Kyle Davies, co-founder of Three Arrows Capital, joins the show. In this episode we discuss:

• Kyle’s perspectives on layer one blockchain protocols and how smart contract platforms are evolving
• The decentralized finance (DeFi) landscape, and where Kyle sees the biggest opportunities
• The blurring of the lines between centralized and decentralized finance platforms

Learn more about Three Arrows Capital: https://www.threearrowscap.com/

Follow Kyle on Twitter @kyled116

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Matt and Nic return to cover news of the week. In this episode: 

• Our review of NFL week 1
• Whether or not securities law topics come up at parties
• Why we’re so excited about Kraken getting the Wyoming SPDI
• Why the SPDI being full reserve is so important – and why it eliminates certain regulators from the picture
• How Kraken’s bank charter is reminiscent of a classic scene in There Will Be Blood
• Why Wyoming’s SPDI is a long-awaited rebuke to Operation Choke Point
• Michael Saylor stacks MORE sats
• How Matt was able to initially break the Microstrategy news
• Why financial services firms looking at crypto need buy-in from the top
• Michael Saylor’s revealing quote about Bitcoin’s hard forks
• Why shrugging off hard forks defeats a key critique of Bitcoin
• What the SEC settlement with Unikorn inc means for other tokens
• The SEC sanctions rapper TI
• Matt’s embarrassing TI story
• Our current view on handshakes
• Why the settlement quality of stablecoins is context-specific

Check out this episode!

Today, Kraken Financial, a wholly-owned subsidiary of Kraken, became the first financial institution to receive the Special Purpose Depository Institution (SPDI) charter from the State of Wyoming. To celebrate this major milestone, David Kinitsky, CEO of Kraken Financial, and Marco Santori, Kraken CLO, joined us on the show. In this episode: 

• Why Kraken decided to open an office in Wyoming and pursue the SPDI
• Why David and Marco chose to join Kraken and work on this project
• Kraken’s journey to obtaining the SPDI and what’s next
• Why Kraken Financial will not seek oversight from the FDIC – and why it doesn’t need deposit insurance
• What an SPDI will enable Kraken to do
• What distinguishes a full reserve bank – and why take that approach
• How Kraken Financial would distinguish itself from the standard banks that service crypto companies and from full reserve bitcoin custodians
• Whether Kraken expects NY to honor reciprocity for the Wyoming SPDI
• The relationship between Kraken group and Kraken Financial
• The next steps to take the SPDI approval and become an operational, fully-fledged deposit taking institution
• What the SPDI will mean for existing Kraken customers 

Read more about the SPDI here. 

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Matt and Nic return for deals and news of the week. In this episode: 

• the NFL is BACK
• Matt’s predictions for the Patriots season
• New data on countries where crypto penetration is highest
• Mastercard launches a CBDC testing platform
• USDC launches on Algorand
• Past is prologue for stablecoins moving chains
• DCG continues to grow into a juggernaut
• Our Sushiswap explainer
• Can DeFi projects maintain sustainable moats?
• What distinguishes DeFi tokens from ICOs?
• Why you can’t apply traditional equity earnings multiples to DeFi valuations
• How Sushi reminds us of Monero’s origins
• How Curve reminds us of Dash’s launch
• Why communities often stick with botched ‘fair launches’

Content mentioned in this episode: 

• Avichal Garg and Curtis Spencer on On The Brink
• Ruben Galindo appears on the show
• Jump Capital’s mid-2020 crypto theses
• Chainalysis’ 2020 global crypto adoption index
• Bitcoin: A Novel Economic Institution from Ark Invest

Check out this episode!

Gabriel Shapiro, partner at BSV Law (no relationship to the coin), joins the show to chat securities law, tokenized securities, and the nature of industry regulation. In this episode: 

• Gabriel’s introduction to the crypto industry and Nick Szabo’s influence
• Gabriel’s view on what public blockchains are for, most fundamentally
• Why there is an inherent tension between blockchains and the law
• Can public blockchains be made compatible with the law, and to what extent?
• The best opportunities for synergy between the law and crypto
• Gabriel’s case for real tokenized securities
• How stock certificates are held and organized in legacy markets
• Domains where tokenized securities could outperform the current state of affairs
• A mistake investors make when interpreting SEC behavior
• Why the SEC will often let private litigation play out before imposing a fine
• The contrast between the EOS/Block One and Sia/ Nebulous
• Gabriel’s critique of Hester Pierce’s safe harbor for tokens – and her response
• Precedents to consider when looking at the utility/security distinction
• Whether a “Hinman test” for sufficient decentralization exists and what it entails
• Gabriel’s proposed modification to securities laws to suit the reality of the industry
• The effect of election outcomes on securities enforcement

Follow Gabriel on Twitter and read his fantastic series on Medium, Size Does Matter

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Ruben Galindo, cofounder and CEO of Airtm, joins the show. Recently, Airtm has been in the news as it was reported that Juan Guaidó, Venezuela’s would-be President, was using the app to coordinate the disbursement of funds seized from the Maduro regime to healthcare workers in Venezuela. In this episode:

• Why Ruben cofounded Airtm 
• How Airtm creates local liquidity for dollars against any local currency
• How Airtm manages their reserve
• How Bitcoin and Ethereum intersect with AirUSD
• How Airtm creates local liquidity on their platform
• The size of Airtm’s userbase globally and in Venezuela
• Why international freelancers gravitate towards AirTM
• The genesis of Airdrop Venezuela
• How Airtm linked up with Venezuelan president Juan Guaido to distribute payments to Venezuelans
• The genesis of the plan to distribute seized funds to Venezuelan healthcare workers
• How Airtm is planning to route around Maduro’s attempts at censorship
• How Airtm manages the physical risks of running a grey market business in Venezuela

Read more about Airtm here.

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Avichal Garg and Curtis Spencer, founding partners of Electric Capital, join the show. In this episode we discuss:

• Their path from entrepreneurship to starting Electric Capital
• The experience of raising a $110M fund II from institutional limited partners
• The current state of play for layer one smart contract platforms
• Framing decentralized finance for the non-crypto native
• The geopolitical chess match for the USA and China vis a vis cryptoasset regulation
• The outlook for privacy coins

To learn more about Electric Capital visit their website and follow Avichal and Curtis on Twitter

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Nic and Matt return with deals and news of the weak. In this episode: 

• Nic and Matt happen to buy the same book
• Nic’s article on why the US should embrace stablecoins and credibly neutral crypto-financial infrastructure
• Our theory on why NYDFS went after Tether
• Can the US successfully disrupt itself as the administrator of financial infrastructure?
• Coinbase IPO prospects
• Coinshares adds transparency to their Bitcoin ETN and the prospects for Proofs of Reserves
• How Proofs of Reserves can ward off regulation
• Arca takes an activist stance towards Gnosis
• What recourse do jilted tokenholders have?
• Publicly traded energy companies are mining Bitcoin with stranded natural gas
• Matt’s suggestion for a Bitcoin-themed sequel to Armageddon
• The single most impactful way you can help Bitcoin
• Nic’s theory about the effect of a fee-transaction count oscillation on Ethereum
• How fees are a regressive tax on users

Content mentioned in this episode: 

• Nic in Coindesk, The Crypto-dollar Surge and the American Opportunity
• Larry White in Alt-M, Should the US Government Create a Token-based Digital Dollar?
• Electronic Frontier Foundation, It’s Past Time for Coinbase to Issue Transparency Reports
• Nic in Coindesk, The Last Word on Bitcoin’s Energy Consumption
• Coin Center, Are Regulators Poised to Demand Cryptocurrency Address Whitelisting? Probably Not
• Tyler Winklevoss, The Case for $500k Bitcoin

Check out this episode!

Aditya Palepu and Frédéric Fortier, the cofounders of DerivaDEX, join the show to talk about DEXes and prospects for their future development, and to introduce their own project. In this episode: 

• How Adi and Fred chose to build a Dex
• Why traders tend to love Dexes despite their shortcomings
• Dexes versus noncustodial exchanges
• Adi and Fred’s Dex taxonomy and where they fit into that
• How Derivadex plans to decentralize the operation of their orderbook
• Are today’s AMM-style Dexes sufficient?
• How the Derivadex team is thinking about the shape of the liquidity mining distribution curve
• How the distribution curve actually affects which users end up owning a piece of the DAO
• Why Derivadex struck a more pragmatic approach than certain other Dexes – and how they’re going after CeFi users
• Why the team opted for USDT as the default collateral type
• The lessons Derivadex took from the MakerDAO exploit
• Their approach to capitalizing an insurance fund

For more, see this introduction to DerivaDEX.

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Nic and Matt cover news and deals of the week. In this episode: 

• FTX acquires Blockfolio for $150m
• DCG announces a $100m investment in Foundry, a mining subsidiary
• Fidelity files with the SEC for a Bitcoin fund – and what this means for other asset managers
• Why large asset managers have not built products around Bitcoin just yet
• The INX situation explained
• Why security tokens might actually make sense
• The Boston Fed is evaluating 30 different blockchains for their digital dollar project
• Do exchanges owe depositors their forked coins?
• How will NYDFS react to the Wyoming SPDI?
• The Fed signals a more inflationary environment
• Can you use whisky as a SoV?

Check out this episode!

Zachary Kelman, managing partner at Kelman Law PLLC, joins the show to shed light on the FATF – it’s origins and its current mandate – the travel rule, and what the industry can expect from these developments. Covered in this episode:

• Zach’s prior career in bank compliance and how he decided to focus on Bitcoin
• How Zach noticed the blurring of lines between stopping crime and politics for bank AML
• Why overseas payments in the correspondent bank system are expensive
• What the Travel Rule actually means
• Why Zach thinks Bitcoin compares favorably with the default correspondent banking system
• Why banks freeze out certain sectors even without a specific ban or prohibition
• How Coins.ph moved the needle for financial inclusion in the Philippines
• The history of the FATF and its original mandate and intent
• Why the FATF’s recommendation could possibly bifurcate the bitcoin market
• How the end of the Cold War might have influenced the creation of the FATF
• What Fukuyama’s End of History has to do with financial crimes enforcement
• Will the decline of the US-led international order mean organizations like the FATF will have a reduced ability to police global finance
• Zach’s thesis that western Europe might end up being a haven for the crypto industry
• How the FATF recommendations actually get enforced at the local level
• How the FATF black and graylists change bank behavior
• Why NYDFS has so much control over global finance
• How bank behavior in the US is often more norm based than couched in law
• Why a rise of nationalism could advantage Bitcoin

Check out this episode!

Dick Bove, senior research analyst at Odeon Capital Group joins the show. In this episode we discuss:

• Dick’s 52 year career as a research analyst and his path to covering the banking sector
• The 2008 financial crisis, the measures that were taken, and how this has impacted the banking industry
• The future of dollar dominance and the rise of China on the geopolitical stage
• The role of cryptocurrency and the state of awareness in the institutional world
• Dick’s favorite books and his perspective on the research industry

To learn more about Odeon Capital and to access Dick’s research visit www.odeoncap.com

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Zac Prince, CEO and Founder of crypto lender BlockFi, joins the show once again to talk their recent growth and milestones. Today, BlockFi announced a $50m Series C round of financing, capitalizing on their recent growth. We dive into the fundraise, BlockFi’s eye-popping growth, and what is driving interest in the crypto lending space today. In this episode: 

• Blockfi announces a $50m Series C fundraising round
• What it was like raising a Series C during covid
• BlockFi’s insane traction and what is driving that growth
• Zac’s big picture vision for the company as a global bank
• The growth that BlockFi has seen in stablecoins on the platform and the role they play
• What is really behind the high yields that BlockFi is able to offer
• The risk profile of lending BTC with BlockFi
• Zac’s taxonomy of stablecoins
• BlockFi’s plan for Tether – and why Zac decided to support it
• Zac’s view of current institutional participation in the lending market
• How Zac thinks about DeFi and the rise of decentralized lending – and whether it competes with BlockFi
• What positions BlockFi is hiring for and who they would like to apply

Check out this episode!

Nic and Matt cover deals and the news of the week. In this episode: 

• Hawaii announces the Digital Currency Innovation Lab
• Wyoming’s Senate nominee Cynthia Lummis is a Bitcoiner
• Why Bitcoin values are American values
• How Bitcoin is mutualistic with the US dollar
• Evidence that Tether is used for capital outflows from China
• Kraken creates Kraken Financial to pursue the SPDI in Wyoming
• Warren Buffett buys gold
• Our explanation of a new breed of ponzis
• Where DeFi is and is not compelling to us

Check out this episode!

Kyle Powers is the cofounder and CEO of LibertyPay, a Boston business that powers remittances to Brazil and Mexico – settling on Bitcoin, rather than traditional financial rails. LibertyPay has settled nine figures worth of value in its history – and most users never know their transactions are settling via Bitcoin. In this episode: 

• How LibertyX began with the cofounders standing beside a Bitcoin ATM in South Station in 2014
• The origins of LibertyPay and how the cofounders realized that Bitcoin-based remittances were a viable product
• How LibertyPay determined the most viable channels for their Bitcoin remittance product
• Why Brazil is a goldilocks zone for Bitcoin-powered remittances
• In which domains Bitcoin-based remittances outmatch the traditional system
• Why LibertyPay uses Bitcoin as their bridge currency and not another asset
• Why obtaining banking in 2014 was such a challenge
• Whether there was a coordinated attempt to unbank crypto companies in 2014-15
• Whether Kyle is optimistic about the future of digital cash
• Whether XRP will ever grow into its promise as a touted bridge currency
• Why Kyle views Bitcoin’s base layer as more of SWIFT analogue rather than a payments network
• Why owning Bitcoin gives you exposure to all of its descendants, in the case of a dispute
• Why Bitcoiners should be excited about stablecoins

Check out this episode!

Coin Metrics network data product lead Lucas Nuzzi joins the show to help explain how to audit the supply of Ethereum – and other, even more challenging blockchains. Also covered in this episode: 

• Does the Winklevoss gold asteroid mining talking point have any merit?
• Are the Winklevii being ironic or sincere
• The Boston Fed is hiring crypto engineers
• Why DeFi tokens remind us of PoW launches from 2014
• Why we need a new taxonomy for autonomous fair launched DeFi tokens
• Why DeFi might not herald a resurgence of the ICO phenomenon
• Microstrategy surprises to the upside
• Facebook focuses on payments
• ETH supplygate explained

Check out this episode!

James Lovejoy, recent MEng MIT grad and former graduate researcher at the MIT Digital Currency Initiative, joins the show to talk about his masters thesis and associated project focusing on detecting double-spends in proof of work cryptocurrencies. Previously, little data was collected in a systematic way to detect double-spends and reorganizations across many cryptocurrencies. James’ project sheds light on previously unknown security properties of PoW. In this episode: 

• How James came to work on Vertcoin
• Why James thinks ASIC resistance is valuable
• James’ blockchain monitoring project and why it matters
• Why reorgs are challenging to detect
• Why investigating the economic damage of reorgs is difficult
• How James noticed a 51% attack in progress on Vertcoin and intervened to save Bittrex money – and how this can be replicated
• Why understanding Nicehash is critical to detecting and dealing with 51% attacks
• James’ critiques of dominant theoretical models of PoW security
• How James found reorgs and counterattacks happening on BTG in real time
• Why exchange processes like KYC might actually help protect blockchains from reorgs
• How permissionless trading and leverage makes certain blockchains more vulnerable to attacks
• Rules of thumb for confirmation requirements for exchanges
• The issue with calling coins “Nicehash-able” – and why it’s likely a lowball
• How exchanges can proactively mitigate the risk of 51% attacks and what they should be targeting
• How BTG developers finally defeated deep reorgs
• Whether James is confident in the long-term prospects of PoW
• Whether James still believes in GPU mining

Content referenced in this episode

• James Lovejoy, An Empirical Analysis of Chain Reorganizations and Double-Spend Attacks on Proof-of-Work Cryptocurrencies
• Raphael Auer, Beyond the doomsday economics of “proof-of work” in cryptocurrencies
• Eric Budish, The Economic Limits of Bitcoin and the Blockchain
• Hasu, Prestwich, and Curtis, A model for Bitcoin’s security and the declining block subsidy
• Carlsten, Kalodner, Narayanan, Weinberg, On the Instability of Bitcoin Without the Block Reward
• Moroz, Aronoff, Narula, Parkes, Double-Spend Counterattacks: Threat of Retaliation in Proof-of-Work Systems
• Judmayer et al, Pay-To-Win: Cheap, Crowdfundable, Cross-chain Incentive Manipulation Attacks on Cryptocurrencies
• Liao and Katz, Incentivizing Blockchain Forks via Whale Transactions
• James Lovejoy and David Vorick, ASICs and cryptocurrencies: benefits and drawbacks  [debate]
• Nic Carter, It’s the settlement assurances, stupid [blog]
• Elaine Ou, Cryptocurrency Deals can Always be Erased, for a Price [article]

Check out this episode!

Nic and Matt cover deals and the news of the week. In this episode:

• Are we in a bull run or is fiat devaluating?
• Africa volumes growing on Paxful
• BCH contemplating redirecting block rewards to fund developers
• Electric Capital raises 110m
• Casa adds a direct buy bitcoin feature
• Dapper labs raises $12m with participation from multiple NBA players
• Matt’s scoop about the Microstrategy Bitcoin position
• Grayscale files a form 10 for their Ethereum Investment Trust
• Whether Bitcoiners should try to appeal to goldbugs
• Why the world needs Bitcoin hardware that demonstrates UTXOs held
• Is DGC the biggest company in the crypto industry?
• Square’s monster Q2 for Bitcoin
• Goldman has a new digital assets lead
• ETC keeps getting 51% attacked

Check out this episode!

Ray Youssef, founder and CEO of Paxful, joins the show to talk his journey with Paxful and his mission to bring Bitcoin to Africa. Paxful is a wholly bootstrapped startup that has recently taken the crown as the largest Bitcoin p2p marketplace in the world with $2.1B in annualized volume. Ray is from Egypt and has always sought to bring Bitcoin to Africa. Today, Africa is the 2nd most active region by volume on the platform (behind North America). In this episode:

• Why Bitcoin p2p is so popular in Africa
• Why interstate settlements in Africa are so challenging today
• Ray’s predictions about p2p volume versus centralized volume
• Why p2p exchange data is more reliable than centralized exchange volume
• How Ray went from being homeless to founding the largest p2p Bitcoin exchange
• Why KYC in emerging markets is so challenging
• How Ray went through 11 failed startups before starting Paxful
• The downside of taking venture financing and why Paxful is better off without it
• Why western startups fail when they try and get involved in African markets
• Why African users are under-served by KYC providers like Jumio or Onfido
• Why Paxful has KYC
• How the Paxful remittance flow works with gift cards
• Whether Paxful users are retail or wholesalers
• Why Nigeria, Kenya, South Africa, and Ghana are popular on Paxful
• Why Ray focused on Africa for Paxful
• How Ray found his way to New Orleans after Katrina
• The genesis of Ray’s humanitarian project to build schools in Africa

Paxful is hiring! 

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Jesse Walden, founder of Variant joins the show. In this episode we discuss:

• Jesse’s journey in the crypto industry, from founding Mediachain, to being an investor at A16Z, to founding Variant
• The crypto ownership economy and how Jesse sees the evolution of consumer software
• Crypto projects through the lens of contract theory

Learn more and follow Jesse at www.variant.fund and follow him on Twitter @Jessewldn

Check out this episode!