Shaan Puri Profile picture
Nov 8, 2022 23 tweets 5 min read Twitter logo Read on Twitter
Here's the 30 second summary of the FTX drama that is blowing up in crypto.

1/ How FTX (a multi billion dollar co) almost died overnight

2/ And why this is a god tier strategic move by @cz_binance
OK so it starts years ago. Binance was an early investor in FTX
But FTX starts growing like crazy. They become the #2 biggest exchange

Steph curry, tom brady, they cut huge marketing deals.

SBF becomes the famous "fro of crypto" Image
They started as friends, now competitors.

Binance #1
FTX #2
(coinbase and others are smaller)

Binance decides to sell it's stake in FTX.

As part of the buyout, they agreed to take $2B of it in "FTT" -- a token that FTX created that it uses for trading fees.
So now - Binance and FTX are friendly competitors

Binance owns a sh*t ton of FTT ($2B)

There's not a lot of FTT trading volume (this is important soon)
Two days ago, CZ comes out and says SBF has been talking sh*t about them to regulators

lobbying in a way that would hurt binance

So he announces publicly on twitter to his 7M followers that he's going to DUMP his entire $2B FTT stash
Anyone holding FTT knows this is bad news.

$2B of sell pressure would crush price

So they start to panic sell

Price of FTT drops like 15-20% overnight.

Nobody wants to buy FTT (too risky, a whale is about to dump) and everyone wants to sell. Number go down.
Enter Alameda - the hedgefund/market maker Sam started before FTX

They are kings.

But news leaks showing the emperor has no clothes

They have ~$12B in assets, $7b ish in liabilities...but half their "assets" are in FTT token

which is plummeting & illiquid

Alemeda might die
If alemeda is in trouble, FTX might be too.

They are sorta sister companies. Market makers on FTX. And possibly hold/trade customer deposits. The relationship has been unclear for years. (achilles heel?)
But most people think of FTX as a blue chip company. Sam is famous. He's a genius right?

They wait for he or alemeda to show they are in good health

*narrator* but they were not in good health
Sam tweets saying everything is "fine"

but it feels to all of crypto like a girlfriend saying "i'm fine"

but she's not fine.
Alemeda's CEO comes out and says they will "happily" buy the FTT token as it plunges

But something tells us that it's not so happy, even with the exclamation mark

24 hours pass

if they had the financial strength, they would have shown it by now

This starts to feel like the "steady lads" moment right before luna collapsed Image
People freak out. start withdrawing funds from FTX

Ya know, just in case it collapses like celsius, blockfi, voyager, luna all did in the past year

$1B+ of withdrawals

FTX is facing a liquidity crunch
More silence (wtf), withdrawls paused on FTX (double wtf)
Then today - @SBF_FTX comes out and says they are entering a "strategic transaction" with binance

strategic transaction?

best code phrase since
CZ clears it up

"FTX was in trouble. We bought them to save them"

Binance basically started a rumor, made a threat, and ended up buying its biggest competitor overnight.

magnus carlsen approves
For now the drama ends

crypto crisis averted

if ftx failed...that would have been devestating for all of crypto
Sam had become the main character

you never want to be the main character Image
go subscribe to the @MilkRoadDaily if you like to get your crypto news in plain jane english like this
and now some of the high quality memes to dull the pain
oh important thing I didn't mention. The deal is not done. pending DD

more room for tomfoolery in the coming days

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More from @ShaanVP

Jul 1
for the past 10 years, I've kept a scratchpad of notes called "money wisdom"

anytime I read, heard, or learned something wise about wealth - I wrote it down... here they are:

Pretend we took all the money, and re-distributed it equally. Everyone got $100,000.

Within 10 years, the rich people would be rich again.

wealth building is a skill that can be learned.

For most people, they need to make 3 small shifts..
quick story - a man wants to learn golf.

He buys clubs, and starts hitting balls at the driving range.

The balls go left, right, center. He can't control it.

He sees a coach teaching a kid nearby. He walks over and hires the coach. First lesson tomorrow.
Read 28 tweets
Jun 29
I got greedy.

For 5 years I've watched @awilkinson & @XavierHelgesen build $100M+ empires "buying businesses"

I love those guys. Invested in both.

But if you sit around a barber shop too long. You'll end up with a haircut.

Here's the story of me buying my first business..
It's Jan 1. I call @benmlevy

Ben - no more startup shit.


No new ideas.

We're buying businesses.

And we're not tip-toeing in. We're going balls deep.

New slogan: "We put the privates in private equity"
I start looking for companies for sale.

Shopify App for sale, $2.1m revenue.

Revenue? What is this, a school for ants?

I need profits. cash flow.

I book an appointment with my tattoo guy. Image
Read 13 tweets
Mar 24
One of the most painful parts of being a founder, is begging for intros or cold-emailing into the abyss trying to get in front of investors

Especially if you're an outsider or first time investor.

A few months ago, my buddy @julian had a great idea on how to fix that.
When I was applying to college, California came out with the "common app"

One application, and you've applied to all UC schools.

What if we did that for startups?

One pitch, raise your seed round from 15 badass investors?

Enter -
If you're going to raise a seed round, you want:

- former founders
- who have big audiences
- who write checks and make decisions fast

Why not apply once, and get your idea in front of all 15 at once?

No cold emails, no sliding into DMs, no begging for intros
Read 5 tweets
Dec 16, 2022
I just sold my 2nd company! (@MilkRoadDaily)

super happy.

- grew from zero to 250,000 readers in less than 1 year
- self funded & profitable even w/ crypto crash
- biggest daily crypto newsletter

here's how it happened..
Me and Ben decide we want to start a crypto business.

But we're too dumb to do anything fancy.

So we stick to what we know.


Let's make a newsletter that summarizes "what happened in crypto today?"
inspired by my buddy @thesamparr who I got to watch step-by-step build @TheHustle from scratch over several years.

I felt like I could copy+pasta his blueprint, but for crypto.

(lesson: be friends with winners, then learn from them)
Read 13 tweets
Nov 9, 2022
This year I learned that there is no"smart money"

A16z, Sequioa, Chamath, Tiger, Tribe Capital, Coatue, Softbank, Paradigm, Ark, 3AC, Alameda, FTX, etc..

all made terrible financial decisions, at huge size.

and yet - most will get richer.
They play a rigged game.

chamath made bank off his shitty spacs as a promoter

& funds managing billions will make hundreds of millions in fees as a REWARD for losing their investors money
they didn't just invest in companies that started to underperform

they invested huge amounts ($50M to $500M) into fundamentally flawed assets
Read 4 tweets
Aug 2, 2022
Can you imagine if you were a 32 year old competing with Elon Musk and Jeff Bezos.

That’s @thetimellis

His company, Relativity Space, is worth $4.2 billion and launches fully 3-D printed rockets into space.
His origin story is awesome:

- Interns at Blue Origin where he pitches them on fully 3-D printing rockets
- They say “nice R&D” but don’t do anything with the project / idea
- Quits to start his own company at 25 years old
7 years later:

- His company reaches 850 employees (500 of them are ex-SpaceX 🤣)
- They just did $1.2 billion in launch sales in the last 3 months
- In 2021 they just got exclusive rights to their own launch site (only 4 launch sites exist in the US; last one built in 1960)
Read 5 tweets

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