My guest today is Eric Meltzer, and this is part one of my conversation with him.
Eric is a partner at INBlockchain, China’s oldest and largest institutional crypto asset and blockchain fund.
To give you a sense of INBlockchain’s size and scope, consider that they recently announced a $1.6 Billion dollar fund with 30% coming from the Hangzhou government.
- Eric’s descent down the blockchain rabbit hole after purchasing a few bitcoins from a sketchy dude at a Cafe in SoMa in 2013.
- How pitching his blockchain project in Chinese to INBlockchain led to a partnership offer from the fund that would later employ him.
- The recent announcement of INBlockchain’s new $1.6B fund. With 30% coming from the Hong-Jo local government.
- Co-Investing with Binance and Sequoia’s recent lawsuit against the exchange.
- Why clear-cut investment theses in the space aren’t helpful or don’t work.
- The impact of his Proof of Work newsletter.
- Whether or not we’ll see a regulated fund denominated in BTC or ETH soon.
- Why it’s impossible to overestimate the power of incentives.
Links Relevant To This Episode:
- Eric Meltzer
- Proof of Work Newsletter
- Scalar Capital
- Coin Metrics
- Charlie Munger
Terms Mentioned in the Episode:
Clay Collins: My guest today is Eric Meltzer and this is part one of my conversation with him. Eric is a partner at InBlockchain, China’s oldest and largest institutional crypto asset and blockchain fund. To give you a sense of InBlockchain’s size and scope consider that they recently announced a $1.6 billion fund with 30% coming from the Hangzhou local government. Prior to that they already had a couple billion under management. When people talk about institutional investing, these are the kinds of numbers they’re referring to. It’s a fascinating interview. I should also mention that, while I try not to pick favorites or at least express them here, I can’t really help myself. I’m really proud of this content and I think this episode, in particular, represents the best of what this podcast aspires to be. In this episode, we discuss: one, Eric’s descent down the blockchain rabbit hole after purchasing a few Bitcoins from a sketchy dude at a cafe in SoMa in 2013; two, how pitching his blockchain project in Chinese led to a partnership offer from the fund that would later employ him; three, the recent announcement of InBlockchain’s new $1.6 billion fund; four, co-investing with Binance and Sequoia’s recent lawsuit against the exchange; five, why clearcut investment theses in the space aren’t helpful or don’t work; six, the impact of his Proof of Work newsletter; seven, whether or not we’ll see a regulated fund denominated in Bitcoin or Ethereum soon; eight, the impact that rapid appreciation of crypto assets have had on blockchain entrepreneurship;
Clay Collins: nine, why many of the investors in his fund don’t want him to hedge; and ten, why it’s impossible to overestimate the power of incentives. As a note of housekeeping, I should mention that, if you want to discuss these topics or this podcast episode feel free to join us on our Telegram group at nomicstelegram.com. Please enjoy my conversation with Eric Meltzer of InBlockchain. Eric, can you tell me a little bit about the origin story of your involvement with crypto asset investing?
Eric Meltzer: I found out about Bitcoin in 2013. Back then it wasn’t as easy to buy Bitcoin as it is now. I actually went on Localbitcoins. I was living in San Francisco at the time. I met some kind of sketchy-looking dude at a cafe in SoMa and brought some cash and I just purchased my first Bitcoins that way. After doing that, I kind of got deeper into the scene and I did a lot of reading. Back then, the main place to read about this stuff was Bitcointalk. Bitcointalk is still an underrated place, but, it’s where Satoshi would hang out and, reading those posts and reading … dialogs with Satoshi and kind of seeing a lot of the early alt coins come onto the scene and then die off was like a really interesting experience and really got me into this.
Clay Collins: It strikes me that you’ve, for quite some time now, been following primary-source dialogs among makers of blockchains and that that has had an influence on the work you do with Proof of Work. Is that fair to say? Hey, it’s me cutting in from the editor’s booth. I just mentioned Eric’s newsletter Proof of Work. It’s actually how I found out about him and I wanted to provide some background. Proof of Work is kind of a weekly, public stand-up meeting for some of the best crypto asset projects. It includes tweetstorms, reddit posts, and blog articles from leaders of prominent crypto projects about strategy and future direction. What I appreciate about Eric’s newsletter is that he decides to focus on amplifying the voices of technical founders slogging it out in the trenches instead of the usual longer-form thought leadership think pieces from pundits.
Eric Meltzer: Something that’s really cool about investing in this stuff is that, unlike startups, where almost all of the information is proprietary, and you’re not able to see very much at all, with public blockchains almost everything is done out in the open. As an investor, your ability to do DD is basically limited only by your own tolerance for doing the work and digging through GitHub issues and everything and your own understanding of the space. If you’re happy to do that, and it’s something that I enjoy doing, you can get a really good picture of where a project is and where a project is going just by completely publicly-available information, which is, it’s really unique.
Clay Collins: It’s cool that that sort of openness isn’t just on the blockchain. It seems to be part of the ethos of the entire community that these conversations and the making happens in public.
Eric Meltzer: hat’s something that is a correlated to project quality. So most of the best projects are developed very much out in the open and you can see that with Bitcoin where there’s a mailing list and there’s an IRC channel and then there’s the GitHub repo. If you kind of watch those three spaces, you’ll have a very full picture of everything that’s happening in Bitcoin development. And it’s messy. People are yelling at each other and flaming each other and a lot of what people refer to as incivility. Sometimes that lack of civility is actually a good thing. That’s just what a decentralized project looks like. I don’t think that’s necessarily a bad thing.
Clay Collins: It’s almost like a feature and not a bug that people are yelling at each other behind computer screens, because, if they were in person, maybe they would give a little on something that is potentially really important for the network.
Eric Meltzer: To be a good crypto dev, you need to have a pretty extreme personality. Being fairly paranoid, being kind of fastidious about things that you don’t really have to care that much about in web development, is really important.
Clay Collins: For everyone listening, Eric and I, actually, this is our second take. We recorded this once, and we had some technical issues, and so Eric is being very gracious by doing this again. But, part of the benefit of having spoken earlier is that I actually know a little bit about your origin story and it involves interesting meetings on boats in other countries. Let’s dig back into that a little bit more. You’ve bought some Bitcoins in SoMa on Localbitcoins. Take us with you further down the rabbit hole that you went down to become subsumed with the space.
Eric Meltzer: After that, I kind of was just, in an amateur way, watching the space, but I wasn’t too involved with it. In early 2017 I kind of got more into it. It went from there being almost no projects besides Bitcoin that I thought were interesting, to stuff like Ethereum coming up and it looking like there was going to be an actual ecosystem of interesting stuff popping up around the cryptocurrency space. I had a few friends that I would discuss project ideas with. A friend of mine named Ben Yu, who is a really fascinating dude, he’s a Harvard dropout. Someone that is always doing something really interesting. We spent a lot of time kind of talking about crypto. At one point we had this idea that it would be interesting to make a live-streaming platform with a cryptoeconomic basis. And the idea for that came from, I went to college in China and so I saw these huge live-streaming platforms in China that became massive businesses. But, for the most part, the platforms took these huge cuts and the people that were actually creating the content were able to keep very little. There were issues around payment processors. The idea that we had was it would be cool to do this on the blockchain. There are some pretty big technical dependencies. You had to figure out payment channels and you had to figure out a way to efficiently do micropayments? And a way to make the actual overall token economy work. But we thought it was a good-enough idea to be worth pursuing and so, the two of us wrote this white paper,
Eric Meltzer: and then, I actually went to China for a trip, unrelated to the project. While I was over there, I thought it would be kind of cool to pitch some investors in China because I had heard that people over there were interested in this stuff and that there were some good investors that were investing in crypto. I asked a friend of mine if she knew anyone that was doing investments in the space. She intro’d me to this guy who, she said, was the biggest blogger in the crypto space and someone that posted a lot on the Chinese version of Quora. I said, okay, it would be cool to take that meeting. Her position was, if I meet with this guy and he likes the project, then he can introduce some real investors. So I said, okay. I go to this meeting and it’s at this really beautiful co-working space. When I was in college in Beijing, Beijing was kind of fairly rough around the edges and then, by the time I came back, it definitely got a kind of Silicon Valley vibe. I’m at this co-working space, gorgeous co-working space. There’s potted plants everywhere and an espresso bar. I meet with this guy who’s actually the partner of the guy that I was getting introduced to. This guy’s name is Lao Mao. He pulls up in a Porsche. He sits down and I’m like, oh, I guess blogging is really lucrative in China. And we start having this talk and it’s just really great. We really agree on what projects are worth doing, what projects are stupid. There’s definitely some bonding that happens between crypto investors over just like hating on crappy projects. At the end of this meeting,
Eric Meltzer: he says he would like to invest personally and InBlockchain, the fund that I now work for, is interested as well and that I should come present at this meeting that they’re having in Shanghai in a couple weeks. That sounded really cool to me. I’d never actually been to Shanghai. I went to college in Beijing and never went to Shanghai in the entire time that I was there. I figured it would be kind of a fun opportunity. I told my co-founder and he was like, “We’ll scrape together the money for the plane tickets, because we’re a tiny startup with no budget, but we’ll make it happen. It sounds like it worth it.” We get home and we have invitations in our mailbox that say, we’ll reimburse your flights in crypto, which we thought was really cool. We’ve already booked your hotel rooms. You’ll be giving a talk at this super fancy event space in Shanghai and then there’s an after party on a boat in the river. We’re like, okay, what have we gotten ourselves into? We showed up to this meeting. What it was was the portfolio companies of InBlockchain, which included like Zcash and iTtoken and a bunch of really awesome projects, and then, also, about a hundred users, the power users from InBlockchain’s exchange at the time, which was called Yunbi. It was this really interesting group of people, both Chinese people and also people from the States and from all over the place. We showed up to this meeting and I pitched our project in Chinese and there was this really funny moment where like, I’m this Jewish white guy giving the talk in Chinese and my co-founder is a Chinese-American guy
Eric Meltzer: but he doesn’t speak super-good Chinese, and, so they have simultaneous interpretation and he picks up the headphones to get the English interpretation, and all the Chinese people around him look at him like, what’s going on? It was great, yeah. We made a bunch of friends. I became really close with the whole kind of InBlockchain crew and was super excited to have them onboard as an investor. Kind of what ended up happening was, I started helping out with a bunch of internal projects at InBlockchain, just with internationalization of some products and with helping them look at other new investment opportunities. What ended up happening is they were just like, “Hey, we would really like to just poach you off of this project and have you just come be a partner at the fund.” I really had never thought about investing at all prior to that. I was very committed to working on projects and I was really excited about what I was working on. It was kind of a hard decision. Part of what helped me make the decision was, someone who I now work super closely with, so my partner on the USD fund that I run now, Kerri Chu, was like, “You know, Xiaolai, the founding partner is not only a really good business mentor, he’s like my life mentor. This guy is like super wise and if you join, you’re going to learn a ton from him.” At the time I thought that was a little creepy sounding. I wasn’t sure what I was getting myself into. But then I had a couple more meetings with Xiaolai and I was just super impressed with the guy.
Eric Meltzer: He has just really a lot of depth of knowledge and a really interesting kind of outlook on the world. I figured it would be a bad opportunity to miss. I basically, made sure that Stream, our project, was going to be able to successfully complete the fundraising round, and bring on some key hires that would be able to do a better job than I was doing even as an ops person. And then I jumped ship from Stream and joined InBlockchain full-time in the summer of 2017.
Clay Collins: It’s really fantastic when operators kind of take a place on the other side of the table and start working for funds. I think it builds trust. There’s a lot of empathy that comes from that. What would you be doing if blockchain didn’t exist. Would you be an entrepreneur? What proclivities did you have coming into this? Were you a developer? Looks like you were a designer. You were definitely a product person.
Eric Meltzer: If blockchain didn’t exist, I would still be making products, partially just ’cause that’s the only thing I’m good at, and I think a lot of entrepreneurs are entrepreneurs by necessity. No one would ever hire me. I would make a terrible employee. As a result, I have no choice but to just go do my own thing, which has worked out well in the past. A friend of mine asked me, “If you weren’t doing this, do you think you would be doing traditional VC investing?” I’m pretty sure I wouldn’t. The space is so weird and unique in the investing world because there’s this like deep, technical component. There’s like a bunch of new technology that no one really knows what to do with and there’s still a lot of research-level interesting innovation happening there. On top of that there’s this insane ultra-volatile 24/7 market that’s just like pure dopamine all day, every day. That combination is just uniquely addictive, to me, and to most of the people that I hang out with in the space.
Clay Collins: Let’s talk a little bit now about InBlockchain and the partnership and perhaps the role that China plays into this whole story.
Eric Meltzer: A little bit of background on InBlockchain. We’re the oldest crypto fund in China. I’m pretty sure we’re the largest, although you never know. We’ve got a couple billion dollars under management, mostly in Bitcoin. We’re also early investors in Zcash and early investors in Sia and BitShares and EOS and a bunch of other projects that ended up being fairly big deals. That’s kind of been our strategy is that we try to get in very early on these projects that we see as very promising and we’re not really worried, even if, when we join, there’s like almost nothing even if it’s just an idea, As long as the team looks strong, we’re happy to be there. That’s how we got started. Going forward, we’ve actually diversified the fund a little bit, so it’s moved from being just purely investment to, we also run an exchange wing. It used to be called Yunbi, and then we launched a new exchange that we invested in called BigONE. We’re actually currently developing another exchange product that’s going to be sort of more of a platform for other people to build exchanges on and share liquidity. We’re very deeply involved in the exchange space. We also have a section that sort of does advisory for existing companies with interesting businesses that want to integrate a token or integrate some sort of a crypto model into what they’re doing. I would say that actually 90% of that business is just telling people to come to us, “Don’t do a token.” A token doesn’t make sense for what you’re doing. There’s like 10%, that come to us
Eric Meltzer: that have really interesting ways of integrating some sort of a decentralized incentive model into what they’re working on. So we do that now too. And then, I guess, very recently, since we last talked, we announced this new fund with the Chinese government that InBlockchain is a co-GP on and that I’m advising, called the Grand Shores Fund. That’s about $1.6 billion with 30% of that coming from the Hangzhou local government. The mission there is to invest in all sorts of interesting blockchain technology. We’re kind of working on a lot of stuff and we see that as a pretty big advantage. What we’ve noticed with the space is that, there’s lots of investors out there. There’s not that many great projects and, the really good projects don’t need money. People are throwing money at them. If you want to be involved with these best projects you have to be able to bring something to the table beyond just money. For us, historically, we can provide truly useful advice on how to operate one of these projects because we’ve seen what works and what doesn’t. We have an exchange and so we’ve been able to help people get their token some liquidity on an exchange and going forward, that’s just going to become more and more important. A lot of the people that I like to co-invest with are people that have a lot of resources to bring to bear on these projects. If you’re an investor in the space and you don’t have that, it’s going to be tough going for the next couple years.
Clay Collins: I want to talk about this fund with the Chinese government. The Chinese government is actually in the GP of the fund. Is that correct? Hey, it’s me from the editor’s booth to explain this question a little bit more. Here, I’m asking if the Chinese government is part of the GP of the fund. GP stands for general partnership. Funds generally have general partners and limited partners. Limited partners are investors in the funds, and general partners run the fund and take a percentage of the returns they generate for investors, typically 20%. This is called carry. The heart of my question here is whether or not the Chinese government is getting economics in the fund and taking a percentage of carry. Okay, back to Eric.
Eric Meltzer: That’s a little complicated. I’m actually probably the wrong person to ask about it. How the Chinese government usually does these funds is they sort of charge an interest rate on it, so it’s a little different than getting actual carry, or getting something like that. I believe in this specific fund, though, we actually do have it set up so that they receive a percentage of the ROI of the fund. They meaningfully are LPs essentially on the fund.
Clay Collins: If I were to characterize what I just heard you say, it sounds like InBlockchain is really focused on teams and gets involved really early in token-only projects or do you also do equity deals as well?
Eric Meltzer: We do absolutely everything. We would do equity. We do tokens. We’ve invested in training programs. We pretty aggressively have no thesis in the space. We’re just very opportunistic and we go after what we think are promising teams. That filter has historically worked very well for us and I think it will continue to work very well, just because there are so few teams that can actually ship meaningful stuff in the space. If you just restrict yourself to teams that you’re super excited about, you’ll do well. It’s funny, I’ve had friends be like, “Man, you really seem to like love the founders of the stuff that you invest in.” That is our bar. If I don’t fall in love with the team when I meet them, then we’re probably not going to invest.
Clay Collins: Let’s dial-in on the statement you made about a thesis. I’ve heard a lot of funds recently talk about the strength of their thesis, but it feels like, after further questioning, there really aren’t any intellectually-rigorous theses in this space. What is your take on a thesis? Is it a limiting filter? Is it helpful? Is it not helpful? Where do you come down on that?
Eric Meltzer: I think it’s not helpful. For the most part, it’s like marketing. For a lot of these new funds, I respect that they have to go kind of do what I think of as like content marketing where they go and write a bunch of fancy thought pieces about how they think about the space. The problem with those is that they age extremely poorly. If you read people’s hot takes about the space from six months ago, they already appear almost nonsensical. With a space that moves this fast, that’s just going to keep happening. It’s much more important to just embrace the uncertainty and just try to find the best projects at any given time, rather than have some fancy overarching conceptual thesis.
Clay Collins: I believe you said this last time, that there’s probably just not enough deal flow in this space to have a thesis here. You’re going to miss a lot of opportunities. I do think, though, that there is a need for differentiation and there’s a number of dimensions along which a fund can differentiate itself. It seemed like, at first, it was all just about exposure to the space, that someone was a trusted party or a trusted partnership. They had the custody thing under control. They had reputable backers. And it was all about institutional investors that wanted some exposure to Bitcoin or to Ethereum. Now there’s a whole bunch of funds. How do you think a fund does go about differentiating now that so many people are offering versions of basic exposure?
Eric Meltzer: I can talk a bit about some of the funds that I co-invest with a lot, because I’ve chosen those, basically because I really like what they’re doing, and I think that they bring a lot of value to the projects that we invest in. Also just a lot of these are just people I like. It’s always fun to hang out friends and invest in cool stuff. One of the people that we started co-investing with is… Binance, a large exchange, has their own fund now called Binance Labs. We co-invested in this project called MobileCoin with them which was actually their first big investment. I’ve been super impressed with the team there. They’re extremely smart and they have a deep view of the space. What’s cool about a fund like that, is that they’re coming from a place that’s totally different from your average fund. These guys are running this enormous multi-billion dollar business that’s at the core of a lot of these token economies. Besides the obvious benefit of like, they can help you get onto Binance, which is certainly not guaranteed, by the way, it’s probably easier for projects that they invest in. Beyond that, I think, perhaps more importantly than that, they’ve just seen so many projects. They’ve seen what works. They’ve seen what doesn’t work. They’re able to provide really useful guidance, much more than like just some guy that’s into Bitcoin and found a couple million dollars to go invest. I really like those guys and I think, in general, funds that are coming out of other large crypto businesses. CoInBase got a lot of flack for starting a fund.
Eric Meltzer: I think CoInBase starting a fund is totally awesome. It’s a no-brainer and that they should do it. It seems like it’s going very well for them so far. I’m really into funds that are spun out of existing big crypto businesses. Another fund I really like is Linda Xie and her partner, Jordan, have this fund called Scalar Capital. They actually do have something that kind of approaches a thesis, which is just that like privacy coins are super undervalued. That’s simple enough that I’m okay with it. It’s nothing too over-intellectual or whatever. What’s cool about that is it’s allowed them, because they mostly focus on privacy, although they invest in a lot of other stuff too, they’ve been able to become complete experts in the privacy space and so they’re able to make really nuanced decisions about what to invest in and how to allocate capital within that space. Funds like that, that maybe you don’t have a complicated thesis, but do limit themselves to some specific niche in order to have really a lot of time to do a deep dive into it is, potentially, good. Especially if you’re a really small fund. I believe Scalar, right now, is four people. Might be five by now. But it’s very small and if you have limited manpower it makes sense to limit the kind of stuff that you invest in and so that you can have a really deep understanding of the companies you are involved with.
Clay Collins: What about methodology? Active versus passive management. Quantitative trading. Maybe taking a venture-capital style momentum incentive in trading. Do you guys work all those strategies or are you primarily early-stage, buy and hold, going for large returns?
Eric Meltzer: At InB we are pretty heavy onto the buy and hold side of things. We’ve certainly left a lot of money on the table because of that. At the same time, the active strategies that some funds pursue, which are great, there’s arbitrage and there’s all sorts of pretty simple algorithmic strategies that work quite well. They tend to be more suited for smaller-sized funds. You can’t really do arb on $2 billion worth of Bitcoin. For the large fund, there’s a limit to sort of how much we can really get out of trading. When you do actively trade, you are exposing yourself to all sorts of risks. You’re exposing yourself to counter-party risk on the exchanges. You’re exposing yourself to the risk that you’ll just mistime, a big trade and then miss a massive run-up in Bitcoin. You’re exposing yourself like, the difference in the security model between having your coins in cold storage and having your coins, even in a really, really secure hot wallet that’s able to go be traded on exchanges is huge. For Xiaolai and for Lao Mao, the founding partners, to some degree, trading just hasn’t really felt worth it. That said, for our smaller fund, we do some active management. We rebalance a portfolio every so often and we are actively finding… We’re hiring a trading team right now just to get a little bit deeper into that.
Clay Collins: It sounds like your edge is probably one of the few categories of edge that, I think, actually exists and that is just deep operational experience in the space, running exchanges, working hand-in-hand with founders that are also, in some cases, LPs in various funds, and just running very, very, very deep in the space, and there’s just not a lot of that out there right now on the investment side of things.
Eric Meltzer: We’re really paranoid about losing our edge. Especially Xiaolai. Something I really respect is, he is super unwilling for us to just rest on our laurels and say, “Well, we’re like the biggest Chinese fund and we’ll always be. People will always come to us.” We do a ton of work to try to maintain a bunch of really useful resources for founders and that’s the only thing that’s going to keep us relevant because the space does move so fast that if you just kind of sit around and say, “Oh, we made a bunch of awesome investments, people will come to us,” that could be fatal very quickly.
Clay Collins: On the deal side of things, what do you see the founders of these projects really being motivated by? I saw you tweeted out an article about Sequoia suing Binance because of the, probably the no-shop clause in their docs. Sequoia’s claiming that they did shop the deal around even though they didn’t take money from either party. You can’t just be Sequoia anymore and walk into a crypto deal and assume that you’re going to get this done. What is making a difference? Does the Proof of Work newsletter make a difference? Does connections to exchanges? I imagine it’s a variety of things for different projects but, how do you see founders responding to different things that you and competitor funds can offer?
Eric Meltzer: Let me just go back to the Sequoia thing for a second because I just want to comment on how ridiculously badass that is for Binance. You can think about this a lot of ways and I’ve had people disagree with me about my take but, in my opinion, when one of the world’s best investors is suing you for an opportunity to invest in your project, then you’re doing something extremely right.
Clay Collins: It’s me, again, with some additional background. As I understand it, Binance signed a term sheet with Sequoia. While this doesn’t obligate Binance to take a deal from Sequoia, these contracts often have what’s known as no-shop clauses, which means that Binance can’t pitch to other venture firms while they’re locked up. Sequoia appears to be suing Binance, not because they took an investment from another firm, because it appears that they have not. Instead, they’re suing because Binance allegedly was in talks with other investors. Like Eric said, when the world’s best-known investors are suing you, not because you took a deal from someone else, but because you spoke with other firms, you’ve probably got a pretty great business on your hands.
Eric Meltzer: In general, even though Binance is, I guess, in some sense, a competitor to us, I’m just really extremely impressed by how they handle things. The ops team is fantastic. Their security is fantastic. They’re really just executing on an incredible level. Sequoia and IDG and all these other guys have noticed that and very badly want a piece of it.
Clay Collins: It is pretty incredible and, in my opinion, it comes off a little petty on the part of Sequoia that they’re actually going to do this. If you want a reputation as being founder-friendly, and you’re going to sue a company because you didn’t get a deal that nobody got in on, that’s just absurd.
Eric Meltzer: If you’re Sequoia, you can get away with it, I think. I don’t know. It’s a little weird though, for sure. To return to your question about sort of like what makes the difference for us in terms of getting deals. Stuff like Proof of Work is really useful in just knowing people and actually seeing the deals. Not necessarily inking the papers, but, at least knowing about cool stuff that’s happening. And I would say, I’m personally fairly lazy. I don’t really like going to conferences. People laugh at me when I say this, but I’m fairly anti-social and just having a network of founders that are building cool stuff has been really crucial for me in actually seeing a lot of these awesome deals. What tends to get our foot in the door and actually get us in these deals is that, for most of these projects, they do want someone to be a partner for them in China and help them navigate the community there and find developers and investors and everything over there, and, I think we’ve, historically, been able to do a really good job with that. We’re doing a lot of work to make sure that we kind of stay on top in that area. That’s been sort of what ensures that be have allocation in a lot of these projects that we’re really excited about.
Clay Collins: As a founder myself, I could definitely see there’s real opportunity to provide value there, especially given how new the entire space is. It seems like a lot of venture funds are actually like crypto hedge funds are, in a lot of ways, like decentralized incubators and these networks that kind of pool knowledge across different groups and legal jurisdictions and technologies and in technology stacks. It’s fun to see innovation just kind of move through the system in a different way than it ever has before.
Eric Meltzer: It’s really fun. A lot of times people that are deeply immersed in a space, they miss the coolest parts about it because they’re sort of hiding in plain sight. One of the coolest parts about crypto is just that it’s automatically extremely international. It’s very easy, a Chinese fund can invest in a US vehicle or a Cayman vehicle or whatever it is just as easily as someone in the US because you’re just going to be sending them ETH or Bitcoin or whatever it is. So the internationalization of the space, just based on that simple fact that like, you don’t have to convince your bank to do a wire to some weird country and there’s no irritating back and forth about paperwork, has massively internationalized the space, whereas most of these deals, like, we’re in, there’s some Korean funds that are in, there’s some Japanese-based funds that are in. There’s people in the U.S. It’s really exciting to me. People have been talking for a long time about the startup scene becoming more global and less purely focused on Silicon Valley. I think, with crypto, that is finally happening to some degree, which is pretty cool.
Clay Collins: Okay, time out. I’m going to do some native advertising for the Nomics API. This episode of Flippening is sponsored by the Nomics API. The Nomics API offers squeaky clean and normalized primary source trade data, offered through fast and modern endpoints. Instead of having to integrate with a bunch of exchange APIs of varying quality, you can get everything through one screaming-fast fire hose. If you found that you or your developers have to spend too much time cleaning up and maintaining data sets instead of identifying opportunities, or, if you’re tired of interpolated data, and want raw, primary-source trades delivered simply and consistently with top-notch support and SLAs, then check us out at nomics.com. Okay, back to the show. I want to talk about Proof of Work for a second because it’s a really fascinating newsletter. It’s how I found out about you and it’s something that I hear a lot of hedge fund managers talk about. There’s the hedge fund managers that do the hedge fund manager like speaking tour. They all seem to be interacting with you. On some level, you’re kind of like the hedge fund manager’s hedge fund manager because, in a lot of ways, it feels like, and maybe I’m off about this, but it feels like you’re kind of the direct link to a lot of different projects and the primary source data from the founders about those projects. What has been the response that you’ve seen to Proof of Work?
Eric Meltzer: Proof of Work is just really fun for me to put out. I literally got the idea when I was in the shower. I was already kind of doing this anyway, so like, for projects that I was excited about, or for projects that we were invested in, I would kind of ping the founding teams once or twice a month and just say like, “Hey, what’s going on? What can I help with? What interesting stuff have you guys shipped?” It was an easy step from that to just putting it all into a newsletter. The reception has been great. The readership is not huge. It’s under 10,000 readers. But, occasionally I’ve kind of just looked through who all these people are and its like crazy-impressive people that are reading it, which is really humbling for me, and it feels really great to be able to put something out in front of a bunch of people that I really respect. The impetus behind doing Proof of Work was also that I saw this weird anti-correlation between a good project and a project that was good at promoting themselves. What you’d see is there’s these guys that are shipping amazing stuff, but they’re not very good at promoting it. Then, on the other side, you would see people that, in my opinion, are doing basically nothing, but are very good at painting a picture of this supposedly massive market that they’re addressing, or whatever. The idea with Proof of Work is like, if I can just, every week, get updates from these guys who are building really awesome stuff, then people can see the progress that’s being made in the space and I can kind of counteract this image
Eric Meltzer: that a lot of outsiders have of there being all these scams, or there not being a lot of actual interesting progress being made. On that level, it’s been very successful. It’s been really fun for me and it’s been fun for a lot other people to just watch these projects ship. We’re on issue 19 now and so, if you’ve been following along from the beginning, you have a very good picture of which projects ship at a really high level, and which projects are a little bit more stagnant. Maybe that’s why a lot of hedge fund people read it is it’s very useful data if you’re an investor.
Clay Collins: The newsletter kind of reminds me of the quote about the Velvet Underground album, The saying there is that, the Velvet Underground album only sold 30,000 copies, but–
Eric Meltzer: But every single one of them started a band.
Clay Collins: Yeah.
Eric Meltzer: It definitely has that feel to me. Everyone that’s reading it is someone that I would be super stoked to be in a room with.
Clay Collins: If you don’t mind me asking, is that owned by you? Is that owned by InBlockchain? Are they supportive of you doing it? What does the ownership look like for that? Is that a side project? How do you think about that project and the role it plays in your sort of day-to-day job?
Eric Meltzer: It’s not incorporated or anything. It’s just completely a side project of my own making. One thing that I absolutely love about InBlockchain and why I’ll probably never leave is just that, I’m given a huge amount of freedom and as long as I’m acting in the best interests of the fund at a macro level, which is something that I take very seriously and try to do at all times, there’s never any concern about like, “Oh, is this thing that you’re doing owned by us or, what’s the IP situation here?” It’s all just completely casual. I love that and that’s something that really suits my personality. I have to absolutely thank Xiaolai and Lao Mao, the founding partners, for setting up that environment. At the big picture, it’s very good for the fund. Proof of Work’s kind of my thing. I had a bunch of people approach me about monetizing it. I had someone approach me to try to buy it, which I thought was funny. I have no intent to do that, and, for me, it’s just like a really fun way to sort of promote projects that I like. I guess the other funny thing is people have asked me, “Oh, you’re just promoting these projects you invested in?” But it’s actually, the projects that are on there I’m invested in a minority of them. A majority of those projects are things that I’m not invested in but that I just think are really cool.
Clay Collins: Having read it and several issues of it, it strikes me that you’d have to read pretty widely or have a pretty sophisticated monitoring system set up to find all the places where people are posting updates because it really does vary from like Twitter tweetstorms to reddit posts, to Hacker News. How do you find all that and over time, are you finding that founders are just coming to you and just tweeting links at you or sending you links so that you at least know?
Eric Meltzer: Proof of Work is a hundred percent. Actually, again, I’m a very lazy person and so, Proof of Work is 100% founder and team-driven. Every week I get like an email from the teams that are on the newsletter with the updates. I don’t have to actually do anything. I just format them and send it out.
Clay Collins: That’s very cool.
Eric Meltzer: It’s like, “Aw, it’s such a great newsletter,” and I’m like, I mean, it is cool. I love it. But it’s not like some stroke of creative genius on my part. It’s just putting together some interesting stuff and then sending it out.
Clay Collins: Let’s talk about the future of institutional crypto asset investing. Do you think we’re going to see anytime soon a fund that’s denominated in BTC or Ethereum kind of shooting for that host-exposure opportunity set?
Eric Meltzer: I do. Another person who I think is super brilliant and who’s doing a fund now is this guy, Nic Carter, who’s at Fidelity.
Clay Collins: He’s great.
Eric Meltzer: He runs a site called Coinmetrics, shout out to Coinmetrics, great, great site. Nic had this question about, at what point will it be more profitable to invest in Bitcoin-adjacent businesses than just investing in Bitcoin itself? Historically, that’s not been the case. Even CoInBase, which was one of the best venture opportunities of all time, actually underperformed just buying Bitcoin. Not by much. It’s roughly equivalent, but, that’s still pretty crazy. What you imagine, maybe, is that once Bitcoin achieves sort of user saturation and that everyone that needs Bitcoin has bought some, then the growth is going to smooth out a lot. At that point, if you had a fund that was denominated in Bitcoin and you went and invested in businesses that were building cool stuff on top of Bitcoin, you should be able to make some money. Nic’s question was when is that going to happen? I think we still have a ways to go. I think, for now, it’s the underlying tokens are going to be more profitable than the businesses. Although, of course, the risk profile is a little different. I’m not holding my breath for that. We’ve got at least another five or 10 years.
Clay Collins: Do you think that the accrual of value in the space to tokens has had a negative effect on entrepreneurship? In other words, 10 years ago, if you wanted to become fabulously wealthy, not that that should be your primary motivation for starting a company, it probably would make sense to start a tech startup, right? But, I think a lot of people who would do that nowadays are just investing in Bitcoin and a lot of innovation likely isn’t happening or it’s turning to ICOs where, supposedly, you can generate money out of thin air. What effect do you think that’s had on an entrepreneurial drive in the space?
Eric Meltzer: An extremely detrimental effect. What I think’s funny is, there are a few teams out there, where, if you give them 50 or a hundred million bucks, it’ll be like pouring fuel on a fire and they’ll ship at an incredible speed. A team that comes to mind is the 0x guys, Will and his team there.
Clay Collins: Oh my God.
Eric Meltzer: Those are monsters, right? If you read their updates every week, it’s just ridiculous. They hired this really badass product manager named Tom and when they were hiring him I was like, so what’s going on this week and Will’s like, “Oh, we’re going to hire this really great product manager so that we can ship more efficiently.” And I was like, “Dude, can you maybe just like not do that?” Our other portfolio companies are going to start looking really bad. Teams like that are really rare. It’s not often that you get teams that have the discipline to get these huge influxes of money and then responsibly spend that money. I think what you see often is, without naming names, is a lot of these projects were like a founder’s started the project, raised a bunch of money, and then have done, basically nothing, for a long time. And they’re just kind of coasting. It’s hard to say whether that’s actual malfeasance or not, like whether there’s actually like malicious intent there. But they just have so much money and they’re so comfortable. The craziest part is the Ethereum or Bitcoin that they’re holding keeps going up and so there just isn’t that huge drive that says, “Okay we have to get this done or we’re going to run out of burn rate and our company is going to disappear.” When we do look at teams, we try to look for teams that we think will be able to handle a massive influx of money without losing their drive.
Clay Collins: The real makers have this inherent drive to produce. They do want to be compensated because they’re looking at comps in the market. But, they’re going to make regardless and, we’ve seen this with people like Steve Jobs and other great tech leaders. The innovation doesn’t stop when they become rich because they want to put that dent in the world. That’s a pretty rare quality and bear markets wash out the casual investors, I think bull markets kind of wash out the casual entrepreneurs.
Eric Meltzer: That’s like a pretty comfortable way of getting washed out but no, I would agree with that. My mental model of the kind of founder that we want, and, of course, not everyone’s going to be at this level, but, if you look at Elon Musk, it’s kind of a cliche, but, he took, basically, all of his money and dumped it into his most recent companies and put his own personal fortune very much at risk. Founders like that, obviously, we really want to invest. From a risk profile perspective, I’m someone that has a pathologically high risk tolerance. It’s pretty funny. I’m married. My wife is someone that has a very low risk tolerance. She’s very conservative. She’s very careful. Being married to her has been really interesting because it kind of, it throws my own risk-taking behavior into the spotlight. But what I’ve noticed is the founders that are most successful in the space tend to be a little bit more on the risk-taking side of things. What we kind of look for is people that do have that out-sized risk tolerance, just because, in so many ways, what you’re going to be working on is risky from a regulatory perspective, from a tech perspective. We tend to see that as necessary. The founders have to be people that are okay with just charging ahead and seeing what happens.
Clay Collins: A bit of a detour, but, one of the things that I really enjoy about our conversations is just how thoughtful you are. There’s a lot of people talking their playbook in the space, and, the way you talk and sort of work through problems, it reminds me a little bit of Ira Glass or, people who I really hear sort of process the deeper question. I know this is kind of a personal question, but, why do you think that is? Do you think it’s because you have to spend less time raising money from LPs? Is it because you travel less and get to spend more time in the shower, sort of thinking over broader questions? Is it because you spend more time, maybe focused on founders than interfacing with other people in the financial space? Were you just born that way? What makes you this way?
Eric Meltzer: That’s a real compliment and actually as a kid I grew up listening to Terry Gross and a lot of public radio. I was very much a public radio kid, thanks to my mom. Maybe that style of talking and thinking has rubbed off a little bit. I do think that I’m super lucky to not have to be too much on the fundraising side. That’s just a massive stroke of luck on my part. As a result, I do get to focus almost entirely just on investment decisions. That gives me a lot of time to slow down and think about stuff. What happens with a lot of these deals is people will say, “Oh, you have like four days to decide whether you guys want to be in on the round,” and we’ll just be like, “Okay, we don’t want to be in on the round.” Because four days is not enough to figure out whether this thing is going to go anywhere. I think taking a slower or thoughtful approach to these things and actually looking pretty deeply into what it is someone’s going to build is really necessary. It’s especially necessary for us because we do, typically, hold these projects for years and years. If you’re like a trading fund, you can just trade off of the short-term enthusiasm around a project. For us, that’s not so much an option and so, we have to really long-term believe in what someone’s building before we can invest.
Clay Collins: I’d love to hear a little bit more about China. You mentioned that you have a high-level of risk tolerance. I imagine that there, potentially, is a lot of personal risk doing something like picking up and moving to China and conducting most of your social life and your academic life in a foreign language in a foreign place, a place that is probably as far as it can be from United States culture. It seems like your high-level of risk tolerance, it isn’t just about capital. It’s about lots of other things. What played into your decision to go to China?
Eric Meltzer: It was just completely impulsive. I was a summer student at UCSF, working on a pretty interesting biology project, and there was the opportunity to be an exchange student to China, and I just took it, literally because my PI, my boss at UCSF, told me that the food at this institution that I was going to go to was really delicious. And I was like, cool, and he was like, “Yeah, you can get a delicious bowl of noodles for two bucks.” And I was like, all right, sign me up. Because I hang out with people with pathologically, like, stupidly, high-risk tolerances all day, and I think what I’ve noticed about us is that, people think of it as like, “Oh, we’re taking calculated risks and that we’re more comfortable with that,” but I think that’s really not the case. It’s just like, I don’t really see things as risky that other people think of as insane. When people have asked me, well why did you decide to go to college in China, it’s like, well, I don’t know, just seemed like a fun idea at the time. I wasn’t too worried about it. It’s hard for me to understand the risk-averse perspective on things and I think it’s, likewise, maybe hard for people who are more calculating in their decisions to understand what drives my decision-making.
Clay Collins: I definitely can relate to that. People have said a lot of things about Bitcoin investing and the amount of my personal liquid net worth I put into it. To me it just seems so obvious that this is the way the world is going to go. Literally everything has been digitized, dumped on the back of Moore’s Law, and experienced exponential growth, and maybe it’s not Bitcoin, but there’s absolutely no reason why this won’t happen to money.
Eric Meltzer: A lot of times, people that I meet in the space, because it does select so much for people with high-risk tolerance, we’re people that really value fun experiences. For me that’s been a driving force behind a lot of stuff that I’ve done where it’s just like, “Well, if this works out, it’s going to be an awesome story. If it doesn’t work out, I’ll figure out something else that will work out” and, yeah, that definitely drove my decision to go to China. It drove my decision to get involved with crypto. I think having that, actually, as an investor, if you have, people think about the best alternative to negotiated agreement where you’re like the BANA and the if, as an investor, you have some decent downside protection where you’re like, well, if this doesn’t work out, I’m not completely screwed, that can be really useful and that can very much enable you to make big bets that can be fund returners.
Clay Collins: Let’s talk about incentives a little bit. It’s something, I believe, we reflected on last time, but, one of my favorite Charlie Munger quotes, I’m not going to get this perfect but essentially he said that he’s spent much of his life thinking about incentives and it is almost never the case that, as much as he values incentives, that he’s never over-valued them.
Eric Meltzer: He’s always underestimating how important incentives are.
Clay Collins: Yeah.
Eric Meltzer: I think that’s super true.
Clay Collins: What do you think are the incentivization levers that exist with crypto projects that you’re working with? Do you seek to have an influence on those levers and what do you see as being the most vital ones?
Eric Meltzer: Crypto, if you think about it, crypto is all about incentives. If you learn about one thing as an investor, I feel like getting a deep understanding of how humans respond to incentives might be the most valuable one. You see that with token models obviously. You see that with the incentives for a team. If a team gets a huge windfall profit before they’ve shipped anything, they’re not going to have the incentive to go ship. You see that with fund managers who, perhaps they’re incentivized to over-raise because they make a lot of money off of a management fee, rather than making money off of actually delivering results. Basically, I totally agree with Munger that every time I think, well, maybe the incentives aren’t so important this time, completely regretted that.
Clay Collins: Do you spend much time thinking about vesting schedules and cliffs and when founder liquidity makes sense?
Eric Meltzer: I don’t spend a ton of time thinking about that stuff, but it’s just not negotiable for me. That’s one of the few things that would just completely kick me out of a deal is, if the founding team is unwilling to have a lockup and a vesting period, just because, again, that’s a very simple way of aligning their incentives with us long-term. If they’re not willing to do that, there’s no possible good reason that a founding team could have for not being locked up, and so that would be just be an instant pass.
Clay Collins: What incentives do crypto projects have around working directly with crypto funds, given that a lot of these tokens are publicly tradable? Is it because it results in founder liquidity? I can imagine folks saying, “Yeah, we’ll talk with you, but if you want to buy our token, just go to a public exchange and pick it up and we’ll be grateful,” but it really doesn’t have a notable impact on the price. How does it affect them?
Eric Meltzer: From a selfish perspective, I probably shouldn’t say this. However, I would say, for the best projects, if they really wanted to, they could totally just ignore funds and they could just go launch their thing and it would get liquidity on exchanges slowly and then they would be able to liquidate it as they needed to fund the project. I would say that if you’re a really great project, you’re going to be able to make your life a lot easier by just bringing in a couple of top-tier funds because, at the very beginning, you’ll have money to run the company. You can have an office. You don’t have to work remotely. You have the cash up front to go do your thing. And then, all the stuff that isn’t actually building the project, so everything from helping you hire engineers to helping you get listed on exchanges to helping you find partnerships with other crypto projects, the funds involved will help you do that stuff. The equation works out pretty clearly in favor of taking institutional money if you’re a project that can get access to the best funds and that can get a good deal from those funds. It’s much less clear to me why anyone takes money from these second and third-tier funds because it’s like they’re not really going to bring you that much value-add. They’re probably going to ask for a sweetheart deal compared to what you’d be able to get on an exchange. It’s going to become tough times for those funds as founders realize that they’re not really bringing much to the table.
Clay Collins: One of the reasons why traditional VCs don’t sell part of their ownership stake in a business earlier is because of regulation and disclosures and potential negative signaling. Do you find that, given that you don’t need to disclose when you’re selling your position or part of the position in a company, that founders really just don’t care, given the liquidity of the space? Or, do they care?
Eric Meltzer: Some projects have lockups and so you can’t sell. I think it’s not great. We had a little bit of back and forth debate on, if we invest in a project and it goes up, say, a hundred X, should we sell 1/100th of our stake just to make back our initial investment? Our conclusion was that, in our case, we probably shouldn’t because the people, so the fund that I run within InBlockchain is focusing on early-stage startups in the space and our LPs are all people who already have a decent amount of money and are purely invested in our thing for access to good deal flow and for exposure to these sort of black swan type of investment opportunities. My initial reaction was, well, it’s kind of irresponsible to not at least ensure that I can return the fund by cashing out a tiny bit. Then, from talking to some of our LPs, they were like, nope, don’t do it. We just want max exposure to this stuff and it doesn’t really make a difference to us if you have that tiny little bit of risk management or not. At the end of the day, for the most part, we’re really pretty adamant about just being long-term holders of this stuff. It’s fairly unusual that we would sell any part of our stake before we’re ready to exit the position.
Clay Collins: So your LPs are like, we’re not doing this to be safe. Don’t do it. Don’t worry about hedging.
Eric Meltzer: Which, honestly, in retrospect, that should have been obvious to me. No one’s investing in an early-stage blockchain fund with the expectation of having a carefully risk-managed portfolio. We’re probably the absolute tip of the spear in terms of the most high-risk, high-reward part of their portfolio. It makes sense to behave as such.
Clay Collins: Given your risk tolerance and the conversation that we had about incentives, can you tell us a little bit about your own investment in your own fund. I believe you mentioned that you’re pretty heavily invested in the fund that you’re managing.
Eric Meltzer: There’s like some stupid regulatory stuff about what I’m specifically allowed to talk about and not allowed to talk about about our fund. I’m deeply invested in the fund and so are the other GPs. I guess I would be fairly skeptical about any fund where that isn’t the case, just because it comes back to incentives. There’s no good reason for the GPs to not be invested with their own money.
Clay Collins: I was speaking with a VC who’s involved in vertical SaaS and that’s a pretty mature space right now. He said that, in his early days, he used to spend a lot of time helping portfolio companies and would get involved in all kinds of things and his thought now is that, after a lot of reflection, he realized that he spent the greatest amount of time with the companies that were likely not going to be successful, and he spent the least amount of the time with the companies that were crushing it. After doing some data analysis, he realized that it, literally, made no difference to his returns and outcomes if he was involved or not. Now his position is, this is a money-only deal. Here’s my business card. It’s got my phone number on it. You can leave a message. I probably won’t call you back. This is what’s happening. Do you think that only works in mature markets and does that type of thinking, does that work in crypto?
Eric Meltzer: I respect that guy for saying that. There is definitely some sort of, you have to be careful about adverse selection where the companies that want your time the most are maybe not the ones that are the most successful. The ones that are just killing it almost don’t need your help. This space is sort of early enough and is nascent enough that you actually can be pretty useful to your portfolio companies. Maybe I’m just comforting myself here and that, if I actually asked our invested companies, they would just be like, “You’re not that helpful.” We’ve done some pretty useful stuff for them. Sometimes just at the level of brokering important deals where they need to make a deal with someone in China that doesn’t know who they hell they are, but they do know who we are. Just being able to be like a trusted counterparty in some of these situations I think is quite useful for our companies. I don’t know. I really respect that guy’s take. I could see this space eventually getting there. I do think there’s a lot of kind of BS and self-delusion about how important post-investment help really is. There’s a lot of VCs that make a big deal of what they supposedly do. At the end of the day, how truly useful it is, is who knows? Really, there’s a few things that a crypto investor can do to help their companies and, other than that, nothing they do is that useful. You can be a sounding board for ideas that they want to try out, just because probably a lot of the things that they’re thinking of trying,
Eric Meltzer: like token distribution strategies or whatever it is, you’ve seen other companies either succeed or fail at, and so you can very quickly just tell them that’s not going to work or that is going to work. You can make important connections within the ecosystem. A lot of times, people really misunderstand how exchanges look at listing tokens. The public perception is that exchanges are just super greedy. They want to take big listing fees and they’ll list anyone. In point of fact, most exchanges, the first thing they think about is safety. They don’t want to list any tokens that have issues with their wallet or that are going to cause some big safety problems for the exchanges, because that’s massively not worth it from their perspective. The other thing they want is, if they’re going to list your token, they want to make sure that you actually have a really active community of people that will be trading that token and providing volume because that’s their business model. Being able to make the connections to these exchanges for our portfolio companies and to give them a better understanding of what the exchanges actual incentives are, has been quite useful. I guess the last thing I would say is that, we do try to help our portfolio companies with hiring. With Proof of Work, I’ve been able to do that quite a bit more because we have this Proof of Work common app where, if you want to work in the blockchain space, you can just fill out this one form, and then, a whole bunch of portfolio companies
Eric Meltzer: plus a bunch of companies that I just think are cool, will see your application. Since hiring, typically, is the biggest struggle for all these companies, especially hiring engineers, but I would say, also hiring designers, is really tough right now. To the extent that we can help with that, we always do so.
Clay Collins: I can completely see that, both on the dev side and the hiring side. It’s getting access to real blockchain talent is pretty difficult. And then on the bus dev side, it seems like there aren’t really advanced structures in place and everyone’s so busy trying to scale and not let the wheels fall off the bus that, just getting ahold of anyone who can make a real decision at another company is pretty hard to do if you don’t have an intro. The space is so new that warm intros are hard to come by. I can absolutely see how those dynamics would affect the valued-add that you bring.
Eric Meltzer: We try to be very cautious about who we do recommend to exchanges. From a personal level, I try to be really cautious about what deals I recommend to other funds, just because what I’ve noticed is, there’s a lot of funds that actually have a pretty good reputation, but, when they send me a deal, it doesn’t really mean anything to me. The fact that they’re investing doesn’t make me think that it’s definitely going to be a good project. Whereas, there’s a very small number of funds where I’m like, you guys have never sent me anything that wasn’t just fire. And I try really hard to be in that category where, if I’m going to share a deal with other funds, it’s got to be something that I’m investing hardcore in, in this round and that I really believe in. That’s another form of value-add for the portfolio companies where, if we invest in only stuff that we really love, then we can, very happily, go to all of our friends and say, you guys should invest in this stuff too, and that results in these funding rounds that close very quickly, which is important for the projects.
Clay Collins: Yeah, no founder wants to spend the majority of their time fundraising when they can go to one place that can syndicate something really, really quickly and get it done. That concludes part one of this interview with Eric. Next week we’ll air part two. Part two is almost as long as today’s episode and just as good. In this forthcoming episode, we’ll discuss some of Eric’s favorite token projects and Eric’s favorite thought leaders and resources. We’ll also play a lightening round game of overrated/underrated and have a conversation about how one might bootstrap a crypto nation state from scratch. It’s a fascinating conversation. See you next week. That’s it for this week. To sign up for our free crypto investing newsletter, listen to other episodes, or get the show notes from this episode, please visit flippening.com. I also invite you to check out the startup that funds this podcast, Nomics, spelled N-O-M-I-C-S at nomics.com. Finally, if you got value from the show, the biggest thing you can do to help us out, is to leave a five-star review with some comments and feedback on iTunes, Stitcher, or wherever you listen to podcasts. Thanks for listening and see you next week.