This Week in Startups - China punishes Didi, Twitter’s new feature, UAE makes it rain + Do Kwon of Terraform Labs | E1251

Episode Date: July 22, 2021

Jason covers China's increasing penalties for Didi (2:52), Twitter's test of a downvote feature (12:13), and how the UAE was able to induce rain with electricity (17:32). Then Do Kwon, the founder of Terraform labs joins (22:38) to discuss his stable coin project TerraUSD (31:18), the underlying cryptocurrency LUNA, and shed light on Tether as crypto insider (59:56).

Okay, we've got a really unique interview, and I've never heard of any company that is going to do what today's company in the interview is going to do, which is they're going to disband after they complete their mission. Really crazy. Doquant is the co-creator of Terra. He's on the program today. It's a stable coin that is not pegged to the dollar, but rather another cryptocurrency called Luna.

And again, he's created a decentralized stable coin, unlike Tether and Jeremy Aller's circle, USDC. This one is not controlled by anybody or any central authority, which makes it really fascinating. And if they complete the project, then they disband the company. Crazy. Interesting. This is a really interesting cat. He's based in Korea, I believe. The company is based in Singapore. So are we going to get a little bit more of a global look at stable coins today. Jeremy O'air is coming on the program. The Tether folks are still in hiding the CEO and CFO are still MIA. They're not doing any press. and the CTO and the general counsel are not coming on the program, it seems, because I think they're scared of the questions I would ask them.

So before we get to that interview with Doquan, I want to talk about three really important stories. The CCP is weighing an unprecedented penalty on DD after they ignore Chinese regulators instructions about where to go public. And Twitter is testing thumbs up and thumbs down, just like Reddit and dig in the early days for some iOS users. That's going to be fascinating. and in the UAE drones are zapping clouds with electricity to create rain.

What impact could that technology have on California and other places where wildfires are going crazy and we have droughts? Maybe we could get an extra two or three weeks of skiing in in Tahoe, more fresh pow-pow. And we could put out fires that have been raging through Northern California, Napa, etc. Stick with us. It's going to be a great episode. This week in startups is brought to you by Dell's XPS products were built with entrepreneurs in mind. With increased mobility and longer lasting battery life, you can stay productive on the go.

Sign up for a free IT consultation and a 5% off coupon at launch.co slash Dell. Notion is one place for notes, docs, projects, and everyday work that goes way beyond a wiki. Go to Notion.S.O and use promo code Twist to get $250 off an annual team plan. And Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast. Twist listeners can get $1,000 off for a limited time at vanta.com slash twist. All right, in our first story, the CCP.

The Chinese Communist Party is weighing an unprecedented penalty for D.D. The Uber of China after they ignored Chinese regulators and went public anyway. If you remember last week, we covered China's official crackdown on U.S. IPOs of their own companies. That was episode 1244. Well, there's more news to report. And I'm wondering, what is China's endgame here? Why are they going after their Google, their Uber, their Amazon, their square. What is China's endgame here? Well, I've got some insights on it, and let's talk a

little bit about it. This was first reported in Bloomberg just this morning. Chinese regulators, I'm quoting here, see the ride-hailing Giants' decision to go public, despite pushback from the cyberspace administration of China as a challenge to Beijing's authority, according to Bloomberg's sources. Okay, that's really interesting. A company in China challenging the Chinese Communist party, that seems pretty bold, especially in the face of, you know, Jack Ma and Aunt and bite dance. Really interesting. While Chinese officials responded by starting an on-site investigation at Diti's headquarters with members from the following government agencies attending. Number one, Chinese cyberspace administration, the Ministry of Public Security, the Ministry of State

Security, the Ministry of Natural Resources, along with tax transportation, other antitrust regulators. I mean, this would be the equivalent of like the FDA, FTC, FAA, I mean, CIA, FBI, everybody's coming to your offices. And this has got to be the most terrorizing thing for a group of entrepreneurs to have this many people show up. Five different agencies? If this is true, it's crazy. And according to the story, regulators are weighing a couple of different punishments on top of not letting people download the app, which was what happened a week or two ago. they're talking about a fine. Okay. How big is the question. A suspension of certain operations. Oh, boy, that's not good. The introduction of a state-owned investor. Hmm. Oh, the state gets to own a piece.

Now it's starting to sound like a shakedown. That sounds like the most likely one. A tiny fine, which is kind of like a Vig. They're kind of getting their little tax through a fine. Who gets that money? Interestingly, that'll be an interesting question. Where does that money go? Whose pockets does it go in the states? Where does that money get recycled to? Or, a potential forced delisting or withdrawal of DD's U.S. shares. And here's the quote, although it's unclear how such an option would play out. That would be kind of an international incident. If you said to the U.S. markets and investors in the United States who bought these shares or in Europe or anywhere else in the world,

you are now getting money back for your shares, I think that means no more Chinese companies going public in the West. the end. You're going to go public, do it on your markets. But this could be, I don't think that this is China's endgame. I think they want access to international markets. So this is kind of weird. What's going on here? You have to wonder, is the Chinese government acting in coordination here, or not? And what is their end game? What is the goal? So D.D. shares drop 7.4% to $10.65 at the opening bell today. And since China began blocking Dedi's downloads, the most market cap for D.D. has swollen over 20 billion from 70 billion to 50 billion,

which is just crazy. And you remember that they got the cyberspace administration. I can't believe they're using the word cyber in the name of their organizations, the regulatory bodies. But this is very similar to what happened to Jack Ma's ant financial,

which was blocked from going public two days before it's trading debut. So in China, you're going to face quick regulation and it's not going to be a debate like it is in the United States. Some other quotes from the article, regulators urge D.D. To ensure the security of its data before proceeding with the IPO

or to shift the location to Hong Kong or mainland China, where disclosure risk would be lower. The people said regulators didn't explicitly forbid the company from going public in the U.S., but they felt certain DEDE understood the official instructions they said. Why is this quote important? Because China did the exact same thing to bite dance back in March. as we covered last week in the news.

So what ByteDance did wind up caving to the CCP and their CEO resigned shortly after. It seems like D.D may have stood up to the CCP or taking a different interpretation and went ahead with their IPOs and now comes the negotiation to how this goes forward. The CCP, if I'm reading this correctly, wanted DD to IPO in Hong Kong or China,

where disclosure risks would be lower. So is China afraid that its largest tech companies? companies are inflating numbers or there's some lack of truth here. That's one speculation, I guess. And maybe the U.S. market is too stringent about disclosures or maybe, you know, China just wants these companies to be public in their country. They want to reap the benefits. They want to have more controls. That seems more likely. So this could be the great, I don't want to say disconnection, but it does feel like the integration of the West and China

and the financial markets is now been frozen and it might start to reverse. So there's going to be this pause. Now, does that mean we're not going to make our iPhones in China? That seems like that would be really hard to do. Does it mean Apple's not going to get to sell iPhones in China? I don't think that's happening. But the NBA or movies occurring in China

that seems like it could come off the table, and that might not happen in the future years. We might not have access to those markets with our cultural products. And that's fine with me. Honestly, who cares if we lose 10% or 20% of Disney's revenue or the MBA's revenue in China? If we can't get to an understanding with them about reciprocity and we can't have some basic trending of human rights in the right direction or disclosures in the right direction, I think it's time for the West to maybe step back 20% in this relationship. Certainly, Taiwan is going to become the hot button issue in the coming years.

And the silicon and the chips made in Taiwan, we need to not be dependent on China. And I think it's kind of lame that, you know, the NBA and Hollywood are so enamored with China and so virtual signaling about so many issues here in America, but you'll never see anybody in Hollywood talk about the three million Uyghurs. in concentration camps, being tortured, being for sterilized. They will not talk about newspapers and journalists being jailed in Hong Kong and Hong Kong being taken over and they won't talk about Taiwan. So the most virtuous, virtue signaling athletes, actors, directors, and studio heads are silent

on China's human rights violations. Lame. Let's just disengage from China on a cultural basis. And then we'll figure out when it comes to building products and, you know, things that are going to be a little harder to become independent, we can figure that out later. But let's have the great unraveling begin. I think it's better for everybody. If they want to pursue a version of humanity, which is communist and authoritarian, and we want democracy, let's move our factories to other countries that are democracies or, you know, less authoritarian. It's a no-brainer for America.

It's a little bit of pain for a lot of gain in my mind for the human species. If you're a founder, you need to check out Dell for Entrepreneurs. They have amazing exclusive benefits for members. Entrepreneurs can get free, expedited delivery, exclusive offers, and up to 6% back in rewards. You can finance your entire IT project with Dell Financial Services, and you'll have a dedicated startup IT advisor to help you with any and all tech questions. Dell has a product line that was engineered with entrepreneurs in mind. Dell's line of XPS laptops and tablets were built for mobility.

They're gorgeous, and they have long. longer lasting battery life to increase efficiency when you're on the go. Plus, Dell is the world's number one monitor company so you can pair your new XPS machine with the perfect monitor to realize your vision. In fact, I've got two 27-inch monitors on either side of my desk right now, turn from horizontal to vertical. Boom, huge amounts of content to keep me really efficient. It is absolutely fantastic.

Over there, on my other desk, I have two desks in my office, a standing desk, and a regular one, I have a 49-inch curved, beautiful Dell monitor. Now, that's like a whole different level. That's like founder's CEO level. But if you want to invest in it, I think it's well worth it because I can have four windows up. I like the two different setups. It gets me into two different mindsets. Once again, members of Dell for entrepreneurs receive additional 5% off on select products,

including the XPS line, which you're going to love. And they'll help with any IT projects you may have. Go to launch.com slash Dell, launch.co slash Dell, and sign up for a free IT consultation and 5% off. Get that coupon today. Next up, Twitter is testing, upvoting, and downvoting buttons for some iOS users.

This is brilliant. I love this idea. The goal of the buttons is to highlight the more interesting and relevant replies in long threads. This would be great because you don't really have a way to signal I disagree with this or I find this, quote, lame in some way.

So a tweet from Twitter support yesterday read, some of you on iOS may see different options to up or down vote on replies. We're testing this to understand the type of replies you find relevant in a conversation so we can work on ways to show more of them. Your down votes aren't public while your up votes will be shown as likes.

In other words, they're taking what dig and Reddit pioneered, and they're moving that to Twitter. This is great for threads, because if you go to Reddit or other forums, you used to be able to see the top two or three threads up top. Now, this does change the chronological nature of it, So you think of every child to the parent tweet. So I read a tweet.

I thought that the TV series Loki was awesome. And then 10 people reply. Well, one of those might be the most interesting thread, but it could be the 10th one down. It would be better to move that to the top. But it is going to take a lot of retraining of users to understand that. Because when you go to Reddit, you're like, wait, why is this child to the parent tweet or the child thread? Why is it up top? Oh, it's up top because it's the most interesting one.

I kind of like that. The buttons can be seen as arrows like Reddits or thumbs like Facebook. So they're testing a couple of different versions of this. And there's only a small number of testers can see these options. But this is the great renaissance going on at Twitter where they're trying a bunch of different things and maybe not being so precious about the product. Some key notes about the experiment, Twitter support continued. This is just a test for research right now. This is not a dislike button.

Your downvotes are visible to you only. Votes won't change the order of replies. So they're not doing the order of replies yet, but that will be eventually where this goes in long threads. Some responses from Twitter with the obvious ones. What's the point of a dislike button if you can't see the numbers for it? And then this isn't quite a dislike button was the reply. In this research experiment, the thumbs down icon is a down vote

that lets us know that you think the reply isn't relevant to the conversation. We want to better understand the types of replies you do and don't find relevant in a conversation. And Cody Elam, hopefully I'm pronouncing your last name correct, Cody. A user researcher at Twitter tweeted, we're testing a few approaches to allow people to upvote and downvote replies. This gives people the power to privately voice their opinion

on the quality of replies without publicly shaming others while giving us more nuanced feedback. So I think you need to think about this as they're just trying to get some feedback on long threads. And I think who's a, opinions are quality discussions. They're not trying to make this a political one where it's like, I disagree with you. It's more, this is an interesting reply. This is a less interesting reply. Perhaps maybe thoughtful would be a way to think of it. This is a thoughtful reply or a compelling

reply. Not that you disagree, but that you find it compelling or not compelling. And that's why at the bottom of Reddit threads, or I think even Hacker News, you'll see like things that are voted down a whole bunch. I think on Hacker News, they made them gray so that you barely, see them on the screen when they get to the negative area. So historically, we've seen Twitter try and test other engagement buttons in the past. And they've been surveying users about emoji reactions, which is something you see on Facebook, where you can put emoji reactions, which Facebook stole from Dave Morin and Path.com. And I think Dave Morin from Path.com got the idea from some Korean social networks,

if my internet history and my social media history is correct. this fits into a lot of what Kavon Bakeport discussed with me on episode 1225. If you go back to episode 1225, I had the chief product had at Twitter on the program. And Twitter wants to connect people to their interests and to conversations that are healthy. So they understand Twitter's toxic. I am taking a Twitter break, not really for the toxicity, but more to focus on this show. Because I realized I was doing all these tweets. about things that I talk about in the show,

and I'm just like, you know what? I want to focus just on the show, just on getting this podcast, this week and start up to four or five days a week and really work on my performance here and the information I share here. That's my goal. That's why I'm taking a bit of a Twitter break.

I still look at Twitter every day. I'm probably spending less than half the amount of time on Twitter, maybe a third of the amount of time, because I don't reply anymore. The only thing I'm doing is I will like and retweet things about the show, so you know the new episodes up, and I'm posting whenever the new show

comes out, what's on the show today. So I just say, new pod. And that's my plan for Twitter. And then I'm going to spend the rest of the year working on the book and this podcast, because I find those two platforms more interesting for me, and I just have a limited amount of time. And as we wrap, Alexis Ohanian, co-founder of Reddick chimed in, you haven't really created a product until someone else copies it.

Yeah, it is, you know, imitation is a sincerest form of flattery. Okay, and finally, in the UAE, drones are zapping clouds with electricity to create rain. One of the driest countries on Earth, the UAE has been hit hard by heat waves and temperatures of up to 122 degrees. And according to the National Center of Meteorology's website, water security remains one of UAE's main future challenges. So right now the country relies on groundwater for two those of its water needs. This has made the country turn to create rain artificially called clouds.

seating. You've heard of that before, I'm sure. Previously, cloud seating involved salt flares, where planes dropped a bunch of flares into low clouds, but this is kind of different. The UA oversaw more than 200 cloud seeding operations in the first half of 2020, successfully creating rainfall. So here we go. There have also been successes in the U.S., China, India, and Thailand. I wonder why we're not doing this when we have fires and we have wildfires in California. you, why aren't we going up and seeding the clouds and creating rain and trying to put them out? A 10-year cloud seeding experiment in Wyoming resulted in 5 to 10% increases in snow packs. This is really interesting.

Tahoe here in California, the real estate crashed after we had like three or four really bad short ski seasons because there was no snow. This could change everything. If we can dump snow, they might say, you know what, this weekend, there will be four to seven inches of new powder. And we're going to force that to happen. to intervene if it doesn't happen naturally. It's a brave new world, folks. Obviously, there are concerns about the impact on the environment and the cost of doing this. So this is just testing out new technology that zap clouds with electricity and create rain.

Basically, the clouds are clumped together and produce precipitation artificially. The UA is one of the first countries in the Arab Gulf region to use cloud seeding technology and the efforts are part of the country's ongoing, in quotes, quest to ensure water security since the 1990s through the UAE research program for rain enhancement. If you were watching the YouTube video, you got to see all this B-roll of rain in the UAE. We're seeing these wildfires.

I mean, I think this is something for us to look into. I also think the desalienization issues are a function of energy. We have small nuclear reactors we can create now. if California really wants to be visionary, it's time to put nuclear reactors and desalinization plants up and down the coast of California and start thinking in a 50 or 100 year cycle

about what we're going to need to do here, we could be pumping salt water that is clean, desalinized, into all the arid places in our country, just like we do for our lawns when we have a sprinkler system. Think about a giant sprinkler system that we could create that would eliminate any kind of issues with fire, and we can send these drones up to create rain if we need, and we could be energy and water independent with the technology we have today. We need only have the will to do it. Okay, here's my interview with Doe Kwan,

the co-creative Terra, which is a stable coin that's not pegged against the dollar, but rather against a cryptocurrency called Luna. It's a fascinating discussion. He eventually wants his company slash project to be put out of business and the project becomes absolutely decentralized and nobody's in charge of it. This is one of the most interesting discussions I've ever had with a crypto person on this podcast. Teams today need a central hub for all the information and work that they're sharing, especially now because you're working remotely. And Notion allows you to take all of the talking culture you had and turn your company into a writing culture company. You want to write stuff down and then you want people to read it, comment on it, and refine it. And all that knowledge

builds and builds inside your Notion. When we went fully remote in March of 2020, Notion became our internal knowledge bank. And actually, here is one of my producers going through our pod notes page on Notion where we highlight all the top lessons from every episode. Notion is the one place where every team, from engineering to sales, can work together seamlessly with 500 integrated apps, including Google and Slack, so you can collaborate in real-time and tailor workflows to your needs. Hundreds of thousands of teams worldwide are already delighting their employees with Notion. Plus, Notion has a worldwide community of millions of users creating templates and tutorials, so the product is continually improving. Go to notion.S.O and use the

promo code twist to get $250 off your annual team plan. That's multiple. months for free for your growing team. That's Notion.s.O and use the promo code twist during checkout to get $250. Very generous software. Thank you to my friends. Had Notion, number one, for making a great product, and number two, for $250. Really good job. All right, everybody knows we've become a little bit obsessed with stable coins here at this week in startups because everybody keeps telling us about tether and how it's super problematic and could be coming apart at the seams. And then somebody I've known for 20 years, Jeremy Allaire from Circle started his own stable coin. What is a stable coin? You ask, well, if you haven't been paying attention,

it's a way to move money around really easily using the basic technology of cryptocurrency. But instead of the price changing, a stable coin stays stable. So you typically have one coin equal $1. Why is this important? Well, get putting people onto different exchanges and to trade cryptocurrency is challenging. Just like if you had to, you go to a casino and you're in Vegas and you get some poker chips and you can bring them from one casino to the other and you can play different games, you don't have to take out your credit card or your ATM and get cash at every different station. It just makes it a little more fluid to carry some chips in your pocket. That's kind of what stable coins are.

But stable coins are not limited to here in the U.S. and they're not limited to Tether, although Tether has reached over $60 billion and has all kinds of different questions about their practices. And so as part of our ongoing understanding of these coins, multiple people said, you know, you've got to talk to Do Kwan from Terra. And I said, who's Mr. Kwan?

I don't know if I've ever met him. And so we got introduced through a bunch of different people. And now on the program from Seoul, Korea, Do Kwan. What time is it there in Seoul? It's five o'clock here in California. Well, it's 9 a.m. So bright and early. Oh, perfect. So this is great. I should only have Korean guests on from now on because I'm at my top performance right around 5 o'clock. And you get to be on right when you get to the office. Thanks for coming on the show. We appreciate it. Now, you heard my little introduction about stable coins and why they're important.

What is it? Why are stable coins important for the crypto ecosystem? And then what are you doing with Terra? Sure. So while Bitcoin and Ethereum were sort of fundamentally important in allowing the creation of lots of different types of crypto apps, it just so happens that most people don't denominate spending or their store of value in a volatile asset. So for example, if you're trying to build, let's say, an HR solution on top of Ethereum and then use Ethereum as the base currency,

it's very difficult to sign an employment agreement in Ether, right? Because if Ether's price drops, then you're going to start. Right. And then if it goes up, then the company's overtain you. Right. So. Yeah, that's going to be a pretty wild ride. I mean, if you get paid in Ethereum 10 years ago, it would be pretty great deal.

And if you got paid in Ethereum, you know, in May of just this year, you would not be too happy. Exactly. The salary would have gone down 50% in other words. Yeah. So, I mean, while these different types of crypto assets are really valuable commodities for whatever fungible value that they represent, if you're trying to build real-world financial applications that, you know, millions, if not billions of people can use, then you need the base asset to be in a currency that retains purchasing power against all the different types of spending and savings that people do in the everyday world.

And that just happens to be fiat. So, for example, the U.S. dollar in the United States and lots of different places across the world, the Euro and the EU, the Korean Yuan in Korea, and then so on and so forth. So stable coins represent a valuable experiment where you can build, you can take the price stability of fiat and bring it into a crypto-native context so that you can use it in lots of different decentralized applications. So what exactly are you building at Terra then? because obviously tether exists, USDA exists, why do we need a third, and I know there's a number of them,

why do we need a third stable coin? How do you compete or contrast with those two other stable coins of note? Sure. So keep in mind that the predominant use case of these stable coins have been used for liquidity transfers across different exchanges. So for example,

if you're trying to transfer assets between Hobi and Binance, or maybe a centralized lender like Celsius or next. So then USDP has been sort of the conduit of choice for most crypto traders across the world. What's sort of like becoming the problem in this first generation of stable coins is that when you're trying to build decentralized finance or defy applications, you cannot build it on a centralized stablecoin. So for Tether and USDC, for every dollar stable coin that's issued,

you keep a dollar's worth of balance in a bank account. And it turns out, especially with the heightened regulatory attention that's coming to stable coins, that those bank balances could easily be censored or, you know, simply, you know, stoken away from the issuer or some other third party. So essentially what that means. Or the issuer themselves could be corrupt. Exactly. Nobody's saying that any of them are corrupt.

But one of them did have a big settlement with the New York Attorney General. And one of them just said they only have 3% in cash and the rest is in some other securities like commercial paper that nobody actually knows what commercial paper they have. So this is a risk, this type of. Exactly. Yeah. Exactly. So, I mean, the basic premise of DFI and sort of like the enormous promise

that was supposed to bring is that you can build a financial system that is trustless. You don't have to trust any middlemen like banks or traders or any other type of agent. And then you just trust the code in the system. And the big irony here is that if you take a trust system and build it on a, on a type of money that is highly dependent on trust of the issuer, of the regulator, and the changes in global regulatory climate, then in that case, building a decentralized application on top of these monies like that, doesn't really make sense.

So, yeah. So to just help the audience who's new to this, I think everybody understands why stable coins exist. Now, you're saying, hey, these stable coins are going to get regulated, and who knows what the people running these stable coins, who knows if you can trust them, Who knows what regulations they have today, not many, and which ones will come in the future. So while USDC circles a stable coin is going to be a public company and it's in the United States

and it's being audited by U.S. auditors or they have attestations from U.S. auditors, something like Tether is, you know, obviously a little bit more opaque. What are you doing then? If you're not holding the peg to dollars and you don't have a bank account with them, then where is the money and for your stable coin living? And then maybe also you could explain to people what's a, what's a functional definition of defy? Got it.

So that's a lot there. Let's start with that functional definition of DFI. What does it mean? Yeah. So the functional definition of DFI is that if you look at traditional finance, most of what happens is based on sort of a hierarchy of centralized middlemen. So for example, if you look at, you know, the U.S. economy, everything starts from the that in the US government.

And then there's a consortium of commercial banks that do business or have an exclusive rights to do business with the central bank. And then fintech gaps and so on and so forth. So how the system works is that you need to trust middlemen at each step of the layer in order for the financial system to all work. In decentralized finance, the idea is that you don't need to have any one of those middlemen, right? You can just simply put your trust or at least have literacy.

in the code that you happen to be running for, let's say, your savings up, for your lending needs, for your FX swaps and so on and so forth. Got it. So we talked a little bit about how, you know, other stable coins are keeping some sort of assets. And these are now tens of billions of dollars. I think Circle is at 26 billion. And Tether was at 63 billion last I checked. So these are very large pools of capital.

If I were to buy Terra or I'm not sure what you call your, coin, is it just called a terra? Is that my correct in calling it that? Terra USD, yes. Terra USD. So if I were to buy a Terra USD dollar for a dollar, where does the dollar go? Where does it live? Yeah.

What happens? So TerraUSD is in sort of a burgeoning class of stable points called algorithmic stable points. And the idea is there that while the currency remains itself pegged to a fial currency like the dollar, It's not backed explicitly by a dollar in the bank account. Instead, it uses a set of game-through-ready incentives that live on a blockchain to make sure that the currency retains its value against the dollar. So the mechanism is relatively pretty simple, and there's sort of like a rich ecosystem of fast followers that are doing very similar things. But the idea is that for every terra stable coin that's issued, you need to burn a dollar's worth of an ecosystem token called Duna. and vice versa, when you're looking to redeem one pteroUSD,

you can burn that peraUSD and then mint $1 of Luna at any given time. So the idea is that when terraUSD, due to increase in demand, starts trading slightly above a dollar, let's say, a dollar and $10, an arbitrator has an incentive to burn a dollar's worth of Luna and then mint one periUSD and then sell it into the markets for $1.1, thereby capturing a 10% of our ARB spread. And the reverse direction, the same is true. If TerraUSD is trading in a discount, you can buy it and then swap it to a dollar's worth of Luna and then capture 10% art that way.

So essentially, by using a set of arbitrage mechanisms against the secondary currency, TerraUSD is able to repay its value. Okay. So there is a coin called Terra. You can buy that where? I can go on Coinbase and buy it. I can buy it on your website. It exists on other exchanges. how does one buy Terra and then where does Luna exist?

Is this Luna is your currency or it's some open standard? Yeah, so TerraUSD, you can purchase a phone number of different exchanges like BitFINX, Q-coin and, you know, lots of different service providers. For Luna, it's a similar situation. It's a currency that sort of provides for network security of the overall Terra blockchain. So you can sort of think about it as a stability counterpart to TerraUSD. And it also trades quite widely on various different exchanges. And the price of Luna changes, but the price of Terra does not?

Yes. Got it. So when I go on to one of these exchanges and I deposit Fiat into them, they would give me, in exchange, some lunas or some Terra's? Yes. Got it. And then if the Terra price changes, why would the Terra price change if it was pinned to a dollar? Sure. So normally it wouldn't, but it's just that most of these cryptocurrencies trade on order books. So if there doesn't happen to be ready inventory available within the time period that you need it,

then that case, due to supply and demand, if demand curve starts to shift, then in that case, the price is going to inch up. Well, why wouldn't you, as the person who controls Terra just print more Terra? Oh, so we don't actually print Terra. So anybody that has Luna tokens can burn it to, to mince terra. So it's a very decentralized redemption and mince mechanism. So if I own lunas, then I can make my own tariffs. If I make my own tariffs, people could be trading them. They could start to grow in value. And if there weren't enough supply, like there haven't been enough supply of Bitcoins or Ethereum tokens, they could go up in price.

But then there's an incentive to then burn tokens. That's the part I don't understand. Sure. So when the incentive to burn tokens, manifest is if there's too many people that are selling periUSD, so it starts to trade a bit discounts to a dollar. In that case, you can buy one pair of USD at that discount, let's say 10 cents. And then you can swap it on the blockchain against $1 worth of Luna token. So for example, Luna right now is around $7.00. So if you swap in one pair of USD, it's always going to give you one seventh of a Luna at that current market price. Hey everybody, I thought I would bring Christina Casiopo. I pronounced it correct. I'm hoping.

You got it. Yep. All right. You're the founder of Vanta. People have been hearing your ads on the pod for the last year. And I thought it'd be fun to have you on and you to explain why you created Vanta and what SOC2 is and why it's important. People get it right. So let's start with what is SOC2 for people who are just realizing they have to become SOC2 compliant? For sure. So sock two is. at a tie level, it's sort of a customer asking you to prove your security. So if you've heard about one, it probably comes, you're probably a B2 company and you're doing sales. And somebody asks you, hey, can I have your SOC2 report? Or, you know, hey, can you go through security review? Or they usually don't phrase it like this, but hey, I'm going to put a bunch of data in your product. And I want to know if you're actually going to be secure or leak it over the internet. So they ask you to get a sock two report. And these SOC2 reports are basically a third party saying, hey, you can trust this

company with your data. It's like a standard, correct? Exactly. Yeah. So a third-party auditor comes in, make sure you're in good shape and writes that report. All right. Thanks again, Christina, for explaining to us why this is so important for SaaS companies, especially when you start getting into that sales process. And you've been very generous. You're making a nice offer. If people go to vanta.com slash twist, where are they going to get, Christina? They're going to get $1,000 off their Vanta subscription. And we're a big fan of Twist listeners. Oh, thanks. I know you had a great response from our listenership, and they always tell you they found you here. So thanks to our Twist Army, and we'll see you all next time.

Bye-bye. Terra has had drops and peaks that are kind of strange. I know on December 30th, the price dropped down to 82 cents, and then you had shortly thereafter it popped up to 105, and then it had another drop in June. What's causing those, you know, those maybe three or four times you've had, you know, five to 10 cent drops or peak? Is that a technical era or something weird?

Yeah, so I think in terms of the volatility that happened in December, I think that's just the function of PeraUSD having had a very small market cap back then. I think that was around that time was around 50 million in market cap. Today, there's more than $2 billion worth of PeraUSD in circulation. So I think it's a different environment. In May, what happened was that most cryptocurrencies dropped by more than 50%. And then during that time, the Terra stable point economy went through, I want to say, about a 25 to 30% contraction. And that's because a lot of people were swapping out of different types of crypto positions and entering back into fiat.

So during that sharp drop, the contraction mechanism kept working. But given that there was too many people trying to sell at the same time, there was the delta risk in all. arbitraging with Luna increased as Luna's price is falling as well. So it's a stable coin, but in some moments of volatility, it can be less stable. Right. And that is better than having USDC, which is always going to be perfectly stable. Why? That would be the question I think some people would ask.

Why should I use this instead of USDC or even Tether if you're so inclined to use Tether? Sure. So, you know, let me, so there's no strict benefits of using a decentralized tablepoint over central as one. It's a tradeoff. So with a decentralized table coin, like the better way of thinking about it is that it's kind of like trading a new currency instead of creating a digital dollar on top of the existing dollar framework. So for example, if you look at the Hong Kong dollar, it's pegged against the USD by keeping a very large forex reserve. So what's analogous to that situation is that's kind of analogous to USC or feather. But what happens to HKD during times of extreme duress is that the FX reserve starts to run out or comes under pressure. And then sometimes it sips in value. Or if you look at the Singapore dollar, it's not kept through an explicit Forex reserve, even though one exists.

but the MAS uses a set of, you know, targeting tools to make sure that SGV maintains relative value stability against the U.S.D. So the pros of using a decentralized table point is that, one, you've got censorship resistance, two, you can build truly decentralized financial apps on top of this, and number three, you are free from things like corruption risk or issuer risk and different things like that.

The downside is that right now the size of these decentralized table points, are not as large as the centralized counterpart. And you can make an argument that if the game theoretic incentives are properly tested, they are more risky than just keeping a dollars worth of fee out currency in the bank account. That's what most people wonder is why wouldn't people be on these exchanges just using fiat? And the reason they wouldn't use fiat is because they might be coming from an area where they're not allowed to. That's the main reason people use a tether or a stable coin,

or because of fees with their banks or regulations? What's the reason why people just don't use Fiat for all this? Yeah. So, I mean, for Fiat, I think a large component of it is just speed, right? So, for example, if you're trying to send wire transfers to capture an ARB opportunity between two different exchanges and that ARB opportunity could only be there for, let's say, 30 minutes, but in that case, transferring Fiat is just not going to work for those types of high-frequency trading situations.

So you do need something that is blockchain or crypto-native. Another reason could be that lots of different types of operations of crypto are not accepted by regulators yet. It's not so much that they're doing something sketchy like funding terrorists or human trafficking. It's just that it hasn't gone under the right types of regulatory purview. So even businesses that operate, by most definitions quite ethically, wouldn't be able to get the the proper types of banking relationships for fiat owners and off-ups. So you said earlier, a decentralized stable coin is censorship-free. And does that mean if it's, what do you mean by censorship-free?

Because when we say censorship, we usually mean, you know, freedom of speech and saying something. What do we mean in this context for the audience that may not understand what you're referring to there? Sure. So what I mean is it's very easy for, let's say, I don't know where tether's 3% bank balances are kept, but whichever government is regulating the bank that's holding those balances could easily shut down tether by seizing the bank balance. For USC, it's very easy for the U.S. government to shut down USC by threatening the bank balance and then telling circle to freeze certain accounts or reverse transactions, which they've done before historically. And in some sense, they can also, you know, seriously jeopardize the Maker-Dow system because about 60 to 70 percent of all dying circulation is now backed by USC.

So a bank could the government could say, hey, this transaction occurred and the actor was a terrorist or it was stolen money or money laundering. You need to reverse this. And while that might be fine for the government to do that, the other parties in there might not. not have known they were transacting with that person, it would be unfair to them. Exactly. And I think a further problem is that while these systems are global, so for example, for Tether, most of the transactions are happening through the Asia or China corridors. It's kind of like a weird situation where most of the users of Tether are actually held hostage

to whichever entity that happens to be regulating Bifinx. So it's in this like weird regulatory loop where you don't really know where the exposure is coming. And how much of tether is, if you know, based on the Chinese exchanges and involved with China because we're seeing China take pretty severe action to remove Bitcoin mining and now they arrested 1,100 people in June for doing money laundering in crypto. So they're taking it pretty seriously, it seems in China. What's your take on China's approach to crypto today?

What's going on there? Do they not want crypto in the country, or do they want their digital, you know, their digital, you know, rem and B as the standard? What do you speculate is going on in China? Yeah, so China's relationship with technology has always been private developments and, you know, ultimately centralized control. So, for example, what's happening to, you know, D.D. Chucheng and Alibaba is all an narrative of trying to, you know, let's say, encourage the private sector to develop something

that's interesting, but ultimately when it becomes, you know, gets to a size where it gets interesting from the state to get involved, to take control of it. So I think that's sort of what's happening with crypto as well. So I think in the beginning, the Chinese government was keeping a watchful eye, but it didn't take action. But now, I think it's in the state where now that's rolling out things like the digital yuan and CBDC, it sort of views Bitcoin and Ethereum and other types of cryptocurrencies as competitors to that digital model.

Yeah, they're going to create their own central cryptocurrency and they don't need competition for that. I've never heard anybody explain it that way. The Chinese government is incented to let innovation happen, let entrepreneurs build and the community build

all kinds of interesting projects. And if they do hit scale, they always have the option to just own them or take control of them like they did with DED, and financial and others. What does that mean for the entrepreneurial ecosystem in China? Why would anybody want to be the next Jack Ma if they see Jack Ma's work

and what he's created just simply taken away from him? Sure. So I think that's a really interesting question, but I don't think what happens to people with, you know, $50, 100 billion necessarily deters young entrepreneurs from picking up the mantle. So in fact, if you look at China, like most things that happen when you're still small and when I say small, below $10 billion type of thing, is that for a regulation perspective, it's a really friendly environment, right? Because, you know, most things are allowed to happen

until they're shut down. And given at the scale of the Chinese government, you're allowed to do lots of different things. So if you remember, there were a ton of like ride sharing or bike, you know, bike sharing companies that sort of made its first debut in China. And back then, you know, those companies were running at, you know, a huge discrepancies and balance balance sheets, right? They didn't have, so they were basically taking small deposits for consumers to make up for losses that they were spending in marketing and HR costs in as a group. So, but even that was okay.

That is very interesting. So it's a less regulated market. And then when you do, become a tall poppy. Be careful because it might be a little less friendly. Your company is based out of Singapore. You're Korean and you're, I don't know if you're just in Korea during, I don't know if you live in Korea or your company's based in Korea as well. But Singapore, what does Singapore's approach to cryptocurrency? Why be based out of there as opposed to the United States or, I mean, we know why you wouldn't be based on China based on the previous discussion, but why not be based

out of Korea as opposed to Singapore? Yeah. So I think where why a lot of crypto entrepreneurs choose to base themselves out of Singapore is because, you know, it's generally Singapore is sort of like, like a gateway to free financial markets. Right. So, you know, lots of things that happen in the financial sector in Singapore actually happened. that happens in Asia actually flows through Singapore through some point in time

and then generally the MAS's approach to cryptocurrencies has been very friendly and encouraging. Whereas for most other places, that isn't the case. So it's been a good place to build a company. How does your company make money? So it doesn't.

So the goal of most of these companies that start decentralized projects is that, well, to be fair, for most of them, to be honest with you, they're complete money graph, right? They just want to raise money and then trade their coins to make profit and then exit. But for, let's say us, so what's kind of interesting is what happened to the MakerDAF foundation and then they made an announcement a few days ago that they're dissolving the foundation. So what they did was they built how to roadmap from when MakerDow was first proposed an idea five years ago.

And then they built out the core technical stack with the Maker Foundation, funding most of those efforts. And then now that the development work has finished, then Maker is a $5 billion stable coin, they're returning all the remaining assets into a MKR token governed Dow, and they're dissolving the foundation entirely. I think the goal for us is pretty similar as well. So we do have assets through fundraisers,

but the goal is to make the Pterr blockchain, and the pyrusible coin ecosystem as robust of an economy as possible, and then to eventually dissolve paraform labs so that it can be a completely decentralized system. So you're going to basically gift that giant project to the world. Why then are your investors giving you hundreds of millions of dollars to do that, as opposed to you taking it public, or is there some other secondary business or is the business in the Luna coins? Oh, so the fundraisers that we've done is we've sold sort of locked allocations of Luna tokens.

So the bet that they're making is if Terraform lives while at last can be a good steward of whatever it's building, that that Luna coins could be more valuable. Got it. So people, instead of funding some corporate entity, they funded Luna coin. They got blocks of Luna coin at a very low price in the beginning? Well, before it changed those things, yes. After it changed those things, it was pretty close to the spot. Spot meaning the effective exchange rate, or whatever price Luna happens to be trading on that thing.

Got it. So they bought a bunch of Luna. So this is sort of like doing an ICO, I guess. They bought the tokens? Well, after the network has launched, it's more just like an OTC deal, over-the-counter transaction. And then you have a,

corporate entity or how do you make money and pay for the team? How many people are working on this project? Is it an open source project? How does all that work? Yeah, it's an open source project and the best way to think about it is there's a lot of people that are building, you know, some area of technical development in the Terra ecosystem. Some of them are compensated through Terraform labs and most people are not.

How many people work for Terraform labs? around a little less than 100 people. Okay. So those people are getting paid from what pool of money? Oh, from the fundraisers we've done. Got it. So by selling the tokens, you put that money in the bank, Terraform Labs can then pay its employees. But does Terraform Labs have any ongoing way to make money currently?

Or it's just you live off of the tokens you sold? Yeah, it's a company that is designed to. vanish at some point in time. Okay, this is the craziest thing I've ever heard. When did you come up with this concept of a company that eventually disappears? Those hundred people who you've hired have decided to work on this project with you in the understanding that you've raised hundreds of millions of dollars to pay them, and then when that money is gone, they go find another job.

And at some point, you guys will just say, turn the lights out. Yeah, and well, so one thing you keep in mind is most of the people that work at Terra are not normal people. They actually don't make that much money. So we only have a handful of people that make more than $100,000. Got it. And so they're doing this because it's a cult, because it's like they're so passionate about the idea of creating a new, their rebels who want to create a new monetary supply for humanity? Is that their motivation? why would they come work there?

I think the motivation is a little bit different for some people other than others. I mean, it could be that, you know, like the learning opportunity to build something that is in the cutting edge of decentralized finance could be interesting. Another component could be that just in general, if you assemble talented people together,

other people want the opportunity to work with those other people. Got it. You know, and some components of it could be anarchy. or a taste for anarchies. Are you an anarchist? You went to Stanford. Are you an anarchist who went to Stanford or are you a capitalist?

What are you? I'm curious. I think I'm a 29-year-old. Still trying to figure things up. So instead of building a large company that could go public someday, you're building a project that is creating a decentralized stable coin that will allow the world to program money. and that is kind of the goal here is to program money

and make the take away the central control over currency from or give an alternative to a central control of fiat. Is that, is we having it right? That's your personal motivation? Right. How do you think the countries that control fiat feel about you doing this? Probably not that great, no, yeah. Yeah.

Do you worry that they're going to come after you for doing this? Like if it actually hits scale and people decide your money is better than U.S. dollars or, you know, the Korean Juan, etc., does that make you an enemy of the states, literally? Well, I mean, I think if I built myself a huge fortune by building something that is sort of antithetical to fiat, then I think there could be lots of. legal responsibility. But in reality, the way that I see it is, yes, they could potentially come after me. But if I built something,

decentralized it and gave everything away, I mean, what am I going to be held responsible for writing code? Well, in a way, it would be like starting a open source project. Like, you know, the fact that people created open source web servers did

dismantle people from being able to charge for web servers previously or people created open source databases, that means that Oracle lost some money because they couldn't use it. So I think you're right in that way. What's the best use case for Terra now? And what do you think in the future

will become the ultimate use case for this decentralized stable coin? Yeah. So there's a bunch of things. So one of them is called Anchor Critical. So if you look at, you know, a lot of different proof of stake tokens in crypto, they offer you pretty insane yields, right?

So, for example, for Pocod, if you hold the Dodd token, it gives you 14% in new inflation every year, which is really high. Or let's say, agrands, you know, still about 10%, you know, Solana is also pretty high. So what Anchor does is that if you make a stable coin deposit, those stable coins are used to tap into proof of stake yields that are coming in from multiple blockchains.

and then compares to the user a double-digit yield under stablecoins. So it's basically a savings account concept. So in a world where interest rates across the most of the Western world are quickly conversion to zero, if you are able to create a system whereby users can deposit things that have their value pegged to the US dollar and are earning, let's say, you know, 15, 20% yield on these things, then in that case is a serious challenge

to things at Wells Fargo and other commercial banks. So let's talk about that for a while. People don't seem to understand how 14% is being paid from Anchor or other protocols. And so I buy some tokens or I place them in Anchor and then I get 14% on my money. Where does the 14% come from? Who's paying that? The token inflation of various blockchains, like let's. let's say the Solana blockchain, Ethereum, Terra,

and then the new token emissions are used to fund the yields. So somebody has to pay that 14%. Who pays it? Yeah. So similar to compound in Avey, when I lend out, when I deposit stable coins into the smart contract, the smart contract then lends out these stable coins to borrowers all across the world,

but that post-collateral in POS assets like Solana, Terra, Pocod, Ethereum. And then the protocol takes that collateral and then stakes it to different blockchains to earn respectively a 14% yield, a 15% yield, and so and so forth. And that yield... Okay, keep going on? Yeah, and that yield is sold off for stable coins to, you know, be convert to the lender in terms of a stable interest rate.

So I get, if I wanted to take a loan against my Bitcoin or Ethereum, I can put it onto one of these platforms. Somebody else can put their stable coins there. I can get a loan against my Ethereum, but that loan can be called if, so I don't have to sell my Ethereum. If I think my Ethereum is going to $100,000 and it's only at two right now,

I can just hold it, but I can take a loan against it, like margin loans like people do against their equity in Google or some other big tech company. Right. Is that generally a way to think about it? Yes. Okay. How long can that last?

Is it just as long as people are willing to take the risk? And is that why Bitcoin had such a dramatic drop, like people were speculating that some people might have gotten what essentially is a margin call? So this is probably going to last up until the point when there's too much money coming into this system that POS yield need to come down. So these yields won't last forever. It's basically, it's either,

because the risk is higher or because the market is inefficient. But what we're betting on is that that rate is still going to be much higher than whatever commercial banks are going to offer. That makes total sense. When you talk to people who are on the inside of crypto like you are and the project tether comes up, what do people talk about, you know, wherever y'all crypto people are talking on Discord or some secret telegram group or whatever? What do the insiders who are the most credible in your world think is going on there?

Because we as outsiders who don't really understand crypto are looking at it going, this feels like it's a scam and it's going to collapse. And these people seem really shady because the CEO and the CFO are nowhere to be found for years. What are people saying on the inside of the crypto world? Because I've heard from a couple of insiders that they think it's a black swan and they're very nervous about it. Are you nervous about it? What are people saying, you know, privately? So my question is that this is true for most crypto projects.

You don't really have just one or two decision makers. Really, like it's more of a community of people with varying degrees of control over the project. So it's possible that for some of them, they could be shady. For some of them, they might be legitimate. But I think overall, it's not so much that Heather intended to run away with $50 billion or things like that. I just think there are genuine challenges to trying to create a stable point. And likely there were, you know, some losses or sort of adjustments that they needed to make in, in order to remain agile in a tough regulatory environment. That is very diplomatic. And if I'm reading into it, some people in the community might believe that they made some mistakes along the way like they did when they had that $850 million reportedly stolen from them.

they maybe mingled assets like the New York Attorney General said, but they might be making up for lost money or trying to clean something up by having paper, commercial paper from real estate projects in China or other places that maybe are bought for pennies on the dollar, but then look like full assets. Do you think there's any credibility to that theory that's been circulating? Yeah, I would be surprised that was true. And you've heard that theory as well. Yes. That the paper is from China.

It's for illegitimate assets that were bought for a penny or two on the dollar. And then that means either you could abscond with the 98 cents on the dollar or you could be making up for money that was either stolen or lost from other attacks or other things they did that were stupid. Right. Yeah. So it's kind of hard to... Yeah, it's kind of hard to comment on Tether's reserves because, you know, just don't really have too much information there.

But I do not believe that people that run Tether are fundamentally shady. Interesting. Why do you think the CEO and the CFO don't talk and have you met them and talked to them? Ever? It's probably because there's a lot of regulatory risk, right? So, Ah, so they are very scared to come up for error because people might find them and arrest them for breaking securities laws in different countries.

I would speculate, yes. Wow. So that is the problem with running these projects if it's centrally controlled. Yours is not a centric home project. You're just writing code. People can use it or not. Just like if I wrote a web server, people can use it. You're not the one running this.

Right. which explains it. It's fascinating. What do you think will happen ultimately with the regulations of stable coins in the United States, or in the Europe, in the West? Yeah, I mean, we already saw this play out with fintech, right? So in the beginning, things were a limit Lucy Lucy, you know, during the time when Alibaba was first, you know, and financial was first growing up, Alipay didn't keep a dollars,

didn't keep all the customer dollars in the bank account. So, for example, as user deposits grew, it used a lot of those deposits to fund this own growth and things like that. But, you know, regulations started to tighten, and now it takes more capital and is more difficult to build up a massive fintech company than before, right? Same with banks. So when it comes to financial regulation, it has a propensity to sort of self-repetuate. So in the beginning, things are a little bit looser, but it gets more and more stringent over time. So I think the same thing's going to happen with stable coins. Right now, there aren't too many laws.

But with the passage of pine, whatever the regulators think that they can control, it's going to get more and more control. Yes. And do you think people will use Terra, Luna, or some combination of them to transact in the world? Do you think people will be shopping online with the, because that's never really happened with Bitcoin or Ethereum that people would use it as an actual currency in the real world to book a hotel, etc. Do you think that's something that your project is more likely to have occur?

Yeah. So things are quite early. So there's a lot of guesswork here. But a lot of the apps that we've created like Anchor and Mirror are starting to see lots of users coming in from all over the world to gain access to high quality savings and things like, you know, unencumbered access to the world's financial markets and things like that.

So I think if you create like a decentralized table coin, that's a real opportunity because everybody can see that decentralized stable coins are going to be treated like banks going forward. So the question is, can you create a money, a truly digital and decentralized money, that is more akin to the internet? And I think that's the opportunity.

And then people can build, on top of that stack, I saw somebody created terra. cards. I don't know if that's your project or just something somebody built on top of Terra. But you can use Terra to buy, you know, iTunes cards or, you know, Spotify, premium, etc. Maybe you could tell me a little bit of that project. Is that yours or just somebody else made a project using the technology? No, I saw it on Twitter as same as you. Yeah.

So I have no idea who that is. So what other interesting projects are being built? before I let you go and do your day or ready, because you're very early into this project, but what are people building that is making you interested? Yeah, so there's a ton of stuff. So, for example, there's a bunch of web apps that are coming on top of mirror protocol. So, you know, a lot of people that were involved in the Wall Streetets movement

is building up exchange infrastructure on pop of mirror, such that people can trade synthetic stocks and create new stocks really easily type of situation. So that's going to be really interesting. The Mirror Protocol would allow them to create a synthetic stock. They could say, hey, let's make a bet that Apple is going to trade at this price without having any Apple shares involved. It would just be like, what do they call those markets, but like a market where you can make a bet on who's going to be the next president

or who's going to what the temperature is going to be tomorrow or something. And people can build that with this Mirror Protocol, which is part of Terra. Am I correct? Yes. Fascinating. Yeah. Yeah. And then there are things like Levana Finance, which is sort of a perpetual contracts protocol,

so you can go, you can take out easy leverage against any type of assets. So it could be like 100 X long position against Dogecoin. It could be like a 10x Schwartz on Apple stock and things like that. And that's called what? Lovana. Levana Finance. So this is a way to create put and call options or something to that effect using Terra and the Lightning.

protocol. Yeah, it creates something called perpetual contracts, which are sort of, you know, essentially perpetual features, right? So, for example, if you hold a 100x Bitcoin bull contract on places like Bitmex or, you know, FTX, then in that case, if Bitcoin's price goes up by 1%, your position is going to go up by 100, 100%. Wow. That's insane. Who would ever take other side of that bat. You'd have to be really confident that Bitcoin was going to go down, right? Yeah, there are good times too short crypto as well. It's not always a long, long, what are the things happening right now? Because clearly, we hit some crazy peak. There was a lot of enthusiasm, and now we're down 50% across the board, generally speaking. And it feels like people

are a little concerned, and we saw this happen before when Bitcoin hit 20 and then went down to 3,000. We're now at 30, we hit 29,000 from 63. Do you think we still have? have a long ways to go or that, you know, it's going to be another one of these like three years sideways kind of situations. What does your gut tell you the possibilities are? Yeah. So my thesis is pretty simple. So right now, the median household holding of Bitcoin is zero across the world, right? The reason why I'm bullish about this industry is that five years from now or 10 years from now, I don't think the median will still be zero. I think I think most households would hold Bitcoin, different types of cryptocurrencies, and I think that's what's going to lead the industry to grow.

So even if I'm reading that correctly, we're still in the first inning. Most people don't own it. Therefore, we could, and most homes will own some Bitcoin or Ethereum at some point. Yes. And that will make the price go up. But you just have to have the stomach for it possibly to go down. And it could go down to 10,000 again. Right.

Yeah, I don't really have them any expenses at bike to work. So how much of your net worth is in crypto versus fiat and owning a house? You don't own a house. You own a bicycle. That's good. That's a start. Is it an electric bike or just a regular bike? Just a regular bike.

Just a regular bike. Okay, so that's worth $200 or so. What percentage of your net worth is in crypto versus other assets? 99%. Sounds like most. Probably some really high percentage. 90%. Definitely higher than 90%.

Wow. I mean, I don't like to give too much advice because you seem really smart and you went to Stanford and I didn't. But I'm going to go ahead and give you permission to sell some of your crypto to buy a house or an apartment. I'm going to officially give you permission. Listen, it's been really great talking to you. You're a fascinating guy and I really appreciate the candidness in talking about this.

And I wish you continued success. This actually seems like the kind of project where somebody is not grifting, trying to take a whole bunch of money and scam people out of money. It seems like a project that could actually help society and give people the opportunity to build crypto into a protocol that allows people to program all kinds of interesting applications. So congratulations on the project. And hopefully we can stay in touch and hear when even more projects come out. Yeah, thank you so much for having me, Jason. All right, thanks for, and hopefully I'll see you in Korea someday or if you're having to make it out here and we can have some Jaj Myeong or something, some Tong-Sah Oak. All right, talk to you soon, brother.

Cheers. Thanks for going on the show.