Charles Hoskinson, the co-founder of the Cardano blockchain, has expressed interest in buying crypto news service CoinDesk. CoinDesk recently announced that it had engaged Lazard as a financial adviser to explore options including a partial or full sale.
The site is owned by Digital Currency Group (DCG), whose lending subsidiary Genesis Global Capital has filed for bankruptcy.
Hoskinson said on a video posted on Twitter that he heard the site was for sale for about $200 million, but admitted he hadn’t seen CoinDesk’s financials. He believes this price is too high and stated that he could afford it if he really wanted to. It remains to be seen whether Hoskinson will follow through with his interest in purchasing the news service and what changes he would make if successful.
Why Are You Interested in Buying Coindesk?
“It’s something that came by my desk recently is that Coindesk is either raising money or attempting to actually get acquired. So I’ve been through the grapevine, talking to people, looking into things, and trying to figure out what the price is.
And it looks like the price is probably going to be hovering somewhere around $200 million if somebody was just going to buy the thing outright, or at least that’s what they’re asserting they’re worth.
Now, I haven’t seen any books or financials, but I’ve been hearing that gross profit was hovering somewhere around 50 million. So it would be interesting to see what the EBITDA is and what the ratios are, as well as the projections that they have.”
Is There a Perception That Cardano Receives a Lot of Bad Media Coverage?
“We’ve been a recipient of some extremely bad media. Some just because they didn’t take the time to really research and deeply get into things, and some because there was actually an agenda to defame.”
What About New Sites Being Funded by Players in the Industry?
“FTX gave the Block a large sum of money, or agents of that organization, to write articles in a certain direction.
Coin Telegraph is actually owned by an oligarch and there’s some shady stuff there (allegedly) and everybody wants to basically have a media outlet and use that as a way to express influence in the space.
‘Okay, so our chain is great and this other chain is bad.’
My interest on the media side is actually more broad in that. I would like to figure out how to get to journalistic integrity again. You’ve probably seen, if you’ve watched my whiteboard videos and you’ve seen me talk in AMAs over the years, things like veracity bonds or other concepts where when someone publishes something, the thing that they publish, they actually put money on the table.
And if it turns out the thing that they’ve written isn’t true or it’s inaccurate, they actually can lose the money that they’ve bonded for it. Wouldn’t that be amazing in journalism where there’s a financial incentive for people to actually fact-check the people who are the fact-checkers?
And you also can try to link it to other stories that are quite similar. And so you actually have a universe of information around a particular topic, whatever that topic happens to be.”
It Sounds Like You Envision Coindesk as Something Akin to Reddit or Twitter. Is That Correct?
“I thought that it would be really cool and also if one had a media outlet that is industry-specific, to have a media outlet actually directly connect to the top 100 Blocks chain projects and say, look, we’re going to give each and every one of you a space to actually write content on a regular basis.
So every two weeks or a month, just publish something about your ecosystem. And of course, it’s segregated, so people know that it’s content by those people, but it basically gives a direct line of communication.
And then you can have a separate investigative journalism unit and they can go deep on particular things and also have some great technology for people to be whistleblowers. The closer the projects are to the media, the easier it is for mid-levels and employees in those organizations to then know who to talk to, to be able to whistleblow about crises and events and these types of things.
So there’s definitely a lot of cool stuff that can be done in terms of advertising. I’ve known this space for a very long time.
And that whole advertising model about incentivizing content through a token and also the BAT (Basic Attention Token) advertising model, I think there’s a huge design space to be able that should create an incentive layer for people to create content.
Community Driven Content
Hoskinson sees communities driving stories and checking facts in much the same way that transactions for validated on a blockchain. Hoskinson continued:
“If you could find a way to bundle community-driven content, community interaction with content integrity mechanisms like veracity bonds and dedicated spaces for the projects of the industry to regularly write things by market cap.
You probably could construct a really amazing media outlet. The question is what real value does CoinDesk as an entity have? I mean, they have a pretty good events unit and it’d be interesting to dig to the financials and see how profitable it really is.
But Consensus is a huge conference and there’s certainly something there. And they have a pretty decent operation that Barry (Barry Silbert CEO, Digital Media Group) was able to finance the construction of to the point where they get a lot of readers and there’s certainly a lot of impact there.
What About a Startup News Site Instead of Spending $200M on Coindesk?
“At 200 million, I do believe it’s a bit overpriced and so there has to be more to that number than where it’s at. I could afford it if I really wanted to. I mean, I’m still one of the richest guys in the space, but just because you have it doesn’t mean you spend it because you can do more with less.
It may make sense if one wanted to make that kind of financial commitment to take five or ten million (dollars) and actually start up a much more decentralized organization, incubate and grow it and take it to a point where it would basically outcompete all of its near neighbors.
The other thing is there’s no metaverse component right now in CoinDesk, nor is there any really good video side. I mean, they’ve been trying to build out those business lines, but they’re not really that popular and that is hard.
A lot of partnerships could be made. Messari, for example, could be more tightly integrated. And I’ve known Ryan (Ryan Selkis, CEO, Messari) for years and I think that would be a fun relationship to foster and grow and they’re mutually beneficial to each other and actually, Lace wallet could benefit from having an information layer as well and putting those components into play.
How Would You Avoid Accusations of Bias When Publishing Stories About Cardano?
“There is a question about objectivity of given that Cardano and me are tightly associated safe for midnight, how then would the organization be perceived fairly?
If I was to acquire something like that, you know, would anytime there’s a pro Cardano story, they say, well, that’s only because, you know, the Cardano, people own it. Or if there’s a negative story, is it because they’re going negative?
Because they want to remove the perception of bias? I think the ultimate resolution of this is, again, to look at stories with veracity bonds and community interactions. If every story is an NFT and it lives in an information graph and there’s people constantly interacting with it, it gives people an incentive to basically ask questions and an incentive to actually continue the discussion behind the story.”