E50: Crypto investing deep dive, Facebook's whistleblower fallout, Chappelle's new special & more

Our daughter's head has dropped because the, our doctor, she felt the head and she was like, "Yeah, it's..." Hey Chamath, whose head has gotten bigger? Yours or your daughter's? What do you mean? Don't quit your day job, Sax. Yeah, Sax. That didn't quite land. He didn't quite land. He didn't land.

He's throwing out material. Total flop. We are not in rhythm. You know why? It's Mercury retrograde. Our 50th episode is going to suck the . Because we're going to have to do a lot of stuff. We're going to have to do a lot of stuff. We're going to have to do a lot of stuff.

We're going to have to do a lot of stuff. We're going to have to do a lot of stuff. Our 50th episode is going to suck the because of this. Here we go. Three, two... We'll let your winners ride. Rain Man, David Sax. I'm going all in. And it's said...

We open sourced it to the fans and they've just gone crazy with it. Love you, besties. Queen of Kinwa. I'm going all in. All right. The Facebook whistleblower hearings occurred and Facebook gave... No, but wait. Where's your, "Hey, everybody. Hey, everybody. Hey, everybody." Hi, everybody. Hi. Three, two, one.

I'm going all in. All right. The Facebook whistleblower hearings occurred and Facebook gave... No, but wait. Where's your, "Hey, everybody. Hey, everybody. Hey, everybody. Hey, everybody." Hi, everybody. Hi. Three, two... Hey, everybody. Welcome to another episode of the All In Podcast. Episode 50. We made it to 50. Cinquanta.

Cinquanta. Nobody expected us to make it. Here we are. We've made it and everybody is thrilled to be here with you and thank you for the support over the first 50 episodes. One episode closer to getting canceled. One episode closer. Man, how great would it be to be canceled and never have to work again?

Oh, that'd be wonderful. Okay. So, Frances Haugen revealed herself on Sunday night on 60 Minutes and then appeared before the set on Tuesday. Wait, don't we get our own personal intros or no? We're done with that. Oh. Hey, Jim. I mean, you're unbelievable. Doesn't the audience know us? Mercury retrograde.

Mercury retrograde. It's Mercury retrograde. I'm all fucked up. Doesn't the audience know us by now after 50 episodes? I... Anyway, everybody loves the intro. Do we really have to put a... Three, two... All right. What? All right. With us again this week is the Rain Man himself, David Sachs and the Queen of Kinwah.

David Friedberg. I love the intro. Of course, the dictator Chamath Palihapitiya and I'm your boy J. Cal. Sachs, I gotta say, I think your AUM is positively correlated with the bags under your eyes. If you mean it's getting bigger, you're correct. I mean, they're heavy. Good lord. They're heavy, dragging you down.

That's where you're hiding all that Solana, in your fucking... Under your eyes. Jesus Christ. You better clear that Solana position. What's your lockup? Four months? Fuck no. He's trying to sell it to me on text message. Yeah, of course he is. We're negotiating discounts. I just had the fact...

Hey, you're fucking the whole thing up. Bro, you don't think to... All Ponzi scheme? I'm hodling. I'm hodling. You think I buy hundreds of millions of dollars of anything without a discount? Everything is a discount. Everything's discounted. You want to clear that position in an LLC? Are you saying I got a billion dollars of Solana?

No, bro. I'm saying I have one. But you know, I brought it at a discount. But you're holding, correct? Ish. Ish. Okay. Yeah, me too. Well, I mean, if something... At what point is the appreciation in an asset that you've invested in early something you need to at least clear a position of and lock in a win?

What's enough? 100X, 500X? You got to at some point bank a win, right? Well, I think you have to put things in a bucket of like, is it an investment or is it something that represents an idea that you love so much? If it's the latter, you should never sell.

If it's the former, yeah, you got to manage risk. Or rather, you know, is it a trade or is it something you want to own? By the way, let me just clean this up because Solana was not a direct investment for us. What we did is we invested in a crypto venture firm called MultiCoin Capital.

This is back in 2017. We realized like crypto was becoming like a full time job for us. It was a total rabbit hole. And we were like, we don't have time to figure out this like 24/7 trading stuff. But we met Kyle and Tushar, who were these two young guys.

We met them through Vinnie Lingham, actually. And they were creating MultiCoin Capital. And we actually invested, we gave them a million bucks at a 20 cap to help set up their firm. And then we invested in their, they had a both a venture fund and a hedge fund. And they were like the first money into Solana.

So that fund, I mean, it's like 100X fund. It's just like bonkers. Crazy. And so as a result of that, we are indirect beneficiaries of this huge venture. Yeah. And it's a huge increase in Solana. It will end up being about, you know, a billion dollars of, I think, Solana for us in terms of returns.

But, but it's the MultiCoin guys determine the trading decisions on that. Yeah. And so people who don't know, Solana is a programmable, you know, Ethereum competitor, I guess, and it's at $50 billion or so market cap. It was trading at $1 not long ago, and now it's at $164.

It's an Ethereum competitor, basically for, you know, $1.5 billion. Yeah. And it's a smart contract platform. And there's a lot of people, I'd say smart money in Silicon Valley who are betting on a flippening where Solana could ultimately overtake Ethereum as the preferred platform. But even if it doesn't overtake Ethereum, you know, it's the number eight cryptocurrency right now.

You know, it could go, there's a lot of people betting it'll go to number three or, you know, what have you. Additionally, it is a fraction of a penny for a transaction. And it can do many more transactions. Yeah. It's a fraction of a penny for a transaction. Yeah.

It's a fraction of a penny for a transaction. Yeah. So it's a fraction of a penny for a transaction. Yeah. So it's a fraction of a penny for a transaction. Yeah. So it's a fraction of a penny for a transaction. Yeah. So it's a fraction of a penny for a transaction.

Yeah. So it's a fraction of a penny for a transaction. Yeah. So it's a fraction of a penny for a transaction. Yeah. So it's a fraction of a penny for a transaction. Yeah. So it's a fraction of a penny for a transaction. Yeah. So it's a fraction of a penny for a transaction.

Yeah. So it's a fraction of a penny for a transaction. Yeah. So it's a fraction of a penny for a transaction. Yeah. So it's a fraction of a penny for a transaction. Yeah. So if you own the token and you run this project as publicly traded and the public can buy it, you should really probably have to disclose your sales.

Yes. And maybe, you know, it's very strange because they're running foundations and I had a crypto person on from a music crypto project and he said they had like three or 400 million in this project in Panama. I was like, "Who's on the board of that?" And he's like, "I can't say." And I'm like, "Why can't you say?" And he said, "Security reasons." I was like, "Well, anybody who's on a public board has to be public." But of course, people who are on the board of GE or IBM or Amazon, they have security issues.

They deal with their security issues. That doesn't mean they don't disclose who they are. He's like, "Yeah, I'm not comfortable saying who they are." And it's like, "Okay, well, they sold three or 400 million." I was like, "How do they give that money out?" He's like, "I'm not sure.

I'm not on it." I'm like, "What?" There's some organization in Panama that's... It was really weird. And I think you're right. The one thing that I'll say positively about these crypto founders is that they will never allow a single... A single venture investor to clog up their cap table, number one.

They do a great job of creating these large, broad syndicates of participation when they seed their projects. And then a lot of it goes into treasury where then they issue coins as needed. And I think that that strategy actually is very pro-employee and pro-ecosystem. When we see these projects, all these companies tend to raise three, four, five million bucks.

It all tends to be at like 30 million pre, and it all tends to be distributed. So it's us, Andrese, and Sequoia, and it's like we put in 200 grand each or 400 grand each. That's why you're forced then go into the market if you believe in a project and then spend hundreds of millions of dollars to buy into it after the fact.

And I think that that's very powerful. It's a really important dynamic that if it comes back to a traditional venture, it could be really disruptive. Why? Well, could you imagine a SaaS founder that basically all of a sudden says, "All right, you know what? I'm raising a $6 million.

Here's a, you know, Kraft can take 500k. Sequoia, you can have 500k. You know, blah, blah, blah, folks." And then you raise 6 million bucks that way, and you never allow anybody to have more than call it, you know, a few percent of a company. So the fact that it's like a mini IPO, it's like a private IPO on Sand Hill Road.

Yeah. And then your board construction looks entirely different. And then as a result, you know, founder protections probably go way up. Employee protections probably go way up. It's actually- And governance goes way down. No. It's not. I actually think what will happen is you're less likely in a round like that to be okay with some dork dingleberry joining your fucking board.

You're going to actually point to some industry expert and say, "This person is joining my board. She does XYZ job at such and such a startup." And then the investors say, "Wow, well, that's a pretty great advocate for the business. Go ahead and do that." Another thing I learned about this whole token space was when I talked to Anatoly from Solana, when they sold their three or 400 million tokens to fund.

And the company, because they consider them utility tokens, not shares, they paid taxes on it. So the IRS is getting massive amounts of tax revenue. Well, think about it. They're selling the token. It's supposed to be for utility. Well, therefore, it's a taxable event. That actually was really smart.

That is showing, I think, some wisdom because there's a lot of founders who want to have their cake and eat it too, which is to say they want to say that these are utility tokens and they don't pay tax. And when they later get traded, they want to say that they're not securities.

So when does the tax get paid? I think it's really smart to pay the tax upfront to establish that this is a corporate sale. They're basically paying the corporate tax, right? Yes. Because this is the problem is if you wait until they're traded publicly and then say, "No, no, no, no.

They're utility tokens, not security tokens," the government's going to ask you, "Well, why didn't you pay corporate income tax when you sold them?" Right? So that is actually showing some perspicacity, I think. Could somebody look that word up for me? Yeah, do you know that word? Foresightedness, J. Cal.

Okay, great. Awesome. It's so great that you have the two producers on either side of you right now feeding you vocabulary words. Well done. So here's another question with this. If the majority of people, Sachs, just put your legal hat on for a second. If the majority of people who bought a token in a project, we'll call it the, you know, an Acme crypto project, they buy Acme coins.

If they're buying them and they have absolutely no interest in using them for the utility, and they say, "I bought these as a speculative device," and the founder says they're utility tokens, but let's say 70% of the people who bought them said, "I didn't buy them for that reason.

They just came out and said, 'I bought this to speculate on the price.'" What should the government do? Should they deem them a security or should they deem them a utility token? I think that's a complicated question, but I think that there should be an opportunity for these cryptocurrencies to establish themselves as utility tokens because they are, they do serve a purpose.

They are designed to be part of a system, right? They're not just objects of speculation. And by the way, even if they were, we don't treat baseball cards as, you know, as sort of a security. So it wouldn't necessarily make them a security just because they're speculated on. They actually do serve a function and a design.

They're designed to be a computer system. So I think what's important here is that there's a safe harbor where these crypto companies know what the rules are. And if they can basically meet the criteria, such as by paying corporate income tax when they sell the tokens and other things like that, that they won't later be deemed to be engaged in an unlawful sale of securities.

I think the important thing is just that entrepreneurs, founders know what the rules are so they can abide by them and not be surprised. And they don't right now. Well, so they don't have to. So they don't get surprised later. They don't get whammied. But with basically, you know, because they are building something legitimate here, you know, right.

But it would seem to the sniff test if the people buying the tokens have no idea, have never written a line of code, have no use for them. I don't see why that's relevant. I don't see why that's relevant. Well, because they're profiting off of them as if their shares and unlike baseball cards, which you can't sell 1000 baseball cards for an increasingly.

You know, in a very instantaneous way, you would have to put them in an auction. Yeah, it's a lot of friction. There'd be a lot of friction. You could sell coins. Like, yeah, free bird, what do you think if the majority of people buying a token are doing it to speculate?

Can the founder say it's a utility token, and then those people who are trading it like either baseball cards, minted coins, whatever analogy shares you want to use are in it for the increase in the value? Should it be a security? And should they have to play by the rules?

Should they have to play by the rules? Should they have to play by the rules? Should they have to play by the rules? Should they have to play by the rules? Should they have to play by the rules? Should they have to play by the rules? Should they have to play by the rules?

Should they have to play by the rules? Should they have to play by the rules? Should they have to play by the rules? Should they have to play by the rules? Should they have to play by the rules?

E50: Crypto investing deep dive, Facebook's whistleblower fallout, Chappelle's new special & more

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