The Chopping Block: Wind Downs, YC's Nemil Dalal, & Will Every Failed Crypto Idea Eventually Work?

**Nemil Dalal** (0:00)
I think the blockchain is the greatest capital innovation machine in the world. I think we don't think it's big enough. Like, it literally is everything. Like, there's not a company in the world that doesn't have to deal with payments, capital raising, and things like that, and the blockchain has shown that. Not a dividend.

**Tarun Chitra** (0:13)
It's a tale of two quants.

**Haseeb Qureshi** (0:14)
Now, your losses are on someone else's balance sheet.

**Tom Schmidt** (0:17)
Generally speaking, airdrops are kind of pointless anyways.

**Haseeb Qureshi** (0:20)
I named trading firms who were very involved.

**Tarun Chitra** (0:22)
I like that ethos is the ultimate problem.

**Haseeb Qureshi** (0:25)
DeFi protocol is part of the antidote to this problem.
Hello, everybody. Welcome to Chopping Block. Every couple of weeks, the four of us get together and give the industry insider perspective on the crypto topics of the day. So quick intro. First, you got Tom, the DeFi Maven and Master of Memes.

**Nemil Dalal** (0:38)
Hello, everyone.

**Haseeb Qureshi** (0:40)
Next, we've got Tarun, the Geobrand and Grandpuba at Gauntlet, but he is running a little bit late, so he will join us shortly. By joining us today, we have special guest Nemil, Crypto Wiseguy at Y Combinator.
Welcome to the show, Nemil.

**Nemil Dalal** (0:53)
Great to be on, Haseeb.

**Haseeb Qureshi** (0:55)
Yeah, great to have you.
I am Haseeb, the head hype man at Dragonfly. We're early-stage investors in crypto, but I want to caveat that nothing we say here is investment advice, legal advice, or even life advice. Please see ChoppingBlock.xyz for more disclosures. Nemil, you're joining us from Y Combinator, the legendary startup incubator. You were formerly at Coinbase. I was seeing all these clips on social media of like this gigantic startup school, like stadium level event that was happening the other day.

**Nemil Dalal** (1:24)
We had an epic event.

**Haseeb Qureshi** (1:25)
What was that about? Yeah.

**Nemil Dalal** (1:25)
We basically rented out the Chase Center in San Francisco, got about 7,000 builders. I had everyone from 16 and 17-year-olds building with AI, all the way up to 40-year-olds like me, all looking to hear from Jensen Huang. We had Sam Altman there. We had Patrick Collison talking about Crypto and AgentFi.
It's a pretty epic event, but it's basically our way to really connect with people who want to build and want to start a startup.

**Haseeb Qureshi** (1:51)
Wow. I can't believe that you've got Jensen Huang, the famous guy who built his business on crypto mining, and Sam Altman, the Coin Founder, on stage. That sounds like an incredible event.
I assume Crypto was the start of the show.

**Nemil Dalal** (2:03)
Yeah. It's actually funny, but I think AgentFi definitely was one part of the show with Patrick Collison talking. But I actually did panels on blockchains. We got a ton of builders. This is actually my favorite time in the cycle, because you have a lot of the serious people who really want to build for the longer term coming in. You ask people, how many of them are launching a token early on, and almost no one raised their hand, which is pretty awesome to see in terms of just an early builder and just really focusing on solving a user pain point. We had a ton of people really focused on stable coins. Then there's a whole group of people, especially from traditional finance, focused on just agentic finance. That was everything from using AI to pay for different things.
I have an AI, it's going to do some work, and it's going to pay for some APIs with it, to everything from a hedge fund that they wanted to build using AI models that could outcompete existing funds or at trade in crypto.
I think it's a different market than you might get two, three years ago in the top of the crypto bull, but it felt like pretty awesome builders there.

**Haseeb Qureshi** (3:05)
Very cool. It's interesting because we're in this moment right now where a lot of stuff in crypto is working, but it's a lot of stuff that isn't exposed to the underlying Bitcoin price or the underlying crypto asset prices. On the other hand, you've got a lot of businesses that are exposed to underlying prices struggling. One of the big news this week was the closure of BitMEX, the infamous exchange, the inventor of the perp swap.
One of the seeds from which the entire derivatives industry has really emerged, is kind of the birthplace of derivatives and crypto, which today are the majority of what's traded in the industry.
They're going to be shutting down on September 23rd, after 11 years of operating. They were once upon a time the number one derivatives exchange in crypto. Now, I don't even know where they are on the map. I presume this is one of these things that as the industry grows, as compliance costs increase, their market share is decreased. Of course, crypto trading volume is down quite a bit. It's become a much tougher market for a lot of these players to operate. Then we got BitMart announced another crypto exchange, less well-known, but they have... I'm talking about BitMart. Yeah. I mean, it's one of those that was always like number 30 on CoinMarketCap. It's like, oh, wait, they're doing $15 billion in volume and they're like exchange over 30? That's interesting. Then there were some other announcements of wind downs, Storage Labs, Movement Labs, Balancer Labs. A lot of labs companies or projects that actually are on chain, not just exchanges, are also coming down. People are realizing like, oh, the amount of fanfare and the amount of surprise is less and less with each one of these. There used to be this joke that crypto protocols or companies, they never quite go bankrupt. There's always someone out there willing to run a node. There's always someone around there willing to trade their token. Nothing ever goes to zero, but things are actually going to zero now.