February 15, 2022

Milk Road Meetings: What we’re learning behind closed doors

GM, this is the Milk Road. The email that tells you what's going on in crypto, in plain jane english.

In Today's Email:

  • ⛰️ ETH Denver 2022

  • 🥛 Milk Road Meetings

  • 🤑 BlockFi Settles for $100m

  • 🍁 Canada Emergency Act

ETH Denver 2022

The largest Ethereum conference is happening right now in Denver. 

Should I be there? Yes. 

Did I just get COVID last month at a farmer’s conference in Kansas City? Double yes. 

Would my wife kill me if I skipped Valentines Day to go to another conference? Triple yes. 

OK – so what’s going on in Denver? 

Count me in for ETH Denver in 2023!

Milk Road Meetings

Wanna know the best part of my week? Every Thursday, I have a 3 hour window where I do Zoom calls with random interesting people. 

Who do I meet with? Well, your boy’s got 250k+ followers on Twitter and a blue check mark…so I meet with whoever the hell I want!! 

This week, it was a famous UFC fighter who’s launching NFTs, a big crypto investor, a founder of a new blockchain analytics startup, and a DeFi obsessed founder.

These conversations are where I get a lot of my secret sauce. But I’ll try sharing some of my notes here. And if you like this, maybe it can become a weekly segment.

Call 1: Founder of two $100M+ Web2 companies, now super into Web3

  • Investing less in startups, more into crypto. Returns are bigger & faster.

  • Interested in investing in options platforms right now. Dopex and Ribbon are two that he likes (*note to self, research them) 

  • Fractional ownership of NFTs and “putting real life stuff in a vault & creating NFTs to transfer ownership without ever moving the physical asset” are interesting to him.

Call 2: Famous UFC fighter

  • UFC pays it's fighters like shit (just look at these numbers). That’s why UFC athletes are very into crypto.

  • Unlike the NFL, NBA, MLB…UFC fighters are independent contractors. Which means they get more freedom to monetize outside of the sport/

  • What if they tokenized “future fighter earnings” so fans could bet on fighters they think are going to be stars? Like an income share agreement. Interesting.

Call 3: Founder of a new crypto data startup

  • Can’t share much here. Very exciting though. Going to invest!

Call 4: Ecommerce founder, now she’s obsessed with DeFi 

  • She’s currently mostly in stablecoins while the market is choppy 

  • She’s putting money to work in CVX (Convex) right now

  • She’s in a group chat with some big whales, they give her good intel on where the big $$$ is moving from time to time

  • Going to ask her to teach a DeFi for Dummies class for Milk Road (interested in this?

Call 5: Founder of a fast growing NFT company

  • I’m stunned how fast they are growing

  • I try to invest, but it sounds like too many investors already swooped in and the valuation is very high now. Damn. 

  • Opensea is coming to compete with them. Will they survive? If they do, look out.

Alright, that’s all for last week’s meetings. Let me know if you like this section and if we should keep it! 

BlockFi Settles for $100M

BlockFi paid a $100M fine to the SEC yesterday, and seemed…happy about it according to the CEO's twitter thread

Here’s what happened: 

  • BlockFi is a crypto exchange

  • They got a lot of traction because they offer users a way to earn ~7-8% interest while they hold their Bitcoin/Eth

  • They got hit with a $100M fine from the SEC

So what’s the problem? Why the $100M fine? 

Well, the SEC said that BlockFi was not clear about the risks associated with their accounts, and where the interest is coming from. 

What are the risks?

  • At first, BlockFi used to require “overcollateralized” loans. Meaning, if you wanted to borrow $100, you needed to put up $125+ of crypto assets as collateral (standard practice in crypto).

  • But as the lending market got more competitive, they dropped the collateral requirement  (without telling users), which puts customer funds at risk (see the yellow box below).

Basically they lied, misled users, and got caught. 

I predict we see more “crackdowns” on projects. Short term it’s going to breed distrust as you hear “bad news” after “bad news.”

But long term, this regulation & oversight is healthy. The wild wild west is fun at the beginning, but that’s not how you go mainstream and get adoption at scale.

Canada's Emergency Act

Jeez. Freezing bank accounts for protesting? 

Not cool Canada. Not cool. 

This is a great example of why individuals should have control over their own money. 

The governments have had a 100+ year monopoly on money. 

Crypto is changing that, one coin at a time. 

This meme riffing off the Crypto dot com Super Bowl commercial was too good not to share

That's all we got today, see ya at the same time tomorrow!

– Shaan “I should be at ETH Denver” Puri + Ben "Doge" Levy

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