hello and welcome here with holistic Investments and I'm your host Constantine kogan and it's my pleasure today to have another amazing guest Mason border who's the CEO and co-founder of tokensoft uh tokensoft is the market leader in launching and supporting compliance security token sales through its wide label uh SAS token sales platform uh Mason is an expert in blockchain compliance he worked closely with a lot of institutional projects here their platform raised more than one billion dollars in China and they have a lot of great and big partnership which we're going to talk about today but that will be all you know insides you know the conversation and for now uh I want to throw traditionally legal disclaimer so this content is for informational purposes only should not consider any such information or any other materials legal tax investment Financial any other advice so whatever we're telling you with Mason just like take it as a conversation a friendly suggestion and opinion now we can talk about anything else because you're very much into compliance Mason so welcome and let's talk about you awesome mola thanks so much for having me um yeah I started in the uh in the crypto space in in 2013 um initially I I came across Bitcoin I thought the technology was very fascinating and at face value I was I was you know after reading the white paper I was like this Bitcoin thing is never going to work uh it's too slow and the price keeps moving and you know how's it supposed to be a peer-to-peer payments Network and so um I started you know trying to build the dollar based blockchain at my first pass so I learned to code and and get familiar with the tech in the space I went on to work at bitco on custody Solutions there uh and so that was a lot of fun that was my first crypto job and uh learned a ton and started tokensoft in 2017 and uh we we set out to you know people were launching tokens and they were either missing the scalability aspect of it websites would crash they were missing the cyber security aspect of it and so people were getting hacked or they weren't following the compliance uh part of it and so we sort of set up a platform to solve those three problems and we've been launching tokens ever since uh 2017.
that's perfect so so let's start with maybe the basics for someone who's listening to you and like you know they're not familiar well the difference between utility and security token maybe like a one minute Crush course the major difference yeah um I guess from a a regulatory perspective we just see it as tokens that are uh launched and treated like like Bitcoin um as they move about and then there's tokens that are treated as Securities as they move about um for the first pass you know if you're doing a token and launching a token there are securities laws that you have to comply with um and so you know all the projects that we launch uh do that and then um there are for security tokens there's Securities laws you know at launch and during trading and so we've had to build some core infrastructure to bring that to fruition now if we're talking about security laws right we have security laws in each particular country where like investors reside so if you have investors let's say from 100 different countries so you have to have multi-jurisdictional uh consideration right of each security laws and each particular respective country right whether it's United States or any country in Europe so how do you make sure this is uh taken into account yeah so I think we had the Good Fortune of trying to tackle the most complex uh regulatory structure uh in in all of Finance uh and so very quickly we learned that you know it's not enough to comply with Securities laws in the U.S like when we're helping our customers launch tokens we may have to help them comply in other jurisdictions internationally and so what does that mean that means you know in the U.S investors have to be treated in a particular way you have to collect certain pieces of information in certain cases you have to make sure there are credited investors when they're investing in something and when you go internationally they'll all the different countries have their own laws uh that they want people to follow uh when they're either investing in a security or when a company is issuing a security and fundraising and so um that was sort of a fun challenge we got into we got into sort of helping our customers comply with those laws internationally country by country I think the most countries that we've helped automate the onboarding process in was over 50 countries it's about as many countries as there are securities laws that are adaptable to you know blockchain-based offerings and so um we yeah got into the weeds with that and it's kind of funny all all of the laws and all the jurisdictions sort of boil down to five or six rules um so it's not impossible to do that it's just a lot of work and a lot of diligence that we have to do to make sure it's it's done right how big is it to use your team like because I'm sure it took time to actually go over like 50 different countries and even though those like five to six rules that's it was a cumbersome I assume you know what's funny is I think when we did the 50 country thing that was February 2018 January February 2018.
back then were either four or five people so we're in a big team we just sort of we have a lot of expertise in architecture and we know how to talk to our lawyers and so um I think a combination of that helped us sort of operate in a very lean Manner and move very quickly to uh to adapt that's impressive like because I know a lot of firms paying millions of dollars to actually just to have this legal opinion right you know how to be compliant now if we talk about the practicality of things right you know so I'm sure we can go to a little bit deeper and you can provide an example of a successful project that you raise money for and you structure them so they'll be compliant with older jurisdictions and maybe you can you can brag a little bit about this project yeah and and just to be clear we don't help our customers uh fundraise or or bring in Investments um we more so technology platform so they can onboard all of their investors whether it's internationally uh it's only outside of the US whatever that may be um and you know we went on in 2018 to build some core infrastructure around actually placing a token that's treated as a security on the blockchain and so we built that technology around a standard called ERC 1404 so you want to put a security on the blockchain where do you start um you have to have a way to make sure that only approved or authorized investors can hold the security and so ERC ERC 1404 uh is basically a permission token it's built on erc20 and uh it allows the capability to approve each address to be able to hold the token so if in a particular country there's a very specific investor onboarding process we can help them go through that process and then whitelist that Investor's address so they can hold the token and one very popular customer that we did this with was called INX and so they IPO um through our platform they raised about 85 million dollars um in total they raised I believe was over 120 million dollars as they went through this process end to end um and they wanted to do an IPO on the blockchain uh and we basically provided the core back-end technology to make that possible so we had the investor onboarding platform uh we created a custody solution so we could make so we could do a formal key ceremony and uh hold and manage the tokens in the most secure way possible we created a cold storage offline multi-sig wallet um to sort of administer the token and then we also set up a transfer agent we built out transfer agent technology and um we basically worked to help get Regulators comfortable with this process uh we work to help uh map the blockchain into the SEC regulations as it exists today and and to bring that token to fruition so today uh INX token has over 9000 users and it's trading peer-to-peer on the blockchain and we're really excited to have you know helped bring that to fruition now before we go to the topics of like what's actually the value proposition of doing that like you know how big is the market of security tokens and the secondary let's let's talk about like you know just the basic principles like what what what is the difference between like you know you have a traditional IPO right which is a very popular you know you you go through NASDAQ list and you go through auditing process like you know and then what's the basic value proposition for investors to participate in you know more tokenized IPO so to speak yeah I think uh we can sort of look at the foundational principles of of the blockchain to begin with and you know any blockchain like Bitcoin or ethereum is inherently peer-to-peer it's inherently global it's inherently uh 24 7.
you can move an asset at any time day day or night you can move it between whoever you'd like to and um and so those are the foundational principles and now that we're putting Securities on the blockchain um those same foundational principles are true and so you can move a security 24 7 whereas in traditional markets you move them uh nine to five uh and only on weekdays and it also allows the issuer to have a peer-to-peer if you will a relationship with their investors or token holders and so it enables that direct access it enables that sort of feeling of community and direct connection with the investor base and it allows you know these Securities to settle you know 24 7 day or night and so it's definitely a very fascinating technology and I think it does enable a lot of use cases that you know existing technology today a does not provide now what were like I would ask you were their most challenging parts so you mentioned that you have to convince The Regulators to be comfortable with that right so it's always um it's always hard to be a Pioneer in something right so I'm sure they had tons of questions how would that work you know what are the risks you know to make sure it's compliant so maybe guide us like maybe just some of the two or three most challenging parts of this I think one big component was we put a lot of upfront effort into building a relationship and with educating the SEC and so we launched we launched our company at a point in time where the SEC was sort of starting to think you know are a lot of these tokens Securities and they were looking to learn more and get familiar with you know what is the market infrastructure like out there what are people doing when they're launching a token who can help them uh you know comply with regulations and and what does that infrastructure look like and so we built a relationship with them and we we were invited frequently to do Tech talks and so there were various uh you know components of technology that we're interested in and we were happy to sort of Leverage our pre-existing expertise in you know custody and uh sort of adapting the blockchain 2 into the regulations to help communicate that so it was a mix of educating them on you know what is the most secure way to bring you know the Global Securities Market onto the blockchain how should you think about custody how should you think about treating these Securities securely and and what are the risks and so a lot of those risks we built technology to help you know reduce and so I guess one major challenge was education the second the second part of it was um I I sort of see the mapping of the blockchain today into regulations sort of a puzzle and so a lot of it was you know we want to do a PR enable a particular activity on the blockchain and so what are the four or five architectures that we can Implement in order to make that activity compliant with today's regulation and so I think a lot of it is I call this sort of legal r d it's just um the engineering team myself uh speaking with our Council and trying to understand you know what are the core requirements that have to exist and then how can we package the technology to meet those requirements um as a as a product solution and so that's sort of the second part is how do you package Tech how do you build it so it meets today's regulations as they are mm-hmm I would say the third was the third uh sort of challenge comes when you know actually educating the SEC and trying to get through the registration process you know trying to get our transfer agent license and uh that involved explaining to them you know sometimes just how the blockchain works and you know how does our ERC 1404 standard uh prevents you know having two Securities if there's a blockchain fork that was one common objection we got you want to put Securities on the blockchain well blockchain's Fork are we going to have two Securities now uh what happens if someone's wallet gets hacked uh you know are you just gonna let everyone's you know Securities get hacked and so um there was a lot of questions like this and we worked hard to sort of educate them on you know why this technology actually is better um why we think it's the future and why we think that you know they should like uh seeing Securities move on to the blockchain you know now you have uh the compliance inherently built in to the blockchain and so you can prevent unauthorized or you know non-compliant transactions and you can sort of automate that allow the tokens to transfer 24 7 and have a more vibrant uh you know ecosystem and Market out there so you know in the end it seemed like everyone warmed up to the idea and they were very interested in you know what the technology provided it's interesting because uh you know I I I believe like there are multiple ways how we can look at it right you know how the on the fundraising aspect and being legal and compliant and you know right now I just before we started I looked at the coin market cap just to make sure I'm still on track how many uh coins are there just listed like it was and the the number was staggering we're talking about 21 000 you know like uh uh different coins so right I am convinced that most of them are not doing it in a legal and compliant way right so so let's talk about like some of the more more I would say critical parts of this so I'm going to go to an example as Avalanche right so uh your website you marked that in the July 15 2020 you did 40 like helped to basically facilitate the Rays of avalanche was a you know pretty big blockchain infrastructure and you know 42 million was raised right and the combination of Like You album like you know using the tokensoft as a platform and for like the average uh ticket per person was 3 800 there was 11k registered sale users um etc etc so there the details are there now let's talk about the practicality if I would talk to a person who invested in avalanche who are now using their ecosystem I doubt that they would um probably somehow like consider it as a security they would probably say it's it's a platform token which is closer to utility narrative right you as a as a platform that is compliant you know with different jurisdictions you would still consider it as a not a security token offered but something close it's like a hybrid model so let's let's demystify those things because I think that that's where the confusion might come from yeah there's a lot of cognitive dissonance here because uh we have a lot of folks come to us and say you know why would I want to sell my token as a security um because you know able to get into all the exchanges and all the infrastructure that's there for you know tokens like Bitcoin and ethereum a lot of the innovators in the space that are launching tokens um just like like Avalanche once the tokens to be distributed decentralized you know the movable peer-to-peer um just like Bitcoin and ethereum and um I guess the way that I would put it is that uh there are two phases of a token one is when you're actually selling it so when an issuer is selling a token to investors out there that's sort of the first phase of the life cycle of the token the second phase is when the token is actually out there and it's moving around and so I would sort of decouple those two phases uh when you look at a token like INX that's a security at sale and then it's intended to be treated as a security uh during trading and transfer later on as well for the tokens uh like Avalanche we sort of service them at the point of sale and so we ensure they comply with Securities laws at point of sale which is a conservative thing to do if you are you know launching a token and uh you are more conservative uh you're thinking more long term how can I make sure there's less you know corporate risk it's good to comply with Securities laws uh wherever you can wherever practical and wherever you know your Council guides you to do so um it's not for for uh you know meat to say um and uh during the second phase we don't actually have any parts in that with tokens like Avalanche and so um the tokens sort of get distributed they um are launched in any case um and for that phase it seems like uh the the legal Community is saying you know those tokens are distributed um they're out there and at that point they're they're not a security and I think there's a big gray area there because that's he hasn't provided explicit guidance um but a lot of the projects that we do we help them comply with Securities laws at point of sale um and then after the fact when they're being distributed they may get treated in a variety of ways based on their council's guidance and it's interesting because again there was a fixed price and there the mechanics were that you know you you do kyc for every investor correct right so there were there's no option to actually get into the deal without the geography which is which is great that's that means you know exactly who is buying and where they're buying from then if you get audited you you will be able to kind of reply to who's solving your token but the tricky part is that as the moment it is listed on centralized exchanges and then decentralized exchanges right then it's like then the rules are off right because like anyone can buy it anyone can trade it anyone can manipulate the price and then you know I'm not even talking about the layer 2 infrastructure that is built on top of avalanche right you know so which is a completely different story right so I I'm just curious like on a practical side of things like you know some of the folks who were asking me about your project right you know and they're asking us okay so they're like are there like a seed invest of crypto like in order to help to raise money like just in a compliant way for U.S customers because if they don't why would I use them for non-us customers so I wanna I wanna challenge you with some of the basic questions and maybe you can go further yeah you know blockchain and crypto in general is something that was very Grassroots since Inception so Bitcoin is something that sort of emerged in a very Grassroots way a developer put it out there other people slowly learned about it they were like oh this is novel this is interesting and uh you know more and more people adopted it and built Tools around it over time and built Market infrastructure around it as well to allow for purchase of Bitcoin and you know wallets to enable transfer of Bitcoin and so um the and and I would say that the best projects that we uh we see employ that sort of ethos today and so um they are projects that will spend a lot of time educating community building an organic community over time and then at some point you know they're going to have uh you know a token that they roll out on mainnet that gets out there and so I would say you know if a issuer's expectation is uh for our platform or for any platform out there to help them with the fundraising it's sort of missing the point of of crypto you know the point of crypto is that you know you actually have Innovative Tech it's interesting it does something new and different and people surround your project because they think the technology is novel and interesting and so you know if if a project goes and someone brings fun you know investors in and they bring in let's say you know 10 million dollars um it's it's sort of that's sort of what happened in traditional markets I feel like uh with you know with IPOs with traditional fundraisers in the world of crypto it's more about um sort of building something new building something Innovative and having people come in you know based on the merits of the tech and so that that's sort of like how I see it and so like with every project that we help launch uh we try to make sure that you know we educate them on like hey the most important thing is that everyone knows how your Tech Works they know how you know your application works um and that's you know they they're familiar with you know what you guys are building and it's it's more about sort of building that organic community and following versus uh you know the actual fundraise the fundraise is more so a way to uh get people engaged um we saw a huge from 2017-2018 from really large check sizes per investor and we saw that average come down a lot so with Avalanche you saw the average check size was 3 800 up until last year we saw an average check size hover between 35 and 500 and I think that signals that the crypto space has you know sort of realized that this is not as much about fundraising as it is sort of like building that initial community and doing it through a token sale where there is sort of some exchange of money just helps make sure that people are there for the right reasons they're bought in they're serious um and so that's sort of what's happened in the space over time and that's sort of how we how we see it now one of the narratives that you're providing is like you're a fair launch platform right you know so um I I want to make sure that there's also no cognitive dissonance on this side because like a lot of people who are like thinking about like Fair launch similar like balancer or any other other like things that are like oh okay well I'm gonna get in it's like completely decentralized and I can just buy in at a certain price points right where it's beneficial like for me and that's like it's like a type of Ico slash Ido just on steroids right and and you know and then you have some multiples you get some tokens that are unlocked you can speculate and sell them or you can hold them and stake them whatever you want to do right the question is in your case I assume it's a very very different narrative like the the fair launch I think that in your definition the fur launch of the definition of people who think about the balancer of the world right you know will be very very different right so let's also explain the distinction from this side you're asking very good questions and the fair launch concept sort of came about um in I believe it was maybe 2018 yeah and it was a 2018 or 20 20 I think 2020 became really popular and the reason was you know they were sort of uh looking at Bitcoin and saying there was no fundraise for Bitcoin uh it was just people mined it or they started you know playing around with it and um that was sort of a fair lunch there was no fundraise which is usually seen as you know hard to get into exclusive only people with significant Capital uh can get in and so this Fair launch concept was adapted sort of from those Bitcoin principles and it was to sort of say hey we're a new token we're a new token project and we want our token out there and we're not going to fundraise for it we're just going to give it out to people and that way it's fair and uh you know we sort of saw this happening and we were like you know what this doesn't seem fair it looks like projects that are lower quality are adopting uh this methodology or just giving out tokens and sort of trying to paint it with Fair launch to show that you know they are of uh you know good moral standards and um uh and and so I think when I when I saw that I was like you know this isn't quite working because it's getting gamed uh these communities are full of bots they're full of speculators and people are just trying to flip the tokens and that's not good for the projects and it's not good for uh the general community and so I I thought the first iteration of fair launch sort of did not provide the intended effects and uh you know in watching our customers launch what we learned was um you know we're actually doing a better job we're sort of doing a fair launch 2.0 and it's actually making these communities fair and you know why why is using tokensoft the Fairway of launching a token well you know I was like we sort of uh check that box because number one uh we ensure that there are no Bots um that are sort of gaming the system and so you know you see a lot of communities out there and they have uh I don't know they have a crazy amount of followers on Twitter and Discord and I think we saw this with the Aptos launch the wallet had hundreds of thousands of downloads at launch and uh anytime a number is too good to be true in crypto uh it probably is and the reason that you know some of these numbers are so high is because people are setting up Bots to either purchase a lot of allocations uh in a certain sale or they're setting up Bots to download a wallet at scale so they can get as much of an airdrop as possible and that's something that we don't think is uh we think it's a little bit disingenuous because uh a lot of those that user base that you know the issuer sees as sort of a virtue is largely not real and so we realized like our platform was making was really good at making sure only real users get into sales uh only you know these real users can have sort of a fair allocation so there's not one big investor that's coming in getting a really big allocation and then selling it on the market before you know the smaller users and so we realized our platform is really good at that it's really good at making sure that the community is a little bit more healthy it's really good at making sure community members are longer term thinkers we launched a couple new Concepts um so obviously time based vesting is something that's very common out there uh with with tokens or with you know Investments as well where you know it's a concept to where uh you you purchase something or you're given a a token and it doesn't fully unlock on day one it sort of operates like employee Equity where you know maybe there's four-year vesting and it's not unlocked for one year and so you don't truly own it before that one year and after that one year now you truly own it and you can maybe go sell a chunk of it or you know keep it if you're long-term minded and so we started rolling out lockups for our customers um we started rolling out you know as a technology we started rolling out uh the concept of you know what if uh you could purchase a token but the per but the token only unlocked at a certain Oracle price so for example what if there was a purchase but it only unlocked when Bitcoin hit previous all-time highs uh at 70k and so wouldn't wouldn't that be a great way to sort of ensure that people were long-term holders and long-term minded and uh you know truly understood the projects uh they were investing in they truly understood um you know how the technology works and they were sort of bought into you know subscribing to these projects on the longer term Horizon that's how we see the fair launch uh and how it should be and that's why we started you know using that messaging because we we do think that we're enabling a fair authentic more real communities out there and that's on the whole better for both the project developers as well as for the community members that are out there today now if we go to the nitty-gritty of this process right so let's imagine I'm a project right and I'm interested in with your uh what you're providing I want to raise whatever my goal is to raise 20 million dollars right and I want to set up a in a compliant legal way now what you're saying you're not helping to raise money you I need to drive traffic to to the platform whatever we set up the platform you help to uh provide the infrastructure right you know the technology and to make sure it's legal and compliant now um I don't know if it's confidential information or not but like uh what what are the the timelines and the pricing like you know so for for such services like you can give a range and obviously it's per project project by project I'm sure it's different right but at least a range for a project to uh understand what they're dealing with because it's one thing when you're raising a small round of like a seed two to five million uh maybe it doesn't make sense maybe there are other ways to to do that right well it's another story when you raise him or a series a or like next consecutive or or a big Fair launch raise of 40 million right then you can afford like uh like more expensive infrastructure and making sure it's uh uh it's to the to the certain level right so let's talk about the timeline and the pricing please yep and uh just to start out um I always tell customers or prospective customers it only really makes sense to use us if number one yeah you want to follow uh follow regulations and uh number two if you want to sort of scale the process whether it's for a fundraise whether it's just for a token distribution we sort of help to get to the scale um because you know it's sort of hard to manage paperwork and compliance for 10 000 users and a lot of our customers do have you know 10 to 50 000 users coming in to engage in a token sale or token distribution whatever you know form it may take and um when it comes to sort of like timelines and pricing we've been at this for about five years now so we can move pretty quickly so uh you know if we need to move in one weeks to two weeks for a customer we can it's really important that customers spend a lot of time on community building because you know if there's not a large community out there then no one's going to know about the project then that's sort of an important component and in terms of pricing I can't get into specifics but I would say that it only makes sense for projects to come to us you know if they've already done a seed round or series A and the reason is that you know just to afford the the legal team and the lawyers and Council to get through you know any token distribution process is quite expensive um to you know process tens of thousands of users you know for us is expensive as well and so I would make sure there's sort of a couple uh perhaps fundraising rounds under the belts uh before engaging in this so you know if a product has raised let's say anywhere from 4 to 10 million uh already that's the point at which it makes sense to engage in a process like this because uh you know these projects are going to do this once they're going to want to do it right they have investors that are obviously long-term thinkers that are high quality and so uh they want you know the their portfolio companies to follow the regulations they want them to do it right the first time if they're sort of getting a token out there and they want them to build a authentic community and so those are the points at which make sense to you know come talk to tokensoft and see what's possible so let's talk about others different scenarios so I'll give you one scenario where the company is Raising Equity round and they will have token words right so the token will come into play a little bit later right so is this a good customer for you so and this would be for a seed round uh uh let's imagine either seed or series a whatever seed probably too early because you mentioned that right so I assume series a would be probably more reasonable but let's imagine series a 10 to 20 million they're already Ray seeds and then they're now doing but they did it in in equity right so now they're raising another round there's no tokens yet there's so many token warrants which come into play a little bit later right but they still want to raise an equity round so does it even make sense to go to you guys yeah so anytime uh I would say it makes sense to use us if there's a large scale of users and so if this product only had uh was expecting I don't know 10 investors or 25 investors then I would say you know hey it really doesn't make sense to use us for the scale um it would you know it wouldn't be worth the money to to sort of use us uh the point at which should make sense is uh the point at which uh they want to fundraise they want to fundraise from I would say over uh 100 to 200 investors uh now I wouldn't say it's economical to to use us at that point but that's the point at which you know the paperwork becomes hard to manage and so I would say that's sort of like the threshold for the process becoming unmanageable um and then at that point we can sort of help scale the compliance process but more importantly we also help scale the legal automation process there's a lot of documents that have to be signed executed and that's a big portion of what we do and because we are sort of uh anchored in helping people comply with Securities laws we can help uh scale that process regardless of the instrument that's being sold and so whether it's Equity it's a token that needs to be treated in security it's a warrant you know whatever it is we can sort of help scale that process and and make it a much more quicker leaner process for for the for the customer great so now let's imagine a second scenario provide you so imagine a company already raise money in a token round um what I would maybe like a million 10 million doesn't matter so it already has a token that is listed on exchanges whether it's centralized the centralized exchanges both now they want to do second level of race right you know like and then the tokens distributed everything fine they're operating black and white um but obviously they didn't do it in a compliant form at the first time right and now they're coming into two understanding okay well maybe we did something not 100 right uh they tried but you know some some Founders coming from a developer background or product people the background so they just literally didn't know now they want to come and do it in a proper way would you even accept this type of client does this project have a legitimate Law Firm they're working with let's let's imagine yes yeah so I think I think the problem here is um you know if compliance isn't followed uh when the token first gets out there uh this becomes a little bit of a cleanup job um so uh this may be called out there might be called regulatory remediation or you know maybe they need to take the existing token holder base through a compliance gate and I feel like we may have done jobs like this before and usually what happens is the people that are holding the token are now instructed to come send the token to a wallet where it's burned they may have to sign some paperwork and from there they might have to sign some new paperwork that gives them a new token in a new format and um that's usually what we see in cases like this and so it's more of a like you put the token out there it's moving around you're not sure if you followed the the right compliance program or the right regulations the first time and so you need to sort of do a little bit of a cleanup and you need to sort of rein in all the tokens that are out there and issue a new token in a new format and new regulatory sort of structure and so we've seen stuff like that before and we're happy to help if you know it's the right if it's a legal team that's uh you know well versed in the world of of compliance Securities and and global banking regulations we're happy to help so and that would apply even if the project did not raise any money from U.S investors right it doesn't matter yeah and I would say our role here is more so uh compliance and helping get something redistributed uh than it is sort of a race but you know our platform's configurable to the point where it can sort of service any sort of compliance Automation and so you know we've helped with a lot of fundraises we've done a bunch of airdrops uh where there is a compliance program that needs to be followed token distributions we can help with just general civil resistance and token distributions and you know we've gone into servicing hackathons as well a lot of folks are now using tokensoft for for hackathons or just random Corner cases where they need they need to follow uh you know a compliance program yeah it's really interesting because I I I I don't I didn't do this analysis but I can bet you that like statistically probably 95 of of the token issuance were probably not 100 compliant so I would just imagine what would what uh what efforts would it take to actually come back and to redistribute them like you know again like you know it's it's it's it means that according to your um you know perspective and you know how how you you guys think see the world like we're operating in a very gray area as an industry I mean and which is which is fine it's probably where we are right now like and we just have to admit it and understand what how can we move forward from here right you know uh and I'm sure there's going to be a lot of degence like hardcore degens who would probably be completely not happy with uh with this particular strategy and they would say that probably it's against the Bitcoin core like you know that narrative etc etc right yet we're still in a very um in a very practical world where regulations and governments exist and we have to comply somehow with them right so your your role here is kind of try to find the middle middle grounds between the centralized worlds and centralized worlds and products that how can we make sure it's working together is this a correct assumption if I would summarize it we're basically a sort of a layer for any tokens that want to come into the world um it's it's sort of you know there's going to be existing regulations they're gonna there's gonna have to be some rules that have to be followed and so we're sort of that layer uh in between the projects first being developed and the tokens coming out there into the world and you know it's it's a hard problem because even even myself you know a lot of the folks in the space are highly Technical and we're really good at software development we're really good at you know pushing out a lot of code and you know we we build a project we put it out there and uh now we learn that there's all these laws and regulations that we have to follow and that's sort of how I got into the space is I built a bunch of tech and a year later I went to talk to lawyers and I learned that you know there's all these complex laws and Licensing and and all this stuff that's necessary and as a person likes to do things the right way I like to my kind of person likes to follow the rules I like to do things the right way I'm concerned about my reputation my career and so for me it was really important to follow the regulations that are out there and so that's sort of how I landed in this spot and I think our role now is to sort of you know for those developers that are out there that are that just want to code they don't want to be sort of regulatory or legal and compliance experts we're sort of happy to help them get over that uh that Chasm and help them get back to focusing on just coding and pushing out products and and get sort of past gray area where they don't know you know what are all the rules have to follow you know they don't they don't necessarily they're not compliance experts and they don't want to be and that's and that's another interesting point because you know I I would assume that right now to be more even more specific we're talking about the primary offering when when the per when people are trying to release the token right with a particular intent to fundraise it like you know if either it's the first time second time but still like the fundraise and then from there listed somewhere because as we talked about in the first exam like in one of the second example where the token is already listed then it becomes redundant because it's already like it's already out there right so people can trade it they can do a lot of things so it will be really really hard to delist it from exchanges and then to go burn the existing token or do the swap I mean it's doable right as you mentioned it there are there are methodologies but who would do that right if it's already operating so mostly you're focusing on primary offerings of the companies that like either having launched their token yet or maybe it's launched in a very kind of hybrid model of a dowel let's assume right and it's still kind of like it have might have a different utility or maybe another synthetic additional token is this a another assumption that we can talk about yeah I think I think that's right so whether it's a Dao whether you know it's it's a centralized company that's developing some software that has you know tokens involved in some way we're sort of the the layer that helps get it into the market and Inception and and so that's sort of ourselves in our role and with that I assume it's even harder because then like legally then you will have to deal with a very different structure you know like it's a centralized entity it's kind of it's a bit easier so you have board of directors or shareholders now with a Dao like you know it still has a legal representation but I assume it's a little bit more complex so I think what happened um in D5 summer is a lot of people saw the term Dao and the act of launching a Dao as a way to get to Market faster without falling regulations and and so you saw a lot of anonymous teams you saw a lot of you know treasuries just held in multi-sig wallets and it's kind of funny you know one or two years in it's sort of you know they start to realize uh wait am I personally liable uh how do I do how do I pay taxes how do I you know all these sort of uh questions that usually you ask when you start a normal company and sort of and so douse sort of started there and now they're back at square one where oh actually you have to do all of the exact same things that any other project was doing before uh before this became buzzword and so you know everyone's back at square one and it's like well the process for launching a token before is actually the exact same as launching a Dow today it's like you do need an entity to be the assure uh you do need a legal structure you do need bank accounts because people want to get paid in their bank they want to get paid in cash uh they want Health Care uh you're going to want to pay taxes through a corporate entity so you're not paying taxes yourself personally and so it's kind of funny we we sort of Saw the space see the term Dao as permission to do anything and over time as people want to do things right you know more professionals get involved we're back at square one and so you know if if anyone is launching a token or a dow out there I would definitely you know have a casual conversation with with a law firm you don't need to have them on you know retainer or have a formal agreement just at least get familiar with you know what you should be worried about and when is the right time to worry about this this type of stuff yeah so coming back to some fun news like because we're talking about like technical compliance stuff like you know remember in 2016 you have uh shared that you know that the pre-order the Tesla Model 3 using Bitcoin right and then uh are you still buying the Tesla for Bitcoins or not anymore you're or you're huddling uh I've made a few bad decisions with respect to my Bitcoin homes over time okay um first one that happened concurrently with you know ordering the Tesla with Bitcoin was uh paying my rent in Bitcoin oh what when was that that was 2015 2016.
oh wow that was expensive rent and uh the second mistake was uh you know I was like you know it'd be kind of interesting is if I could purchase a Tesla with Bitcoin and so I used a app out there which is still in the market today called Shake pay and I use that to send in Bitcoin uh and to have that convert to cash to to send to Tesla on the other side and so I I pre-ordered a Tesla Model 3 uh at that point uh for Bitcoin uh which I later canceled because it took too long and so that was the second worst thing I've ever made with Bitcoin okay uh so so today uh it's a lot harder to get me to part with my Bitcoin uh you can um this is not a challenge uh it's just harder for me to uh to spend my Bitcoin these days because you don't need to and you're huddling any price point that you would consider maybe like cashing out a little bit or not um I I see Bitcoin as sort of like a 401k where it's super long term uh it's kind of it's kind of fun for me like I genuinely like the technology I think uh I think it's really cool I think a lot of the elements of it are really interesting and so I haven't thought about cashing out uh the Bitcoin yet I'm sort of just looking at on a very long term it was sort of my first Passion in the space and uh I still you know sort of see it as a model and a North star uh for for the crypto space now we're in the end of 2022.
it was uh I mean it's already December it's a hard it's a hardcore year for everyone like I would say like you know the the war you know Ukraine and Russia the the the the the the the bear market like you know from multiple like you know explosions you know like ranging from ftx's of the world block or voyagers like three errors Etc now what do you think here let's spec a little bit about the projections of 2023 and if you go if you want to go a little bit to the 2024 how long will the bear market last according to you and what are the efficient strategies how to survive the bear Market so I think when I'm thinking of uh price points uh uh you know I've sold the Bitcoin 20K hat uh I've also sold the Bitcoin 100K hat because I thought I wouldn't need the Bitcoin 20K hat again uh last week I got you know I had the opportunity to wear the Bitcoin 20K hat again um so I think if we're looking at like bear market and Recovery I think these things usually last one to two years I think there was we saw three arrows capital go down we saw Tara and Luna go down the one no one was expecting I feel like was FTX except for a few Geniuses that I've spoken to the past few weeks [Music] and I think the FTX thing caused a scare with Genesis so we saw a lot of folks start to question Genesis as well you know a very long well-established platform uh billions and holdings a very good reputation and I think it's going to take some time to see you you know how else this shakes out you know with FTX going down it affected a lot of funds treasuries it affected a lot of startups treasuries and so I think in the next six months we'll perhaps be out of the worst of the worst and we'll see you know what other startups were affected um but uh I think hopefully you know by the end of the year we'll start to see a little bit more confidence restored uh we'll hopefully see you know people focusing on the Great Tech that everyone's building there's a lot of great teams a lot of smart people continue to build good products and I just think it takes a little bit of a shift in the news cycle for the market to be a little bit more optimistic to be a lot more happy and and to sort of bring new folks into the space so I'm sort of thinking end of 2023 we'll start to see that narrative change and we'll start to see people focused on you know what are the great things that are people building out there and you know what's what's actually you know interesting about the technology 100 I agree and uh it's uh it's interesting because what I mean it's gonna be also my third cycle in a space and like what I've noticed that it's right about like three to four months roughly you know before the hoving that's happening which we don't know exactly where when is gonna happen but preliminary what we know is between suburb between the February and June so maybe April maybe may but I I believe like yeah if you if you account this logic that like a quarter before which is presumably like it's end of 2023 like people starting to bring this hype oh The Happening is happening like and then there is entire excite excitement coming because as you know CZ and his interview recently said I said like you know Bitcoin is still a barometer it's still an index of the health of the entire industry right if Bitcoin is healthy then everything follows right so yeah I think it's a very accurate you know assumption that for now we're probably gonna have another year of their Market which is again opportunity for a lot of folks to get into the space cheaply actually a lot of my friends that are actually buying right now like top 10 you know like they got not an investment advice but just just saying you know like it's sometimes you want to get into the particular token just you because you believe sincerely in a project it can be layer one big project that you know that they have huge Partnerships and you do believe it's going to develop like and become an infrastructure of the future so and now is the time you know to consider it right not when it's already peaking as most of the people aren't coming into um now from your vintage point like again like you know you're a builder you're a creator of a successful platform you helped a lot of other platforms so what other aspects excite you right now besides what you do let's let's talk about like something that really one of the applications that you recently came up to whether it's script or nft or something related to our space did you personally use and you're actually excited about it yeah so I you know as as a as someone with the technology background I'm always drawn to sort of new Innovative Tech and so I think in the last cycle we saw a lot of copy copycat projects um so or loan platforms that are sort of hopping from chain to chain uh in this you know with a similar code base or the same code base um and I think I've I've sort of only seen a few novel things come up in uh recent times um so one thing that's sort of interesting is uh that I'm excited about right now is Hash flow and so that takes a RFQ model for trading and applies it to to the D5 space and so you have uh you can do small block large block trades with no slippage and I sort of think the amm model was really good for bootstrapping uh in d57 you know when things were new and the market is small and young and I think a lot of the infrastructure that's out there is going to converge in traditional formats so I think we'll probably see more on chain order books we'll see folks like cash flow with with you know their RFQ model for a sort of a better amm and I think that we'll see you know stuff like that like the layer two uh scalability layer is there it's proven it's trusted now uh and so we're going to see people that are more comfortable with scale uh sort of coming onto onto the blockchain and I think polygon is doing a really good good job of that of bringing Major Brands onto the blockchain and uh doing it at scale and so that's another platform you know I'm I'm interested in because they're able to get Partnerships that no one else is able to get into and I think part of it was first mover Advantage part of it was you know great business development uh relationships and the ability to execute there and so that's been really interesting to follow um I think other interesting things are sort of the bootstrapping of real world networks um using a token incentivized model uh we see that with uh with helium uh I believe there's another platform pollen and uh demo network uh that's doing that uh demos is more so taking car data collecting car data aggregating anonymizing it reselling it and I think those are sort of some of a few things that I think are kind of interesting new and different and you know I didn't encourage any sort of innovators out there that are building it's not about sort of the incremental improvements that we can make in the space but you know how do you get another you know billion users onto the blockchain I think it's going to be very new novel use cases that no one is implementing today and so I think you know the helium pollen demo is sort of doing that we didn't quite think about those things before but you know someone was able to think in a new different format and be bold enough to bring those to Market and so they they really took off so I think that's that's what I'm excited to see in the space is just things that I wasn't expecting they're really interesting now I have a personal question and I specifically don't notify any of my guests about this question because I wanted to be as genuine as possible as an answer so um now I want to ask you the most important question which I think right it there is some planet Earth right what is the meaning of life to you Mason uh the meaning of life uh we're on this planet for a finite amount of time and uh you know if you do nothing it's really boring so it's really important to keep yourself busy and it's important to uh sort of leave the world in a better place uh than when you arrived and so I think the meaning of life is to uh spend time on things that are meaningful that sort of improve uh The Human Condition and uh and that's what we should spend uh you know most of our time doing uh and so that's that's sort of how I see it I think it's very uh very good way to look at it it's very concise and straight to the point uh Mason really interesting to learn from you really amazing like thoughts and I I hope like people who will watch it will enjoy it will share all the information about tokensoft like if you have some guidelines or anything we're also going to provide them that you know like so that we'll have people have better understanding how they can participate whether they're launching a new token or just want to read and understand more about your platform and yeah we'll share all your information uh whether all the social media they can follow you uh you can share more information about what other fancy car you're buying for Bitcoin maybe closer to 2024 or maybe you want you maybe you're just gonna tease people and say like oh you know what I'm gonna huddle uh thank you so much always a pleasure thank you so much it was a pleasure really appreciate it [Music]