Arjun Sethi CEO of Kraken

Join PondTalk host Blew (@BlewApu) for a deep dive with Arjun Sethi (@arjunsethi), Co-CEO of Kraken crypto exchange. They unpack the innovator's dilemma, creative destruction in blockchain, and how Kraken empowers communities without walled gardens. From memes and frog culture to philosophy, real-world crypto insights, and building for humanity's progress – all explained simply for beginners or pros. No jargon overload, just honest talk on digital trends, autonomy, and the future of finance. $APU vibes included! Not financial advice. Listen now for entertaining, eye-opening convos on crypto, culture, and beyond.

Episode Transcript

(00:00):
Good evening ladies and gentlemen.
Welcome back to another episode of Pawn Talk.
My name is Blue. This is Pawn Talk, the fastest
growing crypto meme coin talk show.
The director for today is LFG Triple O and the producer is Tim
the Proton. So good to see you guys.
Very happy to be here with a special weekend episode or
edition of of Pawn Talk. As usual, we start off with some

(00:21):
minor housekeeping things. On Monday, Pontoc will be doing
a limited edition or special edition with Murad on the SPX
6900 longest space of all time that they're doing.
Tuesday we have Frank Takashi. Wednesday, we have part four of
our Mirage Saga Movement coins. The next steps with our ongoing
discussion. At any rate, today's also very

(00:42):
special episode, like I said, because it's a it's been a long
time coming in in an APU community favorite exchange that
we get to sit down with a memberfrom their Co CEO, Arjun Sethi
here with with us here in Pontalk.
So Arjun, thanks for joining us.How are you doing today?
Good man, how are you? Thanks for having me on.
Of course. Yeah, I'm, I'm, I'm all right.

(01:04):
Just just the, the week, you know, when I first started in
crypto, they told me that the, the days will be long, but the
weeks will be very short and, and at the time just moves
differently. And that's definitely been my
experience. It's just like every, every the
crypto news cycle is like 40 minutes.
It's kind of crazy. Yeah, it's different

(01:24):
generations, everything's on 24/7.
So it it takes a different mindset for sure.
And and also having to just always be on it's a it, it's
definitely the, the appetite to it's a different kind of
appetite. I feel like, you know, I, I
have, I've been in sort of the gaming and I know that's
something that you've you've hadexperience on Facebook as well

(01:45):
is making games there. So I come from that sort of
generation or that ecosystem andI've noticed that crypto it's
just a bit different. I don't know.
I don't know how you compare those two things.
Look, I, I think the scale is just very different because
it's, you know, global communities versus, you know,
localized communities. But you know, I, I, I think

(02:09):
what's more important is that you've got a state of crypto
where most things are community driven as a start, as a start
point. I would say like communities,
like a on ramp drug is maybe a good way to put it.
And they help bootstrap liquidity culture and they can

(02:31):
decide in my opinion, if something is trash or something
is a casino or something is longterm value.
So I, I get really excited aboutit.
And, and I think gaming and opensource communities, I mean
communities as a whole over the last 10:20, 40-50 years prior,
if you, if you go back far enough, you know, they've,
they've always been at the, the forefront of creating this.

(02:54):
Absolutely. And, and I think they're I'm
beginning to see and perhaps it's existed much longer, but a,
a gaming to crypto pipeline thatthat seems to be emerging.
And of course crypto has been described by some as sort of the
first IRLMMORPGI don't know if you've heard of that before.
What your take is on that? No, you know, I think look, a

(03:19):
lot of people come from different ecosystems.
I mean, you can make a very strong argument, obviously, with
Bitcoin and the BTC white paper and you know, you know, whoever
Satoshi was and who he referred to is that I mean that comes
from like a long history of cryptography and, you know,
thinking about digital security.And I mean I I think you have

(03:40):
like these ebbs and flows of what a community means, a
movement means and what are the value sets that continue to
contrive from it. And you know, if you take a look
at the gaming community as a whole, be pre crypto, it has
been, you know, much more again,focused on what is the community
of, you know, building a value, value valuable game, sometimes

(04:04):
short, medium and long term in the gaming ecosystem.
You call them sort of, you know,hardcore games versus general
scale games. And you've had the advent of
companies like Zynga in the past.
And then you've had the, you know, the hardcore games that
people play all the time, all the way to, you know, what I
play pretty daily is, you know, StarCraft 2.
And so the I, I think you've, you've got a lot of values

(04:26):
imbued from those communities, but it doesn't necessarily
translate 1 to 1. So for example, like the state
of crypto today, you've got folks that care about gaming and
99% of it, in my opinion, today is like vapor.
You know, the, the missing piecemight be isn't necessarily NF
TS. It's kind of like liquidity

(04:46):
rails that let in game assets have secondary markets across
games. You don't have that today there
there's a huge counterculture against it from traditional
gamers, similar to how you thinkabout traditional financial
services. So kind of think you know what
it it would be awesome if you had, you know, I don't know if
you ever played counter strike or maybe I'm aging myself.
Here is you can think counter strike skins, Amms

(05:07):
composability. That's when gaming breaks open
in my opinion, or or versions ofit.
So that's one community of or I'd call sub industry today.
Then you've got the memes and again, as I mentioned before,
that's kind of like an on ramp drug for people.
They kind of bootstrap liquidity, bootstrap culture.
I I think a lot of people and you're seeing this on Twitter
today. I just think they're absolutely

(05:29):
wrong or Twitter X. Is that the deride of the the
community of people that focus on memes?
They're they're derided as casino cash or trash in some
cases. But if you look at that, you
know, dog as as I've talked before, if you look at Pepe even
now, I mean, these are flows that dwarf even really, really

(05:51):
early D5 protocols. I don't think people measure
that at the state of when they started.
And so memes themselves have become a a really good
distribution channel and engagement channel for crypto
itself. So now you've got gaming, you
got memes. And then we're talking about RW
as right we're traditional financial services like
tokenized assets are like now institutional wedge.

(06:14):
So equities, bonds, treasuries, money markets on change.
They're thinking about compressing settlement,
extending trading hours, cuttingout intermediaries, etcetera,
etcetera. So I think these real world
assets will on board with more serious capital than any other
defy like yield farm ever did. And obviously a crack in you
know, we're leaning in pretty hard here with X stock

(06:35):
discussing and and compliant infrastructure.
But when I, but I, you know, youasked me about gaming and I went
into some sub industries, you know, these are three of many
that are starting to emerge. And so if you start thinking
about what happens with every single capital flow, product
flow workflow programmable system that can be built, I, I
think there's just a lot of interesting communities that

(06:56):
start emerging when you've got this global financial
programmable system. Yeah, I, I, you know, you
mentioned a little bit the communities emerging from, from
the game as, as being sort of almost, you didn't use the word
tangential, but but it's kind ofsecondary.
And naturally it has to be, I think in memes.

(07:19):
And I wonder, would you agree that in memes it's almost the,
the memes come from the communities to some extent,
right. There's a, there's been a, for
the memes that have existed for some time.
There already exists a sort of apresence that they have
throughout just, you know, people in in in the world.
And then that creates perhaps the the total, you know,

(07:42):
possible community, at least initially.
And it almost seems that rather than a community being
secondary, the the community is actually primary in many of
these cases would. You well, I think I think that's
always the case for for anything.
So, you know, in gaming communities emerge around the
product, right? People play, they form guilds,

(08:05):
clans, marketplaces. The community is the outcome.
So it's a little bit different. As you mentioned in memes, the
community precedes the product. That basically means the meme
already exists or has a presenceor following.
You know, you can think about like the Nyan cat from back in
the day. And that creates more surface
area for products or tokens to be created.

(08:25):
That's how I would think about it sort of, you know, reverse
from each other. And so if I was to frame it more
sharply, I would say like gamingversus memes.
Memes just have different community dynamics and one
starts in, in a different place.So communities are emergent in
gaming product comes first. As I mentioned, players gather
around it, they spend all their time in it.
There's a game loop, there's a bigger immersion community and

(08:47):
communities are, are here and bounded by that product.
And you need the game to exist. And in, in, in memes, when I,
when I spend more and more time there, especially obviously as
an exchange. And, and we support these
communities, like the communities are foundational
first. The community exists first.
And so it's a cultural symbol, ajoke, a vibe.

(09:08):
Tokens and projects get layered on the top of that presence.
The meme doesn't feel like a need.
It doesn't feel like it needs a product to survive because it's
alive in our language, in our culture, in our social consensus
in some cases. So I think that's how, that's
how we think about like the maybe the punch line between the
two of them. And maybe I think too deeply

(09:30):
about this, but you know, it's a, it's a different framework
around how you think about wherea community may start.
And that's not any different than, you know, someone who uses
social networking or mobile messaging in every product or
every, everything that we do has.
It's a, a way of, of what the community dynamic might be.
And, and sometimes they start asa foundation or sometimes they

(09:50):
just emerge because, you know, acommunity is is already there.
Well, and, and it's, it's funny,I didn't expect to talk about
this until later, but the way that this is kind of developed
makes me want to pivot a little bit to talk about the hive mind
and, and how that is comes into play with, with memes and for
our audience and, and viewers. There's an article that, that

(10:13):
Arjun wrote and, and I think it was 2016 or so roughly.
That's right about right about Hive, the, the hive being the
new network and, and the efficiency that comes from that.
And, and I think that when I, when I was reading this, I
immediately thought of the difference between, you know, I,
I used to, and from time to timewhen I have a spare minute play

(10:37):
World of Warcraft. And so I, I think about my
experience in that game, the Guild, as you mentioned, and the
way that everything is, is, eventhough there's still a lot of
ability to communicate across server or across, you know,
wherever you are, it's still somewhat limited considerably in
the way that the communities move.
And when I saw that graphic thatyou have there and I, I, I try

(11:00):
to get it up for whatever reason, I was having it, I was
trying to get that image in here.
I was having some kind of error with it, but just the the
complete rewiring almost from communication with emails to
communication within messaging systems like Slack and so on and
so forth. To to what extent do you think
meme coins and meme communities are facilitating a similar hive

(11:24):
mind effect and and do you thinkit's a fair analogy?
I haven't used that analogy in along time.
Look, I think so let's talk about products, right?
So when you have a product that's usually designed top
down, when it starts for like a founder or a or a team decides

(11:44):
its features, right, like it's, it's structured.
I mean, you can make the same argument for Bitcoin in the in
its network, right, with the, the white paper, right?
It's a it's a, it's a, it's a top down thesis in crypto.
The, in my opinion, the hive mine, if you, if you read that

(12:05):
framework, it, it kind of flips this actually, it doesn't kind
of it actually flips this. So you get community signals and
what it wants is through usage, through memes, through liquidity
builders who can listen and and pivot products faster than any
focus group. Why is that the case?
Because you get so much feedbackfrom a large enough swath of

(12:25):
individuals and communities across the board.
And then sometimes they're anti each other, but you're getting
lots of noise. And then it's up to the, the,
the protocol or the teams to figure out how they want to
think through this. So here's an example like
Uniswap, I don't think it invented itself in a vacuum.
You know, the community or if you want to use the framework,

(12:48):
Hive 9 demanded permission, lessliquidity and the protocol
basically crystallized that desire.
And so I would say that that that social consensus or
community then turns user behavior into a product road
map, right? Like that's, that's one way of
thinking about it. So that's from a product
perspective. Now in the community itself, you
know, if you're going to think about the hive mind communities

(13:10):
are, are they're in the most rawform of the hive mind, right?
If, if, if you think of it that way.
So they self organize, they create language, governance,
capital flow all within themselves and without a central
authority. I think that's really important.
Like it's without a central authority.
It's not like there's one, the one ring to rule, the more all

(13:30):
or a a community behind one individual that the power is
that the coordination happens atInternet global speed.
And so thousands of people can align around a meme or a mission
instantly. And so communities then ends up
being like the CPU, which is really cool when I start seeing
these things happen all over theworld.
We talked about games, for instance, obviously, I think

(13:52):
it's bounded within the world. So again, guilds, clans,
marketplaces, those are, you know, they form around
incentives. And so the interesting part is
that when a, when a when a game plugs into crypto, now you could
maybe coordinate not just in game assets, but some sort of
real financial value. And that makes communities

(14:13):
economic actors. So I'm really excited about what
that will look like in the future.
And I've already started, you know, meeting with communities
that are starting to think aboutgames from first principles, not
like the, you know, what you sawon the Web 3 NFT, you know, sort
of gaming and speculation in thein the past.
So if you really think about nowwhat's happening in crypto, just
going back full circle, tokens, Dows, memes, protocols, these

(14:37):
are all just different shells for the same phenomenon, which
is just thousands of people coordinating capital and culture
without central permission. Again, without central
permission, It's just a, it's really special to kind of sort
of think of it that way. And so I think that's why memes
matter, their language in that community or hive mind.
If you again, if you want to usethat framework to allocate

(14:59):
attention towards liquidity. And, and I think This is why D5
matters more than ever. And it's something that I hope
doesn't get stopped and it gets proliferated even farther is
that then it gets codified that community and that culture and
that and that mind, then it getscodified into the contracts.
And, and I think that's why, youknow, where exchanges fit in,

(15:21):
you know, like what I do day in and day out.
And it's like, this is like we are the arenas where you can
have these tests of conviction in real time.
And so we get to, you know, we get to see this financialized.
Well, that's, and that's, that'svery interesting.
It's you're stressing on the permissionless aspect of this.
You know, it makes obvious sensegiven the environment we're in.

(15:44):
But as you say that, and with respect to the hive mind, I
think also when we look at how, when we look at the analysis or,
or perhaps just the, I'll put itthis way, you've articulated
before, actually a very interesting day.
You published this one. This was March 26th of 2015

(16:07):
about the innovator's dilemma, or perhaps no, that was
subsequently the, the, the firstone was about products and
consumer products. And so I, I read those two
articles as being connected to each other.
I don't know if they were, but that's how I interpreted it.
And, and I'm, I'll get to why, but the, the reason that, that I
find it interesting is that the innovator's dilemma kind of

(16:29):
challenges this notion that, that the community can be a
driving force to some extent. How do you balance and, and how,
how do you square or reconcile those two forces of things
needing to be permissionless, but also that, that the
consumers cannot ultimately or should not ultimately be the

(16:50):
driving factor of, of innovation?
Or do you think that's an outdated model?
No, well you said consumer, I said community.
So those are two different things, right.
So you know, if you, if you lookat any model and they talk about
like the, the, the creator versus consumption, let's just

(17:13):
use consumer versus community asdrivers of innovation.
So traditional consumer model isyou got like a unit of demand.
The consumer is a unit of demand.
And, and I talk about like unitsof time that you have per day.
And so companies build products to capture individuals at scale.
And then the innovator's dilemmais that the incumbents optimize
for existing consumers and then they miss the next disruptive

(17:36):
product because it looks too small, right?
Because it's not right. And so the, the, you know, the
proverbial example is the Blockbuster ignored streaming
because their consumers wanted DVDs Netflix built a new
consumer demand curve. OK, great, easy, simple.
The community model in crypto isthe unit of demand isn't the
individual consumer, it is of the community, right?

(17:59):
So you have to flip that framework now.
And so communities don't just consume the products, they're Co
creating them again, very different than you know, having
it one versus the other. So they again, I go back to the
bootstrap liquidity. They're bootstrapping governance
memes and adoption before the product even exists in some
cases. I'm not saying it's good or bad.

(18:20):
I think this is what happens. And so Doge, we all know this
started as a mean community before it was a financial asset.
I'm seeing with Pepe, the community itself pulled the
product into existence and so onand so forth, right?
And, and as you know, it isn't just a financialization, but it,
you know, it's become something much larger now that we think

(18:41):
about what's happening with the US government is, it's the, the
term is still being used. And so I, I do think
permissionless as an enabler, let's communities act without
asking for approval. That's why memes and D5
protocols explode out of like nowhere in permissionless
systems. You don't need a road map.
You don't need an approval. It's or, or even capital at

(19:02):
first. It's just a permissionless
system. You just need conviction.
And today you just need a meme in some cases.
And so I think why that matters is that consumer driven products
scale linearly on on average. It's not to say that they that
they don't, especially what you've been seeing with, you
know, the app into the AI. So it's it's linearly, then it's

(19:23):
build, then it's market, then it's acquire users.
Community driven products, in myopinion, scale exponentially.
You've got a mean, you've got a community, you've got
liquidation, liquidity, and thenyou've got productization.
So it happens at a in a different way and it doesn't
always necessarily work. It just means that it has a
capacity to scale very, very fast and we see that all the

(19:44):
time. So both models can coexist.
I just think crypto tilts towards community because it's
natively permissionless. So do you think, OK, so then if
the analogy holds, would you saythen that much in the same way
that Apple, let's say, diversified from 11 device to
several and you know, iPad, iPhone, so on and so forth.

(20:08):
Would, would the analogy be thenthat the that the meme community
as as a whole, you know, kind ofdisrupted itself with the
different memes, you know, Pepe APU dog, you know, whatever it
might be? Is that the analogy or, or how
does then how does the analogy track for the the mechanics of?

(20:29):
How you solve the dilemma or what it what?
Let me let me phrase it this way.
What is the innovator's dilemma in a community driven market
rather than consumer driven? Yeah.
So let's let's just go through it.
So Apple one company delivers the same simple wedge, right.
So that's the Mac and then you go into adjacent territories and

(20:50):
categories. So the iPod, the iPhone, the
iPad, the watch, etcetera, etcetera, controlled ecosystem,
central road map, consumers adopt, but they don't dictate.
And I think that's really important.
Again, I'm not, I'm not making acase for one or the other.
It's just that's, that's the model, community, model, the
community itself. So crypto model, the community

(21:11):
itself diversifies. There isn't a single company,
the hive mind, if you want to call it that.
Thanks for reminding me. I haven't used that term in a
long time. It goes into new memes, tokens,
protocols, and each is an experiment in coordination.
Some die instantly and then somecompound.
You know now you can think of the cocaine memes as Apple

(21:31):
devices think of each meme as a product line spun out of the
same community substrate, right.So that kind of bear with me.
So you can say Doge, Shib, Pepe,dog each a diversification play,
but with no central Apple, the hive mind itself is the company,
right? And so keep that.

(21:51):
Now let's talk about like D5 protocols and maybe
diversification of that. So Uniswap started as a simple
AMM. You can think of it as like the
iPod of D5 and then V2 and then V3 were introduced.
Then you got concentrate the liquidity.
So you can think again like Apple moving from iPod to the
iPhone. Now you've got Uniswap X cross
chain in intense settlement. Then it you, you have a

(22:16):
community or the hive mind in this case, continuing to extend
use cases. Then you had maker Dow really
early began with a single stablecoin die.
And again, I'm, I feel like I'm going back in history because
things change so quickly. And it was 100 years ago, but
they diversified into what real world assets, collateral,
governance modules, sub Dow, etcetera.
So the community again wasn't just a consumer, it was the

(22:37):
board was the dev team is the market all at once.
I don't know if you remember curve and they started with
stable swaps. And so the community spun out
gauges and they had the tokenomics side chains curve
USD. Each was an experiment.
Sometimes 1 was really brilliant.
And then one was like very chaotic.

(22:59):
And then meme coins versus D5 ifyou even look at it now today.
So memes diversify very horizontally.
So they have the culture branching into more culture,
which I think is like really cool because if you, if you even
look at how I've engaged over the last couple months, it's
like 1 community to the next andthen back to the other one based
on what they're thinking about building.

(23:20):
And so D Phi diversifies vertically protocols branching
into more financial primitives, right?
It's just like the next financial primitive that you can
build. But they both emerge
permissionlessly from community demand, not from corporate
planning. And I think that's really key.
I go back to this all the time. Like all of this stuff is
happening from community demand,not from corporate planning.

(23:40):
And so I think that technical creativity piece, it's probably
the last one that you want to think through is again, I kind
of think in, in threes is that communities as innovation
engines. It's, it's like that's like a
really important concept in Tradfi.
Now you think about all the parallels that I just talked
about. You've got an R&D department in

(24:03):
Tradfi, in crypto, the communityis literally R&D in front of our
eyes on a daily basis, right? So you're forking, you've got
governance fights, you got mean mutations.
That's how new products emerge. It's cool.
It's the coolest thing I've seen, frankly, in my life is the
speed at which it happens. Then you've got permissionless
compounding. So every protocol is forkable,

(24:24):
like it's remixable. And so that creates an
evolutionary environment like biology in some cases where you
got this constant mutation, rapid selection, some die, some
live. There's a Darwinism to it.
Yeah, and and some become uniso opera obvious like as we see
today. And so I think there's this
creative frame that people keep forgetting about, which is, and

(24:45):
I don't know why, but the memes are cultural genes, D5 protocols
are economic genes, if you want to maybe think of it that way.
You got me down this bio path now.
And so to get together, they evolve into like what I call new
species of products that are much, much faster and any than
any centralized road map could ever do.
It's interesting that we're using this language because

(25:06):
right before you, you after you said the word mutation, it
occurred to me that it, it is rather organic.
I mean the whole thing it, it does unfold more like DNA than
anything else. And it's interesting that the
more, the more technologically heavy or saturated this process
became, the more organic it revealed itself to actually be,

(25:30):
which seems you would think thatit would be the opposite, but
it's actually, it's quite interesting.
I, I, I want to, I want to take a few steps back though, and
hone in on. So I guess that the question I
asked a, a sort of sub question is, you know, is this model kind
of out the window? And the previous model of how

(25:54):
investors and, and a lot of these sort of, I guess
professionals were thinking about the innovator's dilemma
and, and where innovation is coming from.
It seems as though now you have these two forces acting on each
other. And so it's I wonder how, I

(26:14):
wonder how that that stands the test of time.
Look, I, I think the question that you framed is very specific
to what I call linear traditional markets.

(26:36):
So the, again, the core insightsof innovators dilemma is
incumbents fail because they overserve existing customers and
they, they completely ignore disruptive niches.
Like I mean, just take a look atagain, Apple, sorry, iPhone
versus Nokia, Netflix versus Blockbuster, you know, even

(26:56):
today, Tesla versus GM, the pattern's pretty clear.
And so as long as companies and people and firms have a
centralized road map and profit incentives, the dilemma is
always going to hold. And it and it's hard.
It's not impossible, it's just hard in permissionless systems
and community driven systems. The dilemma assumes the
innovator is a company and they can't pivot without

(27:16):
cannibalizing its own profits. In crypto, there's no single
company. Again, I I go back to forks,
memes, Dow's. They are the innovators and
there's nothing to cannibalize they because anyone has, because
anyone can spin up a new and disruptive thing without asking
for permission. So who?
Who are you really? Where does the innovator's

(27:37):
dilemma really lie? It it doesn't unless you unless
you say that all of the profit maximization has to go to a
small community, whereas cryptosit's inverted and and and should
continue to be the same case. So again, I go back to Uniswap
doesn't face the same dilemma asGoldman Sachs.
If Uniswap doesn't do it, a forkwill well.
I guess, OK, so that, that clears it up a little bit where

(28:00):
I where I think the, the distinction is that you actually
have the community, like I said,occupying both, both roles
there. And I think the distinction
actually is that it brings us back to gaming.
And it's sort of full circle here is that when PvP is toggled

(28:20):
on versus off, because I think the, the way we've articulated
thus far assumes this kind of amorphous or very kind of free
flowing movement through the community.
But the truth is, is that we do see some PvP, We do see

(28:41):
communities conflicting with oneanother.
We do see everyone sort of fighting, whether it's for
liquidity, whether it's for mindshare that that has existed.
I think we're moving away from that slowly but surely.
But I so, so, so when I say whenwe're talking about the dilemma,
I I guess it's inter community and not necessarily intra

(29:03):
community, but I think you can even look at it from the within
communities themselves as as it is decentralized, but.
Well, I mean, I think, yeah, I'll, I'll go ahead interrupt
you real quick. Look, I think in crypto, the
reality is PvP is a default, allright?
Communities are in competition for attention and capital all

(29:25):
day long. So the so the resources are
allocated to whichever mean or protocol is the most compelling
in that moment. And you've got community versus
sub communities. That's just, I would consider
that default the PvP versus other model that you had
mentioned. And so do PvP and community
conflict is maybe the question you want to ask.

(29:46):
And, and so yes, of course, somePvP is definitely 0 sum.
If one community wins, another loses.
But in practice in in my opinion, no PvP ends up creating
stronger communities. The friction memes.
So the friction forces memes, products and narratives just to
evolve faster. So the the the community uses

(30:06):
PvP as a filter. The gaming parallel here is that
the the guilds in PvP are heavy environments, not this like
this, like not despite the conflict, but because because of
it, right? And so that just that that
pressure just creates much more bonds with each other than the
other way around. So the take away might end up

(30:27):
just being, again, if we're using this gaming and PvP
framework, is that the conflict in the community are not
opposites. I mean crypto PvP is like a raw
material that forces stronger community outcomes.
I see that, OK and and perhaps even the innovation is is there
with to motivate the communities.

(30:49):
How do they capture more of thatmindshare?
How do they capture more of thisof this liquidity?
Ideally, right, but but but but the reason I say it is that you
actually see the outcome, right?The it's not some toggle you
turn on and off in crypto, it's always on.
Right, fair enough. Well, I think, I think there's,
I think there's some people out there who, and, and I, I've

(31:10):
probably included in that, that,that think that that might be
changing, that there might be some because I one, one other
element to this, I think is it is, so it is a social, sorry, it
is financial, it is social, but there's also a, an element of,

(31:33):
of, excuse me, I meant to say that it is gaming and it is
financial, but there's, it's also social inherently.
And you've, and you know, we've talked about that already, but
there's an element of this that exists.
It's not in a vacuum. It exists within the context of,
of the rest of the world. And there's a political element
to this too. And so much like we saw with
GameStop not too long ago, I think that there are many people

(31:55):
that would would argue that we're watching and, and seeing
in real time that we're we're watching political and social
movements find fertile ground incrypto.
And that might be changing, perhaps not everywhere, but it
might be offering an alternativeto this sort of PPP framework.

(32:17):
What, what do you mean by that? Why don't you expand?
I, I, I have a general sense of what I think you're saying, but
maybe expand on what? What do you mean by that?
Well, very simply, the, this the, the phrase stop trading and
believe in something, right? Trading versus believing is, is
put simply, is what we're talking about here is what I'm
talking about. And I I think people are opting

(32:38):
more and more out of what has been called the solved game of
trading and into the sort of protest of believing.
In regards to political and social movements.
Well, as it relates to to their to tokens, as it relates to
tokenized political and and social movements.

(33:00):
Yeah, let me let me see if I canaugment what you're saying.
So, so the the observation that I would have is for most degens,
let's use that for just aiming and use trading as a solve game.

(33:20):
Yeah, for for most degens trading has become a solve game,
right. So algos liquidity providers in
Wales just kind of dominate. I think that's, I think we can
agree that's what the world looks like today.
And so the reality check is if you are just pressing buttons,
you're playing against bots withbetter latency and deeper
capital. I don't think that's where the

(33:40):
future edge lies. So the implication to that solve
the game is that once trading iscommoditized, the next wave of
innovation isn't better trades, it's what do we coordinate
around besides trades. OK, so you have to believe like
crypto's AI think actually you have to have crypto as a
substrate for belief, right? So memes have proved it in my

(34:02):
opinion. The tokens like Doge, Shiv,
Pepe, you know, now we were talking about these, you know,
the BTC ruins, etcetera. They're not better trades.
They're communities around. There's communities organizing
around a belief. OK, so that's that's where I'd
say memes have proved it. Political and social movements
can be the next step. I'm not sure that it has become

(34:23):
one, and this is where I would push back yet is that if a, if a
meme, if you can meme a dog intobillions of liquidity, can you
meme a movement into sustained coordination?
I don't know the answer to that yet.
My hope is that you can, becauseI, I actually think that's where
the concept of cryptography and,and, and and and security and,

(34:45):
and messaging and programmable capital has come from.
And what might the mechanisms for that be?
It could be tokens, it could be Dows, it could be NF TS and
governance are rails for that identity and belonging, not just
speculation. So I, I do believe that it's
possible. And so I think trading again is
it's extractive. It's 0 sum, someone wins,

(35:05):
someone loses. Believing in, in, in the way I
think about the world is additive.
It's, it's infinite sum. It's like exactly the opposite
of 0 sum. So the more people buy into a
movement, the bigger the collective becomes.
And so I think why this matters,especially for crypto is I, I
believe it makes crypto less like a casino and more like a

(35:27):
social, social operating system that can continue to evolve.
And so I think if you were to ifyou were to build the historical
parallel early stock markets, what was it?
Speculation and wild eventually became rails for organizing
capital around the world for companies.
Crypto starts a speculative chaos, but the rails are already
being hijacked for bigger purposes, movements, politics,

(35:49):
ideology, as we had talked about.
And so I think, you know, maybe there's like a degen meme
Sotheby auction in a political statement.
I'm just making it up. It just sounds like the most
corny thing, but but that's not trading, right?
It's a maybe a collective beliefwith capital attached to it.
And so I think you could have a solve game, you could have a
frontier and you could have ultimate implications.

(36:10):
But we're we're still so early on on on what this all looks
like. OK, I want to, I want to push
back on I have two questions immediately solving or or
following that, but I also have I want to push back on something
you said a little bit earlier. But before we do that use you
before you lay that out, you, you sort of as a preface to your

(36:31):
opinion on how we can use beliefas a substrate for crypto or
rather crypto as a substrate forbelief.
You said that if we can meme a dog to billions, why do you see
that as being connected to whether or not a movement or a
protest or a a social phenomenoncan be tokenized?

(36:52):
Why do you why do you see those things as being connected?
What? What?
I kind of don't see the difference between the two.
Isn't belief just vibes? Like why?
Why should that matter? I mean belief is what underpins
every system and if you want to go to what we talk about now is

(37:12):
it actually underpins every financial system.
I think everyone kind of forgetsabout this.
Fiat currencies are backed by the belief in governments we
believe, right. Gold is backed by a belief in
scarcity. Again, I'm being like really
high level here. Even equities are belief that
future cash flows will exist. That's a that's a belief, right?
And of course you can say, well,that belief comes from XY and Z

(37:33):
and it's substantive here and you've got data here.
OK, well, crypto belief is an abstract.
It's directly financialized thatit's a very different.
You don't just believe, you can own a piece of that belief.
And so that accelerates coordination, accelerates
incentive, it accelerates and makes belief measurable on
chain. So why it's a substrate is

(37:55):
without belief, liquidity doesn't stay liquidity.
Liquidity only follows conviction, and conviction is
just belief with skin in the game.
I don't know that I let me push back on that because I think
that I don't think that's true for 90% of transactions we see.
I don't, I don't, I don't think people are.
I don't think people bought Doge.

(38:17):
Let me put it this way. I don't think the vast majority
of people, I should, I should say, put it that way, purchased
or, or bought Doge because they believed in anything other than
and, and, and believe is, is a, is a, you know, big word.
They hoped, OK, they hoped that and there's a difference there,

(38:37):
that the value would go up and that they could, they could sell
it for more. I think that's that's the vast
majority of people. I think that let's.
Yeah, let's let's go through that.
So let's talk about, you know, any of the dog memes are in
social political movement. So how does Doge, like how does
doge into politics? Isn't that a leap?

(39:00):
Like we believe doge might work?And so I think it's it's you can
say like it started off speculative, started off as a
joke, but structurally it's kindof the same dynamics, right?
It's a meme community. It coordinates attention,
capital, then liquidity. And I don't disagree with you
like why you know a certain set of people might come in for a
different incentive, but a but abelief starts in the beginning,
which is like a belief communitycoordinates attention, the

(39:22):
capital, then action. And so the mechanism is the
same. Memes compress belief into a
symbol, communities amplify it. Tokens attached capital to it.
So whether it's a dog or a constitution, the rails are
identical in my opinion. OK.
No, I think mechanically you're right.
I think, I think the mechanics of this you're, you're correct.
But the reasoning behind it differs somewhat and I think

(39:42):
that's significant because so sorry, go ahead.
Yeah, so, so for the doge thing,right, So, so you're right, 90%
of Doge flows at a certain pointof time.
Are people hoping the number to go up?
I don't, I don't disagree with that, right.
That's that is like the seven deadly sins.
It's human nature. So the interesting part isn't
the speculation itself. It's why people speculated

(40:03):
together at scale around a joke dog instead of, you know,
thousands of other tokens out there.
So the hidden signal in speculation creates.
What does that actually mean? So speculation is bootstrapping
almost every market in history, every single one starts with
speculation. No matter what.
You go like you. You bring up early equities,
early commodities, gold rushes, all dominated by what?

(40:26):
People chasing profit. So the real signal is out of
thousands of speculative attempts, certain memes for
communities pull, pull through, so they get disproportionate
liquidity. That's not just trading, that's
coordination. I think that's the part where we
all kind of forget about. And so the Doge example, again,
we're just talking about it. It's outlived cycles.
It's crossed multiple exchanges.It's become a household word,

(40:49):
right? Like my parents talk about it,
the person down the street talksabout it.
That's not speculation. That's a cultural persistence.
I think that's where everyone kind of forgets, which is that
you have these ups and downs in these cycles.
And so it is a belief that's beyond the money.
I think I'm, I feel like I'm talking about a religion and I'm
not saying I believe in any of the stuff, but it's, it's that I
go back to the belief aspect, because that belief doesn't mean

(41:11):
people don't want to make money.Belief means the story is strong
enough to keep them aligned evenwhen rationally they should have
sold. And that's what it really comes
down to. And so again, for, you know, for
the doge case study, no road map, no upgrades, no utility,
yet it survived because people believed in the joke.

(41:33):
And that's qualitatively different than the pump and dump
altcoin. The political, the political
parallel is going to always, or what it might be is that the
same dynamic applies to movements, right?
Most people in a protest also want personal upside, right?
They want safety, they want jobs, they want rights.
They want the belief that it's going to go up from there.

(41:55):
And the belief in the collectivestory is what sustains the
movement beyond the initial wave.
Good or bad, right? Democratic, Republican,
communism, capitalism, it's the same.
It's the same fundamental concept.
The narratives matter. I, I, I, I don't, you know, No,
no contest there. The, I think what I think the,

(42:16):
the, the, the way we're using the word belief, I think is a
slightly different, not because not because I disagree with you,
but because I think that I thinkbelieving is evolving a little
bit in terms of what it means incrypto.
I think that there's been a, youknow, I'm sure, I'm sure you're
familiar with Murad in his thesis.

(42:39):
There has been a very loud and resounding conversation about
what are we doing this for and and why, why is Coin X, whether
it's SPX 6900, APU, Pepe, whatever, whether why is Coin XA

(43:02):
better vessel for this? And when you're believing, are
you, are you believing that thatword again, I think is evolving
to me more than just I believe in the joke.
I believe in that I will make money.
I think it also means those things, but I think it's also
beginning to mean, do you believe in the community?

(43:23):
Do you believe in the shared mission?
Do you actually want to see thisachieved?
Are you willing to endure, you know, 50% drops in a day and
hold on to that. Like I think and the, and the
reason why I think the reason why I'm saying this is because
back to the hive mind analogy, the more people begin to believe
and participate, the bigger the hive, the more efficient the

(43:44):
hive. And then there's a sort of
positive feedback loop that occurs.
And so that's why I'm suggestingthat.
And I'm, I'm not even suggesting, I'm asking if, if,
if this matters, I guess where Iwas going with this because I,
we've kind of veered off course a little bit, which is fine.
Is do you, do you think that believing is, is evolving?

(44:06):
And if if not, why not? And I can, I can, I can give a
little bit more sort of this time back in.
I get I I I'm trying to the the I think this is where the

(44:30):
conversation goes from degen trading to like existential
philosophical of crypto. So let me see if I can now tune
my mind for a second. So Murad's thesis of the
context, I think just for, you know, for my own betterment,
everyone else's is saying that tokens and primitives are
vessels for collective belief. OK, so some are cultural Pepe,

(44:52):
some are financial and you know,SPX 500 coin X whatever, and
some may be absurd. APU OK, now the the the loudness
around the thesis comes from thefact that he's asking, are these
just casino chips or do they become meaning belief systems?

(45:12):
That's, that's probably the right question because if crypto
is only a number go up speculation number go down
speculation, it just collapses into noise.
And we do see that if it's belief systems with staying
power, then it does evolve into new social and financial
infrastructure. And so like, again, that's the,
that's the context. And so like, what are we doing
this for? So on the surface memes, it

(45:33):
looks like it's for fun, but it's just a wrapper.
Like what's what's really happening is testing how far a
community and culture can move capital for indices, RW as
etcetera. These are beliefs in like
markets themselves, right? They're vessels for more
traditional rational belief. I shouldn't say rational, but
like, let's just, you know, use a traditional model for it.

(45:55):
I trust equities. I want exposure, but I want it
on chain, similar to how you think about, you know, money
markets, accounts, treasury accounts, treasury yields.
The difference is, is 1 is a belief in a community story, the
other is in a shared financial system.
Both are valid, both are experiments and belief
coordination. And so why should you believe

(46:18):
it? Community versus mission?
Well, community comes from vibes.
Mission sustains communities through pain, right.
So I'll say that one more time. Communities form from vibes and
then mission sustained communities through that pain.
And so like can a, can a token or a movement survive a 50%
drawdown like you had mentioned?Well, there's this belief.

(46:41):
That's where I think belief is separated from pure speculation.
Many of these coins have passed the test multiple times.
Many, many of them have not. So why are you believing in it,
right. If it's in a in a meme coin, you
may or depending on which one itis, you are believing in a meme
as a cultural persistence in theS&P 500.

(47:02):
You're believing in a migration of financial infrastructure.
If you're thinking about, you know, coin, whatever you're
believing in metal liquidity bets.
And so I think these are like, I, I think with, again, people
think of these as different. I, I think of all of these as a
belief and these are all valid in these forms.
So why it matters is does the community actually endure when

(47:24):
the chart is read? And so do you think it's
continuing to evolve or not? The I think the more people that
participate, the more stronger the narrative, the more
liquidity flows in, the harder it is to kill.
And I do think that's why beliefmatters.
It's very reflexive. Belief drives pace, price
validates belief, and then the loop reinforces itself.

(47:46):
This isn't unique to crypto. This is how like Fiat works in
equity markets work. Frankly, this is even how
religions work in some cases forthousands of years.
And so is belief evolving? I I think it is right.
So yes, it's evolving from a pure speculation by this number
go up multi layered belief systems, cultural meme coins,
politics, RWS, etcetera. If it doesn't evolve, then

(48:06):
crypto stays at casino. I don't see that personally.
And I don't think that that is what you would look at from
flows from 10 years ago, five years ago to today.
But belief that doesn't harden into a mission or
infrastructure, in my opinion, just eventually evaporates.
And the great thing about cryptois that it's always evolving.
And so crypto is always evolving.
Belief is evolving. The crypto becomes a substrate,

(48:27):
in my opinion, for the biggest coordination in that that, you
know, biggest coordination layerhumanity has ever seen.
And if not, then it's just a massive bubble.
But I'm, I'm in the belief that it's going to, it's going to be,
it's going to be one of the biggest coordinations that we've
seen in our, in our history. It's like it's exciting and it's
also kind of terrifying at the same time.

(48:50):
Well, I'm not terrified you. You may be, but I'm not.
Well, terrifying in like a, in agood way.
It's not like a, not like a oh, this is awful.
But like this is we're, we're onthe the precipice of the unknown
in such a big way with such enormous implications and
consequences. And there's, you know, like I

(49:11):
said, having having come from the gaming world and having come
from the experience in the technological world as well.
I see crypto, the innovation in crypto.
I have not seen this innovation anywhere else like the just the
rate at which it's happening and, and the way that the
communities are all moving and interacting and cross
pollinating. I have never 'cause you don't

(49:33):
get that. You don't, you don't really see
a whole lot of like collaboration among all these
companies that it's, it's a very, you know, when we talk
about PvP, it's extremely competitive to the, to the point
of, you know, trying to destroy each other.
And in many cases in crypto, youactually see communities working
together and it's in a way that's almost against their

(49:53):
interest, you might say, but somehow it, it happens anyways
because they're not thinking so short term.
And so, and so that's, that's what I, you know, that's, that's
what I mean. Rewinding a little bit to the
innovator's dilemma. And you forgive me, I'm, I'm
fascinated with this because, you know, as I was preparing for
this and I was looking at all the different products that
crack in features and has been developing and is, is releasing.

(50:17):
And then when I was reading this, this articles like, oh,
you know, this, this, I'm beginning to kind of understand
the philosophy. And so how do you see Kraken
innovating from, from all the different products that you're
seeing? When I say, how do you see it
innovating? I guess the better question is
philosophically, do you see Kraken going through this

(50:38):
process of not cannibalizing itself in the negative way, but
in the very positive way of of disrupting these different
spaces? So what I mean, one, the great
thing is, again, if you, if you take a look at, it's been a long
time since I read the book, but like Christensen's model, it

(51:00):
says that incumbents fail because they protect again,
existing revenue streams insteadof embracing disruptive
innovations. So we're a company too.
And again, in, in, in crypto, the dilemma doesn't play out the
same way as we mentioned, because everything is
permissionless and forkable. If you don't disrupt yourself,
like the community is going to do it or someone else is going
to do it. And so that I think that's,
that's that's very set The way in which I think about Kraken's

(51:25):
product philosophy today, which is very in line with how we all
think about it internally is that we've deliberately built a
portfolio of products that do overlap.
So spot futures, custody, RW as tokenize equities, crack for
consumer. Now we have our inky product for
memes and a different set of culture.
And then we have our ink layer 2that we contribute to and then

(51:47):
the community that's starting toamorphous there.
On the surface, these products do cannibalize each other.
For example, ink could theoretically reduce volumes of
centralized order books, X stocks could cannibalize
traditional equities partnerships.
Crack could cannibalize our consumer or our professional
trading app. But that's intentional, like
we'd rather cannibalize ourselves and let anyone else do

(52:10):
it. And we do it in a way where it's
not 0 sum, but it's positive sumfor the new, the newer areas
that we're getting into. And so why isn't cannibalization
negative here? Well, in Tradfi, cannibalization
is seen as like a negative because incumbents are
optimizing just purely for profit margins.
In crypto, I don't think the Moat is margin in my opinion.

(52:30):
I actually think the moat's going to always in the future
then. And I would actually liken this
to probably how you look at companies like Facebook.
And we can go down that in a path in a second.
But for crypto, in my opinion, it's going to be liquidity, it's
going to be culture, and it's going to be trust.
And these three are really, really important.
And if you, if you build the next thing and it eats the old

(52:53):
thing, that's fine. As long as the liquidity stays
between Kraken's ecosystem and the cultural ecosystem of our
customers. Cannibalization here is just the
evolution, right? People think of cannibalization
is always 0 sum. Each product line is an Organism
for us, right? It's competing inside the same
hive. And so the best ones will

(53:13):
survive. And so my, my, my product
philosophy and innovation, actually, I've always pushed
this everywhere, not not just our cracking, but you know,
across my venture mindset. So you have to always assume a
certain level of variance. You have to assume that some
bets will not work. Some bets will cannibalize
others. And that's not a bug.

(53:33):
That's a strategy and and I think a Kraken we're going to
continue to apply this philosophy directly like we try
to build like a portfolio spot might be the cash cow margin
might be the cash cow futures might be the cash cow derivas
might be etcetera, etcetera overa period of time.
And by the way, these things happen in years, not you know
days and weeks since in some cases.

(53:55):
But we're going to keep launching disruptive products
that could kill it if one does. We've succeeded like we haven't
failed. We've actually succeeded because
that means that the new primitive is what the market
wants. And so cannibalization for me is
not negative or positive. It's the cost of staying
relevant, ideally over time, in what I believe is going to
continually be a permissionless system.

(54:17):
Yeah, it's, it's almost like a, you know, when you wrote about
it, I don't know if you were quoting Zuckerberg, but perhaps
perhaps it was that someone, some, someone is going to
develop the the app or the thingthat's going to kill Facebook.
It might as well be us. And I don't know if that was if
you're quoting him, but there's an element.
It's it's possible? I'm not sure, I don't know.
Whatever it was 10 years ago, it's it's there's and and to to

(54:41):
move the analogy back to the sort of organic thing, it's.
Like by the way, I think, I think that was Steve Jobs, by
the way. Oh, OK.
There is a, a sort of the, the autophagy or autophagy depending
on, on how you prefer to pronounce it, but you know, on
a, on a cellular level, sort of cleaning yourself up and that
takes energy. And so there are, there are
these parallels that I, I find that continue to emerge and re

(55:03):
emerge and then I find fascinating.
But you mentioned that there wasa, a, a vein of, of Facebook
there. You wanted to explore a little
bit. What?
What were you alluding to there?Well, I, I went back to what I
mentioned. We at Kraken, we try to build
like a portfolio. And so if you think about
Facebook as a family of productsand that's a portfolio of
products and those portfolio products do compete with each

(55:23):
other. They have a set of same
features. They think and act very similar
to each other. It's just that the, the cultural
nuances of the product are different depending on the
intent of the, the segmentation of the customer.
We think the same way here too, which is I think again, everyone
thinks very 0 sum. And in crypto, you've got
consumers, you've got market makers and takers, you've got
professional traders, you've gotinstitutional clients.

(55:47):
All of those customers or clients want and need something
different. And so one of your products
cannot, in my opinion, cannot extend across the board to all
of them because then you become Frankenstein and then you, you
become less relevant in the ecosystem.
You become, and it's like, you become like the post office,
right? It's just like something that
you'd never want to go to. It's just it's a necessary evil

(56:09):
until you don't care about it anymore.
I want to take, I want to take afew steps back.
You know, I, we're, we're approaching here.
The I, I, I don't know how much time you, you were you, you
have, or if you have a hard stophere.
But I didn't want to have this interview without asking you
about the influences in your life in terms of health,

(56:32):
Wellness, lifestyle. I, I know that you, you've
talked a lot about values and it's, it's in your, it's in your
profile. What's that your biggest?
What are the biggest influences on you?
Well, one of the hats I wear is that, you know, I'm chairman of
a firm called Tribe Capital. But if you, if you look at where

(56:56):
Tribe came from, it came from not just my background, but a
background in engineering and what I'd say like building
hardware. And so I think I've heard this
from many other people. So I'm, I'm probably going to be
enumerating what other people have said because I think this
way is that I think that engineering and building
hardware teaches you a discipline in systems thinking.

(57:19):
You can't really fake physics. Like that's a mindset thing,
right? It's a you test, you iterate,
you refine and and that's prettymuch what I'd say how things
have influenced though and how Ilook at business and products
across the board. I think that type of discipline
builds things that either work or they don't.
There's no like there's no Gray area.

(57:40):
So, so you take that as a framework and then you say, OK,
great. What's next?
You think of like venture investing and, and like what we
do at Tribe. It forced me then and my team to
develop a framework for evaluating product market fit
scale, something that we call variance depending on the growth
of the of that early engagement and product market fit.
And that influence learns. It gives you the ability to see

(58:03):
businesses in a very probabilistic way.
Most fail some compound if you become power law outliers.
And that shapes how I think about even, you know, Kraken's
product suite today around like how we're thinking about it.
And so I think you know, it, it's it's, it gives you a way
then to start thinking about even like macroeconomic cycles.

(58:24):
And again, I've been through so many like I've
gonethroughthe.com, I've gone through 2008 GFC, I've been
through COVID, obviously. And if you want to start talking
about crypto, I've been through many crypto winters.
And so that shapes your risk tolerance and conviction.
It it just you have a general sense where that markets can

(58:45):
always swing too far both ways, right?
And so I think conviction matters and draw downs and then
when there's long term builders,those are the folks that
separate from what I'd call, youknow, speculators on the, on the
personal health side, you know, I don't know, I, I think it's,
you know, it's a combination of mental and physical health.
You know, the, I think like if you are going to think 24/7,

(59:09):
especially in this world, the market forces you to take health
probably and discipline more seriously, not less seriously.
So I think, you know, training routines and mental clarity
aren't like nice to have their to me like a survival survival
tool. Like I, I feel like if I don't
do it, I'm, I'm just going to die.
And so I think the the realization that longevity in
crypto is as much physical and mental as financial is probably,

(59:33):
you know, just as important. Absolutely.
Yeah. I've, I've learned that myself
the hard way as well in steppinginto this.
Absolutely. There's you.
You. When did you, you.
You did a lot of game developing, but what was your
first sort of professional experience in, in your life?
And, and, and I asked that question because the next

(59:55):
question after that is going to be about your advice to young
people today, graduating high school, graduating college, and
what advice do you have to them.Define professional.
However you choose to I, I guessI, I guess what I meant was how?
I'll let you interpret that. Yeah, look, I, I think the so

(01:00:19):
like, look, my, my first professional experience if, if I
had to find, you know, where I had like a customer wasn't in
finance, it was in building and tinkering with hardware, right.
It was, it was actually buildingfor race cars.
And so I did a lot of that really early.
And then I actually started likemessing around building games at

(01:00:41):
the college that I went to. And then I just started
building, you know, just, you know, around early communities,
building products that I, I actually think that's probably
professional because you have customer engagement.
So it's not like a commercial scale, but it's enough to
understand how systems, incentives and behavior works.

(01:01:02):
And then I think that just taught me how that design isn't
just about what you think is fun.
It's about like how people respond to it.
And I think the, the first time I ever saw someone like
interacting with my product, butthey didn't know it was me, but
I just, I just watched them use it from the side.
That's like a, that's just a, you know, I would say that that
is a, that is like a chapter in just understanding what I call

(01:01:24):
player behavior. What was it by the way?
It was a, it was a, eventually it was a company called Message
me and I was in the, IT was in amovie theater and that it's the
one that like stays out in my mind a lot.
I just saw someone using this product, you know, just back and
forth with whomever and I just asked them, Hey, what, what app

(01:01:46):
is that that you're using? And they were like, Hey, you're
I'm using this message me product and I just kept asking
like, why do you use it? They were like, it's pretty cool
for this and I don't like it forthat.
And made me a little sad for theparts they didn't like.
But that was that that wasn't like just a, you know, pure
software side, but on the, you know, on the automotive
engineering side, like building a turbocharger system and
aftermarket performance parts, it's really hard.

(01:02:08):
It's like unforgiving, it's hands on.
And so either the car runs or itdoesn't, either the car goes
faster or it doesn't. And so it really, it really
grounds you if you take this in first principles thinking and
the importance of execution. And so that mindset for me has
always continued to carry forward in either venture
investing where I have to identify systems, companies that

(01:02:30):
can scale or systems. Now that I think about a Kraken
and you know, where, where I where I spend a lot of my time
thinking about designing financial infrastructure the way
I used to think about even designing game mechanics or
engines, etcetera. It's just like, you know, again,
first principles like what does it mean to, you know, have a
permissionless system? What does it mean to have
infrastructure worldwide? What does it mean to have rails

(01:02:52):
that are new? What does it mean to have, you
know, programmable capital systems?
What does it mean to have financial rails to be able to
support that? These are all questions that
seem pretty simple, but they're not.
And, and I think like, you know,to your, to your, I have two
kids. I have a 13 year old and an 8
year old and, and I, I have no idea what kind of advice segment
I give them, but then they ask me questions, you know, I, I

(01:03:14):
kind of just tell them like, don't chase pedigree.
I like the, the brand name or the resume.
It usually ends up not working in your favor.
And so a brand name degree or a job doesn't matter in my, in my
opinion, nearly as much as how fast you're learning and
iterating. And so if you, if you have the
ability to, you should join people and environments or
systems where you can absorb, inmy opinion, five years of

(01:03:37):
learning in six months or a year.
And then if you can make those bets really early, then you
don't have to sit on the sidelines waiting to be ready,
You know, and I think of going to high school.
In fact, I actually think of going to high school or college
as sitting on the sidelines. Ship something, invest in
something, fail fast. Now be on the side just sorry
don't be on the side just losingsmall amounts of your time or

(01:03:58):
money. In my opinion is is tuition
itself right Like the the marketor your experience is going to
be the best? Teacher, it's funny, my mother
always tells me that the tutor told me and tells me that the
the tuition of life is the most expensive.
So it's funny that you you use those terms.
Arjun, thank you so much for for.

(01:04:20):
Oh, sorry. Go ahead.
No, I said. Maybe.
Maybe your mom was my teacher. Who knows?
The thank you, thank you so muchfor joining us.
I, I really appreciate it. And I know how much, how
precious your time is. So really fascinating discussion
here and I'm really excited to see I, I, I again, I was, as I
was browsing all the products there.
It's like for us, for, for the APU community, we love Kraken

(01:04:40):
and it was, it was my first exchange.
It was my first, the way that I got into crypto in a meaningful
way. And so we always love to see you
guys on the timeline. We really appreciate you taking
the time to join us here. Of course, yeah, like if if I
was to leave you with one closing thought or or anyone
who's listening, I don't know who's listening.
But to me, crypto isn't about trading.

(01:05:01):
To me, it's like freedom and it's us about coordinating and
coordination. So I know again, like you talked
about trading and may feel like it's a solved game, but I think
what we're really building what we're talking about here and
it's a good debate is that there's just new ways for people
to coordinate that belief, coordinate that culture and
capital and Internet speed. I use this term a lot, which is,
you know, financial services were local, Internet was global.

(01:05:23):
And for the first time we're thinking about, you know,
capital at Internet, global speed and scale.
And so for Kraken, our philosophy has been shaped by
that engineering venture and nowoperating structure.
And so the constant lesson is going to be the same.
The only way to stay relevant isto disrupt ourselves.
The only way to stay relevant isthen to be able to continue to

(01:05:44):
innovate before someone else does.
And that's why I don't think we shy away from cannibalizing our
products again, What's it's why we don't shy away from memes.
We embrace it and we embrace theculture.
It's why we're going to continueto push that.
And you can see that in our product.
So we're really, really early innings.
It's really cool. I, I wish I was 10 years, 20
years younger. And I, and I just think it's

(01:06:04):
cool. Like, I don't know, like when I
was growing up. I just think it's really cool
that a meme can command billionsof dollars.
And that Defy is in the process of rebuilding Wall Street
plumbing and that communities can spin up overnight like
they've never seen before. And so now the real question is
like that we've been talking about today is that can we
evolve that belief into like durable institutions that

(01:06:27):
outlast that cycle? And that's, you know, super
fucking awesome. So like, thanks.
Thanks for thanks for the discussion today.
Absolutely. Thank you.
All right, let's do give me justone second here.
OK, guys, thank you so much for tuning in.
This has been pawn talk with Kraken Co CEO, Arjun Sethi.

(01:06:48):
We'll be back later today with some more programming.
But thank you guys so much for tuning in and I'll see you guys
next time.