Exploring Innovations in Crypto Infrastructure: A Conversation with the CEO of Uphold
Simon McLoughlin, Chief Executive Officer of Uphold, joins theCUBE’s John Furrier at the NYSE Studios in New York City for an in-depth discussion featured in the Crypto Trailblazers series. This video delves into the fascinating realm of decentralized infrastructure and the pivotal role of cryptocurrencies as financial technology evolves to merge real-world assets with digital solutions.
Simon McLoughlin introduces Uphold as a global platform catering to digital assets across diverse currencies, emphasizing its role in facilitating on-chain finance for banks and financial institutions. The conversation highlights the launch of the easyBitcoin app, illustrating Uphold's commitment to democratizing Bitcoin access. Joined by John Furrier of theCUBE Research, the dialogue touches on the seamless integration of digital and traditional finance and unveils developments in blockchain applications.
Key takeaways include McLoughlin's insights into Bitcoin as a superior savings technology and the transformative potential of blockchain in finance. According to McLoughlin, the platform's unique model offers unparalleled resilience and pricing consistency by integrating 32 exchanges. This strategic approach ensures streamlined access to digital assets for companies, potentially transforming their market offerings and enhancing customer engagement. Additionally, the conversation explores the broader implications of decentralized finance and the substantial impact of tokenizing traditional assets.
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David Namdar, CEA Industries
Exploring the Future of Cryptocurrency with Offchain Labs
Join us as we delve into an insightful discussion with Steven Goldfeder of Offchain Labs, analyzed by theCUBE Research. This segment, part of the Crypto Trailblazers series in collaboration with NYSE Wired, explores the innovative efforts redefining the Ethereum ecosystem and the broader blockchain landscape.
Steven Goldfeder, co-founder and CEO of Offchain Labs, discusses significant advancements and strategic insights in blockchain technology. In this engaging episode, hosted at theCUBE Studios, Goldfeder shares their expertise on how Offchain Labs contributes to the evolution of Ethereum through groundbreaking projects such as Prysm and Arbitrum, while discussing impacts on scalability and decentralization.
In this discussion, Goldfeder elaborates on key technological initiatives driven by Offchain Labs, focusing particularly on Arbitrum, the pioneering layer two scaling solution for Ethereum. They illustrate how innovative platforms such as Arbitrum significantly enhance Ethereum's capacity, efficiency, and scalability without compromising security or decentralization, closely analyzed by theCUBE Research.
Highlights include Goldfeder's insights on the future trajectory of Ethereum and its ecosystem, emphasizing the sustainable development model and potential for global business transformations. Goldfeder states that engaging with regulators now can ensure crypto's lasting impact, aligning with a US administration open to embracing this technological shift. This discussion offers valuable perspectives for developers, businesses, and policymakers navigating the crypto landscape.
Find more SiliconANGLE news and analysis https://siliconangle.com/. Follow theCUBE's wall-to-wall event coverage https://siliconangle.com/events/ Learn about the latest theCUBE events https://www.thecube.net/
00:00 - Intro 00:06 - Exploring Innovations in Blockchain: A Deep Dive into Offchain Labs and Arbitrum 05:23 - Ethereum's Scalability and the Layered Architecture 08:01 - Smart Contracts and Developer Innovations on Arbitrum 11:46 - The Impact of Arbitrum on Blockchain App Development 16:08 - Navigating the Future: Offchain Labs and Ethereum in a Regulatory Landscape
>> Welcome back, everyone. I'm John Furrier, host of theCUBE, here in our NYSE CUBE Studio is here on the East Coast at the New York Stock Exchange. Of course, part of the NYSE Wired. Of course, we've got our Palo Alto studio connecting Silicon Valley and Wall Street Tech and money are connected. This is the Crypto Trailblazers ongoing series where we feature the leaders, people who have been plowing the fields, blazing the trails, getting that scar tissue. But as the market shifts here in the U.S. and globalized, the climate has been better than ever. A lot of the innovation is starting to come to the surface mainstreaming of crypto infrastructure, DeFi and TradFi. The convergence is happening. It's happening at a very accelerated rate, and we always have the experts on. We got David Namdar here, CEO of CEA Industries and BNB Network. Thanks for joining us. Thanks for coming on.
David Namdar
>> Yeah, thanks for having me. This is great.>> I got the BNB network. So you got the two things going on and you've been an crypto OG from the early days. So first, explain the namings and the names of the companies and why they exist because I know you got the new brand.
David Namdar
>> Sure. So actually, we just did a pipe transaction, a $500 million pipe, to go into a new treasury strategy under CEA Industries. The new treasury strategy we're calling BNB Network Company, that might be an eventual brand name of the company. The idea as we execute on that strategy is to be really the first NASDAQ listed BNB treasury strategy. What that is, is we've seen a number of companies try to execute on this. Michael Saylor was one of the first ones and he just hit his five-year anniversary and what he's accomplished in the last five years has been mind-boggling. And so now we've seen a number of copycats, but what's really exciting is we've identified a pretty unique asset that the market here particularly has been overlooking, and that's with BNB.>> All right, explain the treasury strategy because a lot of people don't know it. Again, Micro Strategy. I think now they call themselves Micro...
David Namdar
>> Strategy.>> Micro Strategy. Really pioneered it, as you mentioned. But Bitcoin now we see the copycats come in. Well copycats, and it's actually a compliment, but Ethereum. Stake the value, go all in, double down, have a strategy around selling it and reinvesting. Okay, I get that. Now, what's your strategy? Explain specifically how that works and how you're different.
David Namdar
>> Sure. So I think what Michael Saylor really did is he showed people. And he's been carrying the Bitcoin flag as well as anyone in the world, expanding on the merits of Bitcoin and why it's a benefit for any company, any individual to be holding Bitcoin, especially compared to different fiat currencies around the world. So now we've seen people realize that actually the mechanisms he's been doing that to put it on corporate balance sheets and the ways he's been able to raise additional capital in order to accumulate more of the underlying Bitcoin, really has been a pretty incredible strategy that compounds over time. So now we've seen people apply that same strategy to some of the other crypto assets. So in the last couple of months we've seen a couple of Ethereum-focused ones, SBET, SharpLink, and Bitmine, BMNR, really, I mean just accumulated an incredible amount of Ethereum in a short period of time. And so now people are starting to look at all these other digital assets and thinking, all right, what are the other ones that make sense, that could make sense? And for me, as I've been in the space for a long time, as you said, it's been a story that I always get attracted to things that are overlooked and undervalued and misunderstood by the markets. And to me, BNB, which just hit its five-year anniversary, it was actually started in 2017 as Binance Coin, which was started and tied to the biggest exchange of the entire crypto market.>> Which you've got massive numbers. What's the latest stats on Binance?
David Namdar
>> Binance itself is pushing 290 million users.>> They're huge.
David Namdar
>> Their volumes are anywhere between five and eight times Coinbase here in the U.S. And so just to give you a perspective, Coinbase is a 100 billion market cap company today. Binance, if it was publicly listed, might be anywhere from 500 billion to 1 trillion.>> Yeah, I mean, that's something crazy. Again, nice eye on this one. Explain the rationale. What's it like? What's the opportunity? Scope the opportunity and the dynamics.
David Namdar
>> Sure.>> It's not that obvious tho people who aren't following the Binance value, know the stats. And by the way, no one's factored into the in-migration going on in the U.S., which is still a wild card.
David Namdar
>> Absolutely.>> Explain all of this because this is super valuable.
David Namdar
>> There's too many things for us to talk about. But really, another key thing here, and that's really got me to step into this role, because as you know, I've been one of the first people to try to do and bring together crypto and capital markets. I tried to do a Bitcoin ETF in 2014. I set up my first crypto investment bank in 2014. And then in 2017, I co-founded and helped take public Galaxy Digital, which recently up-listed into the U.S. markets. And then, more recently, I've been investing in a lot of these digital asset treasuries because I really like the idea of instead of a passive investment into ETFs, a more active investment into management teams that are out there trying to accumulate more of the underlying asset. So now, for me, what BNB is and what we have here is very special. BNB, actually, it's one of the few assets since it was introduced in 2017 that's outperformed Bitcoin. It's one of the few assets that I actually expect to continue to outperform over the next three to five years. I've managed successfully to BNB-pill myself, and part of the reason for that is that->> What color is the BNB-pill? It's a new one. Green.
David Namdar
>> Yellow and black. So we've got orange-pilling and we've got BNB-pilling. But now, with Bitcoin, I think a lot of people have caught up and accepted this idea in Bitcoin as digital gold and that narrative's caught on. Gold has been breaking out to new highs, I'm sure you saw. And so I fully expect still, and I have from the very beginning, that at some point Bitcoin is going to surpass gold in market cap. Now, the total market cap of Bitcoin is just over 2 trillion today. Ethereum is about 500 billion. People in Wall Street are picking up on the idea that Ethereum is this digital oil and they're getting very excited about stablecoin activity. We had the Circle IPO. I was here actually for it. And so a lot of Wall Street's getting excited about the potential of stable coins driving value to Ethereum. Well, BNB is a quarter of the value of what Ethereum is today, about around 120 billion today. Yet it was started by and was tied to initially the largest exchange in the entire crypto space. And it's actually the only one of the large cap crypto assets that's deflationary. They're burning. There's two inherent burn mechanisms that are part of it. That means about 4% to 5% of supply, over $1 billion every quarter, are being burnt.>> Wow. Explain that from a token economic standpoint. What does that mean? Because people might not know what the burn piece is.
David Namdar
>> Sure. Essentially, it's similar to a share buyback except the way an actual burn happens is you either have a burn where you take the tokens and you send it to an address that's unrecoverable. So it's almost like you're throwing it in the garbage and once it's there, nobody can get it back.>> No one can get it, yeah.
David Namdar
>> And then there's another aspect where all of the transactions that happen on the BNB chain network actually also lead to a tiny amount that gets burnt. So it really is a utility-driven coin. One of the best ways I explain it, it's this digital infrastructure equity of the entire crypto ecosystem.>> Yeah, because it's tracking a lot of things. So I mean there's a monetary and fiscal policies involved. This burning thing comes back down to what insiders call token economics. Not to get into all theories, but it's important that they do this because of the fiscal and monetary policies for the ecosystem, or the currency in this case.
David Namdar
>> Well, look, with any of these things, I started my career in Wall Street. It feels like I've been living multiple lifetimes in the crypto world and I tell people I'm a crypto geek and futurist first. So I like thinking about, all right, how are these crypto assets, how are these different crypto networks going to be? Are they going to grow in the future? How are they going to coexist with the existing financial system?That's what's really exciting to me about the treasury opportunity.>> been an early adopter and pioneer. I mean, First Investment Bank. What are some of the things you worked on? Because, again, in 2014 that was not obvious. Maybe 2016, people jumped on the bandwagon, but even then people were just early investing in companies later in there. You were wicked early.
David Namdar
>> Yeah, so actually my very first interaction was back in 2011 when I'd come across some news articles about Bitcoin shooting in price from $1 to $30 and back to $3. I didn't get involved back then. But actually I love when people bring up volatility as a concern because for me I think...>> It's a feature.
David Namdar
>> It's a feature. When you have an asset that's growing tremendously, volatility is actually a great thing.>> Yeah, it's a sign of activity.
David Namdar
>> Part of what has helped Michael Saylor accumulate so many Bitcoin on his balance sheet, he now owns and controls more than 3% of the Bitcoin supply, part of that is because of the inherent nature of Bitcoin.>> So talk about the idea of accumulation because now we have traditional Wall Street coming in. So you have sellers and buyers going on in the market and there's a lot of new blood coming in. How does all that feel for you? Because some people are saying there's going to be accumulation and there are certainly all those guys are accumulating and everyone's selling. But everyone wants to hold because you can get the yields on them. How do you rationalize that? My mind's a little blown on this feature, but I'm trying to figure that out.
David Namdar
>> Well, I think actually one of the things that's really exciting me and attracting me to this space right now is this idea of the financial piping of the traditional financial markets and the crypto markets finally interacting and in a big way. So I was thinking about, a couple months ago, I put out this thought, my thesis, that about 50 to 100 billion of capital was going to come into the crypto markets through the capital markets and through mechanisms like digital asset treasuries and some traditional IPOs. I actually revised that higher. Now I think it's going to be between 100 and 200 billion over the next year. That's what I mean. About $10 to $20 billion per month is going to come into the crypto markets. Now, what's exciting, and this has already been validated a little bit, there'll be a slowdown. You might see a month where people panic a little in the U.S. and it slows down here. And then all of a sudden in Japan we see a company like MetaPlanet go from having 200, 500 million on their balance sheet to raising five billion. I think they just announced today they did another $1.5 to $2 billion of Bitcoin.>> when it zigs here, it zags there. So it's up and down. This is why I like your BNB play, because Binance is almost a, I won't say neutral proxy, but it certainly is a proxy more globally because of the exchange size, just volume.
David Namdar
>> Absolutely.>> Just on the numbers.
David Namdar
>> Now, just imagine this. Imagine here in the U.S. if Meta, Google, or Apple were the largest company in each of their sectors and they weren't listed in the U.S. and U.S. investors couldn't get any exposure to them. That's essentially what's been happening with Binance where U.S. investors can't access finance exchange.>> Do you think they'll come to the U.S.?
David Namdar
>> Actually, I think the CFTC just a couple days ago or last week said something positive about enabling U.S. investors to get access to overseas exchanges. So this is a big key piece. Look, when I started in the space, and particularly here in New York with the NYDFS putting out the BitLicense, unfortunately, they slowed down and they harmed a lot of innovation here with over-regulation.>> Yeah, they put the collar on a lot of innovation, for sure. And they shut down a lot, too, by misguided regulation. All right, so talk about how that vehicle would turn into, because one of the things that's coming out here, I'd love to get your thoughts, David, on this, because I've observed being an entrepreneur in the tech sector and knowing a little bit about finance from my MBA I got, I never thought about it this way, but I'm seeing a surge, a massive surge, in financial entrepreneurship. And what I mean is that the institutional back ends are vulnerable. And I don't think I've ever seen them that vulnerable before because they usually were the gatekeepers. They managed everything. There was no Clarity Act. There was no Genius Act. So at the end of the day, they controlled the table. Yeah, there was some opportunities to be parasitic on the business model, gets some payment rails, do some prepaid trading cards, whatever. There's some stuff to do, but it wasn't game-changing like entrepreneurship. Like, "Hey, I'm a young gun. I come out of school. I want to do something and actually attain it," or, "I left Morgan Stanley, Goldman Sachs, or JP Morgan, I knew I could make it better," and actually go and take territory down and actually build something. I think now is the first time I've ever seen this. What's your reaction to that and do you believe it? And then, what does that lead to? Because if history's any predictor, it's going to be an upending, not a displacement, reconfiguration of the pecking order.
David Namdar
>> Well, I think definitely I learned this lesson earlier on in my career as well. Optimism pays better than pessimism. So I'm optimistic about all that disruption.>> Yeah, that's cool.
David Namdar
>> Like I said, listen, I'm fortunate. I have a very strong team in place and a lot of great partners and close friends in the space because I create a lot of chaos.>> Chaos is your oxygen.
David Namdar
>> Yeah. Listen, I lead with excitement and I look for things. One of my early investment approaches in the space was I would find the youngest and geekiest and smartest people I could find and I'd look for the things they were excited about, and I'd pursue that and find out more about it. And so I think what's happening now, and I just find it as this fascinating experiment, the crypto markets and entrepreneurs are playing in the traditional finance markets and we're starting to see the TradFi markets also bleed into the crypto markets of tokenizing stocks. We're actually starting to see a lot of actual progress on RWAs, real world assets. That's a theme that's been around for a couple of cycles with, first, people trying to do some tokenized real estate in 2017, 18. But finally now.>> It was early. It wasn't wrong.
David Namdar
>> Yeah.>> The market wasn't set up for it. I was just talking to Sean Douglas from Amber Data. He's got a tech background. We were talking about hyper-convergence back 15 years ago when storage, compute, and networking were siloed things. When you put them in one box, the cloud pops out of it.
David Namdar
>> Of course.>> So we're in almost that same convergence with TradFi, DeFi, and money. I mean, never in history has that been in place.
David Namdar
>> That just reminded me. One of the first sound bites really that stuck with me that I heard, there was a professor out of Stanford, Susan Athey, what she said and the way she described what Bitcoin and digital assets could be is what they did was, the same way that what the internet did for communication, it made it faster, easier, and cheaper moving around bits of digital information, well, that's what Bitcoin and digital assets were doing for money and value, making it faster, easier, and cheaper. And so that's where I think, again, now Bitcoin has been doing that, but at the same time, Bitcoin is still expensive. Ethereum's relatively expensive. It brings me back to why I see BNB really has a chance to win on a lot of things. Now, let me just put something crazy out there. Just imagine when we get into this world as we get into AI and robotics and talking about systems that are transacting at the trillions of transactions per day, things that our brains can't even comprehend, well, there is a chance, and one of my thesis is that, BNB is going to be the chain that wins out on that.>> Why is that? Because of the scale?
David Namdar
>> It's just because it has the scale, but it's also significantly cheaper than Ethereum and Bitcoin.>> In terms of just to operate or just to monetize?
David Namdar
>> For the transactions and everything.>> All right. By the way, I love that comment about information versus value, and I would say that we were actually just talking about Sean Douglas about this and others, that value is money. Value is not ignored by Wall Street people. Information is arbitrage material.
David Namdar
>> Right.>> High-frequency trading, get that latest advantage. Money, value, that's territory. I mean, you can't ignore that. So one of the things I like about this market is it's not only the interactions of the two worlds together, it's a cultural younger generation and older. It's not a younger beating the old guys down. So you have that cultural. What's your reaction to that? Because I think this is coming up as it's not obvious, but the observation is that this is a culture intersection and it seems to be working.
David Namdar
>> Sure. This is where, I guess, one of the things that I love about the crypto space is, look, 20 years ago when the internet was really first starting to proliferate, people were looking back and they were studying, "Oh, let's apply the internet. Let's make a website. Let's use the information now we can get and change this industry and that industry." So it changed a lot of things. Well, now the internet's been around for 20 years. So now when the people that are coming and looking into ways that crypto and decentralized world can disrupt, not just the last 10, 20 years of innovation, but they're going back the last five 10 generations and they're saying, "Hey, wait, wait. These are the principles and the reasons why this was set up back then, Bretton Woods and all these things."Well, how can it be done better today? Why do we just accept the systems as they are today?>> And I think those principles the internet was born on has the same openness we're seeing now. David, great to have you on here. You're a total trailblazer. Love the conversation. We could go an hour probably just on that one topic, but I know we got to go. Get a quick plug in. You got the half a billion dollar pipe. I like half a billion than 500 million. It sounds better, bigger. That's a big transaction. What's on your radar? What's on your to-do list? What are you optimizing for? What are some of your goals?
David Namdar
>> Well, I got a full billion for you. We actually did. The pipe can scale to 1.25 billion because we had warrants as part of it as well.>> Okay, so you're over a billion, 1.2. Again, thank you for the correction. Good call out. Okay, you got over $1 billion. What's on the plan?
David Namdar
>> Really, it's about executing on the strategy, accumulating BNB, and really just helping bring awareness and adoption to the entire BNB space and playing my part in this whole digital asset treasury wave.>> Well, we're super grateful for you and, again, we're going to watch BNB. I think that's going to be, for the folks looking for an edge, an opportunity. It's always, always, they says, "Oh, Bitcoin's priced way too high." Well, you could have got it at 100. You could have got it. What's the price of BNB today? What's it trading at right now?
David Namdar
>> With Bitcoin, about 10% off the all-time highs. BNB is about 2% off the all-time highs. So it has outperformed even since I started.>> 875.
David Namdar
>> Since I started the company or the strategy for us, BNB has outperformed Bitcoin by, I believe, about 10% to 15%. But another thing just on that point that I'll end with, because I love it. If you look at the last five years, the entire crypto market cap went from one trillion to four trillion. If Bitcoin passes gold at 15, 20 trillion, if the entire crypto market grows to 10, 20, 40, 50 trillion, what that means is there's more value to be created ahead than behind.>> Yeah, totally.
David Namdar
>> So it's good to be optimistic.>> I mean, definitely, bullish. Great to have you on. Appreciate it. Congratulations.
David Namdar
>> Thank you so much.>> Again, the trailblazers sharing their story. More importantly, giving you insights into some of the market dynamics, the tech trends. Of course, they're building it out, they're funding it, and they're participating. This is our Leader Series. Of course, theCUBE is doing our part here to help you. I'm John Furrier, your host of theCUBE. Thanks for watching.
>> Welcome back, everyone. I'm John Furrier, host of theCUBE, here in our NYSE CUBE Studio is here on the East Coast at the New York Stock Exchange. Of course, part of the NYSE Wired. Of course, we've got our Palo Alto studio connecting Silicon Valley and Wall Street Tech and money are connected. This is the Crypto Trailblazers ongoing series where we feature the leaders, people who have been plowing the fields, blazing the trails, getting that scar tissue. But as the market shifts here in the U.S. and globalized, the climate has been better than ever. A lot of the innovation is starting to come to the surface mainstreaming of crypto infrastructure, DeFi and TradFi. The convergence is happening. It's happening at a very accelerated rate, and we always have the experts on. We got David Namdar here, CEO of CEA Industries and BNB Network. Thanks for joining us. Thanks for coming on.
David Namdar
>> Yeah, thanks for having me. This is great.>> I got the BNB network. So you got the two things going on and you've been an crypto OG from the early days. So first, explain the namings and the names of the companies and why they exist because I know you got the new brand.
David Namdar
>> Sure. So actually, we just did a pipe transaction, a $500 million pipe, to go into a new treasury strategy under CEA Industries. The new treasury strategy we're calling BNB Network Company, that might be an eventual brand name of the company. The idea as we execute on that strategy is to be really the first NASDAQ listed BNB treasury strategy. What that is, is we've seen a number of companies try to execute on this. Michael Saylor was one of the first ones and he just hit his five-year anniversary and what he's accomplished in the last five years has been mind-boggling. And so now we've seen a number of copycats, but what's really exciting is we've identified a pretty unique asset that the market here particularly has been overlooking, and that's with BNB.>> All right, explain the treasury strategy because a lot of people don't know it. Again, Micro Strategy. I think now they call themselves Micro...
David Namdar
>> Strategy.>> Micro Strategy. Really pioneered it, as you mentioned. But Bitcoin now we see the copycats come in. Well copycats, and it's actually a compliment, but Ethereum. Stake the value, go all in, double down, have a strategy around selling it and reinvesting. Okay, I get that. Now, what's your strategy? Explain specifically how that works and how you're different.
David Namdar
>> Sure. So I think what Michael Saylor really did is he showed people. And he's been carrying the Bitcoin flag as well as anyone in the world, expanding on the merits of Bitcoin and why it's a benefit for any company, any individual to be holding Bitcoin, especially compared to different fiat currencies around the world. So now we've seen people realize that actually the mechanisms he's been doing that to put it on corporate balance sheets and the ways he's been able to raise additional capital in order to accumulate more of the underlying Bitcoin, really has been a pretty incredible strategy that compounds over time. So now we've seen people apply that same strategy to some of the other crypto assets. So in the last couple of months we've seen a couple of Ethereum-focused ones, SBET, SharpLink, and Bitmine, BMNR, really, I mean just accumulated an incredible amount of Ethereum in a short period of time. And so now people are starting to look at all these other digital assets and thinking, all right, what are the other ones that make sense, that could make sense? And for me, as I've been in the space for a long time, as you said, it's been a story that I always get attracted to things that are overlooked and undervalued and misunderstood by the markets. And to me, BNB, which just hit its five-year anniversary, it was actually started in 2017 as Binance Coin, which was started and tied to the biggest exchange of the entire crypto market.>> Which you've got massive numbers. What's the latest stats on Binance?
David Namdar
>> Binance itself is pushing 290 million users.>> They're huge.
David Namdar
>> Their volumes are anywhere between five and eight times Coinbase here in the U.S. And so just to give you a perspective, Coinbase is a 100 billion market cap company today. Binance, if it was publicly listed, might be anywhere from 500 billion to 1 trillion.>> Yeah, I mean, that's something crazy. Again, nice eye on this one. Explain the rationale. What's it like? What's the opportunity? Scope the opportunity and the dynamics.
David Namdar
>> Sure.>> It's not that obvious tho people who aren't following the Binance value, know the stats. And by the way, no one's factored into the in-migration going on in the U.S., which is still a wild card.
David Namdar
>> Absolutely.>> Explain all of this because this is super valuable.
David Namdar
>> There's too many things for us to talk about. But really, another key thing here, and that's really got me to step into this role, because as you know, I've been one of the first people to try to do and bring together crypto and capital markets. I tried to do a Bitcoin ETF in 2014. I set up my first crypto investment bank in 2014. And then in 2017, I co-founded and helped take public Galaxy Digital, which recently up-listed into the U.S. markets. And then, more recently, I've been investing in a lot of these digital asset treasuries because I really like the idea of instead of a passive investment into ETFs, a more active investment into management teams that are out there trying to accumulate more of the underlying asset. So now, for me, what BNB is and what we have here is very special. BNB, actually, it's one of the few assets since it was introduced in 2017 that's outperformed Bitcoin. It's one of the few assets that I actually expect to continue to outperform over the next three to five years. I've managed successfully to BNB-pill myself, and part of the reason for that is that->> What color is the BNB-pill? It's a new one. Green.
David Namdar
>> Yellow and black. So we've got orange-pilling and we've got BNB-pilling. But now, with Bitcoin, I think a lot of people have caught up and accepted this idea in Bitcoin as digital gold and that narrative's caught on. Gold has been breaking out to new highs, I'm sure you saw. And so I fully expect still, and I have from the very beginning, that at some point Bitcoin is going to surpass gold in market cap. Now, the total market cap of Bitcoin is just over 2 trillion today. Ethereum is about 500 billion. People in Wall Street are picking up on the idea that Ethereum is this digital oil and they're getting very excited about stablecoin activity. We had the Circle IPO. I was here actually for it. And so a lot of Wall Street's getting excited about the potential of stable coins driving value to Ethereum. Well, BNB is a quarter of the value of what Ethereum is today, about around 120 billion today. Yet it was started by and was tied to initially the largest exchange in the entire crypto space. And it's actually the only one of the large cap crypto assets that's deflationary. They're burning. There's two inherent burn mechanisms that are part of it. That means about 4% to 5% of supply, over $1 billion every quarter, are being burnt.>> Wow. Explain that from a token economic standpoint. What does that mean? Because people might not know what the burn piece is.
David Namdar
>> Sure. Essentially, it's similar to a share buyback except the way an actual burn happens is you either have a burn where you take the tokens and you send it to an address that's unrecoverable. So it's almost like you're throwing it in the garbage and once it's there, nobody can get it back.>> No one can get it, yeah.
David Namdar
>> And then there's another aspect where all of the transactions that happen on the BNB chain network actually also lead to a tiny amount that gets burnt. So it really is a utility-driven coin. One of the best ways I explain it, it's this digital infrastructure equity of the entire crypto ecosystem.>> Yeah, because it's tracking a lot of things. So I mean there's a monetary and fiscal policies involved. This burning thing comes back down to what insiders call token economics. Not to get into all theories, but it's important that they do this because of the fiscal and monetary policies for the ecosystem, or the currency in this case.
David Namdar
>> Well, look, with any of these things, I started my career in Wall Street. It feels like I've been living multiple lifetimes in the crypto world and I tell people I'm a crypto geek and futurist first. So I like thinking about, all right, how are these crypto assets, how are these different crypto networks going to be? Are they going to grow in the future? How are they going to coexist with the existing financial system?That's what's really exciting to me about the treasury opportunity.>> been an early adopter and pioneer. I mean, First Investment Bank. What are some of the things you worked on? Because, again, in 2014 that was not obvious. Maybe 2016, people jumped on the bandwagon, but even then people were just early investing in companies later in there. You were wicked early.
David Namdar
>> Yeah, so actually my very first interaction was back in 2011 when I'd come across some news articles about Bitcoin shooting in price from $1 to $30 and back to $3. I didn't get involved back then. But actually I love when people bring up volatility as a concern because for me I think...>> It's a feature.
David Namdar
>> It's a feature. When you have an asset that's growing tremendously, volatility is actually a great thing.>> Yeah, it's a sign of activity.
David Namdar
>> Part of what has helped Michael Saylor accumulate so many Bitcoin on his balance sheet, he now owns and controls more than 3% of the Bitcoin supply, part of that is because of the inherent nature of Bitcoin.>> So talk about the idea of accumulation because now we have traditional Wall Street coming in. So you have sellers and buyers going on in the market and there's a lot of new blood coming in. How does all that feel for you? Because some people are saying there's going to be accumulation and there are certainly all those guys are accumulating and everyone's selling. But everyone wants to hold because you can get the yields on them. How do you rationalize that? My mind's a little blown on this feature, but I'm trying to figure that out.
David Namdar
>> Well, I think actually one of the things that's really exciting me and attracting me to this space right now is this idea of the financial piping of the traditional financial markets and the crypto markets finally interacting and in a big way. So I was thinking about, a couple months ago, I put out this thought, my thesis, that about 50 to 100 billion of capital was going to come into the crypto markets through the capital markets and through mechanisms like digital asset treasuries and some traditional IPOs. I actually revised that higher. Now I think it's going to be between 100 and 200 billion over the next year. That's what I mean. About $10 to $20 billion per month is going to come into the crypto markets. Now, what's exciting, and this has already been validated a little bit, there'll be a slowdown. You might see a month where people panic a little in the U.S. and it slows down here. And then all of a sudden in Japan we see a company like MetaPlanet go from having 200, 500 million on their balance sheet to raising five billion. I think they just announced today they did another $1.5 to $2 billion of Bitcoin.>> when it zigs here, it zags there. So it's up and down. This is why I like your BNB play, because Binance is almost a, I won't say neutral proxy, but it certainly is a proxy more globally because of the exchange size, just volume.
David Namdar
>> Absolutely.>> Just on the numbers.
David Namdar
>> Now, just imagine this. Imagine here in the U.S. if Meta, Google, or Apple were the largest company in each of their sectors and they weren't listed in the U.S. and U.S. investors couldn't get any exposure to them. That's essentially what's been happening with Binance where U.S. investors can't access finance exchange.>> Do you think they'll come to the U.S.?
David Namdar
>> Actually, I think the CFTC just a couple days ago or last week said something positive about enabling U.S. investors to get access to overseas exchanges. So this is a big key piece. Look, when I started in the space, and particularly here in New York with the NYDFS putting out the BitLicense, unfortunately, they slowed down and they harmed a lot of innovation here with over-regulation.>> Yeah, they put the collar on a lot of innovation, for sure. And they shut down a lot, too, by misguided regulation. All right, so talk about how that vehicle would turn into, because one of the things that's coming out here, I'd love to get your thoughts, David, on this, because I've observed being an entrepreneur in the tech sector and knowing a little bit about finance from my MBA I got, I never thought about it this way, but I'm seeing a surge, a massive surge, in financial entrepreneurship. And what I mean is that the institutional back ends are vulnerable. And I don't think I've ever seen them that vulnerable before because they usually were the gatekeepers. They managed everything. There was no Clarity Act. There was no Genius Act. So at the end of the day, they controlled the table. Yeah, there was some opportunities to be parasitic on the business model, gets some payment rails, do some prepaid trading cards, whatever. There's some stuff to do, but it wasn't game-changing like entrepreneurship. Like, "Hey, I'm a young gun. I come out of school. I want to do something and actually attain it," or, "I left Morgan Stanley, Goldman Sachs, or JP Morgan, I knew I could make it better," and actually go and take territory down and actually build something. I think now is the first time I've ever seen this. What's your reaction to that and do you believe it? And then, what does that lead to? Because if history's any predictor, it's going to be an upending, not a displacement, reconfiguration of the pecking order.
David Namdar
>> Well, I think definitely I learned this lesson earlier on in my career as well. Optimism pays better than pessimism. So I'm optimistic about all that disruption.>> Yeah, that's cool.
David Namdar
>> Like I said, listen, I'm fortunate. I have a very strong team in place and a lot of great partners and close friends in the space because I create a lot of chaos.>> Chaos is your oxygen.
David Namdar
>> Yeah. Listen, I lead with excitement and I look for things. One of my early investment approaches in the space was I would find the youngest and geekiest and smartest people I could find and I'd look for the things they were excited about, and I'd pursue that and find out more about it. And so I think what's happening now, and I just find it as this fascinating experiment, the crypto markets and entrepreneurs are playing in the traditional finance markets and we're starting to see the TradFi markets also bleed into the crypto markets of tokenizing stocks. We're actually starting to see a lot of actual progress on RWAs, real world assets. That's a theme that's been around for a couple of cycles with, first, people trying to do some tokenized real estate in 2017, 18. But finally now.>> It was early. It wasn't wrong.
David Namdar
>> Yeah.>> The market wasn't set up for it. I was just talking to Sean Douglas from Amber Data. He's got a tech background. We were talking about hyper-convergence back 15 years ago when storage, compute, and networking were siloed things. When you put them in one box, the cloud pops out of it.
David Namdar
>> Of course.>> So we're in almost that same convergence with TradFi, DeFi, and money. I mean, never in history has that been in place.
David Namdar
>> That just reminded me. One of the first sound bites really that stuck with me that I heard, there was a professor out of Stanford, Susan Athey, what she said and the way she described what Bitcoin and digital assets could be is what they did was, the same way that what the internet did for communication, it made it faster, easier, and cheaper moving around bits of digital information, well, that's what Bitcoin and digital assets were doing for money and value, making it faster, easier, and cheaper. And so that's where I think, again, now Bitcoin has been doing that, but at the same time, Bitcoin is still expensive. Ethereum's relatively expensive. It brings me back to why I see BNB really has a chance to win on a lot of things. Now, let me just put something crazy out there. Just imagine when we get into this world as we get into AI and robotics and talking about systems that are transacting at the trillions of transactions per day, things that our brains can't even comprehend, well, there is a chance, and one of my thesis is that, BNB is going to be the chain that wins out on that.>> Why is that? Because of the scale?
David Namdar
>> It's just because it has the scale, but it's also significantly cheaper than Ethereum and Bitcoin.>> In terms of just to operate or just to monetize?
David Namdar
>> For the transactions and everything.>> All right. By the way, I love that comment about information versus value, and I would say that we were actually just talking about Sean Douglas about this and others, that value is money. Value is not ignored by Wall Street people. Information is arbitrage material.
David Namdar
>> Right.>> High-frequency trading, get that latest advantage. Money, value, that's territory. I mean, you can't ignore that. So one of the things I like about this market is it's not only the interactions of the two worlds together, it's a cultural younger generation and older. It's not a younger beating the old guys down. So you have that cultural. What's your reaction to that? Because I think this is coming up as it's not obvious, but the observation is that this is a culture intersection and it seems to be working.
David Namdar
>> Sure. This is where, I guess, one of the things that I love about the crypto space is, look, 20 years ago when the internet was really first starting to proliferate, people were looking back and they were studying, "Oh, let's apply the internet. Let's make a website. Let's use the information now we can get and change this industry and that industry." So it changed a lot of things. Well, now the internet's been around for 20 years. So now when the people that are coming and looking into ways that crypto and decentralized world can disrupt, not just the last 10, 20 years of innovation, but they're going back the last five 10 generations and they're saying, "Hey, wait, wait. These are the principles and the reasons why this was set up back then, Bretton Woods and all these things."Well, how can it be done better today? Why do we just accept the systems as they are today?>> And I think those principles the internet was born on has the same openness we're seeing now. David, great to have you on here. You're a total trailblazer. Love the conversation. We could go an hour probably just on that one topic, but I know we got to go. Get a quick plug in. You got the half a billion dollar pipe. I like half a billion than 500 million. It sounds better, bigger. That's a big transaction. What's on your radar? What's on your to-do list? What are you optimizing for? What are some of your goals?
David Namdar
>> Well, I got a full billion for you. We actually did. The pipe can scale to 1.25 billion because we had warrants as part of it as well.>> Okay, so you're over a billion, 1.2. Again, thank you for the correction. Good call out. Okay, you got over $1 billion. What's on the plan?
David Namdar
>> Really, it's about executing on the strategy, accumulating BNB, and really just helping bring awareness and adoption to the entire BNB space and playing my part in this whole digital asset treasury wave.>> Well, we're super grateful for you and, again, we're going to watch BNB. I think that's going to be, for the folks looking for an edge, an opportunity. It's always, always, they says, "Oh, Bitcoin's priced way too high." Well, you could have got it at 100. You could have got it. What's the price of BNB today? What's it trading at right now?
David Namdar
>> With Bitcoin, about 10% off the all-time highs. BNB is about 2% off the all-time highs. So it has outperformed even since I started.>> 875.
David Namdar
>> Since I started the company or the strategy for us, BNB has outperformed Bitcoin by, I believe, about 10% to 15%. But another thing just on that point that I'll end with, because I love it. If you look at the last five years, the entire crypto market cap went from one trillion to four trillion. If Bitcoin passes gold at 15, 20 trillion, if the entire crypto market grows to 10, 20, 40, 50 trillion, what that means is there's more value to be created ahead than behind.>> Yeah, totally.
David Namdar
>> So it's good to be optimistic.>> I mean, definitely, bullish. Great to have you on. Appreciate it. Congratulations.
David Namdar
>> Thank you so much.>> Again, the trailblazers sharing their story. More importantly, giving you insights into some of the market dynamics, the tech trends. Of course, they're building it out, they're funding it, and they're participating. This is our Leader Series. Of course, theCUBE is doing our part here to help you. I'm John Furrier, your host of theCUBE. Thanks for watching.
