← The Wolf Of All Streets
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- [00:00]
A
Morning everybody and welcome to Crypto Town hall every weekday here at 10:58am Eastern Standard Time. And doubly excited as we continue into October. We have Bitcoin currently trading at a very respectable price of $119,670. Unbelievable. Watching Bitcoin effectively rise by over $10,000 in a matter of October begins and the government shutdown begins at the exact same time. Our first topic here obviously is the market heating up. Listen, stocks also on a record run right now even as the government shuts down. It seems very clear that nobody gives a damn what's happening with the United States government when it comes to stocks. We are in irrational, euphoric period here. And markets can remain irrational longer than you can remain solvent. Dwayne, what do you make of the markets right now?
- [01:07]
B
Hey, good morning. Thanks. Well, I mean, you know, if we put it into perspective here, I mean, yes, despite the fact that there's a government shutdown, the market is overall performing well and in a way that's really expected. I mean, if we look back through history here over the last, say, well, 40 years, so we're talking like 20 government shutdowns, the market generally will move up by say a half a percent over the last, say the last six government, five or six government shutdowns. Even the last one, the market went up about 10%. So it's really the expectations here for liquidity, for the fact that we might go into a rate cutting cycle here. So if we juxtapose that though, with more of the macroeconomic data that came out, you know, this, this week, it was a fairly exciting week in the sense that, you know, we can see that the, with, you know, for example, with the ADP data, there's some weaknesses here. I think the private market lost maybe say the private sector lost maybe like 30,000 jobs upward to 30,000 jobs. We're seeing weaknesses in manufacturing, it's down for the last six consecutive months here. So we got to look at that. And then we have to contrast that with, you know, well, with growth, with all the, with overall, in, you know, market exuberance, with GDP growth, we're like, we're at what, like 3.8%. So we can see that huge contrast here. So, you know, these, these two areas are separating. So if we look back at say, you know, coming out of COVID right, we have this K shaped economy where you know, to the victor goes the spoils. We have asset holders and those with good jobs, college educated, doing very well while the rest of the, you know, While the rest of the market, you know, basically, you know, basically suffers here. So if we do go into a rate cutting cycle, that means we're going to see a big explosion, inflation in assets. Right. And then we're going to see maybe some more persistent, empty, larger days for Main street, for the other side of the economy. Now if we look at, you know, say bitcoin, you know, bitcoin and gold, they should perform very well within a rate cutting cycle as they have in the past. We've seen gold do very well and outperform bitcoin, at least within the last three months. But bitcoin is catching up. We're starting to see inflows come back into the green, you know, so if we can compare this to last year, you know, if we look at say Wednesday, Thursday of next week, if we're getting the same sort of inflows right now, I believe we're around 3, 3, 350 million or so. But if we get say 400 plus like we did last year, then, you know, that means very well, you know, very good for, you know, for October here. And we should continue to see people move to bitcoin here, you know, just to hold on, if not as a safe, as a safe haven, asset to hold on, you know, to hold on to their income here. You know, also just to go along with the overall trends here as we move forward.
- [04:14]
A
Anyone else thoughts on the market here?
- [04:18]
C
Feels pretty good right now.
- [04:22]
A
Yeah. It's just so interesting how indifferent to actual news. If we even get it. We're certainly not going to get data now with the shutdown markets seem to be.
- [04:34]
D
Scott, you said that the market was really exuberant. I mean, does the, does the.
- [04:41]
E
Does.
- [04:41]
D
It really feel that way? Because I don't see a lot of exuberance and, and like freak out. Hey, I gotta get in. I mean, where are we on the emotional wave right now? Because it doesn't seem like there's a lot of overhype.
- [04:57]
A
Well, I think there's. I was more speaking, I guess from stock market perspective, I think bitcoin has a long way to go. But I mean, we can dig into that obviously here with the audit with the panel. I mean, my, my feeling was less of the emotional exuberance, I guess, to your point, than the fact that there's no such thing as bad data or bad news anymore.
- [05:20]
D
Yeah.
- [05:21]
A
What could possibly, what news could possibly make markets go down? It's certainly not wars or government shutdowns or inflation or job.
- [05:33]
D
Yeah, it's illegal to have A recession. Now, I don't believe recessions are on the, on the card, but I don't see a massive exuberance in the crypto space. I don't see the FOMO that we had four or five years ago. Are y' all seeing that or am I just not seeing this correctly?
- [05:51]
A
What do you guys think?
- [05:52]
F
Well, Gary, I think it's a different contingency. I think the FOMO you're talking about from a few years ago was very much retail driven. And so it felt like it was taking up a lot of oxygen because you couldn't open Twitter at the time now x without seeing 5000 posts of different coins or tokens or, you know, someone excited about getting into crypto. Now you see the adoption coming from corporates and just by the sheer, you know, the nature of the way they operate, I think that the amounts are certainly much larger. But also the, you're not going to see the euphoria, you're not going to see the CFO of a publicly traded company, you know, post on Twitter that they're excited that they now have a Treasury play in the space, although that certainly was the case a few months ago when people were announcing them. But this quiet accumulation where it's not even an announced treasury play, it's just companies now accepting and being willing to put digital assets onto their balance sheet. And you couple that with the inflows that continue to happen in the ETF space driven by, let's say, non traditional crypto investors. That's where we get this churn higher. And I think if you pull the lens out and look at, you know, the, the equities market, that's kind of the same. It's, where do you go from here? You look at a dollar that's global buying power is down by what? The dollar index is down 10 +% over the course of the last year. So the dollar is weakening and people are looking for assets that are going to outperform that decline in the dollar. And crypto obviously looks like a really safe bet versus the dollar right now. Safe being a relative term, obviously. But, you know, I just, I don't see the euphoria that you're relating or referencing. But I will say that it's a different sort of enthusiasm. The conversations that I'm certainly having are serious. People who haven't necessarily looked at crypto in the past are now not only deploying capital, they're looking at how they can be more innovative in the space and leverage their existing businesses to take advantage of the Opportunities in crypto or defi or certainly in the RWA space. And those are conversations that weren't really happening at this level with this magnitude and gravity and execution a few years ago.
- [08:27]
A
Anyone else?
- [08:29]
D
Yeah, well, well, you know, in regard to that, I mean, Jamie Dimon, I think just said that he thinks bitcoin's underpriced on relatively old.
- [08:37]
A
He didn't have the 60 something thousand employees that JP Morgan did. He definitely didn't. But you know, we get these reports, it's so funny. We get JP Morgan says hilar, it's like a monolith, you know what I mean? And it's like intern number 12 at J.P. morgan emailed his friend and somebody got it. But yes, 165CitiBanks at 181.
- [08:57]
G
Look, the other side of it is too, I don't disagree with Eric, but look, the other side of it too is people kind of go in their like life cycle of adoption. Personally, dude, to be honest, I haven't looked at the price in like six weeks because every time I sell bitcoin over the past 13 years is kicked me in the teeth. So you know, like I, I, I hold on to the bunch of that I buy as like a terrible reminder that I use bitcoin on like I got laptops that like are like four million dollar laptops, right? So like as you progress through your time in bitcoin, you just care less and less about the price because there is no alternative to Eric's point. What are you going to spend your dollars on?
- [09:36]
H
Nothing.
- [09:36]
G
There's nothing to buy.
- [09:39]
D
That is a fact, dude. Nothing to buy. And, and like that's probably coming from I don't know you, but I, I.
- [09:46]
A
Keep saying you should. You guys love each other by the way.
- [09:49]
D
Yeah, I have a feeling. Okay, let's, let's meet up. But look, I think rich people have everything they could possibly need. And in fact most of the they have, they don't even want it anymore. It's headaches. And I don't think you can buy any more. Villas, prostitutes, mistresses, ski chalets, automobiles, jets, dude, they're maxed out. I don't need anything else. Like really I don't. There's nothing I can buy that's going to change anything for me. And if that happens, you have like, we are going to see people fucking like look at this Netflix thing. Okay, people have been lazy, 15, 17 bucks. But people are starting to say, hey, fuck this. That really does change an economy very rapidly. But I agree with you. Man, there's nothing to buy. They just. Absolutely nothing.
- [10:43]
C
I think FOMO happens on the upswing too. We haven't really seen the upswing that causes people FOMO yet. You know, the. The type of upswing that happens in the altcoins too, where, you know, you'll be out in the middle. Like, I think during 2021, I was at my cousin's wedding in the middle of nowhere. Everyone's wearing cowboy boots, cowboy hats, and trying to talk to me about dogecoin. So that's when FOMO starts. And signaling of the top as well. To Marshall's point, the most expensive car I ever bought was a Honda Civic in 2013 for similar reasons.
- [11:19]
A
Brutal. We did have Trump Token, just the record this cycle.
- [11:24]
C
That was a good sign of the top.
- [11:26]
H
Yeah.
- [11:27]
A
Just saying, you know, we've had our little Doge moments, but it hasn't been like NFTs on Saturday night Live, certainly like we had in the last cycle. So anybody else thoughts here on the market? We have bitcoin. I mean, pushing very close to 120 right now. 119860.
- [11:46]
I
Basically, yeah.
- [11:46]
H
I'll jump in here, Scott.
- [11:47]
A
The day's highs.
- [11:48]
I
Yeah, yeah, that's. That's kind of the range I'm looking at right here as I'm looking at the charts. 120 to 123 for structural resistance. I think this zone is. A lot of folks have referenced. It has a heavier distribution band. So be interesting to see if we can push through there then. I think then, you know, 130 to 135 is the bull breakout territory. And I think that was Marshall who was talking, man, OG from 2010, the miner. I have some Nikes that I bought that I think are probably about $250,000. But the great thing for us now is that we don't have to sell our bitcoin. You know as well as I do we can go out and take a loan against an unchained, et cetera. So thank God for. For that. Right?
- [12:23]
A
Anybody else got some great stupid purchase stories with their bitcoin? Bruce, you got to have a stupid bitcoin purchase story. You've been here long?
- [12:31]
H
Oh, yeah. Well, I put it. I put a bunch of. I put a bunch of 50 Bitcoin investments in a bunch of startups like Change Tip and stuff that didn't make it. A couple made it though, so that probably kept out. But I don't usually disagree with Gary, but I think there's all kinds of fun stuff to buy this week. I bought. So I got a MCX regulator and I had it cerakoted in green and copper. And then I had my Sig Vertis cerakoted to match the space wolves warhammer 40k army. And then I had a Beretta made to match like an Aquaman. No guns. And then I got a.
- [13:18]
D
I'm smiling like a Jesse cat. Almost everything, buddy.
- [13:23]
H
I got a, I got a fast release blade from Blade HQ called the Kalishna Cob. And it's, it's, it's shaped like a corn cob. And everybody can afford that in this chat. So I, I don't know why you don't have one. Because I have one. Yeah.
- [13:37]
G
Look guys, just to give you context, Bruce also, Bruce also sold his house in like 2017 in Boston for bitcoin. So like Bruce has been on both sides. Bruce just crushes it all the time. Meanwhile, I'm over here holding a four million dollar laptop. I don't want to hear it, Bruce.
- [13:55]
C
All right, whose house I want to visit?
- [13:57]
H
Marshall came to my house and, and helped me set up a gaming computer and a mining rig. Would we, would we spend 11 bitcoin on GPU? I don't.
- [14:08]
G
That's a. Those are repressed memories, Bruce. Stop it.
- [14:13]
H
Yeah, no, there's plenty of good things to buy. I got a whole barn full of. You can't do. What's that website? Did you buy this effing thing or something like that? You, you go through and it, and it has all these prices and it says what they were in bitcoin at the time and, and they're common, common purchases. So it's like almost certainly if you go through 10 of them, you're going to see one that you bought and you'd be like, oh yeah, I actually did buy that freaking DVD or I went to that movie in 2014 or whatever and you know, it was like whatever 0.5 Bitcoin, you know, my son sold.
- [14:48]
G
But at the same time bitcoin and like this like push for financial sovereignty. There's a point to it, right? Like there are, there's few, but there are things that I don't regret buying.
- [15:00]
H
Right. Bitcoin. Right.
- [15:01]
G
Good example. My parents house.
- [15:03]
H
Right.
- [15:03]
G
I bought them a house. And like that house today is worth. If I had the bitcoin, whatever, it doesn't matter. Like that is the, the point of getting yourself out of the. And so there are rational examples on what to spend bitcoin on and what not to.
- [15:18]
H
Yep.
- [15:18]
G
So I don't want everybody to think, oh, you should never spend your bitcoin. Like there's a point to it.
- [15:22]
A
Literally every transaction in your life has an opportunity cost, bitcoin or otherwise, right? So that's an endless hole.
- [15:29]
H
You got to live life and, and you know, time is a real thing. You know, it's. You're different when you're 40 and, and 30 and 50 and 60 and 70, you know, and, and eventually, you know, there was a good, you know, well known bitcoiner, early, early guy. And about five years ago he wrote a post, he's like, I'm selling half my Bitcoin. I'm 63 freaking years old. And yeah, I'm rich, but whatever. Like what am I going to do? Maybe I only have 10 more year good years left or you know, 20 or something. Like I'm going to sell it and I'm going to travel the world and do this and this and this. And so, you know, at some point you got to do something. There was another, there was a guy who came to the roundtable who sold a bunch of. He mentioned that he sold a bunch of bitcoin to make this one of a kind, like a music like the, like the ultimate acoustics of any building in the world. Like a 10 million dollar building that, that is. It'll like break records for the best, the best sounding building in the world. So, you know, that's a passion of his. You know, same with Marshall. I, you know, I got, I joke that my farm is the farm Vitalik bot because I paid F F for it. But same kind of thing. You know, F has gone up a lot. But I don't regret that one bit because that changed my quality of life. Gave me more time with my family, more time with loved ones, you know, that kind of thing. So there's definitely, you know, things that if it brings you joy, it's good. You know, you got to have a fine balance of saving enough and, and not say not saving, not being too. You want to be frugal but you don't want to be too, you know, cheap about things. You know, you want to find that right balance. It's different for Everybody.
- [17:07]
A
But yeah, C.J. who's often, often on here on Fridays from People's Reserve, he tells this story and I think it probably echoes a lot from other bitcoiners, but. Well, the first story he tells, I think he bought a house for 100 bitcoin that you know, is worth like 500 grand now or something. And he jokes that, you know, obviously the price of his house would have been multi many tens billions of dollars or whatever it is. But then on the flip side, once he learned that lesson, he said he would never sell his bitcoin again. And actually with apparently a huge stack of bitcoin went and became a waiter so that he could, you know, work and stack more bitcoin to refusing to sell bitcoin. And I know people have all been on both sides of that token. Personally, like if I was a multi billionaire, I probably would like upgrade my car, you know. I guess bitcoiners are built different.
- [17:52]
H
There's a lot of people, I mean we know people that, that, you know, we have mutual friends that have 100 million, $300 million worth of Bitcoin and they live especially up until recently, some of them finally bought nice houses. But there was some folks that had, you know, 10,000 bitcoin and they were living in their cars, you know, like living, living, you know, not, not to be overly cheap, but just kind of vagabond lifestyle. You know, it's kind of a cool lifestyle. Like I know I have a friend who's a, you know, huge holder and he loves crashing on people's couches just for the social aspect. You know, he could stay at any four seasons in if he wanted to. But, but he has more fun just hanging out at a friend's house and crashing on the couch, which I think is good. You know, it's a, it's a, it's a rich life. If you're hanging out with friends four nights a week and having dinner together instead of, you know, you're in a giant, some of these big mansions. It's funny, you know, you, you see these big mansions that go for sale and they have all these nooks and crannies because they want to justify the square footage. They have all these nooks and crannies like, oh, this is your card playing room and this is the other room. And people picture this stuff when they buy it and they never use it. They never, they never use the game room. They never, they use the pool table twice. They, they, they, if they have young kids, they use the swimming pool and as soon as the kids get big, they use the swimming pool. You know, once a year, boats similar, you know, and it's funny because you're, you're shooting for that camaraderie and hanging around with people and then there's like lower middle class people who have a charcoal grill in their backyard and they hang around with friends every week. And in some ways that lifestyle is richer because hanging around with people is one of the most valuable things we can do. And so you don't want to get in the trap of like thinking that you can buy this. Like almost always you'll go look at the big mansions and look at the, look at the descriptions like, oh, there's this little nook room and there's a yoga room and there's this, and there's this. You're not going to use that stuff. You won't use it. I'm telling you. You know, you better off, you'd be better off living like a regular middle class person and actually trying to work on saying like, okay, I'm gonna have, you know, Thursday night, movie night with the friends, or, or every Sunday I'm gonna have a cookout in the summer. And you, you, you probably be better off and man, happier.
- [20:07]
C
Well, soon we'll have AI friends, so we'll just have them.
- [20:15]
A
Are they gonna live in the van with us? With our hundreds of millions of dollars?
- [20:18]
B
Right.
- [20:18]
C
That's why we need humanoid robots, is because we're all, you know, crypto, gj, reclusive.
- [20:24]
A
I've seen, I've seen every version of that movie and it's literally never ended well. But here we are moving on to other topics besides the stupid things that we've all done with our money over time. And if, by the way, if we jumped from bitcoin to like what you've done with your, what you did with like the $10,000 worth of Dogecoin you once had, which is usually my story, it gets even probably uglier than what you've done with your bitcoin. But I think next topic today. And Carlo, I know we have you here obviously to talk about stablecoins and tokenization. We have the SEC basically saying that they're taking a very deep look at moving all stock trading onto blockchain rails. Pretty wild considering where we used to be. Obviously Swift also now saying I believe they're working with 30 blockchains for their ledger. It turns out this technology may be better than the 1970s garbage they're currently all using. Good morning, Carlo. Good morning.
- [21:23]
J
Yeah, man, wild. Who could have seen this coming? So a lot of things are moving very fast. And stable coins, you know, we had the Phantom wallet announcement that they teamed with Stripe and Bridge to launch their own cash stablecoin. They're kind of front running the Genius act because we don't yet have the regulatory rails for the Genius act. So that was an interesting development because they Basically have taken the lead in launching through Stripes kind of plug and play protocol. Yesterday we had a big announcement on Sui and the Sui foundation and their, their treasury has announced that they are launching over Athena and partnering with BlackRock's Money Market to launch their own SUI based stablecoins. Unclear how that's going to comport with the Genius act as well, but very, very creative things are happening in stablecoins and no one's sitting by waiting for the Genius act to fill in the blanks. They're going full throttle. Of course this comes with caveats. There is much more to this than just plug and play when launching a stable coin because you've got to anticipate what those regulations are going to look like under the Genius act because the fines are steep if you fail to comply when this thing goes live. But yeah, between that and the tokenization of everything and the SEC and the CFTC having a, a summit, this is wild times, man. If we can just keep the momentum going. And, and, and now the shutdown obviously complicates all that because legislation is now juggernautted and regulatory on, you know, rollouts are now kind of stalled. So great time to be in crypto, no question about it, and a great time to be looking at building and stable coins because it is definitely the future of money and banks are scared and that's why they're out there lobbying hard against this quote, loophole for consumer defi. Which is ridiculous because when you see what sui's doing, Scott, and you know you and I talked about this a little bit offline, SUI is an interesting play because it enables really, really robust fast defi, faster than eth, less fees than eth. And when you combine SUI with deepbook, their built in liquidity provider, it negates the need to have to go through Uniswap and create your own liquidity pool for all these incoming stablecoin DeFi things. So it's about to get wild, man.
- [24:04]
A
Yeah, I mean I'm literally just looking down the day's news. So we have Bloomberg reports that Tether will launch its new stablecoin USAT through conservative video platform Rumble. The next story to your point, NASDAQ listed Sui Group announced plans to launch two stablecoins, becoming the first digital asset treasury stock to enter the stablecoin sector. Then the next story after that, which is not specifically stablecoins but tokenization. According to Bloomberg, Zach Wyckoff, co founder of World Liberty Financial, said at token 2049 conference in Singapore that he plans to tokenize the Trump family's global real estate assets to broaden access for everyday investors. That's three. Three stories in a row. I didn't even need to skip any Scott.
- [24:45]
D
Here's one more. Scott. World's largest derivative, derivative exchange CME Group. To launch 24. 7 Bitcoin trading.
- [24:56]
A
They have to.
- [24:57]
D
Bang, bang.
- [24:58]
A
They have to because they can't keep up with Coinbase.
- [25:02]
D
Yeah. And the. The entire equities and commodities market will go 24 7.
- [25:08]
A
I mean, that's what napkins are talking about here. Trading stocks on blockchain rail doesn't have a on and off button. Right, Right. Crazy, crazy. Wonder what happens if they do all. I'm gonna ask. I'm gonna tee up, Bruce. So what happens, Bruce, if they do all of this and then the Senate flips and Elizabeth Warren is the chair of the Senate Finance Committee, what happens then?
- [25:36]
H
Oh, I love her. She's just such a wonderful American. She's so smart. And, you know, it was great was that time that she gave $700 billion of taxpayer money to her banker cronies and then branded herself as some kind of every man, you know, who doesn't like the big banks. I mean, it's a magic trick. It's like if she ought to be a magic the Gathering card or like some kind of wizard in a Dungeons and Dragons game. Like, like brilliant. You know, how do you do that? How do you. How do you steal $700 billion from the taxpayer? Give it to banker cronies for stupidity. For those who don't know, like the banks.
- [26:17]
A
That can't be true.
- [26:18]
H
Oh, right. Yeah, yeah. So the TARP bailout. So in 20, in 2008, the dumbest possible people in the world, they were, if you watch, like Big Short, they were giving loans at 13 to 1 leverage on houses that were three times more than what they had for people who had half the income of what should have been for the regular value. So you have a plumber who's making 78 grand a year. He's buying a $500,000 house with a $5,000 down payment. And then they're leveraging that debt on that house for, for, for 9 million. 9 million. And it's all backed by one dude who can't even afford the mortgage. So that's how dumb they were. And that's what the subprime debt is. And all these whining cry babies from all the big banks. And you know, the, the, the, the previous. I think six out of the seven previous treasury secretaries were all Goldman Sachs chairs. So they all go in there and they wind to Warren and everybody, oh, we're all gonna go out of business because, because they did all this utterly stupidity stuff. And instead of letting the markets work like oh, I made it, I made a new restaurant. We serve onion flavored ice cream. It's like oh well that was a bad idea. Like, oh, I'm so sorry you did a bad idea. Let me stop steal from other people and give it to you. That's what they did. They're like oh, I'm so sorry you were so incredibly stupid. You know, Charles Schwab didn't do it, Fidelity didn't do it. Whole bunch of other smart companies didn't do it. But no, the really really dumb companies did that got, got way over their head in this subprime debt. And instead of letting the market work and letting them all fail, which would have been fine by the way, they convinced the, the, the, the people in power and they convinced America ultimately in the media that it was some sort of good idea to steal money from the people by printing it for now, not technically stealing it out of their pocket, but printing it from thin air combined with taxes and giving it as bonuses to these bankers. And you know, they went, they went and bought, they over $16 billion in bonuses were paid to these people. They went and bought mansions and yachts with it. Look up John Thayin, the guy who was the head of bank of America and then he became a government official and then went back to it. He bought himself a $250 million house. It's, it's like, it's like this you know, 50,000 square foot house. And Elizabeth Warren supported that and that, that basically says everything you need to know the, the, how corrupt the system is, how broke it is, how broken fiat is and what lying hypocrites these people are that they pretend that they're like working for the people, they're really working for the bankers. She, her biggest group of, of supporters is, is Wall street people. They of course they, who wouldn't support her. I mean, and you know what's funny? I wouldn't be saying this if I would have been slightly different career if I was working at one of those banks. And I got, there was one guy who got a 200 million dollar bonus for because like oh, you did such a great job doing the stupidest thing in the world selling onion flavored ice cream and we rewarded you by stealing from the taxpayers. And it's, it's just, it's utterly insane and you know, if I would have gotten a $200 million, I might not be saying this right now. It's pretty easy to, like, justify it and be like, all right, I'm just going to kind of be quiet and enjoy my. Enjoy my decadeca millions. But that's how ridiculous the system is. And it was just a total fraud on the American people. Elizabeth Warren was the main person. She was the TARP administrator. She did this. She literally stole from the American people to give to crooked, stupid bankers because of stupidity. I mean, why not? I mean, if you want to reward somebody with stolen money from the taxpayers, at least reward somebody smart. Say, hey, fidelity, you did a good job. Let's give it to you. No, they. They give it to the, the dumbest of the dumb banks. And that just creates all kinds of other problems. And it's just. I mean, it's Fiat 101. But everybody should be aware of what happened with the TARP thing. I mean.
- [29:59]
A
Yeah, but that's crazy. Begs the real legitimate question to what happens to all this momentum if things flip.
- [30:08]
H
I don't know. I mean, we're. I look at it even bigger picture than that. I think that we're in a time where it doesn't really matter so much who's in power. You know, I'm definitely against the, you know, the woke commies being in charge. There's all kinds of horrible things with that, including the fact that they could kill a bunch of people. But, you know, there's a whole bunch of problems with the right being in charge, too. They're. They're. I mean, just, just yesterday, you know, Trump was talking about how great the CEO of Pfizer is. I mean, you got to be out of your mind. Like, the bigger picture. If you zoom out, we're in this fourth turning. The world is changing radically, and it has been ever since the, the bubble was popped with this Covid nonsense, you know, five years ago now. And that set off, you know, just like assassinating, you know, Franz Ferdinand set off the turmoil of World War I. This, this covet thing was the, the pen that popped the bubble of insanity. And that happens every, every four generations or so. It's. That's why it's called a fourth turning. Happens all the time throughout human history. Happened 100 years ago, happened 100 years before that, 100 years before that. Every hundred years or so, the world changes, and then some event, usually not that big. You know, it was basically a big flu year is what it was. And who the heck is Franz Ferdinand?
- [31:27]
F
Nobody.
- [31:28]
H
Cared 100 years ago when he got killed. But some what would have normal in a healthy economy. If Covid would have happened during the 80s, nobody would have noticed. They would have said oh yeah, bad flu year. In fact there was a bad flu year. It was on the COVID of Time magazine. They had like five to ten times more deaths because a lot of people die from flu. They had that five to 10 more times. They're like wow, well geez, what a horrible flu year. A lot of old people died and that was it. And that's what would have happened in a healthy economy. But because everything is broken and stupid from years and years and generations of piled on stupidity. It's a weak system, just like it was weak and the, and the, And World War I popped that bubble. This Covid nonsense popped this bubble and that set off this fourth turning. So we're in this time of epic and crazy change. And every time these things happen, unfortunately it's usually coupled with global war. But at the very least you have massive turmoil. Money changes, systems change, power structures change. That's why old power structures like you know, the New York Times and the, the Davos World Economic Forum, that stuff doesn't matter anymore. And CNN dies down and Joe Rogan rises up and TikTok rises up and you know, old stupid Fiat starts falling by the wayside. You have brand new companies like Tether and Coinbase and Binance coming out of nowhere in a matter of less than a decade and becoming, you know, bigger than the, the old legacy players. So that's just what we're in. So we're in this time of epic and crazy change. It doesn't really matter who's in charge. We're going to have crazy weird stuff happening. Hopefully we avoid mass blood bloodshed and massive global war like we've seen in other ones of these. But we're going to have a lot of crazy turmoil no matter, no matter who gets in power.
- [33:11]
A
Anybody else specific thoughts on what any sort of government change might mean for the momentum that we're having right now? I mean Carlo, you just spoke pretty eloquently about the future of stablecoins. Does anything quote unquote stop that train? No, I don't think that, I don't.
- [33:26]
J
Think you can put this horse back in the barn. I think we're going to see the disaggregation of banks. I've been talking with bankers just casually, managers and so forth. And they largely at the bottom, boots on the ground level, largely still have no idea what's coming. And that's kind of terrifying that banks are not even advising boots on the ground, their managers, their branch managers, etc, how to prepare for this. But when consumers realize that they can avoid these fees, that they can avoid these delays, and that they can move their money around instantly for pennies, and they also have the option in defi to earn yield on this money, it's going to be real hard to make a case for keeping customer deposits in banks. I think banks are going to get stress test, stress tested significantly in the coming weeks, if not months, because I sense that there is a lot of uncertainty among people about what is happening right now. There's a lot of concern. Obviously, we're seeing a lot of attention to gold and silver and bitcoin as hedges against all of this. And I don't know if banks are ready for any of this. And frankly, they've decided to stay and they've locked into legacy ways of doing things and they're slow to adapt. And this sector that we're in, this conversation we're having is quite the opposite. This sector breaks things and moves fast. And I don't think banks are ready for this in any way, shape or form.
- [35:14]
I
All right, how about that? Sorry, I'm having UX UI issues on the app this morning to Carlo's point. Can you hear me?
- [35:22]
J
Yeah, I can hear you, man.
- [35:23]
I
Okay.
- [35:25]
A
I tried to call on you, Matt. My mic disappeared. Literally the button disappeared.
- [35:29]
I
Yeah, yeah, that happened to me, too. That happened to me, too.
- [35:32]
A
There was no mic button to push.
- [35:34]
I
That was weird.
- [35:34]
A
I started pushing areas of my phone, hoping that it would work.
- [35:38]
I
Yeah, mine did the same thing. To your point, though, Carl, I was at bank of America the other day having to deal with a wire transfer and speaking with one of the customer service representatives there. They have no idea what's coming. I said, are you ready for stablecoins yet? Just like, what's that? I'm like, oh, okay. Back to the one point, though, that you raised Scott about if the administration flips and what we might see in midterms, I would like to think, I'd like to hope that there are some smart Democrats on the side of the aisle that are younger, that are a little bit more progressive, that are friendly to crypto. Ro Khanna comes to mind. But I think somebody like Angie Craig from Minnesota, Tim Ryan from Ohio, or maybe even what's the guy, Richie Torres from New York. Yeah, yeah, from where you live. Those folks, I think also might be some promising hope where we could see some movement on the Democratic side of the aisle. But yeah, that's, that's my two cents on that.
- [36:28]
H
Carlo.
- [36:28]
F
Back to your point though, where do banks go? Especially you know, JP Morgan, bank of America, the largers will ultimately adapt and stay, but these small and regional banks, where do they go? Because the regulatory framework really doesn't allow them to get uber aggressive right now. So if you were sitting as the CEO of xyz, you know, regional bank, what would your first moves be?
- [36:53]
J
You know, there's opportunities under the Genius act to launch a state compliant stablecoin regime. So you have forward looking states like Wyoming and Texas that if they could just leverage this and you meet the threshold, which is a pretty high threshold for the state level, you have an opportunity to grow there. Yeah, big banks are capitalizing on this, but in my opinion they're not launching stablecoins, they're launching depository tokens because they're trying to do a bait and switch here where they're going to call it a stablecoin, but it's still going to come with the fees and it's still going to be tethered to their banking rails. So I look at it for banks that are awake to this as an opportunity to retain consumers and to actually pull customers away from big banks and because they're nimble enough to be able to do this. And it's actually an opportunity. But is it an opportunity that they're going to seize on? I don't know. That's where fintech comes in. Because I think what we're going to see is we're going to see a lot of fintech companies partner with these out of the box alternatives, sort of what stripe has done with bridge. And they're going to be offering these very competitive options where people can earn rewards in defi on their money, move their money and it kind of goes into what my mantra is. My mantra is basically make your wallet your bank. Because I'm really starting to fail to see what the utility banks and their current structure are anymore. You can borrow, lend and do all these things in defi and earn yield. Yeah, you miss out on FDIC insurance for your deposits. But Dave Weisberger, our dear friend, has talked about this many times. You kind of don't need that when you have one to one pegged stable coins because the whole notion of FDIC insurance is because of fractional reserve models and this is the antithesis, the antithesis of that. So man, my DMs are open and I'm happy to talk to local banks. I'd love to talk to local banks about this because I think they're fumbling the bag here.
- [39:03]
E
Ryan.
- [39:04]
C
So I'm a firm believer that we typically just go in cycles and we repeat all of our mistakes of the past. So banks will find a way to get into stable coins and most likely will be on a heavily regulated layer one chain, something like a circle chain. They will all take part in offering lending programs through this blessed chain. And I, I really think that eventually we will see fractional reserved lending once again where these stable coins are no longer one to one backed but they will start borrowing against it. And you know, basically they're going to.
- [39:42]
J
Have a hard time with that Ryan, because there's, there's strict limits on rehypothecation under the Genius act, so they're going to have a hard time pulling that off.
- [39:51]
C
There were, there's always been strict laws that get bent for the right people and I, I think the banks have a, a nice positioning with politicians in this country that when they're ready to, they'll bend it.
- [40:09]
A
Guys, it's been a great conversation. I just saw that Michael Heinrich jumped up on stage last week. Actually I had, I had invited Michael from Zero G to have a conversation and then we had a, another breaking news thing and wanted to reschedule that slot today. So I wanted to make sure that I give him some time and that we can discuss everything happening over at Zero G. So we're going to move on to that. Michael, are you there? Is your mic working?
- [40:33]
E
I am. Can you hear me all right?
- [40:34]
A
Yeah. You sound great. Thanks so much for joining me. I really appreciate it. By the way, you have like the craziest background. Serial entrepreneur, Stanford educator, top 100 entrepreneur, Harvard alumni in technology. It's quite a list of accompaniment accomplishments there.
- [40:52]
E
Appreciate it. And I've also been kind of after three weeks of lots of intensity and it's like 11pm at Singapore time, so nice to be joining the Spaces. But thanks for that amazing intro.
- [41:06]
A
I think it was two years ago in Singapore. I hosted this show every single day from token 2049. It was brutal. I remember those days being very, very, very tired and jet lagged. But let's talk about, let's talk about obviously Zero G which stands for zero gravity. People can check you guys out. 0G AI, but it's built as the largest AI L1. Infinitely scalable, fully composable purpose built to power the next generation of AI applications. Maybe you can break down, give us a TLDR and exactly what that means.
- [41:39]
E
Yeah, the core idea is basically to build something that's in direct opposition to what centralized AI or what we call black box AI is doing today. So black box AI, effectively you don't know what's going on underneath the hood. You don't know where the data came from, who labeled the data, who made the censorship decisions, what version of the model you're getting, like what version of the prompt you're even getting that you're entering, how the model is behaving. You're basically trusting a single entity to do all of that work for you and that alignment for you. In opposition, what we're building is effectively decentralized AI. Where we're building AI that's transparent, that's verifiable, that's effectively safe and also community owned, as opposed to kind of monopoly controlled, if you will. And so we're building the core infrastructure to make that happen. So you need a layer one because you need an execution environment for running different types of AI applications. And it needs to be purposefully designed for AI workloads. And AI workloads are extreme. So for example, modern AI data centers, if you're running training processes to throughputs of hundreds of gigabytes, even terabytes per second, when we started, Ethereum was doing about 80 kilobytes per second. So you're literally like a million times off from a data infrastructure standpoint alone. And so we architected a high throughput data availability layer that can do 50 gigabytes per second per consensus layer, which eventually becomes the bottleneck. Then you horizontally scale that and then effectively you get infinite scalability on the data throughput side. Then you need some place to store the models, store agent memories and so on. So we built a storage network that's designed for very fast upload and download speeds, already tested at multiple gigabytes per second on that as well. And you need a compute infrastructure because you need GPUs to run inference and verification. So we have that as well. So you can do inference, fine tuning and eventually pre training. And then we also have what we kind of call the police force of the system, AI alignment nodes that can spot bad behavior, model drift. Eventually they're still on kind of research phase. And then finally we have a service marketplace which is kind of like our version of the App Store. Other networks can plug into it. And so effectively we call this whole system an AI decentralized operating system, so that whatever application is possible in web 2 to be built with AI, you can now build fully decentralized in web 3 and some of the recent breakthroughs we've had just to highlight that is we were the first company to train 107 billion parameter model fully decentralized. People didn't think it was possible. We basically took Google's research called Dialogo, improved it about 357X and called it Dialogo X and basically were able to train that model. So that's a major breakthrough. And we also have another agent paper that recently was published at a top AI conference where we trained agents on screenshots and videos of people using their computer. And now you can tell agents to like hey, open this Word document for me, write this essay for me. So an agent can now control your computer effectively. And we outperformed all of the state of the art models on a centralized system doing that. So very quick introduction on zero G, happy to dive much more deeply into it.
- [44:56]
A
And so where do you stand? I know that you just had the Aristotle mainnet. Was it last week? A week ago, roughly.
- [45:03]
E
A little more, yeah, that's right, yeah. So we launched TGE mainnet, Korean Blockchain Week, a Digital Asset treasury, all at once. So my last three weeks have been a bit of a blur, very intense.
- [45:17]
A
So how did the Mainnet launch go as planned? I'm sure that's a nerve wracking process.
- [45:24]
E
For anybody to go through. I wish everything went according to plan. I think 80% went right, I'd say 20%. We had to improve pretty quickly. Some of the bridging functionality wasn't done in time and so we had to scramble a little bit on that aspect. Some of the dapps didn't deploy as quickly as possible because their audits weren't fully done. But we still ended up having about 100 launch partners or so participate right from day one. And so we were pretty pleased with that. And so some of these are big names like Chainlink and Redstone and PIF as Oracles for example, and then Chainlink as our canonical bridge and then layer 0 and orbiter and so on as bridge infrastructure and then on the kind of decentralized GPU side eth cache and many others. And so feeling pretty proud that we're able to pull it off and definitely making consistent improvements on the chain as well and excited about the dapps that are building.
- [46:23]
A
I saw interestingly somewhere when I was tracking all this happening last week and we were going to talk, I saw the term DAI like DE AI, kind of like, you know, Deepin or Defi, any of those. Is that a term you have effectively Coined because I haven't really seen that before. And what does it mean?
- [46:39]
E
Yeah, that's basically completely new. And that's what I was referring to when I was saying like, hey, there's black box AI, which is we call centralized AI, and then now there's decentralized AI and effectively that just gives a name to the space that's being built in many cases. I mean, I think we're one of the first to launch and kind of call DAI that. And so, yeah, I really like that.
- [47:05]
A
I'm going to steal that. Is that okay?
- [47:08]
E
Of course, go ahead.
- [47:10]
A
I'll give you credit, but I like it. So you mentioned a whole bunch of integrations. You definitely mentioned Redstone. So that's a DEFI integration. So what does a DEFI integration with someone like Redstone on zero G mean? And what's exciting to you about that?
- [47:29]
E
I mean, basically if you want to build any type of DEFI application, you need a very robust kind of infrastructure. And Redstone and PIF and Chainlink, they basically provide Oracle price feeds because you could effectively do Oracle attacks if you're, let's say a dex and you're using your own price feeds to determine price. People could effectively attack it by doing like a flash price increase and then kind of rob the L people, so to speak. And so you want for example, somebody like a chain link to tell you, well, actually the price for this asset based on all of the other centralized exchanges and all other dexes is actually Y. And you're trying to quote it at Z. Something is very off. And so that's why things like Oracle is actually pretty important for DEFI infrastructure. And there's a lot more that goes into that. But that's kind of a high level description.
- [48:22]
A
Interesting. Also I know you integrated with Quicknode Anchor. What are those integrations like?
- [48:29]
E
Yeah, so RPC nodes obviously super important for anybody building in the decentralized space because you need to effectively communicate with the network somehow. So in Web2Land, that's also known as APIs or application programming interfaces. And so that's the equivalent on the Web3 space. So if you don't have a good RPC node, you don't have stable connections to the network, your app may timeout, you may get rate limited. And then people have a negative experience. They're like, hey, why is this swap taking two minutes? It should be 400 milliseconds because that's our block time. And so yeah, I need a pretty robust RPC infrastructure and it shouldn't just be One, it should be multiple and quicknote and Anchor and are some of the best in class providers of that type of infrastructure.
- [49:17]
A
So sort of pivoting to the launch that we talked about before, obviously there was a whole lot of community excitement about that and I believe there was an airdrop as a part of that. So how was that all received? Like how has the community viewed the launch? What's it look like?
- [49:35]
E
Yeah, in general, I think it was successful. We did multiple kind of tranches or phases of the airdrop, if you will. The first phase was to people that did a lot of the kind of social questing KOLs that supported the launch and the protocol over a lot of time. And I was really happy to see a lot of posts. A lot of people DM'd me as well saying like, wow, you changed my life. This is the first seven figure airdrop I've ever received. I can now afford a house, I can pay for my college and so it's really heartwarming to see all of those. And then the second seven figure airdrop. Yeah, some, some people like got close to that basically. I think that was the, I think six figure airdrops definitely. And there was, I think a few seven figure adopts as well.
- [50:26]
A
Sorry I interrupted you. You were, you were continuing. I was just kind of shocked by that.
- [50:31]
E
No worries. We definitely, for the people that have contributed a lot and some of the KOLs, some of them did like 20x the work that we were expecting and we were just blown away by how much they supported the protocol and we're just like, wow, the protocol has to be generous around this. Then the second phase was around node runners on the network and that's when we started getting a bit of FUD from people who were expecting significantly higher amounts. But I think the foundation basically did really deep calculations and filtered out a lot of cibl and then took a assumption of how much people spend kind of on a monthly basis and then ensured that there's anywhere from 50 to 2000% return on some of the node running as well. But still a lot of people were quite upset because I guess they wanted to make sure that all their sibolt accounts get a lot more. But yeah, there is a bit of backlash from the community there, but I think it's natural for people to do that because the incentive is such that if you complain, you want to get more.
- [51:40]
A
I don't think in the history of mankind we've ever had something like this where there was sweeping happiness across the board. Imagine doing something in crypto without having critics and people being upset. I don't think you can.
- [51:54]
E
So yeah, exactly.
- [51:55]
A
That's par for the course here, obviously. So, so let's talk, I guess, more about the future. What do you see as kind of the goals for the next, we'll call it the next 12 months. As the largest AI L1 in crypto, where do you think we'll see the main adoption or what are your plans for driving that?
- [52:14]
E
Yeah, right now it's very much all about building a really deep ecosystem and ensuring that the partners that integrated with us on testnet integrate on mainnet as well, and then actually build applications that are only possible on zero G. And so the way we think about it is we need four layers. The first layer is a liquidity layer, because let's face it, part of the value proposition of a layer one is to have plenty of liquidity over time. And so that's something that we need to effectively build with TVR campaigns and so on, and then to scale with the applications as they need more liquidity because they have more usage and so on. Then there's kind of deep AI application layer that we want to build. And I'll highlight one application, AI Verse. For example, we are the first company to build something called an INFT standard, where for the first time you can actually say that you truly own an AI agent. So we embed the private keys into the metadata of the INFT, which is ERC 7857, that's a new standard. And then when that INFT is in your wallet, you can definitely say that, oh, I now own this agent and any of its economic outputs. And so AI Verse allows you to create these agents and then to trade ownership in them as well. And so we want to see a lot of applications like that come on chain. Then there's the, of course, tech development and research prowess. We are consistently at the cutting edge of research. So I mentioned some of the papers, but over the last few months we published about five papers for which are already in top AI and software engineering conferences. And we need to do a lot more of that around AI alignment, decentralized compute and so on. So that's going to be ongoing. And then the last part of the layer is to create decentralized governance as well. So to make sure that we progressively decentralize. And we're going to be one of the companies to actually have the first companies to have a duna, which is effectively a legal wraparound, the dao, and so very excited about implementing that too. So that's going to be the core focus next year.
- [54:19]
A
It's a lot, it's going to be a big year. And so I guess finally kind of, you know, as the show comes to an end here, how can people get involved? Where should people check you out? How can they join the community, use the tools, participate?
- [54:33]
E
It's a great time to get involved into the ZeroJ ecosystem. So the first place to start is the website itself. Just to get informed. 0G AI. So it's one numeral, one letter 0G AI. You can follow us on socials there. You can read out more about our developer docs and if you want to try some simple things, you can also go to hub0g AI and play around with like a faucet for example or doing some simple swaps and looking at the chain explorer. And over time, over the next weeks that'll become much more full featured. You'll actually be able to discover spotlight apps that are building and other types of applications as well. So those are the two first places to start and of course follow my Follow me on X.
- [55:19]
A
Glad you had mentioned it. Yeah, you guys can obviously see Michael on stage at Michael H0 the number 0 and then G and you can obviously follow their main account as well. I'm having connectivity issues. Can you guys still hear me?
- [55:35]
E
Hopefully.
- [55:36]
A
Okay, well good, I'm glad you came because I'm getting the old reconnecting issue. So guys, please give Michael a follow. Michael, please go to sleep.
- [55:48]
E
Well too.
- [55:49]
A
I appreciate you staying up late to have this conversation for the reschedule because I know it's not easy and you've had a hectic couple weeks. So thank you for doing that. Everybody else, thank you so much for joining once again. Check out zero G and we will see you back to the next Crypto town hall tomorrow. Thanks everybody, have a great day.
- [56:07]
E
Thanks for having me.