Scott (7:31)

Carlo, you got to have thoughts on this one.

Carlo (7:37)

Good morning, Scott.

Scott (7:38)

Morning, Carlo.

Carlo (7:39)

Yeah, I do have thoughts. I actually have questions too. And as the stars have aligned, I'm going to a dinner tonight, Texas Blockchain association in Dallas. Esther Purse is going to be there and going to ask her about this. I think this is an exciting and very forward thinking way to consolidate agencies and to stop trying to silo digital assets and separate them from other tradable investable assets. And anything we can do in that front I regard as tremendous progress. So the ability to now not tie the hands of these exchanges as far as spot trading and all the legal wrangling and ambiguity and bending of logic that had to happen previously to get there under the Gensler era is gone. And I think this is a very, very clear signal that we're headed in a whole new and uncharted water here.

Scott (8:47)

Anyone else, thoughts on what's happening here? Cool, Dave, I'm sure you have more thoughts on what's happening here.

Dave (8:57)

Folks would be jumping all over this, but I guess, you know, who the hell knows, you know, everyone's still recovering.

Carlo (9:03)

From this from the short week.

Dave (9:05)

Yeah, well, you know, it is. I, I was on vacation last week, so there you go. Anyway, I saw Amateo had his hand up. Yeah, cool.

Amateo (9:14)

I think I'm in the glitch, guys, so appreciate that. Yeah, as you know, Dave, that's kind of what I read into the news. I think there's two things, which is one, the ability for major cryptos to get listed on standard US Exchanges is just massive because of the liquidity opportunity there. But I think exactly to your point, the majority of the market, if you're building an altcoin, etc. The path to get on coinbase can be quite difficult and arduous. And Unpredictable. They've obviously opened up Dex trading to things on base, which has allowed kind of Coinbase native users to be able to access some of these tokens on base. But as a whole, if you're based in the us the venues to access the broader market are still quite limited. With the sheer velocity of assets that have been deployed, it's really confined people into the decentralized index world, which is great. But obviously we know it has UI UX issues and complications and maybe not built for everybody. So the ability to have on ramps and off ramps to these exchanges that have been the primary liquidity venues to the vast majority of the market and have a kind of sure fire way to trade on these foreign exchanges as an American is just massive. It shouldn't be understated the amount of broader market access that that gives Americans. Who knows the timeline of when we're going to see this, but it's actually monumental and is one of the things that I think we've really needed to sort of kick off all season. And I'll just double click on one thing and pass it back to you guys, but if you think back to the lost cycle, a huge thing that fueled this was a lot of these companies, including innumerable ones, everything from the apps, Voyager, BlockFi, Celsius to the larger exchanges allowed all of this liquidity and market participation that was extremely broad that we have then because of all these bankruptcies and issues, been whittled down quite narrowly. So I see this as the very thing that opens up that broader market access. It's actually critical to give people access to the crypto market as a whole.

Carlo (11:50)

I still think we just hang on the phrase depending upon the asset, you know what I mean? It's still to be seen which assets will qualify. We had that season where, you know, Coinbase got sued for listing certain digital assets that may or may not have been securities. We're still going to just have to wait and see, I think. Scott, as to exactly what asset class fits into this, it's, it's, it doesn't seem like it's an open gate for Fart Coin to get listed universally.

Scott (12:20)

Now we also have this like structural challenge with how foreign exchanges have had to approach the United States market in the past. Like obviously we had Binance and Binance US or FTX and FTX US okx. Ok, Coin. Right. So if Binance can come as a whole into the United States, is it the same platform that Americans will be trading on? Or to your point, is it the same platform but Missing some assets that are geo fenced. You know, what does that look like for some of those that we're talking about going public? I know there was news at some point or rumors that OKX was potentially going to go public in the United States, but they're obviously a Chinese based exchange. So it's going to lead to a lot of questions that will still I think require legislative clarity from market structure.

Carlo (13:07)

I think Scott, just to touch on that briefly because it's just popped in my head and I kind of have adhd. We're kind of looking at a rerun of the World is Flat Only the thing that's now becoming globalized is tokenization and it's going to be harder and harder to contain that. They're still going to insist on kyc, AML and all that stuff if you're going to have an offshore coming in. But I think it's going to be really hard to make a case that certain digital assets should be barred from US trading while others should be open to US trading because I think we're entering a new globalized digital asset, real world asset finance playing field where you're just not going to be able to defend those cases much longer.

Dave (13:54)

I think that it's important to take a step back and actually understand what really is happening here. The point is that we all understand that there is a very high likelihood that some version of clarity, you know, an act will get passed that will create definitions, etc. And what I've explained to people on this site and, and Ron Hammond when he's here, explains it extremely well is once that happens, which will probably be in the fall, there is then the clock starts ticking and the agency, agencies have to come together and start writing rules and start dealing with stuff. Right. We understand that what we learned yesterday is that the agencies are already, they are it basically it. The Congress is essentially throwing the football and when clarity gets done the agencies will already be have been mid working on it probably for months where things are going to go. If you think they don't have a conception of how this will work and aren't using the basic text of what's sitting out there to drive where they're thinking, then you're not paying attention to what these guys are doing. I mean, look, I have not talked to my friends there about this specifically because I don't, you know, they can't without putting notices in the file, etc. And I'm not going to do that to them. But I know them well enough to know that they're already thinking this stuff through. So I think that, that while the previous SEC has still. Still have the scars and whip marks on people, this is a new version, and you're going to have clarity on projects that an understanding. What you're going to get, though, is you are going to get new disclosure rules. Make no mistake. I mean, my personal pet peeve is going to be addressed, and it's going to apply to. It's going to apply to everything. And so the notion of promoting memes and governance tokens as opposed to true economic value is going to die. And that's going to be a very big deal for tokens that actually do have economic value. And the ones that don't, well, you know, so be it. I mean, if you're a meme, you're a meme, but at least make it clear. The thing is, is a lot of people put money into memes precisely because they had nothing else to gamble on. So just think about that for a second. You know that that does matter. And the Mustang memes are going to die. And I know I get a lot of hate mail if I say that, but I am just going to say that.

Scott (16:20)

Did you say that meme should die? Can you say that?

Dave (16:23)

I mean, you know, people.

Scott (16:25)

I'm just kidding. I'm just kidding.

Carlo (16:26)

I was.

Scott (16:26)

That was, that was. That was a triggering remark.

Dave (16:29)

No, no, no, it's not. It's not a trigger, Scott. It's like, you know, who was on the space yesterday talking about Squirrel with Hat? And we all laughed and all of us are thinking, great, I wish I knew about this because, yeah, you can make some money at it. It's fine. You know, people go to casinos. There's nothing wrong with going to a casino if you want to go. Personally, I can't get myself to play anything other than poker or in my younger days when I had the patience for it, blackjack, when I counted. That's it. I mean, anything else is just complete bullshit. But, you know, it's. There's no reason to think that. That things can't change now. They're also, you know, we could have a debate about whether memes can actually monetize. And the answer there is probably yes. So is Pudgy Penguins a meme now? Right?

Scott (17:16)

No, but Pudgy Penguins was never a meme, right? That. That branched out from being an NFT collection that you were more of a member of. It was meant to have utility and expanded accordingly. But I. Your point is well taken. But Pudgy Penguins was Always meant to be something more than just, I mean.

Dave (17:34)

Right. And so the, the point about all this, I mean you could bring it back to a very simple concept which is the people that are running the agencies in the United States for the next three plus years all believe tokenization should continue to change financial markets and those assets should be available to Americans. That is what's happening now. We kind of know it's happening, but the market is, look, this is post Stockholm syndrome kind of dealing with markets. Right. These things aren't. We haven't had an alt season precisely because correctly, people don't know which ones will actually benefit. Right. Isn't that the, isn't that the driver of it? I mean, you talk about projects all the time, Scott, and the ones that you, I don't like to use the word shill. The ones that you promote are ones that you personally seem to believe derive and create economic value. I don't want to be, yeah, 100%.

Scott (18:33)

Like I, I believe that there's viable tech style VC investments in the altcoin space and that some have a better chance of winning than others.

Dave (18:42)

Right. But I think that, you know, it's, you get these, you get lots of things. And look, I could trigger people all day long. It'd be easy. I mean if I want to trigger people, we'll, we'll mention, I can mention some arguments that I and others have had with, you know, XRP army people. And it's funny because I hold a little bit of XRP and I think there is a trade there. I still do, but I, I made the ultimate mistake of, of. And it's not a mistake because I actually believe it, but I made the ultimate crime of calling XRP and saying it's trading like levered bitcoin. Well, guess what, look at the chart. It's trading like levered bitcoin. I mean it's, it's as simple as that. Does that mean it will be that way in the long run? No. Will, you know, will people start to look at the value proposition of the token vis a vis, you know, as opposed to the company. That's kind of where this SEC wants to drive things. And right now, I mean, you know, even yesterday we had David Namdar on and I like David, I like him a lot. He actually was a strategic advisor at one point to coin routes and I've talked to him many times. He's an incredibly smart guy. But he had to be very circumspect about what he could and couldn't disclose. And I know, as soon as he's able to disclose things, he's going to. And that's someone who wants to disclose. So you got a lot of people out there waiting to be able to tell their story in the right way. I mean, Carlo, I assume that, you know, when you advise projects that's, you know, you're trying to find and say what can you say and what can't you say? Correct? Yeah.

Carlo (20:15)

And look, I want to build on that too, because I think to your point about Meme Coins, Meme coins are becoming brand coins. And I was scrolling through my feed. I'm going to send you this when I find it as a dm, an interesting article that was written by the founder of Rect Brands, which is Wrecked Drinks and I'm a big supporter of what OSF is doing. Scott, you probably know OSF from Real Vision, but he wrote an interesting piece where he talked about the fact that these tokens are now becoming an extension of brand identity. Not so much securities, not so much an ownership interest in the underlying asset class, but as a way for people to own a piece of the brand's identity. And people love to be in social groups. So I think Meme coins are evolving. I mean, Pump Pump Fun Token is starting to see a rebound. We're starting to see a rebound on Solana. We're starting to see some of these larger, more successful, more broadly accepted means like Pengu and Fartcoin start to see increase in their floor price. I don't think this cycle is done. I just think it's pivoting now from just pure gambling to now more brand centric tokens. And now that we're getting more clarity about all this, I think it's a safer harbor where you don't have to necessarily have those difficult conversations because you're going to be able to advise projects with clarity as to what's in and out of bounds. Which to your point, Dave, is what we've always wanted as lawyers in the space.

Dave (21:48)

I think.

Unknown Fortune 500 Executive (21:50)

Great point though about brand tokens because I, I can just disclosed that I'm having conversation with two Fortune 500 companies that are looking at doing brand tokens and they're tethering them to RWAs and experiences and other unlocks that will be a facility of holding the token and it's done a full 180 because if you look at like Nike a couple of years ago in the NFT days, they jumped in and they made a flashy acquisition that they ultimately closed down and they closed down their entire Web3 division. But I think these companies now see those missteps that were made and can come in in a more thoughtful way. And again, to Carlo's point, it really becomes an extension, just like you. To use Nike as an example, you would buy a pair of their sneakers or buy one of their hoodies. This ownership of the token gives you a sense of belonging or a sense of being a part of. And so I think in very short order we're going to see a number of household name brands get into the space in a very intentional way. And ostensibly it's going to be their new version of their loyalty or their rewards programs.

Ryan (23:07)

If I can jump in on this one, I could see this happening. With AI agents interfacing with brands. There's a natural fit between NFTs and tokenized access to things with AI agents having them talk to each other based on their access credentials, being able to use digital products, digital collectibles, it's all kind of building on itself. And then a tip of the hat to the earlier conversation. Once upon a time I used to be able to trade on any exchange I wanted to. I used to have more freedom than what I have today in the U.S. but you know, it's funny how things go when you start introducing markets and money and traditional banks.

Dave (23:50)

Yeah, but, but Ryan, the problem is that we've gone through how many years now where all of those freedoms were taken away from us, you know, and.

Ryan (24:00)

Oh no, that's what I'm saying. Yeah, exactly.

Dave (24:03)

I don't think you're going to find anyone on this panel. Maybe Carlo, because he could make money from, from, from laws. Who wouldn't prefer a more open system, you know, where, where people are free to invest and it was more just, you know, if someone commits fraud, you go after them hammer and tongs. Right. You know, I don't think you're going to find a lot of support for that. But failing that and, and being realistic, we're moving in a better direction. That's really the only point I, I don't want.

Ryan (24:33)

I mean, that was our system, right? Like that was ours. That, that was our system. Once upon a time it was. Our system was free. That was taken away from us. Well, now we're celebrating that it's being dripped back to us.

Dave (24:47)

Well, okay, you know, it's sort of like. Yeah, that's, that's true. Except that it wasn't what, what some of us wanted. The, the amount of manipulation and the amount of fraud that that was in the system was never was going to make itself defeating for broad based acceptance that, that if you don't, if you can't acknowledge that part of the reason FTX happened was because he was offshore, there was no regulation, nobody looking at him, he bought off people, you know, then, then I'm sorry, I just don't know what else to say.

Ryan (25:22)

Well, that was a failure of ftx, right? Not a failure of the projects that were listed on ftx.

Dave (25:28)

Oh, correct. Oh, I wasn't talking about that. Yeah, the projects being. Yeah. Look, I'm still pissed off that, you know, I worked in crypto for eight years and until now, when actually I think we should consider was literally until yesterday I knew because I was told by people at the SEC that if we created a token, they come after us. And so, you know, yes, you're right, that, that point is very true.

Ryan (25:57)

Yeah, I mean I went from being able to spin out tokens and you know, work on these open source projects to having to sit on calls with 10 different lawyers telling me all the things that I couldn't do. It just like the evolution of the space is. It saddens me because it does feel like in a lot of ways like we've, we've hindered ourselves just in the name of safety, in the name of, you know, better regulation for mass adoption and not saying like that's great things. Mass adoption is a great thing because we all make a lot of money. But it just seems like the flight path in which we're getting there is at the sacrifice of our own individual. It's made for a lot of red tape to navigate over the. It's like, oh, wait, three years ago I couldn't do this, but now all of a sudden I can.

Dave (27:02)

This is where I lost Ryan. Yeah, yeah. This is Bruce's point that he always makes and it's very sympathetic too. I think a lot of us, I just am so used to being realistic that people interpret me as part as being a proponent of the machine. I'm not a proponent of the machine necessarily. Necessarily what? Although I guess there's probably some good parts in everything. I mean, but you know, we have to, to if you're trying to figure out how to invest in markets which most of our listeners, that's what they care about, understand that there's a sea change and this notice from yesterday matters and when you look back on it in three, six, 12 months, you're going to say, why didn't I realize this? And that that is what I actually think is true, you know, so you can take it for whatever it is. As far as lawyers go, I mean, there's some good ones. I mean, you know, Carlo and other others, friends of the show. But I mean, Carla, you spend most of your life fight. You know, if you had your druthers, you would prefer significantly simpler rules that you could explain and have even more clients and get more done. Right.

Carlo (28:10)

I'm basically Michael Corleone in the Godfather Part 3. I just want to get out of defending fraud and crime and get into building. But to your point, just when I thought I was out, they pulled me back in because obviously this is, this is where a lot of attention goes. But, yeah, I would much prefer to be having meaningful conversations with founders about building stuff in a regulatory compliant way and seeing them not have to sweat at night and me as a lawyer not have to worry about every word I put in a memo and whether that's going to be the thing that gets me and the client hung up, because the ground below us is constantly shifting. So to your point, yeah, there are great lawyers. What attracted me to this space is the fact that I think that they are some of the most brilliant lawyers I've ever engaged with. And they're doing incredibly cutting edge, meaningful stuff. And they're pirates because we're literally trying to navigate uncharted waters here. So to me, yeah, I want to see this stuff get clear because I want to get to the business of building this ecosystem. I don't want to continue to have to be pulled down by the negative press and the criminal cases. Absolutely.

Ryan (29:21)

What's funny is we never stopped building this stuff. We just stopped taking credit for it. You know, a lot of the engineers in the space just kind of drifted into the background. They stopped putting their names on things. They stopped being doxed because it was too much liability. So there's still people out there building. It's just, unfortunately, we just don't know who they are because there's too much risk and exposing us.

Dave (29:49)

Yeah, that's actually. Yeah, I know people who have said that. I've heard that before many times, Ryan. But I do think that the question of will people. Will founders in the U.S. you know, really start to, you know, engage is a big question. But it's not really necessarily only about new business here. We're talking about, you know, just getting, you know, attracting, you know, capital into the sector. I mean, you know, there, there's, there's, there are stories out about, you know, tokenized, you know, equity. Right. And people say, well, what the hell does that mean? Well, what that Means is there, it's a competing system to the current system and there's lots of reasons why it will be superior. But, but there's a lot of disruption involved there and a long way, a very long way to get there. But some of that fundamental technology is going to be important and you're going to end up with, there will be technologies here that are going to look like, you know, Nvidia six years ago and there's going to be a lot of ones that are going to be hypes, that are going to be complete nonsense, that are going to go nowhere. And that, that gets people very, very excited. Right. You know, because there's, there's going to be a lot of money to be made and there's, but there's going to be a lot of money lost too as people start chasing crap. And, and frankly, that's okay. That's the way markets should work. I mean, you know that, that, I mean, you've seen that before, right, Ryan? You know, most, most startups fail. The ones that succeed, well, those are great.

Ryan (31:25)

It's not always the great ones that succeed. Sometimes it comes down to sales and marketing and it's like, wow, the marketed better than the, the good tech. But you know, at the end of the day that, you know, stuff like Nvidia, like the, the good tech does stay over time. It's just how, you know, how far on the time horizon are you looking right now? You know, we're, we're trading meme coins, we're trading all these altcoins on Solana Fast and Furious pump Fun. You're exactly right. It's a casino. The tech doesn't matter in the short term. On the time horizon here, long term, the tech does matter. It's just getting the tech to stay funded and keeping the engineers involved and not discouraged long enough for the tech to take hold.

Scott (32:12)

By the way. Meanwhile, back at the ranch, American Bitcoin trading halted multiple times since launching. One hour ago it went up 59% momentarily. This is the mining company American Bitcoin that the Trumps are behind that launched today. Just for those who are curious if there's still an appetite for crypto adjacent stocks.

Ryan (32:33)

Or, or Trump adjacent stocks.

Scott (32:36)

Isn't it the same thing now?

Ryan (32:39)

Quite possibly, actually.

Dave (32:40)

I mean, you know, it, it is amusing. You know, you take half the country that, that would, that will literally reflect, refuse to buy it and the other half gets rabid and say, okay, we have to buy it. I, I, at some point, 10 years from now, people are going to look back in this era and say what the hell were these people thinking with their investments? I mean it's, it's really, it really is funny. But you know, look at the, at the same time, you know, Bitcoin is now above, back above 112, you know, the earth that the so called bottom of the, of the, the more recent range. I mean, who knows how long this stuff will last? You know, we wait 10 minutes and whatever. But you got paying premiums is, is something that needs to be analyzed very heavily the direction you can get it. Right. And what. And if you're trying, if you're a trader, you could have the direction. Right. But if you guess if you pay too much of a premium for this stuff, you're going to lose, then it's just a question of looking at it. I mean, what's World Liberty doing? Is World the token. So, so like we're. Liberty token is. If I'm reading this right. Am I reading this right? Yeah. Oh no, it's, it's still, it's basically you've been flat since that first fall back into a range and, and which is kind of what, what you would want it to do. Right. Wouldn't you agree, Scott? I mean sitting around 22 cents. Yeah.

Scott (34:02)

I mean it looks like it's basing, so to speak. You gotta imagine that the people who were aggressively wanting to sell have probably done so.

Dave (34:12)

Right.

Scott (34:12)

I mean if you're an early investor and they needed a release of some tokens to be able to sell in the market. Yeah. I mean all the volume was two days ago.

Dave (34:24)

Yeah. And, and, but it's, it's not a failure. That's kind of the point. And you know, we'll see how this goes. Look, volumes in the market are really still pretty low. You know, I made the point yesterday that okay, today's the first, you know, yes, it was the first trading day back from vacation, but because Labor Day was so early this year there, these markets are still in kind of a holding pattern. We're not really doing anything yet. I mean I can tell you, I can see volumes are quite low right now. And so take everything with a grain of salt.

Amateo (35:02)

Yeah. If you look at World Liberty financials launch launched at like a 30 billion fully diluted valuation, that's hardly a failure. If anything, that is a bloated success story. But I think it kind of touches on the problems that Carlo was speaking to, which is you have these associated Trump coins and you have these Trump adjacent stocks and continue to sort of suck liquidity out of the market. There is actually tremendous innovation happening in the market, especially when it comes to the AI agent sector and many AI applications. But yet these projects continue to struggle to catch a bid to get liquidity, to get broader market access. Exchanges are very expensive to get listed on and liquidity is really low. So then it's really a game of, to Carlo's point, how long can they last until we have some kind of regulatory clarity, some builder clarity or some market liquidity access. And I just think something's got to give here because all of these tens of thousands of builders trying to contribute real technology to the ecosystem can't really survive on 45 day, 60 day altcoin cycles that last, that come around every couple years. So, you know, I don't know exactly what that looks like, but I think kind of this all points to this glaring issue that's currently facing the market and builders trying to create in it.

Scott (36:50)

Sorry, Dave, I'm in the glitch here.

Ryan (36:51)

Go ahead.

Dave (36:53)

No, I don't, I think that's exactly right. I think that, you know, we, it's, it's not necessarily. Look, history doesn't repeat. I'm not going to claim that most tokens are like Internet stocks in the Internet bubble where I have a website meant, you know, you, you attract millions of dollars. But it's impossible to look at the crypto world and not see multiple assets that have hundreds of millions of dollars in valuations that are, that should be worthless. I mean, my favorite generally to look at is ftt, you know, which you could explain why, you know, I guess it's a meme now, but, but why should there be any value in ftt? I mean, can anybody explain that a.

Scott (37:42)

Crypto token can't really die structurally?

Dave (37:46)

I mean, you know, as a market cap of 261 million, that's bigger than a lot of companies out there that have lots of people working for them. You know, it's just, it's, it's insane. You know, it's a hundred and number. 171. So what does that tell you about? Every time McGlone talks about millions of competitors or thousands of competitors, I would make the argument that it would be, you'd be hard pressed to find a hundred, probably hard pressed to find 50 tokens with actual value propositions that have some rational valuation associated with them. And that's coming from someone who believes that the entire sector is undervalued. So think about what we're saying. So yeah, of course, if you're a developer, what you're hoping for is that even if your project doesn't work, you'll still get compensated because they're working will be value in the tokens. And that's really what's going on here. I mean, I don't know how else to phrase it. I mean, do you agree with that, Ryan? I mean, what do you think?

Ryan (38:47)

Yeah, I completely agree with it. I would go one step further and say I don't know of a single project where the value of the token is actually tied to the technology behind the token or what's backing the token. So many of these tokens are pumped through speculation and marketing. The FTX token or whatever other tokens there might be. I watched in 2013 these developers launch a token called Barbecue Coin and they dropped the project like a week or two weeks later. And yet it was still on the cryptsy exchange and it was still on a few other exchanges and it traded for the next three or four years with no developers, no progression whatsoever. And it just underscored this fact that it didn't even matter what was behind the token. It just mattered that there was a token. And that's what a lot of these projects are. And that's what the whole meme cycle is. It's just a token. So throw a hat on something and make money. No one cares what's behind it. In fact, the more you see the put behind something, the less it does. It's like throw all your money into marketing.

Amateo (39:55)

Yeah, I'll just add to that. A while back I spoke to a leading layer, one that I won't mention by name, but they themselves called themselves a ghost chain. And the ironic element of that is that they have a ton of marketing behind this. And kind of worse yet, they have all of these real people trying to build real technology on their chain, but nobody who's using it. And the chain itself worth billions. The projects themselves worth nothing. Even though the projects are trying to do something and the chain is a ghost is doing nothing. So you just have this complete asymmetric development cycle of perceived value versus where actual value is accruing.

Ryan (40:44)

I think long term the good tech does play out well. Where the tech gets adopted, people use it. The problem is surviving the hype cycles and the intermediary time where you basically have no money. Like can you hold out long enough with the tech for it to get adopted? Crypto has been very, very difficult. I mean, I've written patents in the space, I developed tons of tech in the space. We have like truly decentralized Mining systems now that we've deployed with some of these projects, we have truly decentralized AI systems that we've been deployed. You know, we're building agents, we're building like all sorts of markets, we're building all sorts of stuff. Nobody knows about it because there's no marketing. And when nobody knows about it, then nobody uses it. No money is made. So right now it just feels like crypto always comes back down to marketing.

Dave (41:43)

Well, yeah, a lot of things do, but I think it's worse here. I mean, you could make very strong arguments of we talk about what one particular company that tends to have the most press releases. And I'm not talking about Coinbase by the way, that's associated directly with the Token and it attracts huge followings and et cetera, because they whip their followers into a frenzy. Actually, you could say that about several. The question of how long will that last relative to everything else? I don't know. There are many examples of firms that have done well and done very well for very long because they had better marketing than they had product, but the marketing was good enough. Hell, there are fund managers out there that have consistently underperformed their benchmarks for decades that have billions of dollars of management, you know, under management. But why do they have it? Well, they have great marketing. I mean, you don't have to look to it's same thing is true in a lot of industries.

Amateo (42:51)

Yeah, I'll just add that the weird thing about marketing in this industry is yes, you can be sustained with marketing, but marketing itself has become hyper transactional as a marketer in this space. Meaning that, you know, the projects that are investing their capital into KOLs and just spending millions of dollars on creating a hype cycle rather than investing in their technology will outperform those who are investing in their builders. I mean, I saw a post recently from a builder who said that the vast majority of builders he knows and talks to are in a worse place now than they were in 2017, in 2018. And I think that that's just really compelling and actually very unfortunate. So, yeah, something's got to give.

Scott (43:45)

Crazy, but not really that surprising. There's one other story, Dave, I want to touch on because I think it's just really cool. I'm sure people saw this, but the Galaxy Digital has launched a plan to tokenize its SEC registered GLXY shares in a major blockchain, which is obviously on Solana and I. To my knowledge, this is the first time these aren't wrapped stocks. This is like SEC Registered actual shares on a blockchain.

Dave (44:11)

Pretty cool. Yeah, I saw the story. I think it could be enormous. It also could be. It could also work out to. You know, it really depends upon will. Will the. The stock exchanges play ball is really what it boils down to. To. Right. Because there's a lot of plumbing, and all the companies are geared up in the stock market in a system where when you buy stock in your Charles Schwab account, you think you own stock. No, no, no. And so a lot of people say, well, okay, I know I don't own stock, but Charles Schwab surely owns the stock. No, they don't. In fact, the stock is all held by dtcc and there's ledgers and there's all sorts of stuff. So now if you have this new thing that replaces dtcc, that's blockchain, does that mean that. No. That. That that stock could become a bearer instrument again. Is right now trying to get a stock certificate is. Try it sometime. I mean, you can do it, but when you do it, you get. It's like we all have. I don't know if you all. We have, but we do. We've been given gifts over the years of stocks of like a share in a company as a stock certificate that you frame it and put on the wall so you can get them. But it's really hard. And so there's a lot to be dug into there to see where they're going with that. I'm actually curious. I'd love to talk to them about it because eventually it'll become a better way, but right now it's really early.

Carlo (45:33)

Carla, I think we may have lost Scott. Yeah, I would liken this right now to kind of test net season for this, because I was talking with Sandy, who runs digital assets for Franklin Templeton, and actually proposed this very question about how far are we from fully tokenized tradable assets on chain? And, you know, she said that there's going to be a lot that has to be fixed on the existing infrastructure because the current tradfi rails are not built for this. So I think this is great, and I think this is a move in the right direction. And I liken it more to sort of a test net to see if this can actually be pulled off, when will it be universally adopted, and we'll have 24. 7 trading. I think we're still a ways off because there's just so many pieces that need to coordinate in order to make that happen. And that system was not built. It's. It's kind of like we're still in dial up and we need to get the broadband.

Dave (46:30)

Yeah, I mean, look, the first dial up was. Was it T0 or overstock? I can't remember.

Ryan (46:37)

Yeah, it was Patrick Bynes T0. I saw him present that to us in 2014. And it was actually, he was ahead of his time. It was amazing platform he built. I just. I don't think it ever saw the light of day.

Dave (46:53)

Well, I thought there was one equity that got put on it. Look, his reason for doing it, which is somewhat valid, is that the stock loan stock borrow shorting system in the equity market is a complete clusterfuck stock. He's not wrong about that. He attributed short sellers to why his stock was down, et cetera. And that's probably not true for lots and lots of reasons. There's tons of conspiracy theories there. But the fact that we have in the stock loan system today, when you can short a stock by saying, I have a locate, which is, I know I'm going to be able to borrow it and then you don't have to actually deliver it for a couple of days later. Whereas in crypto, if you want to sell something short, you have to borrow it first. And of course, in crypto, it's a lot easier to understand whether or not you have it because it's tokenized, it's there, it's real time and it can be verified, whereas in the current system, you can't even verify it until you actually settle it. So there's a lot of reason to believe the tokenization will be better. But my question, and I think it's the same as yours, Carlo, and you too, Ryan, is how does it work with the Rube Goldberg setup that we have today that is basically a shit ton of duct tape using some mainframe technologies to augment what was paper certificates sitting in a vault. And that really is what it is, right?

Ryan (48:26)

Yeah. I feel like so many different projects have tried to digitize, whether it be like titles on the blockchain for property or stock certificates. It just seems like such a huge uphill battle that is anything regulated, anything government controlled to get it digitized and efficient, you know, maybe international market might take the lead on. Seems like Dubai started digitizing birth and death certificates and all sorts of stuff on blockchain or centralized digital systems. It just doesn't seem like the US is the one that's going to lead the charge here.

Carlo (49:05)

And I think part of a problem too, Dave and Ryan, is this, that you have the settlement delay here, equities don't settle instantly. They close out at the end of the day. And then at some point after the trade, you see the asset or the return on the asset come into your account. In order for this to work, you'd have to have instantaneous settlement. And that means unreversible transactions. That is stuff that's just going to be scrambling brains in tradfi as far as how do you. Wait a minute, you're going to settle instantly. We're not set up for that. And that's where I think, when I was talking with Sandy, I think that's the biggest problem is the settlement layer just needs a complete overhaul. And that's like laying broadband overseas underwater. We're going to get there, but it's going to take time.

Dave (49:51)

Well, I think, I think half of what you said I disagree with completely and half I agree with. So let me explain the technology layer. Yeah, you're 100% right. You know, we have mainframe computers. I mean, I think that there's code that I wrote for Morgan stanley in the 80s that's still in production. I was told this a few years ago and I have no reason to believe it's changed. Okay, so let's just start with that. So there you're right. There's a lot of changes that are gonna need to be made. This is, this is not gonna be easy. But the ultimate way assets are going to trade, liquid assets is not gonna be be instantaneous settlement any more than they do today. In the world of crypto, when you trade spot, bitcoin on, on any exchange, it doesn't settle unless you ask to settle. You can trade in and out and settle up. You know, when you ask for it and let's let them hold it in your name, there is no reason why you can't do. And there's a lot of efficiency for market makers in particular. You look at how all the bigger market makers in crypto operate. If you want to trade with them directly, whether it's 8 hours or 24 hours, they all have sessional settlement. Why would you do that? Well, you do that because it's not really leverage, but it makes sense. That amount of friction that you put in the system, if you demand immediate settlement, will create the failure of the system. The current equity system works better. The issue is what's a day? Is it an eight hour period, some random eight hour period, or is it a clock period? You're going to have to work that out. And there's nothing wrong about that. But you don't have. There's nothing inherent in crypto that says you have to force settlement instantaneously. You just have to make it available for on demand settlement. And that's perfectly reasonable. You go in and you buy and you know you're done and you want it to settle to an account, make it, get your finality and be done. You know you're going to keep trading over the day. You don't want every trade to settle. That's insane. I mean really insane. I could give an example. So like for example, coin routes we traded. You know, I have a lot. I'm doing some TCA reporting on how well we've done, but we've traded multiple billions of assets in orders of over $2 million in an order. We've had multiple orders of $20 million size. Those orders ultimately end up with hundreds, if not thousands of small executions. The cost to clear and settle every one of those individually as opposed to in the aggregate would be extreme. You're not going to do that. So it's important to understand that there's. And by the way, in crypto you don't have to anymore. It's not forced. So people should understand that you want to be able to do it on demand and that's fine. But the real problem is going to be the tratify system can't handle that on demand settlement. And it can't handle real time either. It also can't handle.

Carlo (52:49)

It's basically, if I'm understanding, then it's basically like L2 base settlement where you just batch settle everything and then you bring down on the crypto side of it, you bring down the gas fees by doing it in big batches, which is how they accomplish this. L2 speed and low cost latency. Is it kind of analogous to that?

Dave (53:11)

Well, yeah, I think that that's, that was the template for people doing that is how TRADFI works. You know, it's, I told you there's a shit ton of duct tape in the system. But you know, it's metaphorical duct tape obviously, but yeah, I mean it is that. And you want a flexible system to be able to do that. The trick is blockchain to get finality is, is incredibly powerful. The other things you're going to be fighting, just so you know, is that the hedge fund community and in fact the investor community writ large doesn't want the world to know what they're buying until they're done.

Ryan (53:48)

Right.

Carlo (53:49)

Because transparent blockchain is going to front run things.

Dave (53:52)

Well, if you can, if you can do fidelity every day. Okay, that's not so horrible. But right now, keep in mind you have 30 days for a lot of filing before you have to disclose stuff or when you, when you file it. And big thresholds. So, yeah, you know, like everyone knows about the Galaxy Digital trade because they put it out publicly. Right. You know, they. And, but there were rumors about that trade. Not just rumors. People were watching the wallets move. Well, no tradfi holder wants to see that happen. If you're. Let's just say you're an asset manager that does. And I don't want to start naming them, but there are asset managers that have very concentrated positions. If a concentrated position starts getting liquidated, people start to notice. And if the asset manager. And if everyone can see that it's a wallet that's associated with that asset manager, they're as good as doomed. Right? They pretty much are forced to sell it as one big block and just take their lumps as opposed to selling for very, very little market impact if they can stretch it out over a period of days or weeks. And so, yeah, there are some issues that are going to have to be worked out. There's no doubt.

Gary (55:08)

Hey, Dave. I just wanted to add. I'm not sure that people really care. The vast majority care about instant settlement. We may be putting too much on this. The normal user isn't looking for that. Right. They're looking for entry and exits. I wonder if we're making more of this than we need to. I, I still do not understand the value that this whole concept of tokenizing stocks really brings other than 247 trading.

Dave (55:48)

Well, it brings. It brings three things. So, so let's be. Let's be clear. And, and 247 is.

Gary (55:55)

Can I just finish my comment? Because I, I sure like just the things that you guys are saying. No trail on the planet is going to open his book to an open source blockchain. Okay?

Dave (56:06)

You.

Gary (56:07)

Why would you do that? It's not a requirement. You don't show your charts to everyone. That makes no sense whatsoever. So I just, I just don't. I think that this is more. Hey, look, we're gonna digitize everything. But nobody's figured out a way to make any money from it to provide a service that's valuable to anyone. And my sister doesn't care about settlement. She just wants to know that Fidelity's got her stock and it's either a buy or a sell or a hold. I just don't. I'm just not a buyer of this whole idea, okay?

Dave (56:46)

Well, I'm gonna, I'm gonna, I'm gonna convince you in a bit, in less than a minute. So you're right.

Gary (56:51)

Let me know how I can invest too, because I also don't know how to do that.

Dave (56:55)

Yeah, well it's. Because it's not there yet. I mean the biggest differences between tokenizing and the current system will be in the expense of clearing, which is not as cheap as you think. And around the world is particularly not. The US has gotten it down to a pretty mechanized basis, but the biggest ones are pure full multi currency without having to pay ridiculous tolls like we do for ADRs and GDRs. It's on demand settlement. If you have a custodial situation where you can understand it and control it, it's knowledge. If you're the company, the issuer of who owns your stock right now, you don't know. And right now we've had all sorts of proxy issues and it's 24 7, so it's low cost, it's multi currency. Those are the big reasons it will happen. But I have made the point repeatedly that it's going to take longer than people think because of exactly what you just said. You, there has to be ways to, so that people can't see what everybody else is doing. Because when you can see what everybody else is doing, then the market is not an efficient trading market. People will need to. And it's the same reason we have dark pools. You know, and I could go into that chapter verse having invented a couple of them. You know, I understand how they work. And a lot of people believe, oh my God, they're evil and they're this, they're that. No, what they are is no trader. The first dark pool were the pockets of the people who trade on the New York Stock Exchange. So you're right. So your point, Gary, is extremely important. Which is until it becomes economically better for people, no one's going to care. And the real problem is they have to fix the ability to hide what you're doing. So that's, that's why you're not going to go 100 on chain. Does that make sense to you?

Gary (58:45)

Yeah, and I think it's going to take a long time. I don't understand the galaxy play. It's sexy, but where's the money at?

Dave (58:55)

I think that the reason for the galaxy play is simple. If I'm, and I have not talked to him, nor do I really know him enough to talk to him, but it's actually smart, really smart. So if you're Mike Novogratz and you want to be the Goldman Sachs of the tokenized era. What's the best thing to do? It's to be the firm that understands all where the plumbing is and work out all the issues with how this can become a more efficient, better global system and then start courting global issuers. But in order to do that, need to have somebody who's going to be willing to put up with the pain of dealing with all the issues that you were talking about and others. Well, who better to put up with the pain than a company with their own stock? That's my suspicion. It's completely my guesswork. I have no knowledge whatsoever. But I think that it's. If they're doing it for what I just said, it's smart. And you know, Alex Thorne and some others are off and on here. You know, people feel free to DM me and tell me if I'm, if I'm out of my mind and I'll put, I'll retract it if that's not the case. But I suspect that's what's going on. On. Does that make sense to you, Gary? Okay, well, I guess, I guess that's it. Well, we're at 11:15. You know, Scott's not here anymore. I think, you know, we kind of went off on this and you know, we'll see how things go as we're still in the post summer doldrums and not a whole lot going on, but it does look like markets are, are a little bit buoyant here. Not, not too much. Anybody else have any closing thoughts or have we done beating this one to death?

Ryan (60:35)

Buy more Bitcoin.

Dave (60:37)

Yeah, well, I agree with that. I've been doing my best to orange pill strangers for the last week and a half. I think I got a few of them. Okay, well, with that we will see you Tomorrow morning at 10:15 on Crypto Town Hall. Thanks everybody. It.