SEC新加密提案或终于解决代币问题

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I’m looking at a new place for Santi. Santi, a little pop bottle of champagne behind you—are we celebrating? And then, Rob, I’m looking at your pants; they seem to be drying, or—

1. Jackson Hole & SALT Symposium

Oh, no. It’s a jacket. It’s a jacket that’s there. It’s a little cold. I’m in Jackson Hole. I’m in Wyoming. You know, it gets—

He’s at the conference. Are all the central bankers there, Rob? And are you here to feed us the alpha?

Yeah. CZ—I did see a picture of CZ there. So, the central bankers are, in fact, in attendance.

You know, it’s funny. I’m here for SALT, and then SALT kind of leads into the Federal Reserve meeting. This week was supposed to be jam-packed with all the regulators, a lot of the bankers, and all the exchanges. It’s a very institutional conference.

Then the White House decided to do this dinner tonight with all the crypto people around the CLARITY Act. The Innovation Advisory Committee for the CFTC is meeting tomorrow, and so a lot of people canceled. Oddly, CZ was not one of the people invited to the White House for that dinner tonight, so he is still here.

Noted, noted. How long are you staying, Rob?

I’m flying out tomorrow, actually.

You’re flying out where? To Jackson Hole?

Oh, okay. Well, I’m going to miss you because I’m flying out of—

Everybody is leaving for—what? I’m going the wrong way, but it’s okay.

There is now a direct flight on United from Newark to Jackson Hole, right? If the flight is delayed, you cannot land aircraft at the Jackson Hole airport after around 8:00 p.m. because the buffalo need to sleep.

And it’s this whole environmental thing.

Well, they’ve always had the winter nonstop flight during ski season, but the summer nonstop flights are always kind of hit or miss.

I connected on the way here, and I’m passing through Chicago on the way back. I’m going to stop in Chicago and see some founders. It is one of those places where they’re very thoughtful about things. There are no lights; it’s just very dark late at night.

Great ski resort.

All right, tell us about it, Rob. Tell us about SALT. I didn’t make it this year, unfortunately.

SALT is always a great time. It does tend to be very focused on the legislative and regulatory side and very focused on the institutional use cases. I’ve had meetings with Patrick Witt, who is here, and Tyler Williams, who just left Treasury, is here. There are a number of other people from different parts of the government who have been here.

Chair Atkins is here on the SEC side. He came and kind of left right away. Mike Selig was supposed to be here, the chair of the CFTC, but he canceled because of the Innovation Advisory Committee. So, we’ve seen a lot of that happening, which has been great because, obviously, it’s top of mind.

2. Can Regulation Revive Crypto?

We had a very long discussion on Monday night with a number of high-level people about whether there are still ways that we can try to make sure the CLARITY Act gets passed. That’s a big part of the conversation right now.

A lot of the conversation is also about what the future of crypto looks like. It continues to be very much this kind of TradFi crossover. I was talking to the co-CEOs of Kraken earlier this week, who were both here on Monday and then left. Obviously, a lot of what they’re leaning into right now is the payment side and the exchange-for-everything side.

I was also talking to Mike Novogratz on Monday about this a little bit. They’re spending a lot of time on the data-center side and the AI side. There’s a general belief that people are excited about a lot of the fundamentals for the things that we’re talking about.

This is a broken record on this podcast at this point, but a lot of those fundamentals are doing well. It now has to be parsed with, or complemented by, some knowledge and understanding of what’s happening in AI, what’s happening more broadly, and what’s happening in broader capital markets. That is really the conversation right now.

Let’s talk about that. There are actually a lot of topics for a late-August podcast, but the first big one is probably the SEC and regulation, Project Crypto. Before getting into that, one question on CLARITY, Rob: what is the sense? I saw the people I was texting with who were at SALT say there’s still a decent bit of optimism around CLARITY right now.

I think you said on one of the last podcasts that there was absolutely no way we were getting CLARITY. We would get rules and regulations from both the CFTC and the SEC, but CLARITY specifically—before we get into the SEC, what is your feeling coming out of this week?

I don’t think I said there was absolutely no way. I wouldn’t speak in such absolutes, but I do think you can look at Polymarket today, right? It’s 20% or 18%, something like that.

There’s actually a broader range of things that I’m hearing from people than I have in a while. Some of the people close to the government are still telling me, “We think it’s a coin flip. We think we can get this done. Let’s figure out a way to rally the troops. Here are the things that we can negotiate.”

I think that’s awesome. There is such hard work being put into this, and there is no quit. The people who have been in the administration and Congress have been working on this for many, many months. The companies have also been spending a lot of time on this, as have their government-affairs arms—the Andreessens of the world, the Coinbases, Ripple, which is very involved, DeFi Alliance, and a number of other people.

That’s awesome, and we continue to figure out ways in which I can also be helpful on that side. Among people who are maybe less close to what’s happening in government, but who are seeing what’s happening on the ground from the way that the posturing and positioning are happening day to day at the companies, there’s an expectation that the chances are pretty low. That’s the Polymarket side.

We’ll see. I think we’ll definitely get a vote in September, but I also thought we would get a vote before the recess, and it didn’t happen. There’s work being done. I remain hopeful, but I’m not positioning as if this is definitely going to happen.

That said, I think the market has positioned itself as if this is not going to happen. Any surprise to the upside is good for the market.

Yeah. Let’s get into the SEC, and then we can maybe talk markets. We can talk about some of the more exhilarating stuff for the markets people, which is Stanley Druckenmiller buying PURR. I know everyone wants to talk about that. We can get to that.

But Santi, last week or 2 weeks ago, you were talking about catalysts—what are the catalysts? I’ll give you a catalyst, my friend: the SEC proposing new regulation for crypto assets. This is what I was hinting at a little bit last week. Not that I knew it was coming this week or anything, but I said pretty clearly that if we don’t get CLARITY, we’re still going to get rules and regulations from the SEC and CFTC. Rob had good points on that as well.

The TL;DR for people who didn’t read it is that it’s 402 pages, for what it’s worth. I think everyone is rapidly chewing through Claude credits trying to figure out what this means at the moment.

I was trying to figure out what it means for our token-transparency framework, and I Command-F’d “disclosures” and got 130 mentions in here. I still have not, obviously, gone through the entire thing.

To give a quick TL;DR, they proposed these 2 exemptions for token offerings. There’s the startup exemption, up to $5 million at one time, and a fundraising exemption, up to $75 million. Both require issuers to publish these principles-based narrative disclosures about the token and the investment contract.

The $75 million tier also requires financial statements and ongoing reporting. Then there’s a safe harbor, where once a team completes the managerial efforts that it promised to the market, the token can exit securities treatment entirely.

That is my layman’s understanding of this, not having gone through the whole 402 pages, just having spoken with people who are close to this. Rob, maybe fill in the gaps if there’s anything I missed. And then, Santi, I’d be curious—put your investor hat on.

Is this a catalyst that you would look at? There’s also some stuff happening. Obviously, there are Fed meetings, and we’re recording this on a good day. I think Bitcoin’s around $68K or $69K today. I’m curious if this is a catalyst that you’re looking for. But before that, Rob, tell me if I missed anything important here.

I think those are the most important things. I would call out that the $75 million is actually quite high. People are excited about that. I don’t think there was an expectation that it would be near as large as it is, so I think that’s great.

There’s also a sort of understanding that there is federal preemption versus the states, which continues to be a topic of conversation among a lot of different asset classes and in other ways the federal government is thinking about the world. That is, again, good because it provides more clarity, and we can’t be in this situation where all of a sudden the states are deciding that they don’t like what is happening.

There’s also going to be a 60-day comment period, and then there’s going to be drafting after that. So we’re probably not going to get an actual full rule—we’re going to get to a little bit more detail—probably not until 2027 at some point. We’re going to continue to see some evolution here.

But I would just say that, generally, this is the first sort of fit-for-purpose federal offering that we’ve ever had. What has happened before, and the way there’s been this hodgepodge of enforcement by regulators that seem not to want to legislate, or seem to want to legislate through regulation, has created a situation where we have these offshore, not-for-profit entities that kind of hold the token. They’re pulled apart from the Labs entities, which maybe do a lot of the actual engineering work, and it creates bad incentives and economic misalignment in a lot of cases.

Should this work, and should people take advantage of this, which I think they will, it creates a green space now for innovating around token design back here in the US. We should give the SEC and the CFTC a lot of credit for this. It also puts it directly back to the companies themselves to self-certify that they are decentralizing, and that allows people to try to figure out the best ways possible to do that decentralization versus fitting into really rigid structures that might make it hard for anyone but the most well-funded or best-resourced companies to do that.

I mean, do I like it? Yes. Do I think it moves the needle? You could look at the market responding favorably. I’m not sure it’s because of this, to be honest.

Probably because the Treasury announced increased sizes of long-end liquidity support, which I think was announced earlier this morning. I think, actually, the market didn’t move much in reaction to this, to be fair, and the market is completely moving on the back of the Treasury’s move.

Yeah, I mean, everything else—the market and whatnot. The thing is, we’ve had these safe harbors. Hester Peirce introduced that a number of years ago. I think it made a bigger dent because you were in a much more hostile regulatory environment. This hasn’t really been an issue, certainly not in this administration.

You’re saying, despite your positive comments, your thesis here hasn’t changed?

Correct. What we needed was the biggest bottleneck. We’re going to use that. The biggest bottleneck is: can you tie cash flows to the token?

Okay, I’ve got to let you go into that, but I’ve got to push back here a little bit on the first part. Yes, the administration and the regulators were not going after people for things that were kind of gray-area issues. Of course, they were going after bad actors, but what we have now is an actual ability to collapse the Labs and foundation entities and do so in a US, Delaware-domiciled company, right? And issue a token on top of that.

I understand that the market didn’t move yesterday, and we’ve all talked about this, but the crypto market is very flows-driven. Just because it didn’t move on day 1 doesn’t mean this doesn’t drastically change the way tokens are designed in the future, and then we’ll probably solve some of the problems that you were just about to go in and talk about.

It’s not a durable structure, is my point. This is an agency coming out with a ruling. Yeah, I get it was 300, but it can be reversed in a heartbeat. This is not regulation. This is not clarity, and so it’s a nothing burger in my mind. It is good signaling and posture, whatever, but we haven’t had this issue in a long time.

3. Who Loses From Regulatory Clarity?

I cannot imagine how it could be a nothing burger that the SEC and CFTC came out and said, “Hey, you can do this thing that is new and novel and was never allowed before,” right? Just because it is not yet enshrined in legislation doesn’t mean we’re not going to see, over the next couple of years, a lot of companies trying to innovate around this structure.

And by the way, if this becomes a thing that—I’m not just talking about an offshore crypto protocol coming to the US—we’re talking about real, live, large companies with revenue and distribution who say, “Let me figure out a way to use tokenization for part of my go-to-market, part of my capital stack,” and go and issue a token in the US, that is going to change the way people think about the world.

If the world is different in 2½ years, it doesn’t matter. I mean, it certainly would be better if it were enshrined in legislation, but it will be true that you can’t just whip all of this out of the economy. It just will not happen.

I mean, we could be in a much more hostile administration. This is something we’ve talked about in the pod time and time again. This is why passing some of that clarity is so important, because in a couple years’ time you might be in a situation where we’ll look back and say, “Gosh, we probably should have passed clarity,” because this can be reversed, right? If you change administration, then you can go back to this being repealed and you’re back to square 1.

So it doesn’t matter, and that’s my point. The biggest issue has been the market’s criticism of tokens: you can’t tie cash flows to a token. This is not solving any of that. None of it. It’s just—to your point—collapsing this bifurcation between Labs and foundation entities and having to go to Cayman or Panama or whatever. Is it marginally going to improve things? It doesn’t hurt, but I don’t register it as hugely impactful.

Well, I want to say 2 things. One is, there’s a huge chasm between “it doesn’t matter at all” and “it’d be better if the Clarity Act got passed,” right? There’s a huge, huge chasm between those 2 things, and we’re obviously somewhere in the middle. It’s not that it doesn’t matter at all.

Number 2, I don’t know how you can say this hasn’t changed the way that you can tie cash flows to tokens, because they’re kind of mum on that point, and we already see tokens doing things like buybacks, right? Which does tie a cash flow to a token itself. Now that you can do it in a regulated Delaware entity and collapse the 2, you can have more aligned economic incentives and you can do a buyback. Those things aren’t going away.

There are still obvious questions around actual ownership and what it means in M&A scenarios, and I understand your point there. But I don’t think it’s the same thing as saying there’s not a way that tokens can align with cash flows and that there can’t be better economic incentives than there were before. There is something being changed there fundamentally.

4. The Four-Year Cycle & Is It Time To Nibble?

Santi, let me ask you this. The 4-year cycle would say that October of this year would be the bottom. That would be the time to start buying, in October. There’s a lot of conversation about whether the 4-year cycle is intact or not intact. The numbers would say it is intact so far, right? I think everyone who said that there’s no 4-year cycle—well, it actually performed exactly like the 4-year cycle would say.

So there’s going to start to be conversation around mid-October, and for those watching on YouTube, I’m showing this chart of mid-October coming up. Then what happens? Starting around the October time frame, we have not only this regulatory thing, but we have Saylor capitulating, we have miners fully pivoting to AI, and we have the DATs basically just—I mean, they’ve sold most of their holdings. Not all of it, but there’s been a lot of forced capitulation. And that is now around the time when you would start nibbling. Are you still staying far away from this market?

Bitcoin is different from other tokens. I don't know if the 4-year cycle is intact or not. Maybe this is something that is just meme'd into existence, and therefore you should be—

Like the resistance line or Fibonacci numbers? Fibonacci numbers should not exist, but Fibonacci numbers exist because so many traders think Fibonacci numbers exist.

Yeah. I'll be interested in understanding what the options leverage is, as IV is super low. Maybe we should have Josh or someone come in and talk about whether it's worth buying 100K contracts in December, going out to December or January. That would be interesting.

Not nibbling yet is what I hear. Not nibbling.

5. Hyperliquid’s Institutional Moment

No, no, not nibbling yet. I think there are more interesting sectors to park capital than going out. We should talk about Stan Druckenmiller buying Hyperliquid and what that means, because I think we were recording when the war in Iran kind of broke out and we were talking about Hyperliquid really being a huge catalyst again, a very big catalyst.

It sort of traded sideways from there. Maybe we should just focus our attention on that, because I've always felt you need one asset to really carry forward and maybe reignite interest. HYPE has sort of been sideways for a bit, and it does feel like the entire crypto market is consolidating and stabilizing on certain levels.

Yes, I definitely agree with you. Is Saylor capitulating? His videos are getting more and more cringey by the day, and the market has sort of absorbed that really well. We're not at $50K or $40K, where I thought we candidly may have gone—

After that sacred promise was broken.

But this is a big catalyst. Stan Druckenmiller filed a 13F. All the big hedge funds had to file that, and he has a $23 million position in PURR.

Yeah, I will show you, actually. There's a fund called HedgeFollow.com, and it's based off the 13Fs. You shouldn't just assume that if someone owns something on a 13F, it means they're going long in their fund.

Yeah, we should point out that this is a June 30 13F. Theoretically, he was holding this on June 30, but he could be out of it by now.

He could be out of it. He could have been short on the other side of it. There are a lot of—

Yeah.

I mean, PURR has been trading under NAV for a while, and quite significantly under NAV for a while. So there are a lot of things to be thinking about there.

Yeah. That being said, if you look at the shareholders of PURR right now, you've got Stan Druckenmiller, Rob Citrone, David Greenspan, D1—which is Daniel Sundheim—you've got Jim Simons, Renaissance—let's remove that because they're trading in and out of this thing all day long—and Citadel. You've got a lot of the names.

Maybe you could see something in HYPE. You guys remember May 2020, when Paul Tudor Jones came in and called Bitcoin the fastest horse in the race? There's always 1 or 2 things each cycle that just kicks off these—

Yeah, Rob, you said at the beginning of the podcast that it's a flows-driven market. There's always something that kicks off the flows.

Yeah, maybe it's not the SEC regulatory thing, but maybe it's Druckenmiller. Who knows?

Just to tie the regulatory components together here, the ability for hedge funds to express their views on a project like Hyperliquid is a big catalyst through this structure of a DAT. That's more impactful, in my opinion, than the SEC coming out, by far and away.

But the question is, this has been around for a while. I think PURR has been out since earlier this year or late last year. We've known that a lot of these groups have owned it for quite a bit of time now, a couple of quarters. If you look at D1, they've owned it for a couple of quarters. You do see a couple of new positions, most importantly Stan's.

The question is, why would you have probably sat there thinking HYPE would have been at $80 or $90 by now, but it's not? What's your reading of that?

Listen, we talked about this when it sort of ran up to the mid-$60s. That was April, I think, if I have my timing right. I said then that I thought it was fully valued. I thought it was a great project, but that it was fully valued on a relative basis, and the market basically agreed with me. It's been sideways and range-bound since then.

What has essentially happened is that trading flows in crypto more broadly have completely died off relative to what they were before. We saw it in the public disclosures of Robinhood and Coinbase and all the big guys. We've seen it inside a lot of the DeFi protocols.

One of the things that a lot of people have been talking about lately is, "DeFi as a percentage of total volume continues to go higher. Why is DeFi killing CeFi?" The reality is that it's more of a denominator effect than a numerator effect. It's just that all volume generally is getting killed.

We're at a point in time right now where Hyperliquid actually has more RWA volume today than anything else. This story around how you can do price discovery on Hyperliquid over the weekends and in other types of asset classes, like SK Hynix, is interesting.

I heard this from a large market maker yesterday: There was more volume in a leveraged Korean U.S. ETF on the crypto exchanges' perps than there was in the underlying ETF on Nasdaq last week. What you're seeing is insatiable demand for these derivatives and these perp products on these offshore exchanges.

On the centralized side, that's people who are very KYC'd, and obviously on Hyperliquid it's not, but there's clear demand for this. I think the market is catching up as well. One of the things we have to think through about the future is what the future regulatory regime is going to look like and how Hyperliquid is going to evolve with it.

We've seen a lot of this with the Hyperliquid Policy Center trying to figure out how they might fit into some U.S. framework. We also just got an announcement, I think it was yesterday, that Nasdaq is going to launch, either by the end of the year or next year, that 24/5 market. They're going to try to figure out a way to get to 24/7. So we're going to start to see a lot of interest from institutions on that side as well.

I think there is a question today about the durability of the on-chain products if it's not this kind of regulatory arbitrage. I'm a huge Hyperliquid bull. I think they're doing an incredible job. They clearly continue to execute, and the tech is best-in-class.

They're serving a need where no one else is serving right now, essentially, and now some of the centralized exchanges are starting to serve it. But that market is going to continue to get more saturated. I think this is huge, and it's great that everyone understands that this is the way the market is changing and that Druckenmiller is doing stuff like this.

I also think it's a market that, from a product-access perspective, is going to get way more competitive over the next 18 months.

Hey, just going back quickly to this regulatory piece, one question for either of you guys: Is there a version where it's actually the opposite? We're in an environment where there's ambiguity, and it's regulation by enforcement. The agency is critically understaffed and underfunded, so it can only go after certain projects, and it has.

If you clarify this piece, does it present issues for the projects that were in the gray zone? Now it's very clear: If you are a security—because my understanding is that if there's no economic rights attached to it, if it's just a token based on network governance or whatever, then it's not—but doesn't this actually make it harder for tokens that were in this gray zone? Now it's unequivocally, "You are a security. You're not a commodity."

There are tons of ways. I don't think that's true. There still is this guidebook for how to decentralize and how to make sure that you can fit into this U.S. framework. It is also, by the way, sort of a safe harbor for people to come back onshore. We'll definitely see people who won't do that, to be honest, and who will just continue to stay offshore with a lab and foundation structure.

I think the more interesting question here is that Kalshi filed yesterday to do an S&P 500 perp. Right now, the market teams at the CFTC and the SEC are trying to figure out what perps exactly are. How do you define a swap, and are they swaps versus futures? Whose regulatory regime should this fit under?

On top of that, there has to be KYC and AML. There has to be certain reporting out of a CFTC-regulated DCM. But the broader range of real-world-asset-linked perps fits into a derivative market that's very different from a Bitcoin perp or an Ethereum perp.

One of the things that I think is a tailwind for Hyperliquid is that it's great that we're seeing price discovery on SK Hynix overseas, in this DeFi protocol. That's amazing. This is incredible technology.

But the other side of that is that offering the perp on a listed single-name equity is a much murkier regulatory situation. Today, it's definitely illegal. That's the problem: Those are the 2 sides of this story.

I think the CFTC has been incredibly thoughtful about how it regulates that market and how it wants to bring innovation onshore. I think we're going to get to a good place, but it is going to require a lot more thoughtfulness around regulation, disclosures, and registration than just a Bitcoin perp, where you can probably self-certify today to do that.

Santi, I think I’d answer that differently than Rob. I think your question is really: when you have regulatory clarity,

Is there going to be a losing cohort as well?

Yeah, exactly.

Right. I think that’s your question, because there are a lot of people operating in this gray zone. My take on this is that there will be a losing cohort here. I actually do think that there will be a losing cohort.

I think the teams that were trying to get away with basically, “Nobody’s checking on me, and the law is murky”—well, now the law is no longer murky, right? The rules of the road are no longer murky. So, let’s say you’re doing something that you think is maybe a gray zone, like driving revenue back to your token or buybacks.

I’m not a lawyer, so don’t fully listen to me on this, but here’s my layman’s take: doing the thing but saying nothing is now a very risky path, whereas in the past that was probably the only path. What you have to do now is take the exemption, accept the disclosures and accept ongoing reporting, or you have to finish decentralizing to hit the safe harbor. I would argue that both of those are much better for the market.

Yeah, I agree it’s better for the market because you have disclosures.

I think it’s much better for the market. And by the way, what is the goal of the SEC? The goal of the SEC is to protect investors. So now there are these teams that were operating in this gray zone—sure, getting away with some stuff—and now they have to do disclosures and, for the bigger ones, under the $75 million exemption, report financials and do ongoing reporting.

That’s clearly modeled after what traditional capital markets look like, which is not a broken system. It really works: doing S-1s and 10-Qs and things like that. So I would argue that there will be teams that get hurt from this, and those are the teams that should get hurt from this.

If you can’t do basic disclosures, financial reporting and quarterly updates on what’s happening, there’s probably something under the hood where investors shouldn’t be buying your thing in the first place.

Yeah, so definitely agree there. My understanding is buyback and burn is okay. But as I understand it, if you’re the officer or whatever of the foundation or project, you have to publicly certify that there are no managerial efforts attached to the project.

You can imagine there’s a cohort of projects that, if they want to go through this, are going to have to publicly certify that there are no managerial efforts. If you breach that, historically there have been projects that just operated under some sort of lawyer opinion and gray zone, but now that’s very clearly defined.

I still think that projects that publicly certify might potentially get away with it after 3 years or so. There’s a decentralization that happens, and then there’s some sort of fee switch or whatever that happens in the decentralized network. At that point, there’s no managerial effort, and I think that’s historically how it’s happened.

But to bring it back to Hyperliquid, for instance, Hyperliquid does—Rob, correct me if I’m wrong—buy and burn, right?

Yep.

So, in that scenario, I think buy-and-burn projects are fairly okay under this construct, and even before, it’s just not—

There’s nothing explicitly present preventing it, right? There’s no explicit prevention. I think people are mute on that topic.

Yeah, yeah. Okay. There’s also, by the way, a 60-day comment period, so I would really encourage people to engage. If you go talk to the SEC and the CFTC, what they will ask for when they release things like this—they’re not trying to just say, “This is how it works.” They really want the industry to engage.

6. Which Projects Go First?

For people who are listening to this, if you have thoughts on what the three of us are talking about, or thoughts on what the SEC just released, you have 60 days to file a comment. You have a comment window. This is part of the process of how this works, and I would encourage people to respond to the SEC and give them your feedback.

Rob and others, I’d be really curious to hear the perspective of some of the big law firms in the space. How are they going to advise their projects? You are publicly certifying that you have permanently ceased all managerial efforts and making that public certification to the SEC. I’d be very curious to understand how lawyers are advising their projects and what are the—

Yeah, go ahead. Sorry.

Yeah. Is it better not to do anything and see? It’s sort of like who goes first and how they do it. I know the dialogue with the SEC is much better now, and they have, like, a—

But I’d be very curious: which is the first project going? That’s the key thing, by the way. Here, Santi, is—

How would that land?

Yeah. The project that comes to mind is Uniswap, because they have been on the more hostile side, and I think they won that against the SEC, is my understanding. Now they’ve sufficiently decentralized in terms of UNI holders, so I wonder if they are one of the first ones to go because they’ve had good dialogue with the SEC.

You could argue that they’ve ceased all—put differently, there’s been a discussion around the fee switch that is up to the community and UNI token holders. I wonder if they are one of the first projects to go in there and say, “Hey, guys, we’ve been operating for X amount of years. We’ve had this track record. We’re now going to publish whatever your certification is.”

And then, to cover their ass, if there is a fee switch, you’ve sort of now—I don’t want to say absolved or reduced—a lot of the risk that might happen if there’s a fee switch, right?

Yeah, I don’t know Uniswap specifically. Hayden just came on Empire this week, actually. We just had this Monday episode with Hayden, so I’d recommend people look at that.

I think Uniswap is a very good stress test for the system, as you mentioned, because they have this unification effort, which very deliberately moved them in one direction. I don’t know who Uniswap’s lawyer is or who their outside counsel is, internal or otherwise, but I think they’re one of the more active teams in D.C.

So, anyway, I actually don’t have a specific take there.

Well, I wanted to ask you: if we’re going to move more in the direction of token transparency and disclosures, is it really that much of an issue? I think the gold standard is to tie cash flow to tokens. I feel like that’s a very big unresolved issue, and if they’re going to be securities, my read is that the SEC sort of has no problem with network-demand tokens, but they continue to have an issue with the securities-like cash-flow piece. They’ve been silent on it.

What if tokens are securities? Maybe we should be focusing our attention on what is a token security and—

There is a ton of conversation happening around this right now. There’s a ton of work being done. I think the wrong way to view what came out of the SEC this week is that this is the product.

The right way to view it is that this is the start of building an incredibly robust framework. The SEC came out with what was an incredibly robust 402-page document to kick-start the future, kick-start the conversation and provide as much clarity as they thought they could. They’ve been working on this for a long, long time.

But this is an evolving thing that’s happening right now. Both Yano and I mentioned the 60-day comment period. Probably all of the major firms will be submitting comment letters. We will, and I’m sure everyone else will as well.

There will be a lot of conversation around this. There will continue to be rulemaking after that comment period, and this will go well into 2027. It’s not the last thing the SEC is going to be doing on this topic.

Getting more direct rulings around specific edge cases or specific topics around cash flows and so on will continue to happen. But what we are seeing is an understanding that tokens are different than equities, or at least need to be treated differently within the structure in which they exist. Not all tokens are the same.

7. Token Transparency Hits Bloomberg

And so the idea that all tokens are the same is clearly not a way that we can go and regulate these. Let's figure out how to find a new framework. That's what we should all be excited about: there is an actual movement forward on this topic and an attempt to provide something where we don't have to have all of this uncertainty, and we don't have founders who want to launch tokens but are legitimately scared to do so for very specific reasons for their business.

We literally have a founder in our portfolio, an American guy who moved out of the US because of this specifically. Jeff Yan from Hyperliquid is a dual citizen, and he moved out of the US because of this, right? I had another couple of founders who you both know well who ended up not moving, but we literally had a conversation around, “Hey, we're having our first child. Should we move? We're scared.” That has gone away, and we can't undersell what that does for the market.

Yeah, 100%. Guys, I'm going to have to jump soon. Any other topics you guys want to take on your own, or do you want to wrap early as we are?

You don't want to talk about you guys being in Bloomberg now? Token transparency.

Go check your terminal. We have the Token Transparency Framework inside of Bloomberg. We're recording this on Wednesday, and I don't know if this is going to go live on Thursday or Friday, but we have 2 big Token Transparency Framework updates. This week was a good week for the Token Transparency Framework, so we're now up to 111 filings, and they're inside the Bloomberg Terminal, which is great.

The announcement later this week is actually even more important. I think by the time this is out, we'll have launched it. Right now, it's a total pain in the ass to file a disclosure, so we're launching a way to file your disclosure in 5 minutes or less using AI to pull every single piece of public information that's available about you and combine it with our private data from our entire data warehouse, which is Snowflake. It pulls in every single data source that we have, which is tens of terabytes, and basically builds this disclosure for you entirely using AI.

It's free—we don't charge for this thing. We're basically just trying to say, look, there is zero reason that if you are a protocol, you can't go file a disclosure today. If you're scared to file this disclosure, we will do it for you, or our new thing that we're launching—which I hope will have launched by the time we release this—can do it for you with AI.

Very nice. I know you've got to drop a content of the week. I do want to touch on Rob. There was an interesting chart with one of your guys about stablecoin holders, but I think I know the answer to that, which is: go look at the Artemis reports around B2B stablecoin transfers and the growth that's happening there, not so much retail holders owning more than $10 of stablecoins.

Yeah, I mean, it's an on-chain trading thing, right? There just is less of people trading and holding and doing stuff on-chain. But if you go and look at the card transaction volume, the number of people using on-chain neobanks, and the number of people doing B2B—call it—stablecoin transfers, all of that is growing. What's not growing is people doing other DeFi stuff, right? And so there are just fewer stablecoin holders.

I will give you a content of the week on this, which is actually Connor Dempsey, who is a fantastic marketer and content marketer in crypto. He now works at Rain and wrote a piece. This is very rare for me, but I'm not shilling Rain's bags here; I thought Rain put out a nice article on Twitter.

If you just go to the Rain Twitter account, you can find it. It's a whole, detailed article. I actually learned a lot about how all of this stuff works and what's happening under the hood. Rob, this is all information that you've read a dozen or so times, I'm sure, and know by heart, but for me, a lot of this was actually new. I thought the Rain article that Connor wrote was quite good.

8. Travis Kalanick & Peak Founder Mode

The way payments work is hard. Payments are very complicated, and I think they did a good job of trying to distill it down for people who are thinking about doing this stuff. I got that article brought up to me multiple times yesterday.

Oh, okay. Sorry—not to be cringe, but the Travis Kalanick episode of Founders with David Senra. I feel like we need to put a ban on mentioning David Senra or Invest Like the Best, because they're just on absolute content heaters right now.

This was the most—I think this is the most—I have ever seen a podcast get forwarded around founder group chats in the history of podcasting. The founder group chats were “must-listen, mandatory.” I've seen a lot of investors saying, “We have reached peak founder mode with Travis.” There's starting to be a split between the investors who are like, “This has gotten ridiculous.”

You know why? Because he trashed Accel and was like, “Just get passive.”

No, he trashed Benchmark.

Benchmark and Accel too, I think.

And he trashed Bill Gurley, who's one of the most successful investors of all time.

He also made fundraising seem very much like a game that you can gamify, and the VCs are just lemons. I see why the investors didn't like the episode.

Did you see in those founder group chats where people are like, “Yeah, the VCs don't know. We have to go founder mode and just play them”? Because that's basically what he said.

No, I don't. That was not the conversation at all. I think people said there's good fundraising advice in here, but there was no conversation about playing VCs.

I don't think people actually feel like VCs are useless. I think it's a Twitter narrative that people hate the VCs. You can hear David Senra being like, “These guys are useless,” but I think it's a really healthy conversation. I actually think most founders—9 out of 10 founders—would probably agree with Travis's point that VCs are not that helpful.

But I don't think VCs would even say that they're that helpful. I think VCs are there to provide a service, which is capital that I need to scale the business. Rob, I've seen what you've done with your portfolio companies. Not many VCs do what you do, by the way.

Most people would say, look, you're helpful because you're providing me a service, which is capital that I need to scale the business. But Travis's point is correct: I spend 23 hours a day thinking about Blockworks. There's no possible way that you spend as much time thinking about Blockworks as I do.

By the way, what's the divorce rate in America now? It's like 50%.

50%. Same with—you’re basically entering into a partnership with someone, and a lot of times it might not be the right partnership. That doesn't mean the other 50% aren't happily married with kids. You're always going to hear the horror stories, but it cuts both ways. There are good VCs, and there are not-so-good VCs.

Why does Travis not like Bill Gurley? Because Bill Gurley ran a campaign and got him removed from his company. If a VC did that to me, I would be very unhappy with that VC, and I would forever hate VCs.

But meanwhile, he raised a ton of money from a16z. We have many—the biggest investors in our company are 50T, ParaFi, and Reciprocal Ventures. I have truly nothing but good things to say about all of them, and if we ever raised again, I would love to have all of them in that. I think that's a more standard thing with VCs right now: I like them, they're great.

I actually had a number of founders send that to me, and one of them even sent me the clip about how VCs are “completely useless,” or whatever that clip was. I laughed and was like, “Listen, I agree with a lot of what Travis says: if the founder doesn't know the business better than I do, that's a bad sign. That's absolutely a bad sign.”

These people sent it to me, and then they're like, “Oh, no, but you're great. I agree that all the other VCs are terrible.” I think it is very clear that a lot of what Travis says is specific to Travis and who he is—a person who built Uber. A lot of the advice that he gives is absolutely terrible advice if you're a random Series A, first-time founder.

There's stuff to be learned there. Travis obviously had this incredible success, this fall from grace, and this rise. I personally invested in SBF in Adam's [?], and so I'm excited about what he's trying to build. But I laughed a little at how much it got forwarded around because it's such a specific story for such a specific person and a level of success that pulling a lot of advice out of it is actually pretty hard for most people.

I met Travis once at F1 maybe 2 years ago. He’s an N of 1 person, is what I’d say, too. Yeah, I think, Rob, you are correct. If you are a founder, the more that you run a business, the more you realize that the business has to become an embodiment of who you are.

So if you are—Travis has deeply figured out who he is, and he runs the business, the fundraising, the storytelling, and the podcast circuit based on who he is. And I think, as a founder, if you just try to copy—

Elon. Let’s say you try to copy Elon for a year and then you listen to some Travis episodes—you’re going to do a totally different thing. What’s your style? What is your style? You have to figure that out, and I actually just think that takes time. You just need to go through it to figure that out.

I think the thing he said about how we are grandmasters of chess when we know our business that well is very important, because that is what you endeavor to do as a founder. You endeavor to be the expert. I think the reality is that, for a lot of first-time founders, they’re not actually the expert yet. They’re really figuring it out.

The best companies—I said this on a different podcast—the best companies over time are dictatorships, but there are long periods of time where even Travis will admit he didn’t really know what he was doing, right? So you have to move into learning and sourcing information from a lot of people, trying to figure out exactly what is happening in your markets, being deeply, deeply involved, having high conviction, bringing people along with you, and being a great visionary.

Then, over time, to the point that he said, he got way more comfortable. The more comfortable he got, the more willing he was to tell everyone else, “You don’t know better. I know better.” That’s clearly the right move. Most first-time founders don’t have that yet.

Yeah, my two cents on this, Yano, is the most important thing you said, which is that a lot of this is just an evolution of understanding and discovering your identity, and then figuring out how you’re going to run the firm based on that. I think that reveals itself over time, at least in my experience. It takes time to figure out who you are and how you’re going to run things culturally. That’s not day 1.

Some people get closer to it or not, but—

Yeah, it takes time.

Yeah, agreed. I do think one thing that founders can take away from that, which I didn’t see anywhere on Twitter, is that everyone’s talking about the fundraising advice and the different things like that. He is amazing at these analogies, and I think that is a takeaway that founders can use.

I’ve been pitched—I’m seeing a lot of pitches again. There was a lull in pitches, and now people are pitching again, but they’re wildly overcomplicating it. You get 28 slides in a deck. Because of AI, people just send these memos that are 14 pages, and the deck is 28 pages long. Just send a 1-pager. Give me the analogy, because I have a smooth brain. Simplify, simplify, simplify. I think Travis does such a beautiful job at that. That’s a takeaway I’d have.

Rob, Santi, what do you guys have for content? Unless, Rob, you have a—

Summarize it into a meme. Good point.

It can’t be a meme. You’re doing something wrong.

Yeah, or Rivet has the napkin. Put it on a napkin. So, Rob, Santi, content of the week. What do you guys have?

9. Content Of The Week

I’m reading Kochland, the book about the Koch—

Brothers.

Really, really fascinating story. A lot of people would be surprised. Isn’t it the largest private enterprise? Well, I guess before SpaceX and some of these, but it used to be, at one point, the largest privately held company in America. It has its hands on most products that you touch day to day, from plastics to oil to packaging—everything. It’s a pretty remarkable operation.

It obviously has a New York Times spin on it. It’s a very politically charged book, so if you can tolerate that, it’s worth a good read. I like reading older, 1980s and 1990s stuff, and so it’s worth reading.

Is that a double dip? Didn’t you say that last week? Am I misremembering?

Did I?

I may have. It’s a big book, so I feel like I can—

I think you’re allowed to double-dip with books. I think you—

I’m allowed? No, no one ever finishes a book after a week. Okay, I feel—Robert, do you see him? I’m a slow reader. No, listen.

I am a terribly slow reader.

I like—I read so slowly.

I got a day job, man. But no, it’s a really good book. I feel like there’s a lot to learn about that.

I mean, the Koch brothers are probably the single most politically influential people in the world who are not—

We’ve got to get the Koch brothers to buy Purr[?] and spin out D.C. The dog’s going crazy right now.

Rob, yeah, I know the dog’s going crazy. Why don’t you go and fly from Jackson to Wichita and have a sit-down with Charles, or whoever’s in front, and convince him to buy Purr[?]?

You know, I’ve driven through Wichita once.

Honestly, if someone could do it, I think Rob could do it. I think Rob—

Couldn’t we already decide Rob is the new Saylor of this cycle?

God—

We’ve been talking about Catalyst here. Rob, we need you to rise to the occasion. You’re in Jackson. When Gandhi was talking about “Be the change you want to see in the world,” this is, I think, what he was referring to.

This is it.

Content of the week. Bring us home.

I’m going to lighten it up a little bit. This is a little specific because it’s a Broadway show, but if you’re in New York—or if you’re in London next year, when it’ll be on the West End—there’s an onstage version of Paranormal Activity. I don’t know if you guys remember that movie, but it was one of the first found-footage horror movies I liked as a kid.

The Broadway version is awesome. If you’re in New York and you like horror, or if you’re in London when they’re back on the West End, go see it if you like plays.

Nice. So, Rob, how did you know that crypto was the calling for you?

It’s like, “Well, I love horror, and naturally I felt right at home in crypto.”

At that—

Jesus.

That was it.

The signs were there.

I love having nightmares.

Awesome stuff.

All right, folks. Good stuff. For this Monday’s episode—

20 minutes after Yano said he had to leave, we’re still going.

I know. I’ve gotten so many texts being like, “Where are you?” I’m enjoying it too much. We were supposed to record with Matthew Prince, who’s the CEO of Cloudflare, but that just got rescheduled. So we may or may not have a Monday episode. If we don’t, I apologize, and we’ll see you the week after. If we do, it’ll be with someone good.

If I can co-host that one, I want to be on. Raising my hand.

You want to join me? Join me for it.

Yeah.

Great. Done deal.

I’ll be right here in the background, sending you my support from across the ocean, guys. You bring it home.

Bring it home. All right, folks. Enjoy the weekend, and I’ll see you next week.

Nothing said on Empire is a recommendation to buy or sell any investments or products. [music] This podcast is forformational 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 Block Works team may hold positions in the company's funds or projects discussed.