Flippin' Burgers - "The Great Crypto Deep Funk"

Recorded: Dec. 2, 2022 Duration: 0:55:48

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how many times I'm gonna have to do this before I get used to Twitter spaces and how they work damn all these little options to accept a co-host and accept a speaker off so guys thank you very much for
joining if you hear early. We're going to slowly start inviting our guests to join as speakers as they come in. And as that's happening, look I'm just going to say hi to Adam. Adam you're here. Are you with us?
Sure, yeah Adam was at the Cardano event, but was it was it last week or the week before?
Yeah, that's a good question. I think it was two weeks ago on my day to get him except no last week. Was it an eventful gathering? It was an eventful event.
It was really neat to just kind of meet some of the projects building on Cardano and then also meeting the way they, their institutions. So my institution might be a bit heavy, a bit heavy reward, but the Cardano Foundation, I met some people from there and
people talk about the product that they're building on and there's some very common similarities to. I was going to ask, I imagine every discord is similar with the diehard fans speculating on their project's success and then you've got those who are interested
in the tech and I imagine when you get down to the nitty gritty a lot of communities would be kind of similar at the end of the day despite the technologies that they're following being a little bit different. Yeah, I mean I get the feeling that you know it's they definitely look similar to
people who aren't in crypto, but I think once you're in, it feels different being in, I mean, Cardano is kind of a crypto G as well. You know, one of the first serious iterations after Ethereum, the same way that I owed it was as well. And
you can tell that. You can tell because the people are a little bit more committed to it and they don't, it seems like hype, like speculative hype drives less of it. There are people who are really believing in what they're doing and I would say this is probably true for most of the older ecosystems, even like
ZCAST or stuff like that in Monero. It's probably a similar type of demographic. But yeah, they're all so pretty welcoming of me and us because I was there with Levente and Luca and Mariana of course because she was speaking. So we were kind of like a novel
I think which was pretty fun. That's pretty cool. Did you wear like a name badge that says hi? I'm Adam. I thought about bringing my I actually didn't bring my air to hoodie and I ran through my head whether I should or not but I decided to leave it was actually
the temperature of the place made it so I didn't need it anyway luckily but yeah. Oh very good. I can't wait. I'd really love to sort of hopefully still be around by the next bull market that seems to be years away at this point but hopefully we're not going to fall to maybe travel
what you are up to. I think our speakers are on the line and I'm going to introduce today's episode and then just run through the speakers that we've invited and hopefully I don't introduce somebody who is not here and maybe we'll kind of sort of try to still reach out to listeners who might be in the chat
who haven't accepted the request to become a speaker. So guys, welcome to Flip and Burgers, where we take a look at crypto from different angles. I'm your host Cutcraft, serving it up with leaders from within crypto and beyond. It's time to deliver them spicy hot takes, so get them sweet little bites.
The show is about to get started. Today's episode of Flip and Burgers is the great crypto deep fuck. Look, I love these names and the creative energy that it comes to, that comes around with coming up with these names really cannot be underestimated.
But the gist of today's episode is, you know, when a crypto winter meets a global economic crisis like what we're experiencing now, and one of crypto's largest and most influential CFI cartels implodes. We're talking FTX and Alameda here guys.
It triggers a cascading of events that just pushes an already unstable market right to the brink of chaos. I feel that's kind of what we're approaching right now. And we're still holding on waiting to see where the fallout ends. So while bear markets usually hold the promise of a better time to
build the events of the past weeks or the past month, seem to have been constructed an entire industry which now has to not only rebuild its infrastructure but also evaluate the values that cause this house of cards to fall. So today we consider
If the industry is broken and if it is, then how do we mend it? Does the crisis hold any opportunities? And what values should unite crypto at its core? Join us for this episode. Lend us your ears as we welcome experts from around our industry to evaluate
weight the most recent events. We have with us today a crypto AG, we're just talking about crypto AGs. We've got Mika Otama, he's the CEO and co-founder of Trading Strategies and Algorithmic Protocol for decentralized markets. Welcome Mika, I can see you on the line. Thank you for joining today.
Thank you.
three security firm with expertise in smart contract auditing and offensive cyber security. So welcome Andrew and Andre. Thank you for joining today. I hope you've been out of the speakers there. It's a pleasure to be here. Thank you very much for having us. Yeah, thank you for having us. Of course, thank you so much for coming.
And also with us today we've got Rodney Yesop, he is the partner at HackBC. HackBC is a $200 million crypto seed fund that focuses on DeFi, CFI, and infrastructure. Rodney, I hope you hear so. Welcome Rodney, if you're on the line, thank you for joining us.
Okay. No. Okay. If you're on, if you can hear this, you have to accept your invite to speak, by the way. I'll thank Saddam. You might be on the line, but probably, like I always have in trouble connecting with Twitter spaces. I think it just takes a bit of getting used to. So guys, as always,
We've also got on the line, Alexander, also known as HG, he is the Chief Content Officer at JR Studio. JR is developing routes. Roots is a back end game development, all in one platform as a service. So welcome, Alexander, and thank you for joining us today as well.
Thanks for having me guys. Yeah, of course, of course. So I'm gonna kick things off. You know, I'm just gonna try to stimulate some conversation. Really, I'd love for you guys to just take hold of the conversation, make it organic, ask each other questions if you can.
I've got a really smooth brain and I don't know as much as you guys. So I'm here to act as a guy that sort of pushes you for a little bit more information when I don't understand something and I'll be learning as well as hopefully many of those listening in. But yeah, please guys, just jump
I'll ask a question and we'll just expand on it and try to make it as organic as possible. So what I'm going to do, I'm going to start with a quote from a blog and the blog is called Bitcoins Last Stand. It was recently published written by a guy named Ulrich Bins
He is the European Central Banks Direct General. The quote goes as follows, "Since Bitcoin appears to be neither suitable as a payment system nor as a form of investment, it should be treated as neither in regulatory terms."
and thus should not be legitimized. Does it sound like he's very bullish on Bitcoin? I guess my first question is, is he right? Does regulating crypto legitimize crypto over to you guys? What do you think about that?
If I can just jump in, I mean my first observation is his job and who he works for, European Central Bank, hardly on the side of crypto adoption. So obviously for making such a statement from the position where he sits,
It's always going to be Ante crypto web 3. So that's really where I sit on it. I mean, if you came more from, let's say, more of an unbiased positioning, then it could probably be more of a fair
I think that's a great way to say my listen to his comment a bit more seriously, but the fact is that everything that we're doing in crypto, decentralization, digital assets and so on is a threat to the very existence and the control that the central banks have over on the world. So naturally they'll do everything in their powers to
credit Bitcoin and discredit blockchain and certainly the open source blockchain because it's a threat to their existence. For me, like the skeptical side of me or the pessimistic or the conspiracy side of me feels that
The whole FTX situation has actually been somewhat coordinated. I can be very careful with my words here, but I'm not entirely sure if it's an accident what has happened. I think there's a lot more that meets the eye here.
I do it in certain we certainly feel that way I'm in a board with what you're saying. The thing is I don't want no situations which I don't think it could be proven otherwise but in terms of like you know how I can how I'm interpreting the whole situation but even PR the PR that they're giving him now in the media it it
I'm not sure if you've seen what they've been putting out, the interviews, the whole thing going like really easy on the situation. It's quite pleasant, like failed on for a player, I think I saw in one article. It's odd to say the least, but
Like I say, I mean for me, I just took notice of his job title and who he represents. And ultimately he's a dog force in my personal opinion. So I would discredit anything that person says just on the basis of who he represents.
Yeah, you might be correct because I don't know if I can send any links to this with the space for my computer. I really hate to use mobile phones or about that. But there's a guy at this Mr. Bint sale has written a paper to
2019 that says titled central bank digital currency, financial system implications and control where he is proposing negative interest rates and basically taking taking money from your bank account and using it for the state. So that's his ideology and he has been
doing a research on that. And of course, his background here is that if central bank has more tools, or basically just have tools to attack people directly by opening tasks because currently there
problem is that we can't have two deep negative interest rates because people just would hold cash and that would be a zero interest rate. But this Mr. Pilchene is saying that he wants to have negative interest rates and he says that nevertheless since around to see
would be easier, it would be comforting to have an extra tool to appeal to impose negative rates on CBDC. So he's basically sitting at the opposite political interim, he's sitting at opposite
of the political spectrum that the Bitcoin people are having. So this guy is more like wants to have the state to control all of the money and decide what you can buy and sell and basically emulate the system from China. You can read it in his papers.
Yeah, absolutely. I've seen that talk about CBDCs has really escalated this year. It wasn't much of a talking point last year. There were murmurs, there were small articles. I think Miko, you said the article that year was from 2019, not sure if it mentioned CBDCs, but he is with
We've got the same guy, Mr. Binsale, an active contributor towards the CBDC's efforts in Europe. I'm going to go on further because part of why for me this bear market feels different is because this has been increased talk about CBDC's.
I'm wondering if that could trigger a turning point in crypto where governments like it gives me a sick feeling thinking that government school on mass rollout CBDCs and then sort of hind other growth of
existing cryptos. Now I'm not sure if I'm being too paranoid about that. Is it just as likely that CBDCs will be rolled out and just added to the catalog of existing coins and then everything circulates alongside each other or
are we going to see stable coins kind of phased out in place of CBDCs? What are your thoughts about? Why is the topic coming up more and more and why seemingly a government's taking so much of an interest? I guess adding to what Mika has just said
I'll jump back in again. I mean for me I don't think regardless of what is happening at the CVDC level if we want to use that term. I don't think it's going to threaten the very existence of what we're all contributing to. I think we've got two different mindsets here as well.
well. When I got into crypto originally, my mindset at the time was, you know, I wanted blockchain to be globally adopted and Bitcoin to the masses and so on. But then like a few years into my own journey, I kind of realised that you can't actually force people
to go with a certain, you can't encourage people to go in a certain direction if they don't want to, if they're used to being led by the government and so on. So I think the reality is CBDCs are likely to emerge.
I think that's going to be an evolution on, you know, Fiat, going from cash into digital. And it's not going to threaten the decentralized space that we're all familiar with. And I think really we're just going to get to a stage where people would
have a choice, they'll have a choice to either go onto the decentralized sides of things or in a go in the CVDC direction, but I honestly don't think it's going to negatively impact the market. If anything, it could actually help grow
grow the market further when more and more people get disgruntled with the world that they live in. China is a perfect example in terms of how the populations of the various cities are being treated. They might rebel.
away from the government and naturally move into this sector anyway. So I think in terms of the actual growth of moving into the decentralised world, I think that will grow as a result of the negativity and the rebellionism that's likely to occur as time progresses.
Can I maybe ask something more about the bear market that we find ourselves in? I think it's interesting because the people who in this call all seem to have like this should be a measurable effect on the way
you guys do business or what you're dealing with, whether it's pivoting from one product to becoming a platform or whether it's, I mean obviously if you work at a VC firm, how things feel during a bear market problem.
probably are a lot different than a bull market. I was curious, actually Rodney, what, how is it noticeable that you're in a bear market from your side of the investment table?
Yeah, I mean I feel like valuations are lower for like seed sage deals I also think that there's a lot less noise like before you'd have people who want to build startups because startups are cool and like it's easier to raise money But like now everyone's like a bit more careful about what they're funding again. It kind of always like moves in cycles when there's like
like a lot of facts that's going on, like people are like, "Oh, wow, I wish I was the seed stage investor in a lot of these companies, but then a lot of these seed stage investments take like four to seven years to materialize, so yeah, it all takes a really long time. And so in general, most like seed stage ventriffons are pretty unaffected by what's happening in terms of like, you know, public#
Because these businesses take a really long time to materialize and like venture funds have like a seven to ten year like lifespan for their portfolio But I mean, it's a lot more hands-on like portfolio support than it is like deploying Capital really quickly these days and
Lots of funds and lots of managers that have emerged and like deployed funds into categories that were emerging that they were bullish on like if they're wrong, they're not going to be able to raise like new fund entities A lot of people who like have these these that were like unproven will have their like thesis like tested over the next couple years and yeah
We'll see what happens to a lot of those guys, but definitely a challenging time to be like, especially like a first-time fun manager if you haven't been in the space for a long time. Does it mean that there's a lot more people also coming to you or what is like the deal float? Is it kind of like a ween off or are they noticeably
different or yeah. It's a lot less like random like $100 million valuation pre-product deals like being sent to me that people are excited about and more like people looking to talk about what companies are doing and whether or not they should like get excited about them long run and a lot more like calm diligence and
like truth seeking then like the like fire from the hip bone market days of rounds getting filled out within three days of like you've been knowing that it existed. Yeah. Yeah. Ron, I can give some insights actually.
to the flip side of that, being a startup and trying to raise in this environment. You mentioned earlier Adam about pivoting. For instance, JR Studio, we started off as a game developer creating some NFT games and we still are continuing on with that.
the market has forced us to re-prioritize something that we already were planning on doing, but obviously we had to reflect a bit and make decisions based on the market's end. It's crazy how the FTX, the Bockel, that was actually
almost instantly felt like we had some we had picked up a certain amount of momentum let's say with our with our pivot and then when that happened it was just even though we weren't directly affected right nothing is standalone in space so the tentacles of FTS
We're felt everywhere. So yeah, I'd have to say that it's felt from both sides man from a VCs perspective and obviously from the start up as well. What about Miko or any of the Zokia guys like how does it change your work? Yeah, let me ask for it for a second.
So for us it's a really great period. Let me tell you why. We have stopped seeing so much shitty projects and shitty codes because in the bull market everybody is obsessive with going first to the
market and the pressure from VC is very big on them and they are doing a lot of stupid mistakes and writing extremely shitty code that it's really hard to read and to understand and the level of
involvement of the project that has survived has drastically risen and also the level of involvement in the project overall. Like you can feel it's a lot more quality work that you're seeing.
Now as a result of what because I guess the lower quality projects are running out of funds and they're longer being supported or you know what's the idea there's the fun. Well I think that it's easier to get
funding for literally everything in a bull market and it's and in a bear market you need to show you have some backbone before getting funded. I think that's the difference. So I'm curious about projects that
just starting out as well. Imagine it'd be really hard to sort of feel like you're onto something and working on a great idea, then you're confronted with a bullshit bull market, a bear market that just kind of stops a lot of potential interest getting involved in
what you're doing. Do you guys have any kind of advice on how a fledgling startup can keep the ball rolling until the situation gets better or is it better that they just hibernate during this period and pick things up during a ball market?
investment branch at ZOKIO and we are stressing projects around and I think as long as you have something serious and as long as you have something that you put it hard work into it you don't need to make
I mean, it would probably be harder to get funded than in the bull market, but you will still succeed getting the money because there are still money in the market. People have just been started to be a little bit more cautious how they are.
shade them. That's all. Yeah, I mean, the last year, 2021 was abnormal. So startups have always been hard, like if startups would be easy, like everybody would do it, but
there was because of the money printing because of the economy because of the stocks going up as well in Nasdaq. There was like too much money, so losing around and that makes it easy for VCs and for normal people as well.
stupid investments and that makes it easy for to invest low quality projects but it's not usually the case it was just like last year and if you look back in like last 20 years we had these famous
was compatible back in early 2000, which was pretty much similar that you if you claim that you are startup founder, you could raise money with whatever, whatever not even a PowerPoint, you use paperback 10 and you can call it, hey, I have this new e-commerce
website and you could 20 millions for that. So it was similar and the problem is not the projects or this is not doing two religions, it's a problem that we have too much money and that's a political problem.
Mika, do you still feel close to the startup space? I know with trading strategy, do you still consider yourself a startup or is this stuff close to you? I mean, our company is less than one year old, so it's still
definitely a startup and we raised our seed round earlier this year so we were still raising when it was easier. Of course, when the Ukraine war started it cooled down really fast like everybody was closing off their
And, I'm still very much involved in
I am doing a small instance of myself, so I know the founders and I know what kind of process everyone is going through in crypto at the moment. And now you just like it's back to basic, like you need to
You need to be able to make sustainable revenue. You need to be able to assure that you are not just users and not just air drops, but you have actually a way to make money. Money, a real business and to be able to scale it, to erase lots of wrong.
Because that was the case, like if you raise a series A, you need to have a very product and you need to be able to solve that you can make some money at least. And before like last year you could raise money with whatever EVM clone group blockchain, you just clone
copy paste, go it from source code and call it a blockchain and you get the money and that was the name of the game and I think it's now finally over and it's a good thing to be over because then we have a more time for honest founders with VCs.
That's an interesting angle that I hadn't thought about when looking at, I've got no idea how a small project or a startup would approach funding and seek some cash injections. And meekah from what you're saying is that
not only do they need a product that is somewhat different to copy-pasting something that already exists, but they need to have a sustainable business model. They need to show that they know how to make money before they get money. I've never thought about it like that. Is that a common thing that
that BC's look for in a project because I imagine a lot of builders don't have that business savvy or that business acumen to be able to do that. So is that something common now that BC's are looking for is that that business savvy that comes along with a good technical foundation.
Yeah, it's totally what people are looking for these days. Also, traction and de-risking the opportunity. More than ever, though, people are focused on fundamentals again. So, it's always good to see during these bear markets.
And I guess that brings us to a question of, okay, if we're going back to fundamentals and we're going back to sort of a core way of doing things that brings value that is done properly.
How would that shape the future of maybe D5 products? Let's combine that in with the regulations that we're going to start seeing happening that are probably mainly focused around centralized finance.
and platforms that they're going to fly under the radar of regulation here, or will sort of crypto be regulated as a whole where we see everything involved and it get impacted as well. I mean, I guess what I'm trying to say in a nutshell is that other
these new regulations that are going to come in, are they going to impact the defy space as well as the centralized finance, what's in the public eye, or is it just pretty much maybe just going to be focused on exchanges and what they do with people's capital?
What is regulation really gonna touch instead of an impact defy it a lot of people use defy to like Create regulated entities like the aspect of like custody of another person's funds It's actually like a pretty big risk for businesses to take on and now that we have like non custodial wallet
technology that can still feel like it's kind of custodial. A lot of that stuff will be used to create businesses that are strictly better for people in the face of regulations that would be applicable if you held custody of assets but maybe are not applicable if you use technology for its benefit.
It's kind of like how you saw Stripe grow back in the day. But a lot of these entrepreneurs are going to have to start thinking from first principles instead of like choosing to launch a Dex on like an abstract network that like maybe doesn't have a Dex yet. Like I think a lot more people will be thinking about, you know, how can they build a good
financial product that will serve people in the future of this industry. And like a lot of people are realizing that you can't just chase each other in a circle and like target crypto users, but instead you have to go build real products for real people out there. Yeah.
Yeah, and I think like a larger problem is with the blockchain is that the management of expectations has been bad like everybody expected is going to be an expecting.
which is going to be. But now it's happening slower than people were assuming and now people have been studying things like, hey Bitcoin has been existing for the last 10 years and it's still doing nothing useful.
like this, defy it doesn't do anything useful and so on and it's not 100% true but they have like some some wisdom there and unless unless they begin somehow connectify to the
real economy, maybe a regulation itself, maybe they don't. But in any case, unless there's something real that people are willing to pay for and the crypto is less and less self-referential loop, then we can finally
the progress possible again and then we can have an next bull market but I don't think any bull market will happen again unless we actually start to tell you the real value to the real users and not just like speculate.
to add to that, I would say, right, where we're currently at right now in the spaces. What we have is we have a trust issue, right? People are looking at crypto. It's kind of like a pivotal moment. So you mentioned regulation and how that's going to affect, let's say,
I think what will have to happen is a bit of self-policing. Like for instance, with the whole FTX, the Backel, you saw right away almost like a domino.
the exchanges coming out and wanting to show proof of reserves, I think the standards are going to have to increase. And this is kind of like an organic way for that to happen. And I think you're just going to see more of that even before institutional regulation.
It sounds like you think that the bear market is somehow healthy then.
I mean, as Mika mentioned, that bull market we were just on was kind of driven by money printing, right?
The way I view it, this is just another bump in the road. I mean towards the inevitable. To me, yeah, it's absolutely necessary. To every action, there's an equal and opposite reaction. So we'll see how the industry reacts to this.
And you know how we move forward. It's really up in the air. But I think certain things will have to happen for us to move forward and pause it in a positive way. And for this not to be the doom and gloom end to crypto, which we all know it isn't.
Yeah, it's weird that this is my third bear market now. And H1 feels like it's the fucking end. I feel like I'm going to get bankrupt each time it happens. And I feel as well, it just feels different, but H1 feels different. But this one feels different too.
predominantly because we saw the second largest exchange in the world go under. I think bringing it back to that question of trust that now millions of people have been affected. It's not just a handful of people that are inside the crypto bubble, but potentially millions of users have lost their funds now. Some have lost their
every time it's savings etc. And this is really, really bad being out for crypto. Even though it wasn't a purely crypto issue that caused it, it was the greed of small group of people running a scam on a centralized platform using crypto as the vehicle for that scam.
But I guess just in terms of self-regulation because I remember San Bank and free pushing for regulation actually pushing for a regulation strategy that would benefit his own platform and Recently now we're seeing CZ or CZ also planned for an industry association to communicate with the
regulators. Is it a good idea to go down this track again where the world's biggest crypto platform is going to try to influence crypto legislation? Is this a good angle to do again? How we really learn? Is this how trust gets built?
which is quite important here is that the FTX had several entities all along the world. They had one in Japan as well. I think they got it through acquisition. In Japan, cryptocurrency markets were mostly
self-faculated and they were self-faculated by an industry body. So basically crypto exchange is deciding what other rules there. And as far as I understand, FTX Japan has not lost any money. So they had actually the only thing that matters.
None of the regulation matters unless this is one thing and it's a secretated accounts for every user and making sure that all the your cryptos accounted for. And then like you have full reserves and everything else in regulation is just like a policy. You don't need anything else but this one.
And they have it in Japan because it was made by cryptocurrency exchanges and it looks like it changed, saved FTX Japan. Of course things can happen because now I think on a paper, United States charts is in control of FTX Japan, the company.
So, I'm not sure if it helped Japanese users or not because the whole empire collapsed, but at least in theory it should be better. And I have spoken with many regulators and I know that they are, the problem with regulators is that outside the United
States. The people they have working for them are very junior. It's like your first job from the school. The staff turnover is high. You don't want to work there. It's it's sheet salary. It's not very
not very good place to get progress for your career and so on. So, regularly the state don't really, even if they want, even now the European Union recover place. They just don't have people and expertise. They don't know how to do it properly. Outside the United States, there's no rich
sources. So I don't think it's going to save us. It's mostly going to cause the fact that the regulators try to regulate and they don't have people, they don't have money. It means that everything holds. Like no licenses are going to be granted. Nobody's going to get license and then everything just stops.
Mika, that's interesting about Japan. I didn't know that. I imagine it's a result of what happened with Mt. Gok's years ago. Maybe they put the microscope under crypto back then. Correct, correct. It's exactly caused by Mt. Gok's back in a day.
Well, I guess then it takes a major hack to sort of work as the catalyst for regulatory change and that's exactly what we're seeing now globally. So that maybe what Ace was saying before, it wasn't
necessary to happen and this shakeout might actually end up being good for crypto, which brings us back to that first question after regulation that does become legitimate. You know, it does regulation then legitimize crypto currency.
Anybody have thoughts on that?
I was going to say, man, I mean, it's a step in the right direction. It's not like it's a it's the stamp of approval boom. Now it's legitimate, but I think it'll it'll help regain some of that trust.
that's been lost recently over this particularly hard bear market, let's say, right? Like as mentioned, this one's been extra special because I mean, it's just been like one thing after another, like me in particular,
personally right like fdx came right is some of my assets we're we're going on nice runs that you know like like Luna head is kind of starting to be just a memory and then boom this happens and it's just been like one thing after another so yeah there a lot has happened
to where people have lost trust. And I think regulation is just going to be like a necessary step towards regain that right now. It just, and it does almost feel like it's been set up that way as mentioned earlier. So yeah, it's just, it is a strange time.
I'm curious from a security perspective. Let's imagine that regulations do happen and we've got a future ecosystem. A future crypto ecosystem has a little bit more mature with a little bit more focus on things like proof of reserves
and doing things the right way. How do we go about avoiding another FTX situation? I mean, the dude had a back door coded in to both of his platforms, or the main platforms FTX and Alameda
research to move funds between to go unnoticed. How is this invisible now in the 2020s and how is it more likely from an auditing perspective that it wouldn't happen in the future?
Yeah, let me give my two cents here. So basically, I think it's going to be the same scenario we are seeing right now with Web2N GDPR.
Like if you want to have your website available for people from European Union, you have to be GDPR compliant. So making that analogy, there would be needed a set of clear rules and compliances that
checks or a protocol or whatever product they are building on a centralized or decentralized blockchain will need to be complained with to be able to receive a certificate of
of making part of a standard or something like that. So probably the auditing focus will also move on not just make sure that we can find bugs and exploits and issues in the code.
But let's also make sure their product is also compliant with the standard, not just the ERC20 standard, maybe the CBD standard or the act of 5 November standard or any sheets they are coming up with.
Standardization is a long process though, isn't it? Stefan, I mean, we've got to wait until they are developed before they are implemented, they've got to be approved by bodies and if it's an international standard, it's got to go through multiple, I guess governing bodies to be approved and then implemented.
Well, as in the case with GDPR, you can see that it's only needed for the European states. And Europe was also the champion of regulations and the last one on innovation.
So I don't think they care about that too much. They will be like, hey, if you want European Union, European Union citizens to be able to use a product, you need to be compliant with this standard. If not, you are illegitimate to us.
I see so it's more like a segmented approach where maybe each region has got its own set of standards that, you know, whatever crypto platform would need to abide by and be regulated by. But I can speak for order regions.
and I have some friends that are having friends and politics, let's say like that. And from what I can sew around me, that's kind of the mentality around.
Yeah, gotcha.
I think I want to come back to just maybe what we've seen in the bear market. It's always struck me as curious how so much money can flood in and then as soon as sell-off start happening all this money just gets sucked right back out again.
And I'm wondering, you know, if you know, do investors abandon crypto for good now that it's happened or you know, we're likely to see another cycle and where does their money go between these two or three year lows where seemingly nothing happens in crypto?
in terms of proximity anyway.
That's a macroeconomic question. It's not just like crypto, somewhere it has to go somewhere. If you, for that kind of question you can look at macro charts like about
housing about consumer credit cards, about mortgage, about stock markets and so on. I think most of the money goes to the treasury bonds of the United States if that's an option. And that's my guess.
Guys, I've been wondering earlier, we spoke a lot about, I mean, what is going to be the regulatory consequences? Is there going to be a really, really hardcore reaction on a global level? And we spoke a lot about
about that, you know, we need to start building products for real people out there in the real world. What is the use cases you see surviving this market? Like what trends do you see? Where are we heading to?
I take your silence that there is no one Yeah, so I think like At least in the in the European Union the regulation because it's already done They are not going to change it so it's it's done down. This is good. It's not bad as it could be
like there were some really really stupid proposals from politicians that would like to make name for themselves just by basically forbidding everything in that. So I don't think politicians have time to attach it again for a while, like they have a
much, much important things to do, like they need to deal with the war and so on. So it's done in the European Union now. I'm a little bit caught. I'm wondering what's going to be of value. I mean, like how many NFTs are we going to sell? You know, I mean, we've seen the
the total value of NFTs declined drastically in the spare market. It's certainly not where the focus is going to be in the next couple of months, or even if we recover from the spare market and even after regulations kick in. Where is the real value? If we talk about real people, the real world out there,
What are the use cases? What is there still left to explore actually? Yeah, I think yeah, it's good question and I think there's a lot of things to explore. We don't see it yet because it's not created yet, but for example, what what web 3 web 3 really stands for is like
creator of content like what we have at the moment in the world is that our messenger, our public media, our e-commerce, they are all controlled by the companies in the United States and even even the
if this is let's say very efficient way to do things like we have PayPal, we have Facebook, we have Twitter, we have Shopify and so on. If that's a very efficient way to do it, it's not fair. It's not fair if you are Instagram
start and you can't have real ads on Instagram and Instagram is making money on you and you are not making it yourself. I think that's the real real game changer where we can still have some some progress to happen like how to be a creator, how to be a creator of a digital
content because most of the content we consume today is digital. It can reach anybody in the globe. How to make a system that serve creators and users alike and they don't serve shareholders from the San Francisco Bay area.
One thing that I usually think about when it comes to use cases of where the obstacles really are is some things that I think other people probably find kind of boring. Namely, I would like to see someone to be able to have a
a real MVP for making a payment portal that involves stable points. So using stable points for not only remittances but for purchases. I mean, there are some companies do things with cards like you have Coinbase card or whatever, which is essentially kind of like selling your assets at the point of sale.
But I think it's more important to have something for people to feel like they're paying something in a non-specative asset and for one reason or another. This, which was one of the original ideas of what cryptocurrency could be used for, seems to just have never really taken off. The other two would be identity.
And people who can effectively tokenize real world assets, whether it's some financial instrument, which has been, it seemed to kind of have a, they're coming up with things like GMX and DOPEX for derivatives.
But it's more actual real world things as well, whether it's mining or whether it's tokenized farmland or something that DLTs can uniquely do. This is where I think next, like where progress can be made.
Yeah, I mean, I think we're seeing it. We've seen I think a ton of announcement from polygon in the last couple of weeks, which like vastly didn't have any huge price impact because we're in the middle of a bear market, but I mean the entire reward and program tokenization Starbucks and polygon partners
partnership is aiming for. And I don't know, anybody remember, they were a couple of other partnerships when it comes to rewards programs. So it's probably a good direction to say that tokenization is probably still yet a lot to be explored in the real world.
What else was there?
with Starbucks.
Anybody remember? Yeah, it was a good Insta Chrome. Oh, yeah.
And then I mean if you count Reddit for the NFTs or digital collectibles, that kind of clever swap that they did for calling them not NFTs to appeal to the Normies.
Sorry, how did they call them? I didn't understand. They called them digital collectibles because Reddit, I think in large, has an animosity towards crypto and NFTs. And they just essentially sell them NFTs and package them as digital collectibles and people went ape shit over. All right.
I'm sorry I'm sorry I had to hop in so for everybody who doesn't know I'm normally in the back
and I'm sending messages to everyone and I've been dying to talk on this Twitter space like for the last three episodes so this was the first time I actually dared to hop on so just yeah
Nassus, you were a very welcome guest on Teflashan. I think you should hop on more often and give your input. It was very, very valuable, I think today, especially.
Yeah, thanks a lot. I might do that the next time. Which reminds me, which reminds me we still have a queue for next next episode. We wanted to tease everyone right?
Yes for sure. So I guess at this point we'll wind down today's episode and give the first overall the first huge thank you to all of our guest speakers today who came in. You know we had Miko, Andrew, Stefan.
Alexander and Rodney. Thank you all guys for coming in and giving your insights and please let us know if you're interested in ever coming back on the show. It was great having you guys today so just a big thank you to you all for coming. And as Sue's just mentioned
there's going to be a talk on NFT regulations in Europe. We're going to have a couple of experts, an expert named Svetin Konsulov and Alamari Agangin from Lexdow. They will join the Let's Talk regulation, which is
a series of talks hosted in the IOT discord. And that happens on Wednesday, December the 7th at 6pmc ET. So if you're free and if you want to know about how NFTs will be regulated in Europe, then please consider joining.
And this talk that we're going to have next Wednesday is also very closely linked with our next Flip and Burgus episode, which is titled "Regulate Me Harder" where we examine, again, how the fall of FTX has accelerated the pull
and maybe just taking a detailed look with some people in the regulation side of things in this industry and what is actually likely to happen and when we can kind of expect to see it. And finally, if you've made it to this point, I'd like to
thank you for joining us and having you around means everything. Just like to say goodbye for now and I really hope to see you again next time. See you guys. Thanks everybody. Thanks a lot. Thanks a lot, man. Thanks for having us. Thank you all guys.
Thanks, guys. Thank you.