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Speaker 1: From the heart of where innovation, money and power Collie

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Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with

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Speaker 1: Emily Jay. I'm Emily Check in San Francisco and this

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Speaker 1: is Bloomberg Technology coming up in the next hour. It

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Speaker 1: is the biggest ever takeover of a private software company.

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Speaker 1: Adobe has agreed to buy the software design start up

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Speaker 1: Bigma in a deal vuye at billion dollars. We're gonna

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Speaker 1: hear from executives at both companies in an exclusive interview. Plus,

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Speaker 1: the merge is here success. We're gonna hear from an

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Speaker 1: Ethereum core developer about whether it's all going to plan

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Speaker 1: and what is next? And climate tech investor in entrepreneur

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Speaker 1: David Friedberg is with it us. You might also know him.

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Speaker 1: That's a bestie on the all in hud will ask

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Speaker 1: about his news back Today's Big Tech m and A

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Speaker 1: and Elon Musk. A number of social platforms will announce

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Speaker 1: new actions to combat hate crimes and racially motivated violence

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Speaker 1: at a summit hosted by President Biden at the White House.

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Speaker 1: Representatives from Instagram, Facebook, Twitch, YouTube, and Microsoft all planning

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Speaker 1: to attend. The Company's new efforts will be unveiled alongside

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Speaker 1: a package of federal initiatives to design and address hate

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Speaker 1: fueled violence. Meantime, hundreds of workers at an Amazon warehouse

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Speaker 1: in Coventry, England, are now striking over pay. They've been

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Speaker 1: threatening strikes across the UK after a major rise in

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Speaker 1: the cost of living. Any action to protest against the

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Speaker 1: company's pay packages would likely take place in November, according

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Speaker 1: to the Union, and the UK will open an in

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Speaker 1: depth probe of Microsoft's planned sixty nine billion dollar purchase

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Speaker 1: of the video GameMaker Activision. Blizzard regulators saying the deal

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Speaker 1: could hamper competition and that Microsoft turned down the chance

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Speaker 1: to offer are remedies to address its concerns. If the

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Speaker 1: merger goes through, it will make Microsoft the world's third

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Speaker 1: largest gaming company. The Brazilian agriculture company is planning to

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Speaker 1: list in the US via spack with the help of

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Speaker 1: one of the most prominent climate tech entrepreneurs, Lavareau, helps

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Speaker 1: farmers boost production by offering a suite of key ingredients

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Speaker 1: like seeds, fertilizer and more. I want to get right

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Speaker 1: to David Friedburg Now, a long time founder turned investor

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Speaker 1: focused on climate technology. The CEO of the Production Board

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Speaker 1: which just merged with Lavreaux as well as you might

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Speaker 1: know him as a co host of the All In podcast.

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Speaker 1: David's so great to have you with us, big listener here,

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Speaker 1: talk to us about the thesis behind this spack deal.

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Speaker 1: Why spack why now? Yes, So we set up the

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Speaker 1: back about a year ago specifically to do a strategic transaction,

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Speaker 1: meaning we were seeking a business that operates a scale

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Speaker 1: in a market that we know well food, agriculture, biomanufacturing,

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Speaker 1: life sciences, and where we believe technology that exists in

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Speaker 1: our portfolio of businesses could be additive and a creative

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Speaker 1: to their operations. And we know AGG very well. UM

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Speaker 1: came across Lavorro, which is the largest AGG retailer in Brazil,

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Speaker 1: leading AGG inputs retailer in Latin America UM, and this

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Speaker 1: business really has an incredible opportunity to transform how farmers

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Speaker 1: farm in this market. And Latin America is the largest

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Speaker 1: AG export market globally is the largest provider of calories

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Speaker 1: around the world. UM and so this is a massive

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Speaker 1: opportunity because farmers locally in that market don't utilize the

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Speaker 1: best technology, they don't have the greatest productivity, which is

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Speaker 1: yield per aker, and using agg retail, we can actually

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Speaker 1: access that farmer and really transition them to new technologies

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Speaker 1: like biologics, software and other tools that can massively improve

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Speaker 1: their productivity. And that results in more calories, more sustainability

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Speaker 1: of food production. And it's so impactful because this region

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Speaker 1: is so important globally right now. So I'm curious about

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Speaker 1: the decision UH to do us back in general when

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Speaker 1: they've been under a lot of pressure, you know, they've

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Speaker 1: almost disappeared in the last few weeks. Why do you

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Speaker 1: choose that? Why did you choose that as the vehicle? Yes,

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Speaker 1: so we set up a speck um last summer and

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Speaker 1: so we've been UM. You know, it's the only off

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Speaker 1: balance sheet of vehicle. We have the rest of our

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Speaker 1: operations at the production boarder all balance sheet driven capital

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Speaker 1: UM and we build an investing businesses off our balance sheet.

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Speaker 1: And we did this specifically because there were public market

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Speaker 1: investors that were interested in partnering with us, and we

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Speaker 1: thought that this could be a really great mechanism to

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Speaker 1: find a business that we could be useful to UH,

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Speaker 1: and that's exactly what we're doing. So so we're actually

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Speaker 1: investing a hundred million dollars off our balance sheet into

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Speaker 1: the transaction, and several of our businesses are going to

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Speaker 1: be partnering with lavorro UM in the future, we do

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Speaker 1: hope as a way to bring new technology to that

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Speaker 1: important market. And so this is a really great strategic vehicle,

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Speaker 1: and the SPAC is really just a mechanism for doing

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Speaker 1: that and for getting a meaningful ownership stake in a

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Speaker 1: business of scale. I mean, this business, as we show

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Speaker 1: in the presentation, UM should do about one point six

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Speaker 1: billion top line this UH this year, and it's doing

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Speaker 1: about a hundred and seventy two million proform adjusted IBATA

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Speaker 1: this calendar. You're growing to two seventy seven next year UM,

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Speaker 1: And so it's a business of scale, it's profitable, and

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Speaker 1: I think that there's a real way to drive UM

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Speaker 1: further margin improvement and further revenue growth with some of

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Speaker 1: the technologies we can bring to their here talk to

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Speaker 1: us about deep tech investing, which has been your thing

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Speaker 1: for so long. How it's different in a bowl and

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Speaker 1: bear market. You know, obviously these are companies that need funding,

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Speaker 1: but it can be a harder sell when times are tough. Yeah,

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Speaker 1: So it's exactly I mean, what you're seeing is exactly right.

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Speaker 1: I mean, deep investing typically invests on a milestone based program.

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Speaker 1: So you look at some technical breakthrough, you know, proving

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Speaker 1: something works, and then you raise more capital, and then

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Speaker 1: you prove the next thing works, and eventually you have

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Speaker 1: a product, and eventually you can sell the product and

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Speaker 1: make the product, and eventually you can scale scale into

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Speaker 1: the market. And so that takes several years, and capital

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Speaker 1: needs to be unlocked in milestone based um increments. In

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Speaker 1: a market like this where you can buy US creuxuries

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Speaker 1: and make four percent, or you know, buy a great

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Speaker 1: stock that's got a five percent dividend yield and it's

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Speaker 1: a growing business, it's really hard to find capital into

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Speaker 1: highly speculative long range investment cycles. So then interest rate

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Speaker 1: environment really challenges deep tech UM and it really challenges

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Speaker 1: and I think we've particularly seen it of late in

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Speaker 1: the biotech market. I don't know the latest statistic, but

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Speaker 1: as of a few weeks or months ago, biotech um

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Speaker 1: roughly of public issues, we're trading below cash UM, and

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Speaker 1: so I think it really speaks to the channel lunge

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Speaker 1: that deep tech businesses face. Now what we're doing with

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Speaker 1: Lavoro as an example, and what I think happens often

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Speaker 1: nowadays in biotech and will continue to happen with other

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Speaker 1: UM more deep tech UM investing cycles is to partner.

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Speaker 1: So you partner with the large business. You partner with

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Speaker 1: the business that has scale, reach, distribution, cash flow that

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Speaker 1: can really benefit if your deep tech pursuit unlock some

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Speaker 1: value or some opportunity for their customer days. UM and

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Speaker 1: So I think that's what we'll see more of UM

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Speaker 1: likely going forward. Less of the vcs making you know,

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Speaker 1: big check investments early stage hoping for something to UM

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Speaker 1: you know, to hit that you'll likely need to see

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Speaker 1: much more strategic partnership happen to get these things across

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Speaker 1: the finish line. I'm so curious what you make of

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Speaker 1: the Patagonia founder giving away his company to fight climate change.

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Speaker 1: What do you think about it? Is that something more

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Speaker 1: Silicon Valley founders and CEO should be doing. Yeah, he's

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Speaker 1: always been an interesting guy. UM. You know, he operates

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Speaker 1: his business in a different way than I'd think a

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Speaker 1: traditional capitalist thinks about operating their business UM and so,

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Speaker 1: you know, it doesn't seem surprising knowing the personality and

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Speaker 1: the way you've talked about things. In the past and

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Speaker 1: the decisions he's made. I mean, I think, uh, he

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Speaker 1: kind of banned putting financial services firms logos, you know,

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Speaker 1: as part of their custom embroidery programs that they were

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Speaker 1: having for a while a few years ago. Um. And look,

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Speaker 1: I mean, it's gonna go into these blind trusts, into

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Speaker 1: these irrevocable trusts, and I'm sure that the stewards or

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Speaker 1: the trustees will continue to operate this business in a

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Speaker 1: smart way. I doubt that the trustees are are going

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Speaker 1: to basically shred the thing and give it away. I'm

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Speaker 1: sure they're going to continue to run the business, and

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Speaker 1: that the dividends and the profits generated from that business

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Speaker 1: over time can be used to fund um, you know,

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Speaker 1: uh initiatives in climate change mitigation. Uh and um. And

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Speaker 1: I think that that's a very noble way to transfer

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Speaker 1: the ownership of your business rather than just give it

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Speaker 1: away to a bunch of NGOs and nonprofits. Let the

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Speaker 1: trustees that you know and trust break the business for

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Speaker 1: you that can generate cash and value over time, and

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Speaker 1: then decide where that cash and where that value should

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Speaker 1: be allocated to really drive the impact in the world.

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Speaker 1: So it's it's a great noble decision, and um, you

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Speaker 1: know it really fits well with the way he's talked

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Speaker 1: about what he's done in the past. Meantime, I got

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Speaker 1: to ask you, since the Twitter Musk dispute has been

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Speaker 1: a running topic on your all in pod, you interviewed

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Speaker 1: Elon Musk at the All In Summit. Do you think

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Speaker 1: this steal goes through? Does Musk end up buying Twitter?

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Speaker 1: And if so, how does that change the social media ecosystem? Yeah?

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Speaker 1: I think, Um, look, there are probably two key things

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Speaker 1: at play here. The first is, you know what what

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Speaker 1: ends up happening in the courts as they go through

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Speaker 1: this this legal process. And um, I saw a great

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Speaker 1: post by a legal analysts a few weeks ago, and

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Speaker 1: I wish I could remember the person's name and reference them,

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Speaker 1: but they said, you know, the Delaware um Court there,

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Speaker 1: the chancery court is less likely to try and force

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Speaker 1: a deal to close because then if the parties don't

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Speaker 1: actually close the deal, it really damages the reputation and

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Speaker 1: the integrity of the court. And that there's a case

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Speaker 1: to be made that Musk would just simply say no,

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Speaker 1: I'm not closing. You know, do what you want, give

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Speaker 1: me a fine, of a billion dollars. I don't care.

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Speaker 1: I'm not closing the merger on these terms, and so

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Speaker 1: it's on this Legal analysts pointed out that it's unlikely

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Speaker 1: that they'll close the deal on those that the court

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Speaker 1: will try and force the deal. And I think on

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Speaker 1: the other side, he saw value in the community, he

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Speaker 1: saw value in the user base, he saw value in

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Speaker 1: the social network, and I'm sure he still does UM.

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Speaker 1: And you know, regardless of what he's identified with respect

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Speaker 1: to the bot problem or the stamp problem as he

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Speaker 1: calls it, that there must still be value there. So

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Speaker 1: I would say that based on those two conditions, there's

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Speaker 1: probably a bidass gap that maybe gets met still UM,

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Speaker 1: And I would envision that there's still a motivation to

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Speaker 1: do something here that is probably a function of the

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Speaker 1: true size of the true network of user is on

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Speaker 1: that platform, because it is such an important platform. Deep down,

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Speaker 1: he probably still really wants to do something. And on

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Speaker 1: the other side, the court may end up saying, hey,

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Speaker 1: you know, there's um, there's some way that you guys

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Speaker 1: were only going to charge a fine here, which forces

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Speaker 1: Twitter back to the table to negotiate price, and maybe

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Speaker 1: something happens, so you know that would be my middle

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Speaker 1: of the line, kind of middle middle of the uh,

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Speaker 1: the aisle here kind of decision or or um perspective

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Speaker 1: and what might end up happening over the next couple

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Speaker 1: of months here. Um, So we'll be listening. We'll be

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Speaker 1: listening to the podcast for more commentary Dave Friedburg. Great

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Speaker 1: to have you with us. Thank you so much for

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Speaker 1: stopping by. We'll be right back with more Bloomberg Technology.

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Speaker 1: This is Bloomberg. Let's get back to that Adobe deal

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Speaker 1: to buy software design start a Figma. This deal, valued

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Speaker 1: at bion dollars, is the biggest ever takeover of a

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Speaker 1: private software company. I want to bring in Figma's co

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Speaker 1: founder and CEO hillan Field now as well as Adobes,

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Speaker 1: President of the Digital Media Business David Wadwanti for more

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Speaker 1: on this historic deal. Exclusive interview Dylan kind of the

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Speaker 1: Silicon Draft Valley dream coming true here. You stick with

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Speaker 1: your initial idea, you develop it for a decade, you

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Speaker 1: sell it for billions of dollars. There are still people

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Speaker 1: ask out there asking twenty billion dollars, what do you

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Speaker 1: think is the potential here? And why is Figma worth

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Speaker 1: twenty billion dollars? Well, First of all, I just want

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Speaker 1: to give a giant shout out and thank you to

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Speaker 1: the Thigma team. I'm on this interview to day, and

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Speaker 1: there's so many other people that have been involved in

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Speaker 1: SUSA Thigma along the way, past figmates, current figmates, and

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Speaker 1: I want to thank all of them. Of course, this

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Speaker 1: is about moving forward now and how much potential there

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Speaker 1: is a combined Figma Adobe combo, and we really believe

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Speaker 1: there's such potential here. Whether it's looking at Figma and

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Speaker 1: thinking about how we can accelerate our efforts with fig

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Speaker 1: Jam through um Adobe Acrobats and their giant install base

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Speaker 1: and their productivity case there, whether it's about the Stigma

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Speaker 1: design platform today and how we can bring capabilities from

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Speaker 1: Adobe in whether it be imaging, vector illustration, video three

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Speaker 1: D or more, or it's thinking outside the box where

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Speaker 1: we're currently at thinking about developers and thinking about markets

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Speaker 1: were not serving and we were not playing to serve

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Speaker 1: such as creatives and thinking about how do we bring

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Speaker 1: the capabilities of Adobe onto the Thingama platform and make

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Speaker 1: it set creatives are able to have more collaborative workfloads,

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Speaker 1: make those workflodes web based and make it set creativity

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Speaker 1: design and software development are more accessible to more people.

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Speaker 1: Were truly excited about what can become possible there in

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Speaker 1: our combination with Adobe, David, we all thought we were

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Speaker 1: in a downturn, and here you are doing a twenty

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Speaker 1: billion dollar deal. The stock had kind of a rough

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Speaker 1: day as investors digested the number. Here, what's your response

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Speaker 1: to that? Look, we we had Adobe. We're entering our

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Speaker 1: forty year and we continue to be very aggressive about

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Speaker 1: the opportunities that we see. If you look at the

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Speaker 1: opportunity head and what Dylan and the amazing team and

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Speaker 1: Figma have built. UH, they've built a company that's basically

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Speaker 1: going to add two hundred million dollars of air are

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Speaker 1: this year, crossing four hundred million by the end of

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Speaker 1: the year, UH and UH and addressing a TAM that's

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Speaker 1: sixteen and a half billion dollars. And when you put

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Speaker 1: it in the context of the efficiency of the business,

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Speaker 1: cash flow positive with a net dollar retention rate over

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Speaker 1: a hundred uh, there are very few companies with that profile.

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Speaker 1: And in the context of what we see and some

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Speaker 1: of the things Dylan talked about when we look look

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Speaker 1: ahead and the synergies we can do to accelerate Figma's

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Speaker 1: move into that sixty and a half billion dollar CAM

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Speaker 1: to accelerate what we do in terms of our core

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Speaker 1: creative flagship applications we imagined with the technology running on

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Speaker 1: top of the Figma platform. Uh. And when you think

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Speaker 1: about it in the context of how Dylan was talking

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Speaker 1: about with Big Game and Acrobat really coming in at

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Speaker 1: the cross center across the intersection of um creativity and productivity,

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Speaker 1: we think that the market opportunity here is massive and

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Speaker 1: this was a great time to make that plate. Uh, Dylan.

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Speaker 1: There was a great tweet from Ruben Harris, another startup

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Speaker 1: entrepreneur out there. He compared Figma to Instagram. Well, if

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Speaker 1: you think about it that way, you hear the numbers

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Speaker 1: that David just rattled off, your casual positive you could

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Speaker 1: have gone public as soon as the window open. Why sell?

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Speaker 1: Why not try to build your own hundred fifty billion

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Speaker 1: dollar company and go public on your own terms? Yeah,

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Speaker 1: I mean, first of all, we're super thankful that we

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Speaker 1: had the ability to control our own destiny here. But

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Speaker 1: the end the day, we have to think about our community.

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Speaker 1: We need to think about the impact we can have

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Speaker 1: and what timeline we can have an impact on. And

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Speaker 1: we believe that this accelerates the impact we can have

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Speaker 1: at this Rowden's the impact we can have. And by

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Speaker 1: leveraging and utilizing the expertise of Adobe, the capabilities, the

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Speaker 1: technology they've built, as well as the amazing people they

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Speaker 1: have UH and they've attracted over the past three decades. UM,

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Speaker 1: we think that we're able to basically scale the impact

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Speaker 1: we have beyond just design and move into new areas

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Speaker 1: and be able to have more impact faster, And that's

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Speaker 1: why we've done this deal. David, I know you were

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Speaker 1: the architect of this deal, and you also sold a

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Speaker 1: couple of companies, including one to Adobe in your earlier days.

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Speaker 1: What kind of advice did you give Dylan through this process?

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Speaker 1: You know, personal advice in the best interest of you know,

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Speaker 1: Figma and his company and not necessarily the company that

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Speaker 1: you work for now. Yeah, well, I think I look

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Speaker 1: at it as as a shared common interest and shared

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Speaker 1: objective here. So you know, Dylan and I have known

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Speaker 1: each other for a few years and we started having

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Speaker 1: this conversation in earnest a few months ago having gone

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Speaker 1: through this process being acquired as part of Macromedia into Adobe.

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Speaker 1: The things I know are if you have shared purpose,

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Speaker 1: if you have a shared passion UH, and you have

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Speaker 1: a clarity in terms of how you're going to actually

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Speaker 1: operate and go after the market. UH, great things will

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Speaker 1: happen because there's so much that we have in common

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Speaker 1: in terms of how what we want to approach the market.

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Speaker 1: And Dylan and I have been very clear in terms

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Speaker 1: of how we're planning to run this. Dylan will remain

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Speaker 1: CEO of Figma and UH, and he and I will

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Speaker 1: be working very closely to make sure that the decisions

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Speaker 1: that he makes with the autonomy that he needs to

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Speaker 1: keep the things that are special about Figma special UH,

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Speaker 1: combined with the things that we can do surgically to

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Speaker 1: accelerate the business, accelerate our technology vision, and accelerate move

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Speaker 1: into new markets. That's really the foundation and the big

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Speaker 1: the most important thing, and we talked a lot about

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Speaker 1: this of the process is shared vision and trust and

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Speaker 1: and I certainly have a tremendous amount of respect for

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Speaker 1: what Dylan and the team has done. And I think

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Speaker 1: he's he knows me well enough that he knows that

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Speaker 1: I'm a person of my word and we're gonna do

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Speaker 1: great things together. It's mutual and it's her years prior

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Speaker 1: as well, all right, fig A co founder and CEO

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Speaker 1: Dylan Field, along with Adobes President of the digital media

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Speaker 1: business David Wadwanti, thank you both for sharing both sides

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Speaker 1: of it. Crypto's most important commercial highway, Ethereum has just

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Speaker 1: been repaved. The blockchain network completed the crypto world's biggest

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Speaker 1: and most ambitious software upgrade to date. This according to

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Speaker 1: its co founder of Italic, Peter and The upgrade is

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Speaker 1: called the Merge and appears to be a sell the

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Speaker 1: news event. Bloomer Boss has been covering for this and Shanale,

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Speaker 1: have you been up all night long? Did this thing

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Speaker 1: that we wake up at two am to see what

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Speaker 1: had happened? Yes, Emily. And while it was successful, remember

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Speaker 1: and also one of the biggest upgrades we've ever seen

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Speaker 1: in the cryptocurrency industry, it is still the beginning of

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Speaker 1: many changes for Etheroryum ahead to get to those ultimate

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Speaker 1: goals that Atherorum is looking for. So what is really

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Speaker 1: changing now? We are moving to this proof of steak model.

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Speaker 1: We are moving over from that reliance on miners to

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Speaker 1: stakers who are used to validate the chain and really

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Speaker 1: start to expand other things that Ethereum is really looking

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Speaker 1: to do, which has become more scalable, improve transaction fees

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Speaker 1: and gas fees. But you know that's not going to

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Speaker 1: happen right away. There are things that you've seen the

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Speaker 1: talk Twitter and talk about today on Twitter that will

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Speaker 1: start to get you closer to that, but there's still

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Speaker 1: some concerns right now as we look at the merge

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Speaker 1: and how the next couple of days and weeks work out.

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Speaker 1: What are those concerns. Those include scammers potentially appearing and

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Speaker 1: creating forks that look a lot like the Ethereum chain

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Speaker 1: as it continues through the merge, and you're also worried

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Speaker 1: about the impacts on the layer two's that are tied

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Speaker 1: to Ethereum. You're also worried about any unanticipated glitches that

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Speaker 1: are not just tied to this particular merge, but the

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Speaker 1: future upgrades, because those are the ones that are going

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Speaker 1: to do the things that we want to see from

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Speaker 1: a theory um, which is improved those transaction fees and speeds.

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Speaker 1: So when we take a look here to your point,

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Speaker 1: you're seeing some pressure on Ethereum, but remember this is

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Speaker 1: not really all about the merge. This is also tied

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Speaker 1: to a lot of other issues that are happening in

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Speaker 1: the macro environment. The merge. While there were a lot

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Speaker 1: of people buying it leading into this news, there was

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Speaker 1: a lot of education that went around the merge in

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Speaker 1: terms of, you know, the future for ethereum and what

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Speaker 1: it looks like as people really start to take to

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Speaker 1: the staking model and really bake in the place of ethereum,

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Speaker 1: not just in the crypto community, but while we have

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Speaker 1: all these other global issues going on that our headwinds emily,

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Speaker 1: including a hiking interest rate cycle around the world that

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Speaker 1: can pressure on crypto assets including ethereum. So a lot

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Speaker 1: still for theoryum ahead, but again the next few weeks

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Speaker 1: will be pretty critical as people bake in this news.

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Speaker 1: Alright now, I hang on, I want to bring in

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Speaker 1: Preston van Loon, now ethereum core developer and co founder

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Speaker 1: of Prismatic Labs. Preston, thank you so much for joining us.

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Speaker 1: Love to get your technical perspective here. It seems like

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Speaker 1: it's been a success so far. When will we know

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Speaker 1: for sure? M Well, the merch event definitely was a success.

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Speaker 1: Um you know, the emergence ethereums uh switch from proof

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Speaker 1: of work to proof of stake is literally emerging. The

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Speaker 1: proof of state blockchain they launched almost two years ago

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Speaker 1: with the Ethereum maininet. We've seen that's had consistent block production,

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Speaker 1: consistent finality. So far, everything is a success. I think

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Speaker 1: what we'll see over time is do the metrics hold up.

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Speaker 1: Do we continually see nearly participation. Do we see consistent

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Speaker 1: block finalization and a healthy network in the coming weeks

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Speaker 1: and months? You know, looking out longer term, what are

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Speaker 1: you going to be watching for? Are there any potential

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Speaker 1: um red flags that you are are going to be

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Speaker 1: looking out for? Yeah, great question. Um. You know, with

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Speaker 1: these kind of upgrades, it's really important that Darium stays online. Right.

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Speaker 1: It's a really hard thing to do. Um. But you

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Speaker 1: know with these upgrades there are also so complex, right,

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Speaker 1: so there's a lot of things that could go wrong.

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Speaker 1: We do a lot of testing, We make sure that

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Speaker 1: things are working really well before we do the upgrades.

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Speaker 1: But things we're looking for right this speaking, sure liveness

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Speaker 1: is continued. We still have the same up time as before.

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Speaker 1: One of the cool benefits of the switch of proof

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Speaker 1: mistake is that it's a much smoother blockchain. Box are

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Speaker 1: delivered in Uh, markets the fashion every twelve seconds versus

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Speaker 1: probabilistically every thirteen seconds. UM. So really we're just maintaining

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Speaker 1: that the software stays online, that participants are staying online,

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Speaker 1: that um, the network is seeing healthy. How do you

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Speaker 1: know when this will be successful? Obviously the price action

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Speaker 1: today wasn't all that good and well actually I was

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Speaker 1: down today, but you did see it rising very significantly

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Speaker 1: until this point overall, before we really hit the crypto winter.

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Speaker 1: There was a lot of excitement around this. But when

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Speaker 1: you really see the benefits of the new economy of

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Speaker 1: the system, we're seeing the benefits today. Um, the switch

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Speaker 1: is immediate, right, So the the energy efficiency gain that

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Speaker 1: we've realized to the nine nine point nine. Uh, the

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Speaker 1: more efficient model is in effect immediately today, and and

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Speaker 1: the prior model immediately sees so we already see that benefit.

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Speaker 1: We see the benefit of increased decyndralization. There are way

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Speaker 1: more actors in the in ethereum producing blocks today. UM.

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Speaker 1: In principle um ethereums proofistake is working now. It is

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Speaker 1: successful now, and it's it's running smoothly, you know. Uh.

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Speaker 1: Somehow Panda's preston have become like the signature meme of

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Speaker 1: the Ethereum merge. Can you explain that to me? Well,

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Speaker 1: it is a meme, right, so there's only so much

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Speaker 1: I can explain here. But the idea was that we

431
00:24:18,560 --> 00:24:21,439
Speaker 1: have like a polar bear and a black bear and

432
00:24:21,640 --> 00:24:24,520
Speaker 1: representing east one east to the two layers that are

433
00:24:24,520 --> 00:24:29,880
Speaker 1: emerging together. Uh, and apparently those two things make a panda.

434
00:24:30,280 --> 00:24:34,720
Speaker 1: I'm not sure if that's a totally accurate in terms

435
00:24:34,720 --> 00:24:37,400
Speaker 1: of science, but it is a fun mem and thing

436
00:24:37,440 --> 00:24:41,119
Speaker 1: to really enjoy. What comes next? You know, this is

437
00:24:41,320 --> 00:24:44,240
Speaker 1: very much, you know, a step in a series of

438
00:24:44,280 --> 00:24:49,639
Speaker 1: more steps that will presumably give more people who are

439
00:24:49,680 --> 00:24:54,920
Speaker 1: related to ethereum lower transaction fees, faster transactions. But when

440
00:24:54,920 --> 00:24:58,480
Speaker 1: do you really start to see that happen. Yeah, this

441
00:24:58,720 --> 00:25:01,800
Speaker 1: the switch to prove his stake has really unlocked the

442
00:25:01,880 --> 00:25:06,200
Speaker 1: next stages of upgrades. A theory still has a very

443
00:25:06,240 --> 00:25:10,960
Speaker 1: ambitious roadmap and a very uh large amount of work

444
00:25:10,960 --> 00:25:13,120
Speaker 1: to do in the next coming years. Um, we see

445
00:25:13,160 --> 00:25:17,359
Speaker 1: that there's already scaling through Layer two technologies, and what

446
00:25:17,400 --> 00:25:20,240
Speaker 1: we want to do there is to increase the security

447
00:25:20,359 --> 00:25:23,520
Speaker 1: and data availability guarantees that the theory has. So what

448
00:25:23,680 --> 00:25:27,160
Speaker 1: that means is to provide more data securely for things

449
00:25:27,240 --> 00:25:32,879
Speaker 1: like layer too, to provide that the transaction scaling um,

450
00:25:32,920 --> 00:25:35,360
Speaker 1: and at some point will be also working on you know,

451
00:25:35,600 --> 00:25:41,600
Speaker 1: the idea about charting and having more transaction through put

452
00:25:41,680 --> 00:25:45,359
Speaker 1: on the later one the base protocol of ethereum. But really,

453
00:25:45,359 --> 00:25:47,560
Speaker 1: you know, this is helping the switch proof of state

454
00:25:47,720 --> 00:25:49,840
Speaker 1: is really unlocking on these things and helping it there

455
00:25:49,840 --> 00:25:52,560
Speaker 1: will become a global settlement layer that it aims to be.

456
00:25:52,720 --> 00:25:55,119
Speaker 1: All right, Pressing Vallum, a theorem core developer and the

457
00:25:55,160 --> 00:25:58,639
Speaker 1: co founder of Prismatic Labs, Thanks so much for giving

458
00:25:58,720 --> 00:26:02,440
Speaker 1: us your technical view there. We're gonna continue to cover

459
00:26:02,520 --> 00:26:05,200
Speaker 1: the merge at Shanali. Stay with us. We're gonna talk

460
00:26:05,200 --> 00:26:08,480
Speaker 1: about it from a crypto exchange perspective. The president of

461
00:26:08,520 --> 00:26:11,720
Speaker 1: f t x US, Brett Harrison, joins us next to

462
00:26:11,720 --> 00:26:29,560
Speaker 1: talk about spunk trading and more. Let's get back to

463
00:26:29,560 --> 00:26:31,159
Speaker 1: the big story of the crypto world now, and that

464
00:26:31,280 --> 00:26:35,840
Speaker 1: is the Etherium merge complete, but with the transition to

465
00:26:35,840 --> 00:26:39,600
Speaker 1: proof of stakes, some community participants still prefer to keep

466
00:26:39,600 --> 00:26:43,199
Speaker 1: supporting the mining based proof of work version, so a

467
00:26:43,359 --> 00:26:46,200
Speaker 1: hard fork is expected to follow within hours, splitting the

468
00:26:46,280 --> 00:26:50,800
Speaker 1: chain into which prompted some crypto exchanges to adapt, like

469
00:26:51,080 --> 00:26:54,200
Speaker 1: f t X, who was the first crypto trading platforms,

470
00:26:54,200 --> 00:26:55,960
Speaker 1: one of them to launch spot trading for a theory

471
00:26:56,000 --> 00:26:57,639
Speaker 1: and proof of work tokens. Let's bring in f t

472
00:26:57,800 --> 00:27:00,479
Speaker 1: X US president Brett Harrison for more along with our

473
00:27:00,480 --> 00:27:03,680
Speaker 1: crypto contributor Shinali bos So. Talk to us bread about

474
00:27:03,680 --> 00:27:07,199
Speaker 1: the dynamics at play with the spot trading here and

475
00:27:07,240 --> 00:27:13,280
Speaker 1: that does this just undermine the merge overall. So with

476
00:27:13,400 --> 00:27:15,680
Speaker 1: proof of work, in order to be able to support

477
00:27:15,720 --> 00:27:18,760
Speaker 1: the computational puzzle solving, in order to receive the mining

478
00:27:18,760 --> 00:27:21,919
Speaker 1: rewards from the network, you have to create these giant

479
00:27:22,080 --> 00:27:24,800
Speaker 1: rigs of servers that are going to solve these computationally

480
00:27:24,800 --> 00:27:27,400
Speaker 1: hard problems. Expend lots of energy to do so they're

481
00:27:27,480 --> 00:27:30,399
Speaker 1: very expensive. So all of these companies that put enormous

482
00:27:30,400 --> 00:27:33,399
Speaker 1: amounts of money and investment into creating these mining rigs

483
00:27:33,680 --> 00:27:36,359
Speaker 1: suddenly find themselves as useless in the new proof of

484
00:27:36,400 --> 00:27:39,639
Speaker 1: state post merge world for Etherium. So there's been a

485
00:27:39,640 --> 00:27:43,480
Speaker 1: consortium with these miners that have banded together to basically

486
00:27:43,480 --> 00:27:47,360
Speaker 1: create an entire fork, a copy of the ethereum main net,

487
00:27:47,840 --> 00:27:50,600
Speaker 1: to create their own proof of work kind of classic

488
00:27:50,720 --> 00:27:54,040
Speaker 1: version of ethereum and try to keep that going. Now,

489
00:27:54,080 --> 00:27:56,080
Speaker 1: I agree with you that it sort of undermines the

490
00:27:56,119 --> 00:27:59,120
Speaker 1: whole purpose here, which is that Etherium moving to proof

491
00:27:59,119 --> 00:28:01,480
Speaker 1: of state means that this entire network, which is the

492
00:28:01,520 --> 00:28:06,560
Speaker 1: most popular network for smart contract based computation, is transitioning

493
00:28:06,560 --> 00:28:09,680
Speaker 1: completely to an energy efficient world that hopefully into a

494
00:28:09,720 --> 00:28:13,480
Speaker 1: bunch uh you know, faster transaction speed and lower transaction

495
00:28:13,560 --> 00:28:17,440
Speaker 1: costs in the future. And this new POW token isn't

496
00:28:17,440 --> 00:28:21,400
Speaker 1: going to have the same property. However, these the operators

497
00:28:21,400 --> 00:28:24,040
Speaker 1: of this network, we're air dropping these tokens on existing

498
00:28:24,040 --> 00:28:28,240
Speaker 1: ethereum uh you know, existing ethereum holders, and they're gonna

499
00:28:28,280 --> 00:28:30,399
Speaker 1: want to be able to claim those ethereum tokens, the

500
00:28:30,400 --> 00:28:32,879
Speaker 1: Ethereum w tokens and trade out of them, and so

501
00:28:32,920 --> 00:28:34,399
Speaker 1: we wanted to make sure that we allowed that as

502
00:28:34,400 --> 00:28:37,640
Speaker 1: an exchange operator. Now we aren't supporting the positive withdrawals

503
00:28:37,640 --> 00:28:40,960
Speaker 1: in them. We have many concerns over you know, actors

504
00:28:41,000 --> 00:28:43,640
Speaker 1: trying to uh kind of put themselves in the middle

505
00:28:43,800 --> 00:28:47,760
Speaker 1: of unsuspecting consumers, not being completely sure which ethereum chain

506
00:28:47,800 --> 00:28:51,040
Speaker 1: they're they're interacting with, and as a result, you know,

507
00:28:51,080 --> 00:28:54,000
Speaker 1: basically helping kind of steal money from people who don't

508
00:28:54,000 --> 00:28:55,840
Speaker 1: really know what's going on, and that's not that's really

509
00:28:55,840 --> 00:28:57,760
Speaker 1: not good. You know, we are full supporters of this

510
00:28:57,840 --> 00:29:00,280
Speaker 1: move to proof of state. We have also supported other

511
00:29:01,040 --> 00:29:04,480
Speaker 1: crypto networks that have always supported proof of stake, like Salmana,

512
00:29:04,800 --> 00:29:06,560
Speaker 1: and we think that's really is what's the future of

513
00:29:06,560 --> 00:29:08,600
Speaker 1: crypto is going to hold. But to the point that

514
00:29:08,640 --> 00:29:11,080
Speaker 1: you're making earlier, On one hand, there's a concern about

515
00:29:11,160 --> 00:29:15,080
Speaker 1: any potential scamming here at people moving to the wrong areas.

516
00:29:15,360 --> 00:29:19,920
Speaker 1: But also, you know, while the actual technological change worked

517
00:29:19,920 --> 00:29:23,200
Speaker 1: well today, how much does something like that undermine any

518
00:29:23,200 --> 00:29:30,040
Speaker 1: credibility in a system. The majority of the computational effort

519
00:29:30,120 --> 00:29:33,720
Speaker 1: with regards to the this Ethereum chain that's happening now

520
00:29:33,800 --> 00:29:36,400
Speaker 1: on the main nuts and a very small amount of

521
00:29:36,760 --> 00:29:41,000
Speaker 1: power and transactions are happening on this new each proof

522
00:29:41,040 --> 00:29:43,800
Speaker 1: of work chain, or you know, even though some mining

523
00:29:43,840 --> 00:29:46,880
Speaker 1: activity has moved to Ethereum Classic and some other kind

524
00:29:46,920 --> 00:29:49,160
Speaker 1: of e d M proof of work chains that still exists,

525
00:29:49,800 --> 00:29:51,840
Speaker 1: everything is happening really on Ethereum. And so what we

526
00:29:51,920 --> 00:29:54,240
Speaker 1: probably expect over time is for the activity on these

527
00:29:54,960 --> 00:29:57,600
Speaker 1: kizzle out, you know, the talk himself has said that

528
00:29:57,600 --> 00:30:00,240
Speaker 1: he expects and hopes that this will happen, and people will,

529
00:30:00,280 --> 00:30:02,440
Speaker 1: you know, basically give up the old way a proof

530
00:30:02,440 --> 00:30:05,840
Speaker 1: of work transition completely to prove of steak because this is,

531
00:30:06,000 --> 00:30:08,520
Speaker 1: you know, a superior system in a lot of ways,

532
00:30:08,560 --> 00:30:13,440
Speaker 1: and obviously there's always trade offs, you know, security, reliability, speed,

533
00:30:13,920 --> 00:30:15,760
Speaker 1: the kind of investment you need to get into the

534
00:30:15,760 --> 00:30:18,800
Speaker 1: network in the first place, level of decentralization. That's still

535
00:30:18,840 --> 00:30:20,880
Speaker 1: open for debate between proof of work and proof of

536
00:30:20,880 --> 00:30:23,640
Speaker 1: stake systems. It brings interesting questions into play with cards

537
00:30:23,640 --> 00:30:25,360
Speaker 1: to pitcoin and what its future is going to be.

538
00:30:25,760 --> 00:30:29,480
Speaker 1: But we and the Ethereum community as a whole really

539
00:30:29,480 --> 00:30:32,880
Speaker 1: do support this new proof of steak post merge world,

540
00:30:33,080 --> 00:30:35,200
Speaker 1: and we expect a percent of the activity to move

541
00:30:35,240 --> 00:30:41,000
Speaker 1: there over time. What's your response to sec Chair Gary

542
00:30:41,080 --> 00:30:45,560
Speaker 1: Gensler's comments on the merge in particular. I mean, you know,

543
00:30:45,800 --> 00:30:50,720
Speaker 1: he's he's been pretty clear doesn't think bitcoin falls under

544
00:30:50,760 --> 00:30:57,600
Speaker 1: securities regulation, but that post merge, uh, the Ethereum network could.

545
00:30:59,560 --> 00:31:04,480
Speaker 1: So are many complicated legal analyzes involved in trying to decipher,

546
00:31:04,920 --> 00:31:07,600
Speaker 1: you know, which aspects of this system might be securities

547
00:31:07,640 --> 00:31:11,040
Speaker 1: and which might not so. For example, um, the CFTC

548
00:31:11,200 --> 00:31:16,880
Speaker 1: already regulates ethereum the ether futures on multiple venues including CME,

549
00:31:17,280 --> 00:31:21,240
Speaker 1: ice F, t x US derivatives, and basically lays claim

550
00:31:21,280 --> 00:31:25,560
Speaker 1: to that being a commodity. But perhaps the staking in

551
00:31:25,760 --> 00:31:29,240
Speaker 1: such a system might be considered an investment contract of

552
00:31:29,320 --> 00:31:31,560
Speaker 1: some kind, and that's really an open question. And there

553
00:31:31,600 --> 00:31:34,600
Speaker 1: are multiple kinds of staking as well. There's you directly

554
00:31:34,640 --> 00:31:38,719
Speaker 1: participating in the network as a validator. There's you delegating

555
00:31:38,720 --> 00:31:42,200
Speaker 1: your tokens to a validator to get the rewards from staking.

556
00:31:42,560 --> 00:31:45,200
Speaker 1: There's also investment staking, which is sort of none of

557
00:31:45,200 --> 00:31:48,400
Speaker 1: the above, where you know, delegate your tokens to some

558
00:31:48,440 --> 00:31:52,440
Speaker 1: sort of protocol, a defied protocol which promises a certain yield.

559
00:31:52,720 --> 00:31:56,360
Speaker 1: All of these have, you know, different characteristics that you

560
00:31:56,520 --> 00:31:58,560
Speaker 1: may or may not pass the four prongs of the

561
00:31:58,600 --> 00:32:01,800
Speaker 1: Howe test, and it's all open question. And aside from

562
00:32:01,800 --> 00:32:05,480
Speaker 1: the regulatory risks, there's also other risks involved in staking.

563
00:32:05,640 --> 00:32:08,120
Speaker 1: You know, for example, that the price action that can

564
00:32:08,160 --> 00:32:11,280
Speaker 1: occur between now and when ethereum actually unlocks, and the

565
00:32:11,320 --> 00:32:14,480
Speaker 1: fact that ethereum staked ethereum won't unlock for people to

566
00:32:14,520 --> 00:32:17,400
Speaker 1: reap those rewards for probably six to twelve months still,

567
00:32:17,640 --> 00:32:20,400
Speaker 1: and there's operational risk involved. Two. If a validator fails

568
00:32:20,440 --> 00:32:22,800
Speaker 1: to UH to properly validate a block, it could have

569
00:32:22,840 --> 00:32:25,000
Speaker 1: some of its steak tokens taken away. And so there's

570
00:32:25,000 --> 00:32:27,000
Speaker 1: a number of risks that are still involved in the

571
00:32:27,040 --> 00:32:29,720
Speaker 1: aspect of stake staking. All right, interesting, so much to

572
00:32:29,760 --> 00:32:33,400
Speaker 1: continue to follow on this historic tay s t X

573
00:32:33,520 --> 00:32:37,400
Speaker 1: US President Brett Arison, thanks for breaking that all down

574
00:32:37,720 --> 00:32:40,480
Speaker 1: for us and our very own Chennali Bossi to you

575
00:32:40,880 --> 00:32:52,400
Speaker 1: as well. You a win for the European Union of

576
00:32:52,480 --> 00:32:57,400
Speaker 1: four billion euro fine that's about four billion dollars upheld

577
00:32:57,400 --> 00:33:00,640
Speaker 1: for Google's treatment of services on the App Store. Or earlier,

578
00:33:00,680 --> 00:33:04,360
Speaker 1: my Bloomberg colleague spoke with Margaret Veastier, Executive Vice President

579
00:33:04,440 --> 00:33:06,800
Speaker 1: of the European Commission, where she is in charge of

580
00:33:06,840 --> 00:33:11,360
Speaker 1: Digital and competition policy. Take a lesson. This is a win.

581
00:33:13,160 --> 00:33:16,640
Speaker 1: Huge majority of the case is completely upheld, which means

582
00:33:16,640 --> 00:33:20,640
Speaker 1: that the court has confirmed of you. And because of that,

583
00:33:20,720 --> 00:33:24,520
Speaker 1: of course, we also feel the encouragement to continue enforcing.

584
00:33:24,840 --> 00:33:26,760
Speaker 1: When it comes to big tech, we have a number

585
00:33:26,760 --> 00:33:31,760
Speaker 1: of investigations ongoing, three Apple cases, one Facebook case, uh

586
00:33:31,800 --> 00:33:36,000
Speaker 1: and quite a big Google case also coming up. Does

587
00:33:36,720 --> 00:33:38,520
Speaker 1: the progress that you made with the guards of the

588
00:33:38,520 --> 00:33:40,840
Speaker 1: Google case, do you think that actually helps you with

589
00:33:40,960 --> 00:33:44,440
Speaker 1: some of the other antitrust cases that you're bringing. Well,

590
00:33:44,480 --> 00:33:48,520
Speaker 1: we get the guidance from from the court on our approaches.

591
00:33:49,080 --> 00:33:51,600
Speaker 1: Of course, one of the major things for US is

592
00:33:51,680 --> 00:33:54,520
Speaker 1: first to prove dominance, because if you have that kind

593
00:33:54,520 --> 00:33:58,840
Speaker 1: of market power, then our rules say kick in. If

594
00:33:58,880 --> 00:34:01,000
Speaker 1: you're just a small guy, you know you can do

595
00:34:01,120 --> 00:34:03,400
Speaker 1: so many different things. If you're the big guy. If

596
00:34:03,440 --> 00:34:06,160
Speaker 1: you have the market power, then of course we become

597
00:34:06,520 --> 00:34:09,279
Speaker 1: much more strict. But just to be clear though, I mean,

598
00:34:09,520 --> 00:34:11,279
Speaker 1: we know that Google is going to continue to fight

599
00:34:11,320 --> 00:34:15,080
Speaker 1: this as long as they can. That's expected here. Even

600
00:34:15,120 --> 00:34:18,480
Speaker 1: if you end up with a victory in the traditional

601
00:34:18,560 --> 00:34:22,640
Speaker 1: sense here, does the prolonging of this fight maybe give

602
00:34:22,960 --> 00:34:25,959
Speaker 1: those other companies a little bit more encouragement to fight

603
00:34:25,960 --> 00:34:29,520
Speaker 1: back in their cases as well? Well? I don't. I

604
00:34:29,560 --> 00:34:33,480
Speaker 1: don't see it this way. Also because we have regulation

605
00:34:33,600 --> 00:34:36,040
Speaker 1: coming in to complement what we do with the case

606
00:34:36,040 --> 00:34:40,960
Speaker 1: by case enforcement. The Digital Markets Act was just signed yesterday,

607
00:34:41,120 --> 00:34:44,880
Speaker 1: so we'll be uh in trying to force mid October,

608
00:34:45,640 --> 00:34:48,960
Speaker 1: and of course there is sometimes adju to new rules,

609
00:34:49,040 --> 00:34:54,080
Speaker 1: but by early twenty four those who are designated as skatekeepers,

610
00:34:54,080 --> 00:34:57,160
Speaker 1: you know, real tech market power. They will have to

611
00:34:58,160 --> 00:35:02,200
Speaker 1: comply to quite a number of prohibitions, but also things

612
00:35:02,200 --> 00:35:05,120
Speaker 1: that they must do, for instance, share data with some

613
00:35:05,200 --> 00:35:08,640
Speaker 1: of their customers, some of already the threats of certain

614
00:35:08,680 --> 00:35:11,880
Speaker 1: fines in the upholding has changed behavior to a certain degree.

615
00:35:11,880 --> 00:35:14,040
Speaker 1: And I know that, of course the US had welcomed

616
00:35:14,040 --> 00:35:16,680
Speaker 1: as positives some of the changes, the proposed changes indeed

617
00:35:16,680 --> 00:35:19,319
Speaker 1: that Google has made. It's interesting when you look at

618
00:35:19,320 --> 00:35:22,800
Speaker 1: some of the reporting on the Google story from US print,

619
00:35:23,440 --> 00:35:26,839
Speaker 1: the Boston Globe, the Times saying they call you, well,

620
00:35:26,920 --> 00:35:30,320
Speaker 1: big text tormentor. And I'm interested to whether you're finding

621
00:35:30,360 --> 00:35:33,319
Speaker 1: that the US is becoming a tormentor too. When you're

622
00:35:33,400 --> 00:35:36,920
Speaker 1: here talking with your counterparts from a competitive perspective to

623
00:35:37,000 --> 00:35:39,319
Speaker 1: the United States back you in terms of the moves

624
00:35:39,360 --> 00:35:42,680
Speaker 1: you make on some of the big companies here. Well,

625
00:35:42,719 --> 00:35:45,400
Speaker 1: I have you know, the first time I came to

626
00:35:45,400 --> 00:35:48,399
Speaker 1: the US as Commissioner for Competition with my Google case,

627
00:35:48,719 --> 00:35:51,640
Speaker 1: people say what you're talking about? You know, crazy woman?

628
00:35:52,400 --> 00:35:57,160
Speaker 1: That has changed completely, you know, both public opinion, the

629
00:35:57,280 --> 00:36:01,160
Speaker 1: legislator in their approach, but you shoul law enforcement now

630
00:36:01,200 --> 00:36:04,560
Speaker 1: cases are being brought the States also very active. Uh.

631
00:36:04,680 --> 00:36:07,719
Speaker 1: And it's part of the global development. We see in

632
00:36:07,760 --> 00:36:10,279
Speaker 1: South Korea, we've seen in Australia, we see you know,

633
00:36:10,360 --> 00:36:13,640
Speaker 1: around the planet, people say, come on, we need an

634
00:36:13,640 --> 00:36:17,000
Speaker 1: open marketplace, we need the drive for innovation, we need

635
00:36:17,080 --> 00:36:21,280
Speaker 1: people to have choices. So so that has changed enormously.

636
00:36:21,320 --> 00:36:24,880
Speaker 1: And of course we follow very closely what happens in

637
00:36:25,000 --> 00:36:28,799
Speaker 1: Congress and we're very working very closely with our colleagues here.

638
00:36:29,680 --> 00:36:33,719
Speaker 1: M H. And that does it. For the sedition of

639
00:36:33,719 --> 00:36:37,239
Speaker 1: Blooberg Technology Friday, we've got the CEO of Grinder, the

640
00:36:37,320 --> 00:36:39,960
Speaker 1: new CEO, George Arison, will talk about his plan to

641
00:36:40,000 --> 00:36:43,839
Speaker 1: take on Match and Bumball. And don't forget to check

642
00:36:43,880 --> 00:36:47,040
Speaker 1: out our podcast wherever you get your podcast. I'm em

643
00:36:47,040 --> 00:37:00,719
Speaker 1: only checking in San Francisco. This is Bloomberg. And he'd

644
00:37:00,800 --> 00:37:08,240
Speaker 1: show how people are eating as people a people people

645
00:37:08,360 --> 00:37:15,239
Speaker 1: help people had show people eating the aga people have

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00:37:15,520 --> 00:37:17,600
Speaker 1: beach peple a people