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🦝RAC FM: The Neck Syndicate 🧠 Financial breakdown and more reports
Recorded: May 23, 2023 Duration: 2:11:51Space Recording
Full Transcription
Hello, Eric. Welcome, man. Welcome.
How are you doing, brother?
I'm good, man. So there were some communication issues, apparently.
But we're here now. Everything's good.
How are you, Eric? Good morning and welcome.
And sorry for the delay.
No problem. I'm doing all right.
Apparently, the Econ paper is dropping on the website like any minute right now.
Oh, I've been waiting for that, man.
I heard you on the Joe's page with Tank talking about it.
So that's exciting.
I wasn't patient. I just sent the PDF out to some people yesterday.
But we'll have a proper link here pretty soon.
Are you happy with it? I guess you are since you're going to publish it.
Yeah.
Yeah.
I think it's pretty good.
There's always more stuff we can add, but it's 50 pages.
There's nothing there.
Okay. Okay.
But yeah, Mike is up.
Robo is up.
Steven just came in.
So let's get this going.
Is this the same link as the one I shared?
Yeah.
Yeah, yeah, yeah.
It should be.
All right.
It's it.
Don't worry, man.
We just started two minutes ago.
So we're right on time.
Would you like me to do this through the Wi-Fi official?
That's up to you.
Oh, Steven, you're good, man.
You're good.
You're okay, mate.
No problem at all.
Guys, let me explain very quickly.
And there might be a little bit of background noise until I reach home.
Bangkok's a bit crazy at times.
So there was a bit of confusion, actually, for the first time ever between Bruce and I.
And it's because he kind of booked Mike and Eric, et cetera, et cetera.
And normally, because I'm off tonight, I'd have been hosting a Tuesday one, but I've
got two lined up for tomorrow.
And because Bruce had organized the original guests and everything and set it up, I was
totally convinced that he was going to run the show tonight.
And I was like, all right, OK.
And then he's like, are you starting the space?
And I'm like, dude, come on.
I'd never take this show from you.
And he's like, what?
Bruce, I'd never do that to you.
Not when you set it up like that.
Yeah.
Yeah, I think we should talk about this in another place, because I was asked to set
this up.
So I just did it.
Anyway, it's a brilliant space with Eric and Mike, man.
I don't know Steven, dude.
I don't know who you are, man.
Well, tell you what, we're going to find out.
So, Steven, we've literally been that busy that I haven't spoken to the guys at great
length, but Bruce, Steven was introduced to us from the Reach Metaverse space last week.
I believe, Steven, that you had something to do with our tokenomics.
Is that right?
So, Steven, we kind of know Mike and Eric quite well.
You can probably tell that.
Do you want to just give like a quick introduction to the group about yourself, your background?
You don't have to go into great depth.
Just give us a quick overview, mate, you know?
Yeah, absolutely.
Thanks so much for having me on, guys.
So my background is originally, well, first I studied physics.
After studying physics, I moved into hedge fund trading and I was working as a bonds trader.
I was specializing in short-term interest rates and from short-term interest rates, I
was also doing treasury notes and interest rate swaps.
From there, I went to work in essentially brokerage.
It was kind of like financial advisory brokerage, helping develop income streams for using bonds
and developing income stream portfolios with people.
I started up a fund managing some monies in DeFi in sort of 2019, heading into early 2020
when the DeFi summer hit.
We did very well, but whilst using a lot of DeFi products, I started noticing a lot of problems
with these DeFi products, both from a structural perspective, a design perspective, just a lot
of issues that I saw, which we can talk about later, of course.
And I decided to design my own DEX and my own auto-harvester to try and implement solutions
from a tokenomics perspective to the problems as I saw them to the current implementation of
DEX tokens.
From there, I've been working in the Cardano ecosystem now for almost three years.
So I started that in 2020 with Wi-Fi.
And now I've been in the Cardano ecosystem for three years.
I run my own tokenomics consultancy.
I've worked with a plethora of projects in the Cardano ecosystem.
I'm currently working with Noom.
I'm working with Drip.
I'm working.
I've worked with Copi.
Um, I'm working with a lot of NFT projects as an advisor, and I'm an advisor to Reach
as well.
And I designed their tokenomics with them.
Bro.
And that is exactly why you're on this fucking space tonight.
Ha ha!
I mean, Eric, Mike, you know why your man's here, right?
Eric's a tokenomics dude as well, right?
Right, Eric?
Yeah, my...
You're all about the number.
My man, right up my alley.
I, yeah, literally just invented AstroVault for the same reasons.
I'm launching my, uh, economics paper for Archway, like, right about now.
It's about to get push live on the website.
Um, I...
Congratulations.
Also, new tokenomics consulting.
I actually have a...
One really big name group that people don't know is coming to crypto yet, but I can't talk
about it for another two months.
That's going to be some fun, but it would be great to hear about more projects in the
Cardano ecosystem.
Well, I'll tell you what, guys.
I'll tell you what.
I'm just going to say it.
We've got a couple of ladies in the room, so shout out Wendy below.
She's a Cosmos nerd as well, but we've got our co-host here, B-Banz.
Hello.
Do you want to say hello to the guys?
Hello to the guys.
I get wrong for this.
I get wrong for this all the time.
I keep saying to Bruce, Bruce, say goodnight to the guests.
And Bruce, let's breathe.
Thank you, Rob.
Hey.
B-Banz.
Okay, go ahead.
Are you excited?
Are you excited?
I actually, I feel really bad.
I have to hop out for a little bit.
I have an appointment with the kids, so I just wanted to come and say hi, but I have
to come and listen to the show later.
All right.
Family second.
Family second.
Work first.
Always.
What she's going to do is just lower the IQ on the host panel by dramatically, yeah, by
a large amount.
I think like B-Banz.
Well, I thought I was safe.
We're already.
I thought I was safe.
You said high IQ only.
And I was like, oh, okay, then it's fine.
I can go to this appointment.
No problem.
You guys are all set.
Well, it's the first time that we've probably been like completely out of our depth, but
actually Rack FM's job most of the time is to facilitate conversations.
And I do know that there's been, I mean, really, Bruce has probably got a few words to kick
off, but I was really hoping that maybe Mike specifically might be able to fill Stephen
in on some of the crack that we've had regarding what's happened in regards to certain tokenomics
with proof.
I mean, we could call it proof of stake.
We prefer proof of selfishness.
Over the last week, we've had some real issues with founders and millions and millions of dollars.
So, Stephen, guys, I haven't brought them up on the speed as to what brought on this
particular, you know, discussion tonight.
Bruce, before we ask Mike just to fill Stephen in on what happened last week without any names
or anything, just a hypothetical founder situation.
Have you got any words, Bruce, for the gentlemen and everything?
I would just like to say welcome to this special first, maybe the last, we'll never know.
Maybe we will in the future, episode of The Next Syndicate, joined by the surprise guest,
Stephen, the Cardano tokenomic consultant genius dude.
This is the Financial Breakdown and more reports brought to you by RackFM.
Nice one, Bruce.
That's probably going to be Finn's beginning, isn't it?
Right.
Mike, I mean, I heard all of...
Oh, dude, we get better.
Wait until we get really going.
I mean, I heard Stephen say, like, is this satisfaction in certain DeFi products and stuff
like that?
Mike, like, hypothetically, you know, no names or whatever.
We don't have to go there.
We all know the situation.
I mean, what happened with this kind of situation last week with founders getting tokens, being
able to harvest them, farm them?
Is this unethical behavior or something we should accept, or is it a problem with the
tokenomics at heart?
What's up, guys?
Yeah.
Quick introduction.
Stephen, I come from a similar space with you.
I was a financial consultant, still am a financial consultant.
Um, I come from the securities industry where the stuff is, literally, you're behind bars
for plus 20 years, and if you do any of this insider trading stuff and get caught by the
Securities Exchange Commission or FINRA, um, you're, you're in jail.
So, um, I don't know why it became acceptable and DeFi, I think I'm starting to get to a point
and I was almost at a breaking point last week where I was like, fuck all this, I'm done
in this space.
This is not what I got into this space for.
Um, it was more for, you know, the, the access and the open access to financial markets for
most people that don't understand how hard it is to access U.S. equity markets, to access
the world market.
It's actually very hard for somebody.
I mean, it's, it's easy to trade U.S. stocks, but for the average person to be able to, you
know, open up a brokerage account or open up, you know, a Forex account, it's not as
easy, um, as it is to open up, you know, like a, I'm at a mask or to, to get a Coinbase
account or, or like a decentralized finance wallet.
And that's kind of where, you know, I started to align with it is like, okay, now you have
open access to financial markets, which isn't accessible by everyone, especially if they
don't live in the U S so, um, back to the point of what founders are doing.
Yeah.
It's, it's totally unethical, um, from the point of where, you know, tokenomics wise, where
Eric could probably speak a lot more, like I, I, I address this a lot and I got a lot
of shit for it where, you know, token, a lot of these tokenomics are predatory in the sense
of that inflation is super high in the beginning.
And that allows, you know, user allows founders to either stake tokens or incentivize LP, um,
with LPs.
I mean, I've been a big proponent of saying LPs lose money in traditional market making
world.
You know, market makers don't really take that, take on that much risk because they're
really finding matchers and buyers and it's more of an order book flow.
Um, and, uh, for some reason, these AMMs, um, when Eric is saying what Eric was saying
and why Astro Vault's a lot more different is that a lot of AMMs are incentivized with
these inflationary DEX tokens that don't really have any value other than, you know, I mean,
farming and dumping, which we saw Jake and we saw, you know, the, the at most team, we saw
a lot of people do with these, these farm tokens is okay.
You know, I'm going to incentivize my LP and it's, it's, it's, this is literally the strategy
that a lot of DEX tokens.
Oh, sorry, Mike.
What about governance?
Isn't that a valuable?
No, governance is not valuable.
You don't see fortune 500 companies have regular people that don't keep up with the day-to-day
balance sheet.
Don't keep up with EBITDA.
They don't keep up with any of the stuff of how the financial financials run in a
company, make the financial decisions.
That's why there's a board of directors.
And that's why, you know, you look at Ford, you look at a lot of these companies.
That's why they're, I mean, insurance companies are, I'd say insurance companies in the United
States are the longest standing companies in the United States for a reason, because they
know how to manage risk.
So I think having people decide what, what the financials are is the dumbest shit that ever
came out of crypto.
I think everybody should have their niche and specialty on what they're good at.
And I'll be no stranger to say, I have known nothing about, I mean, I wouldn't say I know
nothing about the technology.
I understand a lot of it.
I don't know how to code.
I don't know, you know, a lot of the technical terms.
And I think a lot of it is fleecing and they make it seem a lot more complicated than it
really actually is to make them seem smart.
So they don't, they have like an edge, but I think, you know, Eric and I talked about
this is where a lot of the shit that they're saying was like, uh, I'm pretty sure this
is not that complicated as you make it seem.
And it's kind of like a Ponzonomic flywheel where, you know, if you really had simple
tokenomics, the more simple it is, the better.
Um, I think we need to be, be off in a lot better place.
But I definitely agree with the fact that, that what a lot of people are saying is that,
um, a lot of the founders should be held accountable.
I think you're making, you're making like people making excuses for Jake, making excuse
for Atmos, making excuse for a lot of these founders.
Well, they have to, you know, they have to fund it themselves.
Like there's a reason why VCs don't invest in these projects because they're probably
shit and VCs don't think they can make money.
And people hate VCs so much.
It's like venture capitals are in here for two reasons.
One to make money and two to align with founders that align with their interests.
And if you're not, if you're not, if you're not one of the, if you're not in one of those
categories, then, you know, you're not going to get money from venture capital.
So let me, I, I've understood.
Sorry, sorry, Steven.
Sorry, Steven.
Just a quick one.
So this cutthroat, no BS attitude that Mike just expressed, Eric also got it.
This is very realistic opportunist.
It's my perspective.
It's why Eric and Mike is going to be hopefully a household name in the Rack FM broadcasting
station.
So Steven, show us what you got.
No, I'm kidding.
Okay.
I understood that.
I understood that from a few perspectives.
There's like a wide range of questions within that.
First, I wanted to start by saying, yeah, absolutely.
Founders should be held accountable.
Essentially at the end of the day, we're building a business, right?
A DeFi product should be a business like any other.
And being a business like any other means that you should be following the laws that
any other business needs to follow in order to operate.
I don't think I am unique in thinking or saying that.
And that's why regulation overall for the space of God, this is a dangerous thing to
say, is in long run a good thing because it legitimizes the space.
And it means that we now have clear cut rules that we need to follow and we have structures
of responsibility that need to be, that need to be, you know, accepted.
As an example, if you have an Australian financial services license, you need to have at least
two responsible managers that work within your business, right?
And those two responsible managers are both there for the purpose of auditing and for
the purpose of compliance.
And that's essentially two people that have the education level to ensure that your business
is meeting the regulatory requirements to hold an Australian financial services license.
Um, when you're providing financial services, you, there needs to be some level of compliance
officer, right?
That's, that's the reality of why we've created this regulatory system that exists.
And it's to protect people from actions from founders, exactly as you're describing, where
they're able to create designs of just a pure inflationary token, um, that they have the
majority of at the beginning, which allows them to inflate their own supply and then dump
down, or of course gives an undue advantage to those that enter the market early.
Um, I, I arrive early, I buy in a lot and next minute I'm able to dump down on the others
that come in after me.
Hence, you know, Ponzi like, um, yes.
So that's one of the big, biggest problems with, uh, the design of DEX tokens, right?
I absolutely wholeheartedly agree with you there.
Now, when, and another thing that I just want to point on though, is you were talking
about the, the trading of liquidity pools, right?
And the trading of liquidity pools themselves, let's remove that, that concept of a founder.
Um, the trading of liquidity pools themselves, people need to kind of adjust the way in which
they're imagining how they're working as a, as a financial product.
Um, as a financial product, liquidity pools are much more similar to interest rate swaps
between two currencies than they are to trading a currency outright, or than they are to market
making, right?
If you think of it as market making, you're instantly going to be putting yourself in a
back foot because you're thinking that I'm behaving as the buyer, as the seller and the
buyer of a token, but the mathematics of it don't behave in the form of market making
mathematics because market making works on an order book model, exactly as you said, rather,
if you think of it as an exchange of relative value between two tokens, right?
Or relative value between two currencies.
Um, and rather than look at it as me market making, I'm looking at as me creating a hedging
structure between two currencies by offsetting 50% of the risk with regaining the token that
I'm losing, right?
Much like swapping a fixed and variable interest rate, right?
I swap my fixed interest for variable interest so that as I lose value in one, in one currency,
as that value in one currency goes down, I'm making back more of that currency through
the interest rate.
Um, because I've got fixed over here and I've swapped it for variable over there.
So that means the variable interest is changing.
Um, now, since we've got, when you look at it within that structure, with the way that
I would engage in DEXs, you don't engage with, like, I don't normally engage with the liquidity
pool with the DEXs token, right?
Like, I'm looking for thinking about my token structure within a portfolio.
So let's say I've got a portfolio of Bitcoin, Ethereum, Cardano, BNB.
Within this portfolio, I know that I'm pretty happy with having BNB and Cardano together.
I don't really mind if I've got a bit more BNB and a bit more Cardano.
I know that I don't mind if I've got a bit more Ethereum and a bit more Bitcoin, right?
What I need now is trust in a protocol that I'm supplying my, my liquidity to, right?
But if I'm supplying Bitcoin and Ethereum and I'm trading off the relative value between
Bitcoin and Ethereum while earning fees, right?
Now I'm behaving like a currency exchange.
So I'm earning fees by allowing others to currency exchange between me, right?
I'm taking off relative value from the respective token, right?
When Bitcoin is going up with respect to Ethereum, I'm earning more Ethereum.
And when Bitcoin and when Ethereum is going up with respect to Bitcoin, I'm earning more Bitcoin, right?
But because I don't mind holding Bitcoin and Ethereum, right?
I'm probably going to be holding both in my portfolio anyway.
I'm willing to accept that fluctuation in return for some kind of flat payout from the DEX, right?
Now, the value of that token often is decreasing because they've designed their tokenomics poorly, right?
But at the end of the day, because within my portfolio, I don't mind having more or less of either of those tokens
and I'm earning a flat return, as long as I have faith in the protocol that's underpinning that,
I don't mind holding it within that liquidity pool.
Does that make sense?
Yeah, I've got a couple of questions.
Yeah, go ahead, Eric.
You take this one.
So first off, excellent coverage.
One, why do you have a fixed supply of Wi-Fi?
And then two, I get that there's like a profit sharing, but what happens when that max supply runs out
and how do you retain value of the Wi-Fi token?
Well, we don't really have that max supply running out.
It's a function.
The farming function is asymptotic.
It never actually reaches zero.
Similar to Bitcoin mining in that respect, right?
As for the supply, we've designed our farm to basically be doled out very slowly over 30 plus years, right?
So the entire idea of the farming in Wi-Fi is that it's a slow, sustained process that takes place over a long period of time.
Now, as an example, our first year is supplying...
Why have a max supply as a whole?
Why do you support max supplies?
What is the purpose?
Why do I support max supplies?
This is interesting, right?
This has got more to do with the Cardano ecosystem itself.
Within the Cardano ecosystem, the concept of burning tokens is looked upon very poorly.
So it's very hard to talk communities through to burning tokens as not an accepted mechanism within the Cardano space.
So since understanding that within the blockchain that I'm working, that that's not a commonly applied mechanism, as we don't apply a burning mechanism, the alternative is to have a max supply that we're approaching but we can never reach, that we're able to control the levers as we don't have the lever to pull out supply.
Okay, carry on.
How much revenue is Wi-Fi making?
How do you justify token supply?
Sorry.
How much revenue is Wi-Fi making?
I wish we were making more.
Right.
Well, in general, DEXs don't make money.
I've been looking over your guys' white paper.
Very well thought out.
Love the diagrams and everything.
And I get that there is a profit sharing type thing.
So, one, I'd love to understand why Wi-Fi isn't the security and how you guys plan on maintaining not being a security as future regulation gets rolled out.
And then, two, I'm wondering how much profit there is.
How much revenue are you guys working with?
What kind of fees?
Is the long-term plan just to sustain itself on fee revenue?
And if so, how does that pay for the team?
Yeah.
We said really nice things about governance before, so I'll avoid mentioning governance.
No, no, no.
Please do talk about governance.
We're just talking shit.
It's Cosmos.
So, okay.
So, with respect to the securities aspect, our token X-Wi-Fi is a security.
We've got a – in Australia, we're not considered a security, and we're an Australian business, right?
In America, it's definitely not that simple.
Our X-Wi-Fi is the one that's considered a security, not Wi-Fi itself.
We've got a mechanism that if we are told that we have to, we can change our mechanism to supplying income to liquidity itself so that it's not adjusting any price of Wi-Fi rather than being supplied to the X-Wi-Fi token.
So, that would annul the security's classification of the X-Wi-Fi token.
Wi-Fi itself isn't classified as a security, and that is something that we are watching very closely with regulation to see how that develops in Australia to ensure that we adjust accordingly as soon as the regulation develops.
Okay, cool, cool.
Now, what was the next question?
What was the next question there?
Yeah, how much revenue are you guys working with?
Do you have means of adapting, adjusting, getting more revenue over time?
Is it just relying on listing fees and trade fees?
So, the, no, no, no, it's actually not even relying on listing fees.
We don't have a listing fee.
You just charge, you're just, it's just the transaction cost to list.
It's on trade volume.
It's also on NFT royalties.
We've got one of the, we've got a popular NFT project on Cardano.
So, it's also based on our lottery, and it's based on the upcoming auto-harvester, and it's also based on the, okay, so in Cardano, there is a transaction fee that gets sent when you perform a transaction.
It's called concurrence.
It costs about 1.5 ADA when you send a Cardano native token, and we're also taking a third of that to go through to the bar.
So, it relies on a volume of multiple mechanisms, right?
So, what's the volume of trades themselves that we're getting?
Like, it doesn't really matter the volume within the trade.
It's the number of trades.
It also matters the volume.
That's another one that impacts the total amount that's going through.
It also has a volume of our NFTs.
You know, it's a really wide, it's going to be a really wide ecosystem when it's completely built.
The current income that we're working with right now, since we launched our DEX a week ago, right?
So, in the last week, we're probably talking 3,000 or so Cardano that's gone through to the bar.
First off, congratulations on the launch.
And secondly, like, sorry to grill you.
Like, I know you know your shit, so I'm genuinely just trying to understand more of this.
No, no, no, please, throw me away.
These are the questions I want.
These are the questions I want, mate.
I'm here to think.
Yeah, just crunchy numbers.
My background is in economic philosophy.
I got into tokenomics from the casino side, actually.
And one of the issues I'm running into looking at things from First Principle's perspective
is that a lot of businesses that we're just expecting are going to work just don't have
the potential for revenue that are required to sustain the businesses.
And one of those I've struggled with is DEXs.
So, I'm building AstroVault as mine.
And basically, we're tapping into the inflationary rewards of the layer ones through the liquidity
that's hosted as a means to try to subsidize because trade fees aren't enough to sustain
LPs and whatnot.
So, I like your guys' idea of the flywheel.
And exactly what you're describing there is what we're doing with our auto-hopper stuff.
Right?
So, it's to be able to access the liquidity of the other DEXs that are around the ecosystem
to then be able to support that back in our own ecosystem.
So, you can access, for example, the MinSwap LP through the Wi-Fi platform.
Okay.
That's another DEX on Cardano.
So, it's like an aggregator?
Yeah, it's an aggregator.
Okay, cool.
Sorry, yes.
It's called differently on different...
Different blockchains have different names for the same thing.
And that always confuses me when I've been so long in Cardano, so forgive me.
We call it an auto-havester.
So, yeah, liquidity aggregator.
So, Chris has a lot of...
Chris had a lot of questions.
I'm just reading them under the RAC-FM spaces.
And it'd be okay.
Can I be okay if I just answer those real quick?
Yeah, of course.
Go ahead.
Go ahead.
So, you say that VCs aren't necessarily a good thing.
They may not invest in this good project, but it doesn't mean they invest in the project's vision.
They're in it to make money.
What do you suggest VCs place dumping on you rather than Jake dumping on you?
With VCs, there's a lot more regulation that goes into the VC space.
In crypto, there's not really much you can do.
If they are a U.S.-based VC, they do have certain rules they have to follow by.
I mean, venture capital and hedge funds are regulated by Reg D in the United States, which...
There's some sort of best interest that's baked into there.
It's not super...
I'd say super rigorous.
It's not like the securities industry.
They're not regulated by the SEC.
So, there isn't really nothing...
There's nothing to really prevent other than investing schedules with venture capital.
And that's really worked out between the VC and the founders.
The thing about the VC stuff is a lot more transparent on kind of how much the VCs hold because they have to report it.
So, I think you bring up a valid point where a lot of VCs really aren't aligned with the project's vision,
are really in it to make money.
But at least you know that VCs are in it to make money.
And I think if you don't realize that, you're kind of...
I wouldn't say you're stupid, but you should tread carefully where VCs are present.
But then, you know, A16E is a good one where I think Anderson Horowitz, I think they do have a long-term vision on the space.
And I think...
I could say Delphi is in here for a longer-term time horizon.
So, it just depends on the VCs that are investing in the projects.
If it's a VC you haven't heard of, I think it's just...
Sometimes, you know, blowing smoke up your ass and it's not, you know, somebody that would have credibility.
If you're looking at some of these projects, I'd look at more quality and I'd say non-predatory VCs.
I think Jump is one of them that you kind of got to be careful with too.
But I mean, Jump's invested in Synthetix and I'm a Synthetix investor and they've been pretty helpful with the success of Synthetix.
So, I think from that aspect that I think VCs dumping on you is a little bit different than the founder.
Because the VCs are in it for making money.
The founder is really in it to make the project and have it be, you know, successful in longevity.
And then you say, who's more at fault, Jake or Stargaze?
Jake can't dump.
Early if Stargaze doesn't do shit about the distribution, that doesn't mean Jake's moral, ethical or was a good decision.
But if you give Edway liquid tokens and say don't dump on you, you're at fault.
So, I agree on that at some point.
I think it is important that, you know, founders are important on who they give, you know, the distribution to.
Jake was a co-founder of Stargaze.
He was no longer affiliated with Stargaze.
But there was no transparency of why he dumped or why, you know, of, you know, why he left the Stargaze team.
That's kind of Stargaze.
I think that is part of Stargaze's fault.
But then again, you know, if somebody leaves the team, you'd have to have proper vesting schedules as well.
So, I think it was a learning experience for Shane, too.
I think Shane had a lot of faith in Jake because Jake, he's building Juno.
And I think there's some shit happened with the code and they ported the code to Juno.
There's just a lot of stuff that's like kind of, I'd say, gray area where, you know, it's not necessarily wrong in the sense of, you know, it's illegal.
But moral and ethically, it's not.
You know, I live by more of a moral compass than a regulation compass.
I think you know the clear, you know, the clear right and wrong in a situation.
If you're walking away from $8 million and, you know, you have, you know, your community and all this.
And you're kind of just like, I'd say you're more than fleecing and grooming your community.
We like to call it in the securities industry is where you're defrauding investors, where you're at the sense of you're telling them not necessarily material and factual information that's not true.
But you're kind of misleading them in the sense of, you know, you're withholding information that you know.
So just because you're not telling the truth, if you know something like, you know, Jake was dumping these tokens and, you know, he was not affiliated with Stargaze.
He was stealing the code and you're still, you know, promoting Stargaze.
You're promoting Juno.
I would still count it the same as defrauding investors because you have access to information.
You're not allowing the community to know and investors know.
So I'd say from that aspect, you know, Jake is wrong for that.
Shane obviously is in the wrong too.
But I'd say Shane is a lot less at fault because I think he had good faith in that Jake would contribute to Stargaze and the success of Stargaze.
So I'll let Robo, Robo's got his hand up, so.
No, well, actually, I'm going to segue into something that Steven just said.
However, I apologize for the noise again.
I just want to find out if Eric or Steven's got any response to what you said about VCs before.
I'll just ask Steven about what he mentioned there.
Eric, you got anything for Mike there?
I mean, one of my major frustrations is that VCs are dumb.
And just in general, like I've had some of the lowest quality conversations I've ever had in the crypto space with VCs who are just absolutely lost.
And then seeing the kind of things that are on the portfolio and just trying to get them to understand things that are just so far over their head, it's infuriating.
That's why most VCs are focused in like private equity and equities markets because that's where the smart ones are.
The crypto ones are failed equity and private equity VCs.
We've noticed more.
Yeah, we've noticed far more success when I just don't talk to them.
Maybe I'm kind of an adverse person and it could come off a little rude, I guess.
But I don't know.
I can actually go into like what we're building and stuff with AstroVault and it just goes way the fuck over their head.
And I get it.
Don't invest in stuff you don't understand.
But if what you understand is fucking monkey pictures, like good luck.
It went over my, I read, I read five minutes in that white paper.
I'm like, okay, I need to talk to Eric and he has to explain it to me because I don't know what's going on.
Well, I understand that feeling well, Eric.
I get into Eric's white paper.
Steven, you got anything, any replies for Mike?
No, like I basically agree with most of the sentiments that you guys have surrounding VCs.
So like I don't really have anything specifically to add.
We had a lot of VC interest back when we were starting, but I never accepted any VC funds because they all wanted control.
And I was very certain that they didn't have the understanding to have control.
VCs, I think VCs in this space aren't in traditional like venture capital.
And if you look at traditional venture capital in the U.S., it's more of a partnership where, you know, the VCs do want control, but they're kind of, it's almost like private equity.
I mean, you have a private equity firm.
They let you do your thing.
They give you a little bit of advice.
They say, hey, you know what?
I think you should focus more on production.
I think you should do this.
You should do that.
Versus VCs like, here's a bunch of money.
Here's what you need to do with your tokenomics so we make money.
Versus, okay, we're going to make money because we're betting on you.
We're betting on the founders.
We're betting on the people that have the vision versus we're betting on how much money we can churn out of this project and make as much money as possible so we can move on to the next one.
I think that's where I think Eric is like coming from is that they don't have the same mindset in traditional venture capital investing because anybody with, you know, a large sum of money can start a venture capital raise and say, hey, you know, in the crypto space, there's really no rules on this stuff.
We can just throw money at a fire and raise money and hope to flip it in two seconds because there's no rules about vesting.
There's no rules about, you know, 144A where, you know, in traditional, like traditional finance, if you're an insider, you only can sell off a certain amount of stock.
Like they don't have those rules in the crypto space.
And I think that's why a lot of these VCs blow up is that a lot of them aren't really smart.
They're stupid people.
They're a bunch of people that were failed venture capitalists, failed hedge fund managers, failed financial advisors, consultants, you know, failed in the traditional industry.
Because I think realistically, a lot of people are in this space because they don't, they don't, they failed in the real world because in the real world, there's consequence for your actions.
You know, if I, if I'm a financial consultant and I'm, you know, a fiduciary and I make, make a wrong recommendation, I could lose my job.
Even if I don't make a wrong recommendation, you know, even if I make a right recommendation, the client thinks I'm wrong, I can still get in trouble.
So I'm held to a very high standard and I understand that versus in a space like this where, you know, I know I'm speaking out of it because I'm just a fucking pixel wizard picture and nobody knows who I really am.
But I'm being counterintuitive to what I was actually talking about.
But I mean, I would say I'm a lot more ethical than a lot of people in this space and I don't plan on launching a token.
I don't plan on doing any of that stuff where, you know, syndicate is going to be a for-profit business that launches products similar to kind of like a broker dealer is.
We have a slew of products. Well, I will get into that later, but I think going to what, what, what Eric and Steven are saying is that, you know, you talked to a lot of these guys, you're like scratching your head.
Like, man, they don't know that I know a lot about like finance and they must think I'm just some idiot guy that didn't, didn't, didn't, didn't know what he's doing.
Just kind of got lucky when, you know, Eric is probably one of the more intelligent guys that I've talked in the space and listening to Steven and his knowledge on, you know,
how LPs are interest rate swaps where I think, you know, I'm coming from a uni, uni, uni LP V3 short straddle where I kind of view them as short straddles.
If you look at the uni swap V3 and concentrated liquidity and, and range liquidity is where you think of it more as a short straddle.
But I think, I think we have a lot of smart people in the space that don't get a lot of credit.
And then we'll do the ones with a lot less followers because people don't really care about finance.
They'd rather have somebody tell them what to do and make a lot of money.
And I think that never is in the advantage of the investor.
And it's always in the advantage of the founders because I think, don't hold back.
Oh yeah.
You're holding back tonight.
I mean, I don't know what you're holding back.
Jesus Christ.
I mean, you're sitting by it.
Everybody.
Yeah.
No, I don't give a shit, man.
I really don't care.
I told Eric or I told somebody this other day, like if this doesn't work out in the crypto space,
I'm fine, man.
I have a regular job.
I enjoy my job.
I get to serve people every day.
I mean, I love doing it.
I like to, I would like to come to this space and be a greater good and, and, and make a
profitable business just like Steven and Eric are trying to do where we have this, this
somehow misconstrued idea that everybody's going to make it.
That's not how the world works.
Look at traditional investing.
There's a winner and loser on every side of the trade.
Whether the loser is the guy that sold the stock at a lower price and the stock went up
the next day or the guy that bought a stock that eventually filed for chapter 11.
Like we don't, we don't know that in the time being where somebody sells a stock.
Let's say I bought, you know, a good example is like, uh, I don't know if you ever heard
of, um, uh, Enron, uh, Enron was a, was a company in the United States that got in trouble.
So, so if you bought Enron, you were the smartest investor ever before they were cooking the books.
So, um, you know, and, and you would say, oh, well, man, I put everything into it and
I made a lot of money until, you know, the new information came out that they were cooking
the books.
So I, I think, you know, again, the person that bought the stock and it went up all the
way, everyone's like, man, I should have never sold Enron at, you know, 50 bucks, now
it's at a hundred.
Well, the guy that sold that 50 bucks felt like an idiot at the time, but when they filed
for chapter 11, he was the smartest guy ever.
He's like, man, I made money on this thing when it went to zero.
It sounds like, it sounds like the Chinese, it sounds like the Chinese housing market.
Um, one, one thing that I really want to, one thing that I really want to add to that,
right, is like you are, you're, I am always apprehensive when I see a founder whose background
is marketing or a founder whose background is, you know, YouTube influencer, right?
That, that to me is an instant sign that this project's probably a piece of shit, right?
Um, now there are many, one of the big things that I found within the crypto space, and I
think sometimes it's done maliciously.
Sometimes it's done from ignorance because the people that we're dealing with that are
building these crypto instruments are very technical developers, right?
Their background is development.
Their background isn't economics.
So when they're building these incredibly technical systems, they don't necessarily apply
an understanding of economics in the way that these systems are being designed, right?
And I think it's a bit harsh to say that it's always done as a, um, as a purposeful way
to mislead a community to take money from them.
I think a lot of the times it's, it's done and exploits are there because they're not
traders who are building this and they don't understand the way in which these systems truly
function, right?
Like particularly when you're looking at stuff like balancer pools, you know, once you implement
a balancer pool, a balancer pool is highly complex.
There's no way that the devs that are building that understand the trading consequences of
having 14 sets of balancer pools, all of which have got shared tokens between them and the
way in which you're able to manipulate LPs, particularly, you know, if you are a founder
or a hold a vast majority of three of those LPs and you're able to move them between those
balancer pools to be able to extract value without damaging values of certain tokens they
don't want to damage, for example.
Right.
Um, I tried to explain that really simply, so forgive me.
That probably made no sense.
No, no, no, I get what you're saying.
I say all the time, we need more game theory audits.
People audit the code, like, yeah, the code may do what you want it to do and what you
want it to do is dog shit.
Like you need to actually understand the first principles of what, of the consequences, the
ramifications of what you're building.
Also about the VC thing to chime in a little bit.
Um, all the projects like, oh, well, this one's good.
It doesn't have VCs.
All the projects have VCs, whether it's, if it's not in a pre-seed or a seed round, then
it's OTC afterwards.
All of your like, oh, well, this isn't a VC chain.
This is a community chain.
Even in the cosmos, they all have VC money.
They all have VCs.
Bro, bro, bro.
Don't, don't use that word community.
That's the biggest bullshit I've ever heard.
Community.
Wait a minute.
Can we come back to that?
I'll tell you what then.
Okay.
Wait a minute.
I'm gonna, I'm gonna do this little segue and it's only a mini one guys.
And, and, you know, flatter us for a minute.
Steven, you were talking earlier and I heard you mentioned the word lottery.
The minute you mentioned the word lottery, I'm like, ah, okay.
What kind of lottery is that?
Right.
Hey, are you guys employing your own form of like randomness or are you accessing like
someone else's randomness on chain, like a link or whatever?
Where are you getting your randomness from?
If you're doing a lottery.
Well, we were super smart about it.
We were the first people to be able to do this on the chain, on the Cardano blockchain.
Um, the way that we're doing it is we're essentially using the block hash itself to be our lottery
numbers.
Right.
So we can't predict what the next block is going to be.
So you said, one second, Steven.
So you said you're the first, you, you, you corrected yourself and you said you're like
the first on Cardano.
So did you look at like other methods on other blockchains before you implemented run?
Cause we've been doing randomness for a very, very long time based on the transaction hash
as well and other things.
So like, when did you guys look at how it was working, how it was taking place on other
blockchains, the people that were using the blockchain natively to create that randomness.
And then we were, we were able to implement that because Cardano works fairly uniquely.
So we had to, of course, adjust that to work for Cardano and implement that.
So you guys are not using a third party for your randomness?
No, we're using, yeah, we're using our own system to do that, but we're using, it's all
publicly verifiable.
It's all open source, is it?
Not the code itself, but all the block hashes that we're using for the randomness are.
So we post those block hashes with the lottery.
Right.
Okay.
Do you time it like with certain like prices of assets at certain specific times as well?
No, we have a use for that complexity.
I could actually see a use for that complexity though, within the Cardano ecosystem, if you
guys are able to supply that.
I'll tell you what, Steven, I'll have to go and chat here.
We did a randomness summit, I think about two months ago now, Bruce, nearly two months
ago, right?
Yeah, it was two months ago.
It was the 20th of March.
We had API3, we had NOIS, we had MOL, because that's what we were into, Steven, our project,
we were a gambling project, well, a gamification gambling project, and we're it, so the noise,
the guys locking up here, and we're into randomness in a big way, right?
And we had a massive summit, and the stuff that API3 are doing is like really cool.
Really like high-level, high, like way above what Chainlink are doing.
So when it comes to randomness, I'm always interested, but I'll have to send you this
summit, and we'll chat later about that.
That might be a different show, yeah?
Absolutely.
Send it through.
I'd love to have a look.
Of course, bro.
Right.
Eric, let's get to this one, Bruce.
Eric's been working.
I mean, I don't even know where Eric's been.
Has he been in the basement for like six months or something?
So, Eric, give us a precursor as to what it's taken to be able to even get in the mindset
of creating these tokenomics.
How hard has it been?
We know there's been delays with Archway.
So is that one of the things, is like the development, like what we've seen of proof
of stake and how bad it's been going in some areas?
Like, are you guys just literally, not making it up as you go along, but is it like your tokenomics
has been based on the development of what we've seen of the previous fuck-ups with proof
of sticks?
Yes, not enough.
I don't know.
We take a lot of really good steps with Archway.
It's not as many steps as I'd like to take, but again, I want to bring out cars and people
want faster horses.
So designing tokenomics is easy.
You just think about what you want to do and you itemize the fastest steps to get there,
line incentives, make sure it's safe from attack in every different way, shape, or form,
and then package it up in a nice little package.
Again, we just dropped the econ paper today.
It is live on the website now where you can go over that with Archway.
The biggest hiccups for me is waiting for everything to get developed as well as then
protocol changes.
So I'm not a developer.
When I have something in mind, like you go through the AstroVault white paper, the formulas
that we use are not the initial ones I wanted.
The initial ones I wanted included fractionalized exponents and they could not code decimals in
the exponents in Rust for what I wanted to do.
So I had to adapt to what will also work that can be done.
And for Archway, I had set up this really, really cool tokenomic model with adjustable
max gas per block based on demand.
So similar to the EIP-1559 type stuff we have in place, instead of just price of gas fluctuating
with DeltaPog, there was also a Delta max gas component.
And then after being completely done with this and mostly done with the econ paper based on
it, they're like, hey, we can actually make the blocks time recursive where the block time
is factored in directly and then we can mint the proper number of tokens and then we can
just like set upgrade to seven o'clock instead of random block height.
And I'm like, this is genuinely way cooler.
None of what I had designed can carry over to be time recursive.
It's no longer safe.
If you have too short of a block time, now it's going to demand more for dev inflation tokens
than was even minted.
There are too many hiccups that we're going to have to redesign this to make all the formulas
time recursive and I had to go back and redesign everything.
And that's what you see now.
So that's a lot of the hiccups, just what's possible.
What do people have time to build?
And then since we're focusing on this, we haven't got to the governance stuff yet where
we're going to have things like actually have staking rewards incentivize securing the
blockchain, which is somehow radical because nobody's actually done that.
They just all say that's what's being done.
So there's a lot more to do.
It's just, yeah, factoring the time and then what people have time to build.
Go on, Steven.
I just want to say I love listening to you here.
I love listening to you talk about problems like that, Mike, because I've spent the last
two and a half years just going through endless lists of them.
And you just get faced with something.
An example, when we were building our vaults, essentially the only way the Cardano, of course,
our blockchain, the way that we have to count on the blockchains are different because we're
dealing with different blockchains, right?
On Cardano, we had to deal with counting in blocks to be able to create block time.
Well, like block time.
But when we're creating payouts, decentralized payouts in a stake, we can only count in units
of block time.
And because we have to link the amount of Lovelace or the amount of tokens we're paying out the
block, we actually have to count on a base unit of time Lovelace.
So our base unit actually incorporates time and Lovelace in the one unit.
So as I adjust my Lovelace, my time counter starts adjusting as well.
And I'm starting to count on a different clock as I adjust my payout rates.
So it turned out into just trying to balance like all these different decimals coming in
from every time we're changing our payouts, we're also changing our basis of our time,
like our clock.
It was an absolute mess.
And every time you do something like that, there's at least one more attack factor,
one more layover of risk, and then you have to set up all the different fail safes that
a lot of projects just flat out don't have because they're designed by developers.
They're like, oh, this does this.
And I'm like, well, what if it doesn't?
Under what circumstances does it not do that?
Staking derivatives.
Yeah.
And people haven't even asked me yet, like how staking derivatives work on AstroVault
when we're an application, not an L1 ourselves, because L1s can have modules for staking
derivatives, and we have to do things as an application, which makes it way, way harder.
And we have to do it fundamentally different than everybody else.
And we are, and once interchain queries and interchain accounts develop, we're going to
have to migrate a lot of the stuff, and we can migrate it properly without having to
redeploy pools.
But we've had to set all this up behind the scenes, again, without VC money, because people
are, yeah, silly.
So we have done so much more than people recognize, and it's frustrating, but at the
same time, every day is a puzzle.
It's fun.
That's part of, that's the fun part of building, of building something.
You know, every day is a puzzle.
And I was actually having a chat about it with one of my colleagues today, and I was
like, man, it's so incredible how complex everything we're building is.
And then he looks at me, and I was like, well, it's not as complex as an oil rig, is it?
Particularly an offshore one.
I'd say one thing, too, to add on to what you guys are saying, is there's this misconstrued,
there's like misconstrued opinion in this space, and I think it's, it comes from a place
of good heart, because I think people get in the space, and they want to build something
that they want to build.
But I think we lose the plot on like traditional business, like people launch businesses as
well, because they believe they can anticipate making profit in the future.
Sometimes some ideas are great ideas in theory, but when you actually launch them, where
are you going to find, you know, your target market, or where you get, like, people don't
do traditional, like, business thinking, or traditional, like, somebody, I wouldn't, you
don't need an MBA to understand business.
Like, if you don't have an audience, if you don't have a community, if you don't have a
consumer, there's no sense in launching a product.
Even if you liked it, and it's something you enjoy, I think, you know, it's cool in theory,
like, again, like, I've, I've, I always wanted to be a professional athlete, but like, I
didn't know, I didn't think it was viable, because I didn't think I could make any
money, like, I didn't do it, because I, I have to pay bills, and I have to, you know,
I have to live life, and I have to be able to eat, but I think some, for some reason,
these big community pools give people money to think, well, you know, this guy has an
interesting idea, and he comes up with all these complex, you know, things on how, you
know, it's going to bring back money to the chain, and if you really look at it, the
bare bones of the business, how is it going to make money when that grant runs out?
I think that's that syndicate, when we were starting to think of, it's like, well, you know,
if we do make this bright marketplace for, you know, Harbor, is it actually going to
make money long term?
Are people actually going to use it if the Comdex platform isn't going to have the users
that we think we're going to have?
And we kind of thought and stepped back and said, okay, you know, we could think of other
products that could actually be usable and make money without, you know, VC funding, without,
you know, grants from a community pool.
But then, again, where Eric is saying, you have to get some sort of VC involved because people
don't work for free.
So it's this balancing scale of where you have to have some of an idea that brings value
to you and brings value to the project, but as well brings value to the chain that you're
working on.
And that's, I think, is the most difficult part of building is the space is that if you
don't launch a token or you don't have a, you know, a place of, you know, accountability,
because when you don't have a token, your revenue is based on how much platform you're
at, your job, your, your revenue is based on how much platform revenue that your platform
generates, not how much the FDV of your token is, not how much the value of the LP on osmosis
is, not, you know, the value of the stake rewards on the blockchain, which Eric and I
both agree are bullshit because you're paying these, these validate, these validators are
essentially your, your, your, your token.
I think validators are this in my sense, and people can maybe question this opinion.
I think validators in the, in the crypto space are important because they value security,
but it's no different than like paying the people at your company or your cyber security,
a shit ton of money for securing.
Like it doesn't happen in traditional business.
Like the people that provide security are important, but they're not the stakeholders
of the company.
They're not running the company.
They're not making decisions for the company.
But for some reason, in the crypto space, we want to change the directive of business
that has worked for centuries.
And this new point of business where you have these people that are super responsible for
the future of the chain, making all the decisions that don't, I mean, understand how to run a
validator node, but don't understand traditional finance or don't understand economics or don't
understand all these complex ideas.
And I think Adam Accelerator got it kind of right.
I know it's self-elected, which I don't necessarily agree with, but you should have these separate
entities that do separate things.
And I think those people should be responsible for the majority of the decisions.
And then obviously the validator should be somewhat compensated for the security they
provide to the chain.
So I know that was a lot to unpack, but I know Robo's got his hand up.
Jeez, Mike, I'm just going to be very honest.
We're an hour in and we're always like, you know, very courteous towards our guests,
as you should be.
You should know where they are in the world, what time it is, et cetera, et cetera.
And it's midnight for Steven.
And there's something I really want the community to hear from you three, big brains.
And I think it's incredibly important at this stage.
Guys, the noise here, man.
Honestly, Bangkok's mental.
Right.
Airdrops.
That's all I'm going to say is airdrops.
You know, we've seen them.
Right.
I'll give a bit of context.
We've seen the model evolve within Cosmos, you know, before all you had to do was stake
like 10 at a minute and you got that airdrop or whatever.
Then we saw like the gamification with Stargate, you had to buy NFTs and you had to stake something
to get like, you know, 20%, 20%, 20%.
Don, Don Kryptonian, who's a voice in on the industry, he's very big on saying that airdrops
and the way that they've been contrived is an after effect of the ICO sort of crisis and
situation of 2018.
So, basically, he's saying like, what happened in 2018?
We saw the ICO shit.
We saw the, you know, the Howie Test, the security shit, blah, blah, blah.
Airdrops are just a way for founders to be able to like get around the ICO shit that we
saw.
I don't need, I mean, I'm going to go to Eric first on this one.
Eric, you've been around Cosmos with Archway.
Obviously, you know the story, et cetera, et cetera.
We've seen a lot of stuff.
So, airdrops, scam or no scam, are there a way for founders just to be able to cash
out quickly under the radar?
Talk to me about airdrops, Eric, will you?
I don't think airdrops necessarily help founders cash out.
What they are is they are a marketing budget where you get to pay in tokens instead of cash,
which teams have a plethora of tokens and they don't have cash.
So, on one hand, yes, it is better to pay in tokens wherever you can pay in tokens if
you're a startup that launched a token.
Now, if you're getting a solid ROI, like usually you're giving out a ton of tokens and tokens
are potential sell pressure.
Now, you're seeing them migrate to try to set it up so that the potential sell pressure
is never activated to be kinetic sell pressure or else the tokens just get absolutely destroyed.
But I don't know if that's the best way to market.
I think things like Crew 3, like Bonus Block, you can probably get a much higher ROI getting
the activations you need on a lower budget.
But at the same time, it does also diversify.
People don't care about the token unless they have it.
So, it is kind of this activation where you're able to grow a community, but enough people
to care about your projects.
Right, right.
Okay, well, Eric, sorry, you mentioned community.
Come on, then.
If you look into tokenomics, and I mean, I know tokenomics vary greatly.
What is, you know, a required amount or an acceptable amount?
Because we've seen about, you know, the community gets like 2.2% and the community go fucking mad.
Then the community's like getting 20 fucking 2% and they're still going mad.
You know, where's the line where this distribution actually has like the impact that it's supposed
to have?
Yeah, 22% is way too much.
I like somewhere between like 5% and 10%.
That's pretty high.
And if so, you definitely need to have things decently staggered.
You need to diversify to a bunch of different groups.
I think we just launched our Archway token distribution allocation paper.
It's 6% reserved for airdrops.
4.5% will be in the first airdrop.
We'll have the terms come out decently soon about what different sections of people will
qualify for it, but we'll have a low whale cap.
So if you've got 100,000 atoms stake, it's not going to give you any more than if you
have 2,000 atoms stake.
Stuff like that, where you try to maximize how many people get access to tokens and lower
the amount of tokens they get access to.
Eric, what's the worst airdrop you've ever seen?
Very quickly, before we bring Steven in.
Stride.
What's the worst?
Oh my god, I heard that.
That guy, that was really quiet.
Steven, you're up, dude.
I don't like airdrops.
I've never been a fan of airdrops.
I try to avoid implementing any airdrops in tokenomics unless they're absolutely required
for certain reasons.
With respect to their function, I agree with what Eric said.
They're certainly designed as a marketing tool.
They're an outlay to the project.
They're not a profit-seeking endeavor.
It's mostly because, exactly as Eric said, if someone's not holding the token, they're
not going to care about the project.
The way that I like to look, particularly when I'm looking at projects, either assisting them
designing tokenomics or looking at projects that I'm interested in putting money towards,
I always like to think of an airdrop within a context because the airdrop in isolation is
just throwing out tokens, right?
So essentially, it's an inflationary mechanism that's only going to push down the value of
your token.
For me, an airdrop needs to be implemented alongside a sink, right?
So you have faucets and sinks.
You've got your release of tokens.
You've got your sucking up of tokens.
What is the sink that is being corresponded with the airdrop that's going to allow that
amount that's being sent out to, at the same time, be used for something that isn't just
selling or isn't just holding and waiting to sell?
An example of that is a, you know, just a really simple example is a time lock vault,
right?
You know, we'll pay you a flat 15% for holding it in a vault for three months.
So then 15% or 20% of the airdrop, go put it inside that vault.
That's a really simple example.
And that's if it's a huge airdrop, you know, that's, I'm not giving specifics here that
necessarily work.
But depending on the size of the airdrop, you want to ensure that you have some kind of
sink mechanism that's accompanying it that's going to be able to maintain
some kind of stability to that total inflationary impact of that airdrop.
For me, if I don't see any kind of stability mechanism being implemented alongside or within
a decent amount of time, you know, within a fairly short time of the airdrop, that to
me is generally a red flag for an early investment in a project.
Oh, I'll tell you what, I've got a, I've got Joe in the DMs.
Oh my goodness.
He wants you on a show, Steve.
And I'll tell you what, you've impressed.
Like in our community, in our little world, you've impressed a lot of people tonight.
Mike, yeah?
Yeah, I'll go, I'll go on and on, on Eric's point is that I agree that it's a, it's a
marketing budget.
And if honestly, I agree with it because if you can pay with cheap tokens and you, instead
of having, you know, money, like actual dollars and paying with dollars, I like to look at
everything as CapEx and OpEx.
I'm, I'm a finance guy.
I don't, I don't look at it other than that.
I think, you know, tokens and airdrops, that's capital expenditure.
You're literally spending capital to acquire users.
And it's, it's a marketing budget.
I think they're done in a way in the crypto space where I don't necessarily agree with
them in the Cosmos ecosystem somewhat, because you have to stake other tokens to get the airdrops.
And then at that point, people can just say, well, I have Juno, I have stars and I have
these to maximize my airdrop efficiency rather than actually believing in a project somewhat.
I think like Paraswap was one that actually people hated the way it was done, but Paraswap
did it when they discriminated against a lot of users that didn't really use the product.
And like you had to do a certain number of swaps and actually use the platform to get
the airdrop.
So it prevents, you know, a lot of people airdrop farming.
I think it doesn't prevent everybody because some, some people are just absolutely malicious
when it comes to airdrop farming.
But I think the way that the Cosmos ecosystem, it is, it's like, you know, you staked all
these other tokens necessarily that you, I wouldn't say necessarily don't believe in,
but, um, you know, you stake to maximize airdrop efficiency.
And like Eric was saying, like the way that stride did, did it isn't necessarily the best
way to do it.
I kind of liked the way that neutron did it, where you had to vote on, you know, the specific
proposal that launched, you know, ICS and, and, and to onboard neutron.
So people that actually were paying attention to governance and stuff like that are the
ones that are going to be able to be eligible for the airdrop.
So I like it in the sense of the way that you actually have to participate in what crew
three kind of does is, is, um, you know, makes people do these certain tasks to be able
to even be eligible.
And I kind of align with that and the sense of the, yeah, there's a pay to play when it
comes to airdrops.
Um, I'm not necessarily against their forum kind of like credibly neutral when it comes
to it, just because I've seen it done in a way where it's super predatory, kind of like
in the way of the reverse ducks auction with rebus and a few of these other protocols that
did it like that.
It's like, well, you've got this massive airdrop now provide liquidity.
And now these pool rewards are going to go to a hundred and everyone is paying influencers
to do all this shit.
I just, I think there's a lot of scummy shit that goes on this space that just goes unnoticed
and people would get mad when like, I bring it out and bring it up about like, you know,
territory and all these tokenomics.
And I talked to the territory founder, like I was like, listen, you guys cannot inflate
the supply 500%.
Well, it cliffs off after X amount.
No, it doesn't make sense.
Like 500% is never feasible.
Like it's not like it's, it's off revenue.
If it's revenue and your revenue is that high, holy shit, man.
Like I'm going to buy, buy your company 10 times over.
No question.
But for some reason, the crypto space we've got, we've gotten to this inflationary rewards
mean that, you know, you hold your state.
It's not stock options.
It's not hyperinflation with max supply.
Yeah.
Get it, get it.
Yeah.
You get a huge percentage.
Well, no, no, Eric, they compare it to, yeah, they compare it to like stock options.
No, it's not.
No, it's not ESOP.
It's not, it has nothing to do with it.
It's not even close.
What you hold your governance power for what your governance votes really matter.
I mean, a lot of people were against a lot of props and didn't matter because the validators
voted opposite.
I'll say, I said what I said, you know, I'm, I'm, I'm, I'm done talking about it before
I take this space another four hours.
Bro, it's much appreciated, man.
This is the reason why we invited you or handled a, I can't, I can't talk right now, but yeah,
we basically made this space, uh, on the comment that Mike wrote to Eric about financial reports
and breakdowns and more reports and more reports.
So yeah, Mike, just keep talking, bro.
We still haven't seen, we still, we still haven't seen that though.
We still haven't seen any of that.
As soon as like, you know, physical responsibility, Mike, is that what we haven't seen any kind
of physical responsibility whatsoever in like, I mean, cosmos is like, you think Ethereum
is a wild west?
Cosmos is, Cosmos is fucked.
I mean, this Dow Dow shit and this like solar Dow and what, you know, these guys just like
printing their own tokens out the thin air, like nothing back on the project.
And oh my goodness, we are so far away from being like a normal kind of regulated environment,
right?
Nobody's going to take us seriously.
Nobody's going to take us seriously until there's actual financial preventives and backbones
built in this industry that can actually solve world problems other than what Bitcoin's
doing right now.
So I think Ethereum ecosystem gets a lot of hate, but I always say this, gas is expensive
on Ethereum because people use Ethereum.
That's why it's expensive.
It's not expensive because, you know, well, it doesn't make sense, EIP 1550.
No, it's expensive because people use it.
That's why people pay for gas.
From a tech perspective, I'd argue that means you should improve your scalability.
Yeah, but that's why L2s exist.
And that's why ZKs exist.
And it's FAT protocol thesis, which I don't necessarily agree with.
But then I kind of side more with it because the ad chain thesis requires, well, it doesn't
require you to have a token, but a lot of people think that you need to have a token.
And I think that's what ICS is solving a lot of.
And you see Noble and a lot more of these chains.
And the people that argue that you need a token are kind of the ones I'm like, you know
what, there's a reason why they're doing this.
And I don't necessarily agree with it because they don't believe that their company can
be profitable in the future.
That's why they need a token.
And that's where I kind of align with this.
If you think your company is going to be profitable in the future, your protocol, I like to say company
because I view everything as a company.
I mean, if you're an enterprise and your expectation is for profit, kind of like I think when you're
investing in a token that doesn't have revenue, you're expecting revenue in the future.
And I would compare that to growth investing and traditional investing versus like a VE
curve position or a curve position where there's already revenue being distributed and you
already know revenue is going to exist.
So you're not going to see the multiples because, you know, people understand that there's
distributed revenue versus, you know, you buy some meme token.
I wouldn't call it meme token.
Let's say you buy a DEX token, like let's say Wi-Fi, you know, Stephen, to compare your company
to example, a protocol.
You know, you said that you aren't making as much revenue as you think.
You know, as you think you should.
So if I'm going to buy Wi-Fi token, I'm assuming that you're going to have more revenue in
the future, meaning that I expect a token price to appreciate significantly once that
revenue is present.
That's no different than, you know, growth investing in today's market where, you know,
Tesla or all these companies, you know, they're making money now.
But in the like in the in the early days, I mean, they weren't making any money.
I mean, if you look at the EBITDA of some of these companies, like they had negative billions
of dollars of revenue per quarter.
It was nuts.
So I think I think that's kind of where you have to look at it if you're going to buy a
lot of these projects that, you know, don't necessarily have revenue that you expect that
they have revenue in the future.
Adam is in this category where ICS and all these other features that are being added to
it are going to be future revenue for, you know, the Cosmos token, which as of right
now, the only thing that's keeping it alive is security and its market cap and the
inflation rewards.
But there's really no revenue other than, you know, trading.
And I mean, I don't know how much revenue Adam generates, pretty much nothing.
But ICS and all these other revenue streams are going to give it more value in the future.
But Eric, you had your hand up.
No, just giving a thumbs up.
Yeah, I agree with a lot of what you're saying.
But again, there's lots and lots more to go on, but we can always have more spaces.
Stephen, it's been awesome talking to really appreciate your insights.
And yeah, I would love to dive more into on what is like future investing.
Most things, if not all things, I believe would run more efficiently with a token.
That being said, tokens are not right for everyone.
But what we're seeing done with tokens is infuriating.
Same with what we're seeing done with what's super cool about the tech and NFTs.
I'm not a fan of how they're just being used right now.
But yeah, the biggest issue that I think, just a change to NFTs for one really brief second,
and also tokens themselves, I think one really big regulatory hurdle that we really need to face
is how are we able to actually apply contracts using assets that we have on chain?
And until we have a regulatory, and you could have an entire space discussing this question.
I've been in multiple workshops where we're discussing this very problem, the entire bloody thing.
But essentially, if I purchase a home, we're using an NFT.
How does that NFT actually convey the responsibilities of a homeowner just by holding it in my wallet?
And it's very difficult to apply NFTs as financial instruments
until we actually have clear regulatory guidance
in which we can actually say the blockchain is behaving as a contract to a certain degree on a legal perspective.
Yeah.
You need to get local governments on board.
You have to get – there's a lot of third parties that need to be on board
because like a deed to the House and stuff like that, that's a very complex idea.
I'm just talking about the United States.
But like there's governments.
There's stuff that are in – that have to be incorporated into this infrastructure.
I think that's what Canto is actually trying to do in Nashville.
I mean they could speak more to it than I could.
But I think that's the direction where you have to go where you have to get governments on board.
Like there is no privacy and all – I mean that stuff isn't – I mean I understand privacy is very important.
You know, your keys, your crypto, of course.
But to operate without governments, to operate without the structure that we currently have,
I don't necessarily think that's the right direction because then you come to a point
where there's a few people making the decisions that hold a lot of the stake in the network.
So yeah, sorry I got sidetracked.
But go ahead, Steven.
No, there's nothing to apologize for, mate.
But one of the things that you just mentioned there, this is an actual sidetrack that actually blows my mind.
In America, you guys run all your housing through local governments.
So it's the local governments that control – you have to go to the local governments to put in all the papers.
And each local government controls who owns the house independently.
No, no, no, no.
I'm at in the sense of like property taxes, stuff like that.
Like you can get your house taken if you don't pay your house tax.
That's what a tax lien is.
So I'm talking about more in the – I'm talking about in the more of the part of a third party having a claim to property tax.
Like if you live in a city is a good example.
So I'm assuming most people understand living in a city, you pay property taxes, you pay water, you pay electricity, you pay all these utility bills.
So like the deed of the house is important.
Of course, the ownership of the deed of the house unless you're going through a bank or unless you're going through a mortgage or all these other instruments that you have to go to to buy a house.
Not everybody is buying cash.
There's more than one party that's evolved.
So it's a good idea in the sense of real estate and stuff like that.
But the actual quality of life improvements other than like, okay, if you could change closing to a week or a couple of days to close a mortgage, great.
Huge quality of life because most mortgages take weeks to close versus, well, now everything is on blockchain.
Now I have to worry about all these crazy third parties that I have to distribute.
It's just I think it's a lot more complex in real estate because I think when you own a property, it's a physical asset and you're in a community versus, you know, like Bitcoin, which is a currency and currency is meant to be spent.
I think you're on the right track and you are right where it comes to, you know, ownership of real estate and stuff like that.
But NFTs are not at that point where there's still third parties you have to deal with when it comes like the deed to your house.
What happens when you sell your house?
You don't have to give up the NFT.
Who says you have to give up the NFT?
Nobody.
I mean, really.
I mean, it's a physical, cool thing that you own.
And yeah, here's the deed to my house.
It's on blockchain.
But it's no different than scanning it and putting it in like a Nord locker.
I don't see the physical benefit of doing something like that.
But maybe somebody can educate me because I'm not a real estate professional.
No, you're absolutely correct.
You're absolutely correct.
There isn't any.
And actually, the more thing that I just wanted to say was in the real offside thing that I wanted to say is that in just in Australia, we have a centralized system that manages all of that from us for us called PEXA.
So all of these ownership systems are already managed in one place, which makes our life super easy here to change ownership.
It does also mean that the government controls all of it.
That's that's the problem.
I mean, not everywhere is perfect.
Don't get me wrong.
Like, the United States has a high crime rate.
There's a lot.
There's a lot of shit wrong with the U.S., but I've been a lot of places and I can't say the U.S. is my favorite place.
I mean, biased, obviously.
But I think every every every government, every country is going to have their own problems.
Like it solves a lot of quality of life within it, which is in the United States, there's a massive barrier to entry for a lot of people to buy homes, you know, because it's credit score.
And then you have to worry about your your debt to equity ratio.
And there's there's a lot of shit that goes into the home buying process and all this stuff that necessarily doesn't exist in other countries, which I I mean, I could be totally wrong.
I haven't been buying houses in, like, Portugal or Australia.
So I know I've gone I've gone through the I've gone through the purchasing process through an Italian bank and through an Australian bank.
And I can say it was surprisingly similar.
But then again, I mean, we're all common law countries.
So the basis of our contract law is essentially, you know, philosophically, it's the same thing.
I'd like to stir the pot here and change direction.
Um, I will admit when I'm wrong on something.
And I think that Joe's in the room.
So I do owe Joe an apology where I was I was advocating for a lot of DeFi stuff and DeFi tokens.
And him and I were were kind of having conversation about DeFi tokens and NFTs and how some like most of the time, you know, like what NFTs are somewhat rug pulls and which which which which DeFi project.
I'm like, well, a lot more DeFi projects.
So what honestly, I view them as the same thing now.
I think a lot more DeFi projects are rug pulls and have these these these complex mechanisms that aren't necessarily, I'd say, fair to judge because I even I can confuse it.
I think Eric can probably jump on this point as well, where a lot of these mechanisms seem really smart.
Then you break them down.
You know, like this doesn't make sense versus like an NFT project.
You know, you're just kind of gambling to hope.
I mean, it's just simple, you know, trading is like I'm buying this NFT either that I like it because it looks cool or I'm buying it in the future to hopefully sell it at a higher price versus DeFi tokens, which is like this mechanism makes you get a share of revenue and then you get a boost.
And it's like, you know, I just hello.
Money comes from somewhere and people want new because it's new.
New is not always good.
I mean, that's what I've been saying, but I'm 2.0 tokenomics and I still can't get a message back from the Adam Accelerator.
Now, guys, we would love an email back if anyone can relate this to them because I cannot get a message back from them.
I think Blockworks is working on their their tokenomics, which which I saw, you know, whatever his name is, Effort Cap tweets about Adam 3.0.
So I think that's they went with that route, Eric.
I think I think that's probably what happened.
Adam 3.0 is that where you increase the community tax via a prop like later in the day, then you can fund like what you want.
I don't know.
I think the Blockworks, I think if it is Blockworks, it's great because I think they're one of the few actors in the space that comes from traditional finance.
So I think they're they're I mean, talking to them, they're generally smart people.
Like what I mean, I agree, I agree, actually, actually smart, not like pretending to be smart.
I agree.
All these technical, you know, loopholes.
I think they're actually financially intelligent.
I agree.
But what was I mean, was 95 a kind of civil attack on the fact that 82 got voted down?
Given if you if you I mean, Eric, I'll go to you first.
If you look at their community pool.
So sorry, the community tax increase, was it a stealth like, you know, that 82 failed.
So the stealth in 95 and got what they wanted.
Is that correct or not?
I don't really understand what you're asking.
Sorry.
Oh, sorry, dude.
So there's a lot of us to think that like prop 82 with Adam.
Right.
Which was the main one.
Yeah.
Adam 2.0 prop 95, which was the accelerator Dow combined with the prop that raised the community tax like that.
Yeah, a lot of people say like, I mean, it's 100%.
It's 100% for them to just force Adam 2.0 down everyone's throats.
It's literally run by the people who propose Adam 2.0.
So it's a civil attack.
It's a civil attack.
Is that right?
Okay.
Yeah.
Joe, I mean, Joe's come up, guys.
I did invite Joe because also, I mean, Mike mentioned him, but he's one of the most relevant voices in the ECO.
I invited him out like 20 minutes ago.
Joe's going to come in here with something dynamite for you guys.
Joe, hello.
Joe, hey, just wanted to say I've been listening.
It's a great convo to just be in the audience and hear these guys weigh in.
So, yeah, I don't have anything crazy to add.
Joe, it was 95, a civil attack on 82.
Are you talking about the tax increase, like a knee-jerk reaction to 82 not passing?
And then 95 afterwards.
Yeah, yeah, yeah.
I can't remember what the community tax prop was, but it was like, do you regard that as a bit of a civil attack?
People not getting what they wanted?
The way that I have always felt is if the validators want to take their own revenue and pool a percentage of it together to fund all these ideas, there's no one that will stop them.
The problem that I have is validators with almost no skin in the game using 1,000x voting leverage with other people's tokens to force, basically take money out of the stakers' hands and use it for their own ideas.
I think they should fund their own ideas.
And if they have to raise their validating fees to do that, there's no problem there, in my opinion.
I wonder if Stephen can just maybe enlighten us a little bit.
Stephen, what's the situation with developer funds and grants and governance on Cardano?
How does it work?
We've got absolutely so many of them.
Most recently, we had a situation with a project called Liquid, where Liquid realised they designed their lending protocol and they designed their pooled emissions, completely incorrectly.
As a result, they decided that they were going to pause all the pooled emissions to the community.
But whilst they were pausing all the pooled emissions to the community, they continued giving the team their regular monthly payouts.
So essentially, the entire community just went, wait, what?
So you basically just stopped paying us out rewards for providing liquidity and you're just taking all the rewards for yourself and dumping us.
And their token went from being the second ranked on Cardano to now the 20th.
Wow.
So you've got as many problems as we have.
Can I weigh in on Liquid?
Liquid, I think the Liquid team very early on positioned themselves, even before Cardano had smart contracts, as the expert DeFi platform.
They were going to build all this cool stuff.
People waited two years for the protocol to actually launch.
They started selling NFTs clearly to fundraise with no actual benefit.
The person in charge of Liquid is also an advisor for Sunday Swap, which was a DEX that launched early on, maybe the first DEX.
And I don't trust anything coming from that team.
Sunday Swap to me is just an extraction of value out of Cardano.
And this guy that we're referring to, he was an advisor for Sunday Swap.
He was involved in another protocol where he sold tokens that were supposed to be vesting ahead of schedule, lied about it, got caught with on-chain data.
So that means...
He sold 200,000 Cardano's worth of Indy that he wasn't allowed to sell due to vestiture.
And he lied about it.
Somebody went through the transactions and found it.
Cardano's really the wild west as well, I would say.
And it just doesn't have to be this way.
It's when you have a bunch of people that are like 20-something years old that claim to be reinventing the financial system because it's so much better than fiat with absolutely no experience and no track record.
People put their trust in it.
Oh, there's a token.
It must be good.
Oh, it's new.
Sorry, sorry.
I interrupted there.
That was rude of me.
No, good, good.
Go ahead, Steven.
I just want to say another thing that I've really noticed, you know, within that, even Sunday Swap, right?
Sunday Swap had their entire deal that they had with, I believe the name of the one was Cardstarter, where they basically, Cardstarter was building a DEX.
And then they said to Sunday, they made a deal with Sunday Swap where they basically said, we're going to stop building our DEX.
And instead, we're going to merge all our liquidity with your DEX.
And in return, we get, I believe it was 20% of their token supply, something like that.
Don't count me on the numbers.
It was a large percentage.
And then at the time of merger, something's not basically just turned around and said, we're not going to want our contract and we're actually just going to give you 1% and all your liquidity can get stuffed and screw all your community.
I mean, things like that.
It's really acting as an adult within a business, right?
You need to treat it like an actual business.
You can't act as, like you said, like a 20-year-old.
It's like, oh, we made a deal, but we're going to renege on our deal.
No, you're a business.
You've made a contract.
And notice, I'm not going to use the word rug pull.
I don't think these are rug pulls.
I think they're just planned really badly with a bunch of inexperienced people who happen to be.
They're stupid kids.
Yeah.
I mean, they turn into rug pulls after that.
When the rubber starts to meet the road, they turn into rug pulls.
And it's unfortunate because I stopped dealing with Cardano after interacting with the Sunday swap team a few times.
I was like, man, these guys are liars or they're really stupid.
And they're probably both.
And they will never answer questions in their own discord.
They lie about the tokenomics.
And then when I realized, like, oh, wait, this is the same team as Liquid, the same guy that's involved in Indigo.
I said, this is just one dude who's connected into everything who doesn't know crap.
What was the guy on Solana that did that?
It was like one guy in Solana made like 20 apps.
But Joe, literally you hit the nail on the head and people get mad at this.
There is something to say about work experience, about life experience that you cannot, you can't teach.
You know, I don't know how old a lot of people in here is.
But, you know, Stephen is, you can't teach years of being at a hedge fund.
You can't teach that.
Like, you can't be, you know, you can't teach being in 10 years of, you know, I've been in the financial services industry for 10 years.
Like, you can't teach that.
You know, there's people that are 10 years ahead of me that stuff I won't know that they have work experience and have seen and dealt with shit like that.
It kind of reminds me of the Rari Cap and Faye situation where you had these young developers, Joey Saldano and the Rari Cap guy.
I can't remember his name where you had these young brainiac kids that were super, super smart.
And everyone's like, bet on these young guys.
And then it came to a point where, you know, there's a hack, there's a Rari hack.
And you expected these guys to act, you know, act smart and act like they knew what was going on.
And as soon as that happened, the Rari Cap guy said, fuck this, I'm running away.
It's like, well, you're the smart guy that everybody was betting on.
Like, we thought you were really smart.
You pictured this really smart guy and you're 17 years old, super coder, web developer, you know, brainiac kid.
But, you know, they lack life experience.
And I think that's one of the things in the crypto space where I think we need to realize that, you know, there's a lot of pressure on younger founders.
And they need to understand it's okay to have other team members.
It's okay to ask for help.
It's okay to build a brain trust of people that are really smart around you.
Like, I don't know why people don't do that more.
Absolutely, Mike.
And it's a thing that we have, it's a topic that's been up many, many times.
Like, the crypto and the Rep3 space is so fucking unique in the way that there's so much money in the hands of people with so little life experience, so little business experience, so little financial knowledge.
Also, I just want to make a quick shout out to a very special lady down in the audience.
She knows who she is.
Anyway, man, how do we onboard more financial experts into the space like the three guys we have here, right?
I will say one thing is that, Stephen, I'll take this question real quick.
Like, as the people that aren't in the space are not in the space for a reason because they have good jobs outside the financial space.
And that's why there's not as many financial people here.
And, like, I'll say – and I said this before for the people that aren't in the audience.
If it doesn't work out in crypto, I will be completely fine.
I love what I do on a daily basis.
I get to serve others.
I understand, you know, finance.
I get to help people save for retirement.
I enjoy what I do every freaking day I wake up in the morning, you know.
And I'm a business owner, so I get to work what I want, you know, when I want.
I'm in the space for truly one reason, to help contribute to the greater good.
And if it doesn't work out and syndicate doesn't work out, nobody gets hurt other than syndicate because there is no token.
So there's no fiduciary responsibility to – you know, people might get mad that, like, oh, this product sucks.
Then don't use the product.
You know, it's not like you have the token and you're anticipating the token to go up.
Syndicate takes all the risk, just like a traditional restaurant business, just like a traditional, you know, software business or any other business.
You lose based on people not consuming your product, not the stock price or token price.
Go ahead, Stephen.
Let's get Stephen in before we bring Lord Seppi in.
Go on, Stephen.
What's your reply?
Well, I was – this is – I've got two replies now.
The first one, it's the myth of the young entrepreneur, right?
You always hear news stories about the young entrepreneur, but it's not actually much of a real thing.
The average age of a successful entrepreneur is in their late 40s to early 50s.
The reason for that is because it takes you 20, 25, 30 years within the industry to build the wealth of knowledge that's required to truly differentiate yourself in some way within your chosen field
and to be able to apply that knowledge in such a creative way that you're able to build a product that builds a competitive advantage over others.
That's not a – you know, the myth of the young entrepreneur is sort of something that pervades the common mythos,
and it's something that is incorrect.
It just doesn't bear itself out in reality.
The next one is – I absolutely understand what you're saying, mate.
Absolutely, the biggest gap to getting people like ourselves working in this industry is that if you've got a successful career,
it's like there's not a huge incentive.
I've taken a massive pay cut coming to work in this industry and running my own project, right?
Like I would make a lot more money working in private industry than what I make now.
And I don't regret that decision because, you know, you do get to live a life where you're building something that you love that's yours.
But at the same time, you know, if you enjoy the work that you're doing and you're doing something that activates you,
the amount of stress that you have to take on to become a project owner is very high,
and it's often not worth the payoff, you know, even if it is successful,
to just being able to do, you know, your job as, you know, going to corporate if you're a lawyer
or if you're an accountant or if you're a trader, if you're an investment banker.
Yeah, I respect that too because it takes a lot for somebody to come in the space.
And honestly, like the chances of succeeding is very slim.
And it takes a lot to be the man in the arena.
It's one of my favorite quotes is that, you know, the glory doesn't belong to the people that say the guy,
you know, you failed, you couldn't do this.
It belongs to the guy that actually took the risk to go and do it.
And that's why I have a lot of respect for people like you and other builders in the space
that are actually in here to say, you know what, let's give it a shot.
And if it doesn't work out, great, you know, at least I tried.
And that's kind of where we're in that same mindset of where, you know,
we don't want to launch a token because we don't want to have the fiduciary responsibility of, you know,
taking token holders' opinions and stuff because, again, we're just in here to make money
and build a product that onboards users and gets more people familiar with the space.
So hats off to you, Stephen.
I do appreciate, you know, people like you in the space that are building, you know, products
and taking a pay cut to do something you love.
Thanks.
It means a lot to hear.
You know, it's a lot of work and you don't know if it's going to pay off.
And you just, it's about the love.
Like, I am very passionate about DeFi.
And I guess, you know, you guys were discussing this earlier.
I do believe that DeFi can act as a force for good as long as it's designed correctly
and implemented in a way that's a force for good.
I mean, it's very much like any other tool where, you know, I can use a hammer to beat
someone's head in or I can use it to build a house.
So my big, and that's where I agree with what you guys are saying, right?
The biggest problem we have right now is that particularly through governance structures
or through the way in which the communities discover projects often, you know, whether that
be through influencers and the general understanding of tokenomics within the industry essentially
makes it a lot more difficult for the average person who wants to build a project to be able
to make or implement this hammer for good, right?
Because we don't have a consensus understanding in the best ways that these things should be
implemented, or we don't have a consensus understanding in how these economics truly
play out on a large scale because we're still smaller than, you know, Apple for all of crypto.
Oh, I love Steven, mate.
I love Steven.
I'll tell you.
I was in the DMs with Steven like for five minutes or something.
Then we were talking about the Civil War in Cambodia.
Like, he's such a nice guy, I'm telling you.
You can tell these people how nice they are.
Guys here...
Absolutely, absolutely, Robo.
But I don't think that you love Steven as much as I love Eric.
Oh, I know you're Eric's biggest fan.
Oh, Eric, Jesus Christ.
I mean, you were his first interview.
You know, the first love.
I mean, he's proper love.
We would say in English, fuckstruck.
But I mean, I'm not going to go there.
I wouldn't do that on a professional basis.
Your man, Sefi, he's come in and he's always on point.
Sefi, you've got three big brains up here.
Have you got any questions?
We didn't want to diatribe.
We want to question some.
No, I think a couple of things.
Like, Steven's on...
When he mentioned much earlier, maybe...
I don't know, it's been about 45 minutes ago, about the token sync concept.
It's like, yeah, if you have a way with anything from airdrops to anything else to create some
sort of demand and holding pressure for the coin, that makes sense.
Like, it has some performance function.
And if the function is simply to engage people on the platform, that's one function.
If the token is used to play some game within the system, that's a different thing.
If the token is used to buy something that people want, whether it's an NFT or whatever in the future, whatever.
Like, these are sort of demands that might come in the digital space where you tie the token to some sort of demand.
Okay, like, that's one thing.
The second point, Robbo, you were mentioning about Adam 2.0.
Like, just because a proposal on the first run doesn't pass does not mean you can't put the proposal forth again and again with revision.
So I think what happened with Adam 2.0 is the criticism they got was, well, you know,
if you put all these things together and wrap these half dozen things into a big package, there's no oversight.
And, you know, we need to, like, break this up into little pieces.
So pretty much with the community feedback, that's what they did is they kind of redesigned everything
and then kind of attempted to kind of deploy things in smaller chunks.
So I think what really all you're seeing from that is just what the community asked for on the various forums and whatnot.
It's not up to the people who want to do something to give up just because the community says give up.
You can always revise things and then float it again.
And if it doesn't pass vote, it doesn't pass vote.
That's just how life is.
But, like, it's easy, I think, relatively speaking, to be a naysayer about everything all the time.
Most people that do that all the time just basically just have fun staying poor.
Like, if you innovate nothing and you accomplish nothing, that's also kind of, like, a pointless –
like, if you want to be Don Kryptonian, for example, and just, like, be negative all the time, guess what?
You're going to stay poor.
That's how life works.
Like, if I was a naysayer about everything, if that was a naysayer about Apple, I would be poor now.
If I felt like, oh, modern medicine is never going to work and, like, I didn't become a doctor, I would be poor now.
So, like, you know what I mean?
Like, you could come up with hundreds of reasons.
And, by the way, like, in the early computing space, like, you know, a lot of computer companies went to zero, literally.
And so, like, you will have some winners in a space over a course of 10, 20 years.
And most of the companies and businesses around any new tech are going to die.
Even if they're run reasonably well, they're going to die.
Like, you know, like Nokia, where are they at now?
Yeah, exactly.
Rest my case.
Basically zero.
They're dead.
Right?
So they were producing good products.
They were producing good revenue.
But, like, staying power and all of that is a difficult thing to achieve for anybody.
And I think the natural, like, life and death processes of these things are pretty normal.
And, you know, the tokenomics and all these things that don't work for specific things or don't achieve the desired endpoints will simply die.
And that's fine with me.
I don't have a problem with that at all.
I think as many people playing around, the better.
And as many of these people lose money, the better.
Like, that's just how it works.
Like, if I go into Las Vegas and I win every time, right, we're all fucked, basically.
Right?
Like, that can't work.
Well, some bold statements there, Sethi.
I mean, Eric's the man.
You're doing good relic if that happens.
Yeah.
Eric's the card counter.
Wait a minute.
Eric's the card counter.
Eric's the card counter.
He's a Vegas man.
So, Eric, I mean, are we in Vegas or not?
I would not insult Vegas that way.
We're in the dot-com bubble.
Is that worse or better?
Is that worse or better?
Oh, worse.
Vegas is fantastic.
Vegas is fantastic.
Yeah.
I mean, how many of these experiments do you guys think we're going to see in 10 years?
Realistically.
I think 99.9% are going to die.
And, like, you'll see Google – not Google, sorry.
Microsoft and Apple.
Like, you'll see two big emerging companies.
Exactly.
And Amazon.
Like, three big –
I mean, and then you'll see some smaller protocols succeed.
I think I'm talking about chains and succeeding.
I think a lot – like, two or three chains will really hold, like, 90% of the TVL in the space.
Ethereum?
Ethereum, Mike?
Ethereum is one of those –
Yeah, I do think Ethereum.
Whether people think I'm an idiot or not.
I think I'm a survival ship bias kind of guy.
If something's been around for a long time, I think it has a better chance of succeeding.
It's kind of like Bitcoin.
It's not sexy, but it works.
And, I mean, Apple continues to innovate.
Microsoft obviously continues to innovate.
But when you talk about a sense of currency, like, you know, why hasn't a competing currency came up to the U.S. dollar?
Because the U.S. dollar has been around for a long time, and it's been strong for a long time.
The U.S. dollar has also been backed by the strongest military in the world's history.
Yeah, exactly.
Well, I mean, that's a different way if you want to argue that.
But that is the reason why we build –
Yeah, well, there's Sethi's point in case.
That's why you build missiles.
That's why you build a strong military as the back.
A dollar is a bad example.
I'm sorry.
But you get the point where I'm saying with something that's been around for a long time.
It's like penicillin is a good example.
You know, penicillin was invented, Sethi.
You could probably, you know, speak on this more than I can.
But it's been invented in a long time.
And it works.
I mean, it –
It actually came from tar, you know, coal tar.
Penicillin actually came from coal tar, believe it or not, in the 1800s.
Quite an interesting story, penicillin, isn't it?
Oh, it was a penicillin.
Oh, sorry, paracetamol.
Shit, I fucked up there.
Paracetamol that came from coal tar, right?
Penicillin.
Penicillin was Howard Florey, an Australian scientist that was the one that was able
to get the first synthesized form.
Hey, you Aussies invented some right mad shit.
I didn't even realize until I moved to Australia.
You invented where?
You invented the air conditioner.
So, Robo, Robo, before you go into full Australian mode, because I know you, bro,
you can just pivot everything into Australia and talk for hours, man.
Honest, we love you.
My point is this, though, that I agree with what Eric is saying, and it is the dot-com bubble,
and you will have emerging winners.
The applications, it's a way – I think it's different than the dot-com bubble,
because you have applications built on top of these internet protocols.
I think it even gets slimmer with that as well.
So, you'll see 99.9% of layer one blockchains fail, and there will be a few that control a lot of TVL
and then some niche market ones.
And then on top of the applications, you'll see, like, three, four, five protocols control, you know,
most of the TVL, most of the business.
So, what those protocols are, zero idea.
You know, I'm thinking that's like everybody else.
So, I just want to – I want to add a little bit of, like, yeah, that's, of course, what's going to happen,
but that's a consequence of the design of markets.
Markets have always got to pull to the center.
So, regardless of how you design any system, as long as you're doing it based on a market economy,
you are going to wind up with the suction to the center where a few people or a few companies
control the majority of the power.
And that is just a consequence of the mathematics of how markets work.
So, unless we can really sort of think of a way to destructure crypto from a mentality of raw trading
and somehow think of crypto more within a societal integration or within a manner in which it's being used
utilistically rather than being utilitarian, in a utilitarian manner, sorry,
rather than just being used as a financial instrument, I think we're always going to find ourselves
with that natural consequence, right?
Yeah.
I was going to say, like, that's why, like, a lot of what I talk about is the game is wrong.
The game is what has to be redesigned because without the proper game theory,
you really just go to what Stephen was saying is basically just monopolies and duopolies and triopolies,
which is the standard for pretty much, like, all of the tech world.
It's the standard for almost, like, I don't know, any industry.
It's an allegority.
Yeah.
It's an allegority.
Yeah.
And Eric, sorry, I was just about to call you Justin Nick.
Like, you're the game theory guy.
How can we, how can we fix it, man?
How can we apply better game theory to this problem?
Earlier in Mike's, I mean, you start at the end.
You start with the goal.
Earlier in the conversation, Mike had talked about how, like, he'll trust NFTs when, like,
they actually can have enforceable contracts and instead of just, like, a deed NFT, but
then they're still actually a deed when there is actually the deed on chain.
We do know what kind of problems at this point crypto can solve and will solve.
It's a matter of bringing those to light, discovering new problems that it solves, but
also bringing the problems it's supposed to solve and actually solve them and actually
get integration.
And then being a part of the projects that do that.
Uh, it, it, the crypto framework 10 years from now looks very different than what it
looks like right now.
Uh, we all talk openly about 99.9% failing, but then we're all shocked when things like
Terra Luna collapse.
So we do have to know what this is.
Hold on, hold on, hold on, hold on, hold on.
If you're going to do a stable coin and Sethi can agree with me on this one, it has to be
under collateralized because there has to be a way for there to be arbitrage.
Number one is seniorized and there has to be a reason to hold it like over collateralized
stable coins.
Don't make sense when the interest rate for markets is 4.5%.
They don't, they don't, all of the stable coins we have are under collateralized.
All of the over, not, not us.
I should, I should have never, easy boys, easy, easy boys.
Everybody easy.
Okay.
The issue with an arbitrage design for a stable coin is that if you implement an arbitrage design,
there's always going to be some net value that's able to break the arbitrage and the
system breaks down, right?
Like that, but you, your only hope to maintain that system is to have the hope that no one
will ever be willing to put the amount of money that it's required to break that arbitrage.
Right.
But there is going to be a point where that arbitrage is broken.
I've only seen one stable coin design ever.
I've only seen one stable coin design ever that I've actually liked.
And it's a DJED, like DJED.
DJED, 400% over collateralization.
Exactly.
Yeah.
And they, they understand when it does get under collateralized and they make the math
public about like, yeah, it's over collateralized for now.
These are the circumstances under which it breaks down.
Meanwhile, what we have in the Cosmos ecosystem is a whole bunch of tokens that are collateralized
by illiquid tokens, collateralized by value, not by liquidity.
Explain, right, Eric, Eric, wait a minute.
Explain US care then for me.
What's your issue with US care?
Isn't that over collateralized?
It's over collateralized by value, not by liquidity.
So the whole, my whole issue with Terra Luna wasn't that they printed their own collateral,
but that their collateral was based on the valuation of Luna, not by the liquidity Luna
had access to.
So, you know, $22 billion worth of, um, worth of value, worth of market cap for Luna, but
you have maybe $100 million of liquidity, dollar-based liquidity that Luna had access
to, means that you really were about 5% collateralized and know that once you access like one or even
half a percent of that liquidity, it's going to cause a spiral to take out of the way the
other four and a half percent.
So you looked at USK, Eric, have you looked at USK, have you?
Yes, I looked at USK.
How did you look at USK?
It's closed source.
I'm just fucking with you.
I'm not, I'm not, I'm not a dev anyways.
They're collateralized by Atom.
And like, yes, I'm happy when it's USCC and USDT, assuming that those versions of USCC
and USDT are able to retain, like, hopefully, like you don't lose actual access and stuff.
But like, isn't it collateralized by a liquid token there?
And even that, it's, it's collateralized by, all right, okay, you're talking about
It's complicated.
Okay, okay, okay.
It's complicated.
Go ahead, Eric.
Over collateralized stable coins cannot and are not designed to scale.
And they shouldn't scale.
Like, where does the money come from?
They're the least efficient.
Like, the, I told people I'll make my thesis known on, on over collateralized stable coins
eventually, the only applications or groups that genuinely, it makes sense to launch an
over collateralized stable coin are groups like Astro Vault, which we're not even doing
this right now.
Maybe we will sometime in the future, but because we have our own autogenic treasury where we
can then do self liquidations when those circumstances show up, where it shows that it is genuinely
under collateralized.
So not only will be like, oh, it's collateralized at 400%, but also we can liquid, uh, self liquidate
up to 70%, stuff like that.
It has to be centralized.
And even then, why would we choose to do that?
Like, it is an incredible, inefficient use of liquidity.
You have to have the liquidity in multiple places at once, which you can do, but then
you move money around the same way that traditional markets do.
So you have to understand the liquidity leverage and, and value things based on liquidity instead
of market cap.
Yeah, I agree with you.
I think, I think most, most CD, CDPs are Euro dollars.
Like they, they, they're, you're basically relying on another instrument, every layer of risk,
every list that you, every, sorry, one more thing, Stephen, before you go is what, every
layer of risk that you add on is more risky.
It's more risk for the stable coin versus like a traditional USDC that is backed by U S
treasury bills.
So why, and, and, and, and it goes in the sense of like, why would somebody hold, you
know, the coin that has a lot of risk, a stable coin, a good example, when, you know, the free
risk interest rate right now with traditional markets is 4.7%.
It doesn't make sense.
So I think, I think it's a good idea in theory, like you're saying, but the problem is, is
that there's gotta be a, like, it's all is RAR.
Like risk adjusted return.
Yeah.
Who's this, who's this theoretical customer?
Go ahead.
Yeah.
It's like, who's this theoretical customer who's going to hold it there without any interest?
That's all it is, is risk adjusted returns.
How much risk am I taking for holding something?
What's their reward?
If it's already a fixed interest rate or a variable interest rate, that's not higher than
the risk free rate, which is the U S treasury, which any money market you can get right now
and get around four, six, four, seven, it does not theoretically make sense to hold something
that is going to give you less than that.
And you're taking a lot more risk.
It is to any hedge fund manager, any risk manager, financial consultant, advisor, whatever
you want to call them, will look at you and like, you're an idiot.
Why would you do something like that?
But for some reason, the crypto space, people are like, well, it's decentralized.
Well, what's the risk?
The risk is that it deep pegs and it goes to zero and you lose money day, day on phantom
just had this problem.
It got exploited.
So, I mean, I, I side with Eric on this.
I'm going to, I'm going to put the hand up, but not put the hand up obviously, because
I look like a player.
If I do that, Steven, I'm well aware.
It's like 10 to one guys.
He's a, he's in Australia.
Yeah.
I've lived in the same city as the guy.
It's 10 to one AM in the morning.
Steven.
Yeah.
You got any feedback for that one?
It's an, I'm enjoying the conversation.
So don't stress about the time.
All right.
No, that's absolutely fine.
No, no.
The only thing, the only thing I'd say is I absolutely agree with you.
What you're saying about Jed, I had that, I was actually having the exact conversation
that you were having or very similar one with the designer, with the head engineer of Jed
at the Cardano conference when two years ago or so, and the way that they've pegged it to
liquidity is, is absolutely brilliant, right?
It's, it is de-pegging to the upside, but that's a known risk that we're going to experience,
right?
And at least from a community perspective as well, if your Jed gets a little bit more expensive,
it doesn't, they don't feel as upset as if it's getting a little, uh, under, let's be
honest.
Um, anyway, yeah, I, I, I agree with you.
I really like Jed's design.
Jed is, Jed is the only coin that I can see that's algorithmically based, but is, makes
sense.
By the way, this, uh, this question of under and over collateralization, I think the, in
the real world, this has been already sorted out in the sense that this is the reason
why the dollar, uh, is not collateralized by anything anymore.
And that was done because the trade-off was the network effect, uh, and like the, the control
effect.
Um, the only way for the dollar to have achieved its current sort of world reserve status was
basically by not having collateral as the basis for it.
So that's where the scalability proof comes in, but like that has side effects, right?
Like if you look at, uh, the national debt today for the United States, it's just weird
and doesn't like, you can't reconcile the fucking thing no matter what you do.
So like, there's a consequence and you don't know that consequence sometimes for 10, 20,
30, 40, 50 years.
And, um, you know, I, but I don't think it's so straightforward to find like, like create
a collateralized version of some sort of currency that people are going to want.
So long as something like the dollar with its yield, um, exists, right?
Like the, like the competition is fierce essentially, and it's hard to, hard to beat that.
You're absolutely right.
Um, and I know that so many people are focused on stable coins.
I'm like completely ignoring that in the industry right now, because I don't think that's where
the future of adoption looks like because the most efficient, like the most efficient
it can be is having 0% collateralization.
It is absolutely a trade-off between security and, um, and scalability.
And so the ones that you can see take off and scale really fastly are the Terra Lunas
where you don't have the security, where it's not actually collateralized.
And that's what makes a good money money.
Like I, there were issues with the gold and silver standard.
And while I'm very much against how terribly we've done spending and speaking as a U S
citizen and what all has happened with a dollar, look at the world, the dollar created, look
at how efficient our world runs.
Um, people are like, Oh, Bitcoin's real money.
No, it's not.
Bitcoin is terrible money.
It's, it might be a good store of value, but it can't be a good money.
If it is deflationary, you need money to devalue over time, to incentivize, um, to incentivize
investment, to incentivize, uh, lack of stagnant or not being stagnant.
And you had to have just massive money printing, but in DeFi, if we're going to build a different
system, you have to understand those risks.
And I don't want to build an ecosystem knowing that I can get rugged at any time from this
unneeded dependency.
And so I'm not going to rely on any type of stable coin like that.
Wow.
Yeah.
The world is, the world is basically a petro agro dollar digital system.
Like it's one big giant machine at this point.
And like the, it's both incredibly, um, like powerful in terms of the types of things that
get produced from that.
Like look at AI today, for example, like these are sort of the side effects of that system.
But on the other hand, the flip side of that is like, it's an extremely fragile system.
Like we're one solar flare away from like complete human decimation, meaning like complete breakdown
of food production and like energy production on this planet.
You're like one little glitch away from just a total fucking planet.
Oh, Sefi, don't, don't, Sefi, don't wreck the buzz.
I mean, don't wreck the buzz.
I mean, I know we're all doomed.
We're, mate, I know we're all fucking doomed and the end of the world is nigh.
And we're, we all, we're all that, but the simple point is like, it's just their trade
offs.
Right.
And this is true.
And if you're building a crypto system too, you can create, like you can trade off scale
for security, et cetera, et cetera.
But there's some fragility that you introduce in the system, um, depending on what trade
off you pick.
And the problem is, is like, none of us can see the future.
So like I might be a AI doomer and you might be a, you know, a solar flare doomer.
And maybe none of those things happen and we get hit with a meteor instead.
So the problem with designing crypto systems is that like, which security problem is going
to kill you or which lack of skill, skill ability is going to kill you.
We don't know a priori.
And that's why it makes it so difficult to sort of design these things.
Like, let's say you're a crypto designer and you're like, Hey, you know what?
I want my thing to grow really quickly.
So I'm going to put together some cool Ponzi-nomics or whatever, and it's going to grow really,
really fast.
Now you could do that, but then like that might have consequences, uh, in terms of like the
longevity of the thing, it might crash quicker too.
So, well, yeah, but so within these trade-offs though, it is always better to choose scalability
over security until it isn't.
And it takes an ungodly amount of time until that's the case.
I mean, have you guys even heard of Jed before this?
No, but you've heard of Terra.
And that's because Terra chose scalability over security.
What did you say?
Right.
I need to double check myself here because we have got a security expert coming on and
it's really security expert coming on tomorrow.
You said that you have to focus on scalability over security, Eric, yeah?
Is that right?
The trade-off?
I prefer, I prefer focusing on security.
However, realistically, it is always the right choice to focus on scalability over security
until it isn't.
And when it isn't, that's when you see giant capitulations, Terra, FTX.
They were focusing on scaling.
They did great.
And all the people who made those decisions got stupid rich by making terrible decisions,
which makes it the right decision for them.
There is a ton of money in running Ponzi's and it's always going to be more efficient
to run a Ponzi than a solid business.
And I hate that that's true, but I'd be amiss to not acknowledge that's the case.
And that's why I'm okay.
That's why I'm okay with high stake and rewards early on.
But you have to use the leverage, the opportunity that you get from scaling to then grow something
that's secure.
You have to get this kind of marketing in place.
And marketing is always an ungodly expense that, in my opinion, isn't really justifiable.
But you can build something secure and nobody's going to come and use it.
So you have to kind of find some kind of mix.
And I hate that, but that's what it is.
I think they'll agree.
This is a problem that we find at a basis of market capitalism, right?
That's not just an incentive structure that exists within crypto.
That's an incentive structure that exists within any form of business construction, right?
You're always going to be incentivized to scale regardless of the consequences,
whether that be environmental, whether that be community damage, whether that be breaking
families apart, whatever X is, right?
Your incentive is to earn income because businesses are essentially unethical.
They're aethical.
They're not good or bad.
They are money-producing machines.
As long as that incentive is to be a money-producing machine, then, yeah, that's going to be the
incentivization at all points within the business cycle.
What I'm saying is we need to rethink, like, there needs to be, I guess, yeah, you know,
you need to restructure the game theory of how you're looking at your businesses or how
you're designing your businesses a priori, right?
Like, I guess we need people that are doing this from a philosophical perspective, not people
that are doing this to line their own pockets.
That's why I'm here.
That's why I'm here as well.
I was going to say, you're singing Eric's fucking theme tune here, like, whether he
agrees with everything or not.
Like, the base points, I'm sure, like, Eric, you're like, yeah, 100%.
All of this that applies to crypto applies to the biggest thing.
And we're catching along fast, but I get frustrated when people act like we haven't
been dealing with this exact stuff for thousands of years already.
But we have barely new problems and barely new solutions.
Almost everything's been done in some way, shape, or form before.
And we need to understand it and we need to decide how we do want to approach things.
We have opportunities to rebuild things better, but also we have more opportunities if you
build more ponzies and if you make more stupid dog monies.
So I, yeah, I don't make a lot of friends in this place, in this space, but I'll still
be here in 10 years and I don't know if they will be.
So I'm going to keep trying to do something that makes sense, that I can rectify ethically
and try to build whatever is going to be the next Google, the next Apple.
But realistically, money is fake.
It has purpose.
It is meant to change every couple hundred or thousands of years.
There is no like, oh, this is the solid money that's going to last forever.
That's not the purpose of money.
That's not how money works.
And understanding-
Are you Kevin O'Leary's son?
Are you Kevin O'Leary's like secret, like abandoned son or something that like we've only
just found out about?
I think I'm not, I'm not in this to make friends.
I'm in this to make fucking money.
Dude, you're talking my language, Eric.
You're talking my language, Eric.
You know?
I'm in this to make a difference.
I hope I provide for my family as I do it.
But I don't care about getting rich.
I'm not in it for that.
I'm trying to do something different.
And again, I want to leave the space in four or five years, just do some advising roles
and start a church.
That's my answer.
I've been public about that from the beginning.
I can tell you, I can tell you, being, talking with Eric.
Bruce, one second.
That's very interesting.
No, a non-dev person who talks like that because we've been doing non-dev stuff.
And Eric mentioned, Eric said earlier, oh, it's a smoke screen.
They're making like, look, our sound is like, it's much harder than it is.
The coding community, like, like, try to.
But actually, it's not that fucking complicated when you start going copying past the people's
code and learning about how bulk functions work and learning how to just, like, change
addresses and change functions and actions.
And like, like, Eric, I heard you earlier.
Like, there's a time where these fucking devs could hide and they were on a pedestal.
That time has gone, dude.
That time is now changing, right?
I don't know.
I hope so.
Well, I like that devs now have an opportunity to lead and run things.
I think it's been a miss that in business for the last 40, 50 years, like the devs do most
of the work, but it's the soft skills people that make the most of the money.
That being said, there's a reason that soft skills people made most of the money.
Like, it is the marketing, it's the deal closers that actually bring the money in.
And so we need more of a mix, hopefully leaning more towards the devs than was previously
done in prior business.
But this idea, like, I was in the ecosystem for a while where they tried to have a salary
cap of $30 an hour for non-tech people and a salary floor of $100 an hour for technical
people.
And I'm like, well, I can do audio engineering.
Does that make me technical?
Like, how do you define this?
Like, what do you do for, like, lawyers or anybody with any kind of legitimate business
experience?
Like, I'm not going to work for you for $30 an hour, but you want my work done.
So, like, justify that.
I'll say this, too.
And this is how traditional business has run for the beginning of time, is where, you know,
businesses that are top-heavy fail really quickly, where you have the people that are
working and have the technical skills running the business versus the people that are...
I mean, I think sales runs every business.
The people that are actually selling the material, actually getting customers, actually onboarding
people are the most important people in the company.
And you saw this with Circuit City.
As soon as Circuit City started paying the salesmen less, Circuit City went out of business.
Why?
I love you guys.
I've got to hop on the mic for a call.
Yeah.
Yeah.
And this is the last thing I'll say.
Steven, great to meet you, bro.
I also have to leave.
Welcome to Patrick, man.
Thank you for having me on.
This is the last thing I'll say before I have to leave, because I have to jump off,
too.
That I don't think there's enough salesmen in this space.
I don't think there's enough people that are actually selling these products and marketing
them the way they're supposed to be.
And the Circuit City problem is, you know, I don't know if people are familiar what happened
with Circuit City, is that Circuit City was super successful.
They had this program with these salesmen that, you know, incentivized them to sell these
programs.
And they sold these programs and made a bunch of money for Circuit City.
And on average, as a college kid, you could be making 50 to 60 grand off selling these
plans.
What happened is new management got in there and said, these salesmen are making too much
money.
What happened?
Circuit City went out of business because they weren't incentivized to sell these plans
anymore.
So I think in the traditional business model, you think that, oh, yeah, just because the
tech people and the management is running this company that, you know, they're making
all these financial decisions and they must be smart doesn't mean they're making more
money because they're paying people less, if that makes sense.
So I think we need to shy away from this traditional business model of, you know, the smart people
that are actually making the code should be the ones that make the most money.
Yes, I understand.
I understand that because they have a lot of skin in the game because they are writing the
actual, you know, point of the business and actually building the protocol.
But again, you have to onboard users.
You have to sell your product and you have to be able to make money.
So you have to incentivize the people that make you the money, not the product itself.
So coming, coming from a sales background, Mike, coming from it.
Sorry, Steven, once I come from a sales background, I have to reiterate exactly what you've just
said, because I remember sitting down like 19, 20 years old, first day of the job and
like the boss explaining, like you go to see your GP, your local doctor, your general
practitioner, someone sold him the fucking stethoscope that he's going to put on your
chest to find out if you've got a fucking lung disease or impending pneumonia.
What Mike said there about salespeople, Mike, like don't overlook that.
They are some like the vast majority of the time, the most essential people within a particular
business environment.
If you're in a business where you're selling product, your sales staff, and that's why sales
teams get given the like greatest like, oh, we've lost Eric.
He had to go.
He had to jump.
Right.
OK, we didn't get to say goodbye.
But like literally sales teams in big companies are given free reign.
It's like it's like they're a different entity to the rest of the company.
If anyone's worked in sales or being part of that environment, it's like you're like
the Wild West, right?
You're allowed to roam free and generate your leads and do whatever you want.
But salespeople are always overlooked and they are generally the most important people
in the organization.
Sorry, Stephen.
And bye-bye, Eric.
I do apologize.
I was a broker.
I was a broker for three years.
I mean, a broker is just a really fancy name for selling angrily at people.
Sorry.
Sales are absolutely the most important part of any business.
And I think that a lot of traditional business does realize that, you know, if you look at
sort of SWAS, if you go to an SWAS company, yeah, debt's making 150K.
But if you're a good salesman, man, you're making 500 to a mil, right?
Like, the problem with sales and the reason that makes sales such a hard thing is that
it's just really hard to find a good salesman, you know?
Like, good salesmen are, you know, one in a thousand.
You have to be a people person.
And sometimes a lot of these devs, not shitting on the devs, don't know how to deal with people.
It's not just that.
You have to deal with a lot of shit.
It's an expert.
It's an expert who's sold on three continents and, like, trained sales teams.
And, like, I've done that.
I've studied the whole fucking thing.
I know exactly.
I teach people this shit every day.
I mean, is it about the salesman?
Is it about the salesman or is it about, like, the product and the ethos?
Which one's more important?
Because I've sold shit.
So is it the salesman or is it the fucking product?
I think it's the narrative of the product, right?
And I think that the actual idea that you're trying to separate them, I don't think necessarily works.
Because you need the product.
Like, you can sell thin air.
Don't get me wrong.
Absolutely, you can sell thin air.
But if you do have a product that you're selling behind you, you want to make sure that that product is meeting up to the narrative that the salesman is providing.
And if it isn't, then you've got a faulty product that I wouldn't feel ethical about selling, right?
So you need those two sectors to work together and in tandem to build both the product and also to ensure that the product's functions are working within the narrative that the salesman are trying to portray of the actual functions of the business.
I think they're both essential.
I think the most successful salesmen in the world and the United States are ones that sell stuff that's really valuable.
And the salesman himself or herself is very valuable as an asset as well.
So, like, you can – you know, a normal guy can sell a really good product and make a good amount of money.
But a really good salesman selling a really good product can take the business to a whole next level.
And I'll stand by that to the day I die because I think there are certain skills in sales that you need to know.
You need to deal with rejection.
You need to know what you're selling.
You need to know how to pitch it.
You need to know how to talk to people and build relationships.
And I think sales is massively built around relationships and getting to know people on a personal level.
And, you know, my father always taught me this as a traditional businessman, very successful businessman in the United States.
People do business with you for two reasons.
One, they like you.
And two, they trust you.
The product can be great.
You know, it can be the next thing since sliced bread.
But if you're some random dude selling this product and they can't trust you, I mean, I don't think they're going to buy it.
And people can push me back.
And Robo, you might be able to push me back on this too.
No, well, I mean, I'm going to ask.
I mean, Stephen's here, and it wouldn't be Rack FM if we didn't do this.
Stephen, is Charles Hoskins the greatest dev in the world?
Or is he the greatest salesman?
Or is he a bit of both?
Both.
Oh, my God.
This is really, really dangerous for me.
That's okay.
No, no, that's Rack FM.
You don't have to go there.
But I'm just going to be diplomatic here because my feelings about Charles Hoskins,
and can be made public.
And then I will have an entire rabid community of 20,000 people at my throat.
That's the way I feel badly about him.
I'm like, if I say the wrong thing, that is a realistic thing that can happen.
Don't worry.
We'll delete the space.
We'll delete the space.
We'll edit it.
We'll delete.
Don't worry.
We'll take care of you.
Charles Hoskinson is a fantastic salesman.
What Charles Hoskinson has done better than a lot of founders has built a cogent philosophy
that's underpinning his blockchain.
Whether he acts in the manner that best exemplifies the philosophy that the blockchain is built on
isn't necessarily, I think, it's incongruous, I think is the best way to put it.
He doesn't necessarily, he acts sometimes in an incongruous manner to the philosophy
that he's selling underpinning his blockchain.
But a lot of the community, such as ourselves, believe in that underlying philosophy,
so we build the blockchain following those principles, or at least we try.
Yes, his strongest strength is sales.
Wow.
I mean, your man came down to throw a down tonight, Brucey, right?
Oh, absolutely.
Absolutely.
Steven, he fits right in.
He's a diamond, isn't he?
Hey, Mike, I know Eric's dropped in.
Oh, you are, dude.
And intelligent.
But Mike, have you enjoyed talking to Steven tonight, or what?
Has it been decent?
Yeah?
Man, it's like, I like using the, if anybody's seen Wall Street, the second one,
is a fisherman always sees another fisherman from afar.
It's one of my favorite lines, because when you speak to somebody that knows what they're
talking about and comes from the same industry as you do, you think kind of in the same way,
and we might disagree on some things, but I like to find common ground with a lot of people.
But again, it's hard to find common ground with a lot of these people in this space,
because they necessarily try to sell you shit.
And again, Robo, you're a salesman, I'm a salesman, I can smell it from a mile away,
and I'm very good at pretending like I don't know, you know, oh, yeah, great.
You know, oh, that's cool.
But I'm like, man, this guy's blowing smoke on my ass.
So I enjoy, you know, Rack FM, I enjoy a lot of you guys, I enjoy, you know, the people
that are in this space and discussing, you know, ideas with them.
And I, you know, I'm entitled to my own opinion, and I let people know that on Twitter.
But Stephen, you know, it's very rare to find people like you in this space that, you know,
are willing to come up here and talk.
I think most of the financial people have either left or are still in this space and kind
of tread lightly.
So thank you.
Thank you so much for those kind words.
And guys, I am going to duck off because it is 10 past one in the morning and I'm starting
to get sleepy.
Yeah, man.
We are going to end this space now as well.
Yeah.
I want to say a few words to Stephen.
He's been a diamond, an absolute diamond, because, you know, something we all know each other
and he came in tonight, you know, not knowing anyone or what we're going to be like.
But I keep saying this about the Rack FM interviews.
When we ask if you want to come on the show and you're like, oh, can we do a pre-screening
interview or blah, blah, literally, we're in the group chat and we're just like, oh,
well, that's a failed fucking, we don't even bother with people who are like, well, can
we go through what you're going to ask?
And I said to Stephen, do you want to come on?
He went, yeah.
Like, it took him like a millisecond to like say yes, right?
Stephen, I hope he can come back in a couple of weeks.
Listen though, dude, we do a Friday show, so I think it's around 10 p.m. Friday, your
time, in a couple of weeks.
Yeah, dude, well, it's a closed mic and it's only like the host, the panellists.
Come back on in a few weeks, Stephen, and we'll talk to you like a little bit more about
like history and just general like crack about everything that goes on in the industry.
It's like, tonight we're like really professional.
The Friday show, we're like shit talk, so I'd like to get you on to be at the shit talk,
dude, you know.
Well, send me an invite, we'll talk about it, send me a DM, we'll talk about it, and
I'll definitely swing on by.
It sounds like a lot of fun, mate.
I enjoy talking to you guys as well.
You know, it's a very intelligent, very intelligent group of people here, and I've done a lot of
spaces, and let's just say a lot of them don't involve a very intelligent group of people.
Lovely.
God bless you, Stephen.
You're lovely, right?
You're welcome back anytime soon, all right?
You know he was talking about Mike and Eric.
Thanks so much, guys.
We'll talk soon.
Yeah, yeah.
Take care, Stephen.
What a great space, man.
What a great space.
I'll tell you what.
Banging fucking guests, man.
Gigabrains just...
Did you guys notice what happened with this space when you started talking about stable
coins?
Had fucking four people talking in the mouth of each other all of a sudden, all being so
civilized and educated, fucking lost the binkies all of a sudden.
I loved it.
Well, because everybody has different opinions about stable coins.
Like, there's no reason to hold them.
Like, I mean, in the United States, you could literally get 4.56% on your money.
Like, why would you hold stable coins?
It makes no sense.
Zero.
And I understand, like, you know, the UST thing, and it's, you know, Sefi was in here,
which is great.
And Sefi is one of the more intelligent people in this space that doesn't really talk that
much, but it was...
What?
What?
We have a, like, we have a standing joke, and I think Sefi knows this.
We have a standing joke that Sefi comes in, and then he makes it into a Sefi space.
And he can just talk for, like, hours.
Really?
Oh, man, maybe I haven't fucking...
Bro, bro, I once did, I once did a 47-minute diatribe with Sefi.
I'll tell you what.
I mean, I was like, you know, Tom Hanks, when he's on the island with Winston.
You know him and Winston when he's on the island?
And he's like, that's it.
And then he gets rescued.
Man, is that...
You mean the...
That's the Australian version?
It's Wilson.
Is that Winston?
Is that the football?
Is that the Australian version?
Wilson.
It's not Winston.
Bro, bro.
No, no, no.
Wilson.
Is it Wilson?
See, I'm back home.
You're talking about the...
Bro, bro, you got to know the bad man.
Wait, no, no.
I'm back home.
He's...
Because I'm back home now.
And he's Winston, like, come to greet me.
Like, I have the greatest dog in the world.
He's so nice.
He's just like a big ball of fluff, man.
But he's...
I'm like...
I'm going up to Winston.
But I'm talking about Wilson.
But you know what I mean, though, yeah?
Bros, tonight...
Tonight, Mike, has been better than I ever thought.
Like, literally, Bruce, tonight's been a banger.
Go on, finish it off, dude.
An absolute banger, man.
Mike, do you have some last words before I finish it?
No, I just appreciate you guys having me on here.
You know, I always voice my opinion about the space.
I'm like, again, I really don't care about what people think.
I kind of say what's on my mind.
And, you know, the pre-screening process was, you know, a DM.
And I was like, yep, 100%.
I'll be...
I don't need a script, you know.
Like, again, I'm not...
If somebody tells me one thing and says another, like, I'm going to speak my opinion
and I'm not going to speak, you know, what somebody wants me to say.
So I appreciate you guys having me on here.
And that's really...
You know, I look forward to more spaces.
Yeah, man.
That was my next question.
If we should do this, like...
Never lose...
Bruce thought...
He should never lose the honesty.
I've just got home, by the way.
He should never lose that honesty.
Because, Mike, listen.
On a space, you can fucking smell.
You can taste barefaced honesty.
You can tell when someone's being themselves and when they're not.
So thank you very much from me for just coming up and being you.
Like, dude.
Big respect.
I'll say this, too.
You shouldn't trust...
Like, you should never trust anybody in this space, including myself.
Like, you don't know who these people are in real life.
Like, you should always tread carefully.
And if somebody...
You know...
And I literally voice...
Openly voice my opinion about community.
Like, I changed literally my subsection of my professional profile to financial services
from community.
Because community has just been hijacked.
To just dump on people's heads.
So, yeah.
That's it.
Spicing it up for next Rack FM.
Absolutely awesome, man.
Thank you, Mike.
Anyways, this was the next syndicate financial breakdown and more report space
with the Kika brains and the Kika chats of the pessimistic, realistic, honesty.
Everybody have a pleb-tastic night.
This was Bruceman hosting.
Bye.
Bye.
Bye.
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Bye.
Bye.
