REBUILD MARKETS

“If you had not even every token, because it's not gonna be every token. 10 to 15 tokens. If 10 to 15 tokens started to compound in return, I think it would solve every problem. I actually do think that's how we get out of this bear market, is that a few tokens say, we're gonna maybe kill our equity. We're gonna drive all the returns back to the token, and we're gonna have one simple structure. We're gonna generate revenue, and those tokens will get rewarded in the market. And then other founders will see those tokens get rewarded, and the flywheel will start to happen.”

“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 mega trend of the next five to 10 years. And so when you think about capital markets, what powers capital markets is trust and infrastructure that connects investors and people with capital, the people that want to use that capital businesses, on-chain businesses.”

“One of the other big problems that I think has existed with tokens so far, which is 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. It's like Uber bootstrapping the network and the people, the early Uber customers end up owning the Uber tokens. But in reality, what's happened is that your shareholders are very different than your customers. So this idea of governance tokens maybe was kind of the wrong vision.”

“This transparency, having the real-time data, if the right amount is displayed, actually smooths volatility. It smooths the volatility over. So that's the opportunity for on-chain businesses. And then because all of that data is just live and it's up to date and real-time, I feel like Coinbase and any public company that does that should get some props, right? They should have to do less of the other bullshit that comes along with being a public company.”

“The Coinbase example is so interesting because Coinbase gets punished from volatility because the analysts consistently miss on the direction of just how cyclical crypto is. In bull markets, if you go back and look at the analyst's expectations versus especially the transaction based revenue, it's always off. So Coinbase benefits a huge amount. Their stock rips because they outperform the analyst. They get punished, though, on the way down. That transparency, having the real time data, if the right amount is displayed, actually smooths volatility.”

“Everyone overcomplicated it, and something like the four year cycle is clearly in effect here. There's the initial dump, then there's kind of actually an initial recovery faster than you think that no one really believes because business sentiment and activity lags price by about six months. Look at 2019. Bitcoin doubled that year, and I remember it as one of the most depressing years of the time that we've been in crypto. So that's what I think this year will be. And then I think you'll start to see a resurgence, and people will think, oh, everything is back, and then the winners pull ahead.”

“The days of tokens, just being able to launch this liquid instrument, not really define what it is, provide no disclosures about ownership, 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. So there's actually a layer of disclosures that is the bedrock, which is just super table stakes, basic stuff.”

“It's not just a revenue story. It's not just build great products, generate tons of revenue. We're actually doing that and the prices still aren't going up. So what it tells you is there's a trust problem. Investors have stopped. They never really understood what the difference was between a token and equity in the project. Token investors have been rugged so many times along the way in ways which would never in a million years happen to equity investors, like just buying out all of the IP and team behind a token. And the token holders get nothing.”

“The median net return of a token over the last five years is down 80%. That is that's the problem with the industry. And there's a lot of startup market structure reasons for that. But there's a broken structural piece that's unique to tokens, especially, I think, at the moment.”

“And I think actually, funnily enough, what's causing the sentiment drift here is that that ideological movement industry blob that is crypto won. And so now that it won, it moved from being a movement which is on the fringe, on the outside and countercultural, to one which is in the mainstream and it's struggling with an identity crisis.”

“And if you look at how this has played out in the past, there's the initial dump, then there's actually an initial recovery faster than you think, that no one really believes, because it doesn't translate business sentiment and activity lags price by about six months.”

“Crypto in many senses was an industry and a technology, but it's also kind of a political movement in a sense. And there's an ideology that underlies that political movement. And I think, actually, funnily enough, what's causing the sentiment drift here is that that ideological movement industry blob that is crypto won. And so now that it won, it moved from being a movement which is on the fringe, on the outside, and countercultural to one which is in the mainstream and it's struggling with an identity crisis.”

“We are the connective tissue that powers these on chain capital markets with a layer of standardized disclosures, standardized data, and we connect investors who wanna deploy capital with on chain businesses that require that capital. The days of tokens just being able to launch this liquid instrument, not really define what it is, provide no disclosures about ownership, sales, those days are ending. And by the way, they should end. This does not work. There's actually a layer of disclosures that is the bedrock — what does the ownership structure look like? What are the emissions schedule look like? Who are the insiders? When are they selling?”

“We have an asset problem, and we have a trust problem. That's the core of what's happening right now, which is, you know, we'll get into some of the data that backs this up later. But I mean, the average token or the median net return of a token over the last five years is down 80%.”

“I don't think it's going to be this huge surge in everything winning again. I do think there'll 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 and the winners winning and compounding, I think will happen, and it'll give faith to everyone again.”