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Self-Amending Blockchains: Arthur Breitman on Tezos Governance Innovation and Crypto Treasury Strategies
Episode 25 • 18th September 2025 • Unblock'd • Dr Jemma Green
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In this episode of Unblock'd, host Dr. Jemma Green speaks with Arthur Breitman, founder of Tezos, about revolutionary blockchain governance and the future of self-amending protocols.

Episode Highlights:

  • Arthur's vision for Tezos as the world's first self-amending blockchain that upgrades itself based on token holder decisions
  • How Tezos eliminates hard forks through formal on-chain governance mechanisms
  • The genesis of Tezos as the original proof of stake blockchain with advanced smart contract programming languages
  • The thriving art ecosystem on Tezos including platforms like objkt.com and Hic et Nunc
  • Generative art communities and why visual artists choose Tezos for their work
  • The upcoming AAA game Reaper Actual and EVM compatibility through Etherlink
  • Arthur's perspective on Bitcoin treasury companies and the risks of leveraged crypto holdings
  • The future of blockchain governance and scaling solutions
  • How technical innovation is addressing information inequality and individual sovereignty

Connect with Arthur Breitman:

Connect with Tezos:

UnBlock'd podcast with Dr. Jemma Green

For more information on Dr. Jemma Green

Visit: https://www.powerledger.io/

Or connect on LinkedIn: https://www.linkedin.com/in/jemmagreen/

-------------------------------------------------------------

Produced by: Podcasts Done For You

View this episode on YouTube @PodcastsDoneForYou_clients


#Unblockd #Tezos #BlockchainGovernance #SelfAmending #ProofOfStake #CryptoArt #GenerativeArt #DeFi #BlockchainInnovation #CryptoTreasury

Transcripts

Anthony Perl:

Self amending Blockchains Arthur Breitman on

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:

Tezos Governance Innovation.

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In this episode, Dr.

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:

Jemma Green sits down with Arthur

Breitman, founder of Tezos, who's

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:

revolutionizing blockchain governance

through self amending architecture,

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Arthur shares how Tezos eliminates

hard forks through on chain Go.

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Pioneered energy efficient proof of stake

consensus, and became the unexpected

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home for generative art and AA gaming.

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From governance mechanisms to

scaling solutions, they explore

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how technical innovation is

reshaping the blockchain landscape.

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I'm your co-host Anthony Perl, and whether

you're an investor or a startup looking

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for insights, it's time to get unblocked.

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Jemma: Welcome to Unblocked Arthur.

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It's lovely to have the

co-founder of Tezos Foundation.

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Join us today on unblocked.

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Arthur: Thank you for having me.

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Jemma: All right.

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I'd like to start at the beginning.

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, Tezos has been around since 2014,

so you are definitely in the OG

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category as a pioneer in this space.

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I'd love if you could just tell us about

what is Tezos and what was it envisaged

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as originally, and what is it today?

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Arthur: Right.

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So Tezos is a unique blockchain in that

it is to the excel of my analogy, only

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blockchain that actually upgrades itself.

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On the fly based on the

decision of the token holders.

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So if you hold a test token, you can

create blocks and you can participate

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in the governance of the chain.

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Now, you know, back in 2014 there were a

lot of discussions around what should be

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the governance model of the blockchain,

and some people insisted that they should

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have none, that they should be setting the

stone and that nothing should ever happen.

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But I think that was myopic because

we've seen 10 years of innovation.

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Proof of stake has been a fantastic

innovation, smart contracts,

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privacy, all of these innovations.

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Were still nascent at the time,

and there's still more to come.

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And at the same time, other

people said, well, you know, you

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don't really need governance.

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All you need is forking because

the developers can just tell

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everyone, here's a new version.

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Now, the problem is that if the

developers can tell everyone, here's

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a new version, you don't really

have any mutable system, do you?

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You just add the mercy of

what the developers want.

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And Tezos has a formal governance system.

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It's also the original

proof of stake blockchain.

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They were trained that.

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Use a form of staking in the past,

but this was the first one where

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actually coins were at stake.

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Like if you misbehave, you would

actually lose your coin in the

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mechanism known as slashing Pioneer.

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Also advanced programming languages for

smart contracts that a lot of people.

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To use formal methods more effectively in

order to prove the security of contracts.

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So it's innovative in a lot of areas, and

as of late, I would say in the past two

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years, the main focus of the development

of the chain has been around scaling.

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So it's a blockchain that's

home to many applications,

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particularly in the art space.

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We have a striving art community.

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There's of course games, there's

of course defi, but all of these.

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Have been popular in part because

Tedo has been able to maintain very

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cheap transaction fees, some of the

cheapest out there, and that has

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been through a relentless commitment

to scaling over time and providing

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more and more capacity for usage.

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Jemma: Great.

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Um, you mentioned like a few use cases

here, art being a, like a significant one.

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Could you tell us a little bit about

the kind of art projects and ecosystems

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related to art that are on Tezos?

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Arthur: Sure.

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So I, I would say as a genesis of

art, and Tezos really starts with a

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marketplace called Ed No, here and

Now, which attracted a lot of artists,

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especially a lot of generative artists,

artists creating art pieces from code.

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And this community really grew.

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And then we saw a lot of

other projects pop on.

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There was ethics s, there's

of course object.com,

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which is a leading.

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Platform for minting

and selling nfcs on ti.

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We also have AK swap, so Teya,

I'm gonna forget some because

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it's a big ecosystem of this.

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Largely visual artists and generative

artists have found their home on ti.

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Jemma: And you mentioned

Defi as well, and gaming.

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Could you tell us a little

bit about the kinds of things

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happening in those regards as well?

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Arthur: Yeah, so we have an

exciting upcoming game on Tezos,

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for instance, called Reaper Actual

and it's AAA game, and it's coming

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to a rollout on top of Tezos.

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So.

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I'm getting into the technical

detail here, but one of the latest

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development is that Tezos, you know,

has a compatibility now with EVM.

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As you may know, there's a lot of

chains out there who took the EVM

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model from Ethereum and ated it, and

that allows developers to develop

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for the EVM without necessarily

committing to the choice of one chain

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and then making that trust later.

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And in that case, so that

compatibility layer is known as eLink.

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So any application that's developed for

the Ethereum world, you know, whether you

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do a bit for Polygon, bay, sirium, all

of this strain, you can now now run it on

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Tezo J filling and RIP actual, which is.

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Coming in a few months is one of those,

so exciting game in a generated universe.

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Jemma: Nice.

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I mean, crypto is like

constantly in a battle between

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decentralization and efficiency.

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Where do you think Tesla sits

on that spectrum, especially as

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projects such as, say, Solana

and others, push high throughput.

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Arthur: Yeah, I don't think

there's actually big trade off

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between, I would say throughputs

and security and decentralization.

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I think for a while it was not known how

to design the systems and so people would

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have the trade off, but facing think very

and large, the trade off no longer exists.

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You know, if you want to get technical,

once you have a technology like Rollups,

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these, a Zika rollup or validity

rollup, which I propose as a scaling

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solution in 2017, or optimistic rollup.

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He marries that with the

availability sampling.

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So I'm getting in the weeds here,

but the point is, um, sorry,

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Jemma: actually hear what you said.

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Could you just say the word again?

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Oh,

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Arthur: sorry.

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Data availability sampling.

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Jemma: Oh, got it.

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Uhhuh,

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Arthur: I'm getting in the weeds here.

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The point is, I would say around 2021,

around 20 20, 20 21, there was a solution

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that was known that would lethins scale.

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So I don't think it's at

odds with decentralization.

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Now, I'm not sure with Solan, with the

people behind salon are thinking because.

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You know, it's not very coherent.

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Like they have this proof of history,

which doesn't really do anything.

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And then they have this idea that

the ledger is secure so long as

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there's a copy somewhere, it's

not intellectually consistent.

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It's kind of nonsense, which doesn't

mean that the chain doesn't work.

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Right.

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But I, I don't think they have a grand

theory of how it is any of this works.

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But, you know, I think they're

very focused on performance

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and it really decentralization

as a, as a secondary aspect.

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You know, it's not, it's not an approach

that I particularly like, but I, I am

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more shocked by the lack of intellectual

rigor than a he by the centralization.

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If they wanna be centralized, so be it.

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But don't go out and say that

proof of history is, is a thing

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that's useful for your consensus.

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That's ridiculous.

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Jemma: Got it.

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So for projects that are considering

like a protocol and maybe, you know,

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there's obviously Ethereum as well,

what would you say is the kind of

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compelling USP for projects to choose kes?

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Arthur: It's a lot of things.

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Out of it is community.

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We have a great community

of, you know, I mentioned of

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artists, but also of developers.

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It's a good I ethos.

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I think there are people who are

allergic to bullshit and it's

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one of the IDOs outta the chain.

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And if you're allergic to bullshit,

I think you find a good home here.

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There's also organizations

within ecosystem which are

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happy to support new projects.

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Of organizations such as Early Tech and

London, such as the Tezos Foundation

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in Switzerland, Tizi APAC in Asia.

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And so one good example

for example is, uh, Sony.

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So Sony is a project that's Sony Slink.

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They are at the

intersection of AI and art.

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They are a, you know, a deep end

platform for artists who want to use

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image models, remix them in fun ways or

like provide compute for the network.

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And you know, so came in via One is that

I think they were attracted to community

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of artists that was existing on Tezo.

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And two, there was also the

connection with CZ apac.

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So it's a holistic, so I would say

it's, uh, for holistic reasons.

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There's also the fact that,

you know, it's a serious place.

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Is secure or the chain has run, you know,

ly without interruption since:

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And you know, the future is assured

in a sense that it's always upgraded.

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It's always been at the

forefront of technology.

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And so you're not going somewhere

that going to disappear or there's

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going to be a flash in the pan.

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It's not a sexy s but it also know

that it's not riding like a hype crest.

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Jemma: Got it.

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I mean, to press a bit further on

that, you could say like Ethereum

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has some of those characteristics.

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What would be the difference?

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Is it speed that you would

say, or like what would be the

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differentiating factor between

choosing it like Ethereum or Tezos?

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Arthur: I would say ES speed

transaction costs, transaction

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costs are much higher on Ethereum.

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Ethereum has not really

progressed on a technical roadmap.

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I think a lot of it has been outsourced

to Rollups, but all the rollups that you

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have on Ethereum contrast it to the one on

or custodial, and that's a big difference.

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So if you're using base, if you're

using arbitrary, if you're using all

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these roll-ups, there's a set of key.

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That can steal all your assets.

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Coinbase has complete control of base.

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There is no difference between

a Defi deck running on base

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and the order book at Coinbase.

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It is a hundred percent under

the control of Coinbase.

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Anthony Perl: Yes,

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Arthur: and I think it gives Rollups

a bad name, but that's not the

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case for the Rollups San Tezos,

which are actually decentralized.

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You know, there's nothing inherently

centralized about the rollup technology.

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It's just that the people who

have built it, you know, as.

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As this kind of infographic ventures

on Ethereum have done it in a way

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that's been completely centralized.

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You know, I also think that they're

responding to the market, which

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doesn't really care that much about

decentralization of, uh, it's not

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everyone, but I think by and large,

like where the money is, is not

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necessarily in decentralization.

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Uh, and also people don't know.

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I think a lot of people assume that when

they're billing on base, they're billing

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on chain and not on a database that's a

hundred percent controlled by Coinbase.

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Jemma: Yeah, like it's a private

consortium, not even consortium,

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it's just a private chain.

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Arthur: I mean, rather than Ethereum.

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But the point is, if you have, you

know, if Coinbase has a key that can

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completely alter the chain, you know,

the set of the chain, I guess, you know,

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it's better than a private database

in the sense that you are at least,

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you know, it's temporary evident.

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It's not temporary proof.

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Mm-hmm.

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Yeah.

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It's like if do something everyone

will see, but which is, you know,

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virtual already improvement,

but they can still do something.

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Jemma: I see your point from what

you've just said there, it sounds

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like another point, which is that

people within the Tesla's ecosystem

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also have a, a good sense of humor.

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Arthur: I hope so.

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I hope so.

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I, I try to.

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Jakob: I wanna kind of piggyback on what

you said about being allergic to bullshit.

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I would say that tezos really rarely

chases these short-lived crypto metals.

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Let's say for example, the revenue

metal that everyone is chasing right

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now, is that restraint driven more

by your long-term thesis for Tezos,

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or is it because of a skepticism that

most metas are just cyclical noise?

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Arthur: I mean.

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The revenue thing is, is a lot

less bullshit than most of them.

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Right?

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You know, if indeed your chain, you

know, if you need a lot of tokens end up

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being burned because you have a constant

demand for, you know, you have constant

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demand for the tokens because people

want to transaction in those and burn.

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That is a very, very valid model.

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It's one of the most valid

that exist out there.

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It's stronger than just being

a, you know, a store of value.

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So I do think store of

value is meaningful.

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Strongly, the maintenance of payment,

the problem with it, because I think

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it's going to be very difficult for

change to raise significant revenue.

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And the reason behind this is

that, as I was saying earlier,

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I think scaling is solved.

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It's a solved problem.

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It's, it's not necessarily like

we don't have systems that.

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Perfectly scaled right now in terms of

engineering, I would say as an academic

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problem, it's solved as an implementation

problem is still work to be done.

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But imagine now that all the

blockchains scale and uh, you have

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abandoned block space, you have

abandoned transaction capacity.

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People can do a million

transaction per second everywhere.

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Where does the revenue come from?

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I mean, people might make transaction,

but the clearing price for transaction

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is gonna be zero if you have a, you

know, if, if you go by an auction

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mechanism or such, because I don't

think we are in a world where the

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demand for blockchain block space is

going to exceed what can be provided.

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I think we reached that world when

if they're, you know, back in:

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serum was doing loss of revenue

because hey, they were doing like.

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A handful of transactions per second,

and those were very important.

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Now Solana with much higher transaction

throughput, I still managed to

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like make a lot of revenue for the

transaction, which is quite impressive.

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The question is like, how sensitive

are people to transactions?

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And you can imagine something where

you have chains that have transaction

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fees, which are not zero, but which

are low enough that people don't care.

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High enough, there's enough

volume that they make money.

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So I think it's still possible to

have revenue, but it's a tough one.

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It's also interesting to

look at the funnel of value.

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So imagine someone who's doing a swap

on a blockchain, and let's say they're

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doing it on some random EPML too.

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So there might be a fraction of a cent

in Burns tokens as transaction fee.

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And then you know, the defi

protocols they're using.

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Maybe it's, you know.

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Keeping like 10 basis points, five

basis points in some form for the swap.

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That's already way more than the thing.

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And then, you know, they happen to

be using meta mask to do it, which

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charge them 75 basis points, and

they're lazy and they don't care.

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So.

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I think the value is going to be captured

by the players who have distribution

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channels, which are gonna be wallets

and exchanges are going to be able to

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extract a lot of values, especially

if they can abstract the backend.

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You know, if you often hear,

sometimes people say like, especially

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like people who like myself had.

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Field blockchain say like, oh,

the future is, you don't even

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know you're using a blockchain.

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It's, you know, completely underneath.

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And that may be true, but it is not a

desirable future for people building

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blockchains because they want to have

brands, they want their chains to work.

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They have like the strong network effects

to work as strong distribution channels.

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And it behind the scene, everyone is

just using application and they have

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no idea what blockchain they're using.

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Then those applications are gonna

be the one pig, the transaction fee.

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Right.

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If the future is like.

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Use some kind of broker and the broker

uses a blockchain under the hood.

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If they can switch from, you know,

making billions of transactions and

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they switch from a place that gives

them like 1 cent per transaction to

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like a fractional cent per transaction,

they're gonna go to the other one.

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So you have a race to zero.

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So the revenue thing, I would say

it's not impossible, but it is iffy,

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but it's certainly a better meta that

would say than memes or, or others.

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Jakob: And if you talk metas are always

kind of also questioning sometimes

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beliefs that you stand for, that you have.

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When you originally came up with

the Tezos protocol, is there any

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belief that has changed recently

where you're like, okay, maybe I

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was on the wrong track Back in 2014?

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Arthur: Yeah, I think in 2014, I mean.

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In 20 14, 1, there's a few, well,

more than a few mistakes that I made,

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but the main thing that was wrong

about was the importance of scaling.

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Essentially, I thought that most

scaling would be done via channels,

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so things like lightning and others.

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I thought that the primary use

case was being digital gold.

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In a way that thing that's more

defensible than the revenue meta.

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I saw the way news case was being digital

gold and as such, you don't really need

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a lot of transaction, a lot of capacity.

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It's nice to have smart contracts.

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And so I didn't focus on true

word or compute very early on.

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In fact, even the early languages in

Tezos, they're made for saying like,

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Hey, you know, you're gonna have a

very, very secure language for doing

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channels, for doing multisig, this

type of thing, but not necessarily for.

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Building very complex application

that run directly on chain, and

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that was rid of it later on.

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That was one mistake.

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I mean, it is, and it isn't because

in a way, I, I still feel like the,

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the narrative that's the safest is

digital goal for Bitcoin out there.

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I don't think that Bitcoin is inevitable.

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It definitely is in a better

position to today compared to

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others than it was in 20 14, 20 12.

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In 2017, we got very close to flip

of Bitcoin via Ethereum, and I

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think they would have had massive

consequences in people's psyche.

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And I think it can still happen between

like a large, I'm not saying, I don't

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know if it'll be Ethereum or something

else, but it is possible and I think

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they would shake a lot of confidence

in the assets if it does happen.

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And I don't think the, uh, dominance

of Bitcoin is completely set in stone,

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although it is safer today, much

safer today than it was a decade ago.

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What else did I miss?

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I wish I had stumbled on the,

the rollup design earlier on.

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I think there was something

very, very strong here.

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I had some ideas around validated

rollup, but I was missing aspects

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of data availability of the other

thing that was very surprising.

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So Tezos has a smart contract language.

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Again, that's very focused on security

because my thinking was you're gonna

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have these small contracts that controls

hundreds of millions of dollars, billions

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of dollars, and so it's gonna be very,

very valuable to make them secure.

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You know, the systems that

are there are insecure.

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It was correct that small contracts

written in EVM, whatever, were going

339

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to secure hundreds of millions of

dollars, and that they would be

340

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insecure and that they would be hacked.

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What I did not see that people

would not care, like by and large

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people do not care about security.

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You know, like wormhole

exploited for 600 million.

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All of these, all of these constant

and constant exploit, and yet the

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market does not want security.

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And I have one theory for that.

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The theory is like if your main use case

is someone buying a token and saying,

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oh, I have 1% chance that this token is

gonna a hundred x and I'm buying a lot,

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your ticket is, that's your main use case.

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If you tell that person, well,

you know, you don't really have

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a 1% chance of your a hundred x.

352

:

It's actually like 1% minus the 0.01%

353

:

because there's also a small,

the contract is gonna be hacked.

354

:

They're risk seeking.

355

:

They don't care.

356

:

In their mind, their money's already

gone, you know, in, in some sense.

357

:

So the demand security, I think,

will come with more like less

358

:

gambling focused applications.

359

:

And right now, you know, the most

profitable things out there are

360

:

bitcoin trading or perpetrating.

361

:

And all, all of these have to do

with like massive them on the risk.

362

:

And I think the corporates care

more about security, but it's

363

:

still been a very cap in the space.

364

:

So, yeah, I was wrong about

the importance of security.

365

:

I don't think I was wrong about the

way to achieve it, but I was wrong

366

:

about the importance of security.

367

:

People care far more about developer

experience than in do security like

368

:

far, far more, and I was wrong about

the importance of scaling earlier on.

369

:

Great.

370

:

Anthony Perl: Yeah.

371

:

Can I jump in and ask you something

about that you were talking about a

372

:

little bit earlier on as in regards to

community, and I'm just fascinated by

373

:

how important community is being for

you and how much you've fostered that

374

:

and that gives you a bit of an edge.

375

:

Arthur: Yeah.

376

:

But I would say every blockchain

fosters its community.

377

:

And so, you know, as a bigger,

stronger, more vocal community,

378

:

oftentimes the better.

379

:

And it's the way I

described the currencies.

380

:

Sometimes it, it's, they're not exactly,

you know, they're, they're ledgers, but

381

:

they're, they're a bit more than ledgers.

382

:

The closest thing to think of

them is as online communities.

383

:

And even sometimes, you know, when,

you know, trying to, like, looking

384

:

for executives to hire and such.

385

:

You talk to recruiters and they imagine

like, oh, you know, you're in a blockchain

386

:

space, so let me find you some people with

experience in FinTech, and it's like on

387

:

a day-to-day basis, it looks a lot more

like, again, online C management or sports

388

:

club management than it does FinTech.

389

:

Anthony Perl: Interesting.

390

:

So do you think that it's an important

way to help, you know, growing ideas

391

:

and things, is that, is it important

to maintain it and foster that?

392

:

Arthur: Absolutely.

393

:

You want a very strong user

community and you want a very

394

:

strong developer community.

395

:

'cause what a lot of people

did and are still doing is

396

:

platform plays for blockchains.

397

:

The idea being that build your

application on a chain, because we have

398

:

all these users, all this community

who wants to use your application and

399

:

vice versa, come and use application

on that chain because we have all

400

:

these cool applications for you to use.

401

:

Now I think that's threatened by

the fact that a lot of applications

402

:

are multi chain and the fact that

wallets are going to abstract that.

403

:

And so in some sense, you know,

people are still users of blockchain.

404

:

They seem like there's some

people out there who say like,

405

:

I like using, you know, Tezos.

406

:

I like using near, I like using

that blockchain in particular.

407

:

And there's a bit of a

loyalty towards block share.

408

:

There's a bit of convenience, but

more and more people are gonna see

409

:

themselves as users of wallets.

410

:

I use this wallet and then, you

know, behind the, the wallet has

411

:

a swap function that's integrated.

412

:

It routes through all the different

chains, find the best liquidity and

413

:

that compresses the margin of anything

that's underneath it in the stack.

414

:

Jemma: Arthur, I wanna just delve a bit

further in your kind of retrospective of

415

:

your thesis and your time in blockchain.

416

:

When you wrote the white paper for

Teslas back in:

417

:

are there things that you would've

wanted to be articulated differently?

418

:

Arthur: So the white paper

was written by l Goodman.

419

:

Uh,

420

:

Jemma: ah,

421

:

Arthur: I know.

422

:

In

423

:

Jemma: terms of insights,

do you have any in terms of

424

:

Arthur: insights?

425

:

Oh, I mean, you know, yeah,

but you know, hindsight is 20.

426

:

Jemma: When I said you, I meant as in as,

427

:

Arthur: yeah.

428

:

Yeah.

429

:

I mean, hindsight, hindsight is 2020.

430

:

Like, what do I wish were in

the, there's a white paper.

431

:

I, I can give you a cheeky answer.

432

:

Yeah, I could say actually like,

Hey, you can have very powerful AI

433

:

systems by using transformers and

deriving scaling load by training

434

:

them on very large amount of data.

435

:

And then you can use RL on.

436

:

On, uh, mass problems to get them to be

reasoners via chain of self reasoning.

437

:

I'm, I'm kidding.

438

:

Uh, you could cram like the past

10 years of innovation in there

439

:

and say they were there now.

440

:

Sorry, I'm, I'm just being cheeky

and, and literal what could have

441

:

plausibly been there and wasn't there.

442

:

Jemma: Yeah, I think that's, yeah.

443

:

Look, and I, I do like the

humorous response as well.

444

:

Arthur: Yeah.

445

:

What could have philosophy beary scale?

446

:

I would say like, I think roll up

style scaling could have been, uh.

447

:

Jakob: I may continue with because scaling

is obviously such a big topic and I

448

:

think a lot of the current brain power

is focused on Ether Link within Tezos.

449

:

I noticed that for Ether Link,

there seems to be a much stronger

450

:

focus on Defi and growing out

the Defi ecosystem, as was the.

451

:

Case for Tezos in general.

452

:

Defi being like one of these areas

where, where I would say critics would

453

:

argue Tezos has never really taken off.

454

:

Yeah.

455

:

Is that something that you think

you would've focused on earlier?

456

:

If you could go back in time?

457

:

So

458

:

Arthur: just to finish my answer to

the first question in a white paper,

459

:

and I'll address the Defi question.

460

:

So white paper, I think scaling.

461

:

Scaling and a bit more privacy.

462

:

We, we do mention privacy in a paper, but.

463

:

Scaling would've been a good one to

tackle on and one that could have

464

:

plausibly been been there, like focus

on a pure consensus and staking layer.

465

:

And then later on, bolt on a really high

efficiency design, which is the design

466

:

we're using for Tezos X at the moment.

467

:

Defi, see, defi didn't really

take off on Tezos in:

468

:

there's a story behind that.

469

:

So.

470

:

I did think that Defi was quite important.

471

:

We had a rocky start.

472

:

There were organizations involved

in trying to grow to this protocol,

473

:

as you know, even starting in 2018.

474

:

But I had a bit of a distant relationship

with them, and so I tried to import

475

:

some momentum, but in a lot of cases

I was unsuccessful in imparting that

476

:

momentum and imparting that urgency.

477

:

So I became aware of uni swab

when the paper came out and

478

:

you know, I come from, um.

479

:

Market making background and I thought,

Hey, this is simple to implement.

480

:

We should get this on Tezos.

481

:

I communicated that and somehow it

turned into a ridiculous year and

482

:

a half long million dollar cost.

483

:

Von Dole Bun Doggle, and you know that,

so we were late with that and that

484

:

was a coherent strategy around, around

Defi, but it didn't really pan out.

485

:

Then 2021 comes around the corner

and then we have the, the most

486

:

aggressive administration in the

United States against crypto.

487

:

And the interesting is like a

lot of people are focused on.

488

:

Securities law around

everything that has with crypto.

489

:

And there were theories being put

forward by the SEC theories, which,

490

:

you know, have not panned out in

courts because they've lost a lot.

491

:

And now, which I think are being

clarified with Syn Clarity Act in

492

:

the us, but there's more to it.

493

:

You know, you're pulling a lot of

money without KYC in Identifi pool.

494

:

So they were also, I would say,

threats from Vincent, threats

495

:

from OFAC around, around Defi.

496

:

It was not a given that Defi was

going to survive this administration.

497

:

There were certainly a lot of risks.

498

:

So the Tezos Foundation did sponsor

some Defi projects to go on Tezos, but

499

:

you know, for example, we didn't try to

launch in-house defy protocols there.

500

:

There was no desire, for

example, to provide liquidity

501

:

inside of Defi protocols.

502

:

So I would say there was an approach

that was quite pre given the onslaught

503

:

that was happening in the United States.

504

:

And the other thing is like,

I saw it at the time that.

505

:

Defi was gonna be worn

by a centralized system.

506

:

Right.

507

:

And I'm very surprised that

Binance Smart Chain did not win

508

:

Defi, for instance, because they

had a few things going with them.

509

:

One, you know, they had enough

performance and low fees, so

510

:

people might care about that.

511

:

They had centralization, but by and

large people who are using Defi,

512

:

you know, they care if it works, but

they're in a transaction for a minute.

513

:

They're not billing something

that's supposed to like last.

514

:

10, 20 years.

515

:

If you're minting, a piece of arts

centralization is super important.

516

:

You want your arts to be there

for the next 10, 20 years.

517

:

You want it to be creatively

neutral, all of that.

518

:

If what you're looking is a cheaper way

to trade your Bitcoin for ETH, or you

519

:

know, your test for USD or whatever.

520

:

You don't really care what it's in

relation, it needs to work in the

521

:

next half hour, but it doesn't ruin.

522

:

So like decentralization was

not a, uh, a huge factor for it.

523

:

A bit different in lending than

trading cost was quite important.

524

:

And then not only did Biden's have,

you know, a fast system, they also

525

:

had all their distribution channels.

526

:

They basically, like anyone who's

interested in treating tokens was, you

527

:

know, had a Biden's account in some way.

528

:

And so they had all these distribution.

529

:

They could wrap every asset,

so like every asset out there

530

:

could be wrapped on their chain.

531

:

They still didn't win defi.

532

:

I find that very, very surprising.

533

:

I also saw, you know, there was a

lot of very unsuccessful attempt

534

:

to foster defi in other ecosystems.

535

:

I saw a lot of foundations spend hundreds

and hundreds of millions of dollars

536

:

bribe being liquidity to come in.

537

:

And as soon as they end, as

soon as they stopped doing

538

:

that, the liquidity dried out.

539

:

The only chain that pulled it

off was to some extent, polygon.

540

:

Polygon managed to retain

a lot of liquidity after.

541

:

I think avalanche kept some,

but it's been very hit and miss.

542

:

Like it completely fell for a Goran,

for example, lost ton of its defi

543

:

after they stopped paying for it.

544

:

It was also very commodity.

545

:

Like there was not a whole

lot of innovation in Defi.

546

:

People had Dexus and then people had

lending and different permutation on that.

547

:

But it wasn't exactly, you know, once you

have these, what else do you, do you want?

548

:

So the way I'm thinking

here, I also think that.

549

:

So, you know, there's a lot more

defi today on, on this, especially

550

:

via Isci Link because Isci Link

has very low latency, which I

551

:

think is important for Defi.

552

:

It's very easy to take existing code

bases for a VM and Nonfamily selling.

553

:

So I think today is selling

Link has a modest but.

554

:

Reasonable TVL, which is

like around like 50 million.

555

:

What I'm excited about is using the

primitives built in Defi for doing

556

:

something that's a bit less circular.

557

:

Because if all you do in Defi

is straight other Defi tokens,

558

:

you know, what is it for?

559

:

Finance has to finance something,

and so today in Defi entails you

560

:

can actually trade things like

uranium, like physical uranium.

561

:

I find that exciting.

562

:

Jemma: I mean, there's so

many things to touch upon from

563

:

what you said there, Arthur.

564

:

Maybe I'll just circle back.

565

:

It sounds like you are perplexed

about what had some defi protocols

566

:

maintain the liquidity and volumes

once they stopped using your term,

567

:

bribing the market for liquidity.

568

:

Yeah.

569

:

Anthony was pointing to before about

the community and the ecosystem, or have

570

:

you not figured out what it was that

differentiated these things ultimately?

571

:

Arthur: Well, liquidity is

more mercenary right than this.

572

:

Especially, you know, especially

as it professionalizes.

573

:

And so, you know, if you're

counting on community for

574

:

liquidity, it is gonna be tough.

575

:

Like it, it doesn't have as

much intangibles and even today.

576

:

So what was the goal of these things?

577

:

People thought like, well, we'll

pay for a lot of liquidity.

578

:

Because we'll have a lot of liquidity.

579

:

We'll get a lot of trading volume.

580

:

The trading volume will pay fees,

and then once liquidity stops being

581

:

subsidized, because all those fees are

being paid, liquidity will stay there.

582

:

So they'll have liquidity because it's

trading volumes, and they'll be trading

583

:

volumes because there's liquidity.

584

:

So essentially you've

created a network effect.

585

:

People just use that chain because it's a

network effect that doesn't work so well.

586

:

Once you have liquidity aggregators, you

know, people can go to jumper and choose.

587

:

Wherever there's liquidity.

588

:

Well, you know, maybe sometimes you'll

be routers who actually like John

589

:

post's bad example, because it doesn't,

it doesn't spread your trader across

590

:

multiple pools as far as I know.

591

:

Once you have aggregators that go and get

liquidity wherever it is, then in some

592

:

sense the network effect gets diluted

because anywhere where there's a little

593

:

bit of liquidity is going to be hit.

594

:

It's kind of like, you know, in the US on

stock exchanges, you have bragging MS and

595

:

like any order has to be routed to like

wherever the liquidity is the cheapest.

596

:

And so like it's a way for, even if you're

a small exchange, as long as you have some

597

:

liquidities, there's a big order like.

598

:

A big part of it is going to be

executed on a big exchange, but a

599

:

small part of it might be executed on

a small exchange and you get the same

600

:

phenomenon and so you can actually like

progressively cheap at the network effect.

601

:

So I don't know how valuable this

strategy is again, because the question

602

:

is, are people, users of your chain?

603

:

Are people, users of your defi protocol?

604

:

Are people, are users of the wallets?

605

:

Are people are users

of like a D aggregator?

606

:

You know, it all ended

up being commodified.

607

:

Jemma: Interesting.

608

:

So if you don't think transaction

fees are gonna be, because there's,

609

:

you know, so much gap between

availability and demand Yeah.

610

:

That it's not gonna be a material

source of income for the protocols.

611

:

Where do you think the business model

and the commercial models actually lie?

612

:

Arthur: So, first of all, I'm not sure

about this, you know, so I'm not gonna

613

:

say like, oh, there's no point in, uh, in

trying, I, you know, I remain skeptical.

614

:

But that being said, I have the,

let's call it the spaghetti theory of.

615

:

Of KPIs, which is that revenue is

an interesting Ty to pull on because

616

:

if you pull on this, Ty I sink,

you get the whole mill behind it.

617

:

And so even if somehow revenue is not

the thing that makes you economically

618

:

viable, it's a great thing to maximize

because it's an indication that people

619

:

are willing to pay to use your chain.

620

:

It's a very hard to fake signal, like

you don't even fake it to yourself.

621

:

If a lot of people are paying a

lot of money to use your chain,

622

:

you must be doing something right.

623

:

And regardless of what.

624

:

The model is, it's a healthy thing

if a lot of people are paying lot

625

:

of money to use your share, like

you build something useful and.

626

:

I would say like regardless of the

business model, the conversion of property

627

:

is like chains, which are very useful to a

lot of people probably are able to capture

628

:

more value than that chain, that errands.

629

:

And so it's a really interesting metric

I think to focus on and maximize, even

630

:

if the economics is not necessarily like

token burn, represent token demand, it

631

:

could be something completely different.

632

:

Maybe even types of rent.

633

:

Maybe there's a store of value aspect

and the store of value is reinforced.

634

:

You know, when the brand is better known.

635

:

And the way for the brand to be known

is for a lot of people to use a system.

636

:

So.

637

:

I still think it's a very

good thing to focus on.

638

:

Jemma: Got it.

639

:

You're a bit critical of meme coins.

640

:

My question about this is I've

heard people that are in the

641

:

protocols are big on memes.

642

:

See that a little bit as a

test net for defi at scale.

643

:

You know, where if blockchain is

programmable money, then traditional

644

:

trad FI systems could migrate onto

blockchain and what memes are is a test

645

:

net for this infrastructure at scale.

646

:

What's your view on that kind of thesis?

647

:

I

648

:

Arthur: mean, people have

said this about defi before.

649

:

Meme coins were a big thing, right?

650

:

People have said like, oh, you

know, isn't defi interesting?

651

:

Because it's a test run for being

able to, you know, to be used for

652

:

real things and real application.

653

:

And it's like, all right, so, you know,

what's stopping anyone for doing this?

654

:

I mean, it's good.

655

:

Like, look, don't get me wrong.

656

:

If tomorrow I can wave a wand and

there's, you know, a, a trillion dollar

657

:

of Bitcoins being traded on Tezos,

spending millions of dollars in fees

658

:

every day and doing that, I'm all for it.

659

:

Like, I, I will wave that wand any day.

660

:

Uh, you know, there's no sour grapes here.

661

:

I don't wanna say like, oh,

I don't have vena, therefore,

662

:

but I think it will abate.

663

:

Like, what at a issue is, is

people who wanna make it more

664

:

than it is in some sense.

665

:

Like, MCO is the future.

666

:

Wimco is this, you know, it's like,

it's a new way to build communities.

667

:

Like that is our bullshit.

668

:

It's a gambling product.

669

:

And if people say like, look, qui

are a very popular gambling product

670

:

and all of people are willing to

spend a lot of money for it, and

671

:

blockchains are a good product to power

this new type of gambling product.

672

:

Why not?

673

:

It's not a gambling I

objects to, it's a pretense.

674

:

Jemma: Got it.

675

:

Arthur: Where do

676

:

Anthony Perl: you see the future

in terms of how you would ideally,

677

:

like what you've created to be used?

678

:

What's the big idea that

hasn't come out yet?

679

:

Arthur: I would say the uranium that

we've tokenized with, uh, urinate io.

680

:

It's close to the type of thing

that I really wanted to do.

681

:

You know, you have some

futuristic commodity.

682

:

I mean, it's not futuristic because

nuclear power plants have been

683

:

there for more than a half century.

684

:

But if fu it feels futuristic now because

they haven't been built for a long time

685

:

and now they're really built again.

686

:

And so if you can power the future

and you know, like bring markets which

687

:

are non-existent like the European

market is, OTCs is not like a liquid

688

:

market for retail and small size.

689

:

And we're actually like bringing

this for the first time.

690

:

So if you can create.

691

:

Important markets, make them happen.

692

:

I think that's, uh,

that's super important.

693

:

But, you know, the thing that got, you

know, that really got me interested in

694

:

doing this in the first place, like the,

I said the, the mission aspect of it

695

:

is essentially like taking some power

away from mission states and putting

696

:

them in the hands of individuals.

697

:

So I think financial surveillance

and financial controls are a big

698

:

problem that is going to grow.

699

:

I think a lot of the fiscal discipline

in governments has come only.

700

:

From the difficulty of doing

global financial tracking, tracking

701

:

every single transaction, and with

technology, the difficulty goes down.

702

:

So day after day becomes easier and

easier for governments to track everyone

703

:

to control everything that they do.

704

:

And I would say historically,

there's two things that

705

:

prevents governments to do this.

706

:

One is popular pressure,

perhaps democracy.

707

:

Perhaps if you do bad

things, you can put it out.

708

:

So like I would say, governance

is one thing that pushes

709

:

against government or abuse.

710

:

Or whatever, you know, like

system of democracy you have.

711

:

And the other thing that pushes

against it is practicality, right?

712

:

So, you know, there's a lot of

laws that the government could

713

:

pass, but they don't pass them

because it would not be practical.

714

:

Right?

715

:

You know, if the government

tomorrow says like it's illegal

716

:

to smoke in your own home.

717

:

Very difficult to enforce.

718

:

They can't go into everyone's home if

tomorrow they had technology, which

719

:

magically let them know everyone smoking

a cigarette anywhere at any time on earth.

720

:

Then easier to enforce

and we are not ready.

721

:

Like the technology is making

it easier and easier to pass.

722

:

Stupid and stupid laws and the governance

institutions to push against bad

723

:

government policies are insufficient.

724

:

And so any technology that I would

say restore some sovereignty and

725

:

restore some control in the hand of

individuals is quite important to me.

726

:

Jakob: I kinda wanna follow up on the

uranium example because many would

727

:

argue that Bitcoin still is kind

of like a digital gold alternative.

728

:

And you've obviously been, uh, quoted

a few times for saying that people will

729

:

treat it as funny internet money as soon

as kind of the market gets under pressure.

730

:

How do you make sure that an asset like

digital uranium has kind of these long

731

:

term fundamental buyers and doesn't

fall into the same trap that maybe

732

:

something like Bitcoin will have?

733

:

Arthur: Yeah, so I had a long

interview where I talk about

734

:

the funny internet money aspect.

735

:

It's a long balanced interview

where I present different aspects.

736

:

There's some s quo here.

737

:

I still agree with the quo.

738

:

What I talked about in this

interview, just to be clear, was

739

:

situations like they were asking

like, are there institutions buying?

740

:

Are the retail.

741

:

And it was like, I don't know,

you should ask this to Coinbase.

742

:

Ask this to OTC desk.

743

:

I'm not a Bitcoin seller, so

I don't know who's buying.

744

:

And then they were saying like, or our

digital assets, treasury companies,

745

:

evident of institutions buying.

746

:

And it was like, no,

because it's not like.

747

:

Some companies are saying like,

oh my goodness, as part of

748

:

strategy for the company, we're

gonna build a Bitcoin treasury.

749

:

No, they're vehicles for retail.

750

:

So like they're a wrapper, they kind of

like, they're a wrapper for retail buying.

751

:

So no, deities are not evidence of that.

752

:

And when we're talking about the COVID,

you know, like Good crisis happened

753

:

and talked about the COVID crisis.

754

:

So you know, during COVID

when everyone now has to get

755

:

confined and like lose their job.

756

:

I would say the first thing that

they did was sell their Bitcoin.

757

:

They sell what they perceive as fun

internet money because they need to

758

:

pay their rent and their rent is dollar

denominated and on Bitcoin denominated.

759

:

So, and there's still this

risk on aspect to Bitcoin.

760

:

It's definitely not the

only source of buyers.

761

:

I think they are more fundamental

buyers who are buying it as

762

:

a macro hedge, especially now

that the dollar is under attack.

763

:

So there's a real demand here, but

that doesn't mean that there isn't

764

:

this like from internet demand.

765

:

So the people.

766

:

Hold Bitcoin for vastly different reasons.

767

:

And there's still quite a bit contingent

of people who hold it because it's

768

:

like, it's an asset that goes up and

the minute it stuffs going up, they'll

769

:

say, my goodness, my analysis was wrong.

770

:

It was convinced it was

an asset that goes up.

771

:

It is actually an asset that intrinsically

does not go up and I shall sell it.

772

:

So you still have this kind of

momentum trading that's very prevalent.

773

:

Now, onto your question,

uranium, I mean, you know.

774

:

Uranium is like a fundamental demand for

uranium, which is nuclear power plants,

775

:

and everyone's building new nuclear power

plants, changing the regulations to a lot

776

:

of the building of nuclear power plants.

777

:

Again, I think the forecast for

the demand of energy coming out

778

:

of a data center is enormous.

779

:

There's a need, a lot, lots of

capacity, and I think most of it

780

:

is gonna be solar and nuclear.

781

:

And solar is fantastic.

782

:

Like the, the cost of scaling

solar is very, very cheap and

783

:

you can scale it right away.

784

:

So if you are in a situation where

you have massive growth and super high

785

:

interest rate, because it's a massive

growth, if there's a lot of value in

786

:

having your accuracy today as opposed

to building a power plant and you know,

787

:

nuclear power plant and having it in

five or or 10 years, nonetheless, you

788

:

still have storage issues with solar,

that batteries remain quite expensive.

789

:

And so there's still a big

place for nuclear in the future.

790

:

Jakob: But then just to kind of reiterate

from what I understand, it's just because

791

:

you have these people that treat an asset

that way, doesn't mean the underlying

792

:

asset is in any essence an asset.

793

:

You shouldn't take seats.

794

:

No, of course.

795

:

'cause from what I understand,

you obviously respect Bitcoin

796

:

a lot for what it is as well.

797

:

Arthur: Yeah, absolutely.

798

:

And it is a validation is one of

the largest holder of Bitcoin.

799

:

So proof is in the pudding.

800

:

But again, things are not defined

by how people feel about them.

801

:

So, actually, you know what I

said that, and then Bitcoin is

802

:

actually inter subjective assets.

803

:

So may lemme take something back.

804

:

Things are somewhat defined by, by

by, by how people think about them.

805

:

But there's enough people who think

about Bitcoin as more than fun internet

806

:

money to make it more than fun.

807

:

Internet money.

808

:

Jemma: Yeah.

809

:

I mean, if equity markets come off,

then I think that, you know, you

810

:

do see Bitcoin prices and crypto

in general take a haircut, but.

811

:

Different about paying your rent with

Bitcoin to perhaps selling a piece of

812

:

property, you know, is the liquidity

piece, or even accessing your pension

813

:

fund that might be invested in, you know,

debt instruments and equity instruments.

814

:

It might not be as liquid or

easy, it might be penalties and

815

:

fees from selling these assets.

816

:

So I think the liquidity piece is

another reason, uh, that Bitcoin

817

:

might be sold down as opposed to it's

the perception of its value per se.

818

:

Arthur: Liquid.

819

:

I mean, there's quite a bit of liquidity.

820

:

The question is like, are there

people who are fundamental buyers of

821

:

Bitcoin who are waiting for a doubt

or momentum to buy, to catch it?

822

:

Because Bitcoin has had this cycle.

823

:

I think we'll see.

824

:

I think we'll see more.

825

:

I think if Bitcoin takes 20, 30%, you know

you're gonna see a lot of retail sailing.

826

:

The question is like, are there

people on the sideline right now who

827

:

are saying, like, are there central

banks who have decided, you know what?

828

:

As a central bank, we wanna buy

Bitcoin, but we're not gonna buy it now.

829

:

We're gonna wait for an

crisis of confidence.

830

:

And then COVID as buyers, like if you have

these people, you'll start smoothing out.

831

:

Essentially like arbitrage these type of

things in the same way that in a stock

832

:

market, you know when a stock stops being

sexy, maybe you have their higher hadaway

833

:

come in and say, wait a second, there's a

great deal on this stock and I have a 20,

834

:

30 year horizon, and so I'm gonna buy it.

835

:

So the question is like, are there

parties like this for Bitcoin?

836

:

Probably.

837

:

But I don't necessarily know who

they are because again, I don't

838

:

run a Bitcoin selling business.

839

:

Jemma: I mean, you, you come from a

markets background and so you would

840

:

have presumably seen people deliberately

pushing down the price of a stock or

841

:

trying to take out people that can

only hold out like options, positions

842

:

to a certain level to bring the price

down, push them out of the market,

843

:

and then buy up at a cheaper price.

844

:

Arthur: I seen that actually, never.

845

:

No, never.

846

:

Jemma: I mean, I, I think that that,

I mean, that's fairly prevalent, I

847

:

would say, in, especially with some

of the, you know, the people that take

848

:

options positions very publicly or

leverage positions very publicly on

849

:

Twitter, you know, trying to gamble

on the price of Bitcoin or whatever.

850

:

There would be people that would

wanna push the price out, take

851

:

them out, and then buy, buy up

the Bitcoin at a cheaper price.

852

:

I imagine that this is,

853

:

Arthur: it's possible, the thing with

this, with all of these like strategies

854

:

is that they're all arbitrable.

855

:

You know, anything where you feel like,

oh, I'm gonna do this, and then that,

856

:

you know, you name any strategy like

this and I can find, if you're doing

857

:

anything that's not like buying base.

858

:

If you're trying to move

the price, essentially.

859

:

Like if you're trying to say like,

I'm gonna buy and my buying will have

860

:

an impact on the price, yada yada.

861

:

Then in all these cases, there's a

condo strategy that should negate

862

:

the effect of what you're doing.

863

:

And that condo strategy would be

saying like, well, whenever I see

864

:

this happening, I'm gonna sell.

865

:

Because you know, there's like someone

creating temporary market impact.

866

:

So if you can predict when people are

creating this impact, then you should

867

:

be providing liquidity in this period

of time, and you'll make a lot of money.

868

:

Jemma: Yeah.

869

:

You know, it's kind

870

:

Arthur: of when people were saying

like, oh look, you remember the bart,

871

:

this is like from 2017, where Bitcoin

would go like, like, uh, Bart Simpson.

872

:

I mean, there was a real phenomenon.

873

:

Like you saw them, you don't

see them as much today.

874

:

That's arbitrage about, like, you know,

if you sing, this is actually happening.

875

:

You can absolutely detect a bar,

you know, like bar shortage and then

876

:

buy back at the end of the bart.

877

:

And you know, the reason it

doesn't happen sometimes is that.

878

:

Because there's not enough like

maturity in the markets that you have

879

:

all these infrastructure in place.

880

:

Like if you have enough people

who are good enough at doing

881

:

stud arb, those things go away.

882

:

Jemma: Yeah.

883

:

A temporary

884

:

Arthur: And usually, you know, like it,

it's not very like, like the closest

885

:

thing I can think of to what you described

with the, the Jane Street strategy with

886

:

the options in India recently, which

has this weird property where like

887

:

the more mon capital you put in the

strategy, the more money you are making.

888

:

So sometimes you just have like

bad market design, but even

889

:

then what should happen is like.

890

:

Basically the other side should go out.

891

:

You know, one, one thing I learned

in finance early on is, you know, if

892

:

you have a strategy and you think the

strategy is making money and you have

893

:

like found a way to like automatically

make money on the markets, ask

894

:

yourself like, who's this stupid buyer?

895

:

Or who's this stupid seller?

896

:

You know, if you're like, oh, I

can buy this thing and make money.

897

:

Well, who's this stupid seller?

898

:

Like you have to have, overall, I would

say financial markets are positive.

899

:

Some, right?

900

:

You, especially if you provide.

901

:

Capital to, uh, businesses, and

then they can do economic activity.

902

:

And so overall, it, it climbs, but

anything that essentially beats

903

:

holding indices to some extent is

gonna be like the song to some extent.

904

:

You're gonna take the value from

someone if you have found a systematic

905

:

way to do this and you keep doing it

over and over and over, like they're

906

:

gonna stop selling to you or, or

they're gonna go out of the markets.

907

:

Jemma: Yeah, indeed.

908

:

What about digital asset

treasury companies?

909

:

What's your view on these?

910

:

Arthur: Well, this is something I thought

about like way back when the, when the

911

:

SEC would not approve an ETF, my thinking

was like, well, you know, if you're

912

:

a staking company and just hone your

treasury, it's not, you're not a fund.

913

:

You're not holding a security.

914

:

You're not a fund.

915

:

But def facto, you would have

something that would be very close to

916

:

ETF because even though you wouldn't

have patient and redemptions, you

917

:

could still manage it by doing at

the market offering and buy backs.

918

:

Didn't wanna do it because again, when

you had an administration intent on

919

:

destroying the whole industry, you don't

wanna be the clever person in the room.

920

:

'cause it's like, ah ha, ha.

921

:

Actually I found a way to get

into TF then you just like put

922

:

a giant target on your back.

923

:

So I started thinking about it again in

November last year, but my idea was like.

924

:

I was wrong, but that I, I thought that

people wanted these vehicles because they

925

:

were like, oh, it's a nice way to get

exposure to the crypto market because

926

:

you might get access, you might get

exposure to a token, and then you might

927

:

get exposure to like, maybe multiple

tokens and like a stacking activity.

928

:

And it's kind of like

better in a box, right?

929

:

You want to, all the crypto

market, you don't know what to buy.

930

:

So you know, buy this company.

931

:

And it's kind of like, has a

diversified set of activity and it will

932

:

represent broadly the crypto market.

933

:

I thought this would be interesting

doing some marketing research.

934

:

This is not what people are thinking.

935

:

This is not what people

want as a single coin.

936

:

DAT has been far more popular than the

other ones, and people have been focused

937

:

on the metric, which is crypto per

share, so it does not seem to stem from.

938

:

People's, I would say desire

to, like for convenience.

939

:

I think it stems from a delusion

that they are necessarily beating

940

:

the assets because saying like, oh,

you know, you have a company, it's

941

:

gonna be better than the assets, and

all the premiums have been absolutely

942

:

ridiculous and completely unjustified.

943

:

I also think it comes

from desire for lever.

944

:

Sometimes they joke that the main

product of crypto is volatility,

945

:

and if the SEC really wanted to

destroy crypto, what it should have

946

:

done is give everyone a hundred x

leverage in their directee accounts.

947

:

That's what people want.

948

:

They want volatility.

949

:

They want volatile stock.

950

:

They want volatile assets.

951

:

And you know, that explains a lot,

that explains why crypto is popular.

952

:

That explains why perps

are even more popular.

953

:

People want leverage.

954

:

People want volatility.

955

:

And so in some sense, when those

companies, uh, raise money with

956

:

convertible debt, they build in leverage.

957

:

So it's a way for people who

don't necessarily have access to

958

:

leverage to get built in leverage.

959

:

And it's also, I would say like.

960

:

Now, I mean, you know, like you, you

take Michael Sailor, he is full of shit.

961

:

So like there's a lot of people who

I think buy his stuff because they're

962

:

generally convinced that, you know,

he has a magic way of making money.

963

:

Now, this is not to cast a stone on

any digital asset treasury company.

964

:

I think there's a very

reasonable case for doing one.

965

:

I think there's good businesses

and you know, essentially it's

966

:

kind of like having a gold mine.

967

:

And you want, you know, you

have a gold mine and you say,

968

:

well, I have a gold mine.

969

:

I'm gonna list it.

970

:

I'm not gonna hedge the gold because

people might want experience to gold.

971

:

So in the same way, you know,

you have a like completely normal

972

:

business, which is like being a value.

973

:

It's a sticker and validator and you say,

I don't have to hedge my, my coin through.

974

:

That's fine, but that's not gonna deliver

on people's expectation that somehow.

975

:

These businesses should be commanding

like a hundred percent premium

976

:

for their talents in deciding

when to buy and when to sell.

977

:

Jemma: Yeah.

978

:

In terms of the leverage piece, I mean, if

you are buying into one of these debts and

979

:

you're not like an initial, like pre IPO

holder, the leverage is already priced in.

980

:

Like you are actually buying something

perhaps at 2, 3, 4 times the underlying

981

:

assets that sit in the company.

982

:

Arthur: That's not necessarily leverage,

that's just you overpaying sometimes.

983

:

Yeah.

984

:

The, the leverage comes from ation,

comes from them buying, getting the debt.

985

:

Jemma: Yeah.

986

:

Arthur: But people like the premium,

people say that, oh, the premium is good.

987

:

Look, it has such a premium.

988

:

That's great.

989

:

Mean is forced even more than it's forced,

even more than the Bitcoin because it's

990

:

has premium U Bitcoin is more valuable

in there and that's, that's crazy.

991

:

But we've seen some now like trade

below, so I think the J Lubin

992

:

East one was below M Now recently.

993

:

Now the big question, there's

a big governance question is

994

:

like, let's say you're j Lubin.

995

:

You hold a lot of ether and there's a

bunch of ether in that company and now

996

:

the company starts trading below its MN.

997

:

Do you want a company to sell

the E and buy back share?

998

:

Not necessarily.

999

:

Keep it in there.

:

00:47:50,679 --> 00:47:55,899

You know, I, and I could, I see we

could get a redux of GBTC where GBTC

:

00:47:55,899 --> 00:47:59,499

was trading far, far below na nav

and they had no interest in, they

:

00:47:59,499 --> 00:48:03,009

were collecting fees and then no

interest in, uh, lowering redemptions.

:

00:48:03,309 --> 00:48:05,769

I think it was also like trying to like.

:

00:48:05,995 --> 00:48:09,205

If it was a bit of a game of

chicken with the SEC in, in trying

:

00:48:09,205 --> 00:48:10,674

to get like a proof for an ETF.

:

00:48:10,975 --> 00:48:12,625

So it's not exactly the same dynamic.

:

00:48:13,015 --> 00:48:16,825

But I wonder, and also I think there's

limitations in companies ability to

:

00:48:16,825 --> 00:48:18,475

do buybacks on the US stock exchange.

:

00:48:18,475 --> 00:48:21,805

It's, you can still do quite a

bit, but are they going to sell

:

00:48:21,805 --> 00:48:22,765

their assets and do buybacks?

:

00:48:22,765 --> 00:48:23,815

What will happen now?

:

00:48:23,815 --> 00:48:25,944

Interestingly, the

leverage that they have.

:

00:48:26,619 --> 00:48:27,939

It caps them on both sides.

:

00:48:27,999 --> 00:48:28,239

Right.

:

00:48:28,239 --> 00:48:31,779

So it caps them on the downside in

a sense that if the assets, if the

:

00:48:31,779 --> 00:48:35,529

value of the assets starts falling

too much, they get margin calls from

:

00:48:35,529 --> 00:48:39,129

their, from their debt or, or they

might not be able to service the debt

:

00:48:39,159 --> 00:48:40,419

and that, that becomes a big problem.

:

00:48:41,019 --> 00:48:44,529

If, however, it gets too high,

then the debt gets converted.

:

00:48:44,529 --> 00:48:47,469

So you're clipping the downside and you're

basically have, you're selling calls.

:

00:48:47,469 --> 00:48:48,459

Mm-hmm.

:

00:48:48,835 --> 00:48:50,694

You're selling calls and you're

selling puts at the same time.

:

00:48:51,115 --> 00:48:54,835

So there's a cascade where somehow

the assets grow, the shares get

:

00:48:54,835 --> 00:48:57,325

diluted, and all of a sudden

people are like, wait a second.

:

00:48:57,325 --> 00:48:59,035

You know, like, you know this.

:

00:48:59,439 --> 00:49:02,199

Crypto doubled and

underlying vehicles didn't.

:

00:49:02,349 --> 00:49:02,979

What happened?

:

00:49:03,399 --> 00:49:04,509

When did it get clipped like this?

:

00:49:04,509 --> 00:49:07,119

And then people start selling and

so you have it like this cycles.

:

00:49:07,119 --> 00:49:08,859

I don't know exactly how it will end.

:

00:49:09,279 --> 00:49:10,569

I think it will end poorly.

:

00:49:10,839 --> 00:49:13,479

I think some will survive because again,

like I said, I don't think there's

:

00:49:13,479 --> 00:49:16,779

anything wrong with having businesses

which have large crypto treasuries and

:

00:49:16,779 --> 00:49:20,319

are focused on doing things, but a lot

of these are going to end up washed with

:

00:49:20,319 --> 00:49:24,219

the tide because if it starts turning

sour, people are might not go and

:

00:49:24,219 --> 00:49:26,559

say like, oh, this DAT is a good one.

:

00:49:26,559 --> 00:49:27,519

This DT is a bad one.

:

00:49:28,524 --> 00:49:31,404

Some people will, and they will make a lot

of money because they'll be able to like,

:

00:49:32,064 --> 00:49:33,535

you know, tell the witch from the chef.

:

00:49:33,984 --> 00:49:37,464

But it's, it's setting, you

know, if, if setting up to be the

:

00:49:37,464 --> 00:49:39,444

next catalyst for a down cycle.

:

00:49:40,404 --> 00:49:40,915

Jemma: Interesting.

:

00:49:40,915 --> 00:49:41,424

Thank you.

:

00:49:42,174 --> 00:49:44,694

Arthur, what's your

favorite song at the moment?

:

00:49:45,625 --> 00:49:47,154

Arthur: My favorite song at the moment?

:

00:49:47,185 --> 00:49:47,904

Oh, I have a bunch.

:

00:49:48,265 --> 00:49:48,685

Let's see.

:

00:49:48,685 --> 00:49:48,895

You can

:

00:49:48,895 --> 00:49:50,154

Jemma: share more than one if you'd like.

:

00:49:53,455 --> 00:49:56,154

Arthur: It's a Barak piece from, or.

:

00:49:58,089 --> 00:49:59,020

I like classical singing.

:

00:50:00,549 --> 00:50:00,970

Jemma: Amazing.

:

00:50:00,970 --> 00:50:01,569

Thank you.

:

00:50:01,960 --> 00:50:05,410

I, I'm sure I can speak on behalf

of Jacob and Anthony and say we've

:

00:50:05,410 --> 00:50:07,629

really enjoyed this conversation.

:

00:50:07,690 --> 00:50:12,009

Just to summarize some of the takeaways

and things that we've discussed, we

:

00:50:12,009 --> 00:50:17,589

talked about abstracting blockchains

that you are allergic to bs some of the

:

00:50:17,589 --> 00:50:20,980

things that you were wrong about in the

past, such as the importance of scaling.

:

00:50:22,194 --> 00:50:26,004

You are not sure that the dominance

of Bitcoin is completely set in stone

:

00:50:26,785 --> 00:50:27,924

Arthur: much more so than 10 years ago.

:

00:50:28,225 --> 00:50:30,895

But thanks for still people

over, over submitted.

:

00:50:31,495 --> 00:50:33,504

Jemma: Yeah, I appreciate

you nuancing that further.

:

00:50:33,654 --> 00:50:34,254

Thank you.

:

00:50:35,095 --> 00:50:40,645

Arthur: My, my, by the way, OD

is not from, or say it's from and

:

00:50:40,645 --> 00:50:42,475

Elena now that it matters, but,

:

00:50:42,654 --> 00:50:45,325

Jemma: oh, well it does matter

'cause I will look it up afterwards

:

00:50:45,325 --> 00:50:46,495

and listen to it and say thank you.

:

00:50:46,524 --> 00:50:46,555

Okay.

:

00:50:48,099 --> 00:50:52,119

And that you wish you'd stumbled

up on the rollup design earlier?

:

00:50:52,479 --> 00:50:52,899

Arthur: Yes.

:

00:50:53,259 --> 00:50:57,859

Jemma: That markets don't necessarily

want security and you know.

:

00:50:58,419 --> 00:51:00,819

If the lottery ticket is the

main use case, they don't

:

00:51:00,819 --> 00:51:03,039

necessarily care about security.

:

00:51:03,609 --> 00:51:07,359

You invented a new word on this

podcast called a Bon Dole, which

:

00:51:07,359 --> 00:51:11,709

was borrowed from boondoggle, and I

learned also about spaghetti theory.

:

00:51:11,709 --> 00:51:14,169

If you pull on spaghetti,

you might get the whole mule.

:

00:51:14,535 --> 00:51:15,044

Arthur: Exactly.

:

00:51:15,345 --> 00:51:15,615

Jemma: Yeah.

:

00:51:15,734 --> 00:51:17,805

So yeah, I really appreciate

your time, Arthur.

:

00:51:17,805 --> 00:51:18,854

It's great conversation.

:

00:51:18,854 --> 00:51:20,084

Thank you so much for joining us.

:

00:51:20,504 --> 00:51:20,774

Arthur: Thanks for

:

00:51:20,774 --> 00:51:21,104

Anthony Perl: having me.

:

00:51:24,524 --> 00:51:26,504

That's all for this episode of Unblocked.

:

00:51:26,564 --> 00:51:29,714

Please check out the show notes

for information on Power Ledger

:

00:51:29,894 --> 00:51:31,664

and other contact information.

:

00:51:31,845 --> 00:51:33,240

We welcome your comments and.

:

00:51:33,944 --> 00:51:36,944

And please hit subscribe

wherever you are listening.

:

00:51:37,035 --> 00:51:39,944

This podcast was produced

by podcast Done for You.

:

00:51:40,004 --> 00:51:43,484

We look forward to your

company next time on Unblocked.

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