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🎙️WEB3| +C.O.C ft Chia 🌱Founder Bram Cohen 🌱& Chia 🌱CEO Gene Hoffman 🌱
Recorded: Sept. 12, 2025 Duration: 2:17:30Space Recording
Short Summary
The Community of Communities is launching a new Web3 platform, featuring partnerships with Chia Network's Gene Hoffman and Bram Cohen, focusing on innovative financial products like dividend certificates and asset certificates. With significant growth and fundraising efforts underway, the project aims to enhance liquidity and yield opportunities in the crypto space.
Full Transcription
Thank you. Music Now look at them yo-yos, that's the way you do it
You play the guitar on the MTV
That ain't working, that's the way you do it
Money for nothing and your chips for free
Now that ain't working, that's the way you do it
Let me tell you, them guys ain't dumb Maybe get up the stone on your little finger We'll be right back. Welcome to Community of Communities, a groundbreaking Web3 movement that celebrates the diverse
tapestry of human creativity, innovation, and collaboration.
In a world characterized by unprecedented connectivity and decentralization, the Community of communities stands as a testament to the power of collective ingenuity.
Together, we'll discover the limitless possibilities of the Web3 movement and the remarkable individuals and communities who are shaping the future.
Stay tuned for a showcase of inspiration, collaboration, and boundless creativity as we dive deep into the heart of the community
of communities welcome aboard i now bring you our host thy revolution good afternoon happy friday
welcome to the community communities web3 space we are super excited for tonight it's a very special
space for everyone indeed thank you everyone for jumping in thank you everyone for joining appreciate you guys for being here tonight and definitely a huge shout
out to bram cohen and gene offman for coming here tonight for a cheer special so we're super excited
for that so to everyone that's jumped in and showed the space out drop comments tag people
all that fun stuff we appreciate you guys very much we are definitely looking forward to an
absolute awesome space review legends tonight we have a great conversation with uh gene and bram to speak about all things cheer
everything that's been happening everything that's going to be happening and maybe a few little fun
things as well in between so that being said i will as always go around the room introduce our
core team and then we'll introduce our super awesome guests for tonight so first and foremost we have the bacon sandwich happy friday
sir all right boys and girls all right boys and girls what a great intro um from dire straight
sir also from you as well rev obviously but i mean what uh what absolute uh absolute banger
um it's called it's called money for nothing um and i resonate with it for a number of reasons one of them being my success as an
airdrop hunter kind of you know the title just kind of makes it for me so it's kind of become
my anthem so I requested that we play that at the start of the space today and I'm glad we did
because it's a banger and what's up Brian what's up Gene welcome back and I'll see you great beer let's go yeah thank you jake thank you bram but yeah definitely
special intro for a special space tonight but uh yeah we've got gene hoffman and bram cohen from
cheer network and we're super excited for that tonight so we hope you guys have had a fantastic
friday thus far but uh yeah we'll start with eugene happy friday sir how are we doing quite well you know for a fun week and uh
you know just getting things done man of action you are always just getting things done i like
it you make it look too easy i've had some practice yes just the experience i love it yeah but i guarantee that that is absolutely 100 truth
but no i appreciate that gene but also we have you as well bram bram happy friday and thank you
for joining us as well we're definitely looking forward to chatting to you two gentlemen tonight
how are you doing bram you okay uh yeah i'm good awesome well thank you for joining us as well so tonight we are going to
be diving into all things cheer which we are always of course always looking forward to and
you guys have been doing some amazing things and built an amazing blockchain and a phenomenal
community and the tech is just getting bigger better and stronger and more and more people
are basically realizing what you guys have been saying for a very long time but it's kind of been a really
amazing journey to watch you gentlemen bring everything to fruition as well so i'm sure
there's lots of cool things to talk about and lots of things to unpack but just in case um there is
anything or anyone um in here that doesn't know what Chia Network is.
Do one of you two gentlemen or both of you guys kind of want to just unpack it a little bit and just explain to people what Chia Network is?
That would be awesome.
Sure, I can go first.
And then, Brian, can go after me.
First of all, also, people have been saying that they're hearing me very well.
I want to make sure that's better.
You sound kind of underwater.
Yay. Okay. I'll see what sure that's better. You sound kind of underwater.
I'll see what I can do after I do this. So GIA blockchain is a brand's genius,
a way to fix Bitcoin's energy use and bring real vulnerability
much better in the glory states than being able to use blockchains to do real quick.
Yeah, that's awesome.
Thank you, Jane.
I mean, I don't know if you want to unpack that a little bit further as well.
Bram, if there's anything that you want to add to that while Jean has a look at his audio, that'd be awesome.
Yeah.
Well, she is very much based off of Bitcoin.
This is like, people get very upset about this because it's like no you can't make a better bitcoin
bitcoin is perfect it's like no no there's actually things in bitcoin um that can in fact
be improved on uh the criticism of saying well that's just marketing speak and everyone's saying
they're just making a better bitcoin is just them making up a bunch of crap that's not actually
based off of bitcoin and for the most part true. But Chia is most definitely very directly,
overly based off of Bitcoin, ripping off all of its really good ideas.
So as I see it, the main problems in Bitcoin are twofold. Number one, well, maybe threefold. First off, you can always be more
secure and decentralized. It's always good to improve on that. And then on top of that, the way
Bitcoin gets decentralized involves using up a lot of electricity in a way that seems unnecessary.
seems unnecessary. So for that, we came up with proofs of space and time, where the details are
kind of involved. But the main idea is there's all this, these like hard drives that are old,
that are not any not useful for storage anymore, because they're not reliable,
they're eventually going to die, and people are just throwing them out. And ideas that you can farm off of those
instead of using up electricity. So this is a resource that already exists in the world,
isn't getting used for anything else. There's a lot of technical stuff involved in making this
all work because you want it to be not only that you get credit for having space, but you can't get credit for having more computational power.
It's very, very difficult to actually make it
so someone can't, with their own resources
on their own system, get extra advantage
from using all this compute power that they have.
So that's a whole thing.
We're actually revving our proofs of space
with a big improvement in that coming up.
The other set of issues has to do with Bitcoin's limited functionality.
So you want to have the kind of power that you get out of having a general purpose language
in the system, but you also would like to keep this very, very reliable, auditable,
also would like to keep this like very, very reliable, auditable, confidence-inspiring approach
that Bitcoin has to scripting in its system. And we've done that. We have something that's based
off of the UTXO model. We call it the CoinSet model, basically the same thing, which has some
of the headaches of programming Bitcoin,
but what it kind of winds up being is that
there's a list you can make of what are deemed
all the kind of onerous best practices
to actually write Solidity contracts well.
And you're basically forced to do all of those
and then some to just make anything work in Shia at all,
which front loads a lot of development effort,
but also makes it so that basically everything that you create
is automatically very auditable and reliable and extensible and interoperable.
What are the things that Bitcoin got right that have been sort of carried over into Chia?
Well, two big things.
Just in terms of working as a secure distributed database,
having Nakamoto consensus.
There's this fundamental idea that you and I are discussing this database,
and we're discussing what is the current state of the database, right?
And we want it to be that it doesn't matter how many people are involved, you and I just
talking to each other can come to consensus. So the algorithm that's used is there's a history
that has a weight to it. People had to put blood, sweat, and tears into creating this history.
And you and I, when we're comparing, we look at which of us has a heavier history and the one whose one is heavier wins.
And we make it so that mostly what's happening is people build on top of existing history.
And the more history that's been built on top of something, the more it's been buried and the less likely it is to get reorged and changed.
likely it is to get reorg'd and changed. This is a really, really good idea if your goal is to have
a very secure, very distributed database. The other really good idea in Bitcoin is the UTXO model,
what we're calling the coin set model, pretty much the same thing, where what
this secure distributed database is remembering is a list of coins. And every coin goes through
the life cycle of not existing and then being created and then getting spent and then it's
gone forever. And a coin has like an amount and a puzzle or a script pub key in Bitcoin parlance, which is what
is needed to spend it.
And that's your fundamental construct of what the whole thing is remembering.
That turns out to be a really, really good idea and has been abandoned for just very,
very rich complex on- chain state in most chains,
which is not a good idea.
Then there's ideas of having like pooling and some other stuff like that, which are
also good.
And payment channels.
And payment channels.
Oh, yes, yes, yes.
In terms of things that have been built on top of Bitcoin,
payment channels are a very good idea.
I've been working for a while now,
just in the final throes of getting it ready to be shipped
and people use it, of building peer-to-peer poker.
And that is based off of state channels,
which are basically payment channels.
We're taking Lightning lightning network style payment channels
and using those, but you can do more stuff in Chia,
so you can actually do peer to peer poker over them.
Yeah, and apologies earlier.
Apparently my browser decided my iPhone in my pocket
was a better microphone than the microphone
I'm sitting in front of.
Hope that's fixed.
Yeah, you're good now loud and clear
cheers for that that breakdown there bram i mean as i as i understand it all right you might be
to correct me if i'm wrong here so a utx is created when a bitcoin is mined and it belongs to you
know whatever that that was um and let's say i i that to someone else, it will call UTXO and then distribute
those that you choose.
So a UTXO, you can call them coins. It's easier if you just call them coins. Everybody
thinks of them as being coins. A coin is owned by someone, is part of its state of being,
and it's immutable. it cannot change what it is.
So the idea is that if there's a coin that's mine,
I know how to unlock it, right?
There's two ways a coin can come into existence.
Either it can be part of the mining rewards,
or farming rewards in Shia,
farming is very similar to mining. It can be part of the mining rewards or farming rewards in Shia. Farming is very similar to mining. It can be part of the mining rewards
or it can be created when another coin is spent.
So there's formulas for how much you get
when you make a block in Bitcoin.
And that's just what you get.
And then when you spend a coin,
when there's an update in a block, that can make new
coins. And the rule is that the sum total of the sizes of the new coins that are created cannot
exceed the sum total of the sizes of the coins that were spent. And a new coin that's made can
be to like your public key.
It's not that it says it's owned by you exactly.
It says, this is the way this can be spent
and there's your private key information.
And so you know how to spend it and nobody else does.
It's probably also good to give the count example
of like what most other blockchains use
and that is the account model. And the idea is that you have like one identity and the chain is a bunch of centralized
smart contracts that just updated list of who owns what from that smart contract versus like
with chia and bitcoin all the individual coins on the chain are owned by you in separate ownership
methods and you can even chia get more sophisticated about how you own them.
And it means that like,
instead of attacking a central smart contract
like North Koreans always deal on Ethereum,
you actually have to like break the primitive
to how the coin is locked up
and then go force each one of the coins.
Yeah, because how I understand it works is they get if an utxo gets split
um they'll they'll always remain the same utx so let's say that what uh the first wallet
the rest of the house it calls the entire utxo and then distributes those to the way the ledger
says that it should be yeah that Yeah, that's not exactly right.
The old UTXO ceases to exist and new ones are made.
And there is usually a change coin that's made that goes back to the sender.
So they take a bigger UTXO and they make a smaller than that UTXO to send to somebody else.
And they make a change UTXO that's sent back to themselves.
You can think about it on paper or coins,
and the idea is if you've got a fiver, you give somebody a pound,
you basically can make the five-pound note disappear
and get back a four-pound note and give the other person a one-pound note.
You have this neat ability to do that.
And the rules specify that you can't create 5.1 pounds you could just destroy value and create 4.5 pounds
but that's on you yeah you could also take four uh utxos of size one and make one utxo of size
five if you're making a payment that's called consolidation.
That's far beyond my knowledge base. But you know, cheers for correcting me there.
I think I've got a better understanding
of that UTXO model now.
Yeah, the benefit of doing things this way
is that the on-chain model is very, very simple.
It's not remembering complex data.
All it needs to remember is these are the points,
and these are their identities,
this is how you unlock them, and this is their sizes.
Oh, and their birthdays.
Remember their birthdays as well.
So I thought you were gonna to jump in there jane i saw your microphone switching i was actually just supposed to actually see um what the coins look like in one of my my coins in the wallet so
like when you look at like martwith hat um i have four hundred and twenty thousand dollars worth or
more twenty thousand whiffs worth but it's actually broken into four different coins two of them are point zero zero
one one's four hundred and twenty eight you know it's 153 thousand and there's that's millions
pardon me million anyway point being i could right now pull those choose those four coins and turn
into one coin of the top value or i could even take the 420 and split it in two it's basically like you get to make your own change or unmake your own judge
so how how are things going on the permuto capital and i saw some post recently uh you know some some
big adopters are ready to rock and roll.
And other people are saying that they're ready to crack on and use it once it's there.
So we should be ready to go soon.
Yeah, look, we are on our side pretty much complete.
We have one thing outstanding back with our regulator that we need to talk through.
But the good news is that all the infrastructure, we need to both trade it on a day-to-day basis to have the customer set.
All of that is all exactly where we want it to be.
We are in an active conversation to get a better timeline of what the one change to require.
But we're at the finish line from you know our overall amount of work yeah i don't think people are prepared to prepared for what uh this product
means to to the market um there's there's a lot there's a lot of value um to be exchanged using
using your methods of uh efficiency um
you've kind of created efficiencies in this in this market to to make it and then there's you
know we spoke about arbitrage opportunities before and and stuff like that um so yeah i'm excited to
to see uh to see this thing go yeah we are too and i think i think it's underestimated how big
of an impact like changing the base you of investing for all blue chip stocks are.
And so for people who don't know what we're talking about, we're talking about basically taking stocks like Microsoft and Apple and Broadcom.
And we're going to split them into their dividend paying component in perpetuity.
We call that a DC or a dividend certificate and the rest.
And we call that an asset certificate.
And it has all sorts of interesting things.
Like, you know, if you're younger and you believe in the growth of Microsoft, Azure,
and you want to be tax efficient, you would buy ACs or convert into ACDCs and sell your DCs,
buy more ACs.
And there's two reasons for that.
One is now you're not paying for the current cash flow because you don't care.
And in fact, the current cash flow can be bad for you if you're young because you're having tax drag on that. And the ACs will trade for basically Microsoft stock price
minus the DC price. And the DC price is in the 40 to 60 range. So you can actually buy a share
of Microsoft for like 20% off. so doing you can take that DC value
and buy 20% more Microsoft underlying exposure so if at the same dollar you
can much more carefully craft how you get your return and where you get return
and how you pay taxes yeah I mean I don't think people are ready i don't think uh people understand understand
what this kind of product can do um to to such a large market like that yeah i mean you know
just the the opportunity alone for the first three if we get to five percent of the market
caps is nearing a trillion dollars if i remember correctly yeah i mean that's that's real adoption right if you're
if you're looking at um you know yeah and it's also solving an interesting and new problem you
couldn't do any other way and we think that's actually really critical to you know why a
blockchain um and you know the issue is like you know some people are talking about tokenizing
stocks and people like wait it'd be great if you could just trade regular Microsoft stock.
And I posit that it's actually a downgrade in consumer experience because right now in most, you know, G7 nations, you can trade global stocks for free.
And, you know, by definition, you're going to move to a world on chain where you actually have to pay block access fees on Chia.
So, you know, that's just not even as good.
And now you have like two liquidity pools, you know, is a market maker moving those back and forth?
There's just a whole bunch of questions that make just tokenizing stock kind of uninteresting.
But having a new product that can really only scale over the long term because the blockchain is so much cheaper to administer it, that's a very different story.
And in fact, the way it works is that it's more expensive to hold the dividend certificate where most of the fees are taken over on traditional rails.
And so there's going to be a monetary incentive because the dividend certificate will literally be worth more on the blockchain.
And that's because it costs us so much less to administer it on blockchain so the everyday um person can can get access to these markets
and trade these uh certificates that's right um The way it works is that for ACs,
anybody, anywhere that's not on the,
well, don't be on the OFAC list.
It means we can't pay you.
If you hold them on the OFAC list,
it means the court's probably
going to make us yank them back from you.
But beyond that,
anybody everywhere can trade.
On the dividend certificate,
everybody anywhere can trade,
but you'll need to file a W-8 or a W-9 with us.
And that's an irs tax
form one's for uh u.s citizens and one's for everybody else if you file that you get your
dividend on chain at 100 if you don't we have to take 30 hold it back and send it to the irs on
your behalf and theoretically the irs and get that money back if that's right but the whole idea is that you
know you do have to get your taxes paid I mean if you think there might be a risk that someone might
sort of double spend that without without realizing I don't think so I mean the issue is going to be
that you know each individual coin you hold as long as it's a large enough coin, we'll get the dividend.
It's just if we don't have you on record tying your coins to one of those tax filings, we can only give you 70 percent of the dividend.
Right. I see. So it's a registration thing. So when you're registered, you get it.
OK, that makes sense.
Yes. So, you know, if you go to the Permuda app and say, you know, here's my wallet or put it all in the Pimodo vault, then we know it's you and we understand.
And in fact, in the Pimodo app, you're going to be able to have a single address where you can take all the cash payments and have them sent to like your cash account effectively.
So that if you had like a bunch of small coins, but they all add up to being a decent dividend payment.
Well, that's great.
You do have to be careful because if your coin is too small, we can only spend about 0.001 cents to any one coin.
So that's the other little limitation is you do want to kind of keep your coins larger.
And that's back to the coin splitting and combining.
You just combine your coins if you need to.
Or you go in and register them.
And we now know, OK, for all these coins, it's really this one person.
this one person and we're sending it to this one address that they've told us to send it to
And we're sending it to this one address that they told us to send it to.
so with with something like um institutional adoption um one of their biggest issues i think
in utilizing this type of technology is the fact that there's no backsies um you know what i mean
by that right um you know you once once it's once it's once you press the go button um and it's confirmed then it's you know the the work is done um is are there any contingency plans
that kind of uh allow for that for institutions to adopt cheer as uh as a blockchain well i'll tell
you that you know when we were out talking institutions and market makers we generally
didn't talk about the blockchain at first or if all. And in fact, I would say in 90% of the cases, they brought it up. And I'll tell
you one exact use case that they're really excited about. So the multiple market makers that we're
going to have on this product are really excited about the blockchain because they can do things
like sell a Microsoft AC short in DTC and go buy it and settle in five minutes on chain.
And from their point of view, that is a full and complete hedge, and they don't have a short position anymore.
And regulatorily, the regulators will agree with them.
So that five minute settlement in liquidity on chain really makes the off chain traditional stuff just that much better and easier for market makers and others and on the
institutional side i would say you know there's gonna be i think big institutions doing things
like securitizations of dcs and you know putting dcs into etfs and acs and dts for that matter
they're comfortable you know with a custodian having the on-chain version of the dividend
certificate because it'll pay 50 you you know, the fee is half
of what it is in traditional finance. And those DCs and ACs won't move a lot when they're inside
of an ETF, for example. And you think that this would be the perfect product for ETFs? Do you
think that's a match made in heaven right there? if you've got a dividend bearing etf the dcs instead in the new etf is going to do much better
perform uh much more directly you know you might move from like a 3.8 yield to like a 6.5 yield
on the same underlying dividend pairs it's really powerful when you can strip out that ac and you don't have the drag if
you will of the rest of the stock versus the value of the cash flow of the dividend
well that's kind of huge we think it's going to be impactful.
Yeah, absolutely.
Especially, you know, with enabling people to have the ability to do that, you know,
from their own pocket is definitely a revolutionary move to make for sure.
Yeah.
And it's across the spectrum, right?
I mean, long-term retail retiree investors are really going to love this, whether they're using it directly or indirectly through an ETF.
In the short to medium term, institutions like it because they can start to do things like take other products that they were having to sell, expensive derivatives to kind of offset the risk, and more directly use ACs and DCs to offset those risks.
use ACs and DCs to offset those risks. And things like the AC is now the very best way to short any
of these high dividend paying stocks. Because in the past, if you try to short like a Pfizer,
which has extremely high dividend yield, you've got to basically take on the risk of paying the
dividend while you're short. Well, now if you just short the AC, you don't have to deal with the
dividend as part of the short. And so all of a sudden now you really can short the AC, you don't have to deal with the dividend as part of the short. And so all of a sudden now you really can short the equity without the dividend kind
of being a major return sapper for you not being able to, you know, go make that bet
on the PE of the company versus their cash flows.
That's incredible.
Yeah, it's a really powerful thing.
So without going into the company, there's a NASDAQ 100, pardon me,
MIS 100 company that five years ago was trading like a 27 PE.
That means 27 times price to earnings.
And nobody thought it should be a 27 PE,
but everybody thought that it would continue to grow a little faster than GDP.
And they had a history of increasing their dividends.
And if you had just bought it as a stock and dividend reinvested,
you'd be up like 19%.
And during the same period,
the S&P 500 went up about 69%.
But if you just bought the DC of that same company and had dividend reinvested it,
you'd be up about 96%.
And if you were really invested in the thesis that that pe was
too high you could have shorted the ac and hit 119 returns on a single stock that on its face
went down during the period you're so you're separating the dividend from the stock um to essentially allow them to be
traded separately that's right you can kind of not create you can benefit from the upside of the dc
whilst trading the risk on the ac to uh to then you know and uh you're i'll try to understand
the compounding on the on the dcs well so you
need to reinvest right so in other words when you get your dividend payment you go buy more dc
so yeah so what you'd normally do is you'd normally receive that dividend and reinvest it
in the stock right right but so like in microsoft case right you'd be spending 20 of that to get
more dividend and 80 of it to get more equity. Here, you could put 100% in getting more dividend.
So in Pfizer's case, it's about 50-50.
So if you buy a single share of Pfizer, 50% of the value is the dividend cash flow, and the other 50% of the value is the underlying equity, if you will.
So there, it's a little different, especially on these, you know, growth tech, large cap dividend payers, you really get an ability to get access to their
dividend in a way you never could have before. And, you know, we think this is important. We
don't think a lot of people buy Microsoft for its dividend. I think most people who would make an
investment in Microsoft today, the dividend is at most an administrative burden. Maybe it's a nice
to have a little bit,
but most people are buying Microsoft stock because they believe that Azure and AI
and the desktop near Monopoly still are going to continue to grow.
Those are the reasons they're buying it.
All of a sudden now, you've got a class of investors
who never could have bought Microsoft for the dividend
because, again, they were wasting 80% of their capital
on the growth of the company, can now put 100% of their capital just to get the dividend because, again, they were wasting 80% of their capital on the growth
of the company, can now put 100% of their capital just to get the dividend.
And so it opens up an entirely new class.
And look, this is not completely unprecedented.
There was a product back in the 80s that lasted until about 1995 that did something close.
It's not nearly as elegant.
But those actually traded at a premium to the underlying stock because what they were doing
was uh making it so that you could bring net new investors to any given name and that's a really
interesting opportunity so so normally those kind of things would arbitrage themselves out
but you're saying that there's a chance that um it would actually just trade at a higher value because its yields are increased
yeah it looks like you know in the historical version of this the primes and the scores is
what they're called uh it seemed to always trade a little above it'll especially trade above when
you hit our cap so there's a point where we cannot currently go beyond a certain amount of the underlying company's outstanding stock.
For historical reasons, we're starting with 5%.
We think that can go up a bit,
but we also actually agree with it
because historically there was kind of one pool of liquidity.
These days, there's two pools of liquidity in Microsoft.
There's the regular market
and there's the ETFs buying Microsoft programmatically.
And so taking it from two to four liquidity pools with the ACs and the DCs isn't as scary as like going beyond that.
But going beyond that, you start to worry that between the ETFs and the ACs and DCs, you might squeeze that regular market so that like the liquidity starts drying in the underlying and moves over in the ACDCs.
And that would not be an ideal outcome.
Yeah, people aren't prepared. I mean, what would you think this would do as marketing for Chia?
Well, I think it really is the mother of all all use cases you know at this point when we're able
to trade blue chip stocks with sec approval i think it ends many questions about can you use
a public blockchain are you going to get in trouble who's reliable why i think that those
questions go to the wayside and we start to finally get to a world where we're going to be
talking people about well frankly a conversation and I like having with people is like,
no, I'm sorry, that's not a blockchain application.
Or no, that is a blockchain application, and here's how you can do it best.
You know, one of my favorite versions of the story was the CAD Trust,
which, by the way, not all the people talk about the CAD Trust because it just works.
Like 99% of all carbon since inception is reported on the GIA blockchain.
New registries are coming on.
One came on the last 30
days. And again, it just works. But when the World Bank originally came to us, Bram and I were like,
we think you need a database. But then they started talking about the problems of trust
between the nations and having the nations and the private actors need to be able to kind of be
on peer and on par. And all of a sudden it became, yeah, you do need a blockchain for that. You need
a public blockchain. And their view was that the only credible public blockchain that didn't use a tremendous amount of power was, frankly, Chia.
And so that's why CAD Trust was chosen.
It's why they did their final test and they went into production, gosh, heading toward 24 months now.
But, you know, once your broker or your ETF manager is using the Chia blockchain to make money, and I'm not talking small money, I'm talking billions, then all of a sudden everybody else is going to be much more comfortable going, yeah, I too can use a public blockchain for my public blockchain in this case.
That is mind-blowing because when you put it like that it is it is huge especially when
the the people that you i would imagine you would have to kind of
talk into considering the utilization of blockchain are sort of of the mindset that
that's the only methodology to move forward with this that's pretty huge in my opinion
yeah look i think you know a lot of a lot of general councils and outside councils and everyone
you know i'll put it this way our blockchain brethren haven't done us any favors
but when you start stacking up these very real cost savings, unlocking new markets,
I mean, there are products that we can create on dividend certificates on chain.
You just really can't do in traditional, and that's because the cost of running them on traditional rails was so high.
But like one great example, two great examples, one's more boring than the other.
The boring one is tax.
The right way to structure these things is as partnerships so that when you are getting
a dividend payment, you're getting passed through qualified dividend tax treatment in
the US, which is only 20% is the tax there.
Off chain for the traditional side of these trusts, it's going to cost us about $400,000
per trust
to be able to go out at the end of the year and find all the people in TradFi who've owned it at
some point and issue them the tax form that's required. If you own it on-chain, on January 1st,
you can log in to the Permuto app and we'll walk the chain of your holdings and generate your tax
form right there in real time and hand it to you. And for anybody who gets K-1s in the US, you'll know this.
You're really happy if you get your K-1 in June or July.
Of course, everybody knows April is when you're supposed to file.
We want you to get your K-1 as soon as you want to log in.
And, you know, it basically takes the cost of tax down to zero on chain, nearly zero.
But the other one is also just payouts.
We can pay cost effectively easily without causing
blockchain bloat a 0.001 cents to somebody. You just really can't do that. You kind of do it by
like wiring all the money to a broker term and then they do the internal accounting to try to
break it all down. But even there, they really can't go out beyond a cent. So it's all those
sorts of things where like we can do a secure the bag transaction and we're doing one transaction for one coin with all millions of dollars that are due on this dividend payout day.
And then it unrolls on a list.
And that happens both automatically, slowly, but surely on chain.
And if you're in one of the leafs and one of the secure the bag elements, you want that now, you can go add a fee to it.
And all of a sudden, you and a select group around you will immediately get your payments
into your wallet immediately and also that's before we do things like money market fund coin
where the moment we secure the bag you're actually starting to earn money market fund returns even if
it's not in your wallet yet and are there um some educational tools for everyday people that want to learn about
how they can best utilize this ecosystem because it's obviously it's incredible um and i imagine there's you know a huge group of people that
will understand how to utilize this ecosystem but is uh is there educational tools or ways in which
you know your everyday people can kind of learn how to you know learn about this ecosystem and
how they can kind of tap into it as well yeah so i say there's the stuff that's available today and
the stuff that will be available soon stuff Stuff available today, quite a few community members in the Chia community have built things like a modeling app
so you can look at any of the likely stocks that will be likely to put in the trust,
and you can kind of use your own assumptions in these growing annuity models
and figure out what you think the AC and the DC should be worth.
There are a bunch of tools that Trent and I have planned.
We have to be a little careful
until the actual registration statement is effective.
Once it is, it's much easier for us
to actually build these tools
without kind of questions
whether or not we're ahead of the offering or not.
But we really do want to teach people
the like, if you're between these ages,
you should think about it this way
and you should own only the AC. And then as you get to middle age, you should think about it this way and you should own only the AC.
And then as you get to middle age,
you should start buying the DC
and we get to older age,
you know, you sell your AC
till you take your long-term capital gains,
use that money to turn it back in DC.
And now you've got cash flow to retire on, right?
So it's some of those sorts of tools
that really do want to get out there
and we will.
And I think, you know,
I've noticed that Trent is
kind of pre-drafting a host of blog posts about the kind of different ways to use it and different
ways to think about it now i will say we expect a lot of the you know asset managers whose names
you know to use these to construct really interesting things that they're then going
to package up as an etf and sell them to you on traditional rails. The neater thing though is, is you probably can out earn them on chain.
If you follow their process, it's so much easier to own 0.01 of a Microsoft share on blockchain.
You just can't really do that over on TradFi for real. You know, Robin can make it look like it
works like that, but it doesn't really. So a lot of what you want an ETF to do in the traditional
world, you can just do in your own wallet on chain. And we're going to be making a lot of those tools available. I mean,
at start, we want to have it so that we have kind of automatic dividend reinvestment.
At first, it's going to be dumb. You're going to tell us, hey, you know, when I get cash in and
automatically invest in these three or seven DCs at this percentage rate. Longer term, we want,
you know, an AI to be making a recommendation to you that you approve or you
adjust before you then sign it and we go out and you know automatically go buy the dividend
reinvestment you wanted so you know you can construct these etfs effectively in your own
wallet and you know be that much more precise because you know you might not like some of the
etfs can't go above 10 in a single stock but maybe you think you want more than 10% in your portfolio on Tesla.
Well, now you can do that.
Yeah, see, that's mind-blowing as well because, you know,
because the ecosystem that's been built is, of course, really complex,
but it sounds like it's been really simplified for people that obviously aren't
as educated on these financial tools as some people.
So I think it's brilliant because it kind of helps everyday people kind of get involved
and it brings funds into this industry from that side of it,
but also it benefits the companies that people are now able to invest into
in a more simplified way that provides more use case for people that want to own their own assets because that's, you know, the urge to, you
know, for self-sovereignty is growing as well and it ties into that as well.
So I think it's brilliant.
Yeah.
Very simplistic for everyday people but also helps bring funds into the ecosystem and into
the industry.
Look, there's two things I want to add and one will will be obvious, and one you have to give me a minute
to come back to why it's obvious.
There is a lot of interest,
and I think a lot of value,
that these are going to make international investment
much easier from outside of the US.
There's kind of two reasons for that.
As I said, in most G7 countries,
your brokerage firms generally work,
but you still now have entanglement in US taxes
because you're getting your Microsoft.
Well, if you're non-US, you should sell the dividend off and only own the Microsoft
AC and your only taxable event, if any, is later when you sell it.
The other issue is that the risks of brokerage firms outside of the G7 are higher.
Not all of them are cheap.
You know, brokerage firms do go belly up from time to time and take your assets with them
if they're not in the US.
And so now the ability to personally custody
using things like Cloud Wallet,
the Permuda app is a version of Cloud Wallet,
and have, you know, your Android or your iPhone,
Android coming very soon,
be how you manage it.
And you manage it in a way that if you lose your phone,
you can easily recover it.
You know, this is just going to change the paradigm of your ability to invest in the most valuable stocks in the world.
Oh, and the other thing I wanted to mention, ETFs are good and bad.
They're mostly good.
You know, what happened in 20 years ago is everybody finally got the message out that you really can't beat the
S&P 500. So just buy the S&P 500. Now, what that's meant is that we've lost the skill set and kind of
the average investor about how you would invest not by investing in the S&P 500. And ACs and DCs
unlock the ability to actually beat the S&P 500 without using leverage.
And so one of the big challenges in a positive way, and one of the things I think is going to happen out of the AC and DC movement, is re-educating the public about how to value companies, why to value companies. And it used to be like, if you did an analysis of Google, and you're like, man, the PE is too high, I don't know what I could do here.
Well, in the past, the answer was nothing.
You basically just had to go ride with it. Now you can sit there and go, I don't like the PE, but
Google's cashflow looks solid and they've been raising the dividend. I'll buy the dividend.
And I can ignore that the market seems frothy. And that's really going to help, I think,
kind of get back to a world where we can actually find valuation for companies again.
Yeah. There's been this problem historically
where it's like you can't short the market as a whole.
You can kind of short one company,
but shorting the market as a whole
is a bit of a fool's errand, well, for two reasons.
One, the big one is that you're losing out
on the long-term growth of everything.
So it's like, well, it's very hard to say, well,
I think the market is overvalued by like this amount right now, but I think it's going to keep
rising in the future. The instruments don't let you say that. They just let you say, I think it's
overvalued. And when you're talking about over a 10 years timeframe, the economy, because of
technology, is growing quite a lot. So you don't want to be betting against that, even if you think right now it's overvalued relative to where it should be. The other reason is that it's just so
volatile, and it's hard to have anything on the other side of this volatility, that it's, you know,
the old average markets can remain irrational longer than you can remain solvent, you just get
wiped out, trying to bet against it. So what this allows you to do is you just buy up DCs
if you think the market is overvalued right now.
And you're still betting on the long-term growth
of the market, but you're kind of saying,
hey, I think that the base cap here is gonna go down.
And then if you think the market is undervalued,
you can go the other way and pile more into ACs.
A high level way of thinking about why we're doing this
is a blockchain is an accounting database.
Good rule of thumb about whether a blockchain
is good for something is to keep in mind,
a blockchain is a very secure,
very distributed
database for money in particular. And the question of, is this good for a blockchain? It's like, well,
is it like a very high value things that are doing accounting? And if the answer is yes,
it may be a good idea. And what a blockchain can do over a regular database is it can get you all this security at much, much lower cost than it does normally.
Like usually you wind up just kind of trusting banks.
And banks are not great institutions to be trusting in general.
We have a lot of social things in place to try and make banks trustable.
But you're relying on a lot of very expensive social
stuff in order to make that happen.
And banks still overcharge for a lot of stuff,
particularly for poor people.
And so a blockchain is a technology solution,
which if done properly, as we have,
can make all of these things much, much cheaper
because you don't have all this massive social infrastructure
in place to try and make it somewhat trustworthy.
Silicon Valley Bank, First Republic Bank, Credit Suisse, First Boston.
Ironically, we've had problems with our banks.
That is the list of my personal banks.
Stop it.
So if I remember correctly, they were three in very quick succession.
That's correct.
So Silicon Valley Bank was Chia's corporate bank.
Credit Suisse First Boston was our underwriter,
and First Republic was my personal bank.
Fuck me.
Well, but you notice all of those by uncle sam so yeah so we do have mechanisms in place to make
them kind of trustworthy and make things not fall apart when these things happen but they're
very expensive interventions two were uncle sam was uncle switzerland oh yeah yeah that's crazy yeah i remember seeing that and just thinking oh my god right this is the start
of all of them like but then it seemed to be uh well i can't remember what it was that triggered
it it was well it would have it would have made everything collapse if sam hadn't stepped in and bailed them out and actually kind of turned a profit in the end, which is what usually happens.
In the 1900s, there was the experiment done of, hey, just let banks go under when they go under.
And then there were financial crises every 10 to 15 years that just almost made everything fall apart or did.
made everything fall apart or did. And then it was decided that this was a bad thing. And there
just became this policy that whenever a bank went under, instead of its creditors just losing out,
the government would step in and backstop it completely and completely wash out all shareholders in the bank and then make any profit once it recovered, if there was
any, or take the loss if it sold for less in the end. Yeah, and that's what's kept banking stable
for the last hundred years. And the main cause of the Great Recession is people started figuring
out regulatory ways of hacking around this and
making like IAC was this giant conglomerate of stuff that was like attaching banking to other
things to make it not really look like banking and stuff. And shareholders didn't even get
completely washed out because it was this like big international thing. And now the policies
on that have been changed. It's like, no, if you're acting like a bank you are a bank and
if you get bailed out by uncle sam it doesn't matter if you're international your shareholders
are in fact getting wiped out but yeah if we didn't have that the whole financial system
would just fall apart on a regular basis do you think this kind of technology will kind of help protect against that in the future
yes i mean the transparency and the fact that you have to actually allocate your assets in the first
place means that like you know what your exposure is there's an argument that if we were in a kind
of post blockchain full adoption world that um lehman brothers wouldn't have happened because it turns out that lehman was an accounting problem not a
solvency problem and you know if you could actually go run the accounting by crawling
blockchain you might have known that lehman was actually a fair counterpart
ah interesting yeah they they had they had a they had the assets they just couldn't liquidate them fast enough. And so the fear came in that they just didn't have the assets. And of course, you can't really prove that until you actually liquidate unless there's completely public books that everyone can go audit, which there weren't.
So basically when that happens, the government are the only ones who can step in fast enough and backstop everything fast enough to keep the entire system from collapsing, which is why that's what usually happens these days.
But that's something you'd really rather not have happen.
Yeah, you'd rather have the trust work, right?
You'd rather have people be able to go up and look and go, you know, not everything's on chain, but Jesus, 80% of the value that Lehman claims they have
is right there and I can see it.
Where in the case of Silicon Valley Bank, it probably, I think that really was a solvency
problem and it probably wouldn't have been able to get into that situation in the first
place if everything had been auditable.
Yeah, correct. And, you know, And in the extremely low interest rate environment,
they levered up.
And I will also say their investment banker made a mistake
that triggered that, but it was a big mess.
They piled everything into long-term stuff
over short-term stuff when there was like a point difference.
You're defining the word bank in the United States.
Okay, so it was was oh my god what
is wrong with you borrow short and long okay well that was
uh I was going to ask if you could help talk a little bit more as well about the Chia Cloud Wallet.
Sure.
So Chia Cloud Wall wallet is a web wallet,
but it's different than any other web wallet you've ever interacted with.
It primarily relies on what are called Chia vaults.
And a Chia vault is a singleton NFT,
but not the way you think about it,
that has programmable and modifiable custody rules
to how it holds other assets.
So when you sign up for cloud wallet, you use pass keys. We got rid of passwords. Those are dangerous. And you go in
and you create a vault and that creates an actual new NFT on chain that you control. And the default
setting for it is that we're going to use the secure element in your mobile phones. This is
the hardware device in your mobile phone that can generate a private key that cannot physically be removed by software or most physical attacks.
It costs a couple million dollars per phone to get this thing out. So it's not something that's
feasible for most people. And then you're going to enroll that as the primary spending key. And so
when you want to spend something, you're going to go on the web and you're going to say, hey, I want
to send Tenchia to this address, submit. You're going to
push notification on your phone and it's going to let you, because it's got the full phone screen,
really compare and make sure that where you're sending that is exactly what you expect and you
can kind of hold it up screen and make sure it all makes sense. And when you hit sign, it signs
on the secure element in the phone and it pushes it back to the cloud wallet and the transaction goes through.
But what happens if you lose your cell phone?
Well, when you sign up a vault,
we're going to give you a recovery key.
Recovery key is one of those 24-word things.
You've seen this before in crypto,
except it's different.
The only thing a recovery key can do
is change the primary signing key to a new one, but it has a user
configurable delay that we started with 12 hours as the default. The idea being that, you know,
you wanted to make sure that somebody couldn't try to time when you were falling asleep so they
could try to get the recovery done while you were asleep and you didn't notice it. But if you do
notice it, you gave it to your lawyer and your lawyer goes rogue and he tries to
recover your wallet, we're going to send you an email and soon a push notification that somebody's
trying to recover your vault. Are you sure? And if you're not sure, you can use that spending key
right then and there to cancel that transaction and generate a new 24 words that now is the
recovery for your vault and then call the police on your
lawyer. And it's going to get much more sophisticated than that, but that's kind of the core capabilities
of it. And what it means is that you now have the ability to do things like key institution
to be a recovery entity. So, you know, you could have like a bank where you go in and
you pay them some nominal fee and they say, okay, if you or your state ever come back and prove to us that you are you, then
we'll recover it and maybe set a week for that one.
So, you know, there's all these opportunities to make the difference between the high risk
spending key and the recovery key be very different.
So now, you know, you can actually have a couple copies of your 24 words on paper with, like, your brother
or with, like, again, your lawyer or a close friend, because if any of them ever were to betray your trust,
the blockchain's going to enforce and Cloudwallet's going to monitor that you can stop them from doing that.
So it makes it not interesting for them to do it because they're just doing something dumb.
But it's a very different way to look at custody. And then Bram is going to take this to
a whole other level because we're going to do things like support. You've got your iPhone and
you've got a used iPad mini and you've got one count on the iPad mini that's really valuable.
But basically you set the iPad mini up, you put Chia Signer on it, and then you never take it
online again. But you can enroll it with your online phone so your
phone knows hey if i get a request signed from this public key it really means i need them to
go get the camera from the other one and i'll display a qr code after you confirm on your phone
and online that it's what you want to sign and you know you'll take the qr code off your phone
you'll compare it again on your ipad mini and you'll go sign and then use QR code to send it back to the
to the online iCloud uh pardon me chia wallet chia signer and then that will push it back to the
cloud wallet which will push it on chain so now you've got the ability to like have a walking
around warm wallet that you have whatever you want on a daily basis longer term when you make it so
that you could like have per asset uh spending minimums or maximums, I should say.
So, you know, you can have it be like, you can only spend a thousand USDC a day,
unless you have this other signature. But you'd also then make it so that all your pile of ACs
and DCs is on that offline key. And you only put that in your safe and you don't worry about it.
And by the way, you've got recovery for that too. So it's really a powerful base unit of custody that we can keep
building neat new stuff off of and build real business processes and real custody processes
that are manageable by mere mortals on hardware you already have. And I would argue strongly that
your mobile phone, if it's in the right mobile phone, some Androids, all iOS since about six,
If it's in the right mobile phone, some Androids, all iOS since about six, is more secure than any of the ledgers or other items because you've got a better supply chain, you've got far larger nation state attacking of these items.
And so you've got a lot more security effort behind them and you have a lot less chance of getting into a supply chain attack, for example.
That's phenomenal to be able to create a new way of investing like never before in a way where you can almost trust the banks, which on its own is just a huge deal, but then also provide a way to protect your assets and protect your assets from even people managing your assets.
It's huge.
I think it's really clever with the 12-hour system as well
because it didn't really cross my mind until you said it.
I thought, yeah, actually, that's probably a really wise thing to do
because if you are going to get caught off guard, it's going to be then.
And that allocates you enough time to kind of do something about it.
So, yeah, I think you're clearly creating a way for people to be able to invest,
cover the taxes, protect their assets, hold their assets.
I think the education around this is actually really exciting
because I'm not the most financial literate person
began is much more advanced than me in this front but to think that it could be possible for me to
have a much better understanding and be able to teach my children how to do the same thing with
them so they can kind of become their own bank and depend upon themselves in a way like they
couldn't before financially is quite remarkable actually. So phenomenal work from the cheer team
as far as I'm concerned.
Yeah, and look, as this goes forward,
there's a couple of things to know.
Like you don't need the cloud wallet
to be able to use this.
There's gonna be other open source wallets
that will let you worst case use the recovery key
to put a new signer key in.
But even there, there's gonna be ability
for you to use your signer key correctly,
you know, and you don't aren't locked in.
But the other thing here is because of the 24 words, there's so much low risk, you can do crazy
stuff like put the 24 words in your will. Because again, if somebody gets hold of the will and tries
to do something, you can stop them. There's also an interesting argument that 12 hours might not
be enough. I mean, the trade-off is really, is it okay to lose my funds for 24 hours? Probably.
Now, that's a question everybody has to answer themselves.
And we kind of went with what we think is the nearly minimum amount of time you should allow.
But, you know, it's the like, I don't take a lot of flights that are longer than 12 hours.
You know, it's those kinds of considerations.
But you'll also be able to do things like in the near future.
These are just features we have to add.
You could go and say, hey, I'm going to be on a long flight.
I'm going to extend my recovery keys time to 24 hours and just sign that with a primary signing key, and it's updated.
And when you get home, you move back to 12.
So it's those kinds of things.
And that's the neat thing about this capability is like,
whatever capabilities you have on the vaults today
are forwards compatible with almost all of the types of additional features we're gonna be able
to add and when you mix in payment channels you start doing really crazy stuff like
pre-authorizing a debit card issuer to be able to get this much usdc out of your vault per 24 hours
that just kind of automatically is spendable at retail using apple
yeah that's huge um we've just had a really good question uh from the legendary monkey zoo and he
said could could hoffman explain why trading stocks on cheer is different to all other RWAs doing the same thing on
other chains and ecosystems and why MEV and sandwich attacks are a real problem
yeah I'll start with the last part and move back so MEV maximal extractable
value formerly minor extractable value is the idea that for non securities you
can use the ordering
and the centralized smart contracts on EVM
or the similar things,
even like move on SUI.
And basically,
because the Oracle kind of depends on last price,
you can like move the price
against somebody trying to buy it up
and then they buy it up
and then you move the price down
and basically back run them.
So you front run them,
back run on sandwich deck.
That's been illegal since 1933.
It was one of the core things that the securities legislation in the United States tried to end
was, frankly, market makers or broker-dealers doing this to their customers.
And so what's been happening is when you hear about an RWA on an EVM chain,
it's not a native ERC-20 token.
It is wrapped in, first of all, permission permissioned wallets so you can't trade it to
any wallet you have to trade it to a wallet that's already gotten permission to be able to trade
uh and it's got other like walled garden wrappers so that uh both it's easier regulatorily because
they don't let anybody in so that's great for them from a regulatory perspective,
horrible for them from a liquidity perspective
because not everybody can make a bid,
not everybody can buy,
and therefore the dollars that can chase the asset
are significantly smaller.
And if you got the late night desire
to try to buy that asset,
well, yeah, I got to wait till tomorrow
because they're not going to be online to KYC yet today.
That gets them out of MEV because you can't like MEV
that really heavy, thick centralized smart contract thing
that they're wrapping it all in to be able to get it to work at all.
So what you see is not a lot.
You see some folks in money market funds.
Those are usually treasuries of other projects that are on chain,
earning money on chain.
There's not like an ability to really trade stocks, like certainly not stock to stock.
But over on Chia, very different.
Transactions go through in parallel.
They can explicitly call out which other coins they're relying on.
So you can have a per block oracle that you can make sure is honest effectively
in your spend. And it's truly peer-to-peer. When you're trading on a decentralized exchange
on Ethereum, it's not peer-to-peer. It is peer-to-centralized monolithic smart contract
where somebody probably has a multi-sig where they can change the contract to peer.
When you're trading an offer file for USDC versus Microsoft DC,
you are saying, I have this USDC coin.
You can see it on chain and here's my signature proving it's mine.
And if you put in an MSFDDC coin that meets the requirements of my offer and you put it into the mempool, you're going to take it and it's going to go through.
And there's no middleman there.
There's only a communication network for you to hear about the open outcry of the offer I'm making in the offer.
And that can be Splash and Dexy or Twitter, pardon me, X.
You know, we could be trading stocks here
in the tail of this channel, right?
You can even do QR codes.
Like I can publish a QR code on a light pole
and if somebody wants to take the offer I'm making,
they can inspect it and they'll take it and make it
and I'll see in my wallet that it's done.
So we actually...
It's more of a direct maker and taker system
rather than like a uh uh
mm mm oh my god i can't say it am i thought i couldn't speak for a second yes amm um so it's
more of a a direct peer-to-peer system yep and even amms in chia are more peer-to-peer so the
way amm works in shia is that
there's a smart contract out there that anyone can spend as long as they follow the amm rules
and the amm rules are the liquidity curve and so anybody who wants to can grab that and make a
transaction and it just works versus again the amms on ethereum you know somebody's probably
got a multi-sig to be able to upgrade that contract and that means that they are frankly a fiduciary that you need to be worried about rewriting your history or screwing up your trade.
Now, there are certainly some Ethereum smart contracts that people have let go of control, but it's not the majority.
Luckily, some of the more valuable ones have.
But this is a real problem because it's just a different model.
It's a different design.
You know, here you really are just announcing a price to the world. And if anybody
raises their hand and say, I'll take the other side, you bring a briefcase full of virtual cash
to their office and they sign the back of the stock certificate and hand it to you, you hand
the cash and you walk away. In the real world, that's still doable. It's legal. It's just a
little scary because hopefully the guy who says he has a stock doesn't have a firearm.
In our world, it's taken or not.
If the taker wants to take it, they can.
If the taker doesn't want to meet your offer, the only thing to do is counter on it.
They can't mess with your offer, and your offer should have an expiry on it and will expire when it expires.
And the chain enforces that expiry, by the way.
So we're actually kind of going back to how Wall Street worked before the 70s.
You know, if you've ever seen like trading places, people would stand in a pit and yell out prices for different stocks or commodities.
And you'd agree and you'd like sign a little piece of paper together
and hand it to the exchange to settle it.
And we're doing that just with a truly peer-to-peer network
called Splash and using the Chia blockchain
as the settlement layer.
It also means that nobody needs a SCC ATS license,
an SCC broker dealer license
an sec national exchange license it significantly lowers the regulatory heft because you don't
have to license what used to be trusted middlemen there are no trusted middlemen here
yeah i guess you're kind of taking out uh a big uh a big element of uh how this stuff would normally work and it's the kind of the human element you're kind of removing out a big element of how this stuff would normally work.
And it's the kind of the human element.
You're kind of removing the human element from it.
Like you were saying, like trading back in the 70s,
it was human beings shaking bits of paper
and trying to get their bids and asks.
Yeah, now that was still brokers, right?
It was still like you were handing it off to a buddy on the phone
and he'd go down in the pit and yell about it.
What we're saying is, eh, screw that.
Let's democratize it so anybody can.
Be your own broker.
Press the submit to splash or Dexy button on your wallet
and you've announced, you've opened outcry
what you're willing to buy that equity or commodity for.
so i wanted to touch on uh bram's poker projects because we spoke about it before and i i really
enjoyed it because i like a game of poker and understanding how this game differs from a normal
game of poker and this is the kind kind of hurdles that there were and kind
of the novel solutions to to enable the gameplay to still be fair and and and challenging um
and risk-based uh but yeah i think you did a really good job with the with the poker thing
there do you want to tell people in your own words like kind of what this
poker is and how it works uh uh well it's peer-to-peer poker so uh which is pretty much what
it sounds like it's poker which is played with no casino and no rake to a casino the idea behind it
is at the beginning of a session you have to wait for one transaction to go through
on chain which might take about a minute and then you play over a state channel over that thing and
then at the end of the session you just wait for one transaction to close it out and the backstop
if someone tries to cheat in the middle or just grief the other person is whatever hands are
pending at that moment need to be played out on chain.
So that's going to happen at like a minute or two per move.
So that's going to be kind of slow.
But everything up until then,
it will happen in real time.
So there's a lot of very technical stuff
that's going on here to make it so that this just works.
It has two really great non-technical properties.
One, you're not paying a cut to a casino.
And two, you can do it legally in many more places.
There's very intentional distinctions in the law
between games of skill versus games of chance,
and whether you're playing a game
directly against somebody else, or you're playing a game directly against somebody else or you're
playing it in a casino. And a casino is an intermediary who acts as a trusted third party
and takes a cut. I'm not exactly sure if you're just a trusted third party and not taking a cut
if you're still a casino. That would be a question for the lawyers out there. But here, there is no casino. You're actually doing it out in public using commit and reveal
and such for that. So you can do it legally in many more places. And it's still not stopping
outside assistance. That's outside of scope for this project.
But the good news is that someone can act as a third party enforcing detection of outside assistance
and still not be a casino.
That's pretty clear.
So that's a good thing.
So yeah, there are some limitations that can happen on the rules.
The biggest one being this only supports two-person gaming,
but you have massive collusion problems on every level.
The reason why it's only two-person gaming
is there's also collusion problems at the state channel level.
So it only supports two-player gaming,
and there's some subtle limitations to what the game rules are.
the game rules are so it's the poker version is played with an infinite deck for that reason
So the poker version is played with an infinite deck for that reason.
yeah i kind of feel like the rules are really novel so if i can remember it correctly um the
instead of having a button that moves around the table um it's then based on the previous winner
i think was one of the things uh the other thing thing was you can't have a system where you can,
you know,
put a blackjack into play and then not have another one of those blackjacks
appear.
So there's the opportunity.
Well,
the rules,
the way the rules are changed is to adapt to the medium.
I could be really indulgent and make up all kinds of crazy
rules that I thought were interesting, but I'm trying to be a responsible adult and mostly
just adapt things with the minimum that's needed to adapt them to the medium. So the rule changes are, the requirements are,
there's some requirements around randomness in it.
And also you want as few turns in a game as possible.
So for as few turns in a possible,
the person to start at the beginning of a hand
is just based off of a coin flip on the very first action.
But you could also do it that you always start two hands at once, and it's always opposite players making the first
move in the two hands that you're starting at once. But after the asymmetry of someone starting
at the very beginning, thereafter, the first to act on every street is whoever was the aggressor
on the previous street. So if somebody calls,
then it's the other person will be the first to act on the next street. And then at the very end of a hand, it's whoever calls that reveals their hand first, and then the other person either
folds or reveals and claims the win. So yeah, those are the rules changes there.
And that's really centered around making it so that there's fewer turns in a game,
so that if things do have to be played out on-chain, it doesn't take forever.
But also, I think that might just be an improvement to the rules,
because the order rules in Heads Up Poker are very confusing if you're not familiar with ring games and I think this is just
the rule of the two players always alternate
turns is much easier to understand
the other big rules change is that it's
played with an infinite deck
and there's a few
things in place to cope with that
like I'm getting rid of
suits because the complexity
of having like identical and fraternal twin
cards is just too weird.
But then people like having
suited whole cards, so to make
an equivalent to
suited whole cards, you get one
bit of information in addition
to your two whole cards that's secret until
showdown. That's kind of analogous
to them being suited, and that's whether you're
boosted. And you have a one that's whether you're boosted.
And you have a one in three chance of being boosted.
And you're just told that at the beginning of the hand,
whether you're boosted or not.
And boosting is the first tie break after the hand type.
So if, like, one player has a pair
and the other player just has a high card,
the player with a pair wins, you know, regardless of boosting.
But if both players have a pair,
then the player and one of them is boosted and the other is not, then the player who's boosted wins regardless of who has the higher pair. But if you're both boosted or both not boosted, which
happens slightly more than half the time, then the higher pair kicks in as the tie break and then the three kickers in mark.
Having played it too, it's a really interesting game
because you're doing this kind of a reverse poker
at the same time.
As you're discarding, you're having to look at what poker is.
Just to make it work with the medium.
Yeah.
What I'm saying is as you discard,
you're having to look at what you're going to make
for the other person's hand.
So it's not only trying to build the best hand out of what they're likely to discard to you but the reverse
is true too so it makes it a double poker game i mean is this playable now is this is this something
that i can grab a friend and go hey you need to need to do this thing with me. Not just yet, but we've
done it internally and have played it
considerably internally. It's mostly putting
the infrastructure to
make it run against the website up.
Very good.
We're going to be going into Alpha
fairly soon here.
And that will have the parts in place, but it's only going to have the reference game,
which is not the poker variant I was talking about, but is another fun game.
And it will also have the concepts that will be in the final thing, that there will be trackers,
which is where you find opponents to play against
and set up games.
And then there will be game hosts
that are websites mostly serving up static data
that are basically act as the application
that you're using to play the game um so yeah let's
where you're playing is what you're saying you've been playing against a bot rather than you could
you could play against a bot rather than the person uh i mean if you want to play against
the bot somebody could set up a bot it would be another person who would set up the bot
so the tracker is like the rooms that you talk to people and things. And you find games against other people where
the game host acts as your application. So you are trusting that with your money. But
hopefully it's mostly just like a website serving up static data. It's acting as an
application. They will hopefully be applications in the future, but I think applications of this type, technically speaking,
are within the rules of the app stores right now,
but good luck explaining that to them.
So we're going with websites for now.
Yeah, I mean, I have made a few apps recently,
and I just found making web apps just so much easier than trying to do APKs and Apple registrations.
Yeah, they're much more featureful than they used to be.
There's some trickery around, you know, it's harder for them to be persistent and send you notifications and have persistent data when you reload them.
But yeah, the web keeps getting more featureful over time.
I want to talk uh i want to talk puzzles uh-huh um so you're you're like the number one
3d puzzle maker in the world i think that's pretty pretty safe to say uh i i'm i'm not
number one i'm one of the top few i'll say okay probably top three
that's still the middle still the middle we'll take that we'll take that
um so yeah have you have you carried on um sort of producing sort of cad models for people to try
because i saw you released a cad model of a 3d printable i have a big backlog of things that i
really ought to post my plan is to post them to printables and i keep doing things so i'm like
okay i'm just gonna as a small little project
that'll just get done in a few hours right now,
post this thing.
And then I'm like, you know,
I didn't really like this design
and I should make a nice print of it.
And then I should take some nice pictures of it.
And, you know, I didn't really like this design so much.
So I'll try and improve it.
And then I spend two days monkeying with it
and I come up with another puzzle and I'm like,
oh yeah, I should post this one as well. And blah yeah so that's how it goes so yeah i have a
backlog of things to post yeah i think uh i think there needs to be more 3d puzzles because i've
seen some of the stuff you've made and they're really cool um i think you did an interview a
little while ago and you had this uh this cube that was made of identical pieces kind of a cube
i don't know i can't quite see it um it's kind of like a cube shape but you could uh slide
slide them apart you know the funny thing is that one is not identical pieces
and i actually had a discussion with a puzzle person who's posting about it
it's uh three pieces of one-handedness and two pieces of the other handedness, and then a
sixth piece that's of the second-handedness, but also has some voxels removed. The dragon has sort
of a wimpy tail on that one. And that actually is really important for how it works, and it's
weirdly subtle looking at it. It's hard for people to notice that difference in the shapes of the pieces so that's the key to the puzzle
it's the it's one of several things it's one of several things that puzzle it turns out is really
really difficult and i think people might want you made it look easy yeah i think people might want
to play with it and i need to dumb it down a lot so i'm going to dumb it down two levels i think
because that one has a whole series of things that has to happen to put it down a lot. So I'm gonna dumb it down two levels, I think, cause that one has a whole series of things
that has to happen to put it together
that should be simplified.
And also it's not obvious where the pieces go,
which also makes it very, very difficult.
So for the thing that's missing
the really amazing solve experience,
but still makes it doable,
I think I'm gonna make it look like a figurine.
And just the pieces have to go in kind of in the right order in order for it to work.
And that will be much more reasonable for people to reason out.
And my plan for that is to post a 3D print of it,
but also make one of the pieces in it be the key thing to make the thing and have instructions about how you can take your own figurine and just from within the slicer turn that figurine into a
puzzle using this thing so you're saying sort of take any 3d 3d objects and then cut the slices that
you need and you could get the same puzzle essentially
yeah yeah get something that has the same mechanism but it's in the shape of your
thing within some limitations about what shape you can have but this particular one is very
friendly towards differing shapes it's based off of um there was a sculptor named Barracall who made puzzle sculptures.
And so this is my interpretation of Barracall with more of a focus on it being a puzzle than being a sculpture.
Everybody blends art and math to great puzzles, right?
Everybody blends art and math to create puzzles, right?
But I wind up having all these projects.
They're all my projects.
A lot.
Side quests.
Yeah.
That's it.
Side quests.
The other day, I went and I made a synth sound that has a consonant tritone.
I need to finish polishing that and post it.
Have you loaded it on the keyboard yet?
Yeah, yeah, I have it on the keyboard.
Set.
I can get it set up here.
It'll take me a minute.
It'll sound better.
I'm just going to say it'll definitely be worth it.
It'll certainly sound better than my mic did at the start.
Yeah, well, it's going to be a little bit limited by how good of a sound my computer can make here.
Did you find my computer?
It would be a limiting issue.
Okay, I'm getting it set up now, but we should keep talking about other things until I have it set up.
You should definitely make a 3D puzzle that's got synth sound.
You said you've made a synth wave, did you say?
Well, it's a bunch of samples.
Okay.
Which are...
Which you can control with a MIDI controller.
A lot of...
An awful lot of things work
in a way that's kind of
simple, that they're just working off of samples.
It's not like emulating the whole instrument
and playing as it goes. But it turns out
that it sounds
the same. You can't really
tell the difference.
Samples are great, actually.
so while short setting that up um just in regards of chia blockchain um i want to see if there are
any questions from the audience can you hear me there bacon maybe i need to do well okay i can
i'm working it might be it might be just bacon that can't hear me.
I'll cut the jump pattern back in.
There's these lots of GMs and his hands.
That's probably a problem on his part, actually.
Yeah, I think we've gotten most of the questions that have been posted.
Nice.
While Bram's doing that, Bram, do you happen to have a page where you've put
your 3D printable puzzles
I've been posting them on printables
if you search for my name on printables
you can find them
but there aren't many up yet
and one of the ones that I
have up I think might be only
one other person that's printed it because it's like
a really big print that requires a bunch
of work after you're done with it
it's this really amazing puzzle that just mechanically works in a way that's utterly bizarre
it's like help it's like a sliding block puzzle that's held together holistically
but it's also very very difficult and kind of an ambitious project for people to make.
So I think people haven't wanted to do it.
But I'm proud of it, so I posted it.
So if you all want a challenge.
Yeah.
You have to be very careful, because it has to all be crazy glued together.
And if you do it wrong, you've got to start over.
There we go.
Can you hear me now, Bacon?
Yeah, I'll be there, Mike.
Wicked.
I had to drop out and back and reconnect.
But then I was just going to ask, Bram,
so do you make 3D puzzles in their entirety for people to play with,
but then also create them sort of basically like the format
so other people can create them as well?
I have some posted on printables.
We were just talking about that.
Yeah. Yeah.
Yeah.
Okay, so I have this now.
Oh, great.
Hopefully I'm not causing an echo.
I don't know how to change the mic using here,
but I think I can.
There we go.
Can you hear that?
It's just a little bit too close. All right, here we go. So, can you hear that? It's just a little bit too close.
All right, here we go.
So, yeah.
So that was my rendition of Smoke on the Water.
But the thing that's a bit of a joke there is that the point
of that one
is it's using the tritone but this is a constant tritone
so this is the thing i made yeah i like. Yeah, I'm still not happy with
when you hit one note by itself,
it still beats a bit, so I gotta
get rid of that. Kind of a pain, so
I gotta figure out how to do that.
Only one back book the CPU
was harmed in the making of this time.
You know, if I hit the middle C
on this, well, first off, the bass notes,
my laptop just refuses to play.
It just won't play them.
They sound great over earpods,
but my laptop itself won't play them.
And then...
But then if I hit middle C on this,
my laptop case buzzes as I'm playing it, which is like, that can't be good for my hard drive.
There was a thing a decade ago where a whole bunch of laptops said their hard drives destroyed because the resonant frequency of these hard drives
was like slightly off from the normal notes that are hit in standard 12 tone
music except the song rhythm nation by Janet Jackson and that very specific
song they sped it up to make it sound I guess punchier but then they didn't
pitch correct it to normal after they sped it up. So it's actually slightly off normal tuning.
And it happened to hit the resonant frequency of this hard drive and destroyed a bunch of hard drives.
A totally true story.
They're a bit cagey about which manufacturer it was
that had the problem.
They don't want it.
I tossed a Microsoft blog up I was
as I was going to ask before
before I was having technical issues
myself, so in regards
of Chia blockchain
as a whole
are there any features that you guys want to touch on So in regards of Chia blockchain as a whole,
are there any features that you guys want to touch on in regards of anyone that might want to build on Chia
that may be building on a different blockchain?
So whether that be NFTs, music, coding games, that type of thing.
Is there any features or any applications that people can use to build or anything in particular that's kind of unique?
We'll certainly dig in there and dig, but go ahead.
Yeah, so we're not there yet, but there's going to be a whole bunch of stuff to do once gaming is out.
So there's a big hurdle towards programming stuff on-chain in general,
hurdle towards programming stuff on chain in general because you have to jump through all
these soups up front to actually make your stuff secure and reliable. But if you just want to make
a game, you're not changing the way the system works, you just want to make a game that is a
turn-based game for two players and has different rules, but you can do that as a nice small contained project once we have gaming out.
That is abstracted away, and all the rules about how you fail over on chain and all that yada yada yada,
you don't need to even think about how all that works.
You just write your thing as if it's playing on chain and doing the rules one step at a time.
And that's a sort of fun, constrained project for people to do
that has a thing that you can actually literally play with when you're done with it.
That unfortunately is not ready yet, but that's a thing that will be coming up soon.
That's awesome thank you and and will that tie into the um the nfts um and utilizing nft
technology within that or is that you know people have one thing that people ask about a lot is
having collectibles based gaming where not collectibles like people are doing
it right now but collectibles where having a collectible gets you a certain
capability in the game and there's some interesting technical questions around
that that I haven't really tackled and there's also questions of just how do you
make it not pay to win because being pay to win in a money-based game is kind of
dodgy so I'm
not sure what the right way to handle that is just from a gameplay standpoint
but I also don't know about it on a technical level with the right way to
approach it so that's an interesting question that will probably be
discussed a lot in the future but for starters not yet yeah no that makes sense
yeah it'd be interesting to see how you um how you how you look at that and how you think uh
think of a strategy around tackling that because that that is um that is a difficult one for
for the gaming sector and for you know making it fair for people to be able to play these games without it being a pay-to-win kind of game.
Because it isn't fun for people that want to put time into something, but others can just put money in to kind of leap over them.
Yeah, you kind of want to make it so that the things that you play with don't really give you an advantage.
They're all kind of balanced, so just like the more obscure ones are nice
because they're just things that the opponent is unfamiliar with.
And so there, it might be good if you made it so that both players would come into a game with some number of items or whatever,
and both players could use all the items.
And so your goal in getting obscure items, no items would favor one player the other,
except for them having greater familiarity with their use.
That would be a way to go about doing it.
Yeah. that that would be a way to go about doing it yeah and just just as um kind of a little bit of a random question uh more of your perspective
of you know in regards of um the gaming world and blockchain um how far off do you think that
blockchain is from being able to cope with some of the games of today? I mean,
I know that it's probably quite far off. But you know, there's a lot of games that have been
created today that are almost realistic. And I was always curious to how how blockchain would
or if it could handle that. It's not good for anything that has timing in it at all.
That time is a real problem.
Especially anything where you get rewarded for reaction times.
Blockchain is very, very not good.
So what we're doing is this very...
The things that are appropriate for the medium.
Two-player turn-based games with very few turns.
With trying to squeeze out as much gameplay from as few
turns as you possibly can yeah no that makes sense I just want to do a big
shout out as well to the cheer community and the Tangang community.
You legends show up and show a lot of support, help community members learn how to understand the tech,
help support the posts that are brought out and help people break down and understand.
Many spaces we've been in with Monkey Zoo, with with jacatus with the legends over at tangang
um helping each other build and code and network and connect it's some of the greatest things i
think i've seen in web3 myself personally um but it's great to you know see some really amazing
minds creating a really really amazing tech um and really bringing it to global adoption and utilizing it in industries
that can really impact well will impact and probably already is impacting the lives of many
and everyday people but also have communities support and be able to stand and believe in
something that provides value right across the board from people that want to create
people want to invest people that want to learn and connect so i just think it's um a really
awesome community i know we say this every time we speak with you guys but it is amazing to see
the uh the cheer community and the tangan community um collaborate the way that they have and the way
that they do and the way that they help really showcase and teach people and uh and help
each other build and code and understand the tech and how it can be utilized so yeah massive shout
out to the community as well and probably probably create the best memes in the industry i've just
got to say that i'm sure gene will agree agree. I just enjoy the show, man.
Yeah.
Some of the things that I say made me laugh so much.
I'm like, you must have a feel there just looking at how creative the community is.
I've gotten used to seeing my visage in very different form all the time.
Yeah, I think I've seen you in every format there is.
I've been a marmot. I've been a frog. I think I've seen you in every format there is. I've been a marmot.
I've been a frog.
I think that was just today.
Yeah.
I mean, it's almost like scrolling through Netflix
and you're the main character in every film and every series.
I'll just shudder a little inside over here.
Oh, it's legendary.
So there's a couple of in the in the community thread oh brilliant let me just have a quick look at that we've asked the one from monkey zoo
he's got another one i think yeah he does about um
permuto capital um do they have trading partners and market makers in
place ready for launch yep we have two market makers we're talking to a third
there are some of the largest market makers in the US equities markets and the
groups of folks who want to trade this we both reached out and had inbound the
Matt Levine article was actually quite useful we had couple of really interesting large money managers come in from that
going, I guess I've got to use this. So we're really excited. I mean, the big thing that changed
as we kind of went to the street and did a pre-road show was that the way these launched back
in the day, you kind of like did an IPO process where you built up a bunch of stock and then
rolled it out. Everybody said, just do it like the ETFs did it the day you kind of like did an ipo process where you built up a bunch of stock and then rolled it out everybody said just do it like the etfs did the day where you just
started trading and then people will come in and as long as you have those market makers there to
do the arb and to do the create redeem you know it'll just kind of expand and contract as needed
for people to trade it so you know we're very confident there's a lot of people around the
rim that want to do that and you know we know we're going to get the launch done because it'll take a little bit of machinations because of the, gosh, what, 45-year-old rule that we're relying on?
God, I feel old.
40-year.
Anyway, so yeah, we're where we need to be.
I think there's one contract that's not done yet, but there's no reason it's not getting done very, very shortly.
And mostly because we have this other thing,
we aren't pushing it super duper hard.
But yeah, no, it's all the pieces are there.
All the partners are there.
It's just this last little item.
Awesome.
Thank you for answering that question.
And I think Slois Timber has a question.
Yes, he does.
Sorry, Bam, did you want to add something to that there?
I, no.
Yeah, no problem, sorry, I just saw your mic on mute.
Yeah, could you talk a bit about Treasury Strips and could Permutual capital do it better yep so treasury strips are
an existing product uh where basically you can take the treasury bill and remove the interest
payment from like the rest of the value of the bill uh these work okay today and so you know can
we make them better yes ish and the ish is for retail, we can make them much easier, more easily accessed.
And either way, we're likely, especially on chain, to be able to administer that process a lot cheaper than it is in the traditional world.
So, you know, kind of one incremental approval and a much bigger approval for retail. awesome thank you jane
how do you choose um what stocks will be involved in this so the kind of
uh metrics we use is a minimum of 100 billion billion in market cap and a kind of appreciable
amount of dividend payments, plus some history of those dividend payments, you know, that there's
been a couple years and that the company has, you know, clearly enough cash flow to keep the dividend,
if not increase it. And that adds up to today about 92 companies. It's actually up a little bit
from our original kind of 85, 86 estimate.
So that's really kind of what we're focused on.
You know, for example, right now,
as we sit like NVIDIA doesn't pay a large enough dividend,
even though they clearly could.
And we would be kind of expensive
to run that on traditional rails.
So, you know, that's the,
at the bubble to show you where like that kind of,
you know, matrix ends.
Though obviously we wanna get there with them pretty quickly.
It's kind of funny NVIDIA isn't paying out dividends. I guess that they have enough factories, but.
They are, but it's four cents a year.
Yeah, and unfortunately,
taking half of that doesn't even get to the place
of covering costs annually.
Yeah.
All the money in AI is going
to NVIDIA in the end.
It's not like they can't pay it,
and they might someday pay it. I'm just saying,
for right this second, taking a conservative view,
we want to make sure that these can,
you know,
these can be on an ARR basis,
at least cash neutral to possible that to profitable.
We expect to make our real money over on great redeem.
And it may be that there's no great redeem,
but we can do it profitably,
but you don't want to start one of these and then be in a situation where
it's like money loser compared to like the other ones
and for someone that wants to access um these tools and this ecosystem, will it be its own application
or will that be through the website?
How's that going to look?
So anybody with a Chia wallet
can absolutely participate in the ecosystem.
There are going to be positive reasons,
just of ease of use,
that you'll probably want to open an account
on the Permuto app,
but it's going to be just another cloud wallet vault
that's in Permuto.
It's just because it's in Permuto, it makes it really easy for us to recognize, okay,
this is one person and here are all their DCs they've bought.
And so we can make the payment to one coin instead of like 14.
But you can absolutely buy these in your Chia cloud wallet vault and then move them to the
Permuto account later.
We're going to have other ways, the Permuto to like show it your wallet and it'll go walk the chain and
understand what's yours and uh you know so there's gonna be a couple different ways to do it but
the easiest use is going to be to have a permuto app account but it's not required
all right okay awesome thank you if you're only buying acs so you're non-us investor you don't
want dcs you kind of
don't need a permuto app account the cloud wallet will do enough i think most of the features that
will go out in the permuto app that are relevant will also go into the cloud wallet and it's things
like dividend reinvestment but that's the only question you know and again if you're just acs
you don't know let's say I wanted to help grow Permutal Capital if I was to
onboard a hundred people into the ecosystem is there kind of any reward
structure in place for people helped helping support the application growth
so I can't really get into it right now but there are a couple of neat things we
plan to do as part of the launch process that will support exactly what you're
thinking about awesome yeah. Yeah, no problem. Thank you.
Yeah, absolutely. Yeah, no, there are some restrictions on what we can do because this
is securities and, you know, there's always been kind of a historical concern about fees being
weird, but there are things we could do like giving you special perks that discount our fees.
You know, those are the kinds of ways we're thinking about making it work so that you can
get folks in and get them interested and, you know, get them, you know those are the kinds of ways we're thinking about making it work so that you can get folks in and get them interested and you know get them you know following what i
think is a kind of new wave of dividend investing that people are excited about and i think you
know things like our dividend are going to be really interested in what the dcs can do for them
yeah that's awesome
yeah that's that's that is really exciting I'm looking forward to that
did have a question but it just slipped my mind well if you think about it bring it back up yeah i will do thank you
because um it was something around the nft side of things um because i know that a while back um
there was some talks of some future um some future future features to help protect people's assets.
I think it was a clawback feature.
Was that something that was being looked at?
Yeah.
So a clawback V2 is already in Sage and will be launching in Cloudwallet any day now. I believe it's in pre-launch right this second.
What clawback V2 does is pretty sexy.
So callback V1 was kind of typo callbacks. The idea being that like you'd set it and then you'd
send it and then you would confirm it and the other side would look at it and you'd go, okay,
great. And it would just, at a certain time, you'd be able to push it on. V2 puts it out there and anyone can spend singleton that's locked until the time
period's up, but then the sender or the receiver can accelerate it into their wallet. So for
example, if an exchange doesn't support all this stuff, you can still do it, make sure it's right,
and then you can accelerate it into the exchange when the time period's passed.
And we're going to use that for other things like restriction hold periods on securities, not the ACs and DCs because we're registering those.
But there's some other things we're going to do that are private offerings.
And you can do things like enforce the six-month required 144 hold by having a V2 clawback where we've delivered your coin on chain.
So you can see it there.
You know, you've given us the money and you need the security.
But you know that you can't do anything with it until that six months is expired
but once you do you unilaterally have control of it and you can just roll it into your vault and
spend it on however you care so you know that's what's coming out it's a much better kind of
primitive um it really does make it easy to like sending test transactions it's just a dumb idea
the fact that like really well
known people in the blockchain space think it's a good idea oh don't get me started anyway so you
know we want a world where you can confidently send stuff and you have a room for error that's
well understood and you can just fix things yeah that is that is a game changer because that that
was always a big problem um because you and inexperienced people are taken advantage of
and there's a million reasons as to why it's just not great that there isn't anything.
And yeah, having to send test transactions yourself is kind of bizarre when you think about it.
So it's awesome that you've kind of got a tool structure in place
to be able to maneuver your assets around comfortably. Yeah. And look, when you're
dealing with a fraudster, usually the experience is that you send it and go, oh crap, that was
probably a fraud. Now it's like, well, if you're a little worried, put an hour callback on and send
it. See what happens. Wait, I don't like it. Okay. I'm going to call it back.
see what happens wait i don't like it okay i'm gonna call it back
yeah that's brilliant yeah between callbacks and offers a whole host of classic blockchain fraud
is just impossible to do like we get attacked all the time saying people are like oh i want to buy a
bunch of chia you know and i want to use bitcoin or ethereum or whatever and we're just like look
if you're serious here's how you create an offer file.
You can bridge USDC on and we'll give you this small discount.
Then if you send it to the offer file,
we'll inspect it and we'll send it back.
And they're like, but I want to scam you.
It's like, well, no, I don't want to be scammed.
Have a nice day.
And just for anyone that might not know,
so how does the callback work um is there
sort of like a central point where you send the asset people send the funds and it's kind of
you can see that both parties are participating in the transaction well the way it works is that
you create a spin and you set the rules on this new coin that you're just going to create
that says hey look until this either time or block height, I will have the ability to spend this back to any address I want to.
But after that time, then anyone can spend that coin, but only to the address I originally sent it to.
sent it to.
And so it just sits on the chain.
And once that expiration period ends,
then either, you know,
you or the receiver
press a button
to spin the coin on into their wallet
just like a normal coin.
And we can even do something like,
and we might,
we might just run a little robot
that does that for people
because anybody can spend it. But only through the address it's destined for.
Yeah.
So there's no way for that to kind of be misused on the flip side where people can give the impression that they're sending you an asset to then claw it back later.
Yeah. people can give the impression that they're sending you an asset to then claw it back later. Yeah, now wallets do need to be, you know, basically cognizant of this, but it looks different,
right? It's pretty easy to see that this is something that you don't yet have control. In
fact, you know, we'll likely start to add like pending or, you know, I don't know,
probably call it clawback on the receiver side, but it's like, you know, in transit,
on the receiver side,
but it's like, you know, in transit,
you exclusively yours after time block.
Yeah.
Right.
But the thing that's neat about it is just, you know,
as long as you're just somewhat careful
with the user experience,
the blockchain does the hard work
to make sure that, you know,
only the sender and the receiver can mess with it
and only at exactly times
that the sender has set it to do.
Yeah, no, that makes sense appreciate that yep yeah because that's such a such a brilliant feature and i think that can
that will help save millions and over time weirdly we're probably going to be a kind
of boring blockchain because most of the hacks and the losses just aren't as easy to happen
yeah i don't think anyone's going to be upset about that.
You know, imagine being able to trust an infrastructure
and actually put real world money in it at scale
and have it all just kind of work.
Yeah, it's definitely going to be an interesting experience.
It's time that Compu and aol die so outside of the um the asset and the um the awesome um stuff with the dividends and the nft
side of things is there anything else that's new for cheer or any any new features that's
coming um whether that be around i know you touched on the game side of things a little bit
but maybe stuff like music or does that stuff kind of tie into the nft side
so uh a couple things are out there there's dig.net which is about to kind of launch its
second iteration and this is the ability to have a content delivery network that's incentivized so you basically have like peers republishing your
web content and you're paying them over time it's pretty cool um and it really is kind of
censorship resistant public publishing uh and that uses data layer and some other uh neat new
uh coins that can kind of stream coins out to people after they prove they've done something
so that's interesting and then circuit doubt which is a die equivalent for chia is going to
launch here real soon now is that like an algorithmic stable coin yes so you're going to
have um oh i'm forgetting their trigger byc uh and it's you know has to have, oh, I'm forgetting their ticker, BYC, and it has to be over-collateralized,
and there's liquidation bots and the whole nine.
Ultimately, I think they're going to put DCs in there too
because you can do some really interesting things
when the yield is Microsoft and Apple fanboys
and people buying AI.
So I think that's going to be a really neat place
to do interesting leverage.
When you add our new options capabilities
that are already in Sage
to write options in American style
on all these assets,
you really get some interesting abilities
to earn and earn more.
And that's even before you do things
like put DCs in an AMM
to bet swap V2 or V3.
V3 is down the line.
V2 is going to make some adjustments
so they can actually support
Microsoft ACs and DCs.
If you're a DC long holder
and you're going to hold the dividends
there for a long time,
there's no reason you shouldn't be LPing
and earning the LP too.
And just so people understand how that works,
if you have a Microsoft Dividend Certificate on Chain
and you put it in the LP,
we're just going to note that you've put it in the LP and pay the parent coin
address effectively of where the LP coin went in. So you'll still get your dividends directly,
even though you're providing DC liquidity in the AMM.
the stuff we do is like little features of what we're doing are often major blockchains
biggest story
so there are opportunities to essentially create create liquidity pools with um these dcs absolutely and acs too for the matter
and it's interesting trad fi finds that powerful because basically one of the biggest questions we
got when we were on the road is well two things one was most investors only see the value in one
side it's hilarious so we have like four meetings and two of them were like who'd buy the ac and
two of them like who'd buy the dc and it's like you all need to talk but that's what we're making
them do in the market but what they wanted to know was there was dc liquidity so the arbitrage
mechanism can work and you know can i get a dc to match with an ac to take it out and you know pull
the prices of both back toward microsoft and a decently staked up liquidity pool on chain is a great source of DCs when you need them
is there an LP opportunity there as well or yes absolutely so in other words as a DC holder you
should likely you know put your DC in liquidity pool and earn both the LP and the DC because you're going to hold those things for a while I have a question here from
from MoreJuiceX it says since CNI
and Permuto Capital have done all the heavy lifting by creating the chain
implementing the clawbacks and formulating the S1 is it possible that
other players could use cheer and the Permuda Capital
business model to offer AC and DC? Maybe they want to undercut the fees Permuda is taking.
So there's a history story here. When this was really done by the America's Trust,
one of the big concerns that the SEC and the companies had was creating too many more liquidity
pools. And so if you go look at the 1985 public record
adoption of these rules and nice rule american rule 118 you will see that it's only allowed to
have one of these types of trust per underlying stock and we believe based on recent interaction
that the sec remains concerned about that we with them about being concerned about that so for right
now it looks like you can only have one of these ACDC pairs per underlying company.
And historically, the SEC has what's been called the first to file rule.
And the idea is the first person to file gets to be the first person who goes out.
So as long as we have filed before a competitor for any of these underlyings,
they're generally not going to be able to come behind.
Now, in general, they're going to be able to use the Chia Rails to do similar things.
They can't do exactly the ACDC business model.
But that's kind of the point.
I mean, you know, one of the things that Chia wants to do, CNI, is go to late stage venture
firms and show them how to get somewhere between being a private company and being a public
company without all of the effort to be a mobile company yet on a really easier path to
like just kind of direct listing ultimately but on chain and being able to go to their general
councils and their boards with the fact that you know top 86 or 90 blue chip stocks are all trading
on the chia blockchain just makes a ton of concerns and objections go away.
Yeah, that's pretty awesome.
I appreciate the answer on that.
Great question.
Yeah, I believe Slowest Time Lord has one blog post on the America's Trust scores and primes,
and I'm pretty sure he can link from there to the documents I'm talking about around the rule and around the
original adoption back in 85.
Okay, wicked.
have you found have you found that um building this ecosystem been um a real challenge um with
the sec how have you found that experience i know you probably you know it'd be too much to kind of
unpack all of that but just in general well so there's two secs right there's the biden administration
and the current administration um because we're a bit more sophisticated than other projects, we didn't actually find the Biden administration that difficult to deal with.
In fact, if anything, I kind of think it's the reverse where they wanted to like hate all blockchains.
But the problem was, is they wanted to see the CAD trust work.
And that was a very important point for them.
And so they couldn't sit there and go, well, you know, blockchain has no value.
Now, the CAD trust has real value to a lot of the policy agendas they'd like to follow.
And so our interaction with the SEC during the Biden administration was very straightforward.
We had no stumbling blocks, no concerns.
You know, we got down to about 11 questions.
And if anybody ever wants to see that, our supposedly confidential filings are actually publicly available
on the Crypto Task Force website
from our first meeting on there,
just in the search for Chia.
And you can see both all of our S1,
our current graph of the S1 for Chia
and all of our comment letters
to get a sense of how kind of business as usual
it was with the Biden administration.
So with this administration being as pro new technology,
crypto, financial innovation, it's been very easy.
We have not had any real problem at all with the SEC.
There's definitely had to be some education.
And the good news, though, is you can educate.
Part of the challenge is they see so many chuckleheads in bad technology where people are like, well, there's no man behind the curtain,
ignore the multi-sig in this AMM.
But people like that don't understand that ESCC has hired a few enough tech
folks to understand that they're lying to them.
So we've definitely had a little bit more skepticism at times that we've had
to work through, but because our stuff works the way it does, we get through.
Yeah, that's brilliant that you've kind of had that experience.
And I suppose now you've built up that connection with the SEC
and you've kind of had that interaction or multiple interactions with them
and you're kind of able to educate them on things that they may not fully understand.
That's pretty awesome, actually.
Yeah, and when you guys get a chance to finally look at the Permuto letters,
which happens about 20 days after they go effective,
you'll be able to see that, in fact, we were often being asked to help educate the entire group
by answering certain questions that were really more about, like,
should ACs and DCs be able to be bridged off Chia?
You know, what would require, you know, what would happen if it went to other chains?
And, you know, an answer there is is that like if you've got custody and like most bridges do then you need a
license now a licensed broker dealer a personal licensed ats they can do that and that's actually
an opportunity we're kind of excited about a couple opportunities down that road but you know
it was a very different interaction and it's partially too too, because, like, the SEC knows that we're well-versed on all of this law and that we are trying and absolutely are doing it the right way, even if we're novel in certain places.
And we know the history here.
So, you know, like, explaining it to them is open outcry.
They all go, oh, yeah, good point.
I now start to understand that.
that. So anyway, point being
that because we can
meet them with the same or more sophistication
and, you know, Scadden is excellent
to have out there as well,
it's been absolutely
businesslike and, you know,
we've gotten things done.
Yeah, that's epic. I'm looking forward
to giving that a read
but but it's pretty great as well that the you know asking you to help educate people on this
as well because i think you know i've kind of seen that from a lot of people's interactions with
kind of their curiosity around how government perceive blockchain or how they want to utilize
it so that the fact that they're kind of open to learning and understanding it kind of
you know brings a bit of hope on the on the topic really yeah look i mean i think they're you know
how do i put this the sec does honestly want to make trading better and so does the dtc
you know i think in our community sometimes i see people saying like, well, like NASDAQ's new announcement is to somehow block you. And I'm
like, no, it's because they are honestly trying to move forward. It's kind of not like music in
the sense that like in the music industry, Tower Records was never going to make it. There was like
almost no path for them. DTC is probably still going to be there, but in a smaller role, because
people understand how big DTC is and all the things it does. And it might morph a little. So it's not
like they look at what we're doing and think that they're going to lose the job or something.
They instead are looking at it going, hey, that might make more sense. And so by going out and
actually doing it and creating what I call real daily volume and actual use and value for investors,
real daily volume and actual use and value for investors, then all of a sudden, like the general
rule that NASDAQ is trying to add around being able to trade the blockchain equivalent in the
same national market at the high level is extremely valuable for us because it would allow them to do
the same thing for ACs and DCs. It may not be the current implementation they're planning on,
but that's because, I can't get into it, We talk to all the national exchanges, just know that.
And, you know, we're excited about making it even more easy to trade ACs and DCs and
trade them cross chain and across the actual national markets.
Unlike a lot of other projects, though, like these aren't liquidity pools.
Our market makers are going to stand on both sides.
And when one side like, you know, if the ac is worth more on blockchain than it is on dtc
they're going to buy on new york stock exchange american and sell on the blockchain and those
prices come back together yeah that's really cool actually yeah no it's a pretty freaking cool thing
because you've got these like from our market makers perspective when you're doing this you
have the underlying mic on NASDAQ.
You've got ACs, DCs on New York Stock Exchange American,
and you've got ACs, DCs on chain.
And so you're always looking at that pairing of five and going, should I do crazy stuff?
Like, gee, I'll buy the DC on DTC
because it's cheaper.
I'll buy the ACs on blockchain
because they're cheaper.
And that's how I'm going to arbitrage pulling the price back up to the underlying microsoft stock
yeah that's brilliant
and these market makers know what they're doing and adding the blockchain and it's just like a
give me the five minute explanation in the quite slight differences
yeah
wall street's pretty good about picking up nickels.
Yeah, it's pretty exciting to think that, like,
this can kind of really open up a new avenue for people to, you know,
to kind of help grow wealth and be entered into a market
that they couldn't originally be entered into,
but also further understand and kind of accumulate their own wealth.
And like I said earlier,
almost be your own bank.
Yeah.
Well,
and look,
you know,
all the tools that people have kind of tried to make on blockchains for
DeFi have had the fundamental problem of the yield ain't so clear.
Like the best case is the yield is,
you know, these overflateralized stables or liquidity,
because at least that does make sense.
You know, there's a money value to providing liquidity.
Now the yield is NVIDIA data centers powered by Broadcom.
It is, you know, Azure and AI and Microsoft.
And, you know, heck, I'm part of the yield
on the Apple ecosystem.
I don't want to talk about how much money I spent the last couple weeks.
But anyway, and so now when you start putting that yield into a blockchain ecosystem, all
of a sudden, a lot of great ideas start to really work and be enduring and much safer
and therefore, you know, a much better yield.
If you think about it, if you own a DC and you plan to own a DC
and a dividend for five years,
you want to get it off of DTC
because your fee that we charge
cuts in half when you go to blockchain.
And now, instead of leaving
the national market market makers
to make the VIG on the actual market spread,
you can do that by putting it into the LP.
And so now you're earning the dividend at maximum rate that you can get it by putting it into the lp and so now you're earning the dividend
at maximum rate that you can get it but for owning the stock and the lp and i can tell you
those national market market makers are going to pay for your lp yeah that's a game changer yeah
Yeah, that's a game changer.
Yeah.
Yeah, that is epic.
And I'm guessing that obviously this isn't available now.
And is this going to kind of like build up over time?
How will this be kind of brought to public?
Will this be something to kind of like build up over time or will it be sort of accessible
at a certain point?
So we're going to launch the first one, and it's most likely going to be Microsoft.
And there is a run-up process that we have built internally and we'll be talking more about that
as we get close. We're very close and have one issue that we've got to deal with.
And as soon as that happens, we do want to give the Microsoft one
a couple of weeks on its own just because we're going to be doing a bunch of new operations.
We want the market makers to start getting comfortable with the, you know,
cross-chain underlying, all that sort of stuff.
We just want to let it stabilize a little bit.
But then the idea is that about every other week or every week,
we'll bring out another one.
And so we'd like to get to a tempo of about two a week.
And we think that, you know, after you get the first one or two launched,
that the actual launch process gets a lot easier because there's a lot less questions on buyers' parts of whether
these work or not. They can see them working. So it's like, oh, yeah, no, I want the, I don't know,
meta one, right? And so, you know, we want to try to get to as many of these as we can. I will say
after we get past the kind of tech ones, there may be some ordering for like market segments.
So you might do energy, you might do consumer products as kind of a group because then you
can do cool things like, hey, you can kind of both in TradFi, big financial institutions could
create a energy ETF dividend payer. And in your wallet, you can create an energy ETF dividend
player. And by the way, the reverse is true too. Like right now, if you try to buy these dividend ETFs and you know,
you don't like oil companies and we got people on this blockchain who I understand don't want to
have ExxonMobil in their portfolio. Well, because you're going to have these DCs directly on chain,
you can choose which companies are in your yield. And so you just buy around them.
and so you just buy around them
yeah that's awesome i appreciate the answer on that
that's pretty exciting as well because as this kind of unpacks and
you know you're adding more and more it kind of builds out the
it kind of builds out the the ecosystem around it giving like the community and
people are intrigued opportunity to kind of play with it and learn yeah look one of the West best
way is to get a lot of value on the Chia blockchain will be to buy an AC or DC
over and Robin Hood and move it across the chain yes I'm guessing that's gonna
like really support the the token itself well no matter what you're gonna have
full blocks on the
ex-dividend day. So the way this is going to work is that if you own the DC in the last block, well,
the first block after 3.59 p.m. Eastern on the day that it goes ex-dividend, aka the paying date,
you will get the dividend. And so there's going to be a lot of volume
running through the blockchain
in that last 30 minutes of the day, East Coast time.
And then as you add more of these,
you start having, if there's 10 of them,
you got 10 of those times a quarter.
And if there's 80 of them,
you got 80 of those times a quarter.
And some days there'll be two of them the same day and wow that'll be a full blockchain
i'm starting to see why people are excited about this
it's revolutionary i mean it's really delivering on the promise of blockchains
and delivering on a new way to invest at the same time.
Absolutely.
Well, gentlemen, we're getting a little past time.
We can probably take another couple of minutes of last questions.
Yeah, no, absolutely.
Well, you know, it's been an awesome conversation and again very educational which we really
appreciate you know the more we speak the more I personally understand I'm sure if I am starting
to understand that anyone is so I appreciate that you're helping us understand it and answering
more of these questions every time we speak and you know it's exciting it's getting closer to the
time of you know this coming to fruition as well and again you know the community have been
incredible when it comes to the education side of it,
the support and growth side of things.
And you and Bram and the team have been brilliant to speak to,
you know, easy to reach.
You guys have been dropping some content of different things
to help people further understand it as well.
And, you know, the fact that there's so many tools
for everyday people to access and a ton of information for
people to read up on and and you know and even be curious about to you know hear you guys in spaces
to to ask these questions and a massive thank you as well to everyone that came tonight to listen in
and for the amazing questions that was asked that helped you answer them and you know unpack more
information for for all of us to kind of further learn understand it as well
happy to help out and one of the things i'd say in the future is maybe we should have answer them and unpack more information for all of us to kind of further learn and understand it as well.
Happy to help out.
And one of the things I'd say in the future is we should have Trent on as he builds out some of his educational material to really walk people through how to think about it and how to think about strategies to, you know,
to basically retirement plan.
Yeah, that sounds awesome.
I'd definitely love to get Trent on.
We'll have to reach out to him and
have you bring him with bring him with you next time
is you going to uh was you going to add something in there bacon
oh sorry i didn't realize that i'm muted uh no i was all i i think uh we should bring trent on
for a chat yeah that'd be awesome
but yeah we'll uh we'll we'll call it a night um we'll wrap the space up but uh again a massive
thank you gene and again thank you bram as well appreciate you guys coming on together and uh
talking to us about cheer about what you guys are built and building, answering all the questions as well,
and hearing the awesome music by you as well, Bram,
and learning a bit about the puzzles that you make as well. It's pretty cool.
Happy to be here, and thank you.
Have you got anything you want to close off on bacon or shall we call it a night sir
no no it's been a great space um cheers for everyone that joined us um it's always good
to catch up with you guys absolutely well thank you everyone um we will call it a night i'll play us out on some music
appreciate everyone that listened in thank you as well to everyone that listens back to the
recording for the community for showing up asking the awesome questions and uh yeah we'll definitely
do this again in the not so distant future so on that note i will play us out and uh yeah gene
brown thank you guys so much we will see you legends next time for sure individual armor community of communities we rise x spaces buzz and truth ain't disguised
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