On The Brink with Castle Island – Details, episodes & analysis

Matt and Nic are back for another week of news and deals. In this episode:

• SEC fiscal year ending in September
• How to get accurate transfer volume figures for stablecoins
• How much volume do stablecoins really settle?
• Do SEC rules stop registered venture firms from voting in governance or staking?
• CFTC settles with Uniswap
• Robinhood settles with the California DoJ
• Choke Point 2.0 is still happening
• What’s the latest with World Liberty Financial?
• John Deaton wins his primary in MA
• What’s the deal with Polymarket versus the polls?

Sponsor notes:

• Withum’s Digital Currency and Blockchain Technology Team specializes in crypto-assets, offering accounting, tax and advisory solutions to fortify trust in a dynamic industry. Contact them today to get started. - withum.com/crypto
• Coin Metrics: An Update on Layer–1 Networks

Dan Burke, CEO of Nirvana Labs, joins the show. In the episode we discuss:

• Dan’s background and journey into the crypto space
• The role of nodes in a blockchain network and the complexities of running one independently
• Challenges with existing node infrastructure providers as companies in the space scale
• Nirvana’s product offerings including managed nodes and web3 cloud and the benefits of leveraging bare metal servers
• Dan’s long term view on how the node operation landscape evolves

Luke Hoersten, the founder and CEO of Bitnomial joins the show. In this episode we discuss:

• Luke’s background and the path that led him to start Bitnomial.
• An overview of Bitnomial and the products that the firm has launched to date.
• Perspectives on the market participants that are engaging in the digital asset derivatives market today.
• The future of digital asset market structure in the United States.
• The regulatory landscape and what is potentially ahead for the industry.
• How Bitnomial’s licensing strategy is unlocking new product opportunities.

To learn more about Bitnomial visit their website.

Matt and Nic are back for another week of news and deals. In this episode: 

• Holland versus the Netherlands 
• The end of Pax Americana
• Ditching the 'stablecoin' term
• Why synthetic USD is not the next Luna
• Caroline Ellison testifies
• SBF wanted to be president
• How Teneo worked with Singapore to apprehend Su Zhu
• Will criminal charges ever be leveled against the 3AC principals?
• Lightning is getting more efficient 

Content mentioned in the episode: 

• Nic and Martin join the Empire podcast
• Do we need a TARP 2.0? 

Sponsor notes: 

• Coin Metrics STATE OF THE NETWORK — Q3 2023 Wrap-Up
• In Coin Metrics State of the Network Issue 228, we set out to analyze USDC's supply loss and its impact on Circle

Guy Young, the founder and CEO of Ethena, joins the show to talk crypto-backed stablecoins. 

• How Ethena began with an Arthur Hayes blog post
• The origins of synthetic stablecoins on Bitmex
• The difference between Hayes’ Nakadollar and the Ethena design
• Why synthetic stablecoins have failed in the past and how Ethena addresses this
• How staked ETH as the underlying collateral opens up a new design space
• How Ethena mitigates their exposure to exchanges with off-exchange custody
• Guy’s backstory and entrance into crypto
• Why the circumstances are favorable for the success of a synthetic stable today
• Why the short leg of the Ethena position has to rely on CeFi for now
• Where the yield from ETH positive funding ultimately comes from
• Limits to scale on Ethena on the short leg of the trade and ETH staking
• Guy’s explanation for where the yield from being long ETH comes from
• Correlation dynamics between the ETH yield and the funding rate
• Why it’s important that crypto yields are somewhat negatively correlated with tradfi yields
• What protects the system when funding flips negative?
• How the system can react to constraints in ETH funding and ETH staking
• The possibility of adding Bitcoin as a collateral type
• Why Ethena distinguished the stablecoin and the yield-bearing component
• Rebasing versus accruing yield tokens
• How they think about different stETH derivatives
• Ethena versus stETH-backed overcollat stablecoins
• Why the supply of stablecoins is shrinking
• Will major stablecoin issuers become interest bearing?
• Ethena’s regulatory strategy
• The BUSD security analysis from the SEC and how interest bearing affects that
• Why end users deserve yield in exchange for taking on the counterparty risk of holding a stable
• Why Guy is excited by Paypal USD
• Guy’s prediction for stablecoin interest-bearing market cap

Further reading:

• Arthur Hayes, Dust on Crust

Matt and Nic are back for another week of news and deals. In this episode: 

• OTB gets some critical feedback
• The boys cover Walter Isaacson’s Elon Musk biography
• Is Elon going to turn around the Twitter acquisition?
• Bourgeous capitalism
• We review Lewis’ Going Infinite
• SBF was tungsten pilled
• Su Zhu is jailed for contempt of court in Singapore
• Is FTX solvent again thanks to Anthropic?
• Does ETH futs ETFs mean that ETH isn’t a security?
• Bharat Ramamurti, one of the architects of OCP 2.0, leaves the White House
• The Economist covers the Bitcoin lab leak hypothesis
• Coinbase gets a license in Singapore

Content mentioned in this episode:

• The Economist, Did bitcoin leak from an American spy lab?

Sponsor notes:

• Coin Metrics STATE OF THE NETWORK — Q3 2023 Wrap-Up
• In Coin Metrics State of the Network Issue 227, we take a data-driven look at the most important events that impacted the digital assets industry from Q3 2023

Matt Hougan, the Chief Investment Officer of Bitwise Asset Management joins the show. In this episode we discuss:

• The SEC’s approval of Ethereum Futures ETFs
• Bitwise’s launch of AETH, The Bitwise Ethereum Strategy ETF and BTOP, the Bitwise Bitcoin and Ether Equal Weight Strategy ETF.
• The current state of play as it relates to Bitcoin spot ETF filings.
• The SEC’s approach and posture given the Grayscale court case.
• The current lay of the land in the institutional market as it relates to digital asset products.

To learn more about Bitwise visit bitwiseinvestments.com

David Phelps is the co-founder and CEO of jokerace and a prolific writer. He joins the podcast to discuss:

•  Why tokens are not optimal for effective governance
•  Alternative ways to incentivize users and distribute decision making power
•  How we solve for retaining users versus just attracting them
•  Composability and evolving from user generated content to user generated apps

Matt and Nic return for deals and news. In this episode: 

• Is AI going to cause unemployment for IB associates?
• Blockchain based sneakers
• Tungsten business cards
• What’s happening with OTB merch?
• Nic’s Vespa catastrophe
• Gensler’s HSFC hearing
• How Gensler is the Tonya Harding of crypto
• Made up airlines
• What’s going on with Huobi?
• FTX trial starts next week

Content mentioned in this episode:

• Merch: onthebrink.shop
• Eric Hess, Bridging Policy and Practice: A Pragmatic Approach to Decentralized Finance, Risk, and Regulation
• Nic's Token 2049 talk

Matt and Nic return for news and deals. In this episode: 

• We recap the conferences 
• Nic's Columbia lecture snafu
• The Bitcoin security budget debate 
• One theory for what might provide Bitcoin with long term security
• FTX sues Joseph Bankman and Barbara Fried
• Tether has resumed their lending operations
• Did SBF's parents make him do it?  
• HK is creating stablecoin legislation
• USA vs Singapore

Content mentioned: 

• David Morris tweetstorm on SBF parents
• Evanston Capital, Investor Participation Trends in Blockchain VC
• Anatoly Yakovenko, Solana co-founder: ‘To keep the next great American founder in America, Congress must regulate crypto. But first lawmakers should learn how it works’

Sponsor notes: 

• Coin Metrics STATE OF THE NETWORK — A Glimpse into Coinbase through Coin Metrics’ Data
• In Coin Metrics State of the Network Issue 225, we highlight pivotal data underscoring Coinbase's current market position