Building @CazasHQ - Fractional real estate you can invest in, stay in, and grow into ownership. | Previously Co-founded @onlywithmith
Los Angeles
Joined October 2008
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MichelleSanchez retweeted
Great perspective on the best way to have invested in this crypto cycle, @LorenzoARK: follow the developers, as always, and get as close to the end user as possible!
Who is actually accruing the value created in crypto?
This started as a conversation on the @Blockworks TG group with @santiagoroel and a few others.
Venture in crypto has shrunk a lot! and imo the main reason is that on-chain revenue pools have been far smaller than anticipated.
From Blockworks data, total on-chain revenue was roughly $8B in 2025, so I wanted to see how much off-chain/Centralized companies are capturing from this industry by comparison.
So consider the off-chain pool: public companies like coinbase, Gemini, BitGo, Bullish, plus crypto revenue from Robinhood, Galaxy etc and private players like Binance, Tether, FalconX, Anchorage, etc.
The result surprised me: off-chain companies generate ~$70B roughly, consider roughly a range between 60B to 100B, 8.5x more than on-chain protocols and L1s.
To put that $8B in perspective: even if you give on-chain protocols generous 70% EBITDA margins and a 30x multiple, the entire addressable market cap today is ~$168B ($8B × 70% = $5.6B EBITDA × 30x). That's the whole on-chain pie, less than a single mega-cap tech company.
Do the same for centralized companies at a more realistic 40% EBITDA margin: $70B × 40% = $28B EBITDA × 30x = ~$840B of justified market cap. Even with lower margins, that's 5x the entire on-chain ecosystem. And to put even that in perspective: the entire centralized crypto industry, all of it combined, is basically worth one OpenAI or Anthropic.
The breakdowns are telling too. On-chain, L1/L2 chains take almost half the pool (~49%), with launchpads/trading apps and DEXs/perps splitting most of the rest. Off-chain, it's exchanges and brokers dominating at ~66%, with stablecoin issuers second at ~19%, everything else (market making, payments, infra, asset mgmt) is single digits. Both worlds are extremely concentrated at the top of the same funnel: trading and the rails to do it.
From a venture perspective, you were often better off investing early in L1s and traditional exchanges than in most tokens. It was a bit simpler than we thought.
To me the common denominator: off-chain companies sit much closer to the end user than protocols and L1s. They own that relationship and monetize it well. They abstract away crypto's complexity: trade, stake, store, manage without ever touching a coldcard or metamask app and people pay up BIG for that.
On-chain is clearly in a bear market, but the lesson for protocols, L1s, and on-chain primitives is to build and verticalize more. Get closer to the end user.
One caveat: this is an approximation, done with Claude's help. Many of these companies don't have public earnings, so the private side (Binance, Tether, and especially "other private") is mostly an educated guess. Directionally though, the gap is hard to argue with.
MichelleSanchez retweeted
Good lord. It turns out that a16z, the same people who told us "Why Decentralized Matters" 8 years ago, now don't think it matters.
Sure, they hedge by making a meek "parallel path" argument between actual DeFi and whatever the suits are doing, but the fact that they now take all this "enterprise blockchain" nonsense seriously tells me they've lost faith.
Or rather they believe decentralization matters for DePIN that enables DeSci for agentic inference, but not for finance. "Peer to Peer Electronic Cash" breaking up Wall Street is now a bridge too far!
Allow me to reframe what is actually happening with TradFi adoption of blockchain: the rent seeking intermediaries for whom friction and delays is a primary source of profits are not into actual crypto (shocking, I know). They prefer fake crypto, because it allows them to hijack the narrative, delay progress, and use lawfare in Washington to kill true innovation.
This isn't some conspiracy theory. The very same banks who are lobbying to kill stablecoins as I type are claiming to use fake internal blockchains to offer services they could have rolled out 20 years ago using SQL.
Also, the same HFT trading firms who have been lobbying to kill DeFi for years are the biggest holders of dubious coins tied to "permissioned networks" supposedly used by COBOL jockeys to do post trade settlement. Before that, they used fax machines.
None of this should come as a surprise. Incumbents fight change. Highly regulated incumbebts who haven't had to innovate for decades fight the hardest.
What does come as a surprise is that the smartest VCs out there (and I mean this genuinely) are falling for their slight of hand.
No wonder this industry is in such a low place. Our once fearless leaders are full of doubt and bending the knee to archaic orgs like...SWIFT?
Like, it took the Society over a decade to try to move cross-border payments that take 3 days to a new messaging standard, but a16z thinks they'll build a viable "blockchain" for real-time payments soon.
Sigh.
Since they end their article with advice for founders, I am going to do the same: Proof of Authority is not a viable consensus mechanism, inside a bank or on CNBC. Neither is Proof of Press Release.
A founder who doesn't think the institutions of tomorrow will be fundamentally different from the dominant ones today proably shouldn't be one.
We aren’t building @CazasHQ around transactions. We’re built around identity.
Today we’re designing the architecture that connects travel / investment history, credentials, community & future ownership into a single member record.
Optimizing for continuity.
Memory = utility
MichelleSanchez retweeted
I think it’s time to revisit the accredited investor laws in the US.
Companies are staying private longer, where only accredited investors (aka rich people!) can invest. Retail investors can only come in after IPO, when much of the upside has already been captured.
These rules were created with the best of intentions, to protect regular people from scams - a noble idea. Unfortunately, in practice they've often made it illegal to get richer, unless you're already rich. A regressive tax!
We have to judge policies based on their outcomes, not on their intentions.
These are two possible routes I see:
1) Replace the rule with something merit-based, like a financial literacy test. Pass it and you're accredited. Having a qualification based on competency rather than your bank balance or income seems far more fair.
2) Remove the rule entirely. Let consenting adults assess their own risk. Disclosure requirements stay and fraud enforcement stays to punish bad actors.
MichelleSanchez retweeted
Three days ago I became a dad. My son, Soren was born with a rare heart defect and is fighting for his life.
I've given 10 years to this space & never asked for anything. Today, humbly, I'm asking.
Anything you can do helps.
5qTKp44FvKsBZakm5YWihqVG2UMeQZp1pDRbLMbApump
MichelleSanchez retweeted
An ETF that just holds assets is leaving utility on the table.
Sandy Kaul, on why tokenized ETFs can be so much more than a wrapper.
@iandebode x @OndoFinance x @therollupco x @andyyy x @robbieklages x @blockworksDAS x @Blockworks
Before I began building @CazasHQ I thought this was how institutions were eventually going to plug in.
Not quite.
Nice to see @mcagney pushing for new rails.
Mike Cagney is dismantling the $74 trillion DTCC monopoly. Why wait for incumbents to innovate when you can just build a better, cheaper, and more transparent financial stack yourself?
(0:00) Why hasn't the $74T DTCC been tokenized?
(0:18) Why won't stocks trade on blockchain?
(1:48) Will equity issuance leave the exchanges?
(2:56) Did Cagney’s master plan actually work?
(3:50) Why start with credit instead of equity?
(5:36) How Figure disrupted the HELOC market
(7:21) The three core value props of blockchain
(8:32) How NFTs solve the proxy voting mess
(9:22) Is 24/7 trading just a distraction?
(10:48) The hidden "cash cow" of stock lending
(13:03) How to force the shorts onto blockchain
(14:19) Solving the "cold start" problem in DeFi
(15:36) Who follows Figure into the tokenized era?
(16:24) Fixing the Digital Asset Treasury (DAT) gap
(19:15) Will Blackrock force the world to tokenize?
(20:01) The DeFi unlock the SEC is fighting
(23:02) Who wins and loses as markets move on-chain?
(26:32) Is this just another centralized exchange?
(28:27) How does Figure actually make money?
(31:00) Why Cagney chose public over private equity