Getty Hill - From Grapefruit Trading to $200M/Month on Oku - ep 177

Speaker A: The thing that people will pontificate on or discuss for a long time. We'll just get in there and while you're still debating it, we'll have completed the task.

Speaker B: This podcast is for informational and entertainment purposes only and is not investment, legal or financial advice. Opinions are those of the host and guests and do not reflect any affiliated entities. Investing involves risk and past performance is not indicative of future results. The host and guests may hold positions in discussed securities now. Please enjoy the show. Getty, thank you so much for joining me today. Super excited to chat with you. All right, Getty, you're the co founder of GFX Labs. GFX Labs is a cryptocurrency products company. Previously you managed a crypto fund and worked at the trading trading firm Grapefruit Trading. All right, Getty, I've known you, I like one of the OGs of, of my crypto career, like since 17. We worked at Athena Trade together right here in Chicago, which is Athenian trade, was a co working. It was a crypto co working space. This is 2017, 2018 and it's crazy to see how far you've come. It's incredible to watch and super, super pumped for you. But since that point, I mean you're now an expert in on chain governance, product creation, tokenomics, daos, et cetera. Um, so take me back to initial thesis formation around GFX Labs. And how do you decide to create that?

Speaker A: Yeah, absolutely. Well, appreciate you uh, having us having me on here. Um, obviously we've known each other since 2018, back when we were just random desk, um, desk baits in that co working space. Um, we did at the time we had like a, a small, like long short fund that we were running, uh, which is what you referred to first. Then we started working for these folks at Grapefruit Trading, which is Chicago prop trading firm that had both the traditional side of the firm, uh, that did, you know, equities, etc, commodities, all uh, sorts of that stuff. A lot of treasuries trading. Um, and then my co founder and I, we were over there on the crypto side of things. I was just getting started. We were fortunate enough to work for um, the gentleman, Mike Komaransky who had started Cumberland, which is of course you know, the renowned uh, first institutional trading desk in the industry. So we worked for him dropping out of school. He encouraged us heavily after the first year to continue to stay with him and said we really, really tried us to not get to uh, encourage us to not go back to school, which we always Joked we said that was very easy for the guy that had the UChicago degree to tell the, the two kids that they didn't need their degrees. Um, but sure enough we ended up working what was one year, that turned into two years, that turned into three years and three and a half years later. Um, we, that was when we decided to start GFX ah Labs. So we had a lot of fun working for those guys running Delta neutral strategies, um, a lot of stuff that was um, on the bleeding edge of Defi, A lot of stuff that at the time we could never talk about or was very like. Our presence in Defi was very unknown to folks, um, yet we were one of the largest participants like regularly, especially through the kind of 2019 through 2021 era was like at least one of the top three, maybe top five, depending what it was like Defi participants, as more capital came in, um, and so we had a lot of fun. We got to learn not only how to be the market maker there, but also active participant in helping new Defi protocols get liquidity, um, for their users and other folks to come in. Um, GFX came on the back of all that when we decided, you know, we had learned a ton of them, made some good money for ourselves. 2021 was quite the boon for anyone who was ready to start a company at the time. Um, and we had a great Rolodex and we were like, you know what, this is a great time to go out there and solve a lot of the problems that we had identified through our years of working at the trading firm. So actually the initial thing we started GFX uh, for was to start a Defi ah, powered Visa card which obviously today has now become like an established norm. We were unfortunately way too early to this. Uh, this is one of the things where like timing really matters in startups. Um, but we got Visa's blessing, joined their fintech fast track program, uh, and we spent a year trying to get this card off the ground and essentially ended up being that like to do it in the United States as Americans were based here in Chicago, um, was pretty much impossible. And then it literally became impossible after FTX exploded because no bank wanted to touch anything related to crypto or anywhere. Operation Choke Point was a very real thing. So we spent a long time trying to build something, uh, that a lot of money that unfortunately we just ended up being like this is just not legally viable. Now of course underneath the new administration, a lot of these doors now opening again for folks. So we were seeing More of that. Um, but along the way we were participating very heavily in protocol governance. So we, I had it individually when I was at the trading firm started uh, participating in compound governance when Compound kind of launched their dao. And Compound in many ways was like the first like defi dao. You know, you had Maker DAO before that, which actually we were participants in as well. Maker was quite different than what is like was the, the norm of the dao space ended, uh, up becoming against the norm. Compound really set that bar back in May of 2020. And so that's when we got really involved in DOWs. Um, and there's so much more to cover here. So which way do you want to take this?

Speaker B: Yeah, I want to, I want to definitely dig really deep into the governance aspect because that, I mean that's incredible and I, I personally don't know enough about that. But I want to hit upon GFX first. So, you know, why, why did you launch GFX with a thought process of we're going to build products that are solving these problems versus we're going to build like this, you know, the solution to this one problem. You know, I thought that was an interesting differentiator that you guys were launching with. Was that kind of a, kind of a startup studio or product studio in some sense?

Speaker A: Yeah, yeah, exactly. Uh, I mean we certainly, I think I've like focused in heavily since then. But when you initially launched the company, Eddie and I, and we still want to get to this, but I think we've maybe become a bit more pragmatic with the years that have gone by now almost will be four years here in a couple of weeks. Um, we love the story of like at&t and Bell Labs. We thought this idea that you have this cash cow company that has a very traditional business that then is able to like fund and support all this fantastic like innovation, uh, that was so important for the United States for like over 100 plus years. I mean like all of the greatest inventions pretty much came out of Bell Labs for a very long time. Um, and we thought as we looked around the industry there was just so many things we wanted to solve. Um, and we saw a lot of companies raising a lot of money and we're like, gosh, well, given what we've known, the people we know in the industry, we could solve a lot of these problems, um, once we got down to the nuts and bolts of it. So that's where we really, the product studio idea kind of came from was that like we had a lot of things Eddie and are very good at executing. Like, that's kind of our. Our mantra over here. Very much our mantra and governance as well, is like the thing that people will pontificate on or discuss for a long time. We'll just get in there and while you're still debating it, we'll have completed the task. So that, that, that's kind of the differentiator for us. So that's where we started off. Um, we still do a number of different things, but in the grand scene of things today, oku, and since we launched, OKU two years ago, has very much become, like, the vast majority of our focus. But there's always many ideas percolating throughout the company. Many different. Like, we have a number of, like, sub products that exist that we don't really market because it's not worth us marketing some of these things that are relative to the opportunity of marketing oku. Um, but yeah, we, we love that idea. And I very much look forward to getting even more back towards that someday when we can have more of these things. Because there's just so much opportunity in this industry. I mean, that's what attracted us to it. That's what's kept us in this industry for the last now almost seven, eight years all.

Speaker B: Uh, right. So I want to talk to you before digging into OKU interest protocol. I. I know you mentioned the timing of when you, like, but you mentioned before we actually started recording, the timing on that product launch was not. Not ideal. Can you tell me about, like, what was or what is interest protocol and tell me about that timing?

Speaker A: Yeah. So when we were, uh, we were working on first our card product, Poppy, and then on the back of the card product, we were like, you know, it'd be, um, really useful if there was a Bar Len protocol that we could plug in this Defi Power Visa card into. And at the time we heard I was growing sour on Compound, I'd been a very active contributor for a long time. Um, the idea of compound V3RE, which is not the V3 everyone knows today, that was back when they were doing Compound Gateway and Compound Chain, was super interesting to me. That ended up kind of dying, and I was kind of a bit dishoned by that. We all, at the same time, were very much in the weeds at MakerDow, one of the larger delegates over there. And we said, what if we kind of marry these ideas together and we use it and plug it into the Visa card? Uh, and so such was, you know, interest, uh, defi, boring. So, um, we developed that in like a sprint of like six months it was, it was like really fast, like a completely like ground up new D5RLM protocol that was very novel, like nothing at that time had been seen. So it was a lot of new code, a lot of new stuff that needed to be tested, multiple audits later, etc. Etc. Also keep in mind through this time period, like the market's still ripping, uh, more or less. Um, and it wasn't really until June where were like had scheduled our launch date. We were in a fair launch. This thing we, everyone we started this

Speaker B: is June 21 or 2222 this June

Speaker A: 22, June 22 we were going to fair launch this thing. And okay, I forget if we had, I think we had already announced the, the launch date, um, of the protocol. We were launching the protocol and then we're going to do um, the token launch a few days after that. We designed a novel onchain auction to do this as like a fair launch. Because at the time there was a lot of talk about fair launches and we thought that made a lot of sense for what we were doing. Um, Terra Luna deleveraging. An explosion happens within like two days of this. I think it was like the day before, like the day of, of like the auction actually started and the protocol had already gone live. And so we're like, so we punt on that, let the protocol run for two months. Getting up some TVL run it in August goes okay, but definitely not to everyone's hope. And then like the real kick in the gut came two months later, I guess three months later when FTX exploded. And between Terra Luna and FTX exploding there was a mass. You know those are two massive deleveraging events. So the appetite to uh, go long on chain off chain vanished. And uh, at that point that was like, okay, well that's most of what you're focusing on trying to do. So we continue to spend some more time. There's a lot of updates got pushed subsequently that a lot of different things we tried. The protocol is still live and up and running today. It's, it's still there for folks to use. Uh, but yeah, I mean that was a huge learning experience at the time. That was definitely like the biggest product we had launched and like the first real like production level product that we had launched of size. Um, now it certainly pales in comparison to present oku, which is substantially larger on all uh, metrics. But yeah, at the time it was a great learning experience.

Speaker B: All right, so what is oku, you know when did you launch, like, tell me all about that process of ideation to creation to like, what is it?

Speaker A: Kind of. And for those who were in DeFi in 2020, the summer 2020, between this terra Luna and FTX spirit, we'll remember that it was uncomfortable, right? Like it was not exactly certain what was occurring. Like, any of the folks who are like presently mad or like disappointed about like the sentiment on Twitter, like I don't really think appropriately remember that stage of Terra Luna and FTX exploding. They certainly don't remember what it was like in 2019 when like DeFi barely existed and there was nothing to do on ch. Um, so around this time period we were very heavy into UNISWAP governance. We were like, like the most prolific delegate by far, when we still are. But back then it was just there was nearly no one participating, so it was very easy to be the most prolific one. Um, the Uniswap foundation, which at the time was just a grants program, was, was getting wound up and the folks there gave us a call and they said, hey, we're thinking about proposing this foundation. What do you think of this? And I'm like, oh, that's a fantastic idea. We need at the time Labs is very much focused on its core priorities. Was like very much need someone to focus on the down to steward this thing. We as a delegate can only do so much. Um, they were asking for, I think it was at the time, 30 or 40 million dollars in funding. And so I was like, what do you want to do with all this money? This is like the most money that has ever been requested at any dow. Like, forget about, just use any dow. Um, and they're like, well, Getty, what do you think we should do with the money? And I was like, okay, I'll come back to with you some ideas. Um, and one of the ideas is what we had pitched that is like what is OKU today essentially was Uniswap at the time had 90% market share on Dex, uh, volume. It had less than 1% when you compare that to overall spot trading volume in the industry. So all the centralized exchanges just blowing it out. So the question is, why is everyone still on these centralized exchanges? And at the time the core talking point too was ftx. Why is everyone still using this trusted platform, ftx, Binance, Coinbase, Run? This beautiful Defi alternative exists? We're like, well, it's simple. The user experience of what any of these centralized platforms offer is far, far greater than um, defi. And unfortunately it's still Very much the case today. Um, the probably resources that Coinbase has spent on improving just their user experience is probably in greater sum that all of the Defi companies combined. Right. They have a multiple year lead on DEFI as an industry and they just have far more resources at their disposal to do these things. Um, our whole pitch was let's reimagine the user interface because what is the Uniswap interface? And I still hold this view today, what is the existing Uniswap Labs interface is not going to appeal to a Binance trader. And Binance accounts for almost half of old industries volumes. And these are very different products, they look very different, they feel very different. Um, they don't have the same feature scope. We were like let's go in there, let's close that gap. Let's say, you know, protocols are great and lovely but there's a lot of people focusing on building novel protocols. Let's just focus on the UX component of it and let's integrate all the leading protocols into one interface. And that was really what OKU was born on. So we spent 10 months developing that, launched that um, in July of 23. Um, so we'll be in a couple weeks here the oku's two years of uh, being launched and since the oku now integrates 36 blockchains, about a dozen uh, bridges, about a dozen order routing systems, a native on off ramp thanks to the Bridge XVC folks, um, we have Uniswap as our core Dex offering. We now have Morpho who are helping with their chain expansion uh, to do borrow lend. So it's really like can we get all of the best pieces of the industry that is generally very fragmented and all over the place and kind of confusing for new users into one interface that is very easy to understand and very seamless. Um, and so we've been on this march from like building what was initially very pro interface and picking a very specific demographic to solve which was like the Pro Uniswap V3LP to now being like okay, we're a bit more of the prosumer category. So yeah, that's, that's in a nutshell, uh, what we're trying to do with OKU and how it kind of came about. There's a lot there I'm still skipping over.

Speaker B: But so, so OKU is not a, is, is a Dex aggregator because you mentioned it was.

Speaker A: It's built Unisp aggregator, it's a Bridge aggregator. I like to tell folks we're very much like A, you know, meta aggregator. Um, because we have just so many different things uh, that is available to users that you'd otherwise have to go and find on your own. And if you're new to this industry, like you're not going to really understand why you go to Jumper for this thing, but you go to this other thing called Rhino and now you're over here and next second I need to be on one inch, but actually one inch is in support it over here so I need to go use this other thing called Ice Cream Swap. I mean it's just like the, the list of apps and protocols and things that you need to know that we just assume people will somehow figure out is absurd. Um, so the more that we can integrate these things into a seamless layer for folks, I think the, the closer we are to actually onboarding more people into the industry.

Speaker B: So you know, they say like uh, the way to make money on the Internet is like bundling or unbundling. So that makes total sense that you're putting all these services in a simplified manner together and you.

Speaker A: And on, on that exact point of bundling, unbundling. Like we very much have gone through a phase where all the incentives through like VCs and ICOs was on creating just net new things and that's well and good but now we have way too many things so now we need to go through this bundling phase, uh, which I think like we were one of the first to like recognize this and now there's a few more folks who come onto this narrative that like owning the user experience and being um, the smoothest and easiest place for folks to actually trade and do their deep activity on is going to be the most valuable. Um, and at some point it'll probably come back around. We're probably like unbundling will become important again. But I think we're at least five years away from that. We got a lot, a lot of work to do.

Speaker B: So. So why is UI UX so important? You, you were mentioning that like the binance traders want to trade or didn't like the Uniswap ui uh, ux so you know, that's why the usage was low or you know, what are your thoughts around? You know, what was the key insight here? Like oh, we need to make it easy for people or what was that insight?

Speaker A: You know the, the key insight was that what is a truly like, what is a product experience that is going to support millions of users is a very different caliber than a product experience that needs to support tens of Thousands of users. Um, you know, it's the kind of thing where it's like, you know, vibe coding is all the rage right now. It's like, because you can sit down, you can like bang out an app, but the app you're banging out at the end of the day is not something that like hundreds of thousands of people are going to touch, generally speaking. Right. Like if you want to build a thing that is truly going to serve. And in Binance's case, I think it's over a billion users. I mean that's a completely different ballgame when you go through each of these magnitudes. Um, and so that's what defi, in Ford's word, defi didn't need to do this, right? Like, even today, like the industry still, it's grown a lot, but it's still relatively small. How much time and money do we need to spend in making these applications? But the, you know, the feature full of finance, I mean, like, what defi platform do you know of right now that you can pull up and you can see like a full blown account history from? And then if you can see your account history on that thing, does it let you download it in a CSV? And is that CSV formatted in a way that it's going to help you do your taxes? Or does that platform even send you anything to help you do your taxes or do you any favor other than like, here's a ref code to, you know, one of the tax accountants. It's like that stuff's uh, the, the things that we take for granted in these centralized platforms because they have such resources and such users that they can justify the investments in building these things and getting every little nook and crane that's generally not thought of like a important thing, uh, until you need it that one time a year where you're like, now I got to do my defi taxes. And this is an absolute nightmare because there's like very limited tooling and not to mention none of the dapps even consider it or like the security side of this.

Speaker B: Right.

Speaker A: Like, you know, a lot of defi platforms, including ours, like the hail how great it is that uh, renowned custodial. And that's true, it's fantastic for now. Custodial. The flip side of that script that most people don't like to talk about is then how do you get users to understand the security implications of them being, you know, non custodial? So for like what we did for oku, for example, uh, we integrated blockade, which is this awesome Technology that will check every single transaction that's going to your wallet. Particularly in our application swaps is the most important one, swaps before you execute them. And the understanding in DEFI right now as an industry is that the onus is entirely on the user and maybe on the wallets. Like a lot of wallets have started to integrate blockades, API and some other technology to help, you know, users from getting drained, et cetera. But the expectation for applications to do anything that an audit on the smart contracts doesn't exist really. And it's like to us that was just like a basic thing. I've had so many folks ask us why'd you integrate block it? And I was like, because it's clearly the right thing to do. I don't know why no one else has done it. But these things are like, what's the difference between a DEFI consumer application, what is an industry leading platform, Binance, Coinbase, et cetera. And we just got to do everything to close that gap. And it's unfortunately a longer road than most would like. But the beauty of a lot of these new AI tooling and whatnot that's coming online, uh, I think is going to meaningfully improve um, the rate in which we can get there.

Speaker B: So I want to talk about user acquisition because I think in crypto it's one of the, you know, people are, there's a lot of credits of crypto that are like there's no use cases, you know, you know, etc. Etc. Um, but you know, I think that uh, there, there are lots of use cases. But I think that especially with the, with the crowd of that there's a lot of founders out there that will build something that they think people want and they end up launching it and like they don't get any traction. I think in your case, obviously there's clear product market fit before you guys started building your products. But how do you guys, how do you guys go about user acquisition? Was it like, hey, we're gonna use meme marketing and like get folks that way we're gonna spend money on ads or like how do you, as a defi builder or someone who builds crypto related products, how do you go about that process of acquiring?

Speaker A: It's really challenging. Um, that's something that we had taken oku a while to get good at and it was only possible through a lot of the things we've learned on prior products like interest protocol, um, that we launched. So I think the first thing is like you really need to know like what's your marketing? I think there's unfortunately a good number of founders that don't really understand like the value prop to the thing that they are building. And from there, like, not only would they view to be the value prop, what they understand the user's value prop to be to their platform that they've just built, like, making sure that there is no disconnect between what I am offering and what they want. Um, and then you really need to understand the actual opportunity, these things. So for us, like, you know, a lot of what we looked at is on the early side of like, what's the opportunity? This was like, well, look what's possible on the centralized exchange side. Obviously there's huge comparisons here, what's available in the market. And you know, these things don't drive over perfectly. Like we're trying to make some assumptions that we can actually migrate millions and millions of users from off chain to on chain. Uh, but okay, let's make that assumption for now because we think we'll develop the tech to do it. And then also, okay, as of like if we launch tomorrow, what on changers can we get to come over? What products are they using right now? So understanding these things I think is the first component to make sure you're not like wasting your time or you know, money that you've raised, um, you know, your capital, resources, etc, because it's all limited and obviously you have, you can have other good ideas too and you need to make sure the thing that you're spending your time on is the best, the best one. Um, from there it's really about okay, once you understand the user and understand how many users there are now, you just go to where they are and what they're doing. If you have a good understanding of these things, it becomes a lot easier to say, okay, I'm going to go target folks, um, that are doing bridges already on Jumper, let's say. And every single user that's on Jumper, I have a very easy pitch for them. Okay, we have a dozen bridges integrated, including Jumper. You can come on here. Worst case scenario, you're going to get a bridge just as good as the one you're going to find on Jumper. Most likely you're going to find a better one because I have the evidence from all the other, you know, quotes that I'm collecting to know that on average it's maybe only the best one 50% of the time. Um, and so that, that really helps is like once you understand the user going after, can you fine tune the pitch for that sort of user. And then the last step there is delivery to that, like that message. So once you actually have the message, package it up. Are you using Twitter as a platform to reach folks? And then how are you tuning that? Uh, just, are you post down there? Are you using ads? How are you using those ads? Are you going to Reddit to the right subreddits? Are you marketing via direct reach? So like there's a ton of different buckets here. It really depends on what you're marketing and what's the available things. But for us, a lot of it for the first six months was just learning all the different tools that exist, figuring out every single channel that we can tap, testing them out, going them as like miniature science experiments. Okay, we're going to run this thing based, uh, off of this knowledge. We think this will do. You know, this. Okay, let's run it two weeks later. Okay, now we know if this did or didn't do well. Now we know that we shouldn't do this again or we should do it again and we should do it in larger size. And we just always took a very like linear and scientific approach to it as much as possible. Uh, particularly because, you know, at the time we didn't know better. Now fast forward a long time later. Now we've, we've learned a lot about how to spend our dollars and where to manage our marketing channels and how to manage them. Um, but we're always learning new things too.

Speaker B: So would you like individually dm, um, traders, like, hey, check this out. Like we built this great tool for you.

Speaker A: I mean it's not to say we've never done that, but not really. Like a lot of it is like, how do you message a hundred people at the same time or a thousand people at the same time?

Speaker B: Well, I think Twitter, when you say that, I'm m like, oh, just post

Speaker A: the next, um, Twitter is well and good and that's definitely like the town square of the industry. A lot of where we spend a lot of our time is on dBank. So like, for example, like we have a much. I guess actually these days our Twitter following is probably larger than DBank. But tweet bank for a long time was our largest following because that was a, uh, very slept on ecosystem. Um, and they have that functionality where you can actually direct message particular wallet addresses. Now granted most wallet addresses there aren't active, um, but about 10% I would say are like 10% of like, or 10 to 15% of the industry's like Active Wallets that are participating in DeFi, which for us is our target audience, is there. Um, and where you're going to get the folks that are going to transition over, I guess is the other component of it. Know who you're not ready to market to. I think a lot of companies spend way too much time and money marketing to people that aren't going to use your application. And so we've always taken a very progressive approach to it to say like, okay, we know for the state of our application who's a good user for it. Obviously we have a goal to be support all these other people coming over from Coinbase and Binance, but I would light the whole marketing budget on fire and probably the rest of the company if I just tried to go and compete with Coinbase today. So, uh, part of it's also knowing where you're at. And so we very progressively started off for saying, hey, we're going off of LPs and Uniswap V3 and active LPs and then move down as we add a new function, features and functionality onto OKU. But yeah, DBing has been a fantastic tool for us. There's a few other ones that kind of fit that same bucket of you can message active wallet addresses without having to like literally send on chain transactions.

Speaker B: All uh, right. So when you're thinking about generating revenue in crypto, I feel like there's always, there's two options. Either we're going to generate US dollars and like we're going to go that path of regular company or we're gonna go token route. Uh, what path did you decide with oku?

Speaker A: OKU is very much the, the, the former. So uh, a, ah, cash, you know, uh, equity business here. So we're not planning on launching a token today. Um, I think we've done a very good job getting as far as we have with the platform, um, without launching a token, without, you know, I didn't want to have any really preserve perverse incentives, uh, for folks to come on and do something that the other wasn't otherwise wouldn't want to do, uh, because that just masks then whether or not your product is valuable and then you're just kind of procrastinating on whether or not it is and then next thing you know you're, you know, how many more months into your Runway and when you didn't even know the real problem. So the nice part about us is at the first it was brutal. I mean when we launched Oku, we did like no volume for the first Six months. But we also like were told regularly exactly what was wrong with the product and we were like, that's fair. Okay, I guess we got to go fix that. And we just went and fixed these things and we just worked our way down the to do list. And sure enough, more and more people kept using the application. And that's, that's Benchley compounded um, into what we are today. So um, on the revenue side of things, we have a kind of a bit of a different revenue model than most folks. And I think now it's becoming more obvious that this is like a revenue model that more projects are taking to. I think we were one of the first ones that had done this. Um, when we launched oku, a lot of a, uh, part, a big part of the reason was to support the Uniswap dao's chain expansion efforts. Um, Uniswap Labs didn't really care about going to new chains. But we also witnessed firsthand with Uniswap V2 that not going to new chains was very problematic for long term growth. Uh, if Unisop be, if uniswap had, when V2 was around, expanded to the leading um, L2s, we probably would have prevented the vast majority of competitors that we have today. So in the long run, like the costs were huge to the organization. So we, with that in mind, we're like, okay, let's try not to screw this up for V3. Fortunately, the organization was probably still net too late. But better late than never is what you know, we kind of think. And so we went and took the Uniswap protocol to a little over two dozen new chains. So things even including like base and whatnot, uh, we've done the vast majority of new Uniswap deployments as part of that. Then these chain teams, um, they'll enter into a deal with us where we kind of will offer the interface as a service because it's also a great thing for them and their ecosystem. So if you're a new chain trying to get off the ground, the cost for you to have a robust, thoughtful defi interface that serves everything that we serve, which is essentially everything you need on a chain these days. Um, I mean, would it cost you a ton of money, millions of dollars? Instead we can offer that at a small fraction to a chain, um, because we have all this infrastructure and the costs are spread out across all the chains and we support 36 chains right now. And the vast majority of those chains are folks that we have ongoing arrangements with. So not, um, A perfect setup. But it's been very good, particularly for the last couple years, to allow us to invest more into the product on our terms without being and entirely reliant on venture funding. Um, because a lot of VCs, as much as they talk about oh I want you back consumer products and I want to back apps, they do not. They, they want a token and they want a protocol so they can get liquid as fast as possible. And for what it's worth, I don't blame them uh, for not wanting to always write us checks. Uh, we've, you know, I think in the long run it's made us much stronger than would have otherwise.

Speaker B: What are volumes today?

Speaker A: Um, do about $200 million in volume A month.

Speaker B: Wow, that's amaz. That's incredible. So from 0 to 200 million, that's uh, to 200 million per month.

Speaker A: It's very much like 0 for six months like we were doing. I mean literally, I think in the, if you add up the first six months of volume entirely, it was 30 million. Uh, so the, it was, I didn't think it was going to take us that long to kind of get going. Um, but we stuck with it.

Speaker B: Amazing. All right, so you said something that I think is like pretty damning because you're, you're so involved in all these different onchain ecosystems and, and governance and etc and you yourself are like I don't want to launch a token because it creates these mess up incentives. Like that is crazy telling from someone who, I mean I don't know many people that are as deep in the weeds on governance as you. So like you and you and your people, your, you and your team. So like that isn't that like kind of a signal that hey, maybe these things are not meant to be? Maybe Dows are like kind of a, in a current form, kind of failed

Speaker A: experiment in the current form, very much a failed experiment. That being said, I still believe strongly the Dows are probably the most interesting thing this industry has come close to discovering. Um, I think they've been largely misunderstood and generally just misimplemented. Um, but I think it's actually probably one of the best inventions that we've had. Um, it's just really hard. Structuring incentives, structuring labor, structuring resources is, is an age old problem. Um, but we came and I think are still in the net, very close to having a thing that is like an idealistic meritocracy combined with like a capitalistic system. Um, and that's awesome. I mean, like, I. I just think. I think a lot of folks that when they talk about Daos, have had the experience that we've had in them on both sides of the spectrum. Like, my day one experience that I will never forget, which will always keep me excited about Daos, is when Compound launched this token. We were one of the largest participants on Compound back when I was the trading firm. Um, at that point, our only opportunity to give the team any sort of input or any input to the protocol, which is verbally like, hey, Robert, it'd be really cool if you guys did xyz. And, you know, they'd be like, cool or not. And maybe they would do it, maybe they wouldn't do it. And that's just kind of the way things have always been in any industry for a very long time. Um, and even, like, elections and, you know, governments and democracy, it's like the same thing. It's just like, okay, you're going to like this guy. Maybe they'll do the stuff, maybe they won't do the stuff. Guess we'll find out. Um, in this, it was like, oh, this token is not alive. Um, you need to have a certain number of tokens to make a proposal. And I'm like, okay. At the time, we were big rap bitcoin, um, minters, right? I think grapefruit trading. And, like, the end was, uh, like the third largest, like, venture of wrapped bitcoins. Uh, and so wrap bitcoin was still a relatively new asset. Uncompounded, had a very low collateral factor, which is like, what allowed you to borrow cash against this thing. And I was like, it'd be really nice for our own operations if we could borrow more against these bitcoins. Um, so it was like, out of self interest, essentially. We're like, we should do this thing. So I go to the bosses, I'm like, hey, can I spend some time trying to make a governance proposal in Compound, Um, to raise the collateral factor. It'll help us make more money. And they're like, yeah, I don't spend too much time on it, but, like, sure, go for it. Um, and so mind you, I'm at the time, I think I was 20 or 19 at the time. And I was like, okay, no one knows me, or I have no represent, like, nothing online. The training firm isn't online. I can't name anything that would be, like, useful, really, to anyone to prove some sort of legitimacy other than, like, that this is a good idea on its own merit. And so I wrote that proposal it's still out there. Folks can find it. It's not like a long crazy document. It is like pretty straightforward, very logical. I went and like posted it up. Some other people were like, m, this is a good idea. And then we made it a proposal. Then people voted on it and then it executed it. And just like that forum, uh, post became a functioning change in the protocol without the team having to do anything, without having there to be some like, well, who's this Getty guy and what is he saying to me? No one asked me how old I was, what my background is. Do I have a PhD in economics? None of that was necessary. The fact that you can do that is so damn cool that I will never lose hope on daos. Um, I will. And we have as an organization, criticize, criticized implementation of many daos and what if so called daos in the space. Um, but the underlying idea of this organization of you can have a good idea, it doesn't matter who you are or what your background is. If it's a good idea and people agree it's a good idea, then you can make the change that's, that's too damn cool to give up on.

Speaker B: So what are the problems with daos today?

Speaker A: There is a huge problem with incentive alignment. Um, you have the full like kind of gauntlet of problems. You have one side things that are, I guess like the biggest problem of all is the things that are called daos that aren't daos. So you're not a dao if you don't have a token that I can go buy or otherwise people can delegate votes to me on and that I can go create an on chain proposal and that if this proposal executes, it actually changes the code base in your protocol. If you can't do what I just said, you should not be called a dao. This is the vast majority of things that are so called daos right now. That's by far the number one problem. Um, once you get into this much, much smaller bucket of people who actually even have the infrastructure to be called a dao, then it has to be, okay, what can token holders actually do? Um, because what you'll see is a lot of teams will control, okay, yeah, I'll have a dao. You have these contracts, you can pass a vote, but functionally speaking, the governance contract doesn't control anything on chain that's still owned by a bunch of multisigs. Um, this is like, I mean, optimism. And a bunch of other like leading protocols that dub themselves daos are still Very much not daos in the grand scheme of things. Um, and you know, folks will say, well, progressive decentralization. Progressive decentralization. I don't want to. These people own um, billions of dollars of your token or hundreds of millions of dollars of token. And you're saying they're too dumb to govern your protocol, but you would welcome them purchasing it and bidding your token all the way. I mean just, it's just absurdly backwards. So it's very much like, oh, I trust myself to govern it, but not all of my token holders. Okay, so that's, that's that like next layer. Once you actually give the folks power, then the question becomes, um, who has the power? What's the makeup of this? And this is probably like even if you solve all these other things, this is where it gets the trickiest part. The other things are pretty easy to solve. The trickiest part is how do you actually make an incentive set up where the folks who have these tokens actually believe it is worthwhile for them to come and participate in governance. Um, and what we've witnessed in public companies or private companies or anyone that is like has a friend or family member or something that they've heard about is on like a board of any organization could even be a non profit. It's like really complicated to have the right people who like sit on boards of a company or the right people that vote in these companies. In the grand scheme of things, like how many people, if like uh, everyone probably listening to this, own some type of share in a company, have they actually ever voted with these shares? Probably not. Like, generally speaking, like most of us just say, okay, well like the largest 10 shareholders are going to do their thing and if only that happened in defi, we probably would be fine. We'd probably be saying daos are success. But the reality is in most cases the top 10 token holders are not participating in governance. And worse, they're uh, probably not even delegating their votes to someone to participate in governance for them. Um, and then we'll go to the layer Depot, let's say that they are. There is of course there's some DAOs like at Uniswap where a lot of the participants have delegated votes from the largest token holders. Now you get into the stage where it's like, okay, you got a bunch of people who don't really have skin in the game trying to solve problems that they think they understand but not necessarily really understand, not really incentivized to understand. Um, and so it just gets Just really messy. If we had something that looked like shareholder voting on a public company where yeah, okay fine. The Joe Schmo who owns a thousand dollars of Apple stock doesn't really have much of a say other than what they legally have by owning these shares. Like I'm sorry Joe Smo, but like we appreciate your investment but you're kind of along for the ride here. Um, but if the 10 largest aperture like shareholders just didn't participate in governance that would be really weird. Like right, like the private markets and public markets would be like what is going on with these largest uh, equity holders are just not participating with for some reason that we've accepted it as the norm of our industry. So. So um, that's, that's my rant.

Speaker B: So. So I mean from my knowledge the, the lack of participation from these larger owners not doesn't come from a place of like apathy. It comes from a place of like they're an ria which means all assets have to be stored with a qualified custodian at all times. And you know, you can't maybe Anchorage or Bitgo or One of these QCs that don't allow the UU to, you know there's no functionality for you to

Speaker A: actually vote that, that used to be the case if you go back um, three or four years ago. You're absolutely right. Most custodians didn't have the functionality for voting. Fast forward today pretty much everyone does. If you're, you're not I wouldn't say like a, a big custodian if you don't have the functionality to support like typical um on chain voting. Um, most of the main custodians do just because at this point enough of the VCs do have governance tokens. They to your point have to be held by one of these guys. Um, and although the VCs might not be participating in governance that often, they are smart enough to make sure that if they wanted to that they could.

Speaker B: So then what do you attribute this, this voter apathy to?

Speaker A: I think I attribute it to that you have a bunch of folks who are used to doing very um, passive investing. You know essentially the job of venture capitalist is generally like to make very high risk early bets but is generally a hands off individual. Like you're probably not there on a day to day basis or maybe even like on a like a quarterly basis like giving feedback or critique to the management team about how they should do their jobs. Um, which is generally the correct thing to do except for when these things are no Longer startups and they're multi billion dollar valuations that have no governance, no custody, no nothing going on. And all of a sudden now you have like this mothball of money rolling around and who knows what could happen to it. Um, you know, it's like in the, in traditional world if you go make a seed startup, right, you probably don't have a board. If you do a series A, maybe you're at that point establish a board. By time you're at series D or E or one of these like letters out there, you definitely have a real corporate governance. There's a real like um, I don't want to say machine but there's a process there that is well defined there. There are countless daos that are way bigger than the vast majority of series D companies that have nothing close to what the same governance structure is. Um, so even if we set that as the ball, we haven't come close to it.

Speaker B: But. So let's pretend voters were extremely, they participated every single time and it was like 98% participation, which is insane. But let's just pretend. Would that solve a lot of the issues in your opinion or.

Speaker A: Yes.

Speaker B: Really?

Speaker A: Yeah.

Speaker B: So you literally think that the, the issue with daos is simply the lack of participation from, from the.

Speaker A: Well, I would say why is the lack of participation is, is what it is. The lack of participation is what it is because the. Generally speaking the daos don't actually have any power. So like your ability to participate is like you, you maybe you could in the. So like an example of the so called dao, you don't actually have any power. So then like the apathy is massive because it's like I could go right up the greatest idea ever, but if like no one believes it can get executed then like no one's going to care, no one's going to read it. Um, and so that's what's happened now. It's like fast forward to present day. You even have bleeding daos where if you brought an ambitious idea to the forums maybe you would get some good faith engagement from it. But chances are half the comments are going to be from some person somewhere who doesn't know anything about running an organization or a company or size giving their two cents on your proposal. Um, or maybe you're going to get a bit luckier and you're going to have a student group give you some comments on it. Uh, but the idea that you're going to get a real capital allocator and someone who's used to like managing Millions of dollars of capital and figuring out how you allocate this, how you grow something. Those folks don't participate. Maybe they don't participate because they don't think it's worthwhile. But I would say a lot of those folks don't participate because they haven't understood the value in these things yet and that there is a huge amount of value and that they could do it. Um, why they're not doing it. I would say, yeah, ah, as a misunderstanding.

Speaker B: So when you say that these, you know, the, the votes actually don't matter often because if you make a proposal, maybe the actual dao and let's pretend majority wins and your proposal actually wins. And you know, what if the dao doesn't implement that? What if the, the rule set allows them to be like hey, I know this is voted that we should do this, but we actually don't want to. Do you ever come across that or, or no, like if, if it's voted in like they will, they will execute on that.

Speaker A: I think you know the biggest daos where you have um, some sort of governance, like you know, you're not going to run into that scenario too much. But unfortunately there's not actually too many of these things. The vast majority is this case of I'm pretty small dow. Maybe I make a forum post, if it goes up, maybe I can get them do it. Maybe the team at that point is going to block me from even making the forum post or making the government's proposal. If I make it the market a spam and just take it down. Um, and then even if it gets passed, if it revolves like some team effort, they're just gonna be like, look like the proposal requires us to go do X, Y and Z things. We just don't have the time to do this or we'll do it later. Like um, the beauty of what Compound invented was this component that removed the team from the equation. It was that the onus was on the proposer, if you were the proposer, made this thing, you embedded the code change of the protocol into the proposal such that when I had made that wrapped bitcoin proposal with my first one, once upon a time their team didn't have to do anything. As soon as it was past governance went through its 48 hour time lock, execute it. And it's like that, that's, that's the coolest part. Um, a lot of these so called daos, you're still reliant on the team actually like wanting to do the thing that was just agreed upon by the dao.

Speaker B: But I guess m, you know, to push back there, it's like, how am I going to know more about this specific protocol than a team? The team, they're, they're working on this all day and night. And sure, maybe I can suggest some things here and there, minor tweaks, but like, at the end of the day I feel like the core team is going to know more about the protocol versus versus the people that are observing and participating the protocol.

Speaker A: Maybe. But a lot of the time, a lot of what needs to go into these things is just business decisions. So take for example, um, another proposal that we're kind of known for was adding the one bit fee tier at Uniswap. So when, um, Uniswap V3 launched, it had the uh, 1% fee tier, uh, which is very common for these days. Meme coins or tax tokens, stuff like that. Um, the 30 bit V tier was the most common one since that's what Uniswap uh, V2 ran on. And then they added a five bit V tier. And we actually were just starting GFX Labs, just leaving the trading firm when we wrote this proposal, which was if Uniswap wants to be competitive on stablecoin, Stablecoin trading, which at the time curve was dominating, um, their house be one bit feet. Because if there's a 5B, no one's going to trade stable coins and get charged five bips every single time. That's crazy. And Dan Robinson and a few folks, you know, Dan Robinson being like one of the fathers of Uniswap and other prolific folks were like, this is ridiculous. This is the race to the bottom, et cetera, et cetera. Um, which they, you know, weren't wrong. Like it could be the race to the bottom. But our argument was this was a necessary thing. And so we actually had like a good discussion on the forums about this. There was many tweet posts, you know, Twitter posts that were engaged, uh, and eventually went to vote. And it passed. And the one bib was implemented. Month goes by, Dan and some other folks come out and say, you know what? I was clearly wrong. This was a good decision. And it was the kind of thing that the tactical work here, like zero. I mean it was like a very simple proposal. The whole value in it was someone had to have the idea, draft the thing and then champion it through governance. And then the product of that was now Uniswap became a huge venue for stablecoin trading and took a big chunk of market share away from Curve at the time and also did a great job at, um, positioning the protocol to compete with centralized exchanges. Because all of a sudden, very often you could do stablecoin trades on chain cheaper than you could off chain. And it's made a lot of the off chain exchanges go into like zero fees for the stablecoin train, which is something else we also debated at the time, but we decided not to do a zero bit fee. Some. Some other day we'll do that.

Speaker B: So, like, what would you say daos are good at today?

Speaker A: Daos are good at owning a thing and spreading the ownership out amongst a lot of people. Um, I would say you could say a company is good at that too. I would say it's. A company is only good at that to a certain point. Right. Um, it is very hard for me to go buy, um, public shares in like foreign companies. Right. And so the same idea, if you're like, not an American and we made like a company that was like unistraw protocol, like, there'd be a lot of folks who'd be excluded from like, participating in that investment. I think that the beauty of kind of tokenizing these things and the ownership is that it is decentralized. Like, that was the whole intention of DAOs, was the decentralization of ownership of these things. Um, I don't think that means necessarily that you like, need to have every decision go through like a robust vote the way it currently does. And I think that's when people go like, oh, should there be a company? Should there, should these things look more like companies? The answer is like, yeah, absolutely. Um, we've certainly trended towards that as we went from like having like these like, very idealistic daos that were just like direct token holder voting. Now pretty much every single DAO has a foundation or some suburb core team who's stewarding it, not to mention at least one committee, if not more committees to kind of help organize things. Right. At uniswap, there's, um, the UNISWAP Accountability Committee. Um, Arbitrend has multiple communities where it's like security. They have the entropy team, they have the foundation team, they have the labs team. You have lots of different ways to structure this. But at the end of the day, the thing that daos are good at certainly could be a lot better is this coordination problem. Um, I think it could be a lot better, but they have a lot of potential. I guess I hope, like, folks take away from like all this is that I don't not believe in daos I think daos in the current form are hard to believe in, but I also believe that there's immense value trapped in new things. I have, like, one of our VCs who invested in us years ago on the phone the other day, and we were talking about Uniswap and he's like, getty, why do you still care about this thing? Why have you not moved on? It's been five years of us participating in the Uniswap dao. And I told them it's like there is such immense potential for this organization. There's so much value trapped inside this thing. And that, uh, if we do get some good progress on how to govern this thing, how to manage it, um, not only can a lot of that trap value, um, get appreciated, but I think we can substantially grow it. And I think that the same can be said with a lot of organizations. And I think that's why ultimately these things do catch a bit. Like, people give daos a lot of flak and, um, if that's, if they get so much flack, the. Why the token price is so damn high. I mean, I think there's still on the net a lot of hope in these things that they get figured out, they get solved.

Speaker B: Do you think that the relevance of DAOs is going to decrease with the hopeful coming regulatory, you know, kind of clarity around, I don't know, everything from stables to just like crypto companies and, you know, with this new administration, I don't think so.

Speaker A: I think, um, maybe very temporarily, but I think in the long run I still have a very strong belief that these are probably one of the best inventions of the industry. Like, I think in the same way that like, stable coins are clearly right now been like, especially in the back of circle ipo, like, clearly this is one of the best adventures in the industry. I think DS will have their moment where, um, people really be amazed by. I think we kind of race to this logical point, uh, of trying to put a DAO on a very big economic machine, these defi protocols, when there's so many other simpler things that DAOs could be applied to that would have been better stepping stones. Why isn't my HOA a DAO instead? And what I mean by that is you have all these local organizations and local places where you have all sorts of different things that need to be cited upon and having a data layer that can make voting transparent, trustless, objective. These are hard things to do. If you went out and tried to make a voting system to do those things, like you would spend a lot of time and money doing that. Um, we have it already solved and it just needs to be packaged and it needs to be marketed and delivered into the right places. But whether that be hoas, whether that be like local communities, whether that be, um, you know, companies that want to use it internally, I, uh, think there's something really cool about using these systems to just get people to vote and agree on upon things and then execute change on these things. Ah. And it can be well outside the scope of crypto, but it can run wonderfully on these rails. So um, unfortunately I don't think we will be the people to build that technology, at least not anytime soon, because we're a little too focused on oku. But uh, I do think that's where daos will kind of have their like honeymoon, or maybe honeymoon is not the right term. But like they'll, they'll have their glow up then and then from there, like who knows exactly where they'll go.

Speaker B: I mean, a lot of you, you sound to me a bit like an activist investor, right? Hey, you know, if, if the, if the folks in management can change this and do this and blah blah, blah, then we can unlock value and everyone will win, et cetera. But like the public markets have figured it out, right? Like, I mean, you know, like that's the whole reason why, you know, uh, there's, there's boards and all sorts of these governance structures within public markets. So I guess, you know, in this future where crypto is no longer like criminalized, you know, won't more companies just want to be regular companies and go public and not have to deal with the on chain governance, you know?

Speaker A: Yeah, I don't think these things are um, usually exclusive. I think the tooling and I think that's part of the thing is people thought, uh, a dao so literally meant, um, what it's been on chain for the last few years. But I think it can mean a lot more. And I don't think this technology can't contribute to those organizations as well. I don't think you can, like, you can have a company that is a traditional company that also involves like the compound standard governance contracts and gives people in the company like a good operating system. Like viewed from a technology point, like I need an operating system such that I can have a thing that people are going to vote on. And generally speaking, this is mood for like a large number of people, right? Like a board's not going to use this, but let's say it's an employee owned company and you have a thousand employees spread across your employee owned grocery store company. And employees need a good easy way to vote on a system that they feel like they can trust and is easy to use. Like this is actually perfect. It wouldn't cost much to have like a great mobile app experience, um, where you can abstract away the wall inside of it but keep it all on chain, all completely transparent still. Such that if anyone did want to go in and look at the audit trail, who voted for what, when and what was the outcome, it's all there. So like, let's just view it from an operating system standpoint. Unless this is like pretty cool.

Speaker B: So in theory what you're saying is like the infrastructure and the way daos are created today and operated today that could be utilized in the future for publicly traded companies that, you know, they adopt that technology as like the operating system to do all that governance maybe, right?

Speaker A: I mean like not to go like totally off track, but um, there's two, two things on that. Like imagine if, imagine if there was like a dao of like all the like Chase bank holders or something. And uh, that's a bad example. Let's go with this. Like everyone who's ever bought something from Lululemon is in a doubt and they can vote on like what the next product is going to be. And let's give everyone like on their Lulu, accountability to vote for this thing. And you know, some people are going to say, well Getty, why is this thing to be completely trustless and like verifiable? It's like answers. It doesn't necessarily, but it'd be pretty damn cool if it was. And I think people would eventually, after a few of these, especially on controversial things, come to appreciate that it was completely trustless and verifiable and that you can now all of a sudden give large groups of people who otherwise wouldn't really have a say in things, saying things, and it's going to be beneficial not only for the consumer, but also for the company to arrive on valuable conclusions. And then if you really want to get out there, you can say, why isn't there a fourth branch of the government that is the people? Why is it that the only way for a law to get passed is to go through Congress and then through the House and he has signed, blah, blah, blah. Why isn't it that I can just have an American? You know, Americans cannot just write their own laws into existence and if you get enough support and you get enough signatures, the thing doesn't pass in like we have all these issues in our nation where folks unilaterally agree, oh, that like XYZ thing, like 85% of Americans agree that this should be passed as a law. And then it's just not for whatever reason. Everyone's like, what the heck? And it's just like, yeah, well all the lobbying groups and all the corrupt congress people, like these things don't happen. It's like, what if we had a whole system that was trustless, verifiable and transparent that everywhere old Americans could participate on and we could have our own separate kind of branch and way to author things into the government. I mean that would be fantastic. What a great way to kind of keep the government in check. If Americans had such technology and this would be a perfect application for it. So I think you very much take the operating system view to it and say, well, where could you put this operating system? Where do these problems exist and has a lot of potential. In my mind you're talking about direct

Speaker B: democracy versus like Republic. Right? And I think that, you know, the founding fathers, they really like worked on the, this, the governance system of the US like heavily because they're like, hey, it should be direct, direct democracy, you should be republic, blah, blah. I forget who said it, but it was like the biggest argument against, Was it Churchill? Anyways, the biggest argument against democracy is, is a five minute conversation with the average voter. You know, like the vast majority of people are not as up, uh, you know, in the weeds as you are. Like, case in point, me, like, uh, this is my full time job. You know, crypto is my full time thing. I'm obsessed with it. Yet I know 1% of what, you know when it comes to governance and what's happening there. Sure, I could get up to speed, but I'm never going to like be your level. So like in that instance, like I don't really. Let's pretend this was us deciding, hey, how should we, how should we run, uh, Uniswap? I'd be like, getty, hey, I'm going to hand it over to you because I don't know enough to, to put, put a valid, uh, a valid statement out there.

Speaker A: Yeah, I mean, I think it just depends on the application here. Right? Like in the context of governing, like a company. Uh, right. This is why the vast majority of shareholders have some sort of proxy when they, they vote and then they're not actually voting. Right. It's really only the largest shareholders who are taking the time to really understand what's going on. They have the direct line of the CEO into the C suite. They have like a real input there, whereas rest are in the proxy category. But, um, yeah, I mean the government example that I kind of gave there was probably a bit far fetched. But this is something that I've been thinking more and more about because there's just, you know, one like sensible issue after another where it's like, oh, the American population, 85% of people agree in this thing and it's just like the why isn't her case. Um, so in my mind it's just like, oh, there needs to be another way to like execute law. But yeah, again that's a, that's very tangential at this point.

Speaker B: Well, quick little side fact here. Uh, you know, Switzerland has some parts of their system that, that's a direct democracy and they have cantons that, you know, instead of states, they have cantons. And uh, in order to join a certain canton, if you're a foreigner, like there's some, there's a woman from the US and she lived in Switzerland for like 20 years and she uh, wanted to become Swiss. And it's a whole, it's a really hard process, right? She lived there forever. She spoke, you know, the three languages or whatever they speak there. And um, and then, so it came time to vote that the canton got together and, or maybe it was a township, I forget, but there's a group of people that she lived with in this canton, had to vote to basically say yes, we want her to become Swiss or no, we don't. Anyways, they ended up voting no because apparently she was a total asshole. Which I thought that was like hilarious. But, but anyways, like, I uh, do think that. I don't know, I, I'm, I, I get what you're saying about direct democracy, but I, I feel like smarter people than myself have, have dove really deep and, and have figured out, oh, actually the average voter is pretty apathetic and they don't really want to be that involved. They'd rather let smarter people, uh, do it for them. But, but who knows?

Speaker A: M. Maybe one day in forwards where this is not an opinion I particularly strongly hold. I just think it's a great example of how we could use this technology as an operating system and that it's one of the places you could potentially implement it. And even if it was implemented, I think it'd be a thing that would be rarely used. All right, because, and I talk about this a lot with folks when we author proposals at uniswap or other DAOs there is a real cost to authoring these proposals, which is part of the reason why not a lot of them get um, written is that you have to take all the hours to not only write the thing and the drafts and the efforts to get all the folks to come in and support the thing before it's even posted such that you know, you're not posting anything that's like dead on arrival. Then once you post thing you got to deal with all the bandwidth required uh, to answer just whatever whole spectrum of comments you're going to get. Like kind of mentioned before like these things are entirely public right now. Which I think is not the best thing where anyone, regardless of if they have no voting power or even a short on the position, you know, a short on the asset, can just show up and comment. There's no requirement for you to have any sort of delegate power, any state. You can just show up and start running your mouth there. And that's really frustrating for a lot of folks who take time to write these proposals is that anyone can just show up and just start yapping away about whatever and then like you're kind of expected to reply to these folks. We've actually begun to tell people that like if it's not clear you have a voting power, unfortunately we just don't have the time to reply to everyone. Um, and so yeah, I don't know, I'm kind of spiraling at this point but like there's, there's a lot of different ways to takeaway should be dows are very cool, just not in this current context. They have a lot of hope.

Speaker B: I want to talk about token design. You know Hyper ah Liquid I think, I believe that they acquire with the revenue they buy. It's 95% of the revenue goes to token buybacks. I, I believe something crazy like that. Um, and, and you know Hyper Liquid has just been absolutely crushing it. I, I forget their last uh, last time I checked their FTV but it was like I don't know, 44 billion something outrageous.

Speaker A: Yeah, it's crazy.

Speaker B: What do you think is the ideal token design? Should all tokens just be uh, should they use revenue to buy back the token? Should they just be like quasi equity or like actual equity? How should, how should. What is the ideal token design in your opinion?

Speaker A: Um, I think this is uh, a great place, as you were kind of saying before, where you can take a page out of what companies have done. Right. It's it Amazon is probably like the, the best example of like an organization that uh, was spending more money than it was making for a very long time. Um, and people kind of viewed this to be like a very odd thing. And now it's become normalized in the startup ecosystem for like, companies to just scale, scale, scale, scale. I think where I would really love to see on the tokenization side things, uh, occur is I would love to see daos begin to really bring in ample amounts of revenue, really to say, how do I monetize my protocol? But where the token holders need to give a little bit is let's, excuse me, let's make sure these folks feel empowered to spend that money too. Right? All these dowels that are launching in the grand scheme of things are still rather novel products and things. They all have a huge potential to further scale. The only reason you should be doing distributions, um, so whether that be buybacks or like quite literally distributing like, uh, revenue back to your token holders, is if you don't feel like you have a better way to spend the money, and if you don't, then like credit to you for like being honest and saying, I don't have a better place to spend this money, I would rather pay back investors. Uh, but if you do, then you should be doing that. And instead we're kind of in like this wrong category of actually I have no revenue and I'm going to take the money out of the dao and I'm just going to light it on fire. Um, cool. Good luck, token holders. So like, I think if we could get to that place where they have revenue but we'll accept them spending the revenue, um, that would be a great next step.

Speaker B: So you, you don't some people think that these protocols, not all of them, some, some protocols should be kind of public goods. Do you not ascribe to that? You think that these should broadly be businesses that generate revenue?

Speaker A: Yeah, I, I, I, generally speaking don't prescribe to like the public good thesis. I, um, think, uh, I'm a big believer that like, if someone is not willing to spend money on it, even if it's like near zero, that it's just probably not that valuable in reality. Um, I think it's a bit harsh, but yeah, like, I don't pay taxes for fun. Like, I pay taxes because I like living in America. I like to tell folks I view like, um, taxation less of like per se taxes and more like membership fees. Uh, I'm a member of the United States. I'm a member of the Chicago, uh, in Illinois. And so if I want to like, be a part of this membership and you know, keep this membership, then I got to keep paying these fees. Uh, and maybe I'm annoyed about like how like the Per Se club is run from time to time but on the net. Like that makes a lot of sense to me. Um, yeah, I think that that analogy carries pretty well which, which daos are

Speaker B: run well and which daos are run poorly. I want to hear, I want to hear all the, all the, the juicy drama.

Speaker A: Um, you know there's a big spectrum. Um, and you have a lot of different organizations that are different kind of places. Uh, you know, like it used to be like the pinnacle of like what a DAO was, was certainly like Makerdao a few years ago, um, where like you had the 10 or 15 active token holders who were participating regularly. You had uh, actually very decentralized setup, like a lot of different folks, uh, who were spread out, um, and not owner the same roof or the reporting to the same boss. And that was good for a time period. Um, um, Maker da has kind of always perpetually been like two years in front of like everyone else just because it's like they've been two years older than everyone else. Um, you've then seen other dows like compound where they've. Compound is like been one of the first major dows. So how to went from like, oh, we were the founding father of like this idea of like defi governance. After Makerd out we had this goated team. Uh, the goated team eventually decided to move on and work on new projects. Right. Whether that be like Super State, um, or I think Jason has a new project too. Uh, sa like a few folks and they only left and moved on. Um, now they had this alpha growth team come in and do a lot of business development for the protocol which actually did uh, a lot of great stuff for compound in the short term. And now they're working on establishing a foundation. So they're going through kind of that structure. Then you have something like optimism which has come a long way from being like they're very much on the progressive decentralization track of like someday we'll eventually become a real dao. And we're working our way very, very slowly to get there. Um, I will say they've come a long way in like figuring out how to allocate their capital. They're probably one of the most experimental organizations on allocating like op tokens and like their, you know, their governance token and um, have done a good job really iterating on that. We've been a participant in their grants program over there on um, the committee side of things for some time. Uh, it's been really great to see how like that dao went from just burning money, uh, in like the first season, uh, to now like I think just wrapped up the seventh one and all of a sudden like there's a lot more checks and balance, there's a lot more structure, um, there's very clear KPIs people are going forward. These things are being tracked. Like it feels uh, not like a company but it feels like we've uh, I should say they have, have done a good job taking a lot of what is uh, the normalized and traditional companies and like large scale companies and applying best practices. So I think I'd give them a lot of credit for like the work that they've put in there. Still a long ways to go. And then similarly, like Arbor Trim is probably the most lively dao these days. Um, there is infinite things being argued and uh, debated often. There's a lot of great proposals, but I mean I think I'd give them a lot of credit for being the most active. Doubt most daos at this point are pretty low in participation where there's very high uh, voter apathy. Um, I might just be talking our book but like we started off with like 300,000 votes at Arbitrum Dow, uh, when it initially launched. We're up to 4.1 or 2 million now. And it's just been because that uh, we've just showed up and we've just done our normal stuff. We just kind of tell people hey, this proposal is not a good idea, uh, more often than most. Uh, and that has seem to have attracted a lot of Arbitrum, uh, token holders to delegate to us. Um, but at the same time we're also generally very constructive with our feedback. We won't vote on things and just say no, this is a bad idea. We'll say no, this is a bad idea. But with these modifications that you can make at a proposal that we would vote for, and that's the thing I think I want to see more daos, um, adapt to is let's stop passing like the first draft of every proposal. Let's actually get to like a third or fourth draft and like then do it. Um, the downsides, it's going to be more painful for folks like us who propose a lot of things. But on the upside I think this will be much better. It's like you, you never take the first deal, man. Like you never take the first deal you always negotiate that they endow just don't understand that. Uh, and unfortunately a lot of people making proposals don't understand that either. So I don't know. I don't have any particularly like juicy, juicy tea. Oh, I do like the Uniswap DAO is currently bricked. No one can like make a proposal though that will pass because the um, largest um, voters uh, have all lost their backing um, from the largest uh, delegator of tokens, who's the largest token holder. So right now we're kind of in a bit of a pickle at Uniswap. We have to try to think about some new crazy idea to how to re engage uh, delegators. But yeah, yeah, there's a lot of interesting things happen there. I, I don't think. And I also, I mean as much as a bad rep dows get, I don't think the industry's lost their hope. At least not the folks who are actually putting in the work. They have not.

Speaker B: All right, Kenny, 10 years from now, where's GFX Labs?

Speaker A: The dream here for gfx and I think when I get there a lot sooner than 10 years, probably in the closer, the order of like three to five years, uh, is you can come onto the platform and you can do everything you've become accustomed to, not only in the crypto industry but, but in uh, a traditional brokerage account as well. So we're making a huge push on RWAs, um, you know, equities, commodities, bonds, etc. Bringing those into OKU and combining those with the defi experience. Like in my mind, the like dream is like, we get to a point where like you see a public company like SpaceX, they need to do like a massive debt offering to like build their Mars base on the moon. So uh, the Mars base, sorry, um, they need to raise a hundred billion dollars or something. So they're going to do a huge public debt offering. Um, a bunch of people invest in this thing. You know, those folks, they need leverage on these, you know, bonds that they just purchased. They go and they come to a platform on oku, deposit these things, get collateral, uh, value on Morpho for them, borrow cash against that. You have some other folks, right, who are lending that cash in. And so I think if we can connect all these different financial pieces, that's when it gets really interesting. Um, so the more that can be done to continue to simplify like the financial experience of not just like regular Americans, but also like the big companies, uh, and big institutions and Give them the tooling that we've begun to develop in this industry would be super interesting and impactful.

Speaker B: Amazing. All right, guinea is time for the closing questions.

Speaker A: Okay.

Speaker B: All righty. If you could instantly master any new skill to help your business, what would it be?

Speaker A: That's a great question. Um, I could easily master any new skill to help my business. I would probably say, like, can I say time travel? Does that count?

Speaker B: No, it has to be a skill. Can't be a superpower.

Speaker A: I really want. I just need more time of the day, if I can see. Yeah.

Speaker B: Um, maybe your skill could be, like,

Speaker A: um, I would probably say marketing, then. Like, marketing's probably like my. My weak suit. Uh, we have a lot of great. We have two great folks in the team who do our. All of our marketing, uh, and something I've learned a ton about and spent a ton of time on. Um, but I don't have the quite the intuition that they have necessarily on these things. So that's probably one of them. That's probably a pretty important thing for us, but it's a, ah, big focus we're making right now.

Speaker B: Love that. All right, what is one unpopular opinion you hold about, uh, startups or company building?

Speaker A: Gosh, I should have looked at, like, thought about these beforehand. I probably would. I would have had instant answers for you. Um, unpopular opinion about startups. Um, I think you should make money. I think that'd be the biggest one. Is, like, folks. Folks are just, like, go out there and they just run companies into the ground and they kind of forget to, like, make money or have revenue. Um, we've always placed a very high price on survivability. Uh, and in this industry, that is really important. And so, like, if it wasn't for the fact that we've, like, thought so much about revenue and, like, actually delivering a product that people are willing to pay for, we would most certainly not be around today.

Speaker B: Love that. All right, what does entrepreneurship taught you about people?

Speaker A: There's a huge spectrum of people out there. I think that'd be the biggest thing. Like, hiring and managing people is definitely something that I knew there was gonna be a lot of when we started the company, but I definitely still underestimated the amount of time I would have to spend on it. Um, so I definitely have grown my appreciation for the different ways people learn, uh, the different ways people interact with one another and communicate. Um, and that's definitely something I would tell other founders or folks who are, I guess, thinking about starting a company that you really should expect particularly if you're the CEO, to spend, uh, a huge portion of your time on guiding and leading the team and making sure everyone around you feels like, energized and excited about the journey. And you simply can't just, like, put on your headphones and like, sit at your keyboard and like, try to code the whole product yourself. Like, you're not going to make it that far. Like, the whole reason you're starting a company is to, uh, get many more resources than just one person to contribute to something. Because what one person can build is not nearly comparable to what, you know, 20, 100,000 people can build.

Speaker B: All right, last one. Is there like some. A piece of content, whether it be like a book, TV series, uh, podcast series, etc. That had a very major impact on your. On, on, on your life.

Speaker A: Oh, this is a great question. Um, there's. I, There's a lot. I don't think there's like, any particular one. Um, I think, um, the Hard Things About Hard Things is a fantastic one that like every founder should read. Uh, I think that is like a great example of like, um, if you're like, ah, you know, wartime CEO or peacetime CEO, I think that's like a great point. Um, I think there's a great book called Disunited nations that's really good about, you know, the global, the different demographics and the position of countries. Like, I do think that's really helpful to understand, particularly in this industry that is so global, ah, and our users are so over the place. Maybe if you're, you know, starting a local company, you don't care about the rest of the world, that's not as important. But for us, I think that's been helpful. Um, and then, I don't know, one of my favorite TV shows is the Newsroom. I think that had a lot of great lessons in it. Uh, Aaron Sorkin did a fantastic, fantastic job writing that, um, show. So there's a lot of good show, a lot of great lessons in that as well, about being in a team, guiding a team and like, the principles of, um, you know, standing shoulder to shoulder with your team members, etc.

Speaker B: Amazing. Getty. Thank you so much. This has been incredible. Where can people learn more about Oku and connect with you?

Speaker A: Yeah, um, I mean, Oku is pretty much everywhere we're across. Um, you know, Twitter, um, and you go to Oku Trade if you want to check out the platform.

Speaker B: Oku.

Speaker A: Yeah, Oku. Exactly. Uh, um, Oku Trade, uh, if you want to do, yeah, swap Bridge, check out our Morpho integration that we just launched on World Chain or anywhere else. Um, and then, yeah, my Twitter handle is just Gettyho. Easy enough to find.

Speaker B: Amazing. Thank you, sir.

Speaker A: Great. Perfect.