Former Coinbase CTO: How Trump can resolve conflicts of interest caused by issuing coins

Author: Balaji Srinivasan, former CTO of Coinbase, Source: Author’s Twitter @balajis; Compilation: Baishui, Golden Finance

Overnight, the vast majority of the next president of the United States’ net worth ($59 billion) is now held in the form of cryptocurrency. This is true even if it drops 90%.

What does this mean?

1) First, President Trump’s cryptocurrency as a percentage of his net worth has risen from 1% to over 90%. Many early Bitcoin, Ethereum, and Solana holders have experienced the same thing.

2) Second, with the demise of fiat currencies, this phenomenon—the relative depreciation of all non-cryptocurrency assets overnight—will be experienced by billions of people around the world in our lifetimes.

3) Third, every politician, influencer, and celebrity around the world is watching this phenomenon with their mouths watering. They’ll be waiting to see how it plays out politically and economically, and if memecoin shows staying power—if!—they might make their own.

4) Second, if we do get a large market with thousands of individual memecoins, then this might actually be OK, because every buyer knows what they are buying: the potential future brand value of the meme.

5) A lot depends on the value of Trump’s assets, if any. Other celebrity memecoins went to zero quickly, but Trump is Trump, and he has the unique qualities of (a) 100 million+ followers, (b) daily, nonstop coverage, (c) presidential immunity, and (d) unprecedented control over the government.

6) So, no matter what kind of political blowback Trump encounters, he now has a strong incentive to legitimize cryptocurrency in the most radical way possible.

7) Of course, this would be seen as a conflict of interest. But Biden took 10% for the big guys, Pelosi traded her stock, Hillary monetized her speeches, Podesta had a $300 billion secret climate fund, Obama got a Netflix deal. They all became millionaires through various forms of deniable Dem bribery.

8) So Trump’s rebuttal might be that he just does everything in the open. He might claim that disclosure solves the conflict of interest problem.

9) That might be true, but it doesn’t quite solve the *alignment* problem. For background: the CEO of a company is usually one of the largest shareholders, but he’s aligned with all of his employees because they hold the same shares. Ideally, all holders go up and down together.

10) Similarly, ideally you’d want the president to be aligned with his citizens so that they all hold (say) US tokens that get some dividends from US profits. Sort of like the Alaska Permanent Fund.

11) So one way to solve the alignment problem would be for Trump to airdrop some TRUMP coins to every US citizen. However, it might be easier for him to email every Trump supporter as an individual offering them some free TRUMP coins.

12) Specifically: he could give 72 hours notice, and various Democrats would sign up for his personal email list, just to get the airdrop.

13) Is this legal? Well, it’s certainly legal for politicians to *ask* for money via email. But as far as I know, no politician has ever attempted a personal airdrop to *give away* money before — certainly not on this scale.

14) At current valuations, Trump could offer all 77 million Trump voters $100 in locked TRUMP via airdrop, and that would “only” cost him $7.7 billion, an asset that was zero two days ago. He could give everyone $500 and still have over $20 billion left.

15) Yes, Trump would lose some assets by doing this. But if you need to join his email list to get the tokens, and if the airdrop can be done without any capital gains, then it will "pay for itself" by turning his base into more fervent supporters.

16) It could even provide him with the political support he needs to completely destroy the Democratic Party's sponsorship machine. Basically, by joining Trump's email list and supporting his crypto policies, you would be earning a kind of UBI.

17) If 77 million Americans also benefited from TRUMP, then the charge of conflict of interest would disappear. It would be a new type of social contract, a personal relationship between the president and the citizens.

Something to think about.