The Scoop

On this episode of The Scoop, The Block's research team speak with Dinwiddie about his crypto journey, what originally got him excited about the space, what made him buy bitcoin, the investments that have made him excited about DeFi, Calaxy, and the NBA. 

Despite the uncertainty of the global economy in 2020, the New York Stock Exchange has had a strong year, helping companies raise more than $66 billion. In many respects, it has been the year of Special Purpose Acquisition Companies (SPACs), according to vice chairman John Tuttle. This year, firms have raised billions through the acquisition-style mechanism.During this episode of The Scoop, Tuttle — who previously led NYSE's global listings business — explained why the fundraising method has taken the markets by storm and how they've evolved from a lackluster funding mechanism to a red-hot fad on Wall Street. "Let's look back ten years or so, SPACs were a four letter word, they didn't have the best reputation, the sponsors didn't necessarily have the best interest in mind of investors in the market place," Tuttle said.He went on to explain:"And they largely fell out of favor. Several years ago you started seeing some rule changes around SPACs to address some of those challenges that SPACs had a decade or so ago and you started seeing higher qualities sponsors come into market.What do I mean by that? Folks that—whether it be the Goldman Sachs or the Gores Groups of the world. Folks that had very well-respected reputations in the marketplace both as financial partners but business partners as well too. You started seeing deals be larger in size. You started see well respected names launch SPACs and partner with SPACs and partner with SPACs, and that's what gave credibility to the product."Indeed, some crypto firms have been considering SPAC-centric strategies, including BlockFi and Ripple. There's also firms like Coinbase, which is said to be in the process of going public in the near-term, as previously reported by Reuters. Tuttle says that the exchange group is talking with crypto firms about tapping into public markets. "It has been a space that's been of interest for quite some time," he said. "We've had discussion with companies that have been thinking about accessing the public market, from that space, crypto blockchain digital assets.""Those conversations continue, they're accelerating," he added. "And I also think that digital assets, crypto are going to play somehow somewhere some way an important role in the market of the future."_________________________________This episode was brought to you by Polkadot Decoded, the Polkadot community conference on December the 3rd. Don’t miss this opportunity to tap into the latest developments and discover what lies ahead in the Polkadot ecosystem, including Gavin Wood in conversation with Laura Shin and a panel moderated by The Defiant founder Camila Russo. . Save your spot today!

CEO Brad Garlinghouse says in what was poised to be a challenging year, Ripple exceeded his expectations for 2020. "We aren’t going to grow as fast this year as we thought. However, we’re still getting two production financial contracts a week," he said.Indeed, the digital asset and payment system has seen some days this year in which XRP liquidity on Bitso exceeded BTC. But still, an opaque regulatory atmosphere has kept Ripple from reaching its potential, Garlinghouse argued in an interview with The Scoop's Frank Chaparro.According to Garlinghouse, there isn't a "level playing field" for all digital assets in this regulatory climate."Bitcoin was the only one with the hall pass," he said.This creates an atmosphere in which assets without clarity underperform, according to Garlinghouse.On this week's episode, Garlinghouse discussed how Ripple is "fighting with one hand tied behind our back," as well as: Why big banks aren't partnering with Ripple, but smaller banks are interested The ways regulatory clarity has benefited bitcoin but not other digital assets, and why the lack of clarity impedes Ripple's growth Why Ripple is currently not planning a blockchain initial public offering (IPO) How central banks are looking into XRP-based ledgers.

Shayne Coplan thinks information markets are the future, and with the recent influx in volume to his platform Polymarket, it seems they are rapidly becoming the present. In recent weeks, the prediction market platform has done millions in volume with its various election markets, which span from the U.S. presidential election to state calls. The platform's "Will Trump win market" has surpassed $8 million in volume.As the U.S. presidential election grew ever-tighter on November 3 and 4, many crypto minds noted that Polymarket's odds more accurately reflected the outcomes compared to traditional models like Nate Silver's FiveThirtyEight.Coplan says he has no doubt in the growing future of prediction markets, and on this week's episode of The Scoop, he laid out why he believes markets are the most reliable source of sentiment data. He also touched on: How he went from early ethereum adopter to founder of a company Why he believes markets are superior to polls, and how prediction platforms can change the way information is interpreted Where Polymarket sits on the sliding scale of decentralization and what that means for compliance How Polymarket's second version is lowering the barrier to entry and what tools are making adoption easier What's next for Polymarket after the U.S. presidential election resolves. 

The ban will take effect in January of next year, affecting crypto brokers, investment platforms, financial advisers and, of course, derivatives exchanges. But, David Mercer, CEO of LMAX Group, said what the ban really does is effectively halve the leverage. The FCA had already limited leverage to retail customers to two to one, now it's one to one.  "You've banned derivatives, but actually you've just halved leverage. It's one to one rather than two to one. That's all that's really happened," said Mercer. "What they're saying to everyone, you can own crypto assets you just can't own it on leverage. "Still, Mercer said there is a duty in capital markets to protect retail investors and firms have a duty of care. LMAX Group is a regulated broker in the U.K. trading mostly spot, but clients still pass suitability tests indicating their understanding of the product. Working with regulators, even when you disagree with them — and Mercer said he does disagree with the ban — is key.Mercer laid out why he thinks the FCA took such an aggressive approach on this issue as well as its implications on this episode of The Scoop. He also touched on: Why normal corporate firms are beginning to set aside part of their balance sheets to bitcoin, and why Mercer says it's inevitable that bigger traditional funds begin allocating portions of their portfolio to bitcoin How the market responded to regulator cases against Bitmex  The implications of the FCA ban and how the regulator's influence might change by ignoring crypto stakeholders Why he thinks a significant bank will move into the marketplace in 2021 and what that will do for crypto.

HODLpac is seeking to put the benefits of crypto protocols on display, borrowing from the industry in its governance and voting structure to apportion collected funds to candidates. Though it doesn't accept donations in crypto yet, it does follow a token-based voting structure to determine who the PAC will support and how much a candidate might receive.Its first Community Ballot will occur tomorrow, meaning those who are interested in donating and voting on candidates still can. For more information, Whirty and Smith broke down the structure and purpose of the project on this week's episode on The Scoop.Whirty and Smith also discussed the opportunities of a blockchain-based PAC and where they see the project going, as well as:  How a crypto-focused hybrid PAC operates and why it's needed in Washington The PAC's quadratic voting structure and how quadratic voting can lessen the disparity between hyper-wealthy and average donators The road to more decentralized governance and a grassroots base An inside look at the way money talks in Washington — and why a PAC or donation-based opportunity may be a faster way to get an issue on the floor What the different 2020 election outcomes might mean for crypto.

Yassine Elmandjra, crypto asset analyst at ARK Invest, published a white paper recently that argues Bitcoin could reach three trillion dollars in market cap by 2025. On this week's episode of The Scoop, he broke down how he arrived at that conclusion.ARK began looking into digital assets in 2015, when BTC was trading around $250. At that time, the firm published a white paper arguing BTC was unique and didn't fall into a traditional asset class. Now, it's published a part two to that early paper aimed at institutions. "In addition to sizing that opportunity for institutions, we really tried to look at what the liquidity and volume profile of Bitcoin are relative to other asset classes and whether or not we're at we're at a place where Bitcoin can support the institutional flow that we so desire," he said. "With that...indeed, we think that over the next five years, Bitcoin presents a multi trillion dollar opportunity."Elmandjra detailed the path to the moon on this week's episode, as well as: The relationship between Bitcoin, the S&P and gold and what that means for strategic allocation What increasing volumes means for Bitcoin's maturity as an institutional asset What the main pain points are for institutional adoption of Bitcoin, like the lack of primer brokerage firms and large custodians  What it would take for Ark to gain spot exposure of bitcoin in the future

Last Thursday, BitMEX found itself embroiled in both a civil and criminal case with the Commodities Futures Trading Commission (CFTC) and the Department of Justice (DOJ), respectively. BitMEX was hit by twin lawsuits. The CFTC accused the derivative exchange and its operators, including CEO Arthur Hayes and co-founders Ben Delo and Samuel Reed, of running an unregistered trading platform and violating anti-money laundering and know-your-customer regulations.The DOJ filed a criminal indictment against Hayes, Delo, Reed and head of business development Greg Dwyer for allegedly violating the Bank Secrecy Act. Reed himself was arrested. Responding to the breaking news developments, Stephen Palley, partner at Anderson Kill, featured on this week's episode of The Scoop to break down the nuances of the two cases. He touched on: The process for litigating Bank Secrecy Act violations, and why it's likely the BitMEX operators are likely on the hook for possible prison time What this case means for the growing decentralized finance space Key facts in each filing that will be impactful going forward Why it's surprising that the BitMeX domain has not been seized by law enforcement

"We knew that DeFi was going to be big and important about sometime last year."CoinGecko co-founder TM Lee has been keeping a pulse on the space since starting the platform as a project with his co-founder in 2014. The initial coin offering (ICO) boom of 2017 multiplied the traffic tens of times over, cementing CoinGecko as a popular crypto metrics provider. Now, CoinGecko is in the midst of another boom — the decentralized finance (DeFi) explosion. The platform has gained even more popularity listing hundreds of DeFi tokens, becoming a hub of information on for those interested in the ever-increasing projects. But even though CoinGecko saw the DeFi explosion on the horizon thanks to a few team members interested in the space, on this week's episode of The Scoop, Lee said he wasn't expecting the magnitude seen today."If you asked me last year, would DeFi be big today? I just couldn't see that. Will Uniswap be a billion dollar trading volume that beats Coinbase? I would also say that's not possible. But we are in this world right now," he said.On this week's episode, Lee talked about how DeFi mania is changing up the platform's approach as well as: The genesis of the platform, from early days in 2014 through the ICO craze of 2017 to today What's driving Coin Gecko's growth now, and why the explosion came only recently How the platform balances offering a wide array of DeFi projects with protecting users from possible scams How the team is working to stay ahead of the curve during DeFi mania Why the investment side of the team's operations is key in the current climate.

In the fast-paced world of decentralized finance, the people behind the protocols are sometimes just as captivating as the protocols themselves. That's certainly the case for yearn.finance's Andre Cronje, the former banking developer who seemingly built out both a cult following and billion dollar protocol over night. Indeed, the governance token tied to the protocol, YFI, has surged beyond $30,000 since its inception at the beginning of the summer. If it was up to Andre, however, he wouldn't be affiliated with the protocol as much as he is. Cronje is currently trying to expand the number of folks responsible for shepherding the protocol.In the most recent episode of The Scoop, he explained why a proper decentralized protocol doesn't need a decision-maker or figurehead, and discussed yearn's planned transition to a more decentralized model in which multi-sig holders would approve strategies. "We haven't fully transitioned yet," he said. Still, he said: "I disagree with this idea that people have that I am yearn because it doesn't need me. If I were to have a heart attack on this call now, it's going to continue without me."We also discuss:  Challenges of decentralized governance and how the yEarn community has fared Why it's difficult for other projects to replicate YFI's success with their token launches How the experimentation happening in the DeFi world matters to the traditional world of finance What lowering the barrier of cost in DeFi means for innovation  What's behind the kind of toxicity in the space that almost drove him out Some of the new project ideas yearn is working on, such as Stablecredit