It's insane.

And it just looked like a money loser.

Uh, and he was the first to it.

Um, I think like it all comes down to attention and banks.

I've always respected this about you.

Like, People for a long – and I've always taken this stance, which is like if you can – people build great products, sure.

But if you can't put eyeballs on it, what is a great product? And I think there's been a lot of stories of that.

Legendary.

Like first, why penguins?

Well, we probably have to go back a little bit further to the history and origin of Pudgy Penguins, so I'll give you the really brief version.

We bought Pudgy Penguins for $2.5 million, and it was an NFT business.

And so we were huge believers in NFTs, huge collectors.

I was actually one of the Pudgy Penguins' biggest holders, and they didn't have the capacity at the time to kind of take the brand where I envisioned it could go.

So, you know, fast forward, you know, six months after my first purchase of the Pudgy Penguin NFT, I placed a bid for two and a half million dollars to buy it.

We put half a million dollars into the business and then kind of crypto and NFTs fell off a cliff literally the day we bought it.

Yeah, super

Like what are the problems that they should be going out and solving and, and telling people they're gonna solve?

It's an interesting one because I think like I always felt like Vitalik always had a good finger on the pulse in terms of like what Ethereum needed to succeed.

And I think his problems that I think he's addressed, that I think they've been working to solve, I mean, the core foundation's been working to solve, are probably the right ones.

Obviously, this is like a different group, and so when I look at this group, um, you know, obviously it's like the big treasury holders.

I'm kind of with you, Kane.

Like I don't know what 15-minute finality, like what difference that makes.

Clearly, it makes a difference to somebody though.

Love it.

Luca, how do you guys think about this? In inside like igloo? But like, you track how much inference people are spending? Like, do you track what models they're using? Like? How do you guys do this?

Not as rigorous as probably I'd like it to be, but I think we're spending like $50,000 a month.

We have some sort of like maximum threshold, and then we get notifications that kind of go off.

Actually, our president, Lorenzo, who was once our CTO, has built, he calls it Omelibot.

It's like a brain for the entire organization.

And he actually wanted to build it out more.

He thought that somebody would come out with it.

Luca, what's your take? Should we ban this from crypto? Where are we going from here, bro? Help me.

... how, how do you guys do this?

It's not as rigorous as probably I'd like it to be, uh, but I think we're spending, like, $50,000 a month.

We have some sort of, like, a, like, maximum threshold, and then we get, uh, notifications that kind of go off.

Actually our, our, uh, president, Lorenzo, who was once our CTO, had built, like, a...

Has built, he calls it O'Malley Bot.

It's like a, a brain for the entire organization, and he actually wanted to build it out more.

He thought that somebody would come out with it, and so we can kinda stop, but we've yet to kind of seen it.

Like [laughs] like starting to-

It, it, it feels, it feels very much-

And I'll tell you this, you wanna know the beauty about this one? Is all the crypto natives, all the smart crypto guys are in, and the exit liquidity here is actually like TradFi and Wall Street.

Like those guys will buy this bag from the crypto folks.

So hopefully the wealth effect here translates really well, right? Because this is the bag that like I can see Morgan Stanley and Goldman being like, "Yeah, we need like a billion dollar position in this." Um, and, and, and this is all the best traders I know, all the, all the liquid funds, like everyone's in this, you know? Very few people that are not in this, in crypto at this point.

Agree.

So would be good for the space.

And, and I talked about liquid funds, so I'd obviously on behalf of Pengu, I, I speak to liquid funds and, you know, just make sure they're aligned on the thesis and ask questions, obviously like pitch why I think Pengu should be in their portfolio.

Um, and to this point that I had just mentioned, he was like, "Look, like we're all in hype, but like when hype hits all-time highs, like we will take profits and we will rotate." And I think there's a lot of people that are, that are in that boat, specifically the guys with huge size.

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Like how do you, like, separate the grifters from people actually doing a thing?

So I had a situation like this happen to me.

When we first bought Pudgy, uh, we kind of consolidated the cap table accordingly to the two and a half million dollar purchase price.

There was basically four co-founders as people know us today, but there's actually a fifth.

to just like, and all it took was me like not doing stuff for like a couple months to completely forget how to protect myself and almost get fucked.

You wanna hear a crazy one? In 2023, when we first raised our round, there was, we were accepting investment checks in crypto and one of the VCs actually got hit with a man in the middle attack.

So they sent us $2 million, but what they actually did is they sent a dude in Nigeria $2 million in USDC.

And this is like while the whole world's imploding and me who's never raised money in my life, I was so stoked that I was starting to get checks through the door.

and when the two million dollars got stole basically somewhere within the email chain the guy adjusted because the person's name had like an eye in it they did the whole l i right so they changed changed it and they were kind of messaging our lawyers direct uh and then and then kind of changed the receiving address they sent the two million bucks i was like so am i still getting the two million dollars i i hate to ask but $2 million would go a long way right about now.

Can the money still come through? They're like, yeah, we have insurance for it, whatever.

But poor VCs.

What's next?

What's your takeaway after 12 hours of this?

I wouldn't go as far as saying complete mockery.

I think that was a little overblown.

I was saying during the commercial break, somebody on my PR team reached out to me to do this, and I smelled this from a mile away.

I knew exactly how crypto would take it.

So the crypto, the crypto pool of people obviously doesn't rock and roll.

And during the commercial break, Tay, you were so funny because there's, I think that just shows like the duality of the different cohorts.

We don't have to pretend

Mm-hmm.

... that taps into global composability and global liquidity, which basically means that, like, anybody with an internet connection can transact, you know, using these payment rails without some sort of intermediary.

And that, at scale, if you actually understand, like, consumer product builds, you know, every, every guy that I know that's building an AI or building consumer product goods at one point has had their account locked up or their funds withheld or are paying a huge premium on these transactions, whether it's 3%, in some cases, 5 to 8% if it's a higher risk product.

Uh, and I think this...

You know, blockchain is very useful when you think about removing that middleman for those applications.

I think we've just been pigeonholed as an industry around, like, these builds that are solely around speculation-

Yeah.

And info, right? The WAP guys can go and plug that in.

Mm.

Because prior to us, NFTs stayed in this digital universe, in this, you know, vision that Ready Player One was gonna come 20 years earlier than it actually was going to come.

And I thought, you know, if this was the next generation brand and all of these companies were raising billions of dollars under this guise, then as a brand builder for the last eight years, I felt like they just weren't doing all of the obvious things that all these brands have to do to win.

Are we going digital? Is everything gonna be digital 20 years from now? Sure.

But today, people need physical interactions.

Uh, and I think that's a huge reason why we've won and we've been so successful the last couple of years, is we've really blended the two worlds, right? We have, you know, toys in 10,000 retailers.

Every toy is tied in with an NFT and crypto experience.

You know, I don't know how, how resource constrained you guys have been exactly, but I imagine it's quite a bit more constrained than, than many other, many other projects in the space, especially as, you know, certain projects got marked, you know, really, really high, a bunch of capital flooded in, and, uh, I don't really have a good lens on, on how that's worked out.