Let’s Talk Web3 Marketing with Blocknative CMO John Jefferies

Ty Smith0:00

What's up, everyone? Welcome to a super exciting interview we have today with John Jefferies. John has been a marketing leader in the Web3 and even this broader tech space for over a decade. He's been the CMO of CipherTrace, which is a blockchain analytics brand that raised, what was it, $45 million?

John Jefferies0:22

42, yes.

Ty Smith0:23

He's seen companies from early stage through serious funding rounds, and then obviously acquisition. Most recently, CMO of Blocknative, a blockchain infrastructure company. I think you just raised what, 15 million in...

John Jefferies0:34

Correct, in the fall.

Ty Smith0:36

Raised 15 million in the fall. Tons of experience across multiple marketing strategies, thought leadership, PR, paid advertising, SEO, and a bunch of others. So we're going to get really into a little bit on John's experience and hear kind of what he's found success with. One fun question I like to ask everyone is, obviously everyone's got kind of an interesting, unique, and it never really seems to be like an average or normal story of how people got into crypto. I'm curious to hear what brought you into the space.

John Jefferies1:00

Sure. So my crypto journey began in 2010 where Dave, my CEO, and I both read Nick Szabo's original smart contract white papers and were fascinated by the potential. So much so that IronKey actually hired him as a product manager, and he helped us design some pretty complex stuff at the time.

John Jefferies1:18

From then, I've been tracking different cryptocurrencies. Nick himself had actually wrote the original e-gold white paper, and I had friends at David Chaum's DigiCash and also e-gold, both of which failed. So I was very skeptical in the early days of Bitcoin. Given my quantitative background, I kind of took issue with the volatility of Bitcoin at the time in the early days. Not that it's not much better now, but, quite honestly, I felt it was overpriced at $30, then I felt it was overpriced at $300, and again at $3,000. And so if I had been willing to take on a little bit more risk, I'd probably be much more wealthy.

Ty Smith1:55

What do you think of it now? Is it overpriced right now? What are we at right now, like 25-ish, I think? I haven't checked in a few days.

John Jefferies2:01

It's 26-ish. I, you know, I'm a long-term holder of both Bitcoin and Ethereum.

Ty Smith2:06

So, John, obviously I gave you a quick kind of lay up there as far as introductions go. Walk me through anything else.

John Jefferies2:12

Sure, sure. So, like yourself, Ty, I started out in traditional finance. I consider myself a very technical marketer with depth in finance. I have an undergraduate in finance and an MBA. So I'm pretty comfortable explaining complicated stuff, which Web3 and cybersecurity tend to be.

John Jefferies2:30

I was very, very early in the Web 1.0 space, literally when HTML was HTML 1.0. And I led marketing and operations at a series of 10 cybersecurity companies over 20 years, which resulted in seven exits, two craters, and one zombie.

Ty Smith2:50

Zombie, what do you, I'm not familiar with that terminology.

John Jefferies2:53

It's a VC term, but it's also sort of a lifestyle company. So, from a venture capitalist perspective, they either want to see you go big or they don't want to continue funding you. And a zombie is a company that just achieves like nominal success but not tremendous success, or, in the case of the one that I was speaking about, was a lifestyle company founded by a CEO who did not care to exit or did not care to go big. It's just about having a nice, comfortable income.

Ty Smith3:18

Got it. Cool. Well, that seems to be a very minor piece of seven exits and two craters.

John Jefferies3:25

But it's also a caution flag, right, for other other potential CMOs is they're looking at companies and it seems like, the leadership or the CEO isn't aligned with your your long-term goals financially, then that can be problematic.

Ty Smith3:38

Yeah, absolutely. So, the Web3 space, obviously you have a ton of experience on the security side, and I want to get into what kind of led you into like, I guess, the the marketing for security-focused businesses, because that's definitely like a niche of a niche of a niche.

John Jefferies3:52

Yeah, and in that sense, I, even though I was working in the internet during what's called the Web 2.0 days, I never ever felt that I was I was in Web 2.0. So I was literally one of the very first webmasters, which is a term that makes people giggle now, on the planet working for a Fortune 500 computer company at the time. And, many of us know, the original version of the internet had absolutely no security. It was more about just wide-open comms and little security. So security was really one of the first problems that needed to be solved, and in many respects, I kind of feel like the same problem exists today in Web3 where we really need to address the security concerns to achieve the next level of growth.

Ty Smith4:32

I, yeah, I imagine it's mostly a B2B type style of marketing, correct? There's not a whole lot of consumers that are buying security.

John Jefferies4:39

It's both. So, I'll discuss that probably with the the first company that I'll talk I'll speak about, which was IronKey. And IronKey had a product that was a retail product. I had a retail store, sold $100k worth of it a day, or a month, sorry, and that ended up funding all of my direct advertisements. So, in that case, it was a B2B2C situation, and so it varies.

John Jefferies5:04

And I find in, at Blocknative, for example, as well, it is, in fact, B2B2C where we sell, or we do business with foundations, we have end users, and end-user customers, and we also have both dapp and and trader customers. So it's it's B2B and B2C, and and many times it's an indirect B2C, B2B through B2C. So where it's the users that attract the the use cases for the various different foundations.

Ty Smith5:34

Got it. Cool. The other roles also kind of that same model or mostly...

John Jefferies5:38

Somewhat. I'll just I'll take a step back and talk about some of my, what I've done in crypto, which I've basically done four things that I'm fairly proud of. I was at the Samsung Innovation Center, and I did innovation sort of at the intersection of blockchain and IoT, which was fascinating. I also grew and launched the CipherTrace brand as the initial marketing hire and, as you suggested, grew that until the acquisition by Mastercard in the fall of 2021.

John Jefferies6:05

I also run a, I founded and am chairman of the Travel Rule Information Sharing Alliance, which is a public good and a nonprofit that basically delivers secure and open-source infrastructure for centralized exchanges to be able to follow global AML regulation. And then, most recently, I started the marketing department at Blocknative and really feel that I've been able to build the best marketing team in Web3 and also raise the visibility of the pre-chain layer, which is sometimes called the mempool, which a couple of years ago had very, very little visibility.

Ty Smith6:44

Yeah, speaking to increasing visibility, explain that in, I guess, simple terms what that pre-chain layer actually is, because I'm sure a ton of people are not super savvy on it.

John Jefferies6:54

Sure, and the simplest way I have to explain it is, just like a credit card transaction, it's not final until it's final. And so there's a moment in time on the Ethereum blockchain, it's 12 seconds, where you sign a transaction and it's floating around in the ether somewhere, you don't know what's happening with it, and then, you might be checking Etherscan every couple seconds to see if it lands on chain. But in that time, 12 seconds, or it could be multiple blocks, there's a lot of a lot of uncertainty. It's been called the dark forest because there's adversaries out there, they're trying to take advantage of certain positions, and you're you're very much blind. So what what we do is we we provide the the ability to both observe and and orchestrate transactions while they're in flight.

Ty Smith7:41

Who, I guess, is like a, obviously that's a, you know, highly technical concept and and product and business. Who really is like the target demographic that you're going after?

John Jefferies7:49

It is, as I said, it's both B2C and B2B. So we have a mempool explorer, which allows any end user for free to sort of watch their transaction while it's in flight. It's kind of like Etherscan for the mempool. And that's just, and I advise anyone I talk to, anyone who asks me about crypto, to sign up for it. It's free, and you can watch your own wallet, and you can watch your transactions in flight so you know if they need to be canceled or paused or if you need to add more gas. So it's an incredible tool, and we continue to to add functionality to it.

John Jefferies8:23

We also sell to the foundations themselves. So Polygon is is one of our customers, and we we support them with both our gas platform. Because we have this sort of, our superpower is the ability to literally see into the future. So we can see blocks as they're being constructed on the blockchain. We have by far the best gas fee prediction model on the planet. And, in fact, the Ethereum Foundation used our our gas platform as they were planning out EIP-1559, which is the advances in the gas algorithm that occurred at the infrastructure layer.

John Jefferies8:55

We also have sort of different types of end users in that we have an open-source platform that helps dapps onboard multiple different wallets in a very user-friendly or developer-friendly methodology. So we have dapp developers. We work very closely with the wallet community. So over 50 wallets are are integrated into our our Web3 Onboard, which is our open-source product. And then the dapps themselves will actually use our our mempool API to provide real-time notifications to end users so they know what's happening with their transaction in real time. And then, obviously, the 12-second time advantage is a real advantage for active traders. So the trading community also is one of our key key user groups as well.

Ty Smith9:43

Yeah, the profile sounds quite complex. It's not like the kind of business where there's one person you're going after for one product and and you can, you know, really simply, you know, build some kind of messaging that that works for them. That sounds like there's a whole different list of personas you're going after. Did you, I guess, going into like your role as CMO at Blocknative, like when you first started, did that like kind of dynamic exist, or is that something that you kind of identified over time?

John Jefferies10:05

I would say it already existed. We were in conversations with Polygon before I joined, so it wasn't a, the MVP hadn't been proven out yet. But the trader and dapp community were were definitely part part of our our demographic.

Ty Smith10:20

Got it. So, I guess, you know, month one, you're you're coming into Blocknative as CMO, starting from the ground up with the whole marketing team. Was there a point where you were trying to do it all on your own, as I know a lot of CMOs do starting out, or did you say, 'You know what, there's there's so much complexity here, there's just absolutely no way that I'm going to get this done with myself or even a small team, and I have to build this out.'? Like how quickly did that conversation happen?

John Jefferies10:41

Prior to joining the company, I had a, some long conversations with my CEO and literally created a a budget and milestones for the first three months, which included hiring. But at the time, two years ago, hiring was very, very difficult. So that was one of my major constraints was be able to ramp the team fast enough. And my personal approach is always to try to do the thing first myself and then either hire in or outsource somebody who's better at it than me to actually follow through. But I, that way, I'm able to sort of understand the nuances and test different characteristics to see what works. But the intent was always to build a small team and a, a small army of contract or agencies to help with with the work.

Ty Smith11:32

Got it. Yeah, you were saying you, you know, you're really proud and happy with the team that you did end up building. What is it about the team that, you know, you are proud of, that you feel, you know, makes them one of the best teams in Web3 marketing, as you put it?

John Jefferies11:43

That's a really good question. They are all extremely competent at what they do, so they're they're very specialized but very collaborative. I, I personally like to race things, cars and boats and things like that, and I feel having team members that are competitive outside of work helps them be very competitive inside of work. So my whole team is very focused on winning. They all have a, their own distinct functional area, but we also collaborate very tightly together. So we have daily stand-ups where we agree on priorities for the week, we monitor them throughout the day or throughout the week, and have collaborative work sessions as well. But the depth of their knowledge and their capabilities are second to none.

Ty Smith12:29

Got it. What do you, I guess, look for when you're making a a marketing hire beyond the competitive nature?

John Jefferies12:34

I look for a high level of curiosity and intellect, especially in Web3 because it's changing so quickly. A, you have to be curious or you're going to be left behind. Even if you think you know what you know today, it'll it'll be outdated in in six weeks. And it's also intellectually taxing, right, because it's complicated stuff. At least the stuff we do is intellectually taxing.

Ty Smith13:00

Yeah, that's that's something that we've always dealt with at Coinbound is the the question of like when we're making a hire, do we hire a really experienced marketer that, you know, maybe understands Web3, or the opposite, so someone that really understands Web3 and and has, you know, maybe a a level of marketing experience that we can work with at least? Do you look for, because I imagine the the talent pool is not super great to to to pull marketers from that have such a high technical like understanding of the, you know, Blocknative's platform. How do you approach that? Is it is it we're looking for just a certain level of marketing experience and we can teach the rest, or or what?

John Jefferies13:30

No, I'm looking for both. I want I want it all. Everyone on my team has worked in crypto before. They've worked at companies that I I admire. Some of them had worked with me. And, they're all, they all bring their own depth of expertise in their subject matters around around crypto. And that that really is kind of what makes the dream team.

Ty Smith13:51

I'm curious, do you do you see yourself like a T-shaped marketer, or is there a is there an area of specialty that you have as far as depth in thought leadership or PR or SEO, or do you or do you not kind of look at yourself that way?

John Jefferies14:05

I think of myself as like a 0 to 50 sort of, 0 to 60 marketer, right, where that's where kind of my sweet spot is around ramping revenues from like almost nothing to 50, 60 million. And, I'm surely capable of going beyond, but, I feel like that's A, the exciting part, the creative part, and also where a lot of the value is created. And it's fun. In racing sailboats, it's funner to be on a mid-sized boat than being on a monster yacht, because on a monster yacht, you just have a very small role to play. And, even in my team, which is fairly small, they all have a very wide area of responsibility.

Ty Smith14:47

Yeah, I know you've done with Blocknative, you've you've had a pretty broad level of like like different channels that you try. You've done paid social ads, I understand, SEO, content marketing. Like what kind of led to that strategy? What have you been focusing on? Where have you been finding success? Walk me through that a little bit.

John Jefferies15:03

Sure. It, and it, I say it's different everywhere, and I think if anyone thinks they know the answers, they're probably wrong. What I like to do is test. And this is why I like to do some things myself, right, and test and see what happens. So we've experimented with with display advertisement, which didn't work. We've had some success with with search engine advertising, which is been somewhat effective. But the SEO is really sort of what what generated the juice, and also some of the ability to retarget through LinkedIn has been spectacular. I will have to say we had some success with Twitter advertising, but that sort of has declined in effectiveness over the last year. So advertising isn't a big part for us right now.

Ty Smith15:46

Okay. Mostly content?

John Jefferies15:48

Content, we do a lot of blogging. So we have, really sort of 101 level and 201 level blog, technical blogs about very timely issues. So as the very, as the Ethereum chain and and network continues to evolve rapidly, we try to stay on the cutting edge of what people are interested in and write about that.

Ty Smith16:11

Is that like an SEO play, or is that more of a thought leadership building play?

John Jefferies16:15

So SEO for sure, we get a lot of inbound. But, I'm always amazed, I was at the Science of Blockchain Conference last week, and people literally came up to my team and they're like, 'We love your content. We read it whenever we need to understand something, we go to the Blocknative site.' And so it's helped create awareness, but also, thought leadership as well.

Ty Smith16:36

Yeah, I I know it played, that kind of style played well for you at CipherTrace with those reports that you were putting out that were getting picked up like everywhere, New York Times, Washington, not Washington Post, Wall Street Journal. It seems to be working honestly for a lot of people. There's so many, I I guess, like fakers in the Web3 world that proving, creating content that proves you know what you're talking about goes a long way, it seems like.

John Jefferies16:56

And and using data. Having insightful data that no one else has access to is really also an extremely powerful tool.

Ty Smith17:05

Again, all that stuff that you did with the reports and them getting picked up, obviously thought leadership building play. Do you feel like that's kind of the most effective for the companies that you've worked at? Let's say let's just focus on CipherTrace and Blocknative. Has thought leadership build been a primary driver?

John Jefferies17:21

Yeah, I would say at CipherTrace, advertising was a lot more effective, and particularly podcast advertising. I spent a lot of money sponsoring the Unchained podcast for 18 months straight. And I know for a fact that was effective at building awareness because many senior executives at financial institutions later commented to our team that they had heard about us through through those ads. And so, while at the time, four year, five years ago, there weren't as many podcasts as there were now, and it was very hard to get on Unchained, the podcast strategy from Blocknative has been extremely effective as well, where Matt, our CEO, has got on 20 plus major podcasts and has really become a voice of authority for Blocknative and and in the space in general.

Ty Smith18:08

Yeah, I was just I was in the press room on Blocknative's website, and the amount of coverage that goes out on such a consistent basis is is is super interesting. I think the kind of thing that listeners of this podcast would probably find interesting to see what type of coverage is possible and and things like that. Because you've been everywhere, I mean, Blockworks, Cointelegraph, The Block, ETHDenver, everywhere.

John Jefferies18:29

Yeah, and with each company, things sort of change, right? So with CipherTrace, we had some focus on TradFi as well as government, so it was very much, industry pubs and business publications that matter. At Blocknative, those those publications don't matter as much to us. So our focus and my directive to the PR team was, get Matt on as many high-profile podcasts as possible. And, a lot of the news right now is also spread via Twitter. So we have very active strategy with respect to just Twitter Twitter streams and and Twitter threads.

Ty Smith19:06

Got it. Is it like a kind of internally incubated growth on Twitter, meaning like you have a a social media manager that you like and that's going well, or is it more of like using external accounts and collaborations that you've been focusing on?

John Jefferies19:18

I wish I had an internal social person. That would be awesome, but I don't. So my head of content, as he creates content, he he simultaneously creates the tweets or the or the Twitter threads that correspond to that. So with everything we do, there's a tweet, there's a LinkedIn post, and and we make sure that we, extend the social reach to the extent possible through that.

Ty Smith19:40

Got it. Yeah, kind of, I don't know if GaryVee actually invented it, but he's definitely the one that people love to attribute that kind of style of one piece of content made into 10 pieces of content.

John Jefferies19:48

I would say that that's one of the powers that that the generative AI brings to the table is you can start with that one piece of content, right, and it can, create repurposed versions, not perfect ones, ones that need tuning, but it can really help, help accelerate that path to multi-channel distribution.

Ty Smith20:08

Yeah, I think it's easier than ever, and it's just the trend is continuing to just go in that direction where it's so much easier now to be omni-channel than it ever was as far as like content-driven platforms like Twitter or, you know, wherever it might be.

John Jefferies20:19

And I would say the reverse is also true. And I think one of the banes of my existence is, all the numerous different inbound channels, right? So now it's so many channels, yeah, that's true. And so that that becomes, creates a challenge to track and manage conversations and, you know, understand where we're at with different relationships.

Ty Smith20:39

Yeah. So, I want to change gears slightly because a lot of a lot of the companies that I speak to all the time, you know, they're either pre-funding or just recently post-funding. And you've been through so many funding, you know, events. I'm curious to hear what like marketing pre-funding looks like versus post-funding, how strategies change, if they do. I'd love to hear a little bit more on that.

John Jefferies20:57

The secret is, yes, they change. They change quite a bit, and I think at various different stages, there's different goals that you're trying to achieve, right? So at a at a seed stage, you're really focused on building awareness, making sure people recognize your brand. And, one of my goals has often been to be considered every time somebody makes a use, purchase, or writing decision about our, whatever that topic is. So in our case, it would be the pre-chain layer, in CipherTrace's case, it would be blockchain analytics. But we want to make sure that we're one of the top three companies that people are considering as they're thinking about that space. And that's really kind of the goal of the early stage, and that's why I I lean on PR, and PR can often be the first thing I turn on when I when I step into a into a role as the first marketing person.

John Jefferies21:46

I think this, once you're looking at a Series A, people have heard of you, you've probably found some early advocates, people that love the product, and it's really about, testing and improving the product-market fit, figure out if people will actually pay for this thing, how much they'll pay for it, and start to experiment with different scaling techniques.

John Jefferies22:13

Whatever that is, whatever, whatever the way you bring users and prospects into the top of the funnel, the B series round is kind of testing those out. So is it SEO, like your earlier questions, is it SEO, is it advertisement, is it digital events, and how do you how do you balance those? And then by the time you're, you're bringing in your Series B, it's really, Series B and Series C are really growth rounds, right? So in theory, you already have product-market fit, in theory, you know how to grow, and then it's it's really about scaling that growth and sort of the science of scaling.

Ty Smith22:41

When in the rounds that you've had, has it typically been like, 'Look, we just raised money, we're going to go out and build a, we're going to double the size of our marketing team or triple the size of it,' or is it, 'Look, we're going to start using the same kind of core team, maybe add a person or two, and then just really double down on what's worked for us.'? Like how does that work as far as personnel in your experience?

John Jefferies22:59

I think the scenario I laid out is sort of the perfect path, and I'm not sure how many times you've been on the perfect path, but I haven't. So everything is always slightly disruptive and not as not as as clean as as I just stated. So, in the case of CipherTrace, we were very, very close to the final days of closing our Series B round late in February of 2020, which, if you remember, that was not a good time, right?

John Jefferies23:26

And so very early in March, as we were supposed to close, the venture capitalist community just stopped writing checks. Like there was just no more investments being done. And so, while I was on a trajectory, and we already had fit and were, looking to overtake the number one player, we didn't raise funding at that point, and it it took many, many more months, many quarters after that. So, while I was, I had my foot on the gas fully, we had to tap the brake and, figure out how to glide without losing our position.

John Jefferies23:52

And then, likewise, the case with Blocknative, right around when we closed our funding, or as we were closing our funding, the Ethereum network itself was undergoing like a significant change. And so that significant change was the move from proof of work to proof of stake, and that actually created some really interesting dynamics around block building of the Ethereum blocks of transactions. And so part of the reason that we were able to close our funding, part of the reason we were funded at that point in time, was to actually to pursue the block building efforts and really start to become very core to the the central of the Ethereum network.

Ty Smith24:30

If you were to start a company now or or to take on the CMO role of a an early-stage company that either was totally bootstrapping or, limited funding, let's say under a million or two million, what would you be focusing on?

John Jefferies24:43

I'd be focused on early early adopters, early users, what they care about, understanding their needs, their wants, and the value we bring to the table.

Ty Smith24:51

What about channel-wise? Where would you dedicate budget?

John Jefferies24:55

Once again, in the spirit of like trying everything first, channel-wise, I would I would focus on a direct channel. So I'd want to have sort of our people talking to the end users or to, to be as close to the the consumers of the product as possible. But once again, that kind of depends, right?

Ty Smith25:10

Yeah, of course. Of course, what you're going to do for like a a mobile wallet is going to be totally different than an exchange and, whatever it might be. Mistakes, everyone's made them, especially in the marketing world, and especially when you bring on the the strategy of let's try a bunch of things, see what works and cut what doesn't, mistakes are just kind of an inevitably planned part of the process. What would you say are kind of the biggest, I guess, marketing regrets you've made or mistakes you've made that you're willing to discuss?

John Jefferies25:35

Well, I often try try to move too fast. So like coming out of the gate at Blocknative, I I brought on five or six agencies in the first six weeks, and I probably should have paced that a little bit more because, not that they weren't competent, but it just, as you're as you're ramping yourself, it's also hard to ramp many folks. I think, career-wise, one of one of the mistakes I I made early on in my career was simply not marketing myself, where thinking that the, the work spoke for itself and, my companies were successful so people knew that I did the work. And so I think CMOs need to walk a fine line between, making sure they market themselves without being perceived as as self-promotional.

Ty Smith26:21

How would you do that? Just kind of content creation on social media, for example, or that's what comes to me as far as building a personal brand, especially in the Web3 space, is Twitter or LinkedIn. Would you agree?

John Jefferies26:31

Yeah, but, when I when I promote things on social media, it's not me, it's my company, right? And so it's it's through my actions that they're able to see it versus, some of the folks in my CMO community will spend a lot of time talking about what they did, or it's all about them. So I think, from my perspective, it still is all about the company and all about, the entity that I'm working for.

Ty Smith26:55

Yeah, I feel like now more than ever, that strategy is working in a in a dual sense of working well for the company as well as for the, actual person, employee doing the work, of this kind of like style of creating content about what's being done kind of behind the scenes. Like, 'I'm so proud of my team. We just accomplished this. We led this department to this amount of growth.' I feel like more than ever, that kind of style is working well. And I feel like a lot of companies, especially in the media space, I think Blockworks does this really well, I think Morning Brew in the Web2 space or, I guess, just broader business space does this well. It's interesting. It's cool to see. It's something that we've recently started kind of prioritizing within Coinbound as well, is kind of brand advocates internally. Switch gears again. Compliance in the marketing space, you've spoken about quite a bit in the past. What do you kind of foresee the, I guess, short-term, mid-term with marketing compliance in crypto?

John Jefferies27:43

Sure. For better or for worse, I have a depth of experience in the compliance space. I run a a nonprofit, as I as I said earlier. And, the original vision with CipherTrace was to make cryptocurrencies safe and trusted, both by government, by end users, and by traditional finance. And, it is really hard to get people to understand the nuances and the differences and not try to apply cookie-cutter approaches. One of the things that, I've always said is that, without the forbearance and understanding of regulators, that the industry simply will not thrive. We could be crushed. Obviously, there's, ways that crypto will never die, and you and I can hand each other our paper keys all day long, but that's not a scalable industry, right? So I think we need the the understanding and the support of regulators.

John Jefferies28:46

At the same time, I find a lot of the proposals within in Congress and the various different bills and what's happening to be extremely short-sighted and not too not too well-informed. So between the the Digital Asset AML Act introduced through Warner and the what's called the CANSEE Bill, they're they're trying to throw the net way too large, right?

John Jefferies29:11

Where they're trying to include wallets and dapp developers and validators. And, quite like right now, we we were a relay for and we we relay blocks to 500,000 Ethereum validators. So under some of these new rules, they're proposing that all these things would be subject to anti-money laundering laws and registration with FinCEN, which is, quite frankly, untenable. So they're they're some of the proposals are simply impossible.

John Jefferies29:38

And there's sort of this lack of understanding that, while a a dapp can control user access through the front end, through the web interface, they have no no access controls at the at the programmatic level. So, you can access Uniswap through APIs and and Tornado Cash through APIs all day long, and in some of these cases, the the keys have been, thrown away, the the dapps have been renounced, and those things are A, never changing, and they're, B, very permanent. And so some of these approaches just don't quite take into account some of this. So, for instance, the CANSEE proposal says, in the case where you can't they can't identify a central body as a controller, that they will just go after anyone who's invested over 25 million into that project, which is, talk about a chilling effect, right?

John Jefferies30:30

And, if you're one of these investors, there's nothing you can do, right? You're not going to you can't, roll back the the blockchain and get those dapps off of it. And so it's it's challenging at best. And I think we're seeing, globally, within Europe, we're starting to see the MiCA Bill start to, really start to have some teeth.

John Jefferies30:57

And, just two days ago, I guess, no, the first, seven days ago, the UK has started enforcing the Travel Rule, which is international AML compliance regulation. And, I would say the one thing that happened that was really interesting yesterday was Vitalik Buterin released a white paper on regulatory-compliant privacy service. So, basically, a version of Tornado Cash that wouldn't wouldn't upset regulators. And so I think, as an industry, we both have to educate and compromise, and show that we're willing to take some steps. I was super impressed with with Vitalik's efforts on that.

Ty Smith31:38

How do you feel that, I guess, plays into like the process of of marketing specific to the Web3 space? I know a lot of people tend to be, you have some people that are like, 'Screw it, we'll do what we have. It's never been explicitly said we can't do this,' not necessarily smartest in my opinion, and some people are like, 'You know what, we're going to be really, really cautious because we're unclear about this.' But just just that whole dynamic has developed in the Web3 marketing space. I'm curious like what you see this kind of unclearity and what's happening with the regulation side, how that affects the marketing process.

John Jefferies32:07

Sure. I, you know, I think as an industry, we need to engage, right? And so, I was originally, not not necessarily a cypherpunk, but I I went to many of their meetings, and so I believe in many of the the ideals of the cypherpunk philosophy and manifesto. However, the reality is is that some of these funds are being used by folks that are building nuclear missiles, and that's a big problem, right?

John Jefferies32:38

And so there's a balance that needs to be achieved between keeping the good actors safe and keeping the bad actors from from accessing the funds. And I think, quite frankly, the regulation is is kind of focused on the symptom, not the cause. And, just like traditional finance, they have rules around security processes and and validations and verifications.

John Jefferies33:03

I think part of our problem within Web3 is that, the dapps themselves have been too vulnerable, and it is those thefts that are being sent to North Korea as opposed to the government being opposed to privacy. I think what we need to do as a community is try to restrict the amount that is liberated from the decentralized finance world.

Ty Smith33:23

All right. Cool. I super appreciate the time you spent with me on this interview. We're going to wrap up here. Before I let you go, though, where can listeners find you online?

John Jefferies33:29

Sure. They can find everything Blocknative does at blocknative.com or follow me on Twitter @johnjefferies, j-e-f-f-e-r-i-e-s.com.

Ty Smith33:42

Awesome. Thanks for joining us, John.

John Jefferies33:44

Thanks.