yeah, it would be a good idea for you to be as compliant as possible, given the changing rule set. Listen, you've been an amazing guest. I would love to have you on again. Congratulations on your amazing success. Thank you.

One fund manager to another. And what's the next deal? I hear there's another deal coming next week. I hear you guys are closing it on a big one. And we can hold this episode to the moment after you invest it. So if you want to, you have my word. We'll keep it confidential here. And you can announce this next deal you're doing.

And we'll launch it the day you announce. We do have a bunch of deals in the pipeline. There's a big one coming. I know this is a big one go. There is a few big ones in the works. I don't know when they're going to drop, so I'm not going to make you wait here indefinitely for the news to drop. Well, listen, if there's a way, I'm ready to start experimenting now. I feel like the crypto, like, crazy period is ending and the legit period is beginning.

So I'm ready to start experimenting and dip my toe in things. So if you have something that's interesting, I want to dip my toe and kind of start learning now. So let me know. And then whenever you announce, come back on the program and let's talk about whatever the newest project is and have that founder or founding team on. You've been a great guest, as I said, and continued success. And you're in Austin and you're hiring or not hiring? I know you're doing a big $250 million fund. I heard it's going to be wrapping up this year. So what are you hiring for? What are you looking for in professionals at your organization? Investment team, we are hiring right now. Our job application process for the investment team is

write an essay about anything in crypto and email it to me. The only requirement is it has to be as good is what is on our blog. Okay, so beat the blog or better, and then your email is? You can guess it. First name at? First name at. It's pretty easy.

So Kyle in the mailroom didn't get your email address. Okay, that's always my note too fast. I just like, can I get that person's email? I'm like, first name at multi-coigne. Capital. Might work. I don't know. I like that.

I like that hiring model. Write some a thesis. A couple pages. That's better than a blog post we have. Yeah. Are you into the writing culture? Did you get into the writing culture as described by Amazon, the right first culture? We are heavily right first culture.

I'm getting into it too. It is so much better. Why is writing first culture better with distributed teams and in 2021 explain why it's so good? Yeah. So specifically for investment team, it's particularly useful because we have people across three or four different time zones. And the great thing about a Google Doc is, 10 people can comment concurrently, but 10 people can't talk into a Zoom concurrently.

And so it actually accelerates the overall pace of the conversation because multiple people can talk to each other concurrent. It's better throughput. Better throughput. And then it forces specificity and forces clarity. If you make, it's much easier to make hand-wavy, dumb claims while you're talking and ranting than it is while you're writing something down.

You papered it. You have to have clarity and you have to have. to take a position as opposed to the theatrics of some PowerPoint or just speaking on Zoom. Jason, crypto's going to change the world. We're going to decentralize all of the things. Okay. That's how this is going to work. I love it. All right, listen, continued success and we'll see you all next time on This Week and startups. Bye-bye.