Blockworks 愿景

Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed.

Going back to crypto, we won. We actually won.

I noticed, though, that we're recording on Empire with the Empire logo. I don't know if that's a subtle power play that you're maneuvering here, but

Years ago, Mike and I were debating founder one and founder two. For those who don't know, Mike is actually pretty good at ping-pong, and he beat me. We did a BM of ping pong for who's founder one and who's founder two, and he beat me. He's held that title for years, and I'm taking it back.

We were a couple of drinks into that game, and I changed my LinkedIn title to "Founder One and Commander-in-Chief" and then didn't log back into LinkedIn for 2 years. For 2 years, Mike's LinkedIn title was "Commander-in-Chief of Blockworks."

We launched a rebrand today. Blockworks did a big rebrand today, and Mike and I wanted to get on the horn and talk to you about it. My high-level context for why I wanted to do this episode is that, for the last year, I've been talking about crypto having this big line-in-the-sand moment. You have the first 15 to 16 years, and then I'd say 2025 was this line-in-the-sand moment, and you have everything after 2025. I'd say this rebrand for Blockworks marks that for us.

1. The Current State of Crypto

Blockworks was started in December 2017; Mike and I were living together in New York when we started it. So, 8½ years in, this is the line-in-the-sand moment for Blockworks. Maybe the best place to kick this off, Mike, is not about Blockworks at all. I'd love to get your take on the zeitgeist in this moment in crypto. We're recording this the week of April 20, and it's kind of low-vibes. There are all these DeFi hacks, and I'd love to get your take on what's going on in crypto today.

Let me try to put a somewhat original spin on this, because the unoriginal take that everyone agrees with, and that we have all this data to back up, is that there's the institutional sector of crypto—the institutional bull market, which is real and happening—and then there is the crypto-native side of things, which is struggling a little bit more.

Maybe to put another spin on it, and I think one that informs the sentiment more directly, crypto in many senses was an industry and a technology, but it's also kind of a political movement. There's an ideology that underlies that political movement. I think, funnily enough, what's causing the sentiment drift here is that that ideological movement and industry blob that is crypto won.

Now that it won, it moved from being a movement on the fringe, on the outside, and countercultural to one that is in the mainstream, and it's struggling with an identity crisis. Let me give you 2 examples of when this has happened in the past: one that's a little bit happier and one that's less happy.

People have compared Bitcoin with the Catholic Church a lot, right? This is actually a really good example because, in the beginning, Christianity—the church—was this outsider movement. It was the ultimate outsider movement at the time. Then, when it entered the mainstream, and Roman society was kind of petering off, the Catholic Church had to assume a lot of the roles of the state, but it also had to reconcile with the state infrastructure.

You had to make all these weird compromises, like, "Hey, we used to regard the emperor as a god, but Christianity says there's only one God." We would be like, "Who cares?" But that was 100 years of war, and then they finally said, "The emperor is an instrument of God." Boom, there's your solution.

Another example of this would be something that moved from the fringe into winning. This is literally what winning feels like. But now, some of the parts of our ideology that haven't survived contact with the real world are going to have to change. That is the moment that we're currently in.

Yeah, I love that. The history nerd in me especially loves that. I would maybe describe everything that you're talking about this way: We no longer have an enemy.

Crypto has always had an enemy. It was us versus the banks. It was, "We're bringing down the financial system. The financial system was broken. We're building a new financial system." What happens when the banks actually start coming in and they're actually the customers? If you're in DeFi or you're in an L1, you're trying to partner with the banks. That's fine, because we still had an enemy. The enemy was the regulators. You had Gary Gensler.

Uniting. Yeah.

Right? Crypto has always had an enemy. But actually, now the regulators are our friends. So now, the 2 biggest enemies that we've had, I think, are gone. We're a bit of an industry in search of an enemy.

This happens in both of those historical examples that you mentioned. We've had it at Blockworks over the years, right? When you have an enemy, it's really easy to rally the troops. It brings everyone together, pushes people, and then when you win and you beat them, it's a good feeling. But then you're kind of like, "Okay, well, we need something else to rally the troops."

2. Crypto’s Trust Problem

And what else, especially at this moment in crypto, is there's no one to blame but us. We were told all of these stories about why—and this is going to get to what I think is at the heart of what's happening in crypto right now, which is a trust problem.

We used to say, "Crypto, we're in a bear market because FTX blew up. We're in a bear market because Gary Gensler. We're in a bear market because Jane Street is selling." I mean, it's just hilarious to me that now we're blaming Jane Street. If you think of the villains list, look at how low the bar—

That's what I'm saying. We're going down.

There's a necessity for an enemy, and we're searching for one. But now I think we're realizing there's no one to blame but us. We've talked about why these assets aren't going up: "Oh, it's a capital-access problem, so we got that." No, it's not. We have an asset problem, and we have a trust problem.

That is the core of what's happening right now. We'll get into some of the data that backs this up later, but the average token—or the median net return of a token—over the last 5 years is down 80%. That is the problem with the industry. There are a lot of startup market-structure reasons for that, but there's a broken structural piece that's unique to tokens, especially at the moment.

As we continue to build up and as the industry finds its foundation, which it's going to do, a huge part of what needs to happen is repairing that trust.

Okay, you said 2 interesting things. One is that the assets are broken, and trust is broken. Which one do you want to start with?

Can we—I feel like this is actually where there may be a unique perspective from our beginnings in media?

Yeah, I agree. When you're building a media business, your whole asset—the whole thing that you're doing—is trust, really. I think maybe that's something we accidentally backed into, or an insight that we had from those years of running a media business, where we realized, "This is really, really, really important."

The people who maybe aren't as clear on what it is that you're building in a media business—let's talk about the history of Blockworks here and how trust was super central to that.

3. Blockworks’ Solution

Yeah, okay. When we originally started Blockworks, there were actually a decent number of places where you could get information: CoinDesk, Cointelegraph, one podcast called Epicenter, then Laura Shin came, and Reddit. Crypto Twitter wasn't even really a thing.

The thesis that Mike and I had was that eventually this really retail-driven asset class would become a big institutional asset class. Those institutions were going to need something that looked and felt more like maybe a Wall Street Journal or a Bloomberg—something that they could trust.

That came from getting laughed out of the room when I was working at this venture firm. I'd put CryptoPanda and Reddit posts in front of them and get laughed out of the room. I think the institutional folks needed an information platform they could trust, and so we built that.

We started with podcasts and events, then had newsletters. A couple of years in, we realized that there were all these good news outlets and media brands, but they were all catering to the crypto-native crowd and, really, the retail crowd.

And so, we decided to get into the news business, right? For better or for worse. We launched the news business in January 2021. We hired reporters, and we're no longer in the news business. We don't do that anymore, but we spent years building this up into what I think is one of—I feel like it's fair to say we're one of the most formidable media news outlets in crypto for a couple of years there.

We learned a lot about what it takes to build a trusted brand and the sacrifices you have to make to do that.

Yeah. And it's funny. I feel like that lesson is getting learned in some adjacent areas. DeFi is a really interesting example that we'll talk about later in this podcast. If you ask your average DeFi founder, “What are you selling?” they would say something like yield—good, risk-adjusted yield. If you were to ask a Fidelity product manager or fund manager, “What are you selling?” they would say trust.

I think the whole industry is converging on the same idea of needing trust. We learned it so deeply in the DNA of Blockworks from the media side of things, and we've carried that over a little bit onto the data side of things.

4. The Data Behind Tokens

This was a presentation that I went through at DAS this year, but it's one thing for us to just say, “Hey, things are broken.” People really appreciate data being put around this stuff. I'm actually going to share, in a couple of really quick slides, just how broken things are and what we mean when we say this. When people say “institutional bull market,” obviously you and I believe that, but that's only half the story we're talking about here.

Everyone loves a meme, but we talk about the institutional bull market. I mean, we had the biggest DAS we've ever had. The chairman of the SEC and the CFTC. The BNY Mellon CEO. These were things that were absolutely impossible a couple of years ago, and everyone's talking about the same stuff: stablecoins, RWAs, and the Treasury secretary saying there's going to be 4 trillion in stablecoins. Just don't look at the tokens.

That's the thing that's really broken and still existential to the industry. Basically, the bull market is here. It's not here for tokens. Here's a look at how bad the data is.

From a total market cap perspective, this is total crypto market cap. Now, you and I aren't TA trading guys, but I could draw a little line here—something like higher highs, weakness becoming support, blah, blah, blah. This looks pretty good. I'd buy this chart.

This is the exact same chart with Bitcoin and ETH taken out. That still looks okay, but way less good. It looks like we haven't really done that much since late 2021 or early 2022. We've peaked out at about the same level in terms of market cap.

But when you look at market cap, it's really a function of the number of assets and the price of those assets. So, let's look at what's happened to the number of assets. Way more. Way, way more. If you're not following along on your screen here, we've gone from about 2 million tokens to just over 35 million. That is an explosion of the supply.

If you were to look at the normalized market cap on a per-token basis, adjusted for the supply, it's this blue line here, which is way worse. Basically, as crazy as this sounds, the average token is essentially where it was in July 2020, before the last 2 bull markets. If you look at it from the peak, the average token is down about 50% in market cap terms.

But that's not even the full story, because, as we know, you can inflate the supply of a token. If you were to take out that inflation and adjust for it and look at price, it's this purple line. Oh, nope, not good. Here's the purple line.

And the last thing, because you and I hear this all the time, is, “If we just built great products that were generating revenue, that would fix everything.” That's actually not true. Back in 2021, price and revenue—the amount of fees that were being generated on-chain—actually matched up pretty well. Look at 2025. We generated a ton of on-chain fees, and the prices didn't move.

Net-net, what can you take away from all of this? It's not just a revenue story. It's not just “build great products and generate tons of revenue.” We're actually doing that, and the prices still aren't going up. So, what it tells you is that there's a trust problem.

They never really understood what the difference was between a token and equity in the project. There's not really a shared understanding of how to value this stuff or where it all belongs. Token investors have been rugged so many times along the way in ways that would never, in a million years, happen to equity investors—like buying out all of the IP and the team behind a token while the token holders get nothing.

Then it doesn't matter if you generate a bunch of revenue, because investors are going to discount it and say, “I don't even know if this is going to come to me.” So, yes, obviously, we need better products and more revenue. But there's another problem, which is a structural “What am I getting here?” challenge.

Yeah. Yeah, and I think one of the things that happened is that, in a race—in a sprint—to build this industry, we abused some of the tools that we had. If you look at tokens, they had the opportunity to be these great mechanisms, but it turns out we actually had a lot of things from the equities world that worked really well, like shareholder rights and passing revenue back to folks.

A lot of these things were never actually possible because of the regulatory situation. One of the other big things that doesn't show in those charts is that the tokens sometimes weren't even able to do the things that they should do because the regulatory situation was so bad.

5. Blockworks’ Evolution

But now we have a regulatory regime that's actually going to let you do the things that the token should do. Now is probably, I would argue, the most important time ever for the folks who are running tokens and probably the greatest opportunity for people who run them. It doesn't feel like that today because sentiment is pretty low, but I really do think it's the greatest time ever for people who are running these tokens. You just have to do it in the right way.

I 100% agree. There have been times, also emotionally, at Blockworks—I don't know if this resonates with you—where it feels like you're losing, but what you're actually doing is winning. I remember the end of 2022 and 2023 was probably the year where we leapfrogged many of our competitors at that time.

You might say, “Hey, that must have felt like one of your best years ever at Blockworks.” It did not feel like that at the time. I do not remember that year feeling like we were winning. It felt like we were getting punched in the face every single day.

I have to pattern-match that to this moment in time, where it doesn't feel like we're winning, but I think we're winning. The rubber's meeting the road. The reason it feels so bumpy is because we've been accepted. We've gone from this fringe movement, based on a lot of ideology, to the mainstream. But then there are some very tricky, thorny problems where the ideology runs up into reality, and that's what we need to solve.

So, maybe that's a good lead-in. I want to talk about the rebrand. Even before we get there, I want to talk one level higher about Blockworks and how we've reoriented our business a little bit to fit this current environment.

6. Issues With Tokens

Yeah. Maybe we can get into that. So, let's maybe tee it up. I'll talk about this transition a little bit, and then let's get into the next phase of what's coming for Blockworks.

I guess, taking us up through the timeline, I mentioned we got into news and media in January 2021. We built this really formidable brand. Revenue grew year after year. We were profitable and bootstrapped for a while.

In 2022, we saw this huge opportunity to get into data. Again, it was very similar to what we saw with media and news. There were other media outlets, but we didn't think any of them were doing it right. We saw that with data. There were other great crypto data players; we just didn't think any of them were doing it at a 10-out-of-10 level. There were a lot of things that were lacking.

It wasn't like we were dying to get into it, but we saw this huge opportunity and a space where, if nobody solved it, the industry wasn't going to grow. We got into data in 2022. We raised our first outside round—the one that 10T led and Santiago and the Framework folks participated in—and we really started sprinting at this data opportunity.

Hopefully, folks know us for data now. That was really only in 2022, but it was really into 2023 that we started pushing heavily into data. So, it's really only been a couple of short years.

About a year ago, we noticed a way bigger opportunity than just data. That's maybe where, if you want to take us into what we're going after today, we can go.

Yeah. I think what we ended up seeing was—if you're a Blockworks employee, you've heard this so many times—but it's assets coming on-chain. That's the trend that we've been talking about internally for years at the business and orienting our products around.

But really, what is happening here is that capital markets are getting rebuilt. And they're getting rebuilt on-chain. That is the big opportunity—the mega-trend—of the next 5 to 10 years. When you think about capital markets, what powers capital markets is trust and infrastructure that connects investors and people with capital to people who want to use that capital: businesses, on-chain businesses.

That is the opportunity that we're orienting Blockworks around. We are the connective tissue that powers these on-chain capital markets with a layer of standardized disclosures and standardized data, and we connect investors who want to deploy capital with on-chain businesses that require that capital. That's really the whole thing of what we're trying to do with Blockworks. We are trying to build trust in this new economy of capital markets being built on-chain. And, by the way, there's no doubt that that's going to happen, but that is really the burning problem that needs solving.

When you think about what we're attacking on a 12- to 18-month time horizon here, we're actually going to start with 1 layer below the data, because everyone's saying, “We need GAAP accounting and we need revenue.” Before we need that, there's actually just a standardized layer of disclosures, right? Right now we're focusing on tokens, but I'll talk about plans further out. For all my legal nerds out there, this is already happening with the CLARITY Act.

This is either going to get passed through the legislature, or the SEC is going to mandate this via rulemaking. But the days of tokens just being able to launch this liquid instrument, not really define what it is, and provide no disclosures about ownership or sales—those days are ending. And, by the way, they should end. This does not work. Refer back to the data that we just showed: it's broken. It doesn't work.

There's actually a layer of disclosures that is the bedrock, which is just super, super basic, table-stakes stuff. What does the ownership structure look like? What does the emission schedule look like? Who are the insiders? When are they selling? Do they have to disclose their sales? Super, super basic stuff like that, right? So there's a disclosure layer that is missing from the business that everyone needs.

On top of that, there is an intelligence layer, right? Now that I have that very basic information, how can I use data to inform either enterprise workflows—like token listings, earn-program integrations at exchanges, or stablecoin issuance at banks, these kinds of enterprise workflows—or help investors better understand tokens and do things like investor relations?

By the way, that whole data layer is powered by AI. I used to be a consultant, and any analyst knows the pain of sorting through 2.5-year-old 10-Ks when you're looking for 1 line item. All of that is going to be answered by AI. We can do this stuff way better.

The exciting thing about this is that we can actually do this much better than TradFi does. Right now we're operating at a 1 out of 10 compared to TradFi. We should be operating at a 15. We have all of the tools. We have transparency. We have real-time data. We're just not leveraging that.

So, anyway, to zoom back into the 12- to 18-month time horizon, it's providing that—it's building that disclosure layer and then the intelligence layer that plugs into investor and enterprise workflows.

Yeah, the way I almost think about what we're trying to do here at Blockworks is as a marketplace in some senses, right? We connect investors and businesses in on-chain capital markets. We give the businesses a platform to earn trust, and we give the investors the information they need to underwrite the asset class. And we have this unique competitive edge in the media and events brands, right? You're listening to 1 of our podcasts today.

So we take basically the base layer, which is data and disclosures, and build things on top: dashboards, analytics, reporting, things like that. We give the companies the tools, and then we leverage our media and events assets as well. So, yeah, we're excited about it.

If you think of 1 thing post this rebrand and what we're really trying to tell the market, it's that we're building a platform here. We're building a platform on top of the software, the data, and the AI that we've built, and we're using a lot of our media and events assets to grow that much faster than we ever could if we didn't own these assets.

Yeah. So let's talk a little bit about this externally—what's happening in the market? People always ask us, “Why now? What's happening now?” The problem with crypto is that there's a ton of information asymmetry. That's fine in private markets, where that's the status quo. But as soon as there are publicly traded instruments like tokens, that information asymmetry is not good.

That's getting solved in real time. I would encourage everyone to get up to date on what's happening with the CLARITY Act. But even if it doesn't happen with CLARITY, it's still going to happen via SEC rulemaking. This is a shift from the ideology that you should just be able to launch a token and do whatever because it's decentralized, to recognizing that it doesn't actually work that way in practice. And because it doesn't work that way in practice, we need a lightweight, hopefully pretty easy version of disclosures and things like that. So that is what's coming down the pike and actually changing things.

The other thing, too, that is a more thorny challenge for founders to think about is that if you look at public company CEOs—anyone that has a publicly listed instrument—you have 2 products. One is your actual business and the product or service that you're selling, and the other is your instrument.

The CEO or CFO of a publicly traded company spends a lot of time on their business, on their internals, all that kind of stuff, but they also spend a lot of time selling their other product—their stock—to their investors. And the honest truth is that you just have to do both of those things. At some point, you will get to a point where you need to be active. You need to be out there telling the story. And there are 2 distinct stories that are obviously very related.

Yeah, I mean, I would also point to 1 other problem that I think has existed with tokens so far, which is that the founders and the team treated the shareholders and the customers as the same person. And that was kind of actually the vision, which was a fun vision for a little bit, right? It's like Uber bootstrapping the network and the people. The early Uber customers end up owning the Uber tokens.

It was a good vision, but I think in reality what's happened is that your shareholders are very different from your customers. And so this idea of governance tokens—maybe it was kind of the wrong vision. Instead of talking to your users and your customers like they're the shareholders, you actually have to talk to these people like they're 2 separate groups, right?

Especially as institutional capital moves into the industry, you've got your customers. There's your product marketing and more standard conversations about how you talk about your product and stuff like that. And then you have your shareholders. There are retail shareholders, but there's also institutional shareholders and everyone in between.

This is 1 of those ideas that sounded nice and was kind of an ideological pillar of early crypto, but it got shredded as soon as it actually ran into reality. There probably is some overlap in terms of users and investors. There have been some successful projects. You point to Bitcoin or Ethereum, potentially, or Hyperliquid is probably a great example of this in a more modern sense.

But even those projects, as they get more mature—even if you think about the stakeholder governance of something like Bitcoin, which is the ultimate decentralization—there's no real product other than the money. You look at the governance of the core developers plus the miners, and that's very distinct at this point from the holders. There's a more tenuous connection: those people probably have a lot of Bitcoin, and they're incentivized to make it go up, but they're just very different groups of people.

Totally. And you have to talk to both. Now, if you're a super-early-stage company, you should just focus on finding PMF. But then you probably shouldn't have launched a token yet, either. So that's the other thing, too: if you have a token and you don't want it to keep going down, you have to talk to people and tell the story.

And you don't have to do it all alone, either. You can get support, plug into networks, and leverage data to tell that story better, but you have to tell the story. Do you think this idea of broken tokens is the biggest thing holding the market back today?

I do. I think it is. Actually, I think that if you had not even every token—because it's not going to be every token—10 to 15 tokens started to compound and return, I think it would solve every problem. Because it would force others to join.

And, by the way, I actually do think that's how we get out of this bear market: a few tokens say, “We're going to maybe kill our equity.”

We’re going to drive all the returns back to the token. We’re going to have one simple structure: we’re going to generate revenue, and those tokens will get rewarded in the market. Then other founders will see those tokens get rewarded, and the flywheel will start to happen.

You know what else? Not to keep putting this in sociological terms, but if you think of crypto as a political movement, any movement is about building a coalition of people who actually want different things, but you unite under one roof and one party—and crypto actually was that. There were different motivations for people to be in this industry, and the cypherpunk one was the only socially acceptable one for a long time. You had to be like, “I live and breathe cypherpunk; that’s why I’m here.” I think a lot of people were LARPing when they talked about that.

I think there’s a really strong contingent of that. I also think it’s not mutually exclusive. I care about a lot of that stuff. Another huge reason, though, why I wanted to work in crypto is because you’re getting in on the ground floor of an industry, and the pace of innovation is so fast, and it’s so interesting. It’s so stimulating.

That’s a huge reason why a lot of people work here, and as this industry collides with reality, it’s given people permission to say, “There are other reasons to work in this industry other than just the pure ideological cypherpunk stuff.” I think that’s a bigger one for people than they would actually really admit. And I think what people want is the ability to bet on companies at an earlier stage.

Dell went public at a $150 million market cap. You could have bought Dell for $150 million in the public markets at one point. That’s freaking cool. We should go back to that. I think it sucks that private markets are now so big, and, okay, great, OpenAI’s going to IPO at a trillion dollars. So, there are like 1,000 people who have made money on that. That sucks. That sucks.

So, tokens getting fixed solves this problem. It opens up the market at an earlier stage and allows people to get access to this stuff at an earlier stage, which is a societal good. Now, what you need to solve is the right balance of how much information you need to disclose so that it’s not so painful for those issuers that they’re just like, “Screw it, I’m going to stay private.”

And that’s where crypto fits, because all of that data is live. It’s literally live data that already exists. All you’ve got to do is organize it. And I think that, over time, those businesses should be treated with kind of an equity-light sort of framework because you’re disclosing so much more than your average business.

Yeah, the other interesting element here is that as equities come on-chain—not just equities, but as more companies do things on-chain—Figure, Coinbase, Robinhood, Stripe—Cloudflare is launching a stablecoin. As more businesses do things on-chain, you can actually start to see their metrics and their numbers in real time.

One very fun example of this right now is Figure. A lot of Figure’s business is on Provenance; it’s on-chain. If you look at most stocks when they have earnings, the price moves because they either miss big or hit big. If it’s a newer stock, they’re still figuring it out, and the stock tends to move a decent bit on earnings day. Figure doesn’t move that much on earnings day, and the reason for that is because the analysts on Wall Street are actually all just looking at the on-chain data. So, you can see 90% of their business. Their earnings days are actually not that big of a deal for a company like Figure, and that will become more and more of the norm.

Yeah, and I think some of the nuance here to figure out, too, because if you’re a founder listening to this, you’re like, “Ooh, do I really want all that information public?” There’s probably the right amount. Think about the way that companies disclose information. If you’ve ever pored over a 10-K, companies get some amount of discretion in terms of, “Okay, I don’t need to disclose the terms of every single enterprise contract.” That doesn’t make any sense. But I do get to see the business broken out by geography—the North American business versus the EMEA or whatever type of business—or you can break it out by a product line, and I think we’ll find some way of doing that.

But I also think the Coinbase example is so interesting because Coinbase gets punished from volatility because analysts consistently miss on the direction of just how cyclical crypto is. I’ve listened to every single Coinbase earnings call ever because it’s just fun. For a long period of time, they were the only public company. In bull markets, if you go back and look at the analysts’ expectations versus especially the transaction-based revenue, it’s always off.

So, Coinbase benefits a huge amount. Their stock rips because they outperform the analysts. They get punished, though, on the way down because the analysts just—this doesn’t exist in public markets, right? You don’t have public companies where the revenue line gets cut in half depending on the cycle. And so then they get punished too much on the way down.

That transparency—having the real-time data—if the right amount is displayed, actually smooths volatility. It smooths the volatility over time. So, that’s the opportunity for on-chain businesses. And then because all of that data is just live, up-to-date, and real-time, I feel like Coinbase and any public company that does that should get some props. They should be allowed to do less of the other things that come along with being a public company. So, yeah, that’s what I feel like the vision here is.

7. The Blockworks Rebrand

Yeah, I agree. So, where do you think—maybe we can talk more about this updated version of Blockworks? I wouldn’t—I think calling it New Blockworks is probably the wrong way to look at it. Updated version of Blockworks, Blockworks 2.0, whatever we want to call it. Where do you think RWAs and on-chain capital markets and bonds on-chain—where does that fit into what we’re doing here?

So, yeah, I think maybe right before we get into that, this would be a good time to review the storytelling part of the rebrand here. For design nerds, you’ll love this, but basically, to give a quick minute-and-a-half description of this, almost every brand that you see out there today is going into space. There’s a lot of it—it’s the era of SpaceX and OpenAI, and everyone’s looking up, which is super cool. I do that in my personal life. I’m a huge—I want to discredit everything I said. I’m a huge space guy. I love the James Webb. I love looking out into space.

Big UFO guy is what you mean.

Hey, whoa, I didn’t use that word. So, we actually went the opposite way, and we went down into the bedrock and the foundation. If you look at a lot of our branding, we’re keeping that signature Blockworks purple, but we have a lot of imagery of stone and solidity and caves and identifying things via echolocation.

That’s the reason why I think this is so cool, and it informs what we view as the opportunity for the space, which is, for lack of a better word, the seam. It’s the seam in between the capital markets that exist today and the capital markets that are getting built on-chain. You need a lot of help and support to actually do that.

So, we first approached tokens. What are the fundamental building blocks—disclosure and basic information—that you need for a token? As we know, there are other types of instruments that are getting represented on-chain. Today, we just call these RWAs, but they can be a treasury fund, a share of a private company, or shares of public companies that are getting traded on-chain.

Turns out, a share of Tesla—one share of on-chain Tesla—does not equal another. Some of them are in these weird SPV structures. Some of them have built-in liquidity sleeves that fundamentally change the actual definition of what the product is. Everything that we just talked about for tokens is going to need to get built for RWAs, vaults, earning and yield products, all of that stuff. There’s a huge market here.

And then, when you think about all of the supporting infrastructure of capital markets, everyone says crypto is so complicated. Look at a diagram of what capital markets look like in crypto. You just don’t question it anymore, but Jesus, there were a lot of layers to this.

In crypto, there are businesses like Moody’s that give you, if you want to issue bonds, some kind of rating. They have their own data, analytics, and research business. There’s Morningstar, which takes a look at funds and asset managers and gives them rankings. There’s this kind of smorgasbord—very fractured supporting infrastructure of capital markets. All of that needs to get rebuilt, and our thesis is that this is going to happen in one consolidated business.

The dynamics and the returns to scale of actually building out crypto data—which is maybe 100 times harder than people actually think—that’s the kind of foundational building block that you need to build all of these businesses. And so, we think all of these different types of fractured data-framework businesses that exist in capital markets are going to get rebuilt in crypto, and it’s going to be one consolidated winner. That is the market that we’re targeting. That’s kind of the future.

So, if we laid out all the work that we're doing with tokens around the framework and the intelligence solution, you can expand that into different types of instruments, and that's the market that we're tackling. Yeah. Big. Exciting. Is this the most exciting? How do you feel, sentiment-wise?

A leading question.

What if I said no? That would actually take all the air out of this podcast. Like, “Nah, this is the worst 4 years.”

8. Crypto Sentiment

Yeah, look, this is year 9 now of Blockworks, right? We're 8 and a half years into this journey. This is definitively the most excited I've ever felt. It was funny—you sent out a tweet the other day saying, “This is the most excited I've been about crypto,” and there were a couple of founders who messaged me saying, “Why is Mike trying to drag us in the mud?” Basically, they were not happy that you sent that out because they're like, “This is such a depressing time to be a crypto founder. Why is he trying to drag us in the mud?” I was like, “That wasn't really meant to—certainly not the point of the tweet.”

Certainly not the point, but yeah, I think the industry is kind of splintering a little bit. It feels like—and this is definitely because of the reasons that we talked about at the top of this episode—but I think it's an interesting time of consolidation in the industry, which we haven't really talked about on the show at all yet. Santi and Robin and I have been talking a lot about it on Empire: The winners are going to win big here.

By that, definitely not because of our skill, but because of a lot of luck, we have found ourselves in a good position here. It's a good time to be at Blockworks, so I think that's going to happen, all stemming from everything that we just discussed.

I think that's going to happen across many different sectors in crypto. One interesting place that you've seen it is in capital availability based on the stage of the business. At one point, there was so much capital available for early-stage businesses, and you had a lot of VCs that were actually closet token flippers. The risk was inverted. Generally, in startup land, the later the stage you are—a Series B or C—the less risky it is because you've proven out the business and found product-market fit.

It's the opposite in crypto, where the idea was that if you got in super early at a super-low valuation, the token would go live and that would be your lower cost basis. You actually had less risk the earlier you went. Now, because of how poorly tokens have performed and because there's consolidation around the categories that win, another effect is taking place: winners consolidate.

Winners are going to keep winning, and so you've seen investment move farther out along the capital stack. But I also think the barriers to entry are significant. Good luck competing with Polymarket or Kalshi if you're a prediction market. My prediction is that no one is going to compete with them. They kind of won the category at this point.

I think that's why I threw out this number of 10 tokens that are going to win: There are 5 categories that everyone believes in, and there are probably 1 or 2 winners in each. I don't think it's going to be this huge surge in everything winning again. I do think there will be some knee-jerk surge where capital moves back into the space and maybe the dino coins pump a little bit, but that dispersion trend—the winners winning and compounding—I think will happen, and it'll give faith to everyone again. It's like, “Ah, yes, this is what we're doing here.”

Do you have a sense of what the timing is? Not to get too far away from the topic here, but what's your timing for what this looks like?

I mean, I think everyone overcomplicated it, and something like the 4-year cycle is clearly in effect here. If you look at how this has played out in the past, there's the initial dump, then there's an initial recovery faster than you think that no one really believes, because business sentiment and activity lag price by about 6 months.

That was 2023, right? Prices started to move higher. It went up 2x, 3x.

Go back and look at 2019, too. It's the same. Bitcoin doubled that year, and I remember it as one of the most depressing years of the time we've been in crypto. So that's what I think this year will be. Then I think you'll start to see a resurgence, and people will think, “Oh, everything is back,” and then the winners pull ahead. If I had to hazard a guess, maybe that starts to happen around the tail end of this year.

You'll see the general move in sentiment start to align toward the tail end of this year. But the compounding of this market—we already saw this last market, didn't we? It sounded like everything won.

9. Closing Comments

There was clear dispersion, but I think that trend will continue into this next cycle.

So, one last little tidbit about this rebrand is that we did this entirely in-house. The way that most companies of our stage do these rebrands, I guess, is they hire a big, fancy agency. There's another company that just did a big rebrand—I talked to the founder the other day, and they spent $850,000, and it took them a full year to do it.

We did this entirely in-house, so big shout-out to our creative team: Reed, who's been at Blockworks for 8 years and is head of creative, and Zach and Crystal, and everyone internally. Yeah, and exciting guys, and just thanks for listening to the pod. There's a lot of cool stuff coming out of Blockworks, and we're making another fun announcement next week, so appreciate everyone. All right, cheers, everyone. Cheers, folks.