Latest / CRYPTO 101 / Ep. 739 The Crypto Data Company Powering Wall Street’s Digital Asset Push

Transcript

Ep. 739 The Crypto Data Company Powering Wall Street’s Digital Asset Push · CRYPTO 101

• 0:00
  [SPEAKER_00]: All right, everybody.
• 0:00
  [SPEAKER_00]: It is time for another crypto 101 podcast.
• 0:04
  [SPEAKER_00]: If you heard me tease this last week on Friday, we're going to start rolling out our interviews from the out-east conference presented by the Thai.
• 0:11
  [SPEAKER_00]: Bryce and I traveled up to New York City where invited by the Thai.
• 0:15
  [SPEAKER_00]: It was invite only.
• 0:16
  [SPEAKER_00]: And it was the who's who of crypto investing was there.
• 0:19
  [SPEAKER_00]: We got amazing interviews.
• 0:21
  [SPEAKER_00]: We got about 17 of them that were going to be rolling out over the next couple weeks.
• 0:25
  [SPEAKER_00]: But before we do that, I want to make sure that you understand the setting that this was.
• 0:29
  [SPEAKER_00]: We were on the road, we had a beautiful media garden set up, but we did have to deal with some weather.
• 0:34
  [SPEAKER_00]: We had some rain, some wind coming, we had to move inside at one point.
• 0:37
  [SPEAKER_00]: So I just wanted to set this up that I'm doing my best job producing this for you guys, I'm doing my best job editing for you guys, the quality is top tier.
• 0:45
  [SPEAKER_00]: There's a couple where there might be a little bit of background noise on trying my best to edit that out for you.
• 0:49
  [SPEAKER_00]: But I do want to set it up that these interviews are some of the best that we've ever done with some of the highest quality guests that we've ever had.
• 0:57
  [SPEAKER_00]: So I need you guys to lock in.
• 0:58
  [SPEAKER_00]: We're going to be dropping episodes every couple days of the next couple weeks.
• 1:01
  [SPEAKER_00]: Everything from former CFTC chairman.
• 1:03
  [SPEAKER_00]: We've got Potomac partners.
• 1:05
  [SPEAKER_00]: We've got sovereign.
• 1:06
  [SPEAKER_00]: We've got monarch.
• 1:07
  [SPEAKER_00]: We've got dragonfly and multi-coin capital.
• 1:09
  [SPEAKER_00]: These are all the people.
• 1:10
  [SPEAKER_00]: that are making decisions in the space and have the money to move markets.
• 1:14
  [SPEAKER_00]: You're going to want to tune in, you're going to want to listen, you're going to want to subscribe, turn on the bell notification, and enjoy this first episode with Josh Frank from the tie who I'll put all this together and stay tuned for the rest of the great interviews this week.
• 1:35
  [SPEAKER_02]: Alright everybody, we are here at the out-east summit in the north-fork of Long Island with the conference organizer himself, the CEO and founder of the Thai Mr. Josh Frank.
• 1:46
  [SPEAKER_02]: Thank you for joining me, but thank you for having me at your summit.
• 1:49
  [SPEAKER_02]: Thanks for having me on and it's great to be together.
• 1:52
  [SPEAKER_01]: Have you had me and we've been friends for since 2019?
• 1:55
  [SPEAKER_01]: Yeah, I think we met at an E-Toro rooftop party during in Los Angeles some random conference.
• 2:02
  [SPEAKER_02]: I have no idea even what conference that was, but I have vividly remember that and thinking, wow, this is like one of the smartest guys I've ever met.
• 2:09
  [SPEAKER_01]: If not, these smart guy in crypto one adds you out of the way.
• 2:11
  [SPEAKER_01]: Tell him he had drank a lot.
• 2:14
  [SPEAKER_01]: That's the takeaway that he had.
• 2:16
  [SPEAKER_02]: No, dude, I mean, you've been, you obviously built a great data company with the tie.
• 2:21
  [SPEAKER_02]: I remember when it was just you and then, and now it's how many people work for you now.
• 2:27
  [SPEAKER_01]: across employees and contractors just over 100.
• 2:29
  [SPEAKER_02]: Yeah, it's insane.
• 2:30
  [SPEAKER_02]: It's so love to see the growth and you know, proud to have been there since the start.
• 2:35
  [SPEAKER_02]: And now we've got this great conference with the likes of fidelity here, Morgan Stanley, in Vesco, Galaxie.
• 2:41
  [SPEAKER_02]: I mean, Coinbase, pretty much every single big name on Wall Street and in on crypto street as you will is here and are all here because of you and the relationships you've built.
• 2:52
  [SPEAKER_02]: And so,
• 2:53
  [SPEAKER_02]: Before we dive into the tie, all the acquisitions you've recently had, the growth, the products, you guys come out with a new product every week, it feels like, and these engineers, I think you're overworking these guys, because it's incredible to see just the rate of production from your firm.
• 3:09
  [SPEAKER_02]: But I want to start with the summit, because this is such a great summit, as we said, great guest.
• 3:14
  [SPEAKER_02]: What was the thought behind coming
• 3:20
  [SPEAKER_01]: Yeah, I mean, the backdrop broadly is that crypto conferences can be pretty useless.
• 3:24
  [SPEAKER_01]: When you go to a big crypto conference and there's thousands of people walking the floor,
• 3:28
  [SPEAKER_01]: their thousands of people and their random and their unrelated to you that could be service providers, it could be, you know, a hundred cell people from the same, you know, you've got to speak after booth and it's not, it's not intimate and even if you find the people that you want to talk to, you pass by them in the hall for one minute, you don't get to sit down with them and I've really found that the best events are events that bring together good people.
• 3:51
  [SPEAKER_01]: for a number of days and just give them an opportunity to connect and visualize jeps.
• 3:55
  [SPEAKER_01]: And so without the whole idea was basically how can we bring people to a place where you can't go anywhere.
• 4:01
  [SPEAKER_01]: There's nowhere to go.
• 4:02
  [SPEAKER_01]: You can't go.
• 4:02
  [SPEAKER_01]: There's no coffee shot.
• 4:03
  [SPEAKER_01]: You could run into the vineyard that way.
• 4:05
  [SPEAKER_01]: The farm mat or yeah, that's how it's going to be.
• 4:08
  [SPEAKER_01]: If you go far enough, you're very pecking with somebody else.
• 4:10
  [SPEAKER_01]: Yeah, you know.
• 4:11
  [SPEAKER_01]: there's not there's not much that you can do and so you know conceptually the whole idea was created an amazing environment where people can spend time together and they can connect and so we chose the North for partially because I'm biased I was married five minutes away from here it was a great wedding it was a great wedding it was a great wedding it was great having you there loved the yeah so I got married you know very close by and it's an amazing area and also it's very close to New York right and so we wanted to do something that was accessible as well so if you're in the city you can drive out here in an hour and a half
• 4:36
  [SPEAKER_01]: And then when you're here, you know, we curate all these incredible experiences, right?
• 4:39
  [SPEAKER_01]: We have a lobster food truck, the pizza food truck.
• 4:42
  [SPEAKER_01]: We have every attendee gets to make their own bottle of wine.
• 4:44
  [SPEAKER_01]: They get to do wine tea.
• 4:45
  [SPEAKER_01]: And we're doing wine tasting later, me and Tevo, yeah.
• 4:48
  [SPEAKER_01]: So we wanted to create this this amazing experience.
• 4:51
  [SPEAKER_01]: And, you know, like, we started the event with you could do a wine tour.
• 4:53
  [SPEAKER_01]: You could go golfing.
• 4:55
  [SPEAKER_01]: You know, you make a relationship.
• 4:56
  [SPEAKER_01]: You meet somebody in over the course of two or three days.
• 4:58
  [SPEAKER_01]: You're able to do business together and grow it.
• 5:00
  [SPEAKER_01]: And I think the thing that our attendees appreciate and why we can bring senior executives here is because we don't just allow random BD and sales people and everyone, and it's not a pitchfast.
• 5:10
  [SPEAKER_01]: It's not a pitchfast.
• 5:10
  [SPEAKER_01]: You know, we really, there's no vaporware, right?
• 5:13
  [SPEAKER_01]: It's really quality and it's also, there's no...
• 5:17
  [SPEAKER_01]: There's no there obviously isn't agenda they're speaking, but there's no agenda in that you're here to do whatever you want if you want to talk to a musician if you want to talk crypto if you want to talk you know whatever it is that you want to invest in you know you have an opportunity to do that and you have this low key incredible environment if you want to go pull somebody over there over there know it did just a gigantic space to do that I got it I got a backtrack to the golf night because I saw that on the agenda and I was like
• 5:41
  [SPEAKER_02]: I'm a high hand to capper, right?
• 5:42
  [SPEAKER_02]: I'm like a 30 plus, like we've dialed together.
• 5:45
  [SPEAKER_02]: We've done this together.
• 5:46
  [SPEAKER_01]: Yeah, you're like, that's in you.
• 5:48
  [SPEAKER_02]: We, you've seen me, too.
• 5:49
  [SPEAKER_02]: Yeah, you've got it.
• 5:50
  [SPEAKER_02]: So would I be welcome next year at the outie's summit, you know, or are these golfers just like, you know, absolute sticks?
• 5:57
  [SPEAKER_01]: So, so what was the varsalt?
• 5:59
  [SPEAKER_01]: We had, so I did, I didn't, I also didn't participate.
• 6:01
  [SPEAKER_01]: I got to work on the game in next year.
• 6:03
  [SPEAKER_01]: Yeah, you would only bear a smile, no, no, no, no, I don't want to get your next year.
• 6:05
  [SPEAKER_01]: We'll play together.
• 6:06
  [SPEAKER_01]: And, you know, maybe a couple of Mulligans.
• 6:08
  [SPEAKER_01]: Well, we'll, we'll make the square car.
• 6:10
  [SPEAKER_01]: I got to make it happen.
• 6:10
  [SPEAKER_01]: Yeah.
• 6:12
  [SPEAKER_01]: But no, we had to, we had a couple of people that was their first time golfing.
• 6:14
  [SPEAKER_01]: It was a scramble.
• 6:15
  [SPEAKER_01]: So good teams.
• 6:16
  [SPEAKER_01]: Good.
• 6:16
  [SPEAKER_01]: And we actually had a few amateur golfers that participated and didn't come in first place, which is so embarrassing.
• 6:21
  [SPEAKER_01]: Who came in first?
• 6:22
  [SPEAKER_01]: I don't know was a group of four.
• 6:24
  [SPEAKER_01]: I'm not sure it was it was in it, but there were a couple sticks.
• 6:27
  [SPEAKER_01]: They shot six under.
• 6:28
  [SPEAKER_01]: Wow.
• 6:28
  [SPEAKER_01]: Yeah.
• 6:29
  [SPEAKER_01]: Incredible.
• 6:29
  [SPEAKER_01]: Yeah.
• 6:30
  [SPEAKER_01]: What was the course you guys played?
• 6:32
  [SPEAKER_01]: I don't I didn't play.
• 6:33
  [SPEAKER_02]: It was somewhere ten minutes away.
• 6:34
  [SPEAKER_02]: Okay.
• 6:34
  [SPEAKER_02]: So I'm here long on.
• 6:35
  [SPEAKER_02]: Yeah.
• 6:35
  [SPEAKER_02]: Now it's incredible.
• 6:37
  [SPEAKER_02]: Look, so the sum it's been great, great content.
• 6:39
  [SPEAKER_02]: How is it that you built these?
• 6:41
  [SPEAKER_02]: I mean, I think truly like not to like hunk your horn or whatever, but I think you are
• 6:47
  [SPEAKER_02]: top five most networked people in crypto in terms of, you know, who you've built, who you have access to is that just by the nature of your business you're providing data to everybody or was there something special that you did to build this network.
• 7:01
  [SPEAKER_01]: I don't know.
• 7:01
  [SPEAKER_01]: I mean, I've been doing it for so long.
• 7:03
  [SPEAKER_01]: It's just a matter of like we met on a rooftop in LA during a random run.
• 7:06
  [SPEAKER_01]: Right.
• 7:06
  [SPEAKER_01]: Right.
• 7:06
  [SPEAKER_01]: And you know, maybe you're just approachable.
• 7:08
  [SPEAKER_01]: No.
• 7:08
  [SPEAKER_01]: I mean, well, when you first get started, you kind of just got to put yourself out there.
• 7:11
  [SPEAKER_01]: I mean, I started the company.
• 7:12
  [SPEAKER_01]: I knew no one, you know, had nothing going on.
• 7:14
  [SPEAKER_01]: And so it's just a matter of meeting people and meeting people through people.
• 7:16
  [SPEAKER_01]: And yeah, I mean, through the, you know, through the the terminal and the institutional business, you know, made hundreds of different, you know, connections to customers and perspective customers.
• 7:25
  [SPEAKER_01]: It, you know, nine years later, you end up meeting a lot of people.
• 7:28
  [SPEAKER_01]: Yeah.
• 7:28
  [SPEAKER_01]: And being in New York, you know, we also used to host weekly happy hours in the city and a lot of people come in and do things.
• 7:34
  [SPEAKER_01]: It's, it's, it's just, it's the culmination of knowing people for a very long time and doing something for a very time.
• 7:40
  [SPEAKER_01]: And I think it's that rule.
• 7:41
  [SPEAKER_01]: Like,
• 7:42
  [SPEAKER_02]: I don't know what the rule is, but you provide value.
• 7:46
  [SPEAKER_02]: You very rarely ask for people to give you value.
• 7:49
  [SPEAKER_02]: You're a giver, not a taker.
• 7:51
  [SPEAKER_02]: And I think that's one thing that why people are attracted to coming to your conferences and working with you, because you're literally hustling around every single different food drug, every single different thing.
• 8:01
  [SPEAKER_02]: You know, hey, how are you enjoying the conference?
• 8:02
  [SPEAKER_02]: Who do you want to meet?
• 8:03
  [SPEAKER_02]: And everybody who I'm asking, they're like, yeah, like Josh is asking, you know, making all these introductions, so you do the leg work.
• 8:09
  [SPEAKER_02]: But anyhow, let's dive into the tie.
• 8:11
  [SPEAKER_02]: Let's dive into what you guys are building on, what you guys are working on.
• 8:14
  [SPEAKER_02]: Start us at a high level before we zoom in.
• 8:17
  [SPEAKER_02]: For folks who are watching, whether they're a retail trader, whether they're an institution, what does the tie do?
• 8:23
  [SPEAKER_01]: Yeah, well, that's it, you know, it depends on when you ask the question.
• 8:26
  [SPEAKER_01]: Sure.
• 8:27
  [SPEAKER_01]: So the answer is actually going to change.
• 8:28
  [SPEAKER_01]: We have a public announcement in a week or two, which will slightly change change change that.
• 8:33
  [SPEAKER_01]: But broadly speaking, clueless anger.
• 8:36
  [SPEAKER_01]: Wow.
• 8:37
  [SPEAKER_01]: It's a, it's a regular story related reason why I can't I can't just I'm happy with that.
• 8:41
  [SPEAKER_01]: Yeah, right.
• 8:42
  [SPEAKER_01]: The, um, but.
• 8:43
  [SPEAKER_01]: What we do broadly is we really help institutions interact with digital assets and that's in a number of ways.
• 8:47
  [SPEAKER_01]: So we start as a data company and so we built the Thai terminal on APIs which for anyone listening think of like a Bloomberg or facts that type platform for crypto which service hundreds of hedge funds, asset managers, vcs, bank, market makers, OTC desks.
• 9:00
  [SPEAKER_01]: So that's kind of where we started, but over the years we really expanded that, so the first thing we expanded that with was events.
• 9:05
  [SPEAKER_01]: And so we realized a few years ago, we knew all the institutions because of our business.
• 9:09
  [SPEAKER_01]: We also knew a lot of the protocols.
• 9:10
  [SPEAKER_01]: We realized the protocols and the institutions didn't really have great place to connect.
• 9:14
  [SPEAKER_01]: So, in traditional capital markets, investment banks put on sell-side research conferences.
• 9:19
  [SPEAKER_01]: So, you know, think, you know, tier one, bold bracket bank.
• 9:21
  [SPEAKER_01]: We'll put on a conference, they'll bring the CEOs of all the public and private fintech companies,
• 9:28
  [SPEAKER_01]: And in crypto that didn't really exist.
• 9:30
  [SPEAKER_01]: So a few years ago, we started putting on our first events, focused on actually helping protocols, connect with institutions.
• 9:34
  [SPEAKER_01]: That's really the genesis.
• 9:35
  [SPEAKER_01]: Our first element's called the bridge because we wanted to bridge protocols and institutions together.
• 9:39
  [SPEAKER_01]: So that's how we got started.
• 9:40
  [SPEAKER_01]: As we built that out more, we realized that there were something that both of our customers had in common is that they had a lot of tokens.
• 9:46
  [SPEAKER_01]: And so we acquired at the end of last year.
• 9:48
  [SPEAKER_01]: They had a lot of tokens.
• 9:49
  [SPEAKER_01]: And they didn't necessarily want to pay us cash, but they had a lot of tokens that they weren't really,
• 9:53
  [SPEAKER_01]: using for much.
• 9:55
  [SPEAKER_01]: And so at the end of last year, we acquired a business called stake in, which is a two billion asked under delegation stakey business.
• 10:01
  [SPEAKER_01]: And the idea was we could go to our clients.
• 10:02
  [SPEAKER_01]: We could say, look, you want to be part of, you know, our, our, our, our, our events, you want access to our data, you want access to our information, delegate your stake to us.
• 10:11
  [SPEAKER_01]: We'll try to do the same rate as any other statement provider.
• 10:13
  [SPEAKER_01]: It's the same, the same terms, everything.
• 10:14
  [SPEAKER_01]: But you got additional value because ultimately, you know, stake your providers are giving you the same rate,
• 10:21
  [SPEAKER_01]: 100% of time, like all of it, it's all the same shit, right?
• 10:23
  [SPEAKER_01]: And so you can get more by delegating to us.
• 10:26
  [SPEAKER_01]: And so that's kind of how we get started.
• 10:28
  [SPEAKER_01]: We also just announced that we acquired a business called StakingRewords.com, which is the top staking in yelled data platform in the spot.
• 10:36
  [SPEAKER_02]: Back in the day, I mean, I've made walkthroughs of StakingRewords.com for our community.
• 10:40
  [SPEAKER_02]: Yeah, you know, like how to use this platform, how to find them.
• 10:43
  [SPEAKER_02]: And so it's cool to watch this full circle, because I'm going to have to make a new website or a new video about the new website and stuff.
• 10:50
  [SPEAKER_02]: Well, it's the same website, it just says by the tie.
• 10:52
  [SPEAKER_01]: It looks good, but we just acquired that business for a few reasons.
• 10:56
  [SPEAKER_01]: The first is, it allows our customers to access to more data, more information, which we can bring into the terminal.
• 11:01
  [SPEAKER_01]: But we can also bring to Stakey Memorials and for all your users, more data from the terminal.
• 11:06
  [SPEAKER_01]: So we'll be able to bring more insights, more analytics, to make that platform even more powerful.
• 11:10
  [SPEAKER_01]: But it's really exciting to me.
• 11:12
  [SPEAKER_01]: And I think was under appreciated by the Stakey Memorials team, and they continue to work with us, and they do appreciate it.
• 11:19
  [SPEAKER_01]: There's a million people that visit the website every single year.
• 11:21
  [SPEAKER_01]: Why do they visit because they care about yield?
• 11:23
  [SPEAKER_01]: And to me, you can turn that into a lot, right?
• 11:25
  [SPEAKER_01]: And so if you a lot of work with protocols and we could help get them more exposure and present yield opportunities and for us, it's moving more than just staking.
• 11:31
  [SPEAKER_01]: It's it to defy yield and RWA yield and make it more of a yield focus platform.
• 11:36
  [SPEAKER_01]: And we also just acquired a platform called liquidity land, which is a platform that helps defy projects raise TVL.
• 11:41
  [SPEAKER_01]: And they've helped products raise collectively over 100 million in TVL.
• 11:45
  [SPEAKER_01]: And what's really cool is the user you can come on the platform and you'll get additional yield versus going anywhere else.
• 11:50
  [SPEAKER_01]: So there's additional incentives.
• 11:52
  [SPEAKER_01]: So you go when you deposit on your platform, maybe you'll get
• 11:54
  [SPEAKER_01]: 5% yield going directly to a lending protocol, but through us, you get 5.1% and it's basically incentives that the D5 protocols are willing to give to bootstrap growth on their network.
• 12:04
  [SPEAKER_01]: And so for the D5 protocols that we're working with, we now are able to give them exposure to institutions.
• 12:09
  [SPEAKER_01]: We'll be able to bring exclusive deals onto the terminal.
• 12:12
  [SPEAKER_01]: We'll also be able to syndicate the deals on to StakingRewords.com to the million million users energy, and so all of these things really work together, but it's all about helping protocols get exposure institutions.
• 12:21
  [SPEAKER_01]: And then helping institutions understand digital assets, get exposure to digital assets, get information about digital assets, but really it's at the intersection of institutions, digital assets, and protocols.
• 12:31
  [SPEAKER_02]: Yeah, I love it.
• 12:32
  [SPEAKER_02]: Tell us, walk us through like, how do these deals come together?
• 12:35
  [SPEAKER_02]: Are you in a board room and people are pitching new ideas?
• 12:41
  [SPEAKER_02]: Are you coming up with the ideas?
• 12:43
  [SPEAKER_02]: Are you going out and calling people and saying, are you for sale like walk us through, from the CEO perspective, how an acquisition actually gets done?
• 12:51
  [SPEAKER_01]: Yeah, I mean, it's, it's, there's no shark tank.
• 12:53
  [SPEAKER_01]: You know, I'm not saying over there later today.
• 12:54
  [SPEAKER_01]: It's just, if anybody does want to come pitch me, please do reach out, you know what that you have to hear what you have.
• 13:00
  [SPEAKER_01]: And we continue to be active in this space.
• 13:02
  [SPEAKER_01]: You know, I think maybe we want to break from acquiring business with three and six months, so I think maybe a little pause, but we are active in the right opportunity is a percent of themselves.
• 13:09
  [SPEAKER_01]: We have investment bankers often.
• 13:11
  [SPEAKER_01]: Go for common, send us tax and present us opportunities.
• 13:14
  [SPEAKER_01]: They're spaces that we we we knew we wanted to acquire a staking business, so we looked at multiple staking businesses and actually wasn't even familiar with the stake in brand before and we got approached by a bank with that opportunity so it's a mix you know sounds founders come directly to me it's also you know talking to The liquidity land deal actually they had referred us customers for some of our other products and a salesperson of my team who works with them said hey you know these guys are looking for an exit you want to chat with them and you know went from that to
• 13:41
  [SPEAKER_01]: being part of the tie and probably like a hundred days or so.
• 13:44
  [SPEAKER_01]: It's pretty quick.
• 13:45
  [SPEAKER_01]: Yeah, crypto is fast.
• 13:46
  [SPEAKER_01]: Yeah.
• 13:46
  [SPEAKER_01]: So, yes, they're pretty quick.
• 13:48
  [SPEAKER_01]: But yeah, I mean, we're open for business.
• 13:50
  [SPEAKER_01]: Love it.
• 13:50
  [SPEAKER_02]: Yeah.
• 13:51
  [SPEAKER_02]: In terms of, you know, the program that you guys have put on, there's been so many good stories being told from the regulatory perspective.
• 14:00
  [SPEAKER_02]: The liquid active, you know, hedge fund perspective.
• 14:03
  [SPEAKER_02]: The Wall Street tokenization perspective.
• 14:05
  [SPEAKER_02]: I've seen stuff on prediction markets, on perpetuals.
• 14:08
  [SPEAKER_02]: Where in your mind is the most, I mean, there was some talks on AI and crypto.
• 14:13
  [SPEAKER_02]: Where in your mind is the most exciting for the next, you know, call it six to 12 months of where crypto is going?
• 14:20
  [SPEAKER_01]: Yes.
• 14:20
  [SPEAKER_01]: So, I mean, to me, it's, to me, it's actually not been as much of a discussion than partially discussion, but it's what we're really excited about, which is this concept of converting tokens and equity, converting tokens into equity.
• 14:30
  [SPEAKER_01]: Well, I've heard converting equity into tokens,
• 14:38
  [SPEAKER_01]: There's a few reasons why I think that this is really meaningful in a matter.
• 14:41
  [SPEAKER_01]: So the first thing is when you're a founder of a company, right?
• 14:45
  [SPEAKER_01]: You know, you own part of part of crypto 101, right?
• 14:48
  [SPEAKER_01]: You own a decent chunk.
• 14:49
  [SPEAKER_01]: I don't know how much you own.
• 14:50
  [SPEAKER_01]: But let's say you own 10% 15% 20% 30%.
• 14:53
  [SPEAKER_01]: Founders of protocols, you know, as a lot of you guys have seen token distribution charts, 10% 15% goes to the team.
• 14:58
  [SPEAKER_01]: The founder might have 2% or 3%.
• 15:00
  [SPEAKER_01]: Yeah.
• 15:00
  [SPEAKER_02]: And he's the one who's working day and night.
• 15:02
  [SPEAKER_02]: Right.
• 15:02
  [SPEAKER_01]: And so reputational risk.
• 15:04
  [SPEAKER_01]: Right.
• 15:04
  [SPEAKER_01]: And so, you know, when the tokens that
• 15:08
  [SPEAKER_01]: Fantastic.
• 15:08
  [SPEAKER_01]: You're worth $300 million to give a shit.
• 15:10
  [SPEAKER_01]: Yeah.
• 15:10
  [SPEAKER_01]: When the token sitting at 50 million mark to cap, you know, they have a hundred grand.
• 15:14
  [SPEAKER_01]: Yeah.
• 15:14
  [SPEAKER_01]: Worse than the thing.
• 15:15
  [SPEAKER_01]: And ultimately, you know, with AI and all the opportunities that, you know, that are available, you might get a better signing bonus than that.
• 15:20
  [SPEAKER_01]: Don't get somewhere else.
• 15:21
  [SPEAKER_01]: Sure.
• 15:21
  [SPEAKER_01]: Or whatever.
• 15:21
  [SPEAKER_01]: It's just the opportunity cost of leaving is no longer very high.
• 15:24
  [SPEAKER_01]: That's the first issue.
• 15:26
  [SPEAKER_01]: the sector and then you can't you can't issue yourself more shares because there's that set pool right and with an equity business like if you guys wanted to hire more employees or we want to hire more employees we could expand our employee stock option pool and basically dilute everyone to create more shares for employees right with a token you can't do that the second thing is you can't raise more money so you go out you've launched a token you've raised money before maybe you've raised 30 million dollars launch a token
• 15:51
  [SPEAKER_01]: your tokens now sitting at a hundred million mark a cap and that foundation only has five percent of the tokens left.
• 15:56
  [SPEAKER_01]: So the most you can do it, you can't raise again.
• 15:59
  [SPEAKER_01]: So you have five million dollars with the token.
• 16:01
  [SPEAKER_01]: Let's say you need ten million dollars in capital.
• 16:03
  [SPEAKER_01]: You can't raise ten million dollars.
• 16:04
  [SPEAKER_01]: You have no mechanism for doing that.
• 16:05
  [SPEAKER_01]: With an equity business, you could dilute yourself to zero.
• 16:07
  [SPEAKER_01]: I mean, you could you could continue to raise as much as you want to do.
• 16:09
  [SPEAKER_01]: Right.
• 16:09
  [SPEAKER_01]: And so, you know, when you went out and you raised originally maybe you raised for five years of runway and you thought the token would exist and you'd be at a high value.
• 16:18
  [SPEAKER_01]: You could sell the token to continue your runway.
• 16:20
  [SPEAKER_01]: Now you can't do that.
• 16:21
  [SPEAKER_01]: The other problem is you have this buyback incentive.
• 16:24
  [SPEAKER_01]: And so everyone is asking for buybacks, buybacks, buybacks, buybacks.
• 16:27
  [SPEAKER_01]: If you're a big product like a hyper liquid and you're very profitable, you can do buybacks and you should do buybacks.
• 16:33
  [SPEAKER_01]: But if you're a smaller early stage, defy protocol that has 10 million in revenue and maybe 1 million in profit, you shouldn't be buying back.
• 16:41
  [SPEAKER_01]: You're token holders like investors,
• 16:43
  [SPEAKER_01]: You want to reinvest in the girl.
• 16:44
  [SPEAKER_01]: You want it?
• 16:44
  [SPEAKER_01]: Yeah, exactly.
• 16:45
  [SPEAKER_01]: Like, you know, if you guys just took all your profit and dividend it out and didn't launch new products, new podcasts here, he's all that.
• 16:51
  [SPEAKER_01]: Like, you would not be where you are today.
• 16:53
  [SPEAKER_01]: And there's this perverse incentive with tokens to buy back and by the way, you're buying back and token prices and even going up.
• 16:58
  [SPEAKER_01]: Right.
• 16:58
  [SPEAKER_01]: And so there's all sorts of different times, sometimes, but like a lot of the times it's not.
• 17:02
  [SPEAKER_01]: And so there's all these perverse incentives that really limit the growth of companies force them to operate in ways that they wouldn't normally operate in.
• 17:09
  [SPEAKER_01]: And so I'm very excited about the concept of basically killing the token, converting to equity,
• 17:14
  [SPEAKER_01]: And then basically what that allows you to do is you convert like the top five or top 10 holders directly to the cap table Maybe to hold their 10 to 100 in SPV like in a vehicle that you basically just sits one vehicle on the cap table with the token holders And then everyone else gets bought out at a premium to what they're holding that.
• 17:28
  [SPEAKER_01]: So let's say let's say the tokens a dollar Maybe you get the opportunity to sell your tokens that a dollar in five cents
• 17:35
  [SPEAKER_01]: And so that way you're not screwing the average investor, right?
• 17:37
  [SPEAKER_01]: I think ultimately actually what it will do is it will cause token prices to go up for seeing that more of these opportunities will happen.
• 17:43
  [SPEAKER_01]: Yeah.
• 17:43
  [SPEAKER_01]: So I think it's actually will be a boon for crypto.
• 17:45
  [SPEAKER_01]: And what I'm ultimately very excited about, and then what you do is you effectively so you basically bring over the top five oldest record on the cap table ever.
• 17:53
  [SPEAKER_01]: They then basically delegate a pull of capital which will be used to buy out the others.
• 17:56
  [SPEAKER_01]: They say we will increase our exposure by $10 million or whatever it is.
• 18:00
  [SPEAKER_01]: Um, and then basically, you then issue a new employee stock after most everyone gets common stock, you issue a new employee stock after 12 on top of that, and, uh, basically, that loot everyone.
• 18:09
  [SPEAKER_01]: So founders can get a little bit more shares, but so can the employees, and then you raise a new round of preferred stock and that loot everyone on top of that so you can continue to grow.
• 18:16
  [SPEAKER_01]: But ultimately, where I think it's really exciting and really interesting is when on top of that, you tokenize the equity and allow the everyday investor to get exposure to the tokenize equity because equity is just a better way to get exposure to these projects.
• 18:28
  [SPEAKER_01]: Yeah.
• 18:28
  [SPEAKER_01]: I just think it's more efficient, and it's better for it to be an equity than to be a token.
• 18:32
  [SPEAKER_01]: And with tokens, you just don't have any rights.
• 18:35
  [SPEAKER_01]: Like ultimately, you can get rugpoles.
• 18:36
  [SPEAKER_01]: If you're an equity holder, you have rights, you have investor protections.
• 18:40
  [SPEAKER_01]: I think it's ultimately better.
• 18:41
  [SPEAKER_01]: And I don't think it makes sense for L1 that has a gas token.
• 18:44
  [SPEAKER_01]: But I think it makes sense for a lot of D5 products and RWA products that have real revenue, AI projects as well.
• 18:49
  [SPEAKER_01]: And I think ultimately, obviously, there's regular trade restrictions on this, but I think allowing people to go for me and holders of,
• 18:55
  [SPEAKER_01]: tokenized crypto to tokenize equity is ultimately better, and I don't think that kills any of the ethos of crypto.
• 19:01
  [SPEAKER_01]: It's still a lot of giving exposure to the masses and letting everyone participate, but it's in a form that's better and has better protections for you as an individual.
• 19:07
  [SPEAKER_02]: It's it's fascinating, you know, we've done, we were talking, yeah, 750 interviews and
• 19:12
  [SPEAKER_02]: Nobody's ever said that one.
• 19:13
  [SPEAKER_02]: So that's a new take and you know, it's something that I'm personally going to want to dive in on more.
• 19:19
  [SPEAKER_02]: What's stopping the market from moving that direction?
• 19:22
  [SPEAKER_02]: Because again, this is an added consensus view.
• 19:25
  [SPEAKER_02]: Is it, you know, the entrenched interests of, you know, these large companies like, you know, Ethereum foundation is just very difficult.
• 19:32
  [SPEAKER_01]: Yeah, it sounds very difficult.
• 19:34
  [SPEAKER_01]: It requires a lot of thought.
• 19:38
  [SPEAKER_01]: Stay tuned for an announcement coming from us in a couple of weeks.
• 19:40
  [SPEAKER_01]: Interesting.
• 19:41
  [SPEAKER_02]: Yeah, I know like Coinbase acquires like, you know, what do they call it?
• 19:44
  [SPEAKER_02]: Then Aquahire, where they, they, for Accelerate, not to put the on the bottom of it.
• 19:47
  [SPEAKER_02]: The difference between that and this is we're not trying to screw anybody.
• 19:50
  [SPEAKER_01]: Yeah.
• 19:50
  [SPEAKER_01]: So this is how can we thoughtfully bring a token community into equity holders?
• 19:56
  [SPEAKER_01]: And at the very least, make sure that the token holders are getting more than what their tokens were today.
• 20:00
  [SPEAKER_01]: It's like, I really want, I don't want to, I want to structure, I want to talk to people about structuring these deals in ways
• 20:08
  [SPEAKER_01]: Yeah, the whole goal is you can't we you could do this and kill the token and it doesn't matter It's not about killing the token it's about doing right by the investors because ultimately even if you don't have a fiduciary duty to do that I think it's the right thing to do.
• 20:20
  [SPEAKER_01]: Yeah, and so it's just it's complicated There's a lot of legal complications.
• 20:25
  [SPEAKER_01]: Sure.
• 20:25
  [SPEAKER_01]: How do you structure the deal?
• 20:26
  [SPEAKER_01]: Where do you structure the deal?
• 20:28
  [SPEAKER_01]: How do you convert people over what do you do at the token?
• 20:30
  [SPEAKER_01]: The token is property So you can't kill the token you can't actually kill it.
• 20:33
  [SPEAKER_01]: You said it to a burner dress the token has to continue to exist in parallel
• 20:38
  [SPEAKER_01]: There's a lot of considerations both from a capital markets perspective on how you do it as well as from a regulatory perspective on how you love it.
• 20:44
  [SPEAKER_01]: Well that's the crescendo to end it on.
• 20:46
  [SPEAKER_02]: I don't think we could get any better than that.
• 20:47
  [SPEAKER_02]: So Josh, thank you so much.
• 20:50
  [SPEAKER_02]: Thank you for having me.
• 20:51
  [SPEAKER_02]: Everybody worth the outie summit sponsored and brought to you by Josh Frank from the tie.
• 20:57
  [SPEAKER_02]: Stay tuned.
• 20:57
  [SPEAKER_02]: We're going to have a lot of great guests coming to you live from the outie summit.