Cobie and Ledger join Ryan and David of Bankless to cope together and try and put some of the pieces back in order.
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FTX – Where Did It All Go Wrong?
⁃ Cobie: Theranos documentary seemed like for them it started with good intentions then become evil to sustain things. Possibly it was like that but impossible to know
⁃ Maybe used customer deposits to accelerate business goals and played too close and got exposed with the bankrun
⁃ Ledger: I don’t understand where all the money went. The UpOnlyTV sponsorship wasn’t that expensive. The purchases they’ve made don’t add up to the massive hole
⁃ Cobie: Multicoin had access to FTX Q2 balance sheet and still lost ~20% AUM on the exchange so was it doctored or did they miss it?
Sponsorship Models
⁃ Cobie: The only people that want token promotions from YouTubers are projects that want token price to go up in the short term vs projects that just build things that work
⁃ Ryan: Creating content that audience want but there’s a difference between what people want and need; need to take responsibility when using your platform
⁃ Ledger: There’s an ethical way to do business and swimming down the easy lane for max profits is not a worthy choice
⁃ Cobie: Comical part is if instead of having FTX as a sponsor if UpOnlyTV had shilled random tokens each episode they’d look better right now
⁃ Ryan: Bankless does it’s best to DD sponsors but law of numbers in crypto means anything can happen
⁃ David: It’s an industry about money there’s no way out of that risk
SBF
⁃ Cobie: SBF was meant to come on UpOnly November 7/8th but once it got pushed back it was radio silence
⁃ Ryan: It was only 11 days ago he was lecturing the crypto industry on regulation
⁃ Cobie: He did the same thing in front of Congress last year and lied or all the problems happened since
⁃ David: It’s an insane amount of projection and confidence they have to produce. 3AC were doing this on Twitter right before they went under
⁃ Ryan: What are the chances SBF was a plant? Rises from nowhere to build the fastest growing exchange, he goes $0 to $22B. Infiltrated DC and became the spokesperson for crypto and then the whole thing becomes smoke and mirrors.
⁃ Cobie: I think it’s probably not true but I also thought it was probably not true they were insolvent so
Alternative Exchange Options
⁃ Cobie: I didn’t use ByBit because they seemed dodgy and did token launches that went down only
⁃ Binance is really confusing
⁃ Coinbase is slow and lost their way a bit in 2021 but now starting to do cool things
⁃ Ledger: I liked Blockfolio but then that became FTX US so we didn’t opt in to FTX originally
⁃ Ryan: UpOnly didn’t rug anyone FTX US is completely solvent
⁃ *me writing these notes 3 days later – I bring bad news from the future…*
⁃ Cobie: Can we get Blockfolio back now?
⁃ Ledger: I don’t want to tell people to go to a platform where leverage is high by default like Binance & FTX were when SBF & CZ came on the show. Make things simpler for onboarding people to products that won’t make them destitute
⁃ Cobie: Coinbase started making decisions based on share price after ICO vs their prior ethos but now going back to that again
⁃ David: Their MPC Wallet is real innovation I think a lot of people don’t appreciate
Effective Altruism
⁃ Cobie: Vitalik tweeted about SBF losing 95% of his net worth and how it was still much more than what he has
⁃ Ledger: I don’t really know what effective altruism means but I feel like Vitalik embodies it much more
⁃ Cobie: I read the book and parts are extremely enticing. It says you should focus on impact vs what feels good but gets strange in that the author then argues the best way to reduce suffering is to work at Goldman Sachs steal everyone’s money and use it more effectively
⁃ The author was SBFs personal advisor
⁃ Ledger: It’s not enough to say you’ll do good work if you’re given lots of money you need to do good along the way and show you can be responsible with larger resources over time or you just won’t
⁃ David: It’s a super convenient process to commit to giving away all your money but not just yet
Solana
⁃ Ledger: The $3 “I’ll buy all you want” meme has got to be a magnet and that would be -99% off the top
⁃ David: I think Solana is well positioned to be the same as ETH from last cycle with the sell pressure and lockups
⁃ Cobie: Solana founders probably bittersweet about FTX events it’s bad for industry and SOL rep as a “Sam coin” but the removal can only be good for SOL in the future
⁃ Solana can do it’s own thing now and build going forward without being cross-pollinated with FTX
⁃ Proving point for Solana still needs to be established outside of price
Network Effects & Crypto Winter
⁃ Ledger: ETH and SOL are building network effects. Bitcoin has got big problems
⁃ Cobie: We all have big problems!
⁃ Running a Bitcoin maximalist twitter alt account that’s got 100K followers now and beloved in the community
⁃ *Cobie wakes up and decides which alt mask to wear meme*
⁃ I don’t think people need to make plans on what to buy now can re-evaluate in future the things that perform best you probably can’t pick them out today
⁃ Ryan: How much time do you think SBF has added to a crypto winter?
⁃ Cobie: Several years. Trust is down, industry progress is moved backwards.
⁃ Ledger: Agree with several years and also the VC market is going to go on ice. Every company no matter their runway will be thinking how do we survive?
⁃ The metrics you used to think matter don’t matter it’s new metrics and new demands now
⁃ Ryan: Are you both planning to stick around?
⁃ Cobie: I’ve been doing this for 10 years it’s part of my identity what else am I going to do?
⁃ Ledger: Where are the rational actors? The populists don’t deserve the power and it pisses me off. I fell in love with the idea of a trustless and programmatic blockchain but the current state of things is depressing
⁃ Ryan: Feel very jaded by this catastrophic failure and agree with Ledger that the right people aren’t being rewarded
Will There Be A Next Cycle?
⁃ Ledger: By the next cycle maybe I’ll be capable but paralysed by scepticism
⁃ Cobie: First time in history people have been extremely confident that another cycle is promised to us
⁃ David: I remember thinking last cycle that everyone was talking about another cycle so maybe it won’t happen
⁃ Ryan: I think it’s inevitable but I wouldn’t call a time on it
Music by GiovanniPickle