"The era of relying on speculative expectations has ended."

Compiled & Edited by: Deep Tide TechFlow

Guests: Brandon Millman, CEO of Phantom; Luca Netz, CEO of Pudgy Penguins

Host: Laura Shin

Podcast Source: Unchained

Original Title: Companies Are Racing to Bring People Onchain. Who Is Best Positioned?

Broadcast Date: August 21, 2025

Key Points Summary

Cryptocurrency is entering a critical phase in the race for mass user adoption.

In this episode of Unchained, Brandon Millman, CEO of Phantom, and Luca Netz, CEO of Pudgy Penguins, come together to discuss who will win the favor of the next hundred million cryptocurrency users.

Will product-driven startups break through first? Or will Web2 giants like X and Meta seize the market? Or will crypto-native applications like Phantom rise to prominence? From competition in the payment sector to the war between trading platforms, and the grand vision of a "universal application," the two guests analyze where true value will accumulate and explain why the "easy money era" for entrepreneurs has passed.

Highlights of Insights

• Coinbase should focus on becoming the "JP Morgan" of the crypto space.

• The form and purpose of trading are undergoing significant changes, increasingly resembling entertainment or thrill-seeking behavior.

• The true winners will be those companies that can not only attract the next generation of users but also effectively respond to changes in the on-chain environment.

• Whoever can capture the latest trends in on-chain finance and innovate in a "chain-first" manner, while perfectly integrating the new generation of attention economy, may become the biggest winner in this field.

• In the crypto industry, the barrier to entry for startups is very low, yet the potential to create billion-dollar companies is very high. The future will be an era where top entrepreneurs continue to hold an advantage, with a few of the best entrepreneurs consistently widening the gap with others, while industry competition intensifies, forcing people to discover who the true leaders are.

• The era of relying on speculative expectations has ended. The focus now is on how to leverage super-financialization and global payment networks, combined with global liquidity and composability, to truly build disruptive technologies that can change the world, rather than merely promoting world-changing narratives without actual action. The future will be an era of results-oriented success, rather than success achieved through speculation.

• As the momentum of cryptocurrency returns, I hope Pudgy Penguins becomes the most familiar and trusted IP, resonating emotionally with users.

• Years have passed, and Phantom's user base has far surpassed MetaMask, with more people engaging with the crypto ecosystem through Phantom. This proves our theory that user experience is the bottleneck for industry development.

• As an entrepreneur, you must choose your battlefield and be clear about your strengths and weaknesses. You need to face your reality; successful entrepreneurs need to focus on one area. Trying to do everything well at the same time is an almost impossible task and is destined to fail.

Current Stage of Cryptocurrency

Brandon still believes now is a good time to build crypto technology

Laura:

We are at a critical stage in the development of cryptocurrency, and the current focus seems to be on "user adoption." Many large fintech companies, banks, and even multinational corporations are actively laying out plans in the crypto space, or at least exploring how to enter this market. At the same time, we also see cryptocurrency companies collaborating with these traditional enterprises or gradually entering the traditional financial sector, such as payments.

Let's first take a comprehensive look back at the development of cryptocurrency. How would you describe the characteristics of the current stage? How does the task of entrepreneurs differ now compared to previous cycles or early stages? Let's start with Brandon to share your thoughts.

Brandon:

I'm excited to have the opportunity to talk about Phantom and the latest developments in the crypto space. As a founder and entrepreneur in a crypto company, I believe this is a very exciting time.

The user adoption rate of cryptocurrency has recently increased significantly, with news almost daily about certain fintech companies or traditional financial institutions (like banks) getting involved in the crypto space in some way. This phenomenon is actually the result of efforts from past development stages. Over the past few years, the entire industry's focus has been on infrastructure development. From a technical perspective, this includes continuously optimizing the speed and cost efficiency of blockchains; from a developer's perspective, we have pushed for the improvement of tools; from a regulatory perspective, we have gradually established a more robust framework. These efforts have made the technology and application ecosystem of cryptocurrency more mature. It can be said that in the past few cycles, the main task of entrepreneurs has been to delve into infrastructure.

Now, these efforts are converging and generating explosive growth effects. An open and permissionless ecosystem has strong network effects and the compounding growth of value, which further accelerates the adoption of cryptocurrency. I believe we are gradually seeing the manifestation of this "rapid growth effect." This is my overall view of the current stage.

Luca sees the current moment as a "turning point" for the industry

Luca:

I view the current stage as a "turning point" for the crypto industry, as well as a key paradigm shift. When we evaluated the acquisition of Pudgy Penguins, my co-founders and I discussed this issue. I told them: "In the crypto industry, the barrier to entry for startups is very low, yet the potential to create billion-dollar companies is very high." This phenomenon has primarily relied on storytelling and expectations of future potential in the past. But now this paradigm is changing. More and more excellent entrepreneurs are entering this field, and I believe the future will be an era where top entrepreneurs continue to hold an advantage. We will see the effects of "power law distribution" gradually emerge, with a few of the best entrepreneurs consistently widening the gap with others, while industry competition intensifies, forcing people to discover who the true leaders are.

At the same time, I believe the era of relying on speculative expectations has ended. The future entrepreneurial environment will be more challenging. The past model of easily accumulating value by building new asset classes and technologies is no longer applicable. The era where non-professional entrepreneurs could easily create billion-dollar companies has ended, and I think this is a good thing. The focus now is on how to leverage super-financialization and global payment networks, combined with global liquidity and composability, to truly build disruptive technologies that can change the world, rather than merely promoting world-changing narratives without actual action. I believe the future will be an era of results-oriented success, rather than success achieved through speculation. This is a good thing for the industry.

Today, the doors of the crypto space have opened, and these opportunities have always existed, but not everyone can discover them. Frankly, I hadn't noticed the missing parts in the consumer cryptocurrency funnel before. But if cryptocurrency is to truly achieve the large-scale breakthrough we have always anticipated, there are still some issues that need to be addressed, one of which is optimizing the consumer journey and promoting the widespread adoption of stablecoins. I believe stablecoins will become a popular medium of exchange, allowing ordinary users to easily transact through on-chain applications. One of the biggest obstacles in the growth curve of cryptocurrency users is completing the transition from "0 to 1." Saran, if you're listening, I believe Phantom may have the best "zero to one" transition in the crypto space, especially within the Solana ecosystem. This is an important paradigm shift: stablecoins allow users to access on-chain dollar assets to support their consumption in applications.

Cryptocurrency dominates the super-financialization space, and in a world coexisting with AI, "power law distribution" will further manifest. Top entrepreneurs will become stronger, while more people in the middle will seek new opportunities. And in the on-chain payment networks of cryptocurrency, there is no better development opportunity than this. Additionally, I have observed that top entrepreneurs from other industries are entering the crypto space and competing, which will further raise the standards of the entire industry.

Personal Experiences of the Two in the Challenges and Opportunities of Entrepreneurship in Web3

Laura:

Before diving into the different market participants in the crypto space, I want to ask both of you. You have both achieved significant success in expanding the influence of cryptocurrency and successfully attracted more users. I'm curious if you could share some personal experiences about how you accomplished this, and how your thinking has changed with the shifts in the industry stage?

Brandon:

I initially worked on the early team at Twitter from 2013 to 2017, starting my career in the tech industry. There, I learned how to build large-scale internet applications for tens of millions to hundreds of millions of users. Later, during the ICO white paper boom in 2017, I entered the crypto space and joined an early DeFi startup, 0x. There, I gained a deep understanding of the concept of DeFi and participated in defining decentralized exchanges that are widely used today. In this process, I realized the importance of user experience in driving the adoption of crypto technology and discovered that one of the main bottlenecks in the industry is wallet design. Wallets are a key entry point for users into the crypto space, determining whether users will register and complete the transaction process. Therefore, we recognized that wallets are a key point in driving industry development, and we began to conceive Phantom, initially hoping to compete with MetaMask and provide users with a better entry experience.

Years have passed, and our user base has far surpassed MetaMask, with more people engaging with the crypto ecosystem through Phantom. This proves our theory that user experience is the bottleneck for industry development. If we apply the experiences of Web 2.0 to the crypto space, we can find many opportunities for improvement. Looking ahead, I believe the infrastructure phase has been completed, and now users and funds are in place. Next, we need to focus on providing the best experience for users, earning their trust and business, and helping them manage their funds safely. This will be the next stage for the crypto space.

Luca:

I want to add that, from an external perspective, Phantom's success story truly embodies the idea that "the best product will win." You have created the best wallet, and users naturally gather around it, achieving breakthrough growth. When your product far surpasses competitors, especially in key aspects of the crypto experience, you will achieve great success. I am a loyal user of Phantom, and I thank you for developing such an excellent product!

For Pudgy Penguins, our product is the penguin characters and IP, which is different from functional products. I realized that there is a problem in the crypto space: cryptocurrency is taboo and intimidating for many people. So what can break this taboo? The answer is cute penguins. Therefore, our strategy is to attract users through emotional connections rather than direct conversions. I try to fill the emotional gap for consumers and establish deep connections with them. When we create many touchpoints with consumers and build trust, they will either actively explore the crypto space or we will guide them into it.

Thus, our conversion process revolves more around how to reach consumers multiple times and how to build trust and credibility. As the momentum of cryptocurrency returns, I hope Pudgy Penguins becomes the most familiar and trusted IP, resonating emotionally with users. Our marketing strategy is primarily based on touchpoints. Many people see our toy products at Walmart as a source of revenue, and while that is true, what excites me is the marketing effect of these products as touchpoints. When users turn off their computers or phones, we can still connect with them through these products. I believe that in the cultural realm, Pudgy Penguins can occupy an important position in the crypto industry. This is where we find our positioning. From this perspective, our strategy includes conveying messages and telling stories. Pudgy Penguins is the face of the crypto space, the mascot of the crypto industry, and the "comeback story" of the crypto world.

Our goal is to connect with users where they are. Whether it's Google, Instagram, X, or other social networks, the penguins can be seen everywhere. We want to create something with universal appeal, which is actually a byproduct of the IP I inherited or purchased. I think one of our important goals is how to involve the whole family. If cryptocurrency is really going to achieve mass adoption, how can every member of the family participate and enjoy the cryptocurrency ecosystem? From our perspective, IP plays an important role in this field. And Pudgy Penguins is particularly good at bringing together people from different backgrounds and psychological traits. I believe that by combining these strategies, we can achieve the growth we have seen over the past few years, which is a product of these ideas.

Who Will Lead the Next Wave of Users into the Crypto Space?

Laura:

Clearly, cryptocurrency is not a singular field. People can enter the crypto ecosystem in various ways. I think the following players may play important roles in this space or have the opportunity to become leaders: First is Coinbase, because it is very large, but its audience mainly consists of existing crypto users; then there’s Robinhood, and of course Stripe; X clearly also wants to be the "universal application," as they have partnered with Polymarket and explicitly stated that this is their goal. This obviously competes with the Base application, as that is their direction. Additionally, stablecoins are clearly an important component of the next phase, such as Tether, Circle, and some newer players like Ethena or other new stable chains like Stable Plasma, etc.

When you observe this market landscape, are there any particular players that stand out as more advantageous than others? Or how do you think this field will develop? I know this is a broad question, and we can discuss the different parts of the market more specifically later. But overall, how do you view this landscape?

Brandon:

Overall, the current crypto space is a "positive-sum" environment. Every new entrant injects more vitality into the ecosystem while driving the development of tools that make it easier for people to enter the crypto space, which is positive for the entire industry. Personally, I believe now is the best time to enter the crypto space. As Luca mentioned, we are at a critical turning point.

From the perspective of specific players, I think Stripe is a very noteworthy player. The payments sector has long been considered one of the most promising application scenarios for crypto technology, such as cross-border fund transfers, low-fee transactions, and instant settlements. However, this area has not been fully developed in the U.S. market. Although areas like DeFi and NFTs have received more attention in recent years, I believe Stripe has the potential to make breakthroughs in the payments sector, which could bring significant innovation to the entire crypto industry. Additionally, X (formerly Twitter) is also a player worth watching because it has a large user base. This includes not only active users in the crypto space but also many ordinary users who have never been exposed to cryptocurrency. I believe X has the potential to become an important entry point, bringing new users to the entire crypto ecosystem. These are two players I am currently very interested in; we can discuss their specific strategies further, but this is my initial view.

Luca:

I think there are three players worth paying special attention to, two of which you have already mentioned, and one that may be less frequently mentioned. First is USDC. If stablecoins become mainstream, USDC will undoubtedly occupy an important position. Its brand positioning, trustworthiness, and name framework are all very strong. If there is a winner in the stablecoin space, USDC is likely to be one of the leaders.

The second is Robinhood; I think it is a true dark horse. Although Coinbase's product has not fully met expectations, I say this as a loyal user and supporter of Coinbase. But Robinhood's product team is excellent, possibly one of the strongest teams in fintech. Their product design is outstanding and resonates deeply with users. As a heavy Robinhood user, I can say it has fully integrated into my daily financial life. If they can successfully enter the on-chain space and launch high-quality products, I believe they will become an important player in the crypto space.

The last player worth watching is World Liberty Financial. They have adopted a theory similar to Anchor but without relying on high yields and avoiding risks like Luna. Their product-market fit is very real and effective. I believe they have great potential in the crypto space, especially in the EVM ecosystem.

The Importance of Distribution and Why Luca is Eager to Invest in Phantom

Luca:

Additionally, Brandon, I think Phantom should also be included. If someone is willing to sell secondary market shares of Phantom, I would be very interested because I believe the middle-layer business has enormous value capture potential. The so-called middle layer refers to the service layer that connects consumers with the blockchain, which can effectively capture value while avoiding value loss. Phantom has already proven its strength, and its advantage lies in controlling user behavior, allowing them to flexibly launch any new, profit-potential business. For example, if Phantom launches a token launcher, I believe they have the potential to become an important player in the market, possibly even dominating the entire market. The key to this model is controlling the user interface, as the ultimate value will concentrate in the hands of those teams that can directly serve users.

From a broader perspective, the profitability of the blockchain itself is relatively weak, while middle-layer businesses are the true core profit points. By optimizing the user interface, Phantom can provide users with a bank-like convenient experience while capturing potential value in areas like stablecoin payments. I am particularly excited about Phantom's exploration in the stablecoin space. Laura, if you feel we are straying off topic, feel free to adjust the discussion direction. But I firmly believe that the middle layer will be the most important and profitable business layer in the crypto space. Phantom's product has demonstrated exceptional capabilities and is one of the best products in the industry. If they decide to go public in the future and want to increase revenue, I believe they can create enormous profit opportunities.

Additionally, I am curious whether Phantom has achieved profitability through perpetual contract trading. I believe they have, and this model is very clever. Controlling the middle layer will be the most successful business model in the crypto space and the main source of profits. That is why I am always willing to provide secondary market investments for Phantom or its team.

Brandon:

I believe that controlling the end user is the most important and strategically significant position in the crypto industry. This applies not only to the crypto space but is also a core principle of internet development. Perhaps some of you or some listeners are familiar with Ben Thompson's "Aggregation Theory." Before the advent of the internet, the structure of the value chain was very different from what it is now. At that time, value was primarily concentrated in the hands of suppliers, such as retailers, newspapers, television stations, and record companies, while the role of distributors was relatively weak.

I believe that controlling the end user is the most important and strategically significant position in the crypto industry. This applies not only to the crypto space but is also a core phenomenon of internet development. Perhaps some of you or some listeners are familiar with Ben Thompson's "Aggregation Theory." Before the advent of the internet, the structure of the value chain was very different from what it is now. At that time, value was primarily concentrated in suppliers rather than distributors, such as retailers, newspapers, television stations, and record companies.

The emergence of the internet changed this landscape, redefining value distribution through an open, permissionless communication layer. Distribution became easier, and the infrastructure for supply was already in place. What truly matters is controlling the distribution points and becoming the aggregation point for user experience. Phantom's structure is similar to this. The crypto blockchain provides an open, permissionless way to create, store, and transfer internet value. This open structure allows global developers to deploy new projects and experiment with innovations. Distribution points are wallets and other user-facing applications that help users explore and use these services in a secure and user-friendly manner, gradually earning user trust.

This approach also allows us to launch diversified business lines, such as the recently very important perpetual contract trading for us. Additionally, as Luca mentioned, we are also considering other potential business lines, such as stablecoin payments. These explorations will further strengthen our advantages in middle-layer businesses.

Who Might Win the Competition in the Payments Sector and What Their Advantages Are

Laura:

Currently, the main competitors in the payments space include the partnership between Coinbase and Shopify, Stripe's Tempo, and some stablecoin chains like Plasma and Staple. In my view, these are the key players in this field. Of course, there are others, such as Paypal, which has launched its own stablecoin but has not really succeeded so far. So I would like to ask you to discuss how you think the competition will unfold, which players might have stronger advantages, and what factors might determine the outcome.

Brandon:

I think there is another important competitor, which is USDT. Especially in non-U.S. markets, it plays a very significant role in payment scenarios. The payments space can be divided into two main types: one is peer-to-peer payments, which are direct transfers between individuals; the other is consumer-to-merchant payments, where users pay merchants for goods or services. The demand and challenges for these two payment methods are different.

For consumer-to-merchant payments, the biggest barrier is whether merchants are willing to accept cryptocurrency payments. Many merchants are still not familiar enough with the use of cryptocurrency and prefer to receive dollars directly. Therefore, this has become a major challenge for further development in the payments space. I believe Stripe has a significant advantage in addressing this issue because it has a wide merchant distribution network. In addition to physical point-of-sale systems, Stripe also holds a huge market share in e-commerce, which gives it unique competitive strength on the merchant side.

Laura:

So, I want to ask more directly: even if Coinbase has partnered with Shopify, does this competition end once Tempo launches?

Brandon:

Absolutely not. I think Tempo hasn't even officially launched yet, and we currently have no clear understanding of its actual performance. I believe the biggest winner in this space will not be apparent in the short term. Therefore, it won't be a case where a product launches and immediately wins the market. As it stands, merchant acceptance remains the biggest challenge, and Stripe may be the most promising player in addressing this issue. Of course, there is still much work to be done in terms of consumer experience. For example, as Luca mentioned, Phantom could be an important entry point into the crypto space, especially in bringing stablecoins to users. So I think Phantom may become an important player in this field in the coming years. However, overall, this competition will take time to fully unfold.

In the U.S. market, the demand for peer-to-peer payments has basically been met. For instance, regular users find that using Venmo and Square Cash is convenient enough. But in emerging markets, traditional payment infrastructure is often inadequate or even nonexistent. This is why USDT is widely adopted in these markets, as its value proposition is very clear there. Therefore, I believe that in the U.S. market, consumer-to-merchant payments may develop first, as the value proposition of this payment method is very clear to merchants. Through crypto payments, merchants can save on high credit card network fees while achieving more efficient fund transfers through blockchain technology. This combination can indeed drive the development of the payments space.

Luca:

Laura, when you mentioned the success criteria for stablecoins, could you clarify that a bit more? Because I feel this question can be answered from different angles. If viewed from the perspective of new B2C users, the answer might be different; if viewed from the monthly or yearly trading volume of stablecoins, the answer would be different again; and if viewed from the highest revenue perspective, the answer might vary as well.

I think I was mainly considering the dimensions of user growth and trading volume at that time. But I agree that it should be divided into two different phases, as Brandon mentioned. Personally, I believe this may start with Stripe bringing stablecoins to users, getting them accustomed to using wallets and such. But ultimately, I do believe people will start using stablecoins for peer-to-peer payments. So this could be a two-phase promotion process. If you could answer the questions for these two phases separately, I would be very interested.

The answer depends on the specifics. I believe if Stripe can achieve automatic conversion of all transactions through stablecoins, it will be hard to beat. This approach is technically feasible and can also generate revenue while enjoying other related advantages. If Stripe can do this, it will be difficult to surpass them in terms of trading volume.

That’s why I believe either a team like Phantom or a new startup will make breakthroughs in this field. I believe Phantom's roadmap may already include similar plans. For example, look at the businesses of Paypal, Square, and Zelle; if they could migrate these businesses to a blockchain payment track and combine wallet functionality with strong deposit and withdrawal solutions, it would represent a $100 billion business opportunity. Through blockchain technology, these applications would transcend borders, and market share would expand from the U.S. to anywhere with internet connectivity.

Does Solana's Seeker Phone Have a Chance to Break into the Market?

Laura:

I know you mentioned before that you are not very interested in the topic of Stripe. But while listening to you speak, I suddenly thought of Solana's Seeker phone. This product is really interesting; it is both a hardware device and can be considered ahardware wallet, while also being a phone, and it integrates features likebiometric technology. I'm curious if you think this is a completely different approach? A way to innovate and enter the market outside of traditional paths?

Luca:

I think so. However, whether it is a hardware product or another product, to succeed in the market, it must be a better product, or at least appear to be a better product. It must be close to existing excellent products. The problem is that as a phone, it is difficult to surpass existing giants like Apple and Android. Unless top talent joins, it is hard to achieve breakthroughs. I think the significance of the Solana Seeker may be broader than the payments space we are currently discussing.

From a payments perspective, if the Seeker phone tries to directly compete with Phantom in the stablecoin payment space, I think its chances are slim because it adds extra complexity for users. However, in other scenarios, hardware does have its unique value. I believe the Seeker phone can serve as an ecosystem product supporting multiple functions, not just limited to payments. For instance, it could enable broader crypto applications through blockchain technology, and in this regard, Brandon's Phantom is already in a leading position.

However, I think the Seeker phone, as an overall crypto hardware device, is a very meaningful attempt from the perspective of the blockchain ecosystem. Blockchain technology needs better user interfaces, and hardware products are a field that has been explored very little. This attempt is very bold and ambitious, and I support it. This product has many potential features that can enhance the user's crypto experience. But if viewed solely from the perspective of stablecoin payments, its impact may be somewhat limited.

Brandon:

Thank you, Luca. I largely agree with your point of view, especially regarding Phantom's leading position in the market. As for the Seeker phone, I think the market logic of hardware and software is completely different, especially in terms of economies of scale. For me, it doesn't seem wise for the Seeker phone to compete directly with the iPhone. I think the Seeker phone's goal should be a completely new direction, and Solana does have its advantages in this regard. They have ample funding to drive their vision and lead industry development. So I see the Seeker phone as a great showcase of the potential of crypto technology.

However, I personally think it will be difficult to truly compete directly with Apple and Android. That said, I do believe the crypto space needs a revolution in hardware wallets. It has been a long time since Ledger became the main hardware wallet, and there have been no new breakthroughs since. I am very much looking forward to the Seeker phone's attempts in this area.

Perhaps we can slightly return to the previous discussion and talk about global peer-to-peer payment super applications that utilize stablecoins for global interaction and payments. In this regard, Paypal and other traditional companies have not performed well.

As we mentioned earlier, large publicly traded companies often face limitations in innovation within the crypto space. They find it hard to take risks in cutting-edge areas for fear of harming their existing core businesses. I believe this is not their fault but rather a structural limitation. These companies struggle to effectively drive the development of the crypto space.

On the other hand, many companies attempt to develop applications similar to Crypto Venmo or Crypto Square Cash, but these applications face the biggest problem of the "cold start problem." Payment behavior has a social attribute, involving transferring from one user to another, and both parties must use the same application. The difficulty of promoting from scratch is very high. For example, if a new application tries to compete with Venmo, why would users choose this new application instead of continuing to use Venmo, which their friends and family are already using? This is a very challenging problem to solve.

Therefore, I believe that the players who truly have the opportunity to enter this field may be those companies that already have a large user base. These companies have already established connections with end consumers and have a broad user group, and then they can layer new businesses and applications on top of that. For example, our team is currently in such a market position, and companies like Robinhood also have similar advantages. This dynamic poses a significant barrier to new players starting from scratch.

How Robinhood Can Leverage Privy and Bridge to Dominate the Crypto Ecosystem

Laura:

I believe crypto technology, to some extent, addresses the "cold start problem." For instance, as long as blockchains can be compatible, multiple wallet providers support USDC running on Ethereum or Tether running on Tron, this indeed lowers the difficulty of promotion. However, regarding stablecoins, I want to hear your thoughts on Stripe's acquisition of Privy and Bridge. How do you think these acquisitions will help Stripe? Or how will they promote the adoption of stablecoins?

Brandon:

I believe Bridge is a key project in Stripe's acquisitions. For Stripe to enter the stablecoin space, it needs the capability to issue stablecoins, and Bridge's technology is well-suited to support this. Bridge's core functions mainly have two aspects: one is to support the issuance of stablecoins, and the other is to provide coordinated management of stablecoins. Without Bridge, Stripe would have to develop these capabilities from scratch, but by acquiring Bridge, they can quickly advance their product roadmap because they gain a very excellent and efficient team. This provides strong technical support for Stripe in stablecoin issuance, cross-chain transfers, and connections with bank accounts. This is undoubtedly a huge boost.

As for Privy, I think it is also a very interesting acquisition. While it is still unclear how Privy's technology will integrate into Stripe's overall architecture, one obvious application scenario is solving the problem of merchants accepting cryptocurrency payments. Many merchants are reluctant to accept cryptocurrencies because they are unsure how to store and manage these assets. Privy's wallet technology can help Stripe simplify this process, making it easier for merchants to accept cryptocurrency payments. Therefore, while I may have strayed from the original question, it is clear that these acquisitions are part of Stripe's core infrastructure, and they will help Stripe achieve its plans more quickly. I am very excited about the potential of these acquisitions.

Luca:

Brandon has already provided a comprehensive answer. However, I have a strategic thought I want to share. As a fan of Phantom, I believe one of the markers of your team's success is pre-installing the Phantom app on phones. This is a huge strategic breakthrough and a direction you need to invest in full-time. Getting the Phantom app pre-installed on phones, especially those in emerging markets, is crucial.

You don't need to directly enter the mainstream Android market, as the scope of Android may be too broad. This is similar to YouTube's early strategic breakthrough, which started with some smaller phone brands. Especially in third-world markets, like some phone companies in Africa. If Phantom could become a pre-installed app on these phones, it would be a huge opportunity. You need dedicated personnel to push this forward full-time. This way, you can expand your user base globally while promoting the development of the crypto ecosystem.

The Impact of the New Trading War on Robinhood, Coinbase, and Kraken

Laura:

Although Phantom is not directly pre-installed on the Seeker phone, it is prominently recommended when I open the phone. I remember it was one of the first apps I downloaded because the phone interface basically guided me to download it. Now, let's talk about trading. I know you will be interested in this topic because it involves Robinhood. This is clearly another important development direction in the crypto space and one of the key factors driving long-term growth in the crypto industry.

Currently, we see two major players—Robinhood and Coinbase—entering the perpetual contract space while also starting to lay out the derivatives market. Additionally, there are many attempts regarding tokenized stocks or tokenized equity. This makes me curious: when you observe these companies' various attempts in this field, which company do you think has the most advantage? Which products might succeed? Which products might struggle due to structural issues or insufficient promotion strategies?

Brandon:

This topic is indeed very broad, with many angles to discuss. I believe that overall, trading behavior is transforming with the times. In our parents' generation, trading was a very serious financial activity, usually conducted by professional institutions, rarely involving ordinary individuals, and certainly not seen as a form of entertainment.

However, now especially among the younger generation, we see financial activities deeply integrating with entertainment and the attention economy. This phenomenon is referred to as "hyper-financialization," where trading and other high-risk activities, such as sports betting, become more accessible and gradually mainstream. Therefore, I believe the form and purpose of trading are undergoing significant changes, increasingly resembling entertainment or a pursuit of thrills.

As for who is best suited to this trend, I think the answer is those companies that can earn the trust and affection of the younger generation, as well as places where young people are willing to store and use their funds. Clearly, Robinhood seems to occupy this position in the U.S. right now. But at the same time, we also see another trend where all financial activities are migrating on-chain. Therefore, I believe the real winners will be those companies that can not only attract the next generation of users but also effectively respond to changes in the on-chain environment. Robinhood has been very proactive in this regard, such as launching its own blockchain and tokenized stocks. I am pleased to see their progress in this area.

Whoever can seize the latest trends in on-chain finance and innovate in a "chain-first" manner while perfectly combining the new generation of the attention economy may become the biggest winner in this field. Of course, there are many different subfields within this.

Does Coinbase Lack an Excellent Product Team?

Laura:

You mentioned before that you really like Robinhood. So if you were Coinbase, what measures would you take to challenge Robinhood in the trading space?

Luca:

Robinhood and Coinbase have very different product positioning. In fact, Coinbase has never been a company focused on product development. For example, they recently tried to launch an NFT marketplace and other projects, but these attempts have not yielded ideal results. Additionally, the product experience of Coinbase cannot compete with that of Robinhood. I agree with Brandon's point that Coinbase should focus on becoming the "JP Morgan" of the crypto space; this positioning makes me more optimistic about Coinbase's future, and they should fully commit to pursuing this direction. Because product development is an organizational capability that requires long-term cultivation and cannot simply be solved by bringing in a great team. Very few companies can achieve this; this capability is usually shaped from the top down by corporate culture and leadership.

Coinbase's strength lies in the trading space. They have strong resource advantages that allow them to negotiate favorable deals. Moreover, they excel in brand reputation and market pioneer status. Therefore, rather than trying to transform into a product-centric company, Coinbase should focus on its strengths like JP Morgan. I think this is a very wise positioning that fills me with confidence about Coinbase's future.

Laura:

So you think they should abandon the vision that Brian Armstrong (Coinbase CEO) has been mentioning, such as bringing more people into the on-chain environment? Do you think they should continue to stick to a centralized model rather than trying to promote decentralization?

Luca:

I think they can drive innovation through acquisitions. If Coinbase wants to achieve its strategic goals, it should acquire teams that are developing products aligned with its vision. As a user who started using Coinbase in 2016, I have not felt that their product experience has been continuously improving. In contrast, companies like FTX have been able to win the market because they provide a powerful platform for U.S. users to engage in more complex trading. Coinbase should have prevented FTX from capturing market share, but they did not succeed in doing so.

In an ideal scenario, I believe Coinbase's strategic direction is correct, but their team may not be suited for this direction. From my observations, Coinbase does not seem like a company focused on product development. Product development is a capability that requires long-term cultivation, and leaders need to have product thinking. I am not sure if Brian Armstrong is that kind of leader. He seems more like a strategic decision-maker who can drive transactions and business partnerships. But if you look at Robinhood's product, it truly embodies an excellent user experience.

For example, when executing certain functions on Coinbase, I often encounter cumbersome issues with notifications, verifications, and approval processes. In contrast, executing the same functions on Robinhood has been very smooth since they opened up cryptocurrency deposits last year, including facial recognition and key verification, providing a more user-friendly experience.

I believe excellent entrepreneurs need to face their true situation, understand what they are good at and what they are not. If you are not a product development-focused person, you need to acquire teams that are building the products you need through acquisitions. Alternatively, you can accept your positioning and focus on areas where you excel. For example, the trading of USDC and Coinbase is a good example that reflects their advantages in the trading space. Coinbase is one of the most reputable and credible institutions in the U.S. crypto industry, and they can leverage this advantage to create value for shareholders.

Of course, building excellent products relies not only on individuals but also on a strong team. I feel very fortunate to have an excellent team. It wasn't until years later that I realized this. Sometimes you just happen to find the right people. But I don't believe one person can drive product development by themselves, especially when you are building Base (Coinbase's blockchain ecosystem). This is a complex ecosystem involving multiple layers, not just a single application. While applications are an important part of the ecosystem, it is unrealistic to think that leaders can focus on product development every day.

In contrast, Robinhood is clearly a company focused on product development. Their product team not only focuses on user experience but can also quickly respond to market demands, which is key to Robinhood's success in the crypto space.

Does the "Universal App" Really Make Sense?

Laura:

Recently, there has been widespread discussion about attempts to create a "universal app," with Base possibly being the first to try to build such a platform, while X claims they are also working in this direction. I am curious about your views on these attempts. Who do you think is most likely to succeed in this field? What key qualities do successful players need to possess?

Brandon:

I have reservations about the concept of a "universal app," especially as a competitive strategy. To succeed in this field, you need to be a large company that already has a vast user base and strong distribution capabilities. Companies like X or Facebook, which have hundreds of millions or even billions of users, possess enough resources and influence to achieve this goal. However, for companies starting from scratch, attempting to cover all areas with a "universal app" is usually unfeasible. Unless you have top-tier resources, this strategy will only lead the company into trouble. Therefore, I believe that only those companies that already have a large user base and can drive global interactions are likely to succeed in this field.

Laura:

So you don't think the Base app can kickstart this direction? They have already started, but they can't compete with X or other existing social networks.

Brandon:

I don't think the Base app will become the next "universal app"; that's a huge challenge. As an entrepreneur, when you are a disadvantaged competitor, you must choose your battlefield and be clear about your strengths and weaknesses. As Luca said, you need to face your true situation and focus on the areas where you excel. I believe trying to compete in all areas at once is unfeasible. This is also why it's difficult for a true "super app" to emerge in the West. I think iOS and the App Store might be the closest thing to a "super app" in the West.

In fact, the entire iPhone App Store and iOS system may be the closest we have to a "super app." What is the essence of an app? I believe its core lies in establishing a close connection with the end user. Apple has gained significant pricing power through these user relationships, as reflected in the App Store and Apple Pay. In the East, the situation is different; companies supported by certain countries have an unfair distribution advantage. In the West, I believe only large players like Google or Facebook can succeed in this field.

Luca:

I mentioned a similar point when discussing blockchain, and I think it also applies to the concept of a "universal app." We can return to the fundamental principles of entrepreneurship: successful entrepreneurs need to focus on one area. Trying to do everything well at the same time is almost an impossible task and is destined to fail. Of course, sometimes you might get lucky and succeed, but this "universal" mindset is usually a poor strategy. So I don't believe in the concept of a "universal app." I prefer to focus on on-chain functional platforms rather than trying to cover all areas. For example, Phantom's product design is excellent. I believe these platforms should focus on providing on-chain functionalities rather than attempting to cover social and hundreds of other features simultaneously. This will quickly become complex and difficult to manage.

I think you should first find the core product-market fit (PMF) in a vertical area, and then gradually expand functionalities, rather than launching a "universal app" from the start without a core feature that can truly attract users.

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