Speaker 1: From the heart of where innovation, money and power Collie
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Check in San Francisco and this
Speaker 1: is Bloomberg Technology coming up in the next hour. It
Speaker 1: is the biggest ever takeover of a private software company.
Speaker 1: Adobe has agreed to buy the software design start up
Speaker 1: Bigma in a deal vuye at billion dollars. We're gonna
Speaker 1: hear from executives at both companies in an exclusive interview. Plus,
Speaker 1: the merge is here success. We're gonna hear from an
Speaker 1: Ethereum core developer about whether it's all going to plan
Speaker 1: and what is next? And climate tech investor in entrepreneur
Speaker 1: David Friedberg is with it us. You might also know him.
Speaker 1: That's a bestie on the all in hud will ask
Speaker 1: about his news back Today's Big Tech m and A
Speaker 1: and Elon Musk. A number of social platforms will announce
Speaker 1: new actions to combat hate crimes and racially motivated violence
Speaker 1: at a summit hosted by President Biden at the White House.
Speaker 1: Representatives from Instagram, Facebook, Twitch, YouTube, and Microsoft all planning
Speaker 1: to attend. The Company's new efforts will be unveiled alongside
Speaker 1: a package of federal initiatives to design and address hate
Speaker 1: fueled violence. Meantime, hundreds of workers at an Amazon warehouse
Speaker 1: in Coventry, England, are now striking over pay. They've been
Speaker 1: threatening strikes across the UK after a major rise in
Speaker 1: the cost of living. Any action to protest against the
Speaker 1: company's pay packages would likely take place in November, according
Speaker 1: to the Union, and the UK will open an in
Speaker 1: depth probe of Microsoft's planned sixty nine billion dollar purchase
Speaker 1: of the video GameMaker Activision. Blizzard regulators saying the deal
Speaker 1: could hamper competition and that Microsoft turned down the chance
Speaker 1: to offer are remedies to address its concerns. If the
Speaker 1: merger goes through, it will make Microsoft the world's third
Speaker 1: largest gaming company. The Brazilian agriculture company is planning to
Speaker 1: list in the US via spack with the help of
Speaker 1: one of the most prominent climate tech entrepreneurs, Lavareau, helps
Speaker 1: farmers boost production by offering a suite of key ingredients
Speaker 1: like seeds, fertilizer and more. I want to get right
Speaker 1: to David Friedburg Now, a long time founder turned investor
Speaker 1: focused on climate technology. The CEO of the Production Board
Speaker 1: which just merged with Lavreaux as well as you might
Speaker 1: know him as a co host of the All In podcast.
Speaker 1: David's so great to have you with us, big listener here,
Speaker 1: talk to us about the thesis behind this spack deal.
Speaker 1: Why spack why now? Yes, So we set up the
Speaker 1: back about a year ago specifically to do a strategic transaction,
Speaker 1: meaning we were seeking a business that operates a scale
Speaker 1: in a market that we know well food, agriculture, biomanufacturing,
Speaker 1: life sciences, and where we believe technology that exists in
Speaker 1: our portfolio of businesses could be additive and a creative
Speaker 1: to their operations. And we know AGG very well. UM
Speaker 1: came across Lavorro, which is the largest AGG retailer in Brazil,
Speaker 1: leading AGG inputs retailer in Latin America UM, and this
Speaker 1: business really has an incredible opportunity to transform how farmers
Speaker 1: farm in this market. And Latin America is the largest
Speaker 1: AG export market globally is the largest provider of calories
Speaker 1: around the world. UM and so this is a massive
Speaker 1: opportunity because farmers locally in that market don't utilize the
Speaker 1: best technology, they don't have the greatest productivity, which is
Speaker 1: yield per aker, and using agg retail, we can actually
Speaker 1: access that farmer and really transition them to new technologies
Speaker 1: like biologics, software and other tools that can massively improve
Speaker 1: their productivity. And that results in more calories, more sustainability
Speaker 1: of food production. And it's so impactful because this region
Speaker 1: is so important globally right now. So I'm curious about
Speaker 1: the decision UH to do us back in general when
Speaker 1: they've been under a lot of pressure, you know, they've
Speaker 1: almost disappeared in the last few weeks. Why do you
Speaker 1: choose that? Why did you choose that as the vehicle? Yes,
Speaker 1: so we set up a speck um last summer and
Speaker 1: so we've been UM. You know, it's the only off
Speaker 1: balance sheet of vehicle. We have the rest of our
Speaker 1: operations at the production boarder all balance sheet driven capital
Speaker 1: UM and we build an investing businesses off our balance sheet.
Speaker 1: And we did this specifically because there were public market
Speaker 1: investors that were interested in partnering with us, and we
Speaker 1: thought that this could be a really great mechanism to
Speaker 1: find a business that we could be useful to UH,
Speaker 1: and that's exactly what we're doing. So so we're actually
Speaker 1: investing a hundred million dollars off our balance sheet into
Speaker 1: the transaction, and several of our businesses are going to
Speaker 1: be partnering with lavorro UM in the future, we do
Speaker 1: hope as a way to bring new technology to that
Speaker 1: important market. And so this is a really great strategic vehicle,
Speaker 1: and the SPAC is really just a mechanism for doing
Speaker 1: that and for getting a meaningful ownership stake in a
Speaker 1: business of scale. I mean, this business, as we show
Speaker 1: in the presentation, UM should do about one point six
Speaker 1: billion top line this UH this year, and it's doing
Speaker 1: about a hundred and seventy two million proform adjusted IBATA
Speaker 1: this calendar. You're growing to two seventy seven next year UM,
Speaker 1: And so it's a business of scale, it's profitable, and
Speaker 1: I think that there's a real way to drive UM
Speaker 1: further margin improvement and further revenue growth with some of
Speaker 1: the technologies we can bring to their here talk to
Speaker 1: us about deep tech investing, which has been your thing
Speaker 1: for so long. How it's different in a bowl and
Speaker 1: bear market. You know, obviously these are companies that need funding,
Speaker 1: but it can be a harder sell when times are tough. Yeah,
Speaker 1: So it's exactly I mean, what you're seeing is exactly right.
Speaker 1: I mean, deep investing typically invests on a milestone based program.
Speaker 1: So you look at some technical breakthrough, you know, proving
Speaker 1: something works, and then you raise more capital, and then
Speaker 1: you prove the next thing works, and eventually you have
Speaker 1: a product, and eventually you can sell the product and
Speaker 1: make the product, and eventually you can scale scale into
Speaker 1: the market. And so that takes several years, and capital
Speaker 1: needs to be unlocked in milestone based um increments. In
Speaker 1: a market like this where you can buy US creuxuries
Speaker 1: and make four percent, or you know, buy a great
Speaker 1: stock that's got a five percent dividend yield and it's
Speaker 1: a growing business, it's really hard to find capital into
Speaker 1: highly speculative long range investment cycles. So then interest rate
Speaker 1: environment really challenges deep tech UM and it really challenges
Speaker 1: and I think we've particularly seen it of late in
Speaker 1: the biotech market. I don't know the latest statistic, but
Speaker 1: as of a few weeks or months ago, biotech um
Speaker 1: roughly of public issues, we're trading below cash UM, and
Speaker 1: so I think it really speaks to the channel lunge
Speaker 1: that deep tech businesses face. Now what we're doing with
Speaker 1: Lavoro as an example, and what I think happens often
Speaker 1: nowadays in biotech and will continue to happen with other
Speaker 1: UM more deep tech UM investing cycles is to partner.
Speaker 1: So you partner with the large business. You partner with
Speaker 1: the business that has scale, reach, distribution, cash flow that
Speaker 1: can really benefit if your deep tech pursuit unlock some
Speaker 1: value or some opportunity for their customer days. UM and
Speaker 1: So I think that's what we'll see more of UM
Speaker 1: likely going forward. Less of the vcs making you know,
Speaker 1: big check investments early stage hoping for something to UM
Speaker 1: you know, to hit that you'll likely need to see
Speaker 1: much more strategic partnership happen to get these things across
Speaker 1: the finish line. I'm so curious what you make of
Speaker 1: the Patagonia founder giving away his company to fight climate change.
Speaker 1: What do you think about it? Is that something more
Speaker 1: Silicon Valley founders and CEO should be doing. Yeah, he's
Speaker 1: always been an interesting guy. UM. You know, he operates
Speaker 1: his business in a different way than I'd think a
Speaker 1: traditional capitalist thinks about operating their business UM and so,
Speaker 1: you know, it doesn't seem surprising knowing the personality and
Speaker 1: the way you've talked about things. In the past and
Speaker 1: the decisions he's made. I mean, I think, uh, he
Speaker 1: kind of banned putting financial services firms logos, you know,
Speaker 1: as part of their custom embroidery programs that they were
Speaker 1: having for a while a few years ago. Um. And look,
Speaker 1: I mean, it's gonna go into these blind trusts, into
Speaker 1: these irrevocable trusts, and I'm sure that the stewards or
Speaker 1: the trustees will continue to operate this business in a
Speaker 1: smart way. I doubt that the trustees are are going
Speaker 1: to basically shred the thing and give it away. I'm
Speaker 1: sure they're going to continue to run the business, and
Speaker 1: that the dividends and the profits generated from that business
Speaker 1: over time can be used to fund um, you know,
Speaker 1: uh initiatives in climate change mitigation. Uh and um. And
Speaker 1: I think that that's a very noble way to transfer
Speaker 1: the ownership of your business rather than just give it
Speaker 1: away to a bunch of NGOs and nonprofits. Let the
Speaker 1: trustees that you know and trust break the business for
Speaker 1: you that can generate cash and value over time, and
Speaker 1: then decide where that cash and where that value should
Speaker 1: be allocated to really drive the impact in the world.
Speaker 1: So it's it's a great noble decision, and um, you
Speaker 1: know it really fits well with the way he's talked
Speaker 1: about what he's done in the past. Meantime, I got
Speaker 1: to ask you, since the Twitter Musk dispute has been
Speaker 1: a running topic on your all in pod, you interviewed
Speaker 1: Elon Musk at the All In Summit. Do you think
Speaker 1: this steal goes through? Does Musk end up buying Twitter?
Speaker 1: And if so, how does that change the social media ecosystem? Yeah?
Speaker 1: I think, Um, look, there are probably two key things
Speaker 1: at play here. The first is, you know what what
Speaker 1: ends up happening in the courts as they go through
Speaker 1: this this legal process. And um, I saw a great
Speaker 1: post by a legal analysts a few weeks ago, and
Speaker 1: I wish I could remember the person's name and reference them,
Speaker 1: but they said, you know, the Delaware um Court there,
Speaker 1: the chancery court is less likely to try and force
Speaker 1: a deal to close because then if the parties don't
Speaker 1: actually close the deal, it really damages the reputation and
Speaker 1: the integrity of the court. And that there's a case
Speaker 1: to be made that Musk would just simply say no,
Speaker 1: I'm not closing. You know, do what you want, give
Speaker 1: me a fine, of a billion dollars. I don't care.
Speaker 1: I'm not closing the merger on these terms, and so
Speaker 1: it's on this Legal analysts pointed out that it's unlikely
Speaker 1: that they'll close the deal on those that the court
Speaker 1: will try and force the deal. And I think on
Speaker 1: the other side, he saw value in the community, he
Speaker 1: saw value in the user base, he saw value in
Speaker 1: the social network, and I'm sure he still does UM.
Speaker 1: And you know, regardless of what he's identified with respect
Speaker 1: to the bot problem or the stamp problem as he
Speaker 1: calls it, that there must still be value there. So
Speaker 1: I would say that based on those two conditions, there's
Speaker 1: probably a bidass gap that maybe gets met still UM,
Speaker 1: And I would envision that there's still a motivation to
Speaker 1: do something here that is probably a function of the
Speaker 1: true size of the true network of user is on
Speaker 1: that platform, because it is such an important platform. Deep down,
Speaker 1: he probably still really wants to do something. And on
Speaker 1: the other side, the court may end up saying, hey,
Speaker 1: you know, there's um, there's some way that you guys
Speaker 1: were only going to charge a fine here, which forces
Speaker 1: Twitter back to the table to negotiate price, and maybe
Speaker 1: something happens, so you know that would be my middle
Speaker 1: of the line, kind of middle middle of the uh,
Speaker 1: the aisle here kind of decision or or um perspective
Speaker 1: and what might end up happening over the next couple
Speaker 1: of months here. Um, So we'll be listening. We'll be
Speaker 1: listening to the podcast for more commentary Dave Friedburg. Great
Speaker 1: to have you with us. Thank you so much for
Speaker 1: stopping by. We'll be right back with more Bloomberg Technology.
Speaker 1: This is Bloomberg. Let's get back to that Adobe deal
Speaker 1: to buy software design start a Figma. This deal, valued
Speaker 1: at bion dollars, is the biggest ever takeover of a
Speaker 1: private software company. I want to bring in Figma's co
Speaker 1: founder and CEO hillan Field now as well as Adobes,
Speaker 1: President of the Digital Media Business David Wadwanti for more
Speaker 1: on this historic deal. Exclusive interview Dylan kind of the
Speaker 1: Silicon Draft Valley dream coming true here. You stick with
Speaker 1: your initial idea, you develop it for a decade, you
Speaker 1: sell it for billions of dollars. There are still people
Speaker 1: ask out there asking twenty billion dollars, what do you
Speaker 1: think is the potential here? And why is Figma worth
Speaker 1: twenty billion dollars? Well, First of all, I just want
Speaker 1: to give a giant shout out and thank you to
Speaker 1: the Thigma team. I'm on this interview to day, and
Speaker 1: there's so many other people that have been involved in
Speaker 1: SUSA Thigma along the way, past figmates, current figmates, and
Speaker 1: I want to thank all of them. Of course, this
Speaker 1: is about moving forward now and how much potential there
Speaker 1: is a combined Figma Adobe combo, and we really believe
Speaker 1: there's such potential here. Whether it's looking at Figma and
Speaker 1: thinking about how we can accelerate our efforts with fig
Speaker 1: Jam through um Adobe Acrobats and their giant install base
Speaker 1: and their productivity case there, whether it's about the Stigma
Speaker 1: design platform today and how we can bring capabilities from
Speaker 1: Adobe in whether it be imaging, vector illustration, video three
Speaker 1: D or more, or it's thinking outside the box where
Speaker 1: we're currently at thinking about developers and thinking about markets
Speaker 1: were not serving and we were not playing to serve
Speaker 1: such as creatives and thinking about how do we bring
Speaker 1: the capabilities of Adobe onto the Thingama platform and make
Speaker 1: it set creatives are able to have more collaborative workfloads,
Speaker 1: make those workflodes web based and make it set creativity
Speaker 1: design and software development are more accessible to more people.
Speaker 1: Were truly excited about what can become possible there in
Speaker 1: our combination with Adobe, David, we all thought we were
Speaker 1: in a downturn, and here you are doing a twenty
Speaker 1: billion dollar deal. The stock had kind of a rough
Speaker 1: day as investors digested the number. Here, what's your response
Speaker 1: to that? Look, we we had Adobe. We're entering our
Speaker 1: forty year and we continue to be very aggressive about
Speaker 1: the opportunities that we see. If you look at the
Speaker 1: opportunity head and what Dylan and the amazing team and
Speaker 1: Figma have built. UH, they've built a company that's basically
Speaker 1: going to add two hundred million dollars of air are
Speaker 1: this year, crossing four hundred million by the end of
Speaker 1: the year, UH and UH and addressing a TAM that's
Speaker 1: sixteen and a half billion dollars. And when you put
Speaker 1: it in the context of the efficiency of the business,
Speaker 1: cash flow positive with a net dollar retention rate over
Speaker 1: a hundred uh, there are very few companies with that profile.
Speaker 1: And in the context of what we see and some
Speaker 1: of the things Dylan talked about when we look look
Speaker 1: ahead and the synergies we can do to accelerate Figma's
Speaker 1: move into that sixty and a half billion dollar CAM
Speaker 1: to accelerate what we do in terms of our core
Speaker 1: creative flagship applications we imagined with the technology running on
Speaker 1: top of the Figma platform. Uh. And when you think
Speaker 1: about it in the context of how Dylan was talking
Speaker 1: about with Big Game and Acrobat really coming in at
Speaker 1: the cross center across the intersection of um creativity and productivity,
Speaker 1: we think that the market opportunity here is massive and
Speaker 1: this was a great time to make that plate. Uh, Dylan.
Speaker 1: There was a great tweet from Ruben Harris, another startup
Speaker 1: entrepreneur out there. He compared Figma to Instagram. Well, if
Speaker 1: you think about it that way, you hear the numbers
Speaker 1: that David just rattled off, your casual positive you could
Speaker 1: have gone public as soon as the window open. Why sell?
Speaker 1: Why not try to build your own hundred fifty billion
Speaker 1: dollar company and go public on your own terms? Yeah,
Speaker 1: I mean, first of all, we're super thankful that we
Speaker 1: had the ability to control our own destiny here. But
Speaker 1: the end the day, we have to think about our community.
Speaker 1: We need to think about the impact we can have
Speaker 1: and what timeline we can have an impact on. And
Speaker 1: we believe that this accelerates the impact we can have
Speaker 1: at this Rowden's the impact we can have. And by
Speaker 1: leveraging and utilizing the expertise of Adobe, the capabilities, the
Speaker 1: technology they've built, as well as the amazing people they
Speaker 1: have UH and they've attracted over the past three decades. UM,
Speaker 1: we think that we're able to basically scale the impact
Speaker 1: we have beyond just design and move into new areas
Speaker 1: and be able to have more impact faster, And that's
Speaker 1: why we've done this deal. David, I know you were
Speaker 1: the architect of this deal, and you also sold a
Speaker 1: couple of companies, including one to Adobe in your earlier days.
Speaker 1: What kind of advice did you give Dylan through this process?
Speaker 1: You know, personal advice in the best interest of you know,
Speaker 1: Figma and his company and not necessarily the company that
Speaker 1: you work for now. Yeah, well, I think I look
Speaker 1: at it as as a shared common interest and shared
Speaker 1: objective here. So you know, Dylan and I have known
Speaker 1: each other for a few years and we started having
Speaker 1: this conversation in earnest a few months ago having gone
Speaker 1: through this process being acquired as part of Macromedia into Adobe.
Speaker 1: The things I know are if you have shared purpose,
Speaker 1: if you have a shared passion UH, and you have
Speaker 1: a clarity in terms of how you're going to actually
Speaker 1: operate and go after the market. UH, great things will
Speaker 1: happen because there's so much that we have in common
Speaker 1: in terms of how what we want to approach the market.
Speaker 1: And Dylan and I have been very clear in terms
Speaker 1: of how we're planning to run this. Dylan will remain
Speaker 1: CEO of Figma and UH, and he and I will
Speaker 1: be working very closely to make sure that the decisions
Speaker 1: that he makes with the autonomy that he needs to
Speaker 1: keep the things that are special about Figma special UH,
Speaker 1: combined with the things that we can do surgically to
Speaker 1: accelerate the business, accelerate our technology vision, and accelerate move
Speaker 1: into new markets. That's really the foundation and the big
Speaker 1: the most important thing, and we talked a lot about
Speaker 1: this of the process is shared vision and trust and
Speaker 1: and I certainly have a tremendous amount of respect for
Speaker 1: what Dylan and the team has done. And I think
Speaker 1: he's he knows me well enough that he knows that
Speaker 1: I'm a person of my word and we're gonna do
Speaker 1: great things together. It's mutual and it's her years prior
Speaker 1: as well, all right, fig A co founder and CEO
Speaker 1: Dylan Field, along with Adobes President of the digital media
Speaker 1: business David Wadwanti, thank you both for sharing both sides
Speaker 1: of it. Crypto's most important commercial highway, Ethereum has just
Speaker 1: been repaved. The blockchain network completed the crypto world's biggest
Speaker 1: and most ambitious software upgrade to date. This according to
Speaker 1: its co founder of Italic, Peter and The upgrade is
Speaker 1: called the Merge and appears to be a sell the
Speaker 1: news event. Bloomer Boss has been covering for this and Shanale,
Speaker 1: have you been up all night long? Did this thing
Speaker 1: that we wake up at two am to see what
Speaker 1: had happened? Yes, Emily. And while it was successful, remember
Speaker 1: and also one of the biggest upgrades we've ever seen
Speaker 1: in the cryptocurrency industry, it is still the beginning of
Speaker 1: many changes for Etheroryum ahead to get to those ultimate
Speaker 1: goals that Atherorum is looking for. So what is really
Speaker 1: changing now? We are moving to this proof of steak model.
Speaker 1: We are moving over from that reliance on miners to
Speaker 1: stakers who are used to validate the chain and really
Speaker 1: start to expand other things that Ethereum is really looking
Speaker 1: to do, which has become more scalable, improve transaction fees
Speaker 1: and gas fees. But you know that's not going to
Speaker 1: happen right away. There are things that you've seen the
Speaker 1: talk Twitter and talk about today on Twitter that will
Speaker 1: start to get you closer to that, but there's still
Speaker 1: some concerns right now as we look at the merge
Speaker 1: and how the next couple of days and weeks work out.
Speaker 1: What are those concerns. Those include scammers potentially appearing and
Speaker 1: creating forks that look a lot like the Ethereum chain
Speaker 1: as it continues through the merge, and you're also worried
Speaker 1: about the impacts on the layer two's that are tied
Speaker 1: to Ethereum. You're also worried about any unanticipated glitches that
Speaker 1: are not just tied to this particular merge, but the
Speaker 1: future upgrades, because those are the ones that are going
Speaker 1: to do the things that we want to see from
Speaker 1: a theory um, which is improved those transaction fees and speeds.
Speaker 1: So when we take a look here to your point,
Speaker 1: you're seeing some pressure on Ethereum, but remember this is
Speaker 1: not really all about the merge. This is also tied
Speaker 1: to a lot of other issues that are happening in
Speaker 1: the macro environment. The merge. While there were a lot
Speaker 1: of people buying it leading into this news, there was
Speaker 1: a lot of education that went around the merge in
Speaker 1: terms of, you know, the future for ethereum and what
Speaker 1: it looks like as people really start to take to
Speaker 1: the staking model and really bake in the place of ethereum,
Speaker 1: not just in the crypto community, but while we have
Speaker 1: all these other global issues going on that our headwinds emily,
Speaker 1: including a hiking interest rate cycle around the world that
Speaker 1: can pressure on crypto assets including ethereum. So a lot
Speaker 1: still for theoryum ahead, but again the next few weeks
Speaker 1: will be pretty critical as people bake in this news.
Speaker 1: Alright now, I hang on, I want to bring in
Speaker 1: Preston van Loon, now ethereum core developer and co founder
Speaker 1: of Prismatic Labs. Preston, thank you so much for joining us.
Speaker 1: Love to get your technical perspective here. It seems like
Speaker 1: it's been a success so far. When will we know
Speaker 1: for sure? M Well, the merch event definitely was a success.
Speaker 1: Um you know, the emergence ethereums uh switch from proof
Speaker 1: of work to proof of stake is literally emerging. The
Speaker 1: proof of state blockchain they launched almost two years ago
Speaker 1: with the Ethereum maininet. We've seen that's had consistent block production,
Speaker 1: consistent finality. So far, everything is a success. I think
Speaker 1: what we'll see over time is do the metrics hold up.
Speaker 1: Do we continually see nearly participation. Do we see consistent
Speaker 1: block finalization and a healthy network in the coming weeks
Speaker 1: and months? You know, looking out longer term, what are
Speaker 1: you going to be watching for? Are there any potential
Speaker 1: um red flags that you are are going to be
Speaker 1: looking out for? Yeah, great question. Um. You know, with
Speaker 1: these kind of upgrades, it's really important that Darium stays online. Right.
Speaker 1: It's a really hard thing to do. Um. But you
Speaker 1: know with these upgrades there are also so complex, right,
Speaker 1: so there's a lot of things that could go wrong.
Speaker 1: We do a lot of testing, We make sure that
Speaker 1: things are working really well before we do the upgrades.
Speaker 1: But things we're looking for right this speaking, sure liveness
Speaker 1: is continued. We still have the same up time as before.
Speaker 1: One of the cool benefits of the switch of proof
Speaker 1: mistake is that it's a much smoother blockchain. Box are
Speaker 1: delivered in Uh, markets the fashion every twelve seconds versus
Speaker 1: probabilistically every thirteen seconds. UM. So really we're just maintaining
Speaker 1: that the software stays online, that participants are staying online,
Speaker 1: that um, the network is seeing healthy. How do you
Speaker 1: know when this will be successful? Obviously the price action
Speaker 1: today wasn't all that good and well actually I was
Speaker 1: down today, but you did see it rising very significantly
Speaker 1: until this point overall, before we really hit the crypto winter.
Speaker 1: There was a lot of excitement around this. But when
Speaker 1: you really see the benefits of the new economy of
Speaker 1: the system, we're seeing the benefits today. Um, the switch
Speaker 1: is immediate, right, So the the energy efficiency gain that
Speaker 1: we've realized to the nine nine point nine. Uh, the
Speaker 1: more efficient model is in effect immediately today, and and
Speaker 1: the prior model immediately sees so we already see that benefit.
Speaker 1: We see the benefit of increased decyndralization. There are way
Speaker 1: more actors in the in ethereum producing blocks today. UM.
Speaker 1: In principle um ethereums proofistake is working now. It is
Speaker 1: successful now, and it's it's running smoothly, you know. Uh.
Speaker 1: Somehow Panda's preston have become like the signature meme of
Speaker 1: the Ethereum merge. Can you explain that to me? Well,
Speaker 1: it is a meme, right, so there's only so much
Speaker 1: I can explain here. But the idea was that we
Speaker 1: have like a polar bear and a black bear and
Speaker 1: representing east one east to the two layers that are
Speaker 1: emerging together. Uh, and apparently those two things make a panda.
Speaker 1: I'm not sure if that's a totally accurate in terms
Speaker 1: of science, but it is a fun mem and thing
Speaker 1: to really enjoy. What comes next? You know, this is
Speaker 1: very much, you know, a step in a series of
Speaker 1: more steps that will presumably give more people who are
Speaker 1: related to ethereum lower transaction fees, faster transactions. But when
Speaker 1: do you really start to see that happen. Yeah, this
Speaker 1: the switch to prove his stake has really unlocked the
Speaker 1: next stages of upgrades. A theory still has a very
Speaker 1: ambitious roadmap and a very uh large amount of work
Speaker 1: to do in the next coming years. Um, we see
Speaker 1: that there's already scaling through Layer two technologies, and what
Speaker 1: we want to do there is to increase the security
Speaker 1: and data availability guarantees that the theory has. So what
Speaker 1: that means is to provide more data securely for things
Speaker 1: like layer too, to provide that the transaction scaling um,
Speaker 1: and at some point will be also working on you know,
Speaker 1: the idea about charting and having more transaction through put
Speaker 1: on the later one the base protocol of ethereum. But really,
Speaker 1: you know, this is helping the switch proof of state
Speaker 1: is really unlocking on these things and helping it there
Speaker 1: will become a global settlement layer that it aims to be.
Speaker 1: All right, Pressing Vallum, a theorem core developer and the
Speaker 1: co founder of Prismatic Labs, Thanks so much for giving
Speaker 1: us your technical view there. We're gonna continue to cover
Speaker 1: the merge at Shanali. Stay with us. We're gonna talk
Speaker 1: about it from a crypto exchange perspective. The president of
Speaker 1: f t x US, Brett Harrison, joins us next to
Speaker 1: talk about spunk trading and more. Let's get back to
Speaker 1: the big story of the crypto world now, and that
Speaker 1: is the Etherium merge complete, but with the transition to
Speaker 1: proof of stakes, some community participants still prefer to keep
Speaker 1: supporting the mining based proof of work version, so a
Speaker 1: hard fork is expected to follow within hours, splitting the
Speaker 1: chain into which prompted some crypto exchanges to adapt, like
Speaker 1: f t X, who was the first crypto trading platforms,
Speaker 1: one of them to launch spot trading for a theory
Speaker 1: and proof of work tokens. Let's bring in f t
Speaker 1: X US president Brett Harrison for more along with our
Speaker 1: crypto contributor Shinali bos So. Talk to us bread about
Speaker 1: the dynamics at play with the spot trading here and
Speaker 1: that does this just undermine the merge overall. So with
Speaker 1: proof of work, in order to be able to support
Speaker 1: the computational puzzle solving, in order to receive the mining
Speaker 1: rewards from the network, you have to create these giant
Speaker 1: rigs of servers that are going to solve these computationally
Speaker 1: hard problems. Expend lots of energy to do so they're
Speaker 1: very expensive. So all of these companies that put enormous
Speaker 1: amounts of money and investment into creating these mining rigs
Speaker 1: suddenly find themselves as useless in the new proof of
Speaker 1: state post merge world for Etherium. So there's been a
Speaker 1: consortium with these miners that have banded together to basically
Speaker 1: create an entire fork, a copy of the ethereum main net,
Speaker 1: to create their own proof of work kind of classic
Speaker 1: version of ethereum and try to keep that going. Now,
Speaker 1: I agree with you that it sort of undermines the
Speaker 1: whole purpose here, which is that Etherium moving to proof
Speaker 1: of state means that this entire network, which is the
Speaker 1: most popular network for smart contract based computation, is transitioning
Speaker 1: completely to an energy efficient world that hopefully into a
Speaker 1: bunch uh you know, faster transaction speed and lower transaction
Speaker 1: costs in the future. And this new POW token isn't
Speaker 1: going to have the same property. However, these the operators
Speaker 1: of this network, we're air dropping these tokens on existing
Speaker 1: ethereum uh you know, existing ethereum holders, and they're gonna
Speaker 1: want to be able to claim those ethereum tokens, the
Speaker 1: Ethereum w tokens and trade out of them, and so
Speaker 1: we wanted to make sure that we allowed that as
Speaker 1: an exchange operator. Now we aren't supporting the positive withdrawals
Speaker 1: in them. We have many concerns over you know, actors
Speaker 1: trying to uh kind of put themselves in the middle
Speaker 1: of unsuspecting consumers, not being completely sure which ethereum chain
Speaker 1: they're they're interacting with, and as a result, you know,
Speaker 1: basically helping kind of steal money from people who don't
Speaker 1: really know what's going on, and that's not that's really
Speaker 1: not good. You know, we are full supporters of this
Speaker 1: move to proof of state. We have also supported other
Speaker 1: crypto networks that have always supported proof of stake, like Salmana,
Speaker 1: and we think that's really is what's the future of
Speaker 1: crypto is going to hold. But to the point that
Speaker 1: you're making earlier, On one hand, there's a concern about
Speaker 1: any potential scamming here at people moving to the wrong areas.
Speaker 1: But also, you know, while the actual technological change worked
Speaker 1: well today, how much does something like that undermine any
Speaker 1: credibility in a system. The majority of the computational effort
Speaker 1: with regards to the this Ethereum chain that's happening now
Speaker 1: on the main nuts and a very small amount of
Speaker 1: power and transactions are happening on this new each proof
Speaker 1: of work chain, or you know, even though some mining
Speaker 1: activity has moved to Ethereum Classic and some other kind
Speaker 1: of e d M proof of work chains that still exists,
Speaker 1: everything is happening really on Ethereum. And so what we
Speaker 1: probably expect over time is for the activity on these
Speaker 1: kizzle out, you know, the talk himself has said that
Speaker 1: he expects and hopes that this will happen, and people will,
Speaker 1: you know, basically give up the old way a proof
Speaker 1: of work transition completely to prove of steak because this is,
Speaker 1: you know, a superior system in a lot of ways,
Speaker 1: and obviously there's always trade offs, you know, security, reliability, speed,
Speaker 1: the kind of investment you need to get into the
Speaker 1: network in the first place, level of decentralization. That's still
Speaker 1: open for debate between proof of work and proof of
Speaker 1: stake systems. It brings interesting questions into play with cards
Speaker 1: to pitcoin and what its future is going to be.
Speaker 1: But we and the Ethereum community as a whole really
Speaker 1: do support this new proof of steak post merge world,
Speaker 1: and we expect a percent of the activity to move
Speaker 1: there over time. What's your response to sec Chair Gary
Speaker 1: Gensler's comments on the merge in particular. I mean, you know,
Speaker 1: he's he's been pretty clear doesn't think bitcoin falls under
Speaker 1: securities regulation, but that post merge, uh, the Ethereum network could.
Speaker 1: So are many complicated legal analyzes involved in trying to decipher,
Speaker 1: you know, which aspects of this system might be securities
Speaker 1: and which might not so. For example, um, the CFTC
Speaker 1: already regulates ethereum the ether futures on multiple venues including CME,
Speaker 1: ice F, t x US derivatives, and basically lays claim
Speaker 1: to that being a commodity. But perhaps the staking in
Speaker 1: such a system might be considered an investment contract of
Speaker 1: some kind, and that's really an open question. And there
Speaker 1: are multiple kinds of staking as well. There's you directly
Speaker 1: participating in the network as a validator. There's you delegating
Speaker 1: your tokens to a validator to get the rewards from staking.
Speaker 1: There's also investment staking, which is sort of none of
Speaker 1: the above, where you know, delegate your tokens to some
Speaker 1: sort of protocol, a defied protocol which promises a certain yield.
Speaker 1: All of these have, you know, different characteristics that you
Speaker 1: may or may not pass the four prongs of the
Speaker 1: Howe test, and it's all open question. And aside from
Speaker 1: the regulatory risks, there's also other risks involved in staking.
Speaker 1: You know, for example, that the price action that can
Speaker 1: occur between now and when ethereum actually unlocks, and the
Speaker 1: fact that ethereum staked ethereum won't unlock for people to
Speaker 1: reap those rewards for probably six to twelve months still,
Speaker 1: and there's operational risk involved. Two. If a validator fails
Speaker 1: to UH to properly validate a block, it could have
Speaker 1: some of its steak tokens taken away. And so there's
Speaker 1: a number of risks that are still involved in the
Speaker 1: aspect of stake staking. All right, interesting, so much to
Speaker 1: continue to follow on this historic tay s t X
Speaker 1: US President Brett Arison, thanks for breaking that all down
Speaker 1: for us and our very own Chennali Bossi to you
Speaker 1: as well. You a win for the European Union of
Speaker 1: four billion euro fine that's about four billion dollars upheld
Speaker 1: for Google's treatment of services on the App Store. Or earlier,
Speaker 1: my Bloomberg colleague spoke with Margaret Veastier, Executive Vice President
Speaker 1: of the European Commission, where she is in charge of
Speaker 1: Digital and competition policy. Take a lesson. This is a win.
Speaker 1: Huge majority of the case is completely upheld, which means
Speaker 1: that the court has confirmed of you. And because of that,
Speaker 1: of course, we also feel the encouragement to continue enforcing.
Speaker 1: When it comes to big tech, we have a number
Speaker 1: of investigations ongoing, three Apple cases, one Facebook case, uh
Speaker 1: and quite a big Google case also coming up. Does
Speaker 1: the progress that you made with the guards of the
Speaker 1: Google case, do you think that actually helps you with
Speaker 1: some of the other antitrust cases that you're bringing. Well,
Speaker 1: we get the guidance from from the court on our approaches.
Speaker 1: Of course, one of the major things for US is
Speaker 1: first to prove dominance, because if you have that kind
Speaker 1: of market power, then our rules say kick in. If
Speaker 1: you're just a small guy, you know you can do
Speaker 1: so many different things. If you're the big guy. If
Speaker 1: you have the market power, then of course we become
Speaker 1: much more strict. But just to be clear though, I mean,
Speaker 1: we know that Google is going to continue to fight
Speaker 1: this as long as they can. That's expected here. Even
Speaker 1: if you end up with a victory in the traditional
Speaker 1: sense here, does the prolonging of this fight maybe give
Speaker 1: those other companies a little bit more encouragement to fight
Speaker 1: back in their cases as well? Well? I don't. I
Speaker 1: don't see it this way. Also because we have regulation
Speaker 1: coming in to complement what we do with the case
Speaker 1: by case enforcement. The Digital Markets Act was just signed yesterday,
Speaker 1: so we'll be uh in trying to force mid October,
Speaker 1: and of course there is sometimes adju to new rules,
Speaker 1: but by early twenty four those who are designated as skatekeepers,
Speaker 1: you know, real tech market power. They will have to
Speaker 1: comply to quite a number of prohibitions, but also things
Speaker 1: that they must do, for instance, share data with some
Speaker 1: of their customers, some of already the threats of certain
Speaker 1: fines in the upholding has changed behavior to a certain degree.
Speaker 1: And I know that, of course the US had welcomed
Speaker 1: as positives some of the changes, the proposed changes indeed
Speaker 1: that Google has made. It's interesting when you look at
Speaker 1: some of the reporting on the Google story from US print,
Speaker 1: the Boston Globe, the Times saying they call you, well,
Speaker 1: big text tormentor. And I'm interested to whether you're finding
Speaker 1: that the US is becoming a tormentor too. When you're
Speaker 1: here talking with your counterparts from a competitive perspective to
Speaker 1: the United States back you in terms of the moves
Speaker 1: you make on some of the big companies here. Well,
Speaker 1: I have you know, the first time I came to
Speaker 1: the US as Commissioner for Competition with my Google case,
Speaker 1: people say what you're talking about? You know, crazy woman?
Speaker 1: That has changed completely, you know, both public opinion, the
Speaker 1: legislator in their approach, but you shoul law enforcement now
Speaker 1: cases are being brought the States also very active. Uh.
Speaker 1: And it's part of the global development. We see in
Speaker 1: South Korea, we've seen in Australia, we see you know,
Speaker 1: around the planet, people say, come on, we need an
Speaker 1: open marketplace, we need the drive for innovation, we need
Speaker 1: people to have choices. So so that has changed enormously.
Speaker 1: And of course we follow very closely what happens in
Speaker 1: Congress and we're very working very closely with our colleagues here.
Speaker 1: M H. And that does it. For the sedition of
Speaker 1: Blooberg Technology Friday, we've got the CEO of Grinder, the
Speaker 1: new CEO, George Arison, will talk about his plan to
Speaker 1: take on Match and Bumball. And don't forget to check
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