Unchained - The Chopping Block: Is BlackRock’s ETF Proposal Breathing Life Into Bitcoin? - Ep. 510

Episode Date: June 24, 2023

Welcome to “The Chopping Block” – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest crypto news. With BTC topping $30,000, the gang tackles the apparent surge in institutional bitcoin interest, with BlackRock’s spot ETF application spawning a bumper crop of similar bids. Why did all these TradFi players act at the same time? That, plus a look at the drama surrounding SEC-friendly Prometheum’s Congressional testimony and what Haseeb and Robert see as the trading platform’s many “red flags.” Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform. Show highlights:  the not-so logical reasons why the markets are up whether GBTC’s ETF conversion will also get approved if BlackRock’s bitcoin ETF gets the SEC go-ahead how all the applications were ready and were “waiting for some sign,” according to Robert whether Grayscale will have to sell the underlying assets of its GBTC trust why a bitcoin spot ETF is more retail-friendly than a bitcoin futures one how plausible it is that London becomes a leading crypto hub the drama around Prometheum’s testimony before Congress the “shady” details of Prometheum’s track record, according to Haseeb why Tarun says that the venture-funded exchanges have “completely failed on many different levels” and what tokens he would list what happened with Curve founder Michael Egorov’s loan on Aave and why Gauntlet, Tarun’s company, advocated freezing the CRV market in the lending protocol why the Aave community rejected the proposal Hosts Haseeb Qureshi, managing partner at Dragonfly  Robert Leshner, founder of Compound Tom Schmidt, general partner at Dragonfly  Tarun Chitra, managing partner at Robot Ventures Disclosures Links Unchained: 3AC Founders Launch Venture Capital Firm Binance.US Briefly Displays Bitcoin Price at $138,000 Invesco and WisdomTree Follow BlackRock, Reapply for Bitcoin ETFs ​​BlackRock Files for Bitcoin Spot ETF - Coinbase  WSJ: Crypto Exchange Backed by Citadel Securities, Fidelity, Schwab Starts Operations Cointelegraph: Blockchain Assoc. requests info on Prometheum over ‘suspicious’ approval Aave proposal to freeze alleged Curve founder’s loans draws controversy CoinDesk: Andreessen Horowitz (a16z) Chooses U.K. as Destination for First Office Outside U.S. Learn more about your ad choices. Visit megaphone.fm/adchoices

Not a dividend. It's a tale of two Kwan. Now, your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways. Unnamed trading firms who are very involved. D5.8 is the ultimate policy. D5 protocols are the antidote to this problem. Hello, everybody.

Welcome to the chopping block. Every couple weeks, the four of us get together and give the industry insiders respective on the crypto topics of the day. So first, quick intro is we've got Tom, the Defy Maven and Master of Memes. Next, we've got Robert, the Cryptoanassur, and Captain of Compound. Then we've got to ruin the gigabrain and grand pooh-bah at Conlitt. And finally, I'm the see of the head hype man at Dragonfly. We are early-stage investors in crypto, but I want to caveat that nothing we say here is investment advice, legal advice, or even life advice.

Please see chopping block. That XYZ from core disclosures. Okay, boys, we are back at 30K. It seems like all of a sudden markets had a sign of life. Things are up again despite all the SEC attacks against crypto and all these things being supposedly unregistered securities. and the market is trying to figure out where this stuff is coming from. And Tarun had a theory. Tarun, can you explain to us why markets are up so much?

Well, cryptocurrency's favorite astrologer is back in action. Merritt and Altman is putting out a new natal chart as a soul-bound NFT. It must be the reason everything is going up. It's a naval chart? N-A-L. N-A-L. I don't even know what that is. What does that mean?

It's like a birth. chart. It's a birth chart, right? Yeah. Oh, so what, it means like what month your way, how does this relate to prices? Or crypto at all. Yeah, aren't prices? You asked me for my thesis and I, I chose a random tweet that I saw today. Okay. Yeah. Got it. So because Mercury is retrograde. It's like it's generated on chain. Can you believe it? It's like generative, generative astrology. You had generative AI recently, but now we've moved forward. We're on generative astrology. Own your astrology. Okay, we're clicking through this. Hold on you got to figure out what what price prediction this is going to give us.

I have, I don't ask me. Tom is going to admit one of these live. But the most interesting thing for people who don't know is like during the bull market, she did give a lot of price predictions from her astrological insights. How do they do? I don't know. I don't think any of them did well, but I don't have no clue. Like, it's, it's, it's, It's hard to beat the market when you're relying on astrological signs. I'll say that. That I think we can say with some confidence. I am surprised there's never been a coin that's, you know, there's tons of coins based

on like random astronomical things like, well, Cosmos, for instance. But I've never seen anyone go straight for the astrology thing. But I feel like if you did that. Wasn't Jay's new project from Cosmos? Jay's, what was it called Virgo Project or Libra project? Well, there was Libra literally. No, no.

And there's Gemini. But none of them leaned into the astrology. They just like happened to choose particular you know, in the Gemini case, it was about the twins, not the astrology, right? I think the astrology gets you in the door, but if you go too hard

on the astrology, I think you start scaring people away. But it's like dog coins are a form of astrology. If you lean all the way into astrology, you definitely do not have segregated customer accounts. That's like the one rule that I can assure you for exchanges. But you don't think dog coins are sort of feel like astrology, right? Where it's like whichever dog coins the flavor of the month is suddenly like people give you some retroactive reason for why it happens and like they pretend it's causal,

but you know, obviously who knows. Yeah. Well, okay. So taking a step back, the real reason why markets are up so much is because not just because Mercury's and retrograde, but also that BlackRock filed for an ETF, a Bitcoin ETF. Now, if you haven't been following crypto, you might not understand why this is a big deal. So there have been many, many attempts to try to create a Bitcoin spot ETF in the U.S. There are other countries that have sort of exchange traded products for Bitcoin,

but the U.S., the SEC has always denied any Bitcoin spot ETF products, although they have approved Bitcoin futures ETF products. And this has been a point of contention for the industry, which is that part of the reason why it is difficult for retail investors to get access to Bitcoin is that they cannot buy it in a normal broker's account very easily the way that you could within an ETF. And a lot of institutions are unable to buy it very easily without getting on board in something like Coinbase, which of course is currently under, you know, attack for their business model by the SEC.

So there have been many attempts by different groups to try create Bitcoin ETFs, but they've all been shot down by the SEC over the last, you know, three or four years. But BlackRock just filed an ETF kind of out of nowhere. This didn't seem to be on anybody's radar. And BlackRock, of course, is the largest asset manager in the world. They have trillions of assets under management. They are absolutely massive. And they also have a pretty incredible record of getting ETF approved.

And so there's a lot of speculation now in the market that this BlackRock ETF filing means that this ETF is going to get approved. I think out of 400 plus ETF applications that BlackRock has made, only once have they ever not been approved. And the last time that happened was like in 2007 or something. It was a very, very long time ago. So this seems to imply that BlackRock knows something the rest of the market doesn't. And basically immediately on the heels of that, we saw Invesco, which is also a large ETF manager, Wisdom Tree and Valkyrie all file their ETF applications. We also saw the GBTC, that's the gray scale Bitcoin trust.

We saw the NAV, the discount to NAV, meaning this was a lot of the origin of the 3AC blow up and all the stuff that was going on, which is that this trust, which does not allow redemptions unlike an. exchange-stated product. This trust doesn't allow redemptions. So when it trades below par, there's no way to actually get it back into par using arbitrage. That gap is closing. So it's now down to 33%, which is a local high on speculation that if this BlackRock ETF gets approved, then it's also very likely that the GBT ETF gets approved as well, or the conversion into an ETF gets approved, and therefore that this gray scale trust is going to get unlocked and that discount is going to go away. That seems to be driving a lot of excitement about crypto. And it seems to run very counter to the feeling in the air that we all had just a couple weeks ago, which is this kind of

gloominess in the U.S., that institutions are going to back off, that crypto is kind of dead, U.S. is going to be pushing things overseas. How do you guys see this story and how does it fit into your picture of what crypto is doing in the U.S. now that you have BlackRock filing for a Bitcoin ETF? Well, from what I've heard, and again, I'm not an expert. But what I've heard from others is that there's a speculation that all of these ETF applications were filed in response to expectations that the Grayscale lawsuit is going to result in Grayscale being approved via, you know, judicial action. And that, you know, if Grayscale is approved or there's the expectation that it's going to be approved, then everyone else wants to get in line quickly. Now, the thing that's

really surprising is that everybody that Haseeb already mentioned, like all of the biggest players on Earth, pretty much all came out at the exact same time with their applications. And this is actually the most surprising thing because, you know, it would have required all of them to have done a lot of work before this point. You know, creating an application is not an overnight process. It's a lengthy process that has a lot of legal time and expense that goes into it. All of the different applications clearly must have been ready to go previously. And so either all of these sponsors were just waiting for some sign and they all, you know, just immediately follow. Astrological sign?

Maybe. Maybe. You know, the world works in mysterious ways. Mercury. Right. Mercury got everyone to take their applications, you know, that they were, you know, holding on the shelf at the lawyer's office and they decided the all file on this week. You know, or they know something that other people don't. Or they were instructed, you know, to or told.

that SEC was going to change its regulatory process regarding Bitcoin spot ETFs. But whenever it was, every single firm had an application ready to go and they all filed them at pretty much the exact same time. So this week has been just a drumbeat of institutions entering crypto with registered products, which again is exactly what the SEC has always indicated, that concept it wants. It wants people to file prospectuses for, you know, investment products. and, you know, disclose the risks and create new things. And so there's now, there's just a wave of institutions that believe that the time is right.

And so, you know, it would be really interesting to see over the next couple weeks, which get approved. It's possible. Every single one of them gets approved. And there's just an army of different choices for consumers to be able to purchase Bitcoin and have it held in an ETF for trust structure. So pretty exciting time. But we're going to have to wait and see to see what the actual outcome is. because the applications alone fundamentally don't mean anything. So again, I don't know anything about how these processes work,

but beyond just what I've observed every last few years of seeing things repeatedly get rejected. But it seems plausible to me that the reason why all these folks have come out of the woodwork is that the SEC is basically ready to backpedal. They see that this case, the GBTC lawsuit that is going live is not going well for them. And they see kind of sentiment turning in Congress against the way that the SEC has been regulating the industry. And rather than have it be, basically, the market is owned by Grayscale or these crypto folks, it's plausible to me that they reached out to, you know, very high-quality ETF sponsors

that the ESEC knows how to regulate very well. And basically said, look, why don't you guys come in the market? I think this thing is ready to go. And we really don't want it to be just Grayscale out here, you know, basically attracted deposits. We'd like to have a more regulated counterparty to be working with in having these products out there. Right, which rugs gray scale essentially. If they were going to get approved traditionally and be the only product out there, they might not be first to market. They might be

last to market. Well, the other thing that's kind of weird is like, I feel like some of the speculation I've read, and like, again, I have no information that is real or advantaged in any way about this, is that this would basically force grayscale to sell to one of, basically sell their holdings to one of these if they got approved first because it would just be like, otherwise they wouldn't have, be able to exit very easily. And like all the creditors and stuff would just push DCG into selling it

because like these funds would obviously want those funds immediately. So do you mean selling the underlying assets or selling the actual product, like actual GDP? No, no, no, the underlying assets. Like dissolving the trust, selling it and retaining the proceeds and returning it to the... Right. Like dissolving it and you, basically you get a BlackRock share for that. That makes sense. So you sort of rewrap all the underlying assets and give them back to.

And the argument for the only reason I said this is all the, there are a lot of people who are like trade that the spread, the discount to NAV for Gray's scale. This was their thesis was that the reason it's going to zero, like people are thinking it'll converge is because the court system will take forever. But if this gets approved, basically the fastest thing that could have. happen is actually some type of force acquisition like this. Is there a precedent for that? Has that happened before? This is where I don't know, but this is what people who love trading GBTC spreads were saying.

So, like, I have no clue if that's like, you know, they were very informed on this or this was like a, you know, Reddit style conspiracy theory. Yeah, it does feel kind of like a slap to the face of DCG of like, you know, why we've had some of these defaults and why they're kind of the position that they're in. And it's like people getting trapped underwater in the GPTC trade, which obviously they have, you know, facilitate through Genesis.

And now it's like, well, you know, even if you basically are, you know, allowed to have this ETF conversion that would have solved the problem in the first place, you know, you don't actually get to benefit from it because, you know, Black Rock is sort of sweeping it out from under you and like pretty much collapsing the value of gray scale. So it's like they just can't win to an extent. Right. And just to be extremely clear, right? GBT and the gray scale products have been a toxic financial product that tens of billions of dollars have flowed into over the last couple years.

You know, the fact that you can't redeem from the product and you're charged exorbitant fees, 2% to literally just total Bitcoin or ether, that's not a good financial product. And the only reason it worked is because at one point it traded for a premium due to supply and demand and balance. and assets rushed in. But fundamentally, the Grayscale Trust are a toxic product that have not been good for the investors, the industry, and it really was the root cause of a lot of the things that blew up, right? 3AC and the ripple effects and just, you know, it's been an absolute calamity.

And really, like, alternatives to GPTC and the Grayscale Trust should have been approved a long time ago, and it would have been healthier for everybody. It would have been healthier for investors, healthier for the market, healthier for competitors. And it's just really sad that there's never been any actual competition on that front. And the only product that's been traded is a toxic product. That's such a good point, Robert.

Like, so much of the damage of the last year could have been avoided if this product basically was arbitrage out of existence. It's a testament to the fact that market efficiency creates so much more stability than, you know, maintaining these inefficient markets. I do feel bad to some degree for, I do feel bad to some degree for gray scale because clearly gray scale, they are in some sense, the people who push the envelope with the SEC to force their hand to have to approve,

I mean, again, we might be jumping the gun, but to approve a Bitcoin ETF. And it seems overwhelmingly that they're not going to be the beneficiary of that. That said, they got paid plenty in the years that they essentially had a monopoly on being that, you know,

exchange traded product. The interesting detail about, I don't know if you guys have any color on this, the interesting detail of why the SEC has claimed that they've rejected all these previous Bitcoin spot products is because they don't have these market surveillance, you know, market surveillance agreements. And BlackRock supposedly has this. This is the one thing that, one place where they diverged from previous applications. And the same thing is true for Wisdomtree and for Invesco is that now they have these surveillance sharing agreements in place. It was always a little bit

unclear why this mattered. That seemed like always a little bit of a red herring, given that Bitcoin is such a massively traded product everywhere in the world. You know, the degree to which you can actually have the surveillance sharing agreements with the biggest spot market, which is Binance, presumably, is, you know, the way that we calculate the indices for what the spot prices is also, you know, uses a bunch of different exchanges. I don't totally understand the details of why this was such a sticking point for the SEC, but it seems like now it's been overcome.

And that should at least address the nominal protest that the SEC gave to all the previous products that were in place. So in one sense, having a spot product as well as a futures product. So there's a spot ETF, features ETF, although technically you could get access to Bitcoin exposure, a futures ETF is just a much more complex product. It does weird things when the futures are going to roll over and stuff. And it's just not as retail friendly. It's not as straightforward as just a super low cost ETF.

There's no rolling. There's no fanciness. There's super low fees because it's just a big pile of Bitcoin that you can hold on any U.S. Exchange. Well, I mean, also the other advantage they had was, like, it is on the few ways to express crypto exposure in a retirement account, which seemed to be, like, one of the biggest drivers of volume, right? Yeah.

I'm more surprised the vanguards of the world haven't, you know, or like Fidelity, right? If they, like, built a custodian, like, you would think they would have tried. I think Fidelity has a custodian. No, no, no, no, as in they would have tried to make a EATF. Oh, yeah. They have so much captive investment retirement, like a customer base that's easy to sell to. Instead, they went for all these weird stuff, like, well, backed maybe forgettable exposure.

But, you know, but like, I mean, you know, obviously their custody and stuff has done well. But I'm just surprised they, they, you know, someone like them who seemed to have first mover advantage didn't, you know, wasn't one of the names we saw. Are there any stats for actually how much is in custody at Fidelity in crypto assets? I don't know. Be interesting. Yeah. So the other thing about this ETS story, so obviously it's caused Bitcoin to cross 30K, eth is that 1800. Markets are rallying on this news basically to a level we haven't seen since April.

The interesting thing is that, you know, the sentiment shift seems really dramatic. Basically a week ago, we assumed that crypto had just become untouchable by U.S. institutions. And now of a sudden you have even larger U.S. institutions who would not mess with crypto, seriously. in quite a while, now of a sudden entering the fray and signaling some seriousness about thinking this is a market worth going after. The other side of that news is that last week there was a story that A16Z, which of course is one of the largest venture funds in crypto, or the largest venture fund in crypto, they were creating a new office for A16C crypto, their crypto arm, in London and claiming that they believe that London was going to be the new crypto capital of Europe

and perhaps that there was going to be more and more founders leaving the U.S. and moving over into the U.K. What did you guys think of this story about, you know, London potentially being this new crypto hub within Europe or potentially siphoning talent away from the U.S., especially in light of what we're seeing now this week? Well, I mean, first of all, it's entirely plausible, right? The primary argument being that even after everyone has filed

ETF applications over the past week, there have been zero actual signs of any regulatory framework actually moving forward or any additional clarity whatsoever moving forward. You know, seeing all these institutions get excited is creates a lot of hope, but nothing has fundamentally changed last week to this week. Besides, a ton of institutions demonstrating their interest in this. But there's always been interest in having crypto financial products.

You know, the UK and a lot of Europe and a lot of Asia is. is actually creating a regulatory framework for Crypto2 flourish, period, not opacity and questionable things. It's just they're actually moving forward and trying to be welcoming and encouraging of innovation. And I think what led to A16Z, you know, creating a UK office is the fact that all of the most primary U.S.-based businesses in crypto have already, over the past couple of months, started moving offshore. Coinbase has started moving offshore. Gemini has started moving offshore.

All of these things that we think of as like the U.S. bedrock of crypto have been moving offshore in response to regulatory overreach in many cases. And, you know, that's, we have an exact opposite environment in the UK. You know, their prime minister was touting the fact that, you know, he's trying to create like a crypto-friendly country. And over time, you know, time, if you're an entrepreneur, deciding where you're going to create something new, there's a ton of evidence that you should be doing it in the UK or doing it in some other country that's extremely welcoming. And so, you know, I think Andreessen just sees the writing on the wall and sees that there's going to be more and more entrepreneurship, you know, having a focal point in the

UK or Europe in general and is trying to, you know, skate to where the puck is going and change their approach, you know, and probably going to be correct. There's probably going to be a lot more investment opportunities for them, you know, for entrepreneurs in the UK and Europe. So I think it was a brilliant move. I think they're doing what, you know, capitalism and regulation in the U.S. have forced them to do. And I think they're doing it because they're profit motivated and they see the writing. An interesting angle on this.

So I agree with you. It's very clear the UK is trying to position itself as being this new haven within Europe. I kind of imagine that, look, when you're at the scale of A16Z, it's also, you can sort of hedge a little bit and say, like, look, you know, I mean, right now it's basically only one partner who's going over there, the rest of the team, as far as I know, is still stateside. You can hedge a little bit, but also, I feel like part of it, you know, there was these hearings last week at the House Financial Services Subcommittee,

and they were basically going through some of the recent events that were happening in crypto. And this thing about A6 and Z going, opening an office in London, this was brought up a couple times as an indication that like, hey, this is a sign that we're messing things up, right? We have the biggest venture firm in crypto now going overseas and talking about how great the UK is as opposed to the U.S. as being a place to fund startups. I have to imagine that part of their motivation for this was guilt-tripping the U.S. And it seems to be working to the extent that, you know, it's one thing to say, well, they're going to

Singapore, they're going to Dubai. They sound kind of shady to an American congressperson. But if you tell a congressperson like, oh, no, London is stealing our jobs and they're taking our investments and our startups and, you know, these smart people are going over there instead of over here, the fact that it's the UK, and obviously our relationship with the UK is such that we don't want to lose to them in particular, I think this is actually a very brilliant move at the low cost of just, you know, opening an office and moving one person over. Well, I guess my question is like, has it been working? Like you made it sound like if there already has been.

I mean, I feel like there were a couple nice PR articles and like the prime minister said something. I'm talking about the way it came across to Congress people. They brought it up several times during hearings. Yes, they brought up several times during the hearings as venture capital firms are moving overseas to the UK because we do not have a regulatory framework. That is the way it's being kind of digested by Congress, which is. great. Well, I mean, the reality is entrepreneurs have been moving out of the U.S. for years and no one has given a shit. Like, frankly, like, it's amazing that, you know, every time people have been, like, entrepreneurs been moving offshore, it's like, well, it doesn't matter, you know,

just, you know, two guys in a garage, who cares? But, like, as soon as a venture firm does it, it's like, oh, my goodness, the venture capitalists are moving offshore. Now we have to pay attention. But, like, this has been happening. And, like, I don't think, anyone in Congress cared when Coinbase and Gemini and like the biggest businesses were the ones who actually are the job creators moving offshore. It's just, you know, it's a little bit annoying because like, you know, people have been like making a stink about this by like trying to demonstrate the reality of how much more difficult the U.S. was for a foundation for innovation than other countries for years now.

On the other hand, investors do more lobbying or like more targeted lobbying. So like it's not it's not like, oh, it's not like it like randomly happened is I guess what I'm saying, right? It's like the companies are usually a little more inept at being able to do that type. Because it's not in the DNA of like a founder to be like, yes, I want to go lobby. And the companies are naturally more suspect. Yeah.

Yeah. It just like never works that way. Right. Tom, you were going to add something? Yeah, I was going to say, I mean, I think the entrepreneurs are really the ones to focus on here. Like, you can still invest into European or British startups from the U.S. Like, nothing precludes you from doing that. But obviously, if you want to base your operations and team outside the U.S.,

that's obviously much more important. And where your base is much more important to how you think about, you know, a regulatory, or which regulations you fall under. So I agree. It feels a bit showy. But, I mean, I guess people are paying attention. And they should encourage it so that they can. tax it later.

Like, yeah. So it, it, well, it's good to see the UK kind of taking on the Singapore strategy, which I guess kind of the UK is becoming more and more of the Singapore of Europe, where it's sort of this, you know, it's like, okay, we can kind of get away from EU governance. We can kind of set some rules, make it attractive for capital flows. Otherwise, like, domestically, there's not that much going on. Well, the rest of their economy is kind of like in decline right now. Yeah, yeah, yeah.

So they're very much taking the Singapore strategy of just like, Let's just have great governance and great, you know, kind of financial capital. And besides that, like, yeah, otherwise things are kind of a mess. Well, also, they haven't had a premier who is a mercantilist until recently, right? Like, they've kind of had these, like, bozos for a long time as their leaders. I mean, so have we, right? Like, the U.S. has had bozos, too. But I'm not trying to, it's not pot-con kettle-blower.

I think Trump was very mercantilist, actually. Yeah, are you saying that because he's a Stanford grad or is there something deeper on your mind there. Well, I don't know. I mean, he clearly worked in finance for a while. I feel like he's much more attuned to this than Boris. Boris can't even like tie his shoes correctly. Like it's, it's kind of a, it's like not even a horse. Boris was no dummy. Let me say that. Boris was actually he was no dummy. He was, he definitely had street smarts. He, but Boris was like LBJ. I don't think he was like, uh, you know, uh, trying to do the Singapore strategy. I mean, Boris was not just like some LBJ. He was actually an incredibly intelligent, literate, and thoughtful politician. Like,

I don't think he gets enough credit in that regard, but like he actually was incredibly smart. He certainly didn't seem like it when he was in office. I agree his like history, like, looks good, but I'm certainly not a Boris fan, let's say. The chopping block will pivot into UK politics. Yeah, I'm following zero of this. I've seen so little. Actually, can I ask, can I ask you guys a question? Like, of all the British companies that you can think of in the last 20 years, which one do you give a shit about in 2023? And there's only one I can think of personally, which is transfer wise.

Deep mind? Deep mine transfer rise. Yeah, those are like the two. I actually kind of hard to think of that many British companies. Well, this is why they actually need to encourage innovation. Like, I've read a crazy stat, which was like, you know, the amount of new IPOs, you know, in London is like anemic compared to like historical averages. There's just like no new companies really going public in the UK. And when they do, the returns have been like mediocre. Like the new issuance

has been like really, really bad. And hopefully we can pull up some stats or something on this. But like, you know, that's the leading indicator for saying like, hey, we need to like rethink this and open our doors to entrepreneurs and capital and like get this mojo going here in the UK. Well, this is the Singapore thing too, right? Like if your local economy and your demographics and like your trade relations are kind of crap, but you can compete on being like, hey, this is a great financial market on which to IPO or to attract your entrepreneurs and like set up your headquarters here, it's kind of what Dublin has been historically, especially for tech companies.

Like obviously that is, I mean, that's more of like tax arbitrage than it is like actual about governance and financial markets. But I think I can see the UK nestling into that kind of a position and using that to solidify its importance internationally. Because otherwise, I think London, the UK broadly has been kind of fighting against its decline for the last 20 years. And I feel like at a certain point, you have to, definitely not 400. War of 1812, war of 1812 was like the beginning.

Yeah, yeah, yeah, yeah. Okay, all right, fine, fine, fine. But at a certain point, you kind of accept that, okay, we're just like kind of a lonely island with bad demographics and like, you know, And we still fund our royals excesses with public. Yeah, exactly. I mean, that stuff is all very bizarre to me as well. But once you accept that and you're like, cool, what do we do with this?

You know, and you sort of take the Singapore attitude of, hey, we don't need to be the center of the universe, but let's like find something that we can be really, really strong at. Anyway, it's a good sign at the very least. Well, I do think they have an extremely well-educated stem populace for this kind. of thing compared to like virtually any other candidate for someone trying to do this. So I think they're in good shape there. I mean, I also feel like France was also trying to do a little bit of stuff like this, but then Binance had an office in France or something. Yeah.

Didn't Paris just kick out Binance? Yeah, apparently they just, yeah, but there were all these people saying like France is the future for crypto. And like, clearly I don't think that was because people were saying the defythe was the future of finance and then it became the future of France. No, no, no, no, no. But then all the same particular defy, French defy people from 2020, all were shilling on Twitter in the last six months being like, oh, look, like, Biden's coming to France is like the greatest thing ever. And like, how you living there is amazing.

And like, look, we're going to be like the crypto heaven. And it's like, really? I don't think so. Brants is not bacon. That's the lesson. Yes. Okay. So my last question is, are you going to move there, Haseeb?

You're going to move to? No. What would it take? What would it take? What would you need to see for it to be like, all right, I'm going to Britain. I'm going to learn to eat in that food. If it was, yeah, I mean, first of all, Britain, I mean, not to hate on any, I don't know if any of listeners are in the UK, but Britain is just like, it's so, it's so, like, the weather is so crappy. It's so depressing.

People there are just, like, unfriendly. I would really fight going to the UK. I feel like Lisbon would be more doable. I could do Lisbon and then like, you know, commute or something. So here's the thing. If you remember before COVID, the standard game for DFI founders or founders in general would be you have a team in the U.S., you go to Switzerland,

and that's where you incorporate and you do your ICO and you do your blah, blah, blah. And then you might have a tech team in the U.S., but there's like this sort of legal separation between the token issuer and the tech team. I would be very surprised if something like that does not continue in one form or another, unless the SEC is extremely aggressive about establishing U.S. nexus, which so far they haven't been quite so aggressive on like where the

tech people are. It's more about, you know, if you advertise here, if you, you know, do stuff domestically and you attract U.S. customers, it seems to be most of what they care about. I would assume that that's going to continue in shape if it doesn't. And if we see that basically people are like, look, I have to move everyone to the UK. And that's the only way that I can do this. Then I would need to see it for at least a year and a half, right? By the time we see the 2024 presidency roll over. And we have some clarity on whether or not this regime of being anti-crypto is going

to continue in the U.S., that would probably be the moment where I can really seriously consider making a move. Otherwise, it feels potentially transient, right? There have been a lot of places that were that crypto hub for like a year. And then it kind of moved over and people moved over. and people moved on because people in crypto are obviously very mobile, right? The fact that people can even be thinking

about going to the UK means that they can be thinking of going somewhere else a year later. So that's the way that I would think about it, but the reality too is that there's still going to be a lot of activity that is in Asia rather than in Europe, right? So I think if you're Andreessen,

it naturally makes sense to like, hey, look, we kind of covered the Anglophone market. That's kind of always been our bread and butter. And the reality, too, you know, because you don't need to be in the UK, like Tom mentioned, to actually see UK deals, right? Like we, at Dragonfly, we see deals basically from anybody who speaks English. You can get your deck to us via Twitter or via Gmail or whatever.

And so it's traditionally been the case that whether or not, whether you're in the UK, whether you're in Germany, whether you're in, you know, Australia, you see all the same VCs, right? Because everybody kind of lives on Twitter. And they don't necessarily know where you are until they actually, you know, get on the call and ask you. So I don't think that that really changes that much of the calculus for a venture capitalist, unless something really dramatically changes, which is possible, but I think it's too early to say.

So the other big news last week, you know, speaking of all the stuff going on with regulation, was about this firm called Prometheum. So this became a bit of a Twitter, witch hunt hullabaloo. So last week when the House Financial Services subcommittee did their hearing on digital assets, they had a number of witnesses that they interrogated about, you know, what was going on in the industry. And one of them was this gentleman from a firm called Prometheum, which is the first SEC approved special purpose broker dealer to trade digital asset securities. Okay, so what the hell does that mean? Special purpose broker dealer is basically a broker dealer license where you can trade.

You have some special abilities that normal broker dealers don't have. That's my understanding. They were the first and only one that's ever been approved for digital asset securities. Now, the problem with this. is that digital asset securities as a concept do not exist. There are no registered digital asset securities. So this person, you know, basically they went on stage and they were kind of a, they were basically like an SEC shill effectively.

They were advocating for the importance of the SEC being the regulator of choice for the digital asset industry. They basically backed the SEC and said, yes, everything in crypto is a security. All these tokens are securities. They should not be traded by retail investors. They should register and file disclosures and all this. stuff. There are all these scams in the industry and the industry needs to be protected, retail investors need to be protected from the industry. But then as he got interrogated by Congress,

Congress started pulling out, some of the Congress people who were asking him questions, sort of pulling out some weird stuff about his exchange. So, for example, they raised a $50 million dollar reggae plus to issue a token, which is kind of weird because there is no token and their website has been scrubbed of any mentions of a token. They raised $48 million with Wang which is a group affiliated with a fund called Hashke that invested into them. And they, now, Wan Shang, hashki, they have connections to the CCP, which is kind of strange. And they mentioned that they went through an investigation by Sipheus, which is the group that checks out these kind of weird, you know, international connections.

But nothing happened. Their broker through which they raised this $40 million was a group called Network One Financial Securities, which was the broker behind the long, Island blockchain, ICT pivot, has a track record of a ton of regulatory violations, basically super shady for whatever reason. Now, and the most obvious thing that's very strange about this company is that you can't trade anything on Prometheum. Now, what I mean that you can't trade anything?

You cannot trade Bitcoin. You cannot trade ether. You cannot trade stable coins. You cannot trade Solana or compound or whatever. Actually, ironically enough, the list compound on the site as though compound is something that you could trade, but you can't, of course. because compound is not registered with the SEC as a digital asset security.

So there is nothing actually that can be done with this platform. And so there's a lot of weird questions because there are some connections from the team to people who work formally at the SEC or work with various agencies. So now there are questions of like, why do the SEC approve this guy

with no real track record, no real business, no real ability to trade anything, and have this person go in front of Congress and basically say, this is so great. The SEC should, should do everything. Why can't you just do what we did? You forgot the best part. You forgot the best part.

Everyone who works at Prometheum who has a law degree, got a law degree from a place that is not accredited by the American bar. I thought that was the best part of the story. Yes. So it's a really bizarre situation. And a bunch of Twitter sleuth, Matt Walsh in particular, we're able to track down a lot of this information after the hearings. But basically, the entire internet is now awash with people trying to figure out what is going on here. It's super, super weird. Conspiracy theory. Conspiracy theory.

So you know how you're talking about how like, hey, the SEC was like the one who like tried to nudge Black Rock. Maybe they did this as a way to because they got so much bad press from Prometheum. They're like, Black Rock, go, go, go distract everyone. I mean, it's totally possible. I know it sounds crazy, but it's, I don't know what is. It's not that crazy. Yeah. I mean, the blockchain association just filed a four.

request. So the SEC is going to have to share exactly what led them to decide to approve this group, given all the weirdness behind them and also the fact that there was really, there doesn't seem to be any business plan, as far as one can tell, even though they raise a giant pile of money. I don't think the issue is approving this group. I think the issue is approving this group and not approving anybody else, including reputable businesses with long, successful track records like Coinbase, that we're trying to get approved to be able to get these licenses. And approving Prometheum but not existing entities with credibility and a track record and all of these things, that's the part that boggles the mind.

You know, I think there should be approvals for organizations like Promethe. I think there should be way more of them. I don't think Prometheum, which is like, you know, red flags out the wazoo should be for whatever reason the only entity that's ever been giving this type of license. That's the astounding part. Well, so the red flags are comical, but I think the core point, as you're mentioning, Robert, I don't even know that it's so much that, okay, Prometheum got approved and other people didn't. It's more that the story the SEC is telling is that if you just come in and register,

then you can run this business in a legal way. Well, this is what that looks like. This is what the SEC thinks that you're supposed to do. You're supposed to do what Prometheum did and launch an exchange that cannot trade anything. Literally, there is no asset that can be traded on this platform. So what is the point of them securing the special purpose broker dealer when it basically means that their business is dead? There is nothing that can be done on this platform. They have to sit around and wait for the SEC to approve other digital asset securities so that they can be traded on this platform without any knowledge of what those will be or whether there is even a path for the digital assets that people want to trade.

Like, you know, the SEC has claimed that Solana is a digital asset security. Okay. How does Solana register? There is no explanation. There is no story. There's no path. It has never happened. So that, I think, is really the crux of the problem. It's not just that, hey, why did you approve Prometheus and not approve Coinbase? If they told Coinbase, well, you could just do what Prometheum did. That is a non-answering. That is a non-transferable. It's essentially a way of, it's a sort of Kafka-esque double speak. Instead of saying, no, you cannot do this. What's that? It's a sold-bound token. You own the right to be non-transferable. I'm missing that analogy. It did not fall in that.

It was a bad joke about like, hey, like, I bought this thing. You can't do any trading with it. But look, I can show you like I bought this thing. Like a sold out. I see. Okay. All right, all right. It's a poll app for showing up at the SEC's office.

Yes. And paying a lot of money. But they're the only ones who got that POAP. Yes. That's the other thing. No one of one. One of one. Right.

Right. Yeah. So the other story from the kind of regulated exchange side is this. exchange called EDX. So EDX, they were funded, I believe, last year by CitSEC, Citadel Securities, Fidelity, Schwab, as well as Paradigm and Sequoia, and Virtue and a few other groups. And they are now launching a basically like sort of a Tradfai exchange. So it's a non-custodial but when they say non-custodial, they don't mean defy non-custodial. They mean non-custodial in the traditional sense, which is that there is a custodian that will hold your funds and

They are just the, you know, basically they do the actual trading and the execution, the matchmaking, but the clearing happens on your custodian. So this is a member's only exchange. This is not something that you can just, you know, show up, install the iOS app and start trading. This is something basically for financial institutions to be able to trade. They can trade Bitcoin, Ether, like coin, and Bitcoin Cash, which they're now, I guess, there's some confidence now that, you know, Ether is not a security, I guess, because it's, being traded on this platform.

Any thoughts on this one? I don't know if anyone. So I think I have a hot take that maybe you may or may not agree with, which I think any venture funded exchange in that's targeting traditional finance people has completely failed in many different levels. Like everything from the Eric Reese thing, which like never fucking took off. The, you know, the lean startup is about making, the lean startup is about a book by Eric breeze about like how you should like be very

minimalistic when making a startup. He didn't take his own advice. He took 10 years to make this exchange that has like negligible market share at best and it was called like the good exchange or something. Yeah, something like that. And that was the long term stock exchange.

Long term. Long term. Disclosure. Very, very, very small angel investor. Oh, wow. I mean, their market share is abysmal. They raised like a ridiculous amount of money. It didn't work.

All of these kind of like people who were in 2017 raising money, like, Binance and then sort of FTCS were the only real survivors that made real exchanges. And neither of them had like tons of venture funding

off the ground. But then there are these people who raised tons of money in 2018 to do crypto exchanges and some of them were institutional, some were in dot, dot, dot. All of them kind of hit the,

hit the hay. I think the other thing is like anyone who offers Bitcoin cash is just never going to make it. Like, who the fuck trades Bitcoin Cash? What are you doing? Just like taking the other side of Roger Verre's bad loans, like always? Like, I don't understand. The Bitcoin Cash part is a mystery. It does seem a little off the mark for what institutions in the U.S. want to be trading. But I don't know. It doesn't cost anything bad. Let me tell you, I once recently had the

misfortune of looking at Roger Verre's Instagram. And so I'll tell you, you're always taking the other side of Roger Verre. You're increasing his lifestyle habits by trading Bitcoin cash. I see. I mean, I agree with you that these do not have a good track record. Obviously, almost all these institutional exchanges have belly flopped immediately. The difference now might be that a lot of these institutions just might be scared to trade on Coinbase at this point. And this might be the moment that there's actually enough legs to this thing, that especially with the custody rule, now, you know, getting closer to being enforced by the SEC, as well as the frontal assault on Coinbase,

there's at least a path to be able to create enough liquidity for this kind of thing to potentially work. I do think that the venture returns are probably not going to be there. I mean, this was funded in like early 2020, I think. So it was near the height of the market that this company was funded. So I doubt this is going to be a great return for anyone, even if they are successful at gaining institutional traction within the U.S. You have to bet on the market growing a lot among institutions

for this thing to really be. U.S.-based institutions. U.S. based institutions. Like not, yeah. Like, it just, like, feels a little too. And especially if the exchange is only doing matching, like, matching at high throughput is not something that, like, you earn 1% on.

Right? Like, exchanges are hard and have, like, a moat and market share because, like, they do all the things right now. Like, they do the custody and the matching and the settlement and everything, right? Well, they're supposed to be EDX supposed to actually open their own clearing agents. They're not going to use Apex or something like that. So like I, I,

they're trying to go for that vertically integrated plate, to be fair. It's just like the licensing is like, you know, you're not going to get all of them at once. You're going to have to do it incrementally. And that is they have said they want to do that. So I will give them credit for that. It does seem like

they're trying to. That makes sense. All right. I think that, I think, I mean, we'll see what happens to EDX. I don't want to be too, I don't want to guess too much because I think the thing just launched. So we'll see how things are out. I don't understand how you think you're going to make money with Bitcoin Cash listed. You know, like, yeah. Yeah, I mean, just so many other.

Cash is ripping right now. There's so many other things I would offer. I would offer, like, Lido. What can you offer? You cannot offer Lido. Are you serious? No, no, like Steeth, not Lido, the token. Okay, okay.

I mean, if BUSD is a security according to the SEC, would not STE also be a security? You got to take chances and risk. Bitcoin cash is not a risk. I mean, look, I don't agree with the SEC's characterization, but I really think that, I mean, this is kind of it. The only other thing you can add is Doge, right? And then maybe stable coins.

Sure. That Doge even seems more favorite. Like, this is just such a boomer exchange. They didn't even like try to attract anything that younger buyers would ever want. I mean, look, this basically minus XRP, this used to be the Coinbase. lineup before, what was the 20? I'm happy we all took a time machine backwards in time, pretended nothing happened.

Like, great. Look, Lycoyne, I just tweeted about this yesterday. Like coin still does more volume than Solana or Polygon or, you know, almost anything in that people actually use. The like coin is still like. Like coin, I'm fine. Like I'm fine. Bitcoin Cash is the one where I'm like, what?

Bitcoin Cash is a bit of a bit of mystery, but, you know, yeah. Cool. Last story I want to get to and to ruin this one, this one especially for you. So last week there was a big kerfuffle in Defi around Ave. So Ave, of course, biggest on-chain lending market. There is a token called CRV, which is a token of Curve Protocol. And the founder of Curve, Michael Igorov, he had a big outstanding loan. He borrowed 60 million plus stable coins against 288 million CRV, which is worth about 180 million. So you had 60 million borrowed against 180 million of collateral.

Now the problem with this, I mean, it's a pretty healthy loan, all things equal. The problem with this is that there's only 850 million CRV in existence, and about 300 of that 850 million was locked into this loan. Meaning that if this loan were to be liquidated for whatever reason, if the curve price were to collapse, there is absolutely no way that any of this stuff could get liquidated for anywhere near what the market price would be just because of how, you know, it's almost like a third. of, or maybe more than a third, of all of the outstanding CRV was locked into AVE in this single loan. So, Gondlet, which is Deroon's company, which I don't know, Turin, maybe you want to explain what happened from here. Yeah, so basically, you know, we spent a lot time monitoring these protocols and seeing like what, hey, like how much margin should they allow for a particular asset and, you know, what the interest rates should be and stuff like that based on a bunch of different sort of math effects. factors and how the markets are behaving off chain, how the markets are behaving on chain,

how much liquidity is in certain protocols, how much of the liquidity is locked in certain protocols. And whether Mercury is in retrograde. No astrology. No astrology. The only, the only, the only thing that's in common between what we do and astrology is the numb as a prefix of numerology as a subset of astrology. Does chain like not report the status of Mercury anymore on chain?

You can't pull that in. I'm sure that you can write it. Right now, I'm sure that exists somewhere. Okay, great. So basically, you know, one of the interesting things about AveyV2 is it doesn't really have supply caps. So the new versions do. And so because there's no supply cap, especially for assets that were some of the earliest ones listed, they kind of aggregate supply over a while. And Egorov, in a lot of ways, outside of being in the press for his.

new houses, also is probably one of the biggest, most active borrowers and all of Defi in like every protocol. Like any single lending protocol that exists, you will find his addresses no matter what. Like he moved, he, he,

he, he, he, he, he, he, he, he, he, he, he, he, made some, some very random, like, uh, tiny, uh, fixed rate lender in response to the SAVE thing,

actually, uh, the other day. But so, so long, short, it's, it's kind of curve is, is, is one of, the assets that like AVE grew a lot on and so the community is actually extremely fond of this asset. It sort of has sentimental value to them because like during defense summer. Sentimental value? There's sentimental value that we're not removing it is my point, right? Like like it's kind of a badass have. You know, for you can go through governance proposals of many people including us being like we should stop allowing borrowing, remove it, do all this stuff. And the

The AVE community is actually has a lot of voices, and a lot of them got rich off curve. And so they, they have this sort of like, we could never get rid of curve. There's like a little bit of that tendency you can sometimes see in people. Okay. Long story short, there was this point where curve liquidity was like basically non-existent. So like even though Igorov's positions net health factor, so health factor is like how much collateral you have divided by how much you're borrowing. And so the higher it is, the better because it sort of says, like, like, you know, your collateral, if you default on your loan,

at least your collateral is worth at least significantly more. And you're over collateralized. And most things in DFI are over collateralized. And the most things that are real that don't blow up. NAFTA add that caveat after Luna. And so, you know, I think as people were freaking out about this, one thing we did, which is we put up this proposal that failed, but it had the exact intended effect,

which is the proposal, was to like, restructing. borrowing and basically, you know, like force the user to adjust their position or take a loss. And in the process, just the act of the proposal being up led to Igorov de-risking his position and then telling the block that he de-risk his position because he saw the proposal. So defy governance, you know, I think is very different than other Dow governance in crypto because it's very focused on these types of quite precise events. But anyway, the main thing is curve liquidity wasn't there. So even though the collateral factor looked good, if it had to be liquidated and you sold all that curve, you would cause the price to go down so much that the loan would spiral.

Was there an estimate of like if the position was liquidated, what would it actually be worth? Yeah, I think we, in some of the form post, we put our simulation estimates and then like the realized estimates over time. But I think it was like around 40 cents was 42 cents was the worst. So 42 cents, but this thing was like more than 2x over collateralized. So it would have been a, you know, maybe okay? It wasn't 2x. It was 1.55. And also, Egorov, you know, very interesting person, but, but I would say he, he's, he's

probably one of the smartest users in Defi if you track his addresses. He's constantly, like, rebalancing his portfolio to, like, stay at this particular health factor. And I feel like he just has a script that's doing it. He's just like, it's like always in this one band. But clearly he's rebalancing without taking it in liquidity into account, which is why people are freaking out. And so the interesting thing is putting a proposal that can make it hard for him to adjust his position, suddenly makes him de-lever, and then like the market moved the other way.

So it was an interesting kind of case study of governance in that sense, in the sense of that. So the Gauntlet proposal was to freeze the position, not allow him to take out any other. his position. Freeze the market. So people can't keep at, yeah, yeah, freeze the CERV. Okay. So the market can no longer grow. It can only contract. Yes, exactly, exactly. And so by doing that, you make it hard to do these rebalances that that he was doing a lot of. And so then he was like, okay, I should lower my risk in curve terms. And, you know, if you followed on-chain stuff, he was like withdrawing a bunch of fracks and a bunch of steak teeth and different assets and using that as collateral. And those are much more, well, not the fracks part, but the, because he had

the frax was for frax lines. But the stake deeth part is a much more reliable piece of collateral. So like at that health factor, if you had a liquidated a bunch of steak dith, it would have been fine. There's tons of liquidity for it. Ironically, in curve, but. He also, I mean, repaid a little bit of the loan, right? Like a few mil.

I think he said in Discord, he like was liquid enough to repay the whole loan if he needed to, which is, I guess, kind of a flex. He did, he did just buy these like $40 million houses in Australia. That is true. And like the memes were all about. how AVE is going to be a real world asset exchange because it's secretly collateralized by Igorov's mansions and stuff like that. Wow, that is fascinating. The really interesting thing to me is why do you think the AVE community rejected the proposal?

Well, because there's a philosophical thing against freezing and especially for Curve. I think there's been a couple times that we've done freeze proposals that have worked, like, whereas like the market was like, like, around the USDC DPEG, we send a bunch of freezes on Avalanche because Avalanche had native USC and like the native versus synthetic USDC pools were completely out of whack and it was like impossible to liquidate a bunch of them. And so the community then was like very open to it. But again, there's something interesting about the flavor of, of,

community-driven finance where there is sentimental attachment to certain assets. Like, like, there is really, it is, or sentimental apathy or even like, you know, anti-antipathy in the sense of like people not putting tether anywhere in defy, right? Like, that's, that's like a unspoken rule, almost a sort of weird sort of lore, astrological law, let's say. But, but my point is, you know, there's a lot of this stuff and really, you know, understanding the needs of these communities. And this happens at normal lenders, too, for the record, like in the real world where they're like, let's say I'm a commercial real estate lender.

And commercial real estate is in the dumpster right now. Yet, it's kind of hard for me to start doing loans in something I don't know because my underwriting process doesn't work or I'm like, kind of not, you know. So sometimes you see similar types of behavior where people have some attachment. It's just funny in this case more because 90% of the revenue from this is coming from this one person who is also the creator of the token. Right, right. It's interesting because you could look at this and say kind of in the way you're describing of like, look, this is why direct democracy for something that's as technocratic as an on-chain lending protocol is kind of weird because people are going to make these emotional decisions about, oh, no, CRV, I made all my money.

Like, it's very nostalgic. So let's not liquidate, despite the fact that It's literally one dude borrowing, like, you know, basically buying houses with his CRV position. Oh, the best part is the loan is almost, like, is close to the sum of the property value. Yeah, exactly. That was like the best part. He, like, bought a bunch of houses. And if you add those up, the loan was only a tiny amount of margin over that. Yeah.

The other side of it, now, if you take the other side of that, and you steal man, why is it that these people rejected this? The steel man of it is that, okay, maybe the collective intelligence of Avey is that, look, Avey is not playing a one-shot game the way that Gontlet might be modeling this as a one-shot game. I'm like, oh, okay, the risk of default is this, blah, blah, blah, but when you have a great borrower who's been borrowing with you for a long time and a bunch of other protocols are going to take a signal from how you treat that borrower, when that borrower is taking a lot of excessive risk,

is that, look, you can say, cut you off, you know, look, you're out of bounds of the loan contract, get the fuck out and, you know, we're not doing business anymore. Or you can say, like, look, I understand where. where things are going, you're having a tough time. Like, I'm going to extend you a little bit of extra wiggle room. All I have to say is people in the beginning were not like that, right? They were once the position actually started going. I'm saying maybe we can give them credit that that's what was going on through the collective

intelligence of the AVE governance community. I will say it didn't quite start that way. It started with the like panic freeze now. And the most important thing from our perspective was like, hey, actually, if this just works is a thing to get the user to change their behavior, then it kind of already did. You don't even need them to freeze the market. Yeah, very fair.

Very fair. So they will be that it's both. In old school Bitcoin academic blend, there's a thing for this called a feather fork. And feather forking is this idea of like a group of miners, so like a big mining pool, telling everyone that they're going to reject a particular fork. And if there's a sufficient size,

the probability that other people will try to continue, on that fork. They measure their EV and it goes to zero provided the pool size is large enough, but it doesn't need to be 50%. It's actually less. And so there's the idea of like, hey, the feather fork, the minority can scare the users into the fork. It sort of had this, it reminded me of that. And I thought that was kind of a funny. It's a little bit like sending a strongly worded email, you know, where it's like it's not quite the same thing as putting someone in default, but it's sort of like, hey, we notice that your position is da-da-da-da. Can you, you know, like, like, this is a little bit more.

It is a little bit like a three arrows default, right? Where like you don't actually put them in default, but you're just sort of like, hey, do you? Are you sure? Yeah, exactly. Oh, my God. And, hey, that stuff works. But, you know, three hours clearly has seemingly come back from the dead according to the internet, speaking of them. I mean, they had in New York Times puffies, you know.

But now they have a new fund. did they do they don't know any details about it i just saw twitter hullabaloo but i i don't know actually what anything about this one there three ac ventures it's no it's not three aces it's three ac ventures that's right that's right which is the part of their book that obviously did the best is uh all the stuff i feel like i feel like i would change the logo to the right like three ac and then add a d in parentheses next to the c and a a v there is so much they could do to make it to be, to be, like, to take the humor in stride about 3AC coming back from the dead. But it seems like they were just very, you know, just kind of.

I would instead, I think that they should make something called 3AC adventures, where they take everyone on tourism tours through all the fancy exotic locations there. The best way to see Bali is a 3AC adventures. I mean, that sounds amazing. It sounds pretty good. What was the fruit that they talked about? There's like, you just got to eat strawberries or something. What was it?

I don't remember. In the New York Times, there was fatty pork belly, but I don't know. Yeah, yeah. That was one of the things they talked about. That was one of the things they talked about. Anyway, all right, I think we're up on time. But we'll be back next week. Hopefully things are turning around for our good old pals in the crypto industry.

Until then. Thanks, everybody.