Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Hello odd Laws listeners and viewers, You're about to get
Speaker 2: a conversation with Turrek Monsieur, CEO of Kelshi. This was
Speaker 2: recorded live on stage at Chicago's Untitled supper Club. We
Speaker 2: had a blast, and we hope you enjoyed the show.
Speaker 2: You're definitely having a moment. The South Park episode last night,
Speaker 2: it was all about prediction markets.
Speaker 3: Did you watch it live?
Speaker 4: I try to avoid watching or reading anything about us
Speaker 4: without kind of getting the third party reaction before. So
Speaker 4: we didn't know because we saw the thing, like the
Speaker 4: announcement a few days ago there apisode prediction Markets, and
Speaker 4: we started kind of imagining all the types of things
Speaker 4: that they're going to do.
Speaker 1: It was crazy.
Speaker 4: I mean the highlight I think is like they copied
Speaker 4: the app like, yeah, exactly, I was. I mean, they
Speaker 4: even had the referrallable and they even had some of
Speaker 4: the bugs we haven't they have. It's like it was unbelievable.
Speaker 4: So but you know, it was. It was pretty cool.
Speaker 4: I mean, there's a few parts that I disagree with,
Speaker 4: but the other for the rest, I mean, we really
Speaker 4: enjoyed it.
Speaker 1: I watched it this.
Speaker 2: Morning why do you think prediction markets are having this
Speaker 2: moment now after they've been around for decades? Literally? Why?
Speaker 4: Now? Yeah, I mean I think there's like path dependence
Speaker 4: in these things, right, Like it's not sort of like
Speaker 4: I'm a strong believer. That's sort of like you know,
Speaker 4: in history, you have to have a few agents that
Speaker 4: sort of like push and you know, push the boundary
Speaker 4: of certain things and somebody's got to do it type thing.
Speaker 4: But my view on this, and that's why we started
Speaker 4: the companies. The fundamentals are there, like this should be
Speaker 4: a very large market. And we could talk a little
Speaker 4: bit about the history. But when we first started the company,
Speaker 4: this idea of sort of like a financial market that
Speaker 4: prices questions about the future sort of we were very
Speaker 4: drawn to it because, you know, one, if you could
Speaker 4: build such a financial market, it could be the largest
Speaker 4: of them all because the largest number of people will care.
Speaker 4: And the number two could be the most important because
Speaker 4: you know, yes, pricing the you know, Sheriff Tesla is important,
Speaker 4: but pricing whether brexfast is going to happen, or Drum's
Speaker 4: gonna win in election, or or what's you know, the
Speaker 4: sort of the next natural disaster going to be. I
Speaker 4: think that's at least as important, if not more, at
Speaker 4: least from our perspective. I mean, when I looked at
Speaker 4: the history and you were chatting a little about the history,
Speaker 4: like the elephant the room was regulatory, it was I mean,
Speaker 4: there's a very simple kind of like first order factory here. Well,
Speaker 4: well it was illegal, like you know that that that's
Speaker 4: a pretty good reason for Yeah, I mean it's a
Speaker 4: pretty good reason for something not to you know, generally
Speaker 4: kind of go mainstream and exist. And the legality has
Speaker 4: been sort of the thing that has weighed on all
Speaker 4: prior prediction markets. I don't know if you ever counted
Speaker 4: in trade.
Speaker 2: Yeah, yeah, I trade it on there.
Speaker 4: Well you know, so so here you go, right, I
Speaker 4: mean in Trade was you know how that story kind
Speaker 4: of ended?
Speaker 1: How familiar are you?
Speaker 2: I don't know how to end it?
Speaker 4: So so so John Delaney was this was a sort of
Speaker 4: founder of in Trade and it's just kind of visionary.
Speaker 4: I mean, like Dawn in many ways. I mean he
Speaker 4: really believed that. You know, he was on CNBC back
Speaker 4: in two thousand sort of like talking about the forecast
Speaker 4: for the election and stuff. But he sort of ran
Speaker 4: offshore from Dublin and it was kind of like a
Speaker 4: VPN stype set up. And then the company got shut
Speaker 4: down in twenty twelve by the government, and two weeks
Speaker 4: later John Laney died and he died climb Mount Everest,
Speaker 4: and there was a kind of whole controversy of like
Speaker 4: what happened? I mean, you know, was there some sort
Speaker 4: of causation there? But for us, when we we got
Speaker 4: really obsessed by doing this and realized like, actually, the
Speaker 4: only way for this to go big is we got
Speaker 4: to legalize it, like there was no other way. And
Speaker 4: no matter how big the company would get, no matter
Speaker 4: how kind of how much culture there was going to
Speaker 4: be around the company, it didn't really matter because the
Speaker 4: government could shut it down and they will after a
Speaker 4: certain level of scale. And so this was sort of
Speaker 4: like we spent you know, three years and a half
Speaker 4: when we started after starting CALSHI, like all we did
Speaker 4: was basically regulatory work.
Speaker 1: It was like, how do we leave fight exactly?
Speaker 4: The fight was actually like more like five years and
Speaker 4: a half, Like with three years and a half to
Speaker 4: get to legalize prediction markets, and was sort of the
Speaker 4: whole thing with the prior administration around the election market,
Speaker 4: which we were completely uncompromising on.
Speaker 1: We had to do that and that was kind.
Speaker 4: Of a whole two year long process that ended without
Speaker 4: suing the government, our own regulator. And then and then
Speaker 4: I think that lawsuit. I view it as sort of
Speaker 4: the probably what the turning point is for these monkeys,
Speaker 4: like this is when we wanted the institution, Like this
Speaker 4: is when everything changed.
Speaker 3: I think, would you have died if Trump hadn't won
Speaker 3: in November.
Speaker 4: No, it would have just been slower and harder. But no,
Speaker 4: not died. I mean, we didn't die under the harshest
Speaker 4: environment of all. I think like, like, you know, well,
Speaker 4: the first right, the first three years and a half
Speaker 4: was like, well this was just not allowed, right, and
Speaker 4: we didn't you know, we kept sort of making progress
Speaker 4: all the way up onto legalizing and launching. But then, yeah,
Speaker 4: the reality is like the prior government I think was
Speaker 4: as hostile as it gets. That it was just not
Speaker 4: I mean, they just didn't want it to exist.
Speaker 2: So well, you say that, like it's really important to
Speaker 2: have a change in the regular landscape, that there was
Speaker 2: no way this could have taken and off had this change,
Speaker 2: had this not changed. However, there is a competitor that
Speaker 2: you can access via VPN fund with stable coins. In theory,
Speaker 2: there doesn't even need to be a company that had
Speaker 2: been operating for several years. Couldn't it have happened and
Speaker 2: could it still happen? That the future of prediction markets
Speaker 2: is on chain and essentially outside of the regulatory lands.
Speaker 4: I don't necessarily think that on chain off chain is
Speaker 4: sort of necessary. It kind of an unregulated regulated like
Speaker 4: like on chain doesn't mean illegal, right, Like.
Speaker 1: Sure so, but I think that like.
Speaker 2: But there was a lot of volume on this entity
Speaker 2: that had all kinds of things while we're talking about
Speaker 2: poly marketing.
Speaker 4: So it's not like we couldn't go on chain, right,
Speaker 4: It's like this is not a very hard thing to build, right,
Speaker 4: And actually, like it's funny, like the first two weeks
Speaker 4: of cash we tried to do something on chain and realized, like, well,
Speaker 4: again it was a good way to sort of be
Speaker 4: maybe like somewhat smart about regular regulation, but not really
Speaker 4: because Augur was on chain also, and like that was
Speaker 4: also sort of shut down and it was a bunch
Speaker 4: of issues.
Speaker 1: For us.
Speaker 4: We stood very firmly that like, for this to go mainstream,
Speaker 4: why you should avoid a VPN, you know, but also like,
Speaker 4: how do you have this be legitimized financial markets attract
Speaker 4: the type of institutions that would trade. You have a
Speaker 4: bunch of institutional partners and now the brokers and actually
Speaker 4: truly take this manstream. There was just no way to
Speaker 4: do it outside of the like this is the universe
Speaker 4: of financial markets. You can now do it outside. You
Speaker 4: have to expand it. And if you expand it, then
Speaker 4: I think we have a real winner. And I think
Speaker 4: the results show like, you know, yes, Bally has a
Speaker 4: lot of volume, but like there's not real revenue yet,
Speaker 4: there's a lot of wash. Like it's kind of how
Speaker 4: do you account for all this stuff? And even if
Speaker 4: you account for all of that today we're like something
Speaker 4: like three x bigger within a year.
Speaker 3: So definitely want to talk about the brokers and the
Speaker 3: market makers. But before we do, a very basic question,
Speaker 3: but often the basic questions are the most interesting. Can
Speaker 3: you walk us through the life cycle of you know,
Speaker 3: a binary event contract that gets created on your platform.
Speaker 4: It's a great question because that's a hard problem, right,
Speaker 4: like because the traditional markets, right the life cycle is
Speaker 4: like you know, you have an idea like grain futures
Speaker 4: or Onion futures or GPU future your future, your futures,
Speaker 4: there is a bad idea.
Speaker 3: It's out up a protection.
Speaker 1: I do.
Speaker 2: I do think it's a little lame that poly market,
Speaker 2: like it hasn't done on your futures because if you're
Speaker 2: gonna look, what's the point of on train if you're
Speaker 2: not sticking it to the man anyway.
Speaker 4: If like the Onion farmers are like finally having like
Speaker 4: instrumental hedge, And what's.
Speaker 2: The point of crypto if you're not using it to
Speaker 2: fight against rule?
Speaker 4: I mean, well, the Onion Future's rule is truly absurd. Yeah, yeah,
Speaker 4: it's like that's one of those but I guess now
Speaker 4: it's maybe kind of funny.
Speaker 1: Maybe we should just keep it. But like.
Speaker 4: Or like GEP I mean, or like GPU Future, I mean,
Speaker 4: like the point here is like you have something where
Speaker 4: the lifetime is infinite. You list the future and the
Speaker 4: derivative and it's sort of there forever, and then you
Speaker 4: build a liquidity over time and you can take your time.
Speaker 4: It takes like usually these things take time, they take
Speaker 4: years to kind of build up to market them and
Speaker 4: build equity. This is different, right, Like this is much
Speaker 4: more dynamic. It comes and goes like oftentimes the trend
Speaker 4: could be sort of like there for two to three weeks,
Speaker 4: sometimes a week, sometimes it's a day, and you have
Speaker 4: to much more, much faster, and kind of my mental
Speaker 4: model for what this looks like is sort of like
Speaker 4: there's an idea that can be from a user, from
Speaker 4: a from the news, from a trend from some tweet.
Speaker 4: Then there's the listing of the market, and then there's
Speaker 4: kind of like from a listing to kind of making
Speaker 4: it reasonably liquid and active. So we've we've gone through
Speaker 4: like all kind of types of regulatory winters. But the
Speaker 4: first time we listed a market, it took us eighteen months.
Speaker 4: That was just for listing and because there's a lot
Speaker 4: like the operations attack. These are tickers, right like you
Speaker 4: list them like a stock or like a like WTI
Speaker 4: crude oil. Now we do it within thirty minutes, and
Speaker 4: so we've expanded the territory quite a bit.
Speaker 3: And when you list it, does it go to the
Speaker 3: CFTC or what.
Speaker 4: Basically processes there's like a self certification which basically fight
Speaker 4: with the CFC, and they kind of like generally historically
Speaker 4: is basically like if you file it and you haven't
Speaker 4: engaged with them beforehand. They usually will basically block it.
Speaker 4: They'll call you and say stop until we talk, and
Speaker 4: then you do it. But now we've covered so much
Speaker 4: territory and build so much technology and like the operations
Speaker 4: and the regulator in the loop, that like most new
Speaker 4: things that we do actually fit into a bucket that
Speaker 4: we've already done. And sometimes there are complete new things,
Speaker 4: like right now, the frontier is actually some of the
Speaker 4: SEC company related markets.
Speaker 1: I think it's the sort of next frontier.
Speaker 4: But we've covered so much grounds now that like most
Speaker 4: things are like of a similar flavor.
Speaker 2: We've been going this whole time. You know, you talk
Speaker 2: about company related stuff, talk about hedging onion futures, maybe
Speaker 2: hedge or sorry, hedging onion prices. Maybe you want to
Speaker 2: strip out something related to Tesla car. But let's talk
Speaker 2: about the business. How much of this is sports right now?
Speaker 2: How big is the gap between volume on a Sunday
Speaker 2: versus volume on a Wednesday.
Speaker 4: Volume on a Sunday is very very big. But like
Speaker 4: it's interesting, I mean, like I'll say a few things,
Speaker 4: like the sports side has grown, Like I mean, I'm shocked.
Speaker 1: I'm still shocked.
Speaker 4: Like every week, we do a forecast and we beat it,
Speaker 4: and like, you know, America likes NFL.
Speaker 1: I mean I don't know.
Speaker 4: I mean they like football. I don't know, more than expected,
Speaker 4: I guess, but it's a little bit more than that.
Speaker 4: Like the thing about sports is, let's say there's two
Speaker 4: things going on one there's just a lot of scheduled events.
Speaker 1: Okay, there's just a lot in the week.
Speaker 4: But if you compare like a one to one like
Speaker 4: a game to like basically anything that Trump does, Trump
Speaker 4: will win, like you know, like the in terms of
Speaker 4: volume one to one. He like these markets do really
Speaker 4: really well, and it could be literally unlike any I
Speaker 4: mean anything he does.
Speaker 1: The problem there is like there's not enough schedule, like
Speaker 1: I think there may be over just what percentages on Sunday,
Speaker 1: Like it's not I mean probably ninety percent of sports
Speaker 1: on like a regular weekdays like much lower.
Speaker 2: And what's the gap and harm between three acts?
Speaker 1: Maybe?
Speaker 4: Okay, okay, so like yeah, I mean NFL Sunday is
Speaker 4: like massive, but it's a little bit like it's it's
Speaker 4: a littally like asking a question.
Speaker 1: Like okay, well, on election Day, what was the volume? Right? Yeah,
Speaker 1: it's like nine nine elections.
Speaker 4: Right, So, so sports is very large, but like we
Speaker 4: have other categories now, like like culture, for example, I
Speaker 4: think is like growing at a similar rate. That's just
Speaker 4: starting from much lower baseline, and our market diversity, our
Speaker 4: liquid is just not there yet, whereas sports is much
Speaker 4: more kind of like I would say, like much more
Speaker 4: diverse and much more liquid.
Speaker 3: Okay, so I'm going to ask the obvious question, I guess,
Speaker 3: but why is it not sports betting?
Speaker 4: You know, I don't have kind of like as much
Speaker 4: a problem with the word betting. I think gambling is
Speaker 4: sort of where where I have a problem. I mean,
Speaker 4: you know, when like see me launch Water Future is
Speaker 4: like three four years ago, and you know I remember
Speaker 4: like the headline about that is like, oh you can
Speaker 4: now bet on water. It's like all right, I mean,
Speaker 4: I guess the word betting is you use very sort
Speaker 4: of loosely. But like I would say two things, the
Speaker 4: sort of the legal question and there sort of the
Speaker 4: ethic goal is this good for society?
Speaker 1: Question?
Speaker 3: And those are we will do both of them, don't worry.
Speaker 4: Yeah, let's I mean, I guess. So the legal question,
Speaker 4: I mean, like our approach has always been sort of
Speaker 4: legal and regulated first, like always do it within the
Speaker 4: bounds and expand the bounds. So we did this friction market.
Speaker 4: Then elections, you know, I mean a year ago right
Speaker 4: well ego, even like I mean, people were saying, this
Speaker 4: is going to destroy democracy, right like it was it
Speaker 4: was the end of the world if we ever got legalized,
Speaker 4: and like you know, and like it was and then
Speaker 4: we legalized, and it was like super biased and you know,
Speaker 4: I was being accused of being more sad agent.
Speaker 1: I don't remember that period, but like it was.
Speaker 4: Like I missed no one, like it was like a
Speaker 4: whole thing about you know, I worked at pountry and
Speaker 4: thus I'm obviously kind of rigging the election. But like
Speaker 4: and obviously the vibe has shifted pretty dramatically with the election.
Speaker 4: And because you know, there is some kind of powers
Speaker 4: these markets. So when it comes to sports, like on
Speaker 4: the legal piece, like it is legal, like doc could
Speaker 4: stop it if I wanted to, but the states can't.
Speaker 4: That's federal preemption. And that's how it works. And we're
Speaker 4: extremely strong legal footing. I mean, Don was mentioning sort
Speaker 4: of the I don't think safety is a sleep at
Speaker 4: the wheel, Like you know, they have less staff but
Speaker 4: they have staff, and the staff is aware of sports
Speaker 4: we talked about and it's not like we showed up
Speaker 4: one day like hey, surprise, sports markets are here.
Speaker 3: Like, isn't Trump's nominee also on your board, the nominee
Speaker 3: for CFTC.
Speaker 1: Well he was X nominee.
Speaker 4: Now, I mean, we'll see, but I mean I don't know,
Speaker 4: but I don't know if it's X nominy.
Speaker 1: But like there there's a kind of questions.
Speaker 4: But he was not there when this happened, and like
Speaker 4: he was, he's still not there actually, so I don't
Speaker 4: think it's very relevant to the question. I think the
Speaker 4: change of the administration is well into the question, Like yes,
Speaker 4: I mean I think it would have been much more
Speaker 4: challenging in the prior administration.
Speaker 1: Like there's no question about that. But the law is
Speaker 1: pretty clear.
Speaker 4: I mean, if you read the Commodities Exchange, actor's like
Speaker 4: a two prong test and it's is an event kind
Speaker 4: of related to war, terrism, assassination, violence, or gaming, and
Speaker 4: then there's some sort of illegal stuff that's illegal under
Speaker 4: state or federal law, and so you can fall under
Speaker 4: de cart We could debate whether this falls under gaming
Speaker 4: or not.
Speaker 1: And there's actually quite a bit of a debate there.
Speaker 4: And then the second test, which is like, if it
Speaker 4: does fall under dis category, tifcy can make an explicit
Speaker 4: determination that is contrary to public interest. Right, so there
Speaker 4: is that sort of second standard, yeah, which rais me
Speaker 4: second question, which is like, I'm just shaw and believer
Speaker 4: in markets, Like I think a market based model for
Speaker 4: these market is better than the over the counter sports.
Speaker 1: Book model because the odds are better.
Speaker 4: Anyone can be a price better, they don't have to
Speaker 4: be a price taker, and the results show like less people,
Speaker 4: Like the percentage of people that basically lose on CASHI
Speaker 4: is closer to fifty to fifty.
Speaker 1: It's just not the case and like a traditional.
Speaker 4: Sports book, And I think that's the sort of argument
Speaker 4: that wins it long term, which is like this is
Speaker 4: just better, Like you get better prices, more transparency, and
Speaker 4: the ability to you know, influence, like basically participate in
Speaker 4: a way you can't an a traditional model.
Speaker 2: You already said that you don't think that the distinction
Speaker 2: is not between trading and betting, the distinction between betting
Speaker 2: and gambling. See sort of preempted to question, But there
Speaker 2: is this Facebook ad that I saw, and it says
Speaker 2: breaking news, sports betting in California is now legal, And
Speaker 2: I saw a screenshot but I couldn't find it. I
Speaker 2: found it on a blog. But is that like an
Speaker 2: actual Kelsey ad that.
Speaker 4: Ran, well, we have a very large marketing team and
Speaker 4: this is the ad is not there anymore, but like regardless,
Speaker 4: I mean that was what you gotta imagine a company
Speaker 4: that's like rule one hundred x so like like nothing, you.
Speaker 2: Know, you're saying like breaking news, Like I guess what
Speaker 2: I'm saying is like we all know what's going on.
Speaker 4: Well, the news is breaking. I mean it is legal
Speaker 4: to trade ony states. I mean that that's big news,
Speaker 4: like you know, yeah, and we are ligitally I mean
Speaker 4: you know so, but like I do actually think that,
Speaker 4: like I'm not as worried about this, like like you know,
Speaker 4: the word gambling is the one that really irks me,
Speaker 4: Like I think, you know, because like okay, zero zero
Speaker 4: DT options, like like what retail is doing work like
Speaker 4: a trillion dollars of all I mean you probably know
Speaker 4: the numbers.
Speaker 1: What is it there?
Speaker 3: I can't remember, but it's a lot.
Speaker 4: Yeah, So what is retail doing the like hedging? I mean, right, no,
Speaker 4: what exactly are they doing.
Speaker 2: They're gambling.
Speaker 1: I don't know about that.
Speaker 2: No, I think, I mean, I think it's fun. Like
Speaker 2: I agree with like this premise that the well.
Speaker 4: Draw line is basically like like it's it's the sort
Speaker 4: of thing where like I mean, in nineteen oh five,
Speaker 4: I think we talked a little b about this, Like
Speaker 4: the Supreme Court there was this whole question of grain
Speaker 4: futures like should it be gambling or should it be
Speaker 4: a financial instrument?
Speaker 1: And if it was gambling was going to go under
Speaker 1: the bucket shop laws.
Speaker 4: And it was this sort of Supreme Court case Chicago
Speaker 4: Board of Trade versus Christie, where Supreme Court basically like
Speaker 4: ruled in favor of the Chicago War of Trade, which
Speaker 4: is like, yes, a lot of people are speculating, but
Speaker 4: there's value to these markets beyond the actual speculative.
Speaker 1: You know, activity is taking place.
Speaker 4: And then you get into the kind of question of
Speaker 4: like what is the standard of the Commodities Exchange Act,
Speaker 4: Like should all the activity be hedging? Well, if if
Speaker 4: that's the case, then you let's just cancel the whole act.
Speaker 4: Let's just stop trading altogether. Because in most markets, including
Speaker 4: grain futures, like ninety five percent laws is not hedging
Speaker 4: expeculative and I think that's true in the sock market.
Speaker 4: And so you know, and then like, okay, well how
Speaker 4: do you distinguish and you know, should we take out
Speaker 4: the spectator and just keep the hedging. Well, if you
Speaker 4: do that, then there's no liquidity and so it doesn't work.
Speaker 4: And then how do you even know who's hedging and speculating?
Speaker 4: Do you go and check? So so you go into
Speaker 4: all these different questions. But like, to me, gambling is
Speaker 4: sort of like you create an artificial risk and then
Speaker 4: you roll a dice and then you gamble on it,
Speaker 4: you know, but trading on whether breaksit happened or not,
Speaker 4: that's just like a natural risk.
Speaker 1: That's sort of there.
Speaker 4: And then the second question is that and to me,
Speaker 4: the even more important one is like the the market
Speaker 4: based mechanism versus sort of like you walk into a casino,
Speaker 4: the odds are like structurally stacked against you, and actually
Speaker 4: if you start making money, they like, in the best
Speaker 4: case scenario, they basically, you know, stop you from participating,
Speaker 4: and that happens in sportsboks and others. And the worst
Speaker 4: case scenario, they like kneecap you right, like they and
Speaker 4: so that to me is gambling. Like it's like the
Speaker 4: revenue of the company is equal to the losses of
Speaker 4: its customer and vice versa. I just don't think this
Speaker 4: is the same here, Like, that's not how the New
Speaker 4: York startion makes its money. It makes it funny based
Speaker 4: on fees. Same with Robin, and same with you know,
Speaker 4: same with Calci, And so I think there's a big
Speaker 4: structural difference.
Speaker 3: Well, this was going to be my next question actually,
Speaker 3: So setting aside the gambling terminology, part of your argument
Speaker 3: here is that even if it is betting, it is
Speaker 3: somehow qualitatively different than traditional betting, where you know, you
Speaker 3: have a sports bookmaker who's setting all the prices. And
Speaker 3: you said earlier that there is more transparency and fairer
Speaker 3: pricing and all of that. But then again, if you
Speaker 3: look at some of the words that your own company
Speaker 3: has used to describe this. You put up job advertisements
Speaker 3: saying that you need experts in something similar to sports
Speaker 3: book pricing.
Speaker 1: No, that's not quite right.
Speaker 4: Now, the job is the sports operations, listing the markets,
Speaker 4: how to settle them in all these different things, which
Speaker 4: that dynamic is very similar, right, Like you have to
Speaker 4: know which markets list, how to list them? What are
Speaker 4: the price feeds to kind of like pull up to
Speaker 4: pull to basically settle whether it's sort of like this
Speaker 4: team one versus the other. That's very different, like you know,
Speaker 4: we need I don't know, like someone who is like
Speaker 4: an expert and like you know, like programmed to like
Speaker 4: you know, bring in traders and figure out how to optimize,
Speaker 4: like how to like optimize like losses and things like that.
Speaker 1: Like this is very very different.
Speaker 3: Well, talk to us how the prices are actually set then,
Speaker 3: And why does you know a platform that ostensibly is
Speaker 3: a peer to peer trading platform need market makers at all?
Speaker 4: Well, if you listen to new market right now, like
Speaker 4: on let's give an example, like even fed rates, you
Speaker 4: got to kick started somehow, right, Like the financial markets
Speaker 4: need market makers right, and they are peer to Like
Speaker 4: financial markets are the ultimate version of peer to peer.
Speaker 1: That's what they are.
Speaker 4: But it's basically a way to kickstart and move shabequity
Speaker 4: and actually are our most liquid markets. The more successful
Speaker 4: market becomes, the more profitable market becomes, the lower the
Speaker 4: percentage of market makers, like whether it's like partners like
Speaker 4: Susquehanna and in soitutional market makers and others, and the
Speaker 4: higher it is that it's basically organic liquiity. So actually
Speaker 4: the more successful it is and the more profitable for us,
Speaker 4: and like you know anybody, it's the lower the participation
Speaker 4: of these market makers. So the use is actually like
Speaker 4: you got to have somebody that starts to bid asked,
Speaker 4: like otherwise you put a market and there's nothing, it's
Speaker 4: just that, And so you have to kind of break
Speaker 4: the chicken in the egg in some ways. You start
Speaker 4: with the chicken and you incentivize that chicken so that
Speaker 4: the egg comes and then you basically get the flywheel rolling.
Speaker 4: So I think it's kind of exactly it's the same
Speaker 4: as financial markets. And like a lot of our liquidity
Speaker 4: is in the non liquid markets market make it driven
Speaker 4: and the liquid markets non market drive.
Speaker 2: Let's talk about some non sports stuff and the future,
Speaker 2: Like you could sort of futurize anything right when you
Speaker 2: envision it. Could you have could we one day have
Speaker 2: a future for every single stock on the extra change,
Speaker 2: a perpetual future, a perpetual Tesla future, a perpetual Apple future,
Speaker 2: a perpetual like could it be a world that we
Speaker 2: live in one day and a perpetual tenure treasury future.
Speaker 4: I mean Goshi's everything in Arabic, right, So so you
Speaker 4: know the long term vision is like yes, I mean
Speaker 4: I just think, like you, we should have a market.
Speaker 2: Perpetual a future for private companies SpaceX future.
Speaker 4: Yeah, and you know, like the idea, So I get
Speaker 4: like one, I guess general and then specific answer generally
Speaker 4: and then specifically. So the general is sort of principles,
Speaker 4: Like I think anything that has a different opinion, the
Speaker 4: difference of opinion of qualitative opinion, should basically have a
Speaker 4: mechanism to resolve that quantitatively.
Speaker 1: Mm hmm.
Speaker 4: So like instead of debating subjectively or something like less,
Speaker 4: debate about it objectively and quantitatively, which.
Speaker 1: Is trading, you know, what's something and so.
Speaker 4: And then there's some limits, like I think there are
Speaker 4: markets that do create bad incentives and I think actually
Speaker 4: see A does handle them, and like we we haven't
Speaker 4: done these markets. But to your question, like, yes, I
Speaker 4: think that's that's probably what the next frontier looks like.
Speaker 4: And I think that the concept of security futures has
Speaker 4: been like a very kind of like I'd say, it's
Speaker 4: been a very exciting concept for that I mean even
Speaker 4: pre Calci. It's not like we're But I think the
Speaker 4: SCF T C SEC relationship historically has been a big
Speaker 4: part of the bottleneck because if you're on the SEC side,
Speaker 4: you can't red don't relydo futures, and if you're on
Speaker 4: CFC side, your futures that you don't do securities.
Speaker 1: And then you have this question like should I get
Speaker 1: reggae by both?
Speaker 4: I mean, you already have one that's sort of I
Speaker 4: mean you're like daily in your operations already very tough.
Speaker 1: Now you're adding a second one.
Speaker 4: And it doesn't scale linearly, it's scale its scale sort
Speaker 4: of quadratically, and so it's been really tough historically. But
Speaker 4: maybe now in this environment, I think it might be possible,
Speaker 4: and maybe maybe we'll figure it out on Monday.
Speaker 1: So we'll see on Monday.
Speaker 3: Okay, Can I go back to the market makers for
Speaker 3: a second, because this is an area where I think
Speaker 3: people have a lot of questions, But what are the
Speaker 3: actual obligations of market makers on your platform? And you
Speaker 3: talked about how in the beginning, you know, maybe you
Speaker 3: have this really esoteric contract about throwing rubber objects onto
Speaker 3: basket ball courts or whatever it is.
Speaker 1: We don't have that, but but you yeah, the other
Speaker 1: that one, the CFC would block.
Speaker 3: You know, how do market makers decide what contracts to
Speaker 3: actually support initially? And are they obligated to come in
Speaker 3: and provide for everything?
Speaker 1: No?
Speaker 4: Because well not everything no, because like well if well
Speaker 4: you have fair access sort of requirements and a CFC
Speaker 4: reggae exchange, so you have to have rules that like
Speaker 4: basically are generally like accessible by anybody in a certain
Speaker 4: sort of like trans or two or whatever. But like
Speaker 4: if a market maker wants to come and trade on CASHI,
Speaker 4: they could do that, and they have no obligations they
Speaker 4: can make, they could take, they could do whatever they want. Generally,
Speaker 4: what happens is like you know, if a market maker
Speaker 4: wants like okay, but then how do you kind of
Speaker 4: incentivize equity? Then you could sort of say, like okay,
Speaker 4: maybe you rebate you some fees if you basically commit
Speaker 4: to obligations, and the obligations the way they look like
Speaker 4: is like if you make on the fed market. So
Speaker 4: that's an actual specific example, like you put like seventy
Speaker 4: five thousand contracts up on each side within like three
Speaker 4: to four cent spread, and you have like ninety eight percent.
Speaker 1: Availability, so you're pretty much there.
Speaker 4: Every time we kind of probe you could, for example,
Speaker 4: get your fees that you pay, rebate it so you
Speaker 4: don't have to pay. So that's kind of like actually
Speaker 4: our most common type. I mean, this is pretty much
Speaker 4: like marketing program I love them. Are public and people
Speaker 4: can sign up to which markets they want to participate it.
Speaker 4: So some people sign up to economics, some people do politics,
Speaker 4: some people do sports, some people do a combo of both.
Speaker 4: A lot of people do financials. And the reason you
Speaker 4: want that actually is because without any sort of structure,
Speaker 4: then no one is going to commit to anything, right
Speaker 4: Like then people will only do it when it's like
Speaker 4: advantageous for them, and they won't do it when it's
Speaker 4: maybe like a novel market where we need to kind
Speaker 4: of bootshop liquidity and so on. So you have to
Speaker 4: figure out the sort of setup incentive, especially in the beginning,
Speaker 4: and those over time go down as the market goes
Speaker 4: more and more liquid as you need less.
Speaker 1: And less of them.
Speaker 3: And are the rebates and incentives and I guess the
Speaker 3: information is that equal for all the market makers on
Speaker 3: the platform, because you also have depends.
Speaker 5: On the abligations. Okay, so you're like, so finish the sentence. Well,
Speaker 5: I was going to ask about kt Yeah. Yeah, so
Speaker 5: people ask a lot about Cashi trade. So fully it's
Speaker 5: fully information, like we've operated for five years. It's fully
Speaker 5: solid Informationally it's like run independently and so on and
Speaker 5: so forth. What I can say, like emphatically, Katie has
Speaker 5: absolutely no advantages like in any way, shape or form
Speaker 5: of other marketmakers with market participants. And we've always said that,
Speaker 5: you know where we don't think of this as a
Speaker 5: flank because it's true and the safety audits us and
Speaker 5: they see the numbers and the numbers you know, are factual.
Speaker 5: They're now the best performing trader, let alone marketmaker on
Speaker 5: Calshi by orders of magnitude.
Speaker 3: Like you know, I leave it that they're successful because
Speaker 3: they're not that successful.
Speaker 4: They're doing okay, I would say, And it's it's fine
Speaker 4: they haven't. I mean they you know, try to kind
Speaker 4: of like booch op to quit in some of the
Speaker 4: markets are harder and so on and so forth, and
Speaker 4: that's a good thing, like otherwise these markets would sort
Speaker 4: of not be there. But say for sure is they
Speaker 4: don't have any privileges or you know, benefits out aside
Speaker 4: from anybody else, aside from SIG. Aside from we have
Speaker 4: some small teams two three people that sign up to
Speaker 4: marketmaker programs. Some of these teams are actually beating all
Speaker 4: the other market institutional including ours.
Speaker 1: Institional usually better than ours.
Speaker 4: But like what we do is like there's like tiers,
Speaker 4: So if you kind of like buy by certain conditions,
Speaker 4: you can.
Speaker 1: Get more rebates.
Speaker 4: Then if you do lower conditions and less rebates, and
Speaker 4: those tiers accessible to anybody that basically would.
Speaker 1: Do the conditions uniformly.
Speaker 4: One because regulatory wise we have to and then two
Speaker 4: otherwise like people didn't trust the sort of marketplace.
Speaker 1: So yeah, there's.
Speaker 4: No, no, none, Like we got accused a lot about
Speaker 4: a lot of different things, you know, but like that's normal.
Speaker 4: I mean there's like a lot of incentives and interests
Speaker 4: that on the other side of this equation for specifically
Speaker 4: now sports. At the time it was elections, but I
Speaker 4: think that kind of like we let the truth mean
Speaker 4: revert over time.
Speaker 2: So obviously you have these sort of legacy market makers
Speaker 2: who are now participating on your platform. You mentioned Susquehana,
Speaker 2: et cetera. Have you seen like I'm very curious about
Speaker 2: whether we'll see legacy institutions become actual sort of like
Speaker 2: use your markets for actual head dream purposes. Now, I'm
Speaker 2: sure there's some around the election, but some of these
Speaker 2: other things, Like I'm curious, for example, do you know
Speaker 2: other hedge funds that might have a particular trade on
Speaker 2: and they want to hedge against the possibility of a
Speaker 2: negative NFP print because they think that a bad jobs
Speaker 2: report is going to bust some trade like that is
Speaker 2: the risk, or maybe a sort of hot CPI trade,
Speaker 2: et cetera. Do you see institutions using these markets yet
Speaker 2: to actually take hedging or positional trades yet?
Speaker 4: So, yes, But it's kind of a size thing, right,
Speaker 4: Like the main bottleneck is basically equity, And it goes
Speaker 4: back to the same question. It's like you have to
Speaker 4: incentivize more and more equity over time so that like
Speaker 4: you get the larger sizes like a typical I mean,
Speaker 4: the way I think about it is like there's a
Speaker 4: small prop shops and the smaller shops like those are
Speaker 4: doing some and like because you can take millions of
Speaker 4: the querity on CASHI, it's not that difficult. Now depends
Speaker 4: on the markets and so on. But then if you
Speaker 4: get to serve of the buyside ferns, like the larger yeah,
Speaker 4: you know, like you know, we're just getting the top
Speaker 4: ten fifteen on the street, ten to fifteen hatches on
Speaker 4: the street, and then after that corporation is like then
Speaker 4: you're talking like the minimum minimum size like for even
Speaker 4: two care as eight figures, but probably fifty to one hundred.
Speaker 4: And so I don't think liquity is there quite yet,
Speaker 4: Like elections start flirting with that sort of level, and
Speaker 4: we've seen some, but like we don't see that, Like
Speaker 4: it's just a matter of time for liquity to build
Speaker 4: up for the kind of like a deep institutional use
Speaker 4: case to basically start kicking in. And I think I
Speaker 4: see this sort overin the next two three years. Like
Speaker 4: I think that's going to be a very big part
Speaker 4: of CASHU. It's always in part of the division because
Speaker 4: you you create a marketplace where you can price anything.
Speaker 4: You know, what you're doing at that point is you're
Speaker 4: pricing risk. You're pricing any risk sort of happening in
Speaker 4: the wild, and then when you price the risk, it's
Speaker 4: much easier to create the liquidity. The same way it's
Speaker 4: easy to create liquity for the option market today that
Speaker 4: it's much higher for some esoteric event as there's more
Speaker 4: and more price benchmarks than you can provide more liquidity.
Speaker 4: And then after that you can basically red cater to
Speaker 4: the sort of institutional risk transfer use case, which I
Speaker 4: think is kind of where the term really expands long.
Speaker 3: I mean, I assume in addition to talking to regulators,
Speaker 3: a big chunk of your time is spent going out
Speaker 3: and talking to institutional players, either on the market making
Speaker 3: side or maybe buyside, who might one day potentially be
Speaker 3: interested in actually using this as a hedge. What are
Speaker 3: those conversations actually, Like, you know, you have this partnership
Speaker 3: with Suskahanna, Now what are the concerns that they lay
Speaker 3: out when it comes to this new business and what
Speaker 3: are the sort of I don't I guess enticements that
Speaker 3: you offer.
Speaker 1: So I would say, like, right now, it's a lot
Speaker 1: more just like learning. It's not.
Speaker 4: I say, like, hey, our book is much more like
Speaker 4: let's we learn, we learn, and then we figure out
Speaker 4: how to build right product and then people come. It
Speaker 4: usually works that way, not sort of like oh like.
Speaker 3: Did Sufkahana did they approach you then we have.
Speaker 1: It took a while.
Speaker 4: I mean, like we had a reationship like way kind
Speaker 4: of when we're starting like thinking about the company and
Speaker 4: this we have issued with a lot of the sort
Speaker 4: of institutional payers and like marketmakers, and I mean I
Speaker 4: worked at CYDA before, but like I don't know if
Speaker 4: like we I mean, we just had relationship and we
Speaker 4: started talking, and you know they see the vision, Like
Speaker 4: so s Quhanda really believes, I mean, Jeffy has really
Speaker 4: believes in the vision of sort of like this idea
Speaker 4: of like have some skin in the game to forecast
Speaker 4: any question of the future instead of debating about it.
Speaker 4: And he's always off prediction markets. So there's a little
Speaker 4: bit of a natural fit there. But like going back
Speaker 4: to the kind of institutional like what.
Speaker 1: We learned is like.
Speaker 4: It's there right a lot of them, whether they price
Speaker 4: these specific events like NFP specifically or like a CEO
Speaker 4: leaving a company specifically, or or they're worried about it,
Speaker 4: like even if they don't price it specifically, but they're
Speaker 4: sort of like this is something that I'm worried about
Speaker 4: on my thesis, Like I have a thesis, but these
Speaker 4: are some of the external factors that could.
Speaker 1: Like screw it up.
Speaker 4: That's a real thing, and like they would use it
Speaker 4: for hedging. And I think the requirements of like okay,
Speaker 4: some of them that are like solved, like compliance regulatory
Speaker 4: like that, you know you have a clearinghouse regulated all
Speaker 4: the kind of usual stuff. But then there's liquidity like
Speaker 4: how much size can I take for it to be
Speaker 4: worth it for me to kind of allocate a desk
Speaker 4: and you know, put resources into it. And then the
Speaker 4: second one is like margins, which like you know today
Speaker 4: it's fully cash callarer on CALSHI, So if you want
Speaker 4: to trade one hundred dollars you have to put it up.
Speaker 1: That's very difficult for like let's say a citadel.
Speaker 2: Well, I was gonna ask, actually, do you anticipate on
Speaker 2: the road map sort of byside traders when there is
Speaker 2: perhaps if it happens sufficient liquidity, will they be trading
Speaker 2: on CALCI or will it be something they trade through
Speaker 2: their prime broker or their futures broken cabo? But do
Speaker 2: you like are you in talks with the brokers?
Speaker 4: Yeah, it's the same exact sort of like reason means
Speaker 4: like what do you need basically like and how does
Speaker 4: it work. But yes, I mean the prime brokerges are
Speaker 4: very important because like you get you basically get like
Speaker 4: they have the full portfolio, so you can get a
Speaker 4: bunch of margining benefits if you kind of do it
Speaker 4: all with one prime broker. And that's why you usually
Speaker 4: prime brokers are the gateway into financial markets. Yeah, and
Speaker 4: the same way as a broken strategy for retail, right
Speaker 4: like with the robin and Mebo and some of the
Speaker 4: other brokers. It's very similar actually, because you have your
Speaker 4: portfolio with the prime broker and then like as you're
Speaker 4: thinking about your portfolio is like, hey, I could add
Speaker 4: on a hatch. It's much easier for me to do
Speaker 4: it through my prime broker then do it on a
Speaker 4: separate platform.
Speaker 2: But by the way, it's pretty crazy if you go
Speaker 2: to the app store and you just like look at
Speaker 2: robin Hood. It's the first thing is like the football,
Speaker 2: the image of the football right already because yeah, because
Speaker 2: they're trading through you. Anyway, just an interesting.
Speaker 3: I mean, well on that point, I mean there's a
Speaker 3: social utility question here, right, Like if I download robin Hood, okay, yes,
Speaker 3: I could get into zero or one day options and
Speaker 3: we can talk about the social utility there. But maybe
Speaker 3: I'm going to invest in an actual stock that generates
Speaker 3: some income. But now I'm seeing ads for football and
Speaker 3: sports betting, and I don't know. I'm sure there are
Speaker 3: some old fashioned people out there potentially like me, who
Speaker 3: would say, who would say, like, what does this do?
Speaker 3: What's the value?
Speaker 1: Do you think that?
Speaker 4: Do you think that's sports? Like let's even forget about.
Speaker 3: Like I mean, first of all, I don't like sports.
Speaker 4: But well, I mean but like you know, I mean
Speaker 4: a lot of people love love sports, right and and
Speaker 4: like you know, I don't know that like my job
Speaker 4: to view with these things. I mean, I'm a free
Speaker 4: markets person, like you know, building a company where the
Speaker 4: name is you know, we want to have markets for everything.
Speaker 4: So so I'm much more in the camp of, like
Speaker 4: you know, you figure out what people want to do
Speaker 4: and figure out how to do it in a safe,
Speaker 4: equitable and fair manner, like you know, make sure that
Speaker 4: like it's done with fair rules of the role for
Speaker 4: everybody to participate. And they want to get smart and
Speaker 4: do their own research, and if they don't, that's on them,
Speaker 4: and they figure it out and and add some sort
Speaker 4: of text and balances around it to make sure it's
Speaker 4: safe and there's customer protection. But I's tetly like I'm
Speaker 4: a strong believer that, you know, sort of the job
Speaker 4: of regulators should not be dictating what people should do
Speaker 4: with their money or their lives. Like I'm a very
Speaker 4: very strong, like staunch sort of opponent of that sort
Speaker 4: of view of what a regulator should do.
Speaker 1: And I think that fits there.
Speaker 4: I mean in some ways, maybe that's like like if
Speaker 4: you look at romod, like there's all these these choices now,
Speaker 4: and like it's a bit weird to me that, Like
Speaker 4: the decision here is sort of like don't let them
Speaker 4: make the choice, Like if they want to invest in great,
Speaker 4: then if they want to do football, then also great.
Speaker 1: I mean, and the decision.
Speaker 4: That feels weird to me, which is like hide that
Speaker 4: option because the fifty year old or thirty year old man,
Speaker 4: so Robin needs me to figure out what to do
Speaker 4: with their money, right like, and so that to me,
Speaker 4: that's always felt weird to me. And I think that's
Speaker 4: where financial regulation has sort of like gone too far
Speaker 4: in the last I would even call it regulation.
Speaker 1: I'm very pro regulation.
Speaker 4: We chose to be regulated up front, right, So, but
Speaker 4: it's sort of like I would say, like I would say,
Speaker 4: I mean, people are like what law fair but whatever,
Speaker 4: like the financial regulars.
Speaker 1: I think I've taken it too far in that dimension.
Speaker 2: So, as we've mentioned a couple of times, there's this
Speaker 2: big meeting in DC Nextrik, there's gonna be a round table. Incidentally,
Speaker 2: so Tracy mentioned earlier in the day we interviewed Terry
Speaker 2: Duffy for an episode that'll be out in a couple
Speaker 2: of weeks. And I guess you haven't met. He said,
Speaker 2: you've never met, but I guess you're gonna meet on Monday. Bro, Like,
Speaker 2: what should we ask Trek? And he said, I think
Speaker 2: if I'm getting this right, he said that Kelsey characterized
Speaker 2: itsself as CFTC approved, and he says, it's not that
Speaker 2: it's instead not CFTC banned that actually because it's the
Speaker 2: self listing are you CFTC approved and or is it
Speaker 2: just that the CFTC has not said no.
Speaker 4: Well, it's actually incorrect. I mean, I don't know, you know,
Speaker 4: it's like I mean, I'll be Terry Vice meaning Terry
Speaker 4: I mean Terry's.
Speaker 1: Legend, but like.
Speaker 4: We got a license and then a second one. So exhanged,
Speaker 4: and then the clearinghouse and then the broker license. So
Speaker 4: the exchange was like in twenty twenty in the in
Speaker 4: the clearinghouse is twenty twenty four, and then the broker
Speaker 4: one was in twenty twenty five. There's all approvals, I mean,
Speaker 4: it's not like you know.
Speaker 3: But for instance, the individual contracts that go up to
Speaker 3: the CFTC, are those each getting approved.
Speaker 4: Well obviously not actually dissip right like, and we had
Speaker 4: to see over it and it was we were clearly
Speaker 4: right on the log given that we won the district
Speaker 4: and then the in the appeals court. So maybe there's
Speaker 4: a separate dimension here, which is also the regular is
Speaker 4: not always right. But you know, there's a whole other
Speaker 4: thing there. But self certification is a regime which by
Speaker 4: the way, CME is also operated within and they've you know,
Speaker 4: so from from that specific perpecive for each market. Yes,
Speaker 4: it's not that every market goes through a perspectus like
Speaker 4: and the SEC and then gets approved.
Speaker 1: It's actually like a disapproval regime.
Speaker 4: Yeah, But the CFC has authority to stay things and
Speaker 4: it's a very broad authority. Right, So maybe it's a
Speaker 4: good question to see f to see because you know,
Speaker 4: I can't speak on their.
Speaker 3: Behalf, but you can ask them on Monday.
Speaker 1: Yeah, I don't know if they'll be on that table.
Speaker 1: But you know what is the uh, well, we talk
Speaker 1: to safety all the.
Speaker 2: Time, so you know, obviously polymarket is a major competitor
Speaker 2: to you. What do you see as like, what's your
Speaker 2: vision for what is traded on chain and what are
Speaker 2: like could you imagine you know, we just talked to
Speaker 2: Don He said in hit he could see in five
Speaker 2: years almost everything being on chain, Like do you see that?
Speaker 1: Yeah? Maybe? I mean, well it's interesting because Pallly, now
Speaker 1: I was they're doing.
Speaker 4: So there's kind of the on Chaine strategy and then
Speaker 4: the kind of what we did, the regulated you know,
Speaker 4: normal clearinghouse like reggae clearinghouse strategy, and like now they're
Speaker 4: doing this sort of they're pivoting to ours basically. That's
Speaker 4: that's and so our view, jomally is like, well, it's
Speaker 4: a pretty positive signed for our strategy, probably right, because
Speaker 4: you know, but but.
Speaker 3: Even setting a certain top, well, my boy is like
Speaker 3: they're regulated.
Speaker 4: To me, it's a regulated like front. It's more so okay,
Speaker 4: there are a lot of benefits. I really believe that,
Speaker 4: and I think the being on shape, yeah, because like
Speaker 4: one of the ones that I'm less interested in is
Speaker 4: sort of like skirting regulation like that. But but I
Speaker 4: think that like there's a number of things which is
Speaker 4: like my mental model for it is is a bit
Speaker 4: like you know, the banking rails were set up in
Speaker 4: the kind of early twentieth century. It's like JP Morgan
Speaker 4: a bunch of his friends are like, hey, how do
Speaker 4: we dominate this whole thing? And you know, they set
Speaker 4: up a bunch of rags and then they close the
Speaker 4: door behind them, and that was sort of that, and
Speaker 4: there's a much more complexity to that. But to me,
Speaker 4: this sort of whole on chain thing is is it
Speaker 4: imagine a bit like having given that problem to a
Speaker 4: bunch of smart, like like hard working developers without any
Speaker 4: limits and let them build. Right, Obviously, that's gonna be
Speaker 4: there's a lot of good that's gonna come out of that,
Speaker 4: and then there's gonna be some bad that comes out
Speaker 4: of that, obviously, But like to me, it's like, well,
Speaker 4: there's a lot of liquity on chain today, so that's
Speaker 4: something that we should access in at some point.
Speaker 1: Two.
Speaker 4: I think the clearing side there's a lot of benefits
Speaker 4: for you know how, like you have to do no ovation,
Speaker 4: and you have to do immute immutability, and usually right
Speaker 4: now we do it from a like operational legal perspective,
Speaker 4: and obviously there's some tech, but aunchin really helps with that.
Speaker 1: That's like basically what it's designed to do.
Speaker 4: And so over time, like I think, I hope as
Speaker 4: sort of regulators get more permissive, like I see some
Speaker 4: parts of clearing going on chain where you know it
Speaker 4: enables some of these use is, and then also more transplancy,
Speaker 4: like the trades and the transactions are all transplants for
Speaker 4: everybody to see, and then people can build interesting like
Speaker 4: UIs and interesting projects on top of that us having
Speaker 4: to sort of this whole permissionless sort of concept.
Speaker 1: And so I'm very bullish on it.
Speaker 4: I do agree with Don actually that like over the
Speaker 4: next four or five years, you see comedies like Robinhood
Speaker 4: like companies, like a lot of companies are leaning in.
Speaker 4: I think, well, Cawshi is also leaning in. So I'm
Speaker 4: pretty scorry about it.
Speaker 3: So obviously the trajectory of your business has changed enormously
Speaker 3: just over the past year less than a year. Really,
Speaker 3: if you were thinking about it now today as we
Speaker 3: sit here, what's the biggest I guess blockage to further
Speaker 3: growth for Kushi?
Speaker 1: You know, right now it's the question I haven't been
Speaker 1: real thinking about.
Speaker 4: It's been growing so much right now, it's like all
Speaker 4: about how do we like not break basically because like
Speaker 4: I mean honestly, like we grew way more than we
Speaker 4: could have possibly imagined, even in the most bullish scenarios,
Speaker 4: even both post winning the election lawsuit every like, even
Speaker 4: like December twenty twenty four with like foregus for twenty
Speaker 4: twenty five, like, there's nowhere near what it is today.
Speaker 1: So and it's interesting because we're not.
Speaker 4: It feels like we're sort of like halfway through, like
Speaker 4: there's still just the current structure. I think we're not
Speaker 4: even halfway through. Like we have more brokers. We have
Speaker 4: very deep pipe on a broker, so that's great. And
Speaker 4: more sports. I think it's the frontier is the sec thing.
Speaker 4: So I think it's like more markets, like and I
Speaker 4: think we have a lot of what we want. I
Speaker 4: think over time is like how do we start doing
Speaker 4: company with dated prediction markets?
Speaker 1: And we're very excited about that.
Speaker 2: I just have one last question, and it's kind of
Speaker 2: a softball. But like after years of fighting all these
Speaker 2: different battles, regulatory battles, should states, et cetera. Like how
Speaker 2: good does it feel? It must feel really good to
Speaker 2: actually kind of know that the business is real and
Speaker 2: have these battles. Yeah, I mean, just like describe that feeling.
Speaker 4: It's weird because I don't know if I feel that
Speaker 4: it's about this year than last year. I mean, Juan
Speaker 4: and I whly started the company. We really build a
Speaker 4: company around. I love this book. So have you ever
Speaker 4: read the book? Like the score takes care of itself.
Speaker 4: I don't think it's a great book, but life like everything, honestly,
Speaker 4: Like I really it's just you know, like so John
Speaker 4: Woden was of basketball coaches, like most legendary about I mean,
Speaker 4: the whole thing was always about like never mentioned winning,
Speaker 4: but training the teams like folks in the process and
Speaker 4: like day in day out, like just fall in love
Speaker 4: with the training and like if you do, you just
Speaker 4: start winning.
Speaker 1: And like I I would say a few things.
Speaker 4: I see, these things are sort of there's good times
Speaker 4: in bad times for all companies, and so yes, right
Speaker 4: now we're having a pretty great time like as good
Speaker 4: as it gets for a company, But I don't feel
Speaker 4: that different. I think it's just like solutions bring new problems,
Speaker 4: and like then you focus on the new problems.
Speaker 2: It would be so much.
Speaker 4: The one person I will say, the one part I
Speaker 4: feel pretty good about is winning the election lawsuit, like
Speaker 4: that one because we were so there was some pretty
Speaker 4: big time vindication there. Like I think we were, you know,
Speaker 4: because imagine like in twenty twenty, like three going off
Speaker 4: to our board, you know, like Seicoya and munch of
Speaker 4: others and like, hey, like, yeah, we're not really figuring
Speaker 4: this out. It's been two years of like you know,
Speaker 4: pouring money into this and like we're you know, and
Speaker 4: nothing is working. We lost half of our team over
Speaker 4: it and like company might die, and actually what we're
Speaker 4: going to it was a good triple down and sew
Speaker 4: our regulator now, so you know that was they looked
Speaker 4: at us and they're like, well that that that doesn't
Speaker 4: feel right, you know, like and we still went through
Speaker 4: with it and like it ended up being absolutely the
Speaker 4: right decision. So that I think maybe like October seventh,
Speaker 4: the day we won the election lawsuit, was probably the
Speaker 4: day I felt happiest.
Speaker 3: What did you do when drop the lawsuit?
Speaker 1: That was not that important. It was the one where
Speaker 1: we the appeals.
Speaker 4: Yeah, that was important because well I first screamed a
Speaker 4: lot and like we just like you know, all got
Speaker 4: hit faced in the office and like you know, you know,
Speaker 4: it was amazing.
Speaker 1: But then you know, then.
Speaker 4: We got back to work because were anxious about set,
Speaker 4: like you know, launching the thing. Yeah, that was a
Speaker 4: brutal three weeks because we had to ramp up really aggressively,
Speaker 4: and I mean we really went from we really grew
Speaker 4: one hundred x overnight, Like it was crazy. And so
Speaker 4: that was the three weeks away. I worked the hardest
Speaker 4: in my entire life. I was sleeping in the office,
Speaker 4: Like you know, I was like I was given this chance,
Speaker 4: like we have to basically like you know, utilize it
Speaker 4: to the fullest. And it was and we didn't charge
Speaker 4: He's on the election market. I know, if you knew that,
Speaker 4: it was an intentional decision because like the KPI here
Speaker 4: is we've got to show the word that these markets work. Yeah,
Speaker 4: and it's done safely and nothing that is going to
Speaker 4: happen and democracy is going to be totally fine. And
Speaker 4: actually and you'll see we're announcing a few things with
Speaker 4: some some big news organizations pretty soon. What we'll see
Speaker 4: the shift that's happened in culture where like the level
Speaker 4: of embracing that's happening with prediction markets now, it's that's
Speaker 4: that's pretty.
Speaker 1: Nice to see.
Speaker 3: Plus south Park and south Park.
Speaker 2: Yeah, Trek Mansur, thank you than so much.
Speaker 1: Thanks having thanks lot, Thanks so much. Guys.
Speaker 2: That was our conversation with Turik Monsour, recorded live on
Speaker 2: stage in Chicago.
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway and.
Speaker 2: I'm Joe Wisenthal. You can follow me at the Star Wart.
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Speaker 2: Bennett at Dashboard in Keil Brooks at Keil Brooks. From
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