341: Chris Slaughter On A Better Crypto Exchange Business Model

Chris Slaughter is co-founder and CEO of LVL, a new full-fledged banking account that I invested in that is focused on providing all of the fiat and Bitcoin financial services you would expect for only $9/month. This disruptive business model is already growing in popularity with users, so I wanted to bring Chris on to explain it in more detail. In this conversation, we discuss demand deposit accounts, custodial accounts, importance of FDIC insurance, why monthly subscriptions make more financial sense for everyone involved, and how they built a product to service US dollars and Bitcoin simultaneously. =============================== The Trends premium weekly report helps you understand market trends poised to skyrocket and how you can pounce. Join the private network of 5k+ builders, founders, and investors spotting tomorrow’s trends. Expand your network, and discover the next big business idea before it explodes: https://trends.co/pomp/ =============================== The Helium Hotspot is a new product that enables the people, not the telcos, to own and operate a wireless network in their city for Internet of Things devices. You can literally earn crypto for helping to build the network and providing connectivity to Internet of Things devices sending small bits of data. Join the movement and get your Helium Hotspot today with $50 off using the code POMP at helium.com. =============================== Pomp writes a daily letter to over 50,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast. Simply the best podcast out there. Let's kick this thing off. Chris Slaughter is the co-founder and CEO of Level, a new full-fledged banking account that I invested in that is focused on providing all of the fiat and Bitcoin financial services you would expect for only $9 a month. This disruptive business model is already growing in popularity with users, so I wanted to bring Chris on to explain it in more detail. In this conversation, we discuss demand deposit accounts, custodial accounts, importance of FDIC insurance, why monthly subscriptions make more financial sense for everyone involved, and how they built a product to service

• 0:43Anthony Pompliano?

  both US dollars and Bitcoins simultaneously. I really enjoyed this conversation with Chris, and I hope you do as well. Before we get into the episode, though, I want to quickly talk about our sponsors. First up is Trends by The Hustle. It's a premium weekly report that helps you understand market trends poised to skyrocket and how you can pounce. They've got a private network of over 5,000 people who are builders, founders, and investors working together to spot tomorrow's trends. I've been reading a bunch of the content and participating in the community, and I'm blown away. You can expand your network and discover the next big business idea before it explodes. Head on over to trends.co/pomp. Again, trends.co/pomp.

• 1:28Anthony Pompliano?

  It's normally pretty expensive, but for listeners of this podcast, they're offering a $1 trial. So go to trends.co/pomp. No-brainer. Next up is the Helium Hotspot, a new product that enables the people, not the telcos, to own and operate a wireless network in their city for Internet of Things devices. You can literally earn crypto for helping to build the network and providing connectivity to all sorts of different devices. Remember, the telcos traditionally have owned the wireless networks, but the Helium Hotspot is helping us take back our power and control from the telcos. It's democratizing ownership of wireless networks. So join the movement today and help take down the telcos by getting your Helium Hotspot.

• 2:12Anthony Pompliano?

  You can get $50 off using the code POMP, P-O-M-P, [email protected].

• 2:18Anthony Pompliano?

  To telcos don't need any more money, we can democratize access and ownership to wireless networks. Go get a helium hotspot today. helium.com. Use code POMP. Lastly, don't forget that I write a daily letter to over 50,000 investors about business, technology, and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. Alright, that's it on the ads. Let's get into this episode with Chris. I hope you guys enjoy this.

• 2:52Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 3:18Anthony Pompliano?

  Alright guys, bang, bang. Super pumped about this episode. I have Chris here with me. We are proud investors in Level, so thanks so much for doing this, man.

• 3:30Speaker 02

  Yeah, really appreciate you having me on, Pomp.

• 3:32Anthony Pompliano?

  Awesome. Let's get started. For those that don't know you, your background and what you did before you got into Bitcoin and crypto.

• 3:39Speaker 02

  Yeah, sure. So I, I was originally an applied mathematician and I studied mathematics at the University of Texas. And while I was there, I developed some computer vision technology for tracking augmented reality headsets. So the basic idea was that you could, you could take these virtual reality headsets like the HTC Vive, and by putting cameras inside of them that pointed out at the world, that you could track their position without having to set up any cables or, or base stations. And that was my first foray into entrepreneurship. We sold that business in 2015, and then we sold the business unit again. And from there,

• 4:22Speaker 02

  I really just wanted to take like a sabbatical and, and think about, you know, like what would I like to prioritize? With my career and that was that was two thousand seventeen, early two thousand seventeen. Obviously, at the time, crypto was getting a lot of attention. The the price was going up, you know, really from the second quarter consistently. But what attracted me to that area more than anything was this idea that that consumers could have better financial outcomes by sort of decentralizing power within finance, that decentralizing through these protocols, sort of who has leverage over money,

• 5:02Speaker 02

  having these transactions be verifiable, that that ultimately could be like sort of a boon for consumers. And, you know, when I was in my early twenties, when I was in my early twenties, I I was a victim of the, you know, the Wells Fargo overdraft scandal, they opened a fake accountant in my name. So I've always been really passionate about. I mean, I would say first I was really mad. I was really mad that that was happening to me. Then over time, you know, I got passionate that working in the crypto space is something where, you know, you really have an opportunity to tackle those challenges. And so we started with an indexing platform. That was our first product that we introduced in crypto.

• 5:42Speaker 02

  And that that attracted some team members that we still work with today, like Willie Wu, Jimmy Song. And, you know, as we developed the product, we we really just said from first principles, like, how can we make the experience of being involved in crypto just easier to use? Some products are doing a better job of that than others. But the two things that we identified was that it's really expensive to trade on crypto exchanges, and it's not the easiest thing to do. It's a fairly technical experience. And that's really what got us down the road to to developing Level, which is the platform that we've we've just introduced.

• 6:21Anthony Pompliano?

  Got it. And so what was the original impetus for Level, right? In terms of you go down the indexing path and then you realize, wait a second, there's this other path that we want to go down. We think we can build a really compelling product that not only is sustainable and can be profitable, but also, and more importantly, it can solve a number of problems for users. What were those pain points that you identified? Or what was kind of the opportunity?

• 6:47Speaker 02

  Yeah, so I think pain points is a good way to do it. And this was really an incremental process. So from the moment we introduced our indexing platform, we had a lot of smart people around the table that had been involved in crypto for a long time, really understood what it's like to use the products today. These are people like Jimmy Song, Willie Will, I think I mentioned. And it was really a clear sequence of events of solving what we thought were major customer problems. So first, we released this indexing platform. And the biggest barrier to using this indexing platform was you had to first go and set up an exchange account on something like GDAX is what it was at the time, now Coinbase Pro, or on Binance.

• 7:31Speaker 02

  Then you would have to get the API tokens that would allow our platform to talk to Binance and place trades. And you had to put them into our platform. And since we were building something that we really wanted dad and mom to be able to use, that was really not a great customer experience, right? And so what we tried to do was go talk to the exchanges and say, can we onboard customers? And then basically bring the KYC information that we get to you. And then you approve the accounts. And we're going to be able to offer a much more seamless experience than having to go set up two different products, right? And the long and short of the answer we got from the exchanges was like, we're basically, multiple exchanges just said,

• 8:16Speaker 02

  we're happy to buy you and integrate what you're building into our product, but we won't support it as a third-party product. And so what we decided to do was say, let's build our own spot market. That's the most fundamental thing that these customers are. Providing for, or these exchanges would be providing for us. Let's build a spot market. And so we built that spot market and we launched it. And that was our alpha product, the ability to place market and limit orders on our own exchange. And all of that was crypto only. And that it's, so first of all, that that got us a little down the path of making a better experience overall. But it also attracted more users to the platform.

• 9:00Speaker 02

  So now we had hundreds of people that we could talk to, to understand, you know, like, what is it they like? What's missing now? And so the next thing that we identified was that people, if you're really trying to get mom and dad to to get into crypto,

• 9:16Speaker 02

  they're not going to open a Coinbase account, buy USDC, transfer USDC over to our platform. And so we very essentially had, to basically offer cash services on level. We needed to have the ability for people to to start with just cash and then get into Bitcoin and have a very like easy user experience.

• 9:40Speaker 02

  And so I think, I think having to have our own spot market and, and basically supporting cash, those are the two main sort of observations that took us in the direction of directly competing with Coinbase and Wells Fargo. Along the way, there were secondary things that would come up. So how do we get liquidity on the platform? And we've decided to address that through the autopilot feature, which I'm happy to discuss. That was a problem that came up, for example. But it's been a very, I think, as much as possible, we've tried to make it a natural evolution

• 10:17Speaker 02

  of delivering the, the, the product that our small but growing community was, was looking for.

• 10:25Anthony Pompliano?

  And so it's very unique, I think, in this space to offer a cash product, right? US dollar cash product that's FDIC insured and also a crypto spot type product. And so maybe talk through just a little bit about, you know, one, why are, why is that so rare? Like, why do so few other people go after that? And then two, what are the steps it takes to kind of run that dual process and get the regulatory approvals to be able to even offer this?

• 10:53Speaker 02

  Yeah, so, um, you know, I want to draw an analogy to a couple of their platforms that are a little bit like this. Um, and, uh, and, and for that reason, you know, have attracted a lot of users because there's some clear benefits of this model. Um, so Cash App, for example, uh, you can buy Bitcoin, they just support Bitcoin. You can buy Bitcoin on Cash App and you can store cash on Cash App. Um, another example would be Robinhood, like you can, you can buy Bitcoin on Robinhood. Um, you can't withdraw or deposit, though. It's, it, it looks like any other stock.

• 11:30Speaker 02

  Now, the way that we've built our platform under the hood is very different from, from those platforms in, in a couple of different ways. So first of all, the cash that you're holding in your level account is in an FTIC insured demand deposit account. And what a demand deposit account is, is it's a bank account that is open directly in your name. So when you sign up on the platform pump, you're going to get a cash account. And that cash account is a full FTIC insured checking account. And that means that, you know, if something was to go wrong in the general financial system or something was to go wrong with our business, the FTIC will just cut you a check directly.

• 12:11Speaker 02

  Now, Robinhood, Cash App, Coinbase, they don't build around demand deposit accounts. What, what they use is a type of account called a custodial account. And the idea of a custodial account is all the customers' deposits get pulled together in one corporate account. And then the company keeps track of, uh, of basically how much money each customer is, is good for or should be credited based on the current status of their account. Um, and, and, and so what we, we want to basically make it so that your cash is either in your name and directly FTIC insured, just like you would have it at Wells Fargo, or it's been sent to someone else's account because he bought their coin. Those are the two acceptable states for, for, for, for cash on our platform.

• 12:55Speaker 02

  Um, so that's one big difference. The, the second big difference is our business model. Um, so I'm, I'm sure we'll have an opportunity to talk about, you know. Our business model in comparison to something like Coinbase, we charge $9 a month, they charge transaction fees. But I want to stay focused like specifically on the sort of Cash App, so the Robinhoods of the world. So Cash App and Robinhood, they don't operate spot markets. What they do is if you buy Bitcoin, they match that Bitcoin to a market maker that they have a relationship with. And what a market maker does is let's say the price of Bitcoin is $10,000. They're willing to sell you Bitcoin for $10,025.

• 13:41Speaker 02

  They're willing to buy Bitcoin from you for $9,975. And that's called a spread. That's basically a profit margin that the market maker is charging for their services. And then they pass that profit to Robinhood or to Cash App. That's how those platforms are built. Now, our spot market is different. We do not market make on our own platform.

• 14:07Speaker 02

  And so that that makes us different from Coinbase, Consumer, Robinhood, and Cash App. Level never directly sells you Bitcoin. What we do is we have a product on Level called Autopilot. And when users fund their Autopilot account, it automatically market makes that process that I just described. It automatically market makes for other users. So what you're doing is you're taking your Bitcoin and your cash, you're putting it to work. And that allows other users to buy on demand. So it provides liquidity for them. And in return, you earn an income on the profit margin that you set yourself. And so I think you could safely say that, you know, taking kickbacks from market makers like Robinhood and Cash App do.

• 14:51Speaker 02

  I think you could safely call that a hidden fee. And on our platform, there is no hidden fee that the platform charges. There's just a profit-making opportunity for other users.

• 15:03Anthony Pompliano?

  So this is really important, right? What you're getting into is kind of all the different business models around financial services and exchanges for these kind of consumer retail focused applications. So you started out with first just a transaction fee. Basically, if I buy or I sell, I'm getting hit with a stated percentage, right? Could be 25 basis points, could be 10 basis points, whatever it is. But there is a stated fee that I am going to pay in order to finalize this transaction. So that's one Coinbase, most crypto exchanges, that's how they're making money. There's a second one, which is the spread that you're talking about. So when you go in, it says you're buying Bitcoin at $10,025. There is a $0 transaction fee, right?

• 15:47Anthony Pompliano?

  So you're paying $0 in transaction fees. But actually, what's happened is there's a margin that's baked into the price at which you're buying the asset itself. Now, you guys are basically going ahead and you are pioneering a third business model, which is very interesting. It got us excited is you are saying, wait a second, we don't need the transaction fee and we also are not going to include spreads. All you do is you pay us a $9 a month flat subscription fee. Doesn't matter how much you trade, how much you buy or sell. You pay us nine bucks a month and you can use the service unlimited amount of times. And that's your revenue sources, that $9 a month per user compared to the transaction fees or the spread. So maybe explain a little bit as to like why the subscription fee and then how that math works to make it attractive for you to go after.

• 16:33Speaker 02

  Yeah, if you don't mind me looping back, I thought what you said about transaction fees versus hidden spreads was like very spot on. And I think one thing that's worth noting, they are, they're different models, right? When you charge a, when you charge a fee specifically on trading, that's called a trading commission.

• 16:53Speaker 02

  And then, you know, charging a spread, that is like a, that's like a markup, basically. But in some sense, you could kind of view both of them as transaction fees. It's just how transparent are you being with the customer? On Coinbase Pro, we tell you exactly the percentage we're charging. On Coinbase Consumer, they have a spread, just like, you know, Robinhood does. And they just, they disclose their commission, but they don't disclose their spread on Coinbase Consumer. Then on Robinhood, they don't disclose the spread at all. But really, I mean, both of them are sort of like you're making a percent of the customer's order.

• 17:27Speaker 02

  And, and so. You know, I'm only bringing that up because like if we can call both of those transaction fees, I think it sort of illuminates like besides the issue of like, you know, let's be as transparent as possible when we're charging our customers. It's seems like the least we can do. When you group them together as as as transaction fees, I think you can really start to sort of to say like, are these transactions fees like necessary? Just from an engineering perspective, are they good for the customer? And, you know, the whether you're charging a hidden spread or you're charging a commission and these can be quite high. So, you know, if you place nine trades on Coinbase consumer a month of $50 or less, that's $9 you're spending.

• 18:12Speaker 02

  You spent $51, you know, that would be $18 you're spending. So these are quite high fees. Now, the first question, and the spreads are high too, you know, 1% on on something like Robinhood. So the first question is like, are those costs justifiable? Like, just like, I think it's such a fair question. It's just like, like, are these companies going to go out of business? Like if they don't charge those transaction fees? And, you know, the answer to that is like, they're actually totally not justifiable. Because from an engineering perspective, when I buy Bitcoin for new pump, all that's happening is your database entry of how much Bitcoin you have goes down. My database entry goes up. That's milliwatts. And it's objectively less complex than something like World of Warcraft,

• 18:56Speaker 02

  for example, which also operates on a subscription model and does many more calculations in the administration of that service. So that's one reason where you can say, hey, these transaction fees might not make sense. Right? And then the other, the other reason you can say that they might not make sense is, you know, if these exchanges were just barely skating by, they wouldn't be booking a billion dollars of net income a year. Right? That net income directly comes from overpaying for services. So, so in a nutshell, we can afford to, and we think it's more reasonable to charge a $9 subscription fee.

• 19:34Speaker 02

  And, you know, other than just the value savings, which which can be apparent quickly. It's one trade on Coinbase Pro of $1,800. It pays for itself. The if you do five trades on Coinbase consumer in a month, it pays for itself. So other than it just being a pretty fast recuperation of value, we also with the membership fee, we want to align. We want to align ourselves to not be a transaction-based business, but to be a services-based business. So in a transaction-based business, I'm going to make my money when you log on. If you're not logged on, I don't care about your account. There's no reason not to automate things. If you have a problem, unless that problem's about a transaction, I don't have a vested interest in resolving it because I'm not going to make money off

• 20:19Speaker 02

  helping you recover your account, for example. With us, we assign a personal banker to every level member, and you can talk to them right in the app. So most people right now are just talking to Clifford, and 40% of our users that sign up have a conversation with Clifford within the first week. I don't understand how this feature works, or, you know, I want to make sure that I'm doing this correctly. And so we're really there to provide a service to the customer that you can tap at all times, instead of just showing up in time to make money.

• 20:51Anthony Pompliano?

  And so I guess part of this is, you say you can afford to do it, but is it more profitable or less profitable to go with the subscription-based model versus the transaction fee model?

• 21:05Speaker 02

  Um, you know, I think that, I think that remains to be seen. Um, it depends on, it depends on the distribution of customers, like the customer makeup and how much money they're spending today. Now, as I, I just mentioned a couple of thresholds, like five trades a month that pays for itself, or one $1,800 trade on Coinbase Pro. Um, those are very low thresholds. Um, like, like, just pretty much anyone that's active trade, actively trading right now, uh, we are going to make less profit on those guys, right? Um, and so, and so clearly, that profit is going directly back to the customer. We're not making it, we will make less money than Coinbase in that category.

• 21:50Speaker 02

  Now, as we look into the future, we're not just building a low-cost crypto exchange. We have full FDIC insured accounts. We have free money transfers. We have free wire transfers. Uh, we have automation technology that's completely automated and included in your account.

• 22:08Speaker 02

  Over time, we hope that this product becomes something that anybody can use, right? It's way less technical than Coinbase. You could refer it to mom and dad. Now they have a product they can actually use. And I think that expansion in the addressable market, you know, just that these people that maybe were annoyed by Coinbase are finally willing to come use it. You know, it could be more profitable in that regard, just because we can help more people.

• 22:36Anthony Pompliano?

  Got it. And so as you're kind of building this out, talk a little bit about the FDIC insurance and then the security on the crypto side, right? Because I think one of the things that people see is, okay, so you're telling me I have a cash product and I've got a crypto product. Those are two different types of assets. I'm very worried about security in general, just in the industry. And so how do you guys think about the advantages of having FDIC insurance on the cash? And then also, how do you think about the security of the crypto?

• 23:07Speaker 02

  Yeah, so, so I'll preface this by saying that, you know, when people entrust us with their money, that is an extremely high sort of bar of responsibility. It's people's vacation budgets. It's their kids' college funds. And we take that very seriously. And especially as an emerging brand, we want to make sure that we're doing as good or better of a job than the incumbents, so you can feel completely secure about putting your cryptocurrency on the platform. And let me just compare it to a traditional exchange. I think that would be, you know, sort of the best thing to just draw a direct comparison to.

• 23:51Speaker 02

  So on it, and I'm going to answer both elements of your question, the cash side and the crypto side. So on your traditional exchange, they manage, I'll start with crypto. So on your traditional exchange, they manage their own cold wallets and hot wallets that that basically pulls all of the customers' crypto together. And that crypto is considered to be in the custody of that exchange. So they're responsible for making sure that they have enough crypto at all times, that they don't get hacked. They're the single point of authority on approving transfers. That is the traditional way to handle crypto. Now, what we've, what we've done in our financial institution, as we've built Level,

• 24:36Speaker 02

  we want to decentralize that security and make it less likely that we would be a point of failure. And so what we do is we work with a company called Bitco. And our wallets are multi-signature wallets that require two of three approvals. Level holds one key, so we can't send your money by ourselves. We only hold one, and it requires two keys to send. Another one is in stored somewhere safe, in case other I, us, or Bitco lose a key. And then the third key is in Bitco's possession. And with Bitco, we implement these institutional policy controls.

• 25:19Speaker 02

  So only so many withdrawals per hour of a certain value per hour, like of a net combined value.

• 25:29Speaker 02

  So Bitco is required and is in a second sign-off. But before we even get there, we also perform our own internal reviews.

• 25:39Speaker 02

  And, and our internal reviews, what we're looking for is, we want to make sure that you have sufficient account balance. Obviously, we look for patterns of suspicious activity that might indicate identity theft. We don't want people going on buying crypto in somebody else's name, that whether they're a customer or not, we just want to prevent that. And so we're able to go through these two layers of security. The internal review to prevent fraud and identity theft, and then the Bitco review to prevent unauthorized sends. And we currently, the turnaround time on that is less than 15 minutes. And we, we, we confirm at one block, whereas Coinbase confirms at three.

• 26:20Speaker 02

  So what you're looking at is a procedure that is, or a security system that is more decentralized, that has more layers of approval, but is in fact faster than Coinbase. And so that's the, that's the answer on the crypto side.

• 26:35Speaker 02

  Now let's talk about cash. The traditional way to store cash on a crypto exchange is in a type of custodial account called a for benefit of account. And that is an account that's in the company's name that holds the cash of all the different users. And then what the company does is keep a record of how much funds are for the benefit of each customer. And what you'll typically see, you'll typically see something in the contract that I think is pretty scary that says like, we'll never voluntarily give up your funds in an insolvency event, right? So if we get sued, if we get, if we go bankrupt and we get in a, you know, a bankruptcy proceeding, we're not going to voluntarily give up your money. But you know, you do lots of stuff in bankruptcy that's not voluntary.

• 27:19Speaker 02

  So we wanted to, we wanted to really make sure that the cash is as safe as possible. And the gold standard for storing cash in the United States is an FDIC insured checking account in your own name. Because, uh, because it's the best experience. If we fail, you can log into that account, you can pull the cash. We're not allowed to touch it. Um, first of all, we're not allowed to direct funds unless it's directly authorized by a customer. So the customer has to tell us every time we direct funds. Second, if something happens to Level, you just log in and you can pull the cash off. And then third, it's directly FDIC insured. And so if there's a big macro financial event, um, then the FDIC under the law will mail

• 28:03Speaker 02

  you a check for the cash. Um, and I think that that, that really is sort of the highest degree of competence I think you could have in cash, um, under current North American law.

• 28:13Anthony Pompliano?

  Got it. And it feels to me like, uh, the security component is getting figured out by a lot of people. And, and obviously there's been, uh, less hacks, uh, which is a good thing overall for the industry. FDIC insurance is an absolute game changer on the cash side. Going to this model of having kind of the, the true deposits rather than the custodial deposits is another kind of game changer. Um, one of the other issues that's come up on the crypto exchange side is, uh, the treatment of private information of the users. Uh, so there's been reports that some exchanges have sold information, uh, some are using it for other purposes. Maybe just talk a little bit about kind of what you guys see, uh, on the industry, um,

• 28:57Anthony Pompliano?

  perspective, and then how you're looking at treating, uh, individual private information.

• 29:03Speaker 02

  Yeah, so um, so I want to preface this by saying that like what I've seen on Twitter is a lot of speculation. And it's very interesting to me, like I would love to like sit down with someone at Coinbase and just ask how they actually handle some of these things. But I don't know, for all I know, um, for all I like, I just cannot say that I know Coinbase's policies. What I can do is talk about the types of things that come up that affect customer privacy in an exchange and how we've chosen to handle those.

• 29:36Speaker 02

  So you know, the first thing that we do with our, the first thing when you create an account that we ask the customer to do is to apply for their level account. So you've signed into the app, but you can't, you can't, you can't access banking services until we've verified your identity. And this is again, to prevent fraud and identity theft. It takes about two minutes. We take a picture of your photo ID, the front and back. We automatically fill out all the fields like your name and your address. We have you do a selfie video that authorizes the opening of the account, which, which, which we also use to, if you ever get locked out, we can look at that video and make sure that it's you. And then we get a record of your social security number.

• 30:18Speaker 02

  At that time, that is, that is, uh, that is, all exchanges ask for this stuff. A lot of them, a lot of them might like, like a breadcrumb it, you know, ask for it one step at a time, like maybe you can buy a hundred Bitcoin. But now we need a picture of you. Now you can buy a thousand, but now we need your social, right? We do, that's because they, they don't want to, they don't want to get hacked, right? The less sensitive information they get hacked for, the better. For us, we collect all that because you're opening an FTIC insured bank account and the law requires that you collect that. But what we do is we custody that with our banking partner that has decades of experience with no, with no vulnerabilities, right?

• 30:59Speaker 02

  Like, uh, and, uh, and then we pull information only when we need it. So like, for example, if you buy a debit card, we're going to send a request to the bank, get a copy of your address. And then confirm that with you and then ship the debit card there. So in that sense, you know, the first line of defense about protecting information is just to not have it. And you know, we're, we're just designing to not have that information. Now,

• 31:29Speaker 02

  It is true, I think, I think it is very true that there are laws that have to be followed when you're running a financial institution.

• 31:40Speaker 02

  You know, we're, we, we are, we are an exchange, we're a financial institution, we offer FDIC insured bank accounts, and I live in Los Angeles, not Hong Kong. So I have to follow these laws. Now, what we are going to try to do as a business is to be as transparent as possible about what it is that we're doing. And I'm happy to talk about a couple of elements of that here today.

• 32:09Speaker 02

  So, so first of all, some exchanges have a, some exchanges have a blockchain analytics unit. And what those analytics do is they look at transactions that are incoming to the exchange or that are leaving the exchange. And they, they monitor, for example, to, to make sure that you're not withdrawing Bitcoin to one of the addresses associated with that, that hack that happened two days ago. That's a totally different, that's a totally reasonable thing to do, right? But some exchanges also take that, those tools that they've developed to make sure that, you know, funds aren't being sent to like kiddie porn operations, for example, which I think everyone would agree is a good thing to stop.

• 32:52Speaker 02

  They take those tools that, that they've made available or that they've developed internally, and they make them available to law enforcement. So law enforcement can now use these blockchain analytics tools that were developed by an exchange in order to sort of, in order to sort of de-anonymize people on the blockchain, right? Now, you can also go a step further, and you could say, exchanges, you can't track individual users in exchanges, just, it's just an idiosyncrasy of the way that exchange wallets work. But an exchange that chooses to sell that type of software to the government could choose to, to basically split out all their users and their deposit addresses and their

• 33:35Speaker 02

  withdrawal addresses to add more detail to that map on an anonymized basis. And they could even choose to put the username and the, you know, the username, the data for the social security number in the de-anonymized version and sell that to the government. There's no law preventing that. I don't know that that is what. Coinbase is doing. But I can tell you that, first of all, we do not sell analytics technology to any federal agencies. And second, we do not provide personal information on a customer.

• 34:13Speaker 02

  Basically, with the same policy as Kraken, like if you could, if you subpoena us, we will follow the law to the letter and otherwise, like you're not going to get information from us. And so, so an example of that would be like, there's a, there's a thing called a 314B, which is basically a report you file because you saw something suspicious, that you're just voluntarily giving that information to the government. We don't file 13, 314Bs. We don't think that it adds value.

• 34:44Speaker 02

  And then places where we do report to the government, because again, we're required by law, we're going to follow the law, I don't want to go to jail. What we try to do is be as transparent as possible to the customer. So we don't want there to be any ambiguity about what we provided or why we provided it. So, for example, the Internal Revenue Service requires a, requires a report if you do more than $40,000 of payment transactions on a platform in a year. So what we do is we, of course, file that, but we, we strip it down to the most anonymized form that we can. No, you don't, can't see who the counterparties were, the type of trades, whatever. We give them the absolute bare minimum to be in compliance with the law.

• 35:30Speaker 02

  And I don't think we're trying to withhold anything from them. We just want to respect customer rights as we submit that. Then what we do is we email the customer and say, hey, this is what we sent to the IRS. Here's the reason we sent it to the IRS. By the way, here's the information that you need for your 1099B for your tax filings. And here's your transaction summary. And here's your 8949, like cost basis summary. So we're, we're basically going to follow the law and then we're going to give the user all the information they need to be fully empowered about their rights. And if I could just give one more example, just because it's unique, it's specific to us being a, a financial institution that operates bank accounts.

• 36:10Speaker 02

  Exchanges aren't required to let you know if they sell customer data for marketing purposes, or if they sell customer data for marketing purposes by their affiliates, or if they do joint marketing. They're not required by law to disclose that. A bank is required by law to disclose that. And so, once a year, you get, let's say you bank with Wells Fargo. Once a year, you're going to get a letter that says, here's all the information we're selling. And, you know, if you want to opt out, you need to make 10 phone calls and send 6 emails, right? In our app, there's a privacy notice. And basically, we use your personal information to send transactions that you initiate. And we don't market with affiliates. We don't sell with affiliates. We don't market to third parties. We don't sell to third parties. And that is disclosed on an annual basis.

• 36:55Speaker 02

  And right in the app, you can see it. So, our model does not require us to make money from the government. It does not make, require us to make money by trying to sell you car loans. And we just don't do any of that.

• 37:08Anthony Pompliano?

  Why? Like, when I hear that, that all sounds great. Why do you choose to go down this path and others don't?

• 37:16Speaker 02

  Um.

• 37:18Speaker 02

  How could I speak to the motivations of other people? I mean, obviously, it's lucrative. I think for us, we're a services business. And our customer is the, uh, our customer is the trader. Is, our customer is the level member. If we were selling this technology to the government, our customer would be the government. And then, maybe, our product is customer information. But the only customer that we have is the level member. And if I was a level member, I wouldn't want any of that information shared unnecessarily. I, I, I would want to know if information was shared. I would want to be notified. And I think, I think it's really just the bottom line is, the people we serve are our customers.

• 38:02Speaker 02

  And, and we don't have conflicting financial interests that I think would compromise us in this area.

• 38:09Anthony Pompliano?

  Yeah, that's not a bad way to look at it. Talk through a little bit about how you're seeing users use the product so far, right? So you kind of have two different products in terms of a cash product and a crypto product. You take a very kind of customer centric or customer first approach. What are users doing when they come on? Are they putting, you know, all of their money in the deposit account? Are they putting all their money in crypto? Are they splitting it? Like, what do you see there from user behavior?

• 38:36Speaker 02

  Yeah, great question. So there are three central components of our product. There's our banking product, our crypto product and our customer support product. So the main product today that is going to save people a lot of money just right out the gate is our crypto product. And that's because, that's because, as I mentioned, with with very low trading on other platforms, it pays for itself. And it's also because we have, we have autopilot. And so all the, all that sweet market making income that Coinbase has been keeping for themselves. You can put your Bitcoin in there and passively earn an income that way. And all of that stuff is, is running today.

• 39:21Speaker 02

  We also are seeing a lot of engagement with the support chat. And I, I, I really want to emphasize like how much that we've tried to make that a good product, right? So many support systems are designed to, to be like, how can I not have to deal with these people, right? Like first, I'm going to give you a robot. If you negotiate with the robot or like match zero over and over and over again, then like maybe I'll let you talk to a human, but it's not going to be the human you wanted to talk to. And then like, we're just going to disconnect if we get frustrated with you, right? Our support product isn't like that at all. It's a chat you have with an assigned banker and that banker is there to help you navigate the product. And that's provided free of charge. So we're seeing a lot of people go engage with those.

• 40:05Speaker 02

  Bankers and sometimes it's I initiated a withdrawal. What's the typical time that it takes for that to to settle? Sometimes it's like, hey, I really like it, but you know, did you know about this bug on the buy screen? But we're seeing about two out of five people are going and engaging with support. And that's exactly what we want. Like you're not, we're not going to give you a canned response that says like, hey, have you seen the support article? We're going to talk to you because that's the expectation you that is what you expect. When someone is banking for you, right? We're not on exchange, we are banking for you.

• 40:37Speaker 02

  And then the banking side, we are seeing people deposit a lot of money. The main reason you would do that today is to facilitate purchasing crypto or liquidating crypto.

• 40:49Speaker 02

  By the end of this year, we'll have a debit card. And you can receive paychecks, deposit checks and send checks from Lovable. So there's, there's no reason that you wouldn't use this to replace both Wells Fargo. And Coinbase and like in addition to the benefit of it just being a good experience and being affordable. You wouldn't have to move money between them anymore. But what we're seeing people do today is save a lot of money on crypto trading and talk to our support team.

• 41:16Anthony Pompliano?

  So already is pretty compelling. Obviously, we invested in, you know, my personal fascination is just this idea of. Can you completely disrupt an industry that is highly, highly profitable by simply changing the way that you get paid? Right? And so rather than the transaction fees, if you go to the subscription model. I ran the math and it's look, you know, Coinbase would have made more money in 2017 by having everyone pay $9 a month. That was part of their user base rather than have them just make the billion plus dollars they made on transaction fees. All right. So the subscription model works in that sense. Now, in terms of where you guys go from here. What are kind of other products you're thinking about, other areas that are interesting?

• 41:59Anthony Pompliano?

  And kind of maybe other bodies of work that that you guys may or may not end up working on?

• 42:05Speaker 02

  So our mission is to build the best financial institution in the world. And a financial institution is a bank, first of all, it's a place where you can collect your paycheck and, you know, deposit checks and basically be the place you keep your money.

• 42:21Speaker 02

  But we think that, we think the ecosystem is rapidly evolving. And so, you know, for us to offer a bank, if we want to launch the best financial institution and we didn't support crypto, that would be like launching a new laptop in 2002 that doesn't support wifi. Right? You know, or you launched the iMac without connecting to the internet. So it's, it's, we fundamentally have to be part of this, this, this change that's going on from sort of government issued funny money to, to money that we can all really trust. Like, like, we want to bank your money and Bitcoin is better money than cash. So like, we're going to bank that, right? As we look beyond that, and of course, we, we have the customer support features.

• 43:05Speaker 02

  As we look beyond that, we are planning to add more states. So we support 60% of the population today. We expect to support everywhere but New York by early 2021. That's, that is a, an incremental change. And if you sign up now, you'll receive a notification email once your state is open. The other thing we're doing is we're offering, we're adding by the end of this year, a debit card. And the ability to do direct deposit and deposit checks. So at that point, what you have is a bank that's completely at parity with something like Chime or Wells Fargo Mobile, but is built for you, has great customer support.

• 43:48Speaker 02

  And, and, and that's where we see people going, basically being able to live off this product, right? I mean, you could, you could never deposit cash once onto this platform. Just use it to store Bitcoin and pay your bills with your debit card. It's just a radically new approach to banking and. We're in early access now. During early access at the end of the year, those features will be deployed and then we will be a full production product. Beyond that, I'd say the major initiatives that we're looking at is we would love to support the Eurozone, the United Kingdom, Canada, New Zealand, and Australia as a start.

• 44:28Speaker 02

  Because it is our goal to be the best financial institution in the world and the most reasonable place to start is in financial systems that are a lot like ours and with customers that have a lot of those same similar expectations. And the other thing that we'll look at is adding stocks. I think there's a big opportunity to make

• 44:49Speaker 02

  stock investing better. Part of it is, is if you want to invest in stocks, you need to move cash from your bank account into a brokerage account. And just like we want you to be able to buy Bitcoin right out of your checking account, you ought to be able to buy stocks right out of your checking account. And then, you know, that's part of the motivation. Another part of the innovation is we want to get rid of these hidden spreads that Robinhood charges. We want to educate the market on that and have our customers feel confident that their subscription is the only fee that they're paying. And then the final part of that would be taking autopilot, which is our technology for automated trading today, and evolving it into something that can manage your whole portfolio. How much Bitcoin are you hodling? How much are you

• 45:32Speaker 02

  market making with the autopilot? Do you have a diversified portfolio of ETFs? You should be able to invest from your checking account and liquidate back into your checking account without leaving the app and have that investing experience, be able to meet all of the needs as you invest, you know, your cash for the your cash or Bitcoin money for the future.

• 45:53Anthony Pompliano?

  Explain a little bit more about what autopilot does right now.

• 45:57Speaker 02

  Yeah, so.

• 46:00Speaker 02

  So at a high level, what autopilot does is it allows you to take bitcoin that you would otherwise be hodling and move it into the autopilot account and it will automatically invest those crypto, those assets on your behalf. So how does it invest it? Is it like crazy voodoo machine learning? It's not. It's, it's doing a process called market making. And market making is one of the like oldest, most proven and consistently profitable ways to make money in all of investing. And it follows the simple, the simple rule of buy low, sell high. So a market maker, let's say you got, you've got $10,000 of bitcoin on your account. You've got $10,000 of cash on your account and bitcoin's trading at $10,000.

• 46:44Speaker 02

  So what I'm going to do, or what I'm going to do is I'm going to take my cash. I'm going to offer to buy at a discount. So I'm going to offer to buy at 99,950. That means anyone that trades with you is paying you a $50 profit for each bitcoin that they buy. Then I'm going to take all my cash. Sorry, that's with cash. Then I'm going to take my bitcoin and I'm offered to sell that at a 0.5% premium. So $10,000, $50. And so anybody that buys that, you're making $50 profit for, for the bitcoin.

• 47:16Speaker 02

  And so what autopilot does is it runs that strategy based on the current price estimate from our partners over at Nomics. And it runs that strategy 24 hours a day and it reprices your orders every 15 seconds. So this is like a high frequency trading tool that is running like a, a proven strategy for consistently earning income. And the way it earns that income is when people go on our platform and they just buy or sell using the standard interface, that's a market order and it's going to consume some of these AMMs liquidity. And so During Alpha, we were, we're gonna have to see what happens during prod.

• 47:59Speaker 02

  Like, are we gonna have a big birth, like a big growth of supply? And while demand is ramping up, it will be a lot more demand than supply as the marketplace balances out. But during Alpha, we were seeing, we were seeing people get about a 6% monthly return on their autopilot funds as the, while the markets were active. The final thing I want to touch on is it was really important for us to

• 48:24Speaker 02

  to introduce a strategy, an automated strategy that lets you participate in the crypto market, but passively. And we didn't want it to be voodoo. So the specific implementation that we've made is, is based on state-of-the-art research

• 48:41Speaker 02

  on stochastic optimal control, and it's proven to be the optimal strategy for market making. It's what the Wall Street guys are doing, it's what the Chicago guys are doing. Modern market makers run this algorithm, and we're making it available to everyone. You can learn more about this strategy by clicking the more info button on your automated market maker, and that includes a link to the research paper where we developed it.

• 49:04Anthony Pompliano?

  Yeah, it's really cool, I think, how, what you're basically saying is you're giving the market making profit to the user, and also making sure there's liquidity on the platform, right? Is that generally correct?

• 49:17Speaker 02

  Yes, that is a hundred, it's both those things. And then also what we're doing is we're taking, we're taking another one of these hidden fee business models, and we're getting rid of it. Because if you go on Coinbase Consumer today, you're gonna have a, you're gonna have a commission fee, which is 1.5%. And then that is subject to a minimum, right? 0 to $50 is a dollar, beyond that is $2, it goes up to $3. So that's their commission. What they're not telling you is that they also increase the price by 0.5%. So Coinbase is market making directly to their consumer clients. We are also eliminating that. Now, there's still a fundamental need to market make, and we're gonna let our customers earn the profit by delivering value market making,

• 50:03Speaker 02

  but we are removing ourselves as a market making participant and intermediary, such as Coinbase would.

• 50:11Anthony Pompliano?

  Got it. What, uh, what do you think the biggest obstacle for growth for you is moving forward?

• 50:16Speaker 02

  So we're really proud of our product and we're not gonna stop improving it until like really every customer is happy. And I can't stress that enough. I mean, every day we go through our chats from the previous day, we prioritize things that we need to fix. We burn them down through the day. I mean, just today, the whole team is working on changing some aspects of the referral program. And the reason I emphasize that is,

• 50:44Speaker 02

  as I said, it's an enormous amount of trust to put your money on our platform. And the number one most important thing that we need to do is make it easy to use at a fair price. And so nothing is a higher priority than that. We want to, we want, we want to earn trust in the business model and the quality of the product. Now, beyond that, it's, it's sort of evident that we need to get a certain amount of customers before this business model really works, right? Even though, even though the per transaction cost for us is low, we have, we have subscriptions to various pieces of software. We have employees to pay, right?

• 51:26Speaker 02

  And so, so we need to, we need to grow to a sufficiently sized user base to be sustainable and offer this free trading forever. Which is, which really needs to be a community effort. We're asking that, and, and, and I guess one way to say it is like, we always want to deliver more value than we're, than we're asking in return, but we are going to ask people on the platform to, to talk to other people about what they've seen. There's tools to share it on Twitter. There's ways to text message your friends. We're not forcing you to do it. We want you to, to look around the product.

• 52:03Speaker 02

  We are giving, we're giving rewards in consideration of your time. So you get $10 just for signing up. The friends you invite, they get $10 for signing up. Once you have three friends that have downloaded the app, they don't even have to be a paying customer yet. Just that they've downloaded it, we're gonna give you 10 bucks. And then beyond that, you know, we'll, we'll, we'll pay you 30% of the, of the, the membership fee that we collect from people that you refer forever. So that's $24 a year, as long as your friends are, are users. Now, like, why are we doing that? Because to get the word out,

• 52:40Speaker 02

  You have to do marketing and to do marketing costs money. And the, we think the ideal way to do that would be to impress our customers enough with where they don't mind sharing it. And because that's value to us, we're going to pay you and we'd rather pay you than Google or Facebook. It's, it's really that straightforward.

• 52:59Anthony Pompliano?

  Yeah, I love that. And talk a little bit more about the promotion that you're running right now. When somebody signs up for an account, then if they get their friends to sign up, kind of how that works and kind of what the incentives are for, for people to join like you're talking about there.

• 53:16Speaker 02

  So when you sign up through a invite code, so POM's invite code, for example, is lvl.co/pomp. If you follow that, you can download the app off the app store. You sign up for the account and POM is automatically going to get credit for having referred you.

• 53:35Speaker 02

  Now, when you sign up, the first thing we do is we just give you 10 bucks. Like we're, we're not going to charge you for the first month. We just give you $10 of Bitcoin. We want it to be completely free to you to be able to poke around the platform, see if you like it. And if what you want to do with that $10 is just withdraw it off the exchange, like bummer, but you're allowed to do that too. It's your $10 for giving it to you just to sign up. Next, if you like the product and you decide to share it with three friends by text message or by posting a link on Twitter, once we see that three friends have downloaded the app, we credit you with another $10. So that's $20 and so far what you've had to do is download the app, play with it,

• 54:21Speaker 02

  text it to three friends and see if they want to download it, right?

• 54:26Speaker 02

  So you can earn $20 just by getting involved on, on the, on the very first day.

• 54:31Speaker 02

  So then downstream of that,

• 54:35Speaker 02

  once, let's say that you have five friends that sign up and they all become users, they really enjoy using it. We're going to be making recurring revenue off them. And so we're going to give you a recurring reward too.

• 54:49Speaker 02

  You'll get $2 for each of your friends that are active in perpetuity forever. So four referred friends are getting paid a hundred bucks a year.

• 55:00Speaker 02

  The idea is like, we want to ask you for the minimum amount to do to show that we have value, right? So like, thank you much for so much for signing up. Like, we really appreciate it. We knew that took time out of your day. Here's $10 because we want you to play with that money, not your own money. We think we can get your trust, right? Then, you know, when sharing with your three friends to download, like, you don't need to convince them to use it. We're not going to force you to do it. But if you do it, thank you so much for your time. Here's 10 bucks. And if they convert, we're going to give you some of the rev share. We want it to be completely voluntary, but we want to show the deep gratitude we have for people that helped make this company a success by bringing it to scale.

• 55:39Anthony Pompliano?

  Got it. And I guess, as you think about the industry kind of much larger, just outside of you guys, where are we going, right? So it's very obvious that infrastructure has been a great business to be in, in crypto and in the legacy fiat world. Where is this all going? And kind of how do you see this developing over the next five years or so?

• 56:01Speaker 02

  Yeah, so that's a great question. And I think it's possible to answer that from two different contexts. Like, one of them is like, where's crypto headed, right? And like, how does that affect a crypto platform? And then the other is, is where financial services headed? And so I'll start with crypto, if that's okay. You know, I think like, like, let's talk about Bitcoin. You know, Bitcoin is, it's decentralized. It's a payment method. You don't have to worry about people printing more of it. And so it is just intrinsically a, it is intrinsically a hedge against the US dollar,

• 56:44Speaker 02

  and basically charges the US government every time they print more money. That's what holding Bitcoin does. In addition, because it's a payment mechanism, if we were to take Bitcoin transactions, build easier to use products where it's easier to pay for things with Bitcoin, as we're going to try to do with Level, if we're able to drive the transaction volume of people paying with Bitcoin, we would see the price of Bitcoin go up by a factor of 100. It's also true that we can get transaction volumes up high enough where it's more cost competitive relative to debit cards, which costs 1% to 1.5% fee to process, right? As you know, Bitcoin has a simple flat rate fee. And so

• 57:28Speaker 02

  Bitcoin makes a lot of sense to own as an investment to help be a part of promoting its adoption as a payment mechanism. And so I think today, uh, uh, offering crypto as part of a financial product is absolutely essential. I would not feel responsible building a bank where users can't bank crypto, if that makes sense. Um, so that's where I think crypto's headed. Uh, the financial services, um, what we're seeing right now is, uh, a lot of companies that have started in different areas, trying to sort of complete, to be the complete financial institution of the

• 58:11Speaker 02

  customer. And everyone is starting from a different vantage point, and they're taking a different approach. Um, so I'm just going to name a couple at random. Robinhood started as a stockbroker account. Now they want you to keep your cash there, but they don't have checking accounts. They don't have demand deposit accounts, FDIC insured accounts. So they have to, they call their program for holding cash, they call it cash management, because that cash is being held in an SIPC account. You see the same thing with, uh, Betterment. Um, so that's one approach, right? Then you've got, uh, you've got Venmo. So now Venmo wants to, to keep some of your money. Um, and what the, the way that they're doing that is basically by loading a card. So like, under

• 58:56Speaker 02

  the hood, they have a cash account, and it's basically, it's just credit on a payment network, and they'll send it back to you. Um, uh, so, you know, that's not a real checking account, and there's also the issue that, you know, if you fund that with a debit card, it's a 4% fee, right? And so, um, so, uh, there's a clear advantage when you have a financial institution that can do all of these things. Like if you have one app where you can buy stocks and you know, there's no hidden fees, where you can buy crypto and you know, there's no hidden fees, where you can bank, where you can spend on a debit card. If for some reason you run out of cash, it just covers the overdraft with your Bitcoin. There are so many benefits to that.

• 59:38Speaker 02

  Not to mention just cutting down on the fees that you would have paid moving money from Coinbase to Wells Fargo, right? There's just an incredible number of benefits. And so what we're seeing is a lot of companies that are trying to collect the infinity stones. They need to get the banking infinity stone. They need to get the brokerage infinity stone. They need to get the crypto infinity stone. And if they can get all the right infinity stones, they can be this trusted digital financial institution.

• 1:00:08Speaker 02

  That obviously is our goal. What we're trying to do is take the most principled approach that we can on every aspect, every pillar that we have to the product. So our checking account, it is not cash and a preloaded debit card. It is not an SIPC account, brokerage account. It is a, it is not a custodial account where we're looping it together with other funds and just hoping it goes well. It is a bank account. And it's a bank account that comes with all the same guarantees you would have at Wells Fargo, including from the FDIC, right? When we did crypto, we don't want to do a stripped down version of crypto like, like, like Robinhood would do, where you can buy crypto, but you can't actually send it. And when you buy it, you're always going to be paying

• 1:00:53Speaker 02

  a markup to Coinbase, or sorry, to Robinhood. We want to do it where it's just a spot market. We don't participate in it. Like you can make liquidity and make money. You can buy crypto and make money. It's just totally up to you. And then, you know, as we move forward to other things that we add, we're going to be just as principled.

• 1:01:14Speaker 02

  Now, who gets there first? Who is, who, you know, who's the favorite platform? I don't know, but I can tell you that, I can tell you that

• 1:01:24Speaker 02

  our business model is transparent and we have been laser focused on doing each aspect of this financial institution in the way that our customers think, we believe that our customers would expect from us.

• 1:01:37Anthony Pompliano?

  Makes sense to me. What is the place that we want to send everyone to go and find out more about Level?

• 1:01:46Speaker 02

  Yeah, so if you're, I would, I would recommend, I'll give you a couple of resources. First of all,

• 1:01:54Speaker 02

  there's no harm in trying out the app. Go to lvl.co/ton, or sorry, lvl.co/pomp, sorry about that.

• 1:02:01Anthony Pompliano?

  Come on, give me, you gotta give me my credit.

• 1:02:04Speaker 02

  I know, I was on, I was on, I was, I was, did a video with Tone yesterday, so I'm just like, like, wissy gray and I'm so sorry.

• 1:02:10Anthony Pompliano?

  Don't listen to that guy. Come on, come on into lvl.co/pomp.

• 1:02:15Speaker 02

  Yeah, lvl.co/pomp. If you didn't get that, lvl.co/pomp. So, look, if you go to lvl.co/pomp, you're going to be brought to the App Store, you're going to download it, there's no commitment whatsoever. You can log into the app, you get your credited Bitcoin, you can look around, you can explore every single feature. It's up to you whether you want to complete the verification, it's up to you whether you want to share it with other people. The entire app is open-faced. At the second you log in, you can see everything that the app does, explore the entire thing. So, I would strongly encourage you to go to lvl.co/pomp and just try it out. In addition to that, you can go to lvl.co and we have information on the platform,

• 1:02:56Speaker 02

  including the states that it's available in, 26 states and 60% of the US population. We also have a Twitter, Bankwith Level, and we use that Twitter to basically engage with people. And right now, as the platform is really in its infancy, you have a really strong voice. So if you tweeted us and you're like, "I hate this feature, like, please fix it", there's a really good chance it's going to get fixed that day, if not that week. And so I would also just highly encourage you to engage with us there because, I mean, basically, people snapping at us on Twitter is like, is like our, that's our new boss, as we're getting this rolled out.

• 1:03:34Anthony Pompliano?

  I love that. Before I finish up, I always have the same two questions. First is, what is the most important book that you've ever read?

• 1:03:42Speaker 02

  Most important book that I've ever read? So I got this last time, and so I'm going to try to think of something different.

• 1:03:56Speaker 02

  I'm gonna say, I'm gonna say The Great Gatsby. And so last time I did a nonfiction book about like vulnerability. Now I'm gonna say The Great Gatsby because it is just such a well-written book. And we could say this is second most important because I do think it's very important to like understand vulnerability and be a healthy adult. But you know, if you want to read a book that's just a work of freaking art that you know, you're just really gonna appreciate that there's smart people out there writing books. Totally recommend The Great Gatsby if you haven't read it.

• 1:04:32Anthony Pompliano?

  That is a great one. Any new thoughts on aliens? There's been UFO videos that have come out. There's all kinds of new developments.

• 1:04:42Speaker 02

  So like, there have been a lot of new developments. And I think the answer that I gave you last time was like, of course there's aliens. I think like there's so many stars, there's so many planets, you know? But now I'm not so sure because I was reading about, I was reading about, I think it's called the Fermi paradox, which is like, which is like, if there's so many aliens, why aren't we seeing any of them? And like, I just like, I just like read through that Wikipedia page like, like all day. I mean, not all day, but like I read through that and it made some pretty compelling arguments. Like we should be able to see radio signatures. We've like really swept the sky. Also, the idea that like advanced civilizations would build superstructures. And the superstructures would have certain like marks that would be easy to identify.

• 1:05:28Speaker 02

  And then that got me down the path of like, well, if we can't see that, you know, is, is there some great filter thing where like civilization gets far, far enough along, they build some doom state of ice and then wipe themselves out? And that was depressing, so I stopped thinking about it. That's why, that's my download.

• 1:05:48Anthony Pompliano?

  You went and did research, though. I'll take credit for you going and doing research.

• 1:05:52Speaker 02

  What a You made me think.

• 1:05:54Anthony Pompliano?

  What, uh, what question you got for me to finish this thing up?

• 1:05:58Speaker 02

  Um, so the last time I asked you, um, I think the, I think the, I, I think the last time I asked you how you balance, um, having a podcast with being an investor. And so I'm gonna ask you the easy one this time, which is just like, I need a download on your view on aliens.

• 1:06:22Anthony Pompliano?

  Yeah, there's definitely aliens. The the two key qualifiers of that are aliens being other life or other intelligent life. You could categorize it either way. If you just go other life, for sure, because you just need organisms. They're probably on Mars, right? There's water on Mars. And then the second thing is just from a time perspective, are we here on the same time scale? So let's say that, you know, there could have been other life a billion years ago, but humans weren't around. Or

• 1:06:51Speaker 02

  Yeah, yeah, yeah.

• 1:06:51Anthony Pompliano?

  A life could be a billion years from today, and humans won't be around. I don't know. But I definitely think that there's life. It's just a matter of, you know, kind of, are we here at the same time? And is it intelligent or not?

• 1:07:05Speaker 02

  Yeah, I buy that. Like, we're in, we're on a very small cord of time on a cosmic scale, you know, we're like, like 0.001%. Like, we're gonna live 80 years out of 13.8 billion. So, yeah, I mean, that, I totally buy that. I just, I, it's just depressing if you think about the the great filter, but it's totally plausible that we just, we just miss these guys.

• 1:07:32Anthony Pompliano?

  It's depressing, man. When you start thinking of that, it's like, hey, let's go do some crazy, wild stuff while we're here, because we ain't here for very long, right?

• 1:07:40Speaker 02

  Exactly.

• 1:07:41Anthony Pompliano?

  All right, man. I love it. Everyone go to lvl.co/pomp. We're super excited. Like I said, we invest in the business. I really think that this idea of a $9 a month flat fee could be quite disruptive in the market. And frankly, it's just better for users. So guys, go check it out. And Chris will do this again sometime soon.

• 1:08:02Speaker 02

  Yeah, sounds great. Thanks so much for having me.