This episode unpacks the strategic pivot from crypto media to data infrastructure, revealing how the industry is maturing beyond speculation into a new era of on-chain revenue and institutional adoption.
Blockworks' Strategic Pivot Away From News
- Jason begins by addressing the difficult decision to shut down Blockworks' news division, laying off nine journalists. He explains that while the news team was highly talented and punched above its weight, the company's core focus is shifting to its data and software business, which has found significant product-market fit. This move is framed as a necessary "band-aid ripping" decision to concentrate resources on becoming a world-class data company.
- Jason acknowledges the personal difficulty of the layoffs and the public backlash to his announcement, offering a lesson in communication. He notes that a post about layoffs is not the time to celebrate company revenue, but to support the departing team members.
- He emphasizes that the integrity of a company during layoffs is best judged by its current and former employees, not by online commentators who lack context on severance and internal communications.
- Rob adds that many of the laid-off journalists are highly sought after, with his portfolio companies already reaching out to hire them for communications roles, highlighting a natural career progression from journalism to comms.
The Future of Crypto Journalism
- The conversation shifts to the state of crypto journalism and why Blockworks felt it could step back. Jason notes that when they started, the quality of journalism in the space was lacking. Now, the ecosystem is much more robust, with strong reporting from outlets like Unchained, CoinDesk, The Defiant, and even mainstream publications like Bloomberg and The Wall Street Journal, which now have dedicated crypto teams.
- Santi points out that Blockworks played a crucial role in bringing more integrity and fairness to crypto reporting at a time when traditional media was overwhelmingly negative.
- The decision was also driven by business focus. Jason states, "A company only gets one, maybe if they're extremely lucky, two things that they can be world-class at." For Blockworks, that focus is now data and software, not news.
The Transition to a Data-Driven Business
- Jason outlines the vision for Blockworks' future as a data company, comparing the current moment to the early 2000s internet boom-bust-rebirth cycle. He believes the industry is entering a 20-year secular bull market, and Blockworks is positioning itself to be a dominant player in this new phase.
- The data business has grown several hundred percent this year, achieving strong product-market fit with average deal sizes in the hundreds of thousands.
- The primary customers are major protocols and, increasingly, on-chain applications like Maple and PolyMarket that are generating real revenue but need better ways to tell their financial stories.
- Jason identifies a key mega-trend: "The last 10 years, the mega trend was assets moving on chain. The next 10 years is going to be companies and real revenue moving on chain."
Public Market Moves: Securitize's SPAC Deal
- The discussion turns to Securitize, which is going public via a SPAC (Special Purpose Acquisition Company)—a shell company that raises capital through an IPO to acquire a private firm—at a $1.25 billion valuation. Rob notes that Securitize has been singularly focused on tokenization since 2017 and is now finding product-market fit as the narrative gains traction.
- Securitize acts as a transfer agent and fund administrator, managing the records, compliance (KYC/AML), and administration for tokenized securities.
- While the valuation seems high for a traditionally low-margin business, Rob argues its strategic value comes from being the only pure-play public asset for investors to bet on the tokenization trend.
- Santi challenges this, comparing it to Circle, whose stock has performed well as the only public vehicle for stablecoin exposure. He frames it as a "lazy thinking" market where narrative and unique access trump fundamentals.
Western Union's Solana Integration and the Incumbent's Dilemma
- The hosts analyze Western Union's partnership with Solana to launch a stablecoin. This move is significant for a legacy remittance giant whose stock has been crushed due to its failure to digitize. The market has heavily favored tech-forward competitors like Remitly, creating a massive valuation disconnect.
- Santi argues that Western Union is a deeply undervalued business with immense distribution that the market has left for dead. He sees it as a prime target for activist investors to unlock value by forcing a digital strategy.
- Rob counters that for the last 15 years, growth investors have consistently outperformed value investors. The market pays for growth, not fundamentals in a declining business. The key question is whether an incumbent like Western Union can successfully digitize or if a digital-first disruptor will win.
- This leads to a friendly wager: Santi bets that Western Union's stock will outperform Solana's token (SOL) over the next six months, while Rob takes the opposite side, betting on growth over value.
The "Pay-to-Play" Ecosystem Debate
- Rumors surfaced that the Solana Foundation paid Western Union up to $50 million for a six-month exclusivity deal. Rob clarifies that while he has no specific knowledge of this deal, such payments are standard practice in the industry.
- Rob states, "Almost all of these deals are paid... in almost every instance where you've seen a large org come and build on a specific chain, they have wanted to derisk their initial buildout through some sort of payment."
- This strategy is about kickstarting a flywheel. Jason draws parallels to Amazon paying companies like Domino's and Uber to build on Alexa or Facebook paying publishers to join its platform.
- The critical question for investors is not whether payment happened, but whether there will be a real return on investment. Many past incentive programs have failed to generate sustainable, long-term volume after the subsidies end.
Mastercard's Rumored Acquisition of Zero Hash
- The conversation covers the rumored acquisition of crypto infrastructure provider Zero Hash by Mastercard for $1.5 to $2 billion. Zero Hash provides the licensing and technology for crypto on-ramps and brokerage-as-a-service, powering platforms like Interactive Brokers and DraftKings.
- This move is seen as part of a broader trend where every major financial institution is exploring acquisitions in the stablecoin and crypto payments space.
- Rob notes that as key infrastructure assets like Zero Hash and BBNK get acquired, the remaining independent players become more valuable.
- The acquisition signals Mastercard's intent to build deep infrastructure for stablecoin movement, positioning it to compete with Visa and emerging players like Stripe.
The Battle for Credibly Neutral Infrastructure
- The hosts debate the meaning of "credibly neutral" infrastructure in the context of major players like Stripe launching their own chains (Tempo). Rob argues that when a payment service provider like Stripe launches its own network, it is no longer neutral, as it directly competes with its partners.
- Networks like Visa and Mastercard have historically succeeded by remaining neutral and serving all participants. Stripe's move with Tempo is a departure from this model.
- This creates a strategic dilemma for other payment companies: "Why would you want to send money through a chain infrastructure... and help your biggest competitor?"
- This dynamic is forcing market participants to become more opinionated about their partnerships and technology choices, creating clear competitive lines between ecosystems.
Conclusion
- The industry is undergoing a fundamental shift, with capital and talent consolidating around data infrastructure, institutional adoption, and real-world payment solutions. For investors and researchers, the key is to look past short-term market sentiment and analyze the strategic battles over distribution, ecosystem incentives, and the architecture of the new financial stack.
