Unchained - The Chopping Block: WBTC Drama, Decentralized AI & SEC Subpoenas - Ep. 689

Episode Date: August 14, 2024

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and chop it up about the latest news. This week, the gang is joined by Shuyao, cofounder of MegaETH Labs and founder of hotpot DAO.  They dive into the unfolding drama surrounding WBTC and BitGo's strategic shift towards multi-jurisdictional custody in Hong Kong. They also explore the growing buzz around decentralized AI, sparked by Haseeb’s newfound role as an “influencer” in the space, and debate whether these projects can truly succeed.  Moreover, with the SEC reportedly issuing subpoenas to crypto VCs, the discussion turns to the potential implications for token investments and regulatory scrutiny. Lastly, is this cycle lacking a zero-to-one innovation? Show highlights:  ➡️ 02:22 What MegaETH is and how hotpot DAO was born ➡️ 07:09 Reflections on the Science Blockchain Conference and its academic rebranding across major universities ➡️ 16:55 How Haseeb became an “influencer for decentralized AI” and whether decentralized AI projects will succeed ➡️ 25:45 What BitGo's move to multi-jurisdictional custody with Justin Sun-linked company BitGlobal in Hong Kong means for the future of WBTC ➡️ 40:33 What the SEC's rumored subpoenas to crypto VCs might mean for the future of token investments and underwriter laws ➡️ 48:28 How the current crypto cycle's lack of a "0 to 1" innovation reflects the industry's momentum and sentiment Hosts Haseeb Qureshi, managing partner at Dragonfly  Tom Schmidt, general partner at Dragonfly  Tarun Chitra, managing partner at Robot Ventures Guest: Shuyao, cofounder of MegaETH Labs and founder of hotpot DAO Disclosures Learn more about your ad choices. Visit megaphone.fm/adchoices

I got to say that's all from grace to go from like you're getting your company acquired from a few multi-billion dollars to I have to go in the maker governance form. Not a dividend. It's a tale of two quons. Now your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways. I'm named trading firms who are very involved. I like that eat is the ultimate policy. D5 Protocol is part of the antidote to this problem.

All right. Hello, everybody. Welcome to the chopping block. Every couple weeks, the four of us get together and give the industry insider's perspective on the crypto topics of the day. So quick intro, first you got Tom, the Defy Maven and Master of Memes. Hello, everyone. And we've got Tarun, the Gigabrain, and Grand Puba at Gauntlet. Yo.

And joining us today, special guests, we have Brother Bing, who is the heiress of Hot Pot Dow. What's up, guys? And then I'm Haseeb, the head hype man at Dragon Fly. So we're overseas investors in crypto, but I want to caveat that nothing we say here is investment advice, legal advice, or even life advice. Lecy Chopin'Block. at XYZ for more disclosures. So, okay, Brother Bing. First of all, what is the backstory on Brother Bing?

Yeah, so my name is Shielo, real name. I don't know if you guys realize, well, remember in 2020, Defi Summer, there were a bunch of guys who were siopsing as girls on Twitter. So then I thought, why don't I do the opposite? I'm a girl that's siopsying as a dude on Twitter. Then it's Father Bing. But also, I'm from Bexing. Beijing and the Beijing girls tend to be very brolish.

So then I... Is that right? Yeah, so bro Bing Bing. Sometimes people call me. Bro Bing Bing. Yeah. Did you lean into your character and become the character you started as? Yeah, you have to cultivate it.

Okay. So now it's getting really prominent. Give the listeners some context. What does Bing mean here? Why Bing? Yeah, so... The search engine, right? Yeah, actually.

So Da Bing actually has some meaning. in Chinese. Dabing means big pancake. And that's actually how Chinese community called Bitcoin. Bitcoin is a giant orange pancake. So I used to have a column with the crypt where I used to write about crypto stuff

and crypto in China. So my editor was like, what's your column's name? I would be like, oh, it's daubing. And then I just took the name on. I like that. I like that. So besides being the Hotpot Dao Eris,

you are also a co-founder of MegaEath. It was a project that a lot of people are talking about. You guys are making a lot of buzz and getting a lot of hype. I think a lot of people maybe don't know what Mega-Eath is. They've heard the name. They know it's a fashion brand. Yes, they know. At the least.

At the least. It's memetically very powerful. But what exactly is Mega-Eath? Give us the sort of elevator room, you know, two-sentence explanation. Yeah, absolutely. Mega-Eath is the first real-time blockchain. By inheriting Ethereum security and decentralization, we're able to create an execution environment that not only has,

super high throughput, aka 100,000 TPS, but also extremely low latency. Think about some millisecond, hence the real-time is. This has never been done before in crypto. We are extremely excited about our protocol, but more importantly, we're extremely excited about the application that's going to be built on Mega-Eath, because we believe that they are pairing the Web2 performance with crypto economics and the P2P network. Yeah, so, and Megheath, notably, is a layer too. and is it EVM-based layer 2, which is also...

Well, the first real-time blockchain, which is a EVM-based layer 2. And you are relatively unique person because I think you're one of the most global people I know. It used to be global head of BD at consensus. Is that right? And you've split your time. I mean, obviously, you come from China. You spent a lot of time in the U.S. in New York. And you're now in Dubai.

You've kind of been a globetrotter for as long as I've known you. And you run this thing called Hotpot. Dow. So what is Hot Pod Dow? Yeah, it's a cult. It's a cult. It's a food-based cult. It's better than 2020 food defy coins. So I started Hot Pod Dow in 2020. Back then, there was a conference called AmCon. Anyone remember?

AmCon. Yeah, it was a conference for Dow. Back then, that was cool. That did not age well. That did not age well. So I was, you know, running BDI consensus and anything new is just poked my interest. So I went to Denver and it's a very small conference and in the middle, you know, there's no Asian food after three days. And I was just like, going to fucking kill myself. I can't eat another sandwich or more meat. So I was like hanging out in the cafe with a bunch of people.

The pseudo-swap guys were there, some dudes from Polichet. I was just like, yo guys, like anyone wants to go for hot pot? And people were so excited about it. And I did Google this hot pot place which was like, 30 minutes away in the middle of nowhere without we thought we're going to get kidnapped. So we all went there. We had hot pot and I just jokes. I was like

oh you know what? This is the first hot pot down. And it really works because I really hate crypto networking. I hate stepping into a room really noisy. You're like trying to hold your drink. You don't really want to drink. I don't know who to have a conversation with. But with

hot pot, right, you just sit down, you eat your food, you talk about life. So it thinks it's really easy way to make friends. So the first one was in Denver in 2020, but after that, I basically have been running Hot Pod Dow in every conference that go to, place I visit, and Hot Pod Dow is actually extremely decentralized right now. I say it's the only doubt with product market fit because I actually, I used to have people who are willing to pay me to come to Hot PodDA because it's just like the most popular event. But we also have Dow member who are hosting

hot pot da all over the world. So a really strong chapter in Hong Kong, Singapore. We have one in Thailand. They just started without letting me know. And they were like, yo, can we use your brand? I was like, do it. We have a very strong one in New York. It's founded by Dan from Egan Lear.

And he just like rent out this hot pot restaurant. Have everybody come in a free flow of hot pot cream barbecue alcohol as well. So yeah, I don't even know what's happening with hot pot diet at the moment. I've been sufficiently decentralized. Yeah, very nice. Very nice. Okay, wow. Well, I also think it's funny that this was the year that a hot pot company IPOed on.

Yeah. I'm nicey, right? Yeah, Heidi Lau. Yeah. And they're in New York now. Yeah, yeah, yeah. Crazy. So you're the hot pot.

Well, no, I wanted to make it to the Hot Pod Dow event, but apparently I wasn't cool enough. And it was denied Dow membership. So, fortunately, it looks like it's very, you were right. It's very difficult to attend, get Hot Dot Daub membership. I think it's a sign you may have to change your aesthetic a little bit. I know. I know. The wrong kind of Asian, apparently, to get into Hot Poddow.

Okay, so we are wrapping up the week of SBC. SBC was last week. We got some interesting commentary from, but I'd love to get some reflections for everybody on what you thought of SBC. Last week, we said that SBC had rebranded a science of blockchain and that it was a very cringy rebrand. The SBC team apparently was not thrilled to hear that we thought it was very cringy. And they also moved to clarify that it is now being shared, it's being rotated between New York with Cornell Tech, which is associated with IC3.

And then Stanford and Berkeley are the three universities that it's going to rotate. So it's actually going back to Berkeley next year. It's not staying in New York. So signs of blockchain conference. Turin, what was your feeling now that the conference is wrapped up? Any reflections? I think there was a time in like 2018, 2019, 2018. 2020, where it was more of a place where, like, people would come with, like, new research and it'd be like, oh, this is the new ZK algorithm that, like, has a speed up or this new consensus protocol matters. But I think in the world in 2024, bluntly speaking, I don't think there's that much left in consensus. It feels like people are extracting, like, very tiny improvements. So it's like, all right, there's not that much there. And then that to the side events for consensus have better.

kind of more relevant research. SBC feels a little like stale and slow. I think in academic conferences, this is often the case that that happens where like a conference gets too big or kind of stale and a new one shows up. I think the weird part of SBC is like there seem to be too many like

no one even seems to watch the research talks anymore and also 90% of the research feels like I read it six months ago. or was online six months ago. And so it feels a little dated. Like, I feel like when it was... Isn't that also true at academic conferences that, like, you post the preprint

before you ever show up for conference? For sure. For sure. But I think there's something weird about this conference. Like, it used to feel like there's a tighter loop. Oftentimes a lot of people post preprints when they get in to a conference.

Oh, I see. Or if they don't get in, whatever, like, at that time. Yeah. But some of that SBC just feels like it's dated. And it also doesn't really represent applications very well. It's not supposed to be a research conference.

No, but there's research on applications. Like, Defi research, right? Like, very underrepresented there. Okay, so let's say that you were to start the successor at SBC. SBC is already old hat. Is this a hypothetical thing? Is this a hypothetical thing I have done? Oh, oh, oh.

Tell me about the thing you've done. I did start a sort of defy research conference that we had our first one in May. What's it called? TLDR, which is the latest in defy research. Oh, yeah. But like the other thing. about SBC is there's all these side events like there's the application summit there's a consensus summit there's that movie and those were much more in the know i feel like it reminds me in music

festivals right it's like you go to music festival it's awesome and then you go the next year and it's like yeah okay a little less awesome like some of your favorite artists like now that place is boring sucks not going and then you go the third time and it's like oh okay now it's like too commercial and then you find out that there's some after hours outside that like is like now much more interesting, you know, creatively than the main conference. And then all of a sudden you start going to that and you don't go to the main. Like, I feel like that SBC has gone through the music, music, music festival cycle. That's just my. That explains a lot of the people who are coming, showing up to SBC every year. Is that? Yeah, well, I feel like it's also funny because there's like

so many more investors and researchers there, which already tells you it's like over. Yeah. I mean, the fact that like I show up to anything at SBC and I get so many people pitching me. trying to raise money. I'm like, okay, this is not an academic. It's not an academic event. Yeah, it was funny because I went from SBC to this zero knowledge podcast that, this other podcast that I'm on. So I guess I was sorry listeners for talking about this.

It's like a more research conference. I went to the hackathon in Montreal and there was literally zero investors. It was like, it was like all, it was actually funny. The winning hackathon project was something where you could breath, breathalize yourself and prove in zero knowledge that, you know, you were, you were not drunk. This is what happens when you have no

investment present. It's not commercial, but it was like people did fun crazy shit. Right. Okay. So there's, that's what I'm saying. I feel like SBC had that in 20, you know, back in the 2015 to 2020 era. And then post

pandemic, it just hasn't kind of not the same. Yeah. Flexions, SBC. Yeah. I kind of know what you I mean, I did notice some of the papers were like from like 2023 and I was like it's been a while. But I don't know. I feel like at these conferences too, like most of it just kind of used it.

It's like meeting people and networking and kind of seeing like for us portfolio companies. And so even at like non-academic conferences, I'm still not even really attending the talks and kind of going and seeing people. So I feel the rising actually been that much of a change for me. But the beauty of academic conferences, at least the talk teaches you something. But that was not what I felt like. I remember the first SBC when it was still called Stanford Blockchain College. conference, I sat through like probably 40 to 50% of the talks and like live tweeted notes about all the talks.

And like I could not imagine that being the best use of my time today. Like it, I mean, it was a very different time in that like there was so much. It's almost like this heroic period. Like, you know, I often read about the heroic period of physics in like the 30s and 40s when people were inventing just like the basically what we think of as like modern physics in a very small period of time by a very small number of people. And it just felt like science was moving so fast. And that's kind of how 2017, 2018 felt,

is that there were so many new ideas and there were so much just uncovering this vast frontier of what was possible with blockchains. And today, it just doesn't feel like that. And that's normal, right? But like, yeah, it just, the excitement of sitting and being like, I wonder what I'll learn today. I haven't felt that in a very long time. To Shiaz's point, though, in her intro, like, I do think the application side is

like more interesting, which is why I think the infrastructure conferences kind of suck, no, to be honest. Yeah. What's your take on? That would be my point, actually. I, sorry. Sorry for front-howing you. Sorry for front-wing.

Actually, I really, I enjoyed the previous SVC as well. But this one, I think I came, I went with a different identity. I was hunting for application builders. So I didn't, I stopped by the actual conference. But I wanted this one called Bass, right, blockchain applications. Summit, I walked in there was no application. You know, you look at the talk and all the, it's just no application. So I feel like we're in the awkward space of the underlying technology innovation is not

that exciting. There's nothing groundbreaking, but you also don't get really exciting application builder, right? Everybody there was an L1 looking for applications. We're just trying to beat each other. I see. But on the bright side, I do. think that because this year is in New York gives me a very good intro into the New York builder scene. At the conference, you know, I got to meet fresh college graduates who are

like really open to ideas. So they're not builders yet. So that was just tremendously helpful to us. And then I think the side events were met. I just anyone do you want to call out? Yeah, who are you calling out? The one that I saw you at. Wait, which one is this? Come on. Yeah, which one? I went to a bunch of. It's the same speakers going to different side events.

It's the same thing. I will say there was only one of them that I actually presented a new research at. The other ones were like, I recycled. Yeah. So it tells you something. Yeah. The one with new research also had like 20 people. So, you know.

Yeah. For better or worse. That's just how it is. Yeah. But yeah, yeah, I think in general, I would say, SBC is still a much better conference quality than many others in other parts of the world. One thing I would say, there were a lot more undergrads to your point at this conference this year than I think I saw it even in like 2022, 2021.

I kind of feel like the AI fatigue is like undergrads are actually coming back, which is like an interesting. Last year, I feel like it was like no undergrad. Well, last year was like peak AI hype is such that you could be moderately technical and raise money for a seed round of like AI for dentistry or whatever. You know, some stupid chatty coin. Denticoin. Exactly. AI denticoin girlfriend.

And that is. Aidento coin girlfriend. Yes. But that phase has very much ended. Right. The ability for like a random Stanford grad or Columbia grad to just go raise like five million dollars to do some random chatty btie rapper, like that's very much done. And so I think the reality that's setting in for a lot of folks who are entrepreneurial and just graduating from college is they realize in AI, like I, it's very unlikely you're going to be able to contribute anything because requires like either PhD level contributions to a foundation model, which is very, already that's even hard because all these foundation models are crashing and burning. And they're just rapidly depreciating assets that can only be funded by huge companies.

Or you like pick the exact right vertical and have this, you know, full, full court press like a. legal, you know, chat to BT for law or whatever, this kind of thing. But this is really hard. This reminds me. Somehow you have become a influenza for decentralized AI.

Tell us how this happened. It's, yeah, okay. This is also a little bit strange to me. I was just talking about this with brother Bing before we started rolling. So, I mean, I've been learning a lot about AI over the last couple years because crypto was doing pretty slow in the bear market.

And obviously, AI, I think it's pretty obvious that what's happening right now with large language models is one of the most important technology shifts in the last decade. So naturally, I spent a lot of time learning about it, studying it, and like learning some about machine learning, which I wasn't super knowledgeable about before. And once all the decentralized AI stuff started getting hot, I wanted to learn about it. And the way that I generally learn about a new space is I write about it. Because if I write about something and I'm sort of forced to teach other people, then I have to

understand it better than, you know, in order to communicate effectively. And so I decided, okay, I'm going to write like an overview of decentralized AI because I keep getting these pitches and I don't really understand what they're all doing and what the landscape is. And so I wrote a piece and that piece went, you know, moderately viral. And then consensus I gave a talk to basically just summarizing the piece and that talk went fairly viral. And the thing that struck me most of all is that like it's not a very complex space.

If you know, just like the basics of machine learning. a lot of investors who are investing in the space do not have that even that level of understanding of what the hell is going on in the space and you can kind of see it from the way that a lot of projects are getting funded is that the VCs who are funding this stuff

are just like embarrassingly ignorant of what's happening in the space and so I don't know how I became a decentralized AI. That's literally it. That's all I've done is just like wrote one blog post but that's enough right now in the space in order to get a lot of respect from founders and builders. So, yeah, I don't consider myself an expert by any means, but relative to VCs.

It reminds me a lot of when I first got into crypto VC, which is, I mean, this was like, you know, early 2018. I remember I just started a big stable. Because you were at a fund that only invested in L1s. That was most of what there was at that time. I mean, what else was there in 2018? Zero X? Yeah, true. Well, you were working there, right?

Yeah, yeah, yeah. Yeah, I mean, zero X is like one of the few applications that had a token at that time. I was just, I couldn't think of that. Yeah, I mean, it was like Iota. There was light coin, you know, like ripple. Like, that was the landscape of that time. If you said, I had two more times, Eric, well, I was going to bust through this wall and, like, punch you. Yeah.

And so I just started as a crypto VC. And I remember I went to like my, I was so nervous. I had so much imposter syndrome about, you know, I know nothing. I just came into this industry. How could I possibly become an investor and, like, give advice to founders and judge their products. Like, I don't, I don't know shit. Welcome to the industry. I know, I know.

And so I remember I went to my first investor dinner and I met a bunch of other investors. And we were just like talking about whatever's going on in the industry. And after that dinner, I was like, never mind. I'm totally fine. Like the level, I thought I knew nothing. And then I was like, wait, these investors don't even know nothing. You know, it's like that that was the thing that ultimately gave me confidence to be able to say like, okay, you know what? Yeah, I don't know as much as like these guys I really respect.

Do you think there are any decentralized, has AI investments that will be successful? I do. The current current. I mean, I think it's quite, so first thing I'll say is that projects, I expect them all to evolve, right? I don't think anybody is going to be able to, you know, it's sort of, when I describe these sort of frontier type networks, it's very much like, you know, Christopher

Columbus saying like, okay, I'm going to go find India. And then he just goes and starts sailing, you know, and like almost certainly your path when you're sailing through uncharted waters where no one knows where. the demand is. No one knows where the product market fit is. Almost certainly it's going to change as you keep going. So if you look at something like near or even Solana, right, they've changed really dramatically from what the original description of the project was, of originally how it was supposed to work, right? Like, and they iterate and they kind of move more in the direction of, ah, here's where the demand is, here's what people want. Here are all the things that people

are complaining about that we have to address over time. And I think a lot of these Gen 1 crypto AI projects will eventually do that. They will respond to demand and they will sort of fix the broken incentives and so on. Some of them won't. Some of them won't figure it out in time. And some of them were just too early and they end up becoming these stepping stones that other people will, you know, jump on top of. But I do think there is something at this intersection, but it has to be cost efficient, has to actually be useful to people. And it has to plug into demand. And that's the thing that right now is missing on most of these crypto AI startups is that they just make no contact with the demand side. It's all aggregating supply. And aggregating supply

without actually tapping into demand is a trap that we've fallen into crypto over and over and over again. I mean, they've fallen into it in AI too. Oh, yeah, yeah, yeah, no, to be clear. But if you look at the, like, if you look at the GPU marketplaces, right, and you compare them to, like, you know, you guys are investors and together, like, together or Lambda or Corweave, like, there's not a demand problem on those businesses, right? Those businesses can barely serve the demand they're getting. But the opposite is true in Crypto land, which tells us, okay, there's a real problem

that can be solved with a better product, but that product is not yet forthcoming, and there's a lot of work to figure out how to create that product that can stand toe to toe with those other products. I mean, there's just a lot of adverse selection in the crypto training networks. I feel like there's also this problem of, like, AI is inherently better in some ways when centralized.

Like, it's easier to have centralized data provisioning. You can do things like RAG, which is, like, impossible to do when you try to decentralize. It's like, I think that's why I was curious what your take on the business. Yeah, I completely agree with you is that, you know, going after use cases that are not well served by a decentralized network is going to result in failure. And like you have to find what is the niche that my different market structure. And the other thing, too, that you can't underestimate is that, you know, demand often increases in response to changes in the underlying world.

Right. So, like, you know, one example of this is, is die, right? Die demand changed dramatically when you started to see more and more blacklisting from, you know, the centralized stable coins. And the same thing I think is likely to happen with AI. We're very, very early into the intersection of AI and geopolitics. Never forget that Richard Hart was once the largest dieholder. Yeah. He might still be. I think, uh, what's the name of the, not Hegs? It was like the, his, like, DeFi thing, like, like, pulse. I think I might still be the large dieholder, actually. That's crazy. Yeah.

Yeah, it's somewhat embarrassing fact. Right. And like, well, my point is that as AI, inevitably is going to become politicized. And inevitably, there's going to be large fights. I mean, you already see it in China, right? There was an article I was reading in China talking about how, in order to launch an AI product in China, the party basically has, like, essentially these, like, challenge response pairs that's like, okay, I will ask you, like, 100 politically sensitive questions, and you must, like, not answer 100 of them or, like, 95 of them in order for you to be eligible to, like, go public with your AI product. Forget about China, though. I feel like Europe is going to be the first place.

Oh, yeah, Europe. Europe is going to like ban everything. China's already there, right? Europe is trying to join China as fast as they can. Yeah. And then, I mean, we'll see what happens in the U.S. And I think it really, none of this stuff is predetermined. You know, I think it is really just the people in power and the way in which politics plays out as to how technologies get regulated.

So I don't think there's any predestination in any of this. So my guys should not pay that to be an AI crypto coin. Not yet. Not yet. Pick your spot. Pick your spot. No, no, but you should attract those projects because that's transaction fee of demand. Yes.

I'm a seller of block space. Actually, we work with a few crypto AI projects. And I think the problem in describe everyone knows about it. It's like people pretend that they don't exist almost. That is a big thing in crypto. Yeah. It's bothering me something. I feel like they should just go be selling in Europe and China, like to all these people who are like, I'm banned from using XYZ.

Yeah, you are kind of competing with just VPNs, though, which is also a pretty good product. But in China, they're increasingly difficult to get your hands on it. Europe is still pretty easy to VPN. But in China, obviously, I mean, you know this very well. So, yeah, one thing. I feel like in Europe, though, they're actually systematically trying to ban even using like the kind of models within Google and stuff, right? like they're getting mad at the big players. So your web browsing experience might look very different

and you're up in like six months to the point that you get such different results that you might use a different search engine. I could see that. I could see that. So, okay, so let's get into some news. There's been some drama this week over WBT. We don't talk a lot about WBTC on the show, but WBTC, for those of you who don't know,

it is a tokenized version of Bitcoin that originally was custodyed by Bikko. So Bicco, you know, very well-known custodian in the space. And WBGC has kind of been a DFI stalwart. So you sort of imagine it like Tether, but for Bitcoin. We're basically literally, you know, it's not a fancy, decentralized, blah, blah, blah thing. They just keep the Bitcoin in a multi-sig. And, you know, Bikko is like, yo, we're good for it. We're regulated.

Just like circular tether. It is one very important difference from Tether because it was founded by a consortium. That there's, there were multiple minters. So it wasn't just one company, which I think was like why people were much more comfortable with it. Because I remember people in Defi used to fight about, oh, like, could we even list WBTC, even though it has so much liquidity on Uniswap? Like, you know, like the early Compound Dow government's fights over WBT were so incredible on this, this tiny thing of having the consortium over minting was the reason it got listed and Tethernet wasn't. And that was like what they drew the line at. Who was in the store?

I know Coinless was in there. Who else in the consortium? Kyber wrote a lot of code. I was going to say that, but I was like, wait, that doesn't make sense. but I guess they were. Yeah, well, there's also different roles. There's like Minter and there's like broker and there's something else. So it was the first intent-based.

Yeah. Oh, okay. Very nice. All right. It's all these like intent people who've just joined crypto since that air mirror just like missed out on all the fights that are exactly the same as a fights that they're having now. Yeah. Well, what's old as new.

Anyway, okay, so WBTC, the OG Bitcoin rep or the Bitcoin peg on Ethereum, on August 9th, Bicco announced that they were going to move WDBCC to become multi-jurisdictional custody, starting a joint venture in Hong Kong in partnership with Justin Sun. Wait, wait, wait. Technically with Bit Global. With Bit Global, sorry. Yeah, Bit Global, which is a company that has some affiliation with Justin Sun, not super clear. Is there an ownership structure or whatever?

None of this has been disclosed exactly. But they made very clear in their talks in public and in the governance forums that Justin Sun is affiliated with a business. this endeavor in a way that has not been yet specified. So Justin's son, of course, the founder of Tron, somebody who's had occasional legal troubles, maybe regular legal troubles, and also a diplomat.

Former diplomat. His Highness. What is it? But I thought it got taken away. Did it? Because that's an expiration date. Okay. But Tron, USDT,

hit the highest monthly volume ever in volume transferred. Okay. And Tron has been doing quite well. Tron, USDT has been, you know, for all of the potential negatives about Justin Sun, there are two very big positives, which I think people forget. USDT on Tron is actually used in the real world, and he's the biggest restaker. So, you know, I... His liquidity in Defi is like, is...

Liquidity incarnate. He is liquidity as a person. Yeah, okay. So, all right, so Justin Son is going to be affiliated now. with this new WBTC transfer. And of course, WBTC, just to give you a sense of scale, WDBC has about $9.2 billion circulating of WBTC on Ethereum. And it's got a big presence in defy.

It's in Avey. It's in compound. It's in Maker. More than 30% of WBTC is held just in those four protocols. So on August 10th, the day later, Monet Supply, who's a very active governancey person in the Maker ecosystem, him, he proposed to offboard WVTC as collateral on Maker. And this has caused kind of a firestorm of controversy of,

is this an overreaction? Should MakerDA offboard WBTC? This kind of caused a downstream question to also be asked in AVE. I think Avey is pressing pause and saying, we'll decide in a couple months after seeing how things play out. So the proposal is not to, you know, eliminate all of the current loans, or basically to prevent any new loans from being drawn against WBTC. But right now, how much dye is there's about $150 million of dye,

sorry, 150 million dye of, out of 5 billion of total dye circulating, that's minted against WBTC. So it's significant, but it would not be catastrophic to make her to offboard WBTC as collateral in that ecosystem. But Mike Belchie, who's the CEO of Bicko, was in the governance forums, arguing, hey, this is a big nothing burger, everything's okay. Like, we're happy to have you get an attorney and come in and diligence and stuff, but we're not going to tell you in public how it all works.

And so there's a lot of sniping and going back and forth and kind of some of the messy internals of crypto are being let loose here. I got to say that's fall from grace to go from like you're getting your company acquired from a few multi-billion dollars to I have to go in the maker governance forum. That's like a real, real fall for it. It is always a tough look when somebody comes to ingratiate themselves to a governance forum. I really do. And has never been, you know, it's like, this is this person's first post.

Yeah, that's true. That's true. Whenever you see that, you're always like, we never want to do your first post in a governance form. That's always a bad day. I actually love those. Or even when people are duking out on crypto Twitter because so often it's with like an in anon with it a ridiculous name. Like herpes cat was going back and forth with Mike Belchie on the Maker forum.

And so I'm like, surely Mike has better things to be doing with his time other than duking it out with Herpes cat on the nature of WBT and Maker. But there you go. I mean, yeah, you got to feel bad for him. that failed acquisition just really was that sucked. But rumors said that the failed acquisition because he was now able to provide the audit report. I agree, but I'm just saying it's, it seemed like it was this close to closing. Somehow very last minute was.

I mean, this was when the market was collapsing. So it's not surprising that they found some thing. But the thing is the deal started in like peak of the bull market, right, before Luna. Oh, yeah. I mean, that's how it's all. Yeah. I mean, any deal that's drug out, while the market is going down 60% is probably not going to close. Yeah.

You know, at the previous price. I guess the only one that I remember that happening was the thing that Stellar bought in the last cycle. Do you remember they bought? A chain.com. Oh, yeah. That was like one of those that. In my memory, I always have these memories of these, like, particular acquisitions that are very, that tell you a lot about the candor of the market participants. Right.

Right. Okay. So, Thurun, what's your take on the WBT drama overblown? You think it's reasonable? I mean, it almost feels like a sort of character-driven question. So a lot of this kind of, you know, I would say a lot of the reasons people are a little weary of Justin in lending protocols is there was a centralized stable coin called true USD, which Justin. which Justin eventually bought sort of like the company that owns the minting function for it. And there was a lot of very like weird stuff that happened.

Like they started their own lending protocol. So it's kind of like there was this unknown supply showing up from nowhere that they're barring against. And like the the stable coin depagged a bunch. And so people, but you know, a lot of lending protocols still had it. A lot of exchanges had, obviously Wobie had it. There's also HBTC, which is Wobie's. Bitcoin peg, which is trading at 26K? Yeah, I was trying to do some research on this before the show, and I couldn't find much,

but I was, do you guys know the backstory on what happened with HBTC? Because it basically started the DPEG, like, beginning of this year. And then there was this rumor thread floating around for a while that like, oh, like Justin is looting the coffers of HBTC, but I think that's just like redemptions are turned off. So I don't know what's going on there, but it has seemed very weird that something that's supposed to be like a WBT clone effectively is now like I mean I mean every other rap Bitcoin that's not like TBT which is like more decentralized but very hard to get liquidity for but like you can definitely be sure your Bitcoin is there yeah all the other like

centralized rap Bitcoin not all but like most have had some crazy deep I mean obviously the SOBTC during the FTX collapse was the craziest one because it just like completely deepag to zero almost all been kind of suss and I don't understand why it's so hard to run this Well, this is why I'm like, okay, if they keep the consortium and there's enough other minters and redeemers, I'm a little okay with it. Because, again, I feel like they do- Well, I think it's the custody, right? It's not the-the-custody. That's the real problem. That's true.

So I was looking at, so normally with a custodian, right, they're charging some percentage of a UM and like that's sort of their model. Obviously for these like rap Bitcoin tokens, they can't really do that because you can't, like, draw down the reserves, like it's supposed to be pegged. And so they charge like a few bips on mince and redeemed. And so there is a little bit of a spread when you go and try to, you know, trade this thing. But I was looking on, I think Defi Lama had a good chart on like total fees earned since inception of HPTC. And it was only like 12 mil. So it's really not a very good product to operate. Like you're not making anything.

In some ways, it's cannibalistic with your existing, you know, maybe better, you know, your custody product with better economics. And so I'm assuming big girls just wants to get rid of this thing. Like it's not a great product line for them. I see. To be fair, that's been true. that there has been there haven't been the other thing of the WBTC versus some of the other derivatives is people tend to mint large positions with it so they pay one fee it's not like there's like a high volume of fees versus some of the other assets just because of the price of Bitcoin and so like the people who are doing it tend to do it a sufficient size. One thing I will say maybe if we if we take a more optimistic view is that all of the people who have been working on these like decentralized Bitcoin alternatives. that basically have just not so far succeeded due to capital efficiency reasons.

Like it's hard to have liquidity for them. They're slower. Whatever. All of them have the greatest opportunity in history right now. If you look at the governance forum, it's all filled with like BTC-pegged decentralized projects pitching to Baker governance. All of the restake BTC LRTs. They're all going to be there also.

Oh, yeah, yeah, yeah. They're all there. It's going to be interesting because like I do feel like because everyone knows the market is there, there's going to be this mad rush to try to fill the gap. Well, but on some level, like, what WBDC is also telling you is that this market kind of sucks if you're monetizing this way. So you need to find some other way to monetize if you want to run this business. Well, you don't have to cut the TBTC type of case.

You don't really pay the custody cost per se. Like, you pay the initial validator on and off cost. Right, right. I mean, you are paying some, you know, security fee. For sure. You're definitely paying a fee. But, yeah, you have a little more. kind of flexibility. Right, but that fee

should be in some sense proportional to the total amount outstanding, which is basically a custody fee. It is a custody fee, but it's one that I think people are probably more willing to... Yeah, exactly, which is almost a signal, like if people are willing to offboard WBTC,

that's maybe a sign of like, hey, Bicko, kick out, I bit, what is it, BIT, what is it, BIT Global? Yeah, kick out Bick Global. Yeah, kick out Bick Global and just start charging on after BlackRock. Oh, right. I take it back, please don't sue me at Paco. Yeah, so kick out a big global and just say, look, we're going to charge a custody fee.

And all of a sudden, it becomes an amazing business instead of being this, like, crappy $12 million since deception type of business. And you can compete toe to toe with like the TBDCs and the other. I think the other thing that maybe is worth considering is that when WBT came out, one of the main advantages of using it was market making Bitcoin. was really inefficient, even between exchanges, but it was very easy to do market making on WBT because the theorem transfers are faster. But now you have a million alternatives. Like, why wouldn't I just use Solana or Tron or anywhere else

where there's enough liquidity? So the market making use case, which has high volume, which is high fees for the custodian, like, has gone away. So I think that's the real problem. It's like, how do you replace that activity? Yeah, if you look at the fee chart, you know, basically it has a nice curve in like, you know, 2019, 2020, and then it's just been kind of slowly tapering off.

And also, obviously, there's ways to trade perps, you know, in DFI that there weren't before. And so, yeah, kind of that core use case of Bitcoin, you know, margin trading exposure in DFi is also kind of kind of whittled away. Yeah. I think they just have such a huge liquidity advantage. It feels like a waste to just say, well, our business model doesn't seem to be very good for this environment. So let's just like end off the business, turn into JV and then, you know, let them run it. Well, they are. That is what they're doing.

No, no, no, no. I was just saying that, that feels like a strategic mistake, you know? Like, it feels like they'd be better off just changing the business model. Yeah. And saying, look, if you want to redeem, here's a winner to redeem. Otherwise, it's now going to be an AUC business or an assets under custody business. Yeah. So.

I wonder why Justin wants the business, though, because he's, he's smart. I don't want to. Oh, yes. He is smart. And he loves businesses with lots of collateral on the dollar. Yeah, yeah, exactly. I mean, this is every justice. Like Kobe, like true USDA.

You know, he's a history of this, which is why I think people are afraid. On the other hand, I don't really know, I don't, I don't know enough about Bitco's current existence, but I'm imagining there's a reason that is, you know, they needed to get acquired and that didn't happen. So now they're. Someone was saying that he, Bigot race around after the failed acquisition. And they were saying, oh, there's an Asian fund that invest in that round. So the speculation is It's Justin.

I mean, honestly, honestly, I like, I like, I like those types of rumors. Yeah, this sounds very conspiratorial. I don't buy that. But the thing is, you know, yeah, Justin is, you know, might be shameless,

but there's no way you can say he's not smart. He's one of the smartest on-chain users, period. Yes, yes, yes, he is very shrew. He is very shrew. And we'll see how this plays out. So far, I think it was supposed to go to vote today, but I don't think the vote's been concluded yet. So still TBD.

There's still a lot of fighting. That forum post is one of the ones where like I go to the bathroom, I come back and I get the little bubble that says three on red. Yeah, yeah, yeah. There's definitely more fighting to be done. So we'll see how this drama plays out, but it's very interesting sort of update in the world of defied dramas. So speaking of VCs and investors,

there was another news story that's been making the rounds about the SEC subpoenaing three crypto VCs. So this story kind of came as a report on a rumor. So it's not confirmed by anybody. It's not confirmed by the SC, not confirmed by VCs. But I can say we've also heard the story

about the SEC subpoenaing some crypto funds. And luckily we did not get one such subpoena, or at least not about this. We've gotten subpoenaed before. Yet. Yes. Yet. So who knows, please don't subpoena us.

We'd prefer not to. Don't be basing in New York. But so the story here, I think is getting a little bit subverted by people who don't really understand what the SEC cares about and what kind of things would show up in a subpoena. And so these subpoenas, as far as I understand, and I should make clear, I don't have expressed knowledge of this, but my understanding is that what's going on is that they're being investigated for becoming statutory underwriters.

So what is the statutory underwriter? Statutory underwriter is somebody who basically, you know, normally when a VC invests into a token project in the U.S., they will have a one-year cliff. So they will not invest any tokens before one year. The reason why you do that is that that is an exception to the broker-dealer rules that normally require you to be an underwriter in order to sell something before a year. And so there are certain crypto funds or crypto-vCs that may have been selling assets before the one-year cliff. And if they sold an asset before the one-year cliff, then they would be liable for these statutory underwriter laws.

You don't have a B-D license. You're not supposed to be selling things that you bought from insiders. And that supposedly is... Now, again, this is sort of speculation. I don't know if this is exactly what they're being investigated for, but supposedly this is the story. So this is definitely not everybody who's getting it up about this, not every VC because most VCs in the U.S., especially,

especially the institutional ones, very assiduously follow this rule of one-year cliff and then multi-year vest. And that's why that rule is there is because this is a law in the U.S. that the SEC has pretty clear about. And most investors have followed this rule, you know, even without having any enforcement actions for the last five, six years, just because it's the best, most obvious reading of what the law says about tokens, regardless of whether or not you think there's securities.

So that's the story. I don't know what you guys think about all the speculation that's winding around on Twitter about this. I think people like it because I like the theory craft a little bit where A, and people see subpoena and they think, you know, a bad thing when really just like a request for information. Like, so like everyone has gotten a subpoena pretty much. It's a request for information. And then two, I think the scope of it was pretty broad.

It was like all token investments from whatever period of time, which is kind of insane in terms of scope for ask. But that's how you would dig up. Like, have they done this? Yeah, yeah. So anybody who's gotten a reputation for doing this, for selling tokens early, you'd be like, show me all the tokens you've ever had and all your buys and sells. Yeah.

So. I don't know, but I would be more interested in what time period the person violated this. Like, was this like before Luna, was this in-between Luna and FTX was after FTX? Because I feel like in those regimes, I can guess very different actors

would have been the ones subpoenaed. That's why I like it because it's like you can now craft to choose your own adventure of... Yeah, I mean, it's very clear before 2017, 2018, this was probably getting violated all the time because people just did not have...

FBG. Yeah, well, I mean, they're not US regulated, so they're not very good. I know, but I just met someone. Yeah, yeah, yeah. So before that, also just did norms around the stuff were not as well established, right? So, like, I remember, when I first came in the industry,

I remember having a conversation with somebody who's now a very prominent founder about, they were recruiting me to potentially join their project. And they were like, yeah, you know, we want you to be part of the early team for this. And I was like, oh, okay, cool, so what's the vesting? And it's like, vesting. What do you mean vesting?

And I'm like, you're not going to have vesting? Shouldn't you have vesting? And it's like, no, no, no, no. If you sell your tokens early, you're an idiot. That's the check on selling your tokens early because obviously they're just going to do this. And this was during the bull market, right?

So everything was doing this constantly. And then we all learned a big lesson as an industry and we started and everybody started investing everything. So it definitely, like the norms have shifted a lot, especially since the irony is, the reason I say this is I remember in 2023, I got so many doc updates that were like, hey, we're increasing your vesting.

I feel like that. That's why I'm saying like there's one era where it's like implausible, which is like the post-FTX era because like everyone was like, nope, no, vesting's going up, vesting's going on. Then there was the pre-Luna era where people were definitely fast and loose

and pretending they're a hedge fund. And that certainly, you know, that era, it could be like everyone from, you know, a small fund to gigantic fund. But in the Luna to FTX blow up era, I feel like that would have to be someone who's so

distressed that they did it. So that's my rough, like, I don't know, you have a quizzical look on your face. I just, I found this exercise to be a little bit boring. Like, entertaining a group of VCs. We're early stage investors.

I had to guess, like, who are the, yeah. They were movies and shakers in the crypto industry. You used to be an investor. What are you talking about a group of investors? I was never an investor. You were doing deals when you were at consensus. Well, yeah, because... Yeah, so there you go.

All right. I apologize. I'm a well thought after Angel. Oh, well thought after Angel. Is that right? Okay. That's very, very elite of you. Yeah.

No, but I feel like, because when I saw the news, I was like, you know, everyone was guessing with it. I feel like your framework probably makes sense. Was that framework? No, no, no, my framework for us. I don't know. I'm kidding. I'm kidding. But I feel like every VC has experienced, like, the VCs behave so differently before and nowadays, because just the different investors going in.

Like from a founder perspective, even like, I read this news and I was like, what's the impact to me? Do I just not come to New York when I race next time? Like, should I go to Dubai? Yeah. Is everyone moving offshore? I feel like the impact is probably just like some people who are on your cap people might be more annoying. now if they're the ones. They're going to be like, hey, we need these docs to prove that we did.

To be clear, subpoenas do not necessarily mean enforcement actions, right? So we got to wait and see what's going to happen. For them to give the SEC everything they want, they might be going to whichever companies and being like, oh, we have to like show, prove some other thing and we didn't get all these docs. Maybe. I would doubt that. I would think more somebody's like, oh, shit, let's like, you know, figure out what.

Like, if somebody sold early when they weren't supposed to, that is a, oh, shit, type moment that that we have to provide this to the SEC or, you know, we're going to be in doing some obstruction of justice stuff. So, but I don't think, I don't think it's going to reach out. I don't think it's going to affect a portfolio company. It will just make you say, oh, I should not work with that fund. Yeah. I think they're, they're probably going to, like, start asking about the companies, too. Maybe, maybe.

But it's a lot harder to reach the companies, right? The funds are directly in the SEC Zambit. No, no, for sure. I just think they're going to annoy the shit out of the companies. Like, I feel like any time, any, any time investors in my company have ever had some kind of, you forget about regulatory things. Yeah, yeah. I had a bad audit.

I suddenly get 20 fucking emails like, oh, like, send us this stuff. So like, I will tell you. I think, I think it will. Yeah, yeah. I mean, I hear you on that. I hear you on that. Okay. So I want to move to one last topic.

we still have time. So there was one interview that actually, Pac-Man, the founder of Blast and of Blur, also known to Tishin. He had an interview

that he had a very interesting perspective on this cycle that I wanted to get everybody's reaction to because I think it's a, you know, you've noticed in this cycle that it feels like there's a lot more pessimism, a lot more almost nihilism

about crypto from a lot of the crypto insiders. There's a sense of almost fatigue. You know, people talk about, about, oh, there's enough applications, there's too much infrastructure. You guys are a little bit of a symptom of this. Exactly. And so Tiochin's claim is that the reason why the current cryptocicle hasn't played out,

like previous cryptocicles, is that previous cryptocicles were all oriented around some particular innovation. So, you know, previously it was around ICOs and decentralized capital formation. Then it was around, you know, the metaverse. No, no, no, you're skipping DFI and Univ swap. Of course, the most important one of all of these. Because it actually was a new technology. Okay, yes.

The rise of defy, the rise of NFTs, the, you know, the metaverse story. And in this cycle, it doesn't feel like there is a new zero to one thing that's getting people excited. And that's part of the reason why this cycle is sputtering in the way that it is. So that's his claim. Curiously, you guys take on that story. Because I found it thought-provoking. What do you guys think? I feel like everyone has been saying that for a long time.

Yeah. And there is nothing new. I agree. I mean, like, I mean, I'm a protocol founder, right? So I'm obviously looking for new things. But yeah, this for the last six months or even when I was at consensus, there's really nothing that's innovative. Like that's zero to one, right?

Now I'm just getting like 100 pumped off on ish lunchpads all sorts of chains and have a bit of unique flavor. You're getting a bit of AI and crypto, but everyone knows it's a bit of vaporware. So I think people try so hard to find something new. but it's not there and no one has succeeded I don't think so

and I think that the way we started the episode about SBC being kind of like uninspiring is like an equivalent on the even further back end of the research side

that there's nothing coming from that area either yeah okay so I'm just getting pessimism pure pessimism is that the answer the mega it has answered yeah yeah I think there are

new things and new applications they're not necessarily new ideas like polymarket, for example, is now working, but prediction markets have been around for a while. But it's also, it's just not thematic. And I think that's maybe more of the point is all these other cycles, there was a big theme.

And someone kind of cracks it. And then the whole industry is kind of like ODs on it. And I'm right, okay, there was too much. That was too much ICOs. And then we're kind of have a come down. Yeah, too much DeFi. Too much. And now it feels like, you know, there aren't a million prediction markets.

There's not a million, you know, ZK, TLS, AI kind of thing. I am actually seeing a lot of predictions. But yeah. No, no, no, no, no, no. There's a ton of people raising for them. There's not like a ton of them that can attract any liquidity or usage. That's like the problem.

It is actually almost monopolistic, which is like weird because like the other crypto stuff was much less monopolistic. Like there were many competitors or at least like five. Right. It doesn't feel like that for a lot of this.

Yeah. I think like DeFi summer was like every week someone was launching some new thing and was being tweaked slightly and then someone was launching a new thing. And it's not really like that other than I guess Y-F-V-I-I. Yeah, yeah.

Oh, my God. I haven't thought about that in a while. I have a thesis for, you know, the cycle that I's going to bring up by Meghath. We're very bullish on the 2017 ICO scam ideas. Okay. Like, think about decentralized VPN. I don't know, dental coin, color coin, whatever. Dental coin.

That's one you might. Yeah. That's one. All right. Elaborate, elaborate. But I think a lot of the, I feel like everybody got into cryptocurrency. because there is one idea, whether it's supply chain or, I don't know, VPO or whatever, that just like tickle your, it's a butterfly.

You're like, oh, wow, there is some sort of efficiency unlock via coordination that's there. And that's why 2017 will have a bunch of ICO coins, but, you know, they were not serious. And the infrastructure was not ready. Like, think about putting energy on the grid, right? Like, that is one of the 50 spokes that consensus had. Our thesis is that let's go revisit the 2017 ideas. and see what can we do nowadays, but without just enforcing a coin into it. That is what I think is the next wave.

I think there is merit to that, like a lot of even something as simple as like, you know, deep learning, right? This is a very old idea that only became feasible in the past, you know, 10, 15 years because of changes in technology. And like, maybe there's something thematic to that for crypto as well where it's like, yeah, maybe some of these old ideas weren't bad. They were just early. and like even something like perps,

people have been trying to build decentralized perps for years and years and years and years. And now it's like, maybe we actually had the tech to make something good and like in the markets here and there's liquidity here. And like, you know, it's not, yeah, it's not wrongaged early. Yeah, I like that idea. And I do agree that there's something,

like it feels like what this cycle is about, if it's about anything, is it's about quantity becoming a quality of its own. Right? And it's like there were a lot of things that were working on very small scales. Like, you know, stable coins, were just much smaller.

And then, you know, polymarket volumes were much smaller. And, like, centralized perps were much smaller. And they were there, you know, it's not like we invented these things in the last two years,

but now they're big. And the bigness of them actually makes them qualitatively different and makes them, you know, now polymarket is like the primary market for the election. It's, you know, perplexity just integrated polymarket

instead of integrating like, you know, 538 or whatever the modern equivalent of 538 would be. And that feels to me like a, something that happens not as a zero to one, okay, there's a new paper published about this, but it's the one to 100. And the one to 100, in some sense, like, intellectually it's less interesting because it's just

more of the same, but bigger. But that is such an important part of how crypto actually does the thing that we were all talking about three to four years ago, right? Like, the stories we were telling in some way are premature. Now the stories we're telling are actually right-sized, but they're actually happening, you know? And that feels like the difference to me in the cycle. Like the thing you were talking about last time about Georgia, right? And you were in Georgia and you were like buying tether with a POS system, you know, buying toothpaste. Like that couldn't have happened in the last cycle. That's true.

That's what we talked about in the last cycle, right? Everybody talked about, oh my God. Bingy, we talked about that maybe like two or three cycles. Yeah, yeah, yeah, exactly. That's a 2017 idea. See? Yeah, okay. So given your thesis, what is the Pets.com of 2017?

That will be the door dash of this cycle for you in your mind. The Pets.com. So in 1999, Pets.com, or what was the delivery one called? Webvan. Webvan. Well, like, you know, 1999 web van, something that failed in 2017 versus DoorDash and something now. Augger Polymarket? Yeah, but I guess I mean for the net, you know, what.

Okay, the next generation. Yeah, so, I mean, we're obviously exploring something where we're right now working with a builder is a decentralized VPN idea. People probably don't know. The top six VPN in the world are controlled by this one company. It's definitely not private and it's definitely not secure. But with megaeth, right, with our technology, you can actually have a VPN that is decentralized, that's private by nature,

but actually doesn't sacrifice performance. That's what we're always saying, right? Like the megaEath application pair Web2 performance with Web3 crypto-nitiveness. So that's what we're excited about. So Orchid is Webvan. Orkin. That's what you're saying. Whatever that name is.

Yeah, damn. Okay. NIM was a little after. I didn't, they didn't ICO, but Orchid definitely ICA. Well, so VPN and like

Tor, I think, are like a different scale. Yeah, yeah. The mix and stuff, I guess, is different. Yeah, yeah. That's like a different, that's a different scale

of security that you're trying to get there. But, I mean, I think this is also very topical because you spend so much time in Asia. And of course, folks who are using crypto in China, I would love to hear you speak to that a little bit about the role of VPNs

for people using crypto in China. Because I think everybody kind of knows China matters in crypto. And everybody knows people in China are still trading crypto. They're still trading on finance somehow, even though they're not supposed to. It's all very shadowy, I think. I mean, the Jupiter and hyper liquid volume isn't coming from the U.S. Come on. Yeah, I mean, it's like, give us a glimpse of what is the average user in China doing?

And what is the role that VPNs play for people in China? Yeah, we didn't think about the VPN is for Chinese users. It's actually Middle East. And most of the applications are blocked in the Middle East. Like if you live in the Middle East, you got to fucking have a VPN. Otherwise, it doesn't work. Right. And a lot of people use VPN not just because of lack of accesses for privacy as well. So I don't think this is a China thing.

I mean, VPN is a huge time. It's a big market. But yeah, I think, but going back to question about, you know, people in Chinese, it's mainly just trading, right? You know, they're the one who will just go on telegram the little mini game and just keep tapping, tapping, tapping, tapping, hoping there's something out of it. Most of the airbag farms operated out of China. But yeah, I still think China is where liquidity is. We're novel.

Well, where the exit liquidity sometimes are, which is very sad. I also think I'm actually very bullish on Chinese builders. I make it actually sort of my own mission to kind of inspire builders in Asia because I think, you know, they're so far from New York, where, you know, the cabals are hanging out. They just don't know what's good. Where the podcast get reported. The podcast got recorded.

There's the Chinese equivalent cabals, though. They're, but they're very different. Yeah, we were just talking about one earlier on the show. Yes, but you got what I'm saying. But yeah, I actually think we're going to get a generation of Chinese and Asian builders because the economy sucks. Totally agree with this, right? And there's been a huge Chinese diaspora of folks who are now very, very influential

in building a lot of stuff in the crypto. industry. The thing that's fascinated me the most, and maybe we can, we can just end because I know we're coming up on time soon. Like, you know, one thing that we learned from the Binance, the FTC case was how much of Binance's volume still comes from mainland China, which obviously, like, it's illegal. You're not supposed to be doing that. So like, how are they doing that? And I think part of the answer, and you can correct me if I've, if I've missed anything here, but there's basically, what is, it's not too Valu? What's the, what's the island nation where you get like the digital passport? You don't what I'm talking about? Oh, yeah, I do know you were talking about.

Caribbean Islands? No, there's one in Asia. I thought it was, isn't it on Tuba. Yeah. Maybe it's Tuba. Whatever. There's like some, there's some country where you can get a digital, like, Palau, that's what it is.

You can get a digital ID in Palau and then using a Palau digital ID, which you don't have to be in person to actually go collect. You could just sign a form online. You become a digital citizen of Palau. And using a Palau ID, you can sign up on Binance and start trading. And this is how a lot of mainland Chinese are Chinese people get onto Binance is with this Palau idea. And there's like, oh, you have a Chinese sounding name,

but apparently you're a Palau citizen, so it's cool. And that's how Binance has like, what was it, 20% of their trading volume comes from mainland China, Chinese. And so China, one way or another, will always find some way to get onto these things, right, and to get access to crypto. I think the entire world does. I think African do this.

Right. Latinos do that. Yeah, I don't think it's particular. I mean, I don't think it's unique to China, but it's also, China has always been such, a big part of the crypto industry. And like just by kind of mass, China is obviously, you know, the second largest country in the world, the second largest economy in the world.

So it is really, really significant to understand the gravitational force they exert on the rest of the crypto industry. Yep. Yeah. Okay. All right. Thank you, brother Bing. We appreciate you sharing your insights with us.

Thank you, guys. Pleasure. Always. All right. I think with that we can wrap. Thanks, everybody. We'll do you next time. Bye.

Thank you.