0xResearch - Crypto Treasury Mania, Stocks Onchain, and Crypto Venture | July 3rd, 2025

Transcript

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Danny, you're on mute, buddy. Danny, you're muted. Amazing. All right, welcome back to another episode or live stream actually from the Zerox Research Crew. We're uh we're working through the tech issues today. Uh you know, it it's always fun out here. uh joined by a bit of a fun crew today. I would say we we're kind of mixing up the usual folks on the stream, but we've got James Kristoff, the renowned Wolf Rob Junior Dev. Uh incredible frequent frequent podcast listener and Telegram enjoyer of Xerx Research. We got Westy, apparently Chill House Treasury co-founder, but also from the Blockworks data team. Um and then we've got Smack from Compound joining today and Tulks, uh apparently now also a Wol Swap senior dev. Um, we've been hiring. How are we doing

today, guys? I think it's kind of chill vibes. Yeah, just in my house. It's all good. Yeah, we're heading into the Fourth of July weekend. Coins are up. Things are good. Nobody's bearish. Everything's good. We're always hiring. Okay, we're actually about to do our series A, so we should um connect offline on that. Be a strategic partner. Yeah. Thanks. All right. Cool. Love it. Glad to have you guys on. I think uh should be a fun one today. Um there's a lot I think you know we've been talking about in the Telegram. Everyone's been in there yapping about the events of the past I want to say week, two weeks. Um one of

the big ones right now is like crypto treasury co mania. We actually talked about this a lot at permissionless. Um all the pods, you know, all the pod hosts got together. Pete Rizzo was talking about uh Bitcoin Treasury co like they're going to get even more absurd from here which I actually kind of agree with that view and they like have been getting more absurd. Um but I I don't know. I want some I want some thoughts here like if it's doomerism if it's like this is just natural like you know you know someone does a treasury code the price you know pumps people see that and then they replicate it. adnauseium. Um, or is there something else going on here?

I mean, I can I can see why there's sort of a frenzy around this that everyone and their mother are raising money to to make a treasury company because from the from the point of view of the the issuer of the equity and the buyer of these tokens, it makes all the sense in the world. If these things continue to trade at a premium and you can, you know, generate, you can both raise money and then generate the ability to issue more shares at a premium, buy more of the token, and especially if you also own the token beforehand before you do like your T-W. It makes all the sense in the world why you would spin up a treasury company. as long as the market continues to like value these treasury companies

at far higher than NAV. Um, it's a good Ponzi. Yeah, I can see why people like the Ponzi. And so, yeah, I mean, yeah, on the the panel you guys had, you definitely had a range of perspectives. It was definitely on the like, of course, like we're just going to see a million of these. Every every public company is going to own 5,000 Bitcoin and we're going to ride off into the sunset. Um, but like my point of view is like yes, like it's super attractive and we're going to see more of these, but at what point does the like the momentum stop? Like because at that point you run out like the treasury company are the biggest buyers right now of Bitcoin of

like any single group of investors. So as soon as you see the money start to run out, what does that do to the price of Bitcoin and and potentially alts? I don't know. But that's kind of my high level thoughts. It's also kind of funny where on one of those panels, I don't know who it was, was talking about like, yeah, we're going to have we're going to see these things pop up in like every market that has every place that has capital markets. We're going to see it all over the world. And it's like, yeah, maybe true, but it's happening in the deepest capital markets first. So like does it really like it does it move the needle if you know I don't know XYZ 100 largest capital market country has somebody go public there who's buying

Bitco definitely diminishing returns and it's kind of like feels a little bit like the youth in Asia roller coaster in some respects. Um so yeah I it's a good it's a good sync I guess we see it in two different ways. Oh, go ahead, talk to. No, I was just gonna say it's getting to the point where it's like every other meta that we've had in crypto, you know, like just thinking back to we talked about it maybe like a month ago and it's obviously, you know, snowballed more from there and like it's not a problem in a sense, but it's just like I said, every other meta in crypto that we've seen like there's something that like micro strategy that takes off like, you know, the first AI like agenda coin that

goes to, you know, like 500 million and then, you know, everybody just starts spinning one up and that I mean it can go on for, you know, depending on the market environment going for 3 months, 6 months, you know, a year. Um, but yeah, I mean, just it's very similar to every other meta that we've seen. Same thing with, you know, perexes and clubs and prediction markets. Like, you know, there's one success and everybody just kind of, you know, piles into the thing that's successful. Have you guys listened to Jim Chanos talk at all about this stuff? I haven't go ahead.

Yeah, I was just going to say like his his whole thing is like he's on the exact same side of the trade as Sailor, right? Like he's short the comment and long Bitcoin. So, it's just funny to me like when you think of like the trade construction of how this stuff works. You'd naturally think like people in the crypto space who are way more bullish BTC would not be kind of cheerleading the other other side of the trade, right? Where these treasuries are selling the common into the market. Um, I just don't know eventually who the natural and one I don't know who the buyer is for it now. I guess maybe I'm not clicked in enough with like kind of the the the initial offerings like who the stuff is being sold into. Do you guys have any idea of like who's buying the stuff up, be it like retail or

institutional like what the breakdown is. I mean, I'm not sure on on the exact breakdown or who the marginal buyer would be. Um, I don't know. I mean, I think it's kind of just speculative capital and there's I I guess like I mean the argument was always kind of that the instruments to express like crypto bullishness were kind of lacking in tribey and I mean as every day passes and I mean especially with ETFs live like that argument it doesn't really make sense to me. Um but I mean these things you know they still volume and volatility and that's kind of what they feed off of. I don't know exactly where that constant demand is coming from, but

yeah, I mean, it's coming from somewhere for now. No more no more questions like this. Yeah, you're gonna you're gonna scare people. No, it's funny. Like I I also think like one thing that I've always thought about with the treasury stuff is um the impact of like activist hedge fund investors and because I think they're eventually going to come into this space. Um like if you're one of these, you know, goes that just launched, you know, a few weeks ago and you're trading like super super rich to your book value, like why why are you not just like dumping into the market in mass? Like just try to do it over the weekend, like completely

dilute the hell out of your company. Um I I wonder how long they're going to be allowed to kind of trade at a premium before, you know, existing, you know, people in existing market participants just start trying to force them to, you know, dilute even more and more to bring down to, you know, call it like a closer book value. If it it does feel though on the like um I I don't necessarily think that it's unique to crypto in that sense when you look at kind of like some of the trady stuff like the names that are outperforming most over call it like this year or the last couple weeks is I would say maybe the not like the uh the most uh fundamentally sound businesses in the world. It's a lot of kind of like let's

go let's like even tradfi is like let's go as far far out the risk curve as we can with some of the companies that are um outperforming. So I I don't know I it is definitely symptomatic of some something going on in like general markets and I don't it doesn't mean it's like a top but it also I don't know it's an interesting data point that you're seeing like a flood of these things now. Yeah. What I think that's a good part. Good point.

What do you guys think are the the signals of like when this thing turns over is like the only thing you should be looking at like the average like like uh value to NAV and like are those compressing over time? Like to me that is like the number one metric I'm paying attention to. But I don't know if you guys are thinking about okay when does this thing start to like roll over? I I almost feel like one of the things that I've been looking at mostly is you see the theme here has almost been like with memecoin launches where you know maybe the rumblings of one of these raises happens, you know, a company gets bought out or some sort of

acquisition happens, but the announcement of like, hey, we raised 200 million so that we could buy Bitcoin and put it in the treasury. like when that announcement comes out, it's like okay, instant pop in the share price of that thing like the next day or um after hours or pre-market or what have you. And um they those pops have not been as strong as they were, you know, 10 treasury codes ago. Um obviously they're still happening, right? like, you know, raising 500 million to buy Bitcoin for like a company that used to be valued at like a $20 million market cap. Like it there's just sort of like a natural thing that's going to happen there. But, um, I think that's one of the things that I've been looking at is like if if

if that return that immediate return there starts to continually like erode, then it it takes away a lot of that I think value to keep running these up. I think it's also becoming way more difficult to to um I don't know get visibility into like Bitcoin or or BTC price for example like in the past we had I don't know you had way it was like you could look at things like funding and open interest and and kind of like internals um you could look at like whale activity when this was like a smaller asset class even like micro strategy you could look at kind of the the um the nav have premium. Uh but I don't know. I think like these treasury

companies add I mean on top of a bunch of other things add like almost like a layer of obfiscation of like where you can feel comfortable about I don't know developing your own opinion on like where do you think the price is going like there were it was just way easier or I should say yeah way easier to I don't know build like a view where you could look at some of these things. Now I think there's just another layer of yeah obfiscation of like okay maybe maybe it's less clear to me whether like what this means on shorter time horizons.

They also just like even like the onchain data. Yeah, just like the onchain data like you said, smack like there's a lot of stuff used to be able to look at and just like to the overall conversation we're talking about. There was a um report that some people were running with last night about a um I think it was Asia-based company that was buying uh I want to say it was 5,000 BTC. Um no, I think it was 10 to 12,000. But then in the fine print like you can see that like there it the new it hits the newswire as you know a company acquiring a billion BTC and then you scroll down in the article like and it says that it's uh a common agreement between essentially somebody who already holds that to transfer it to this company and like it's just the obiscation that

you're talking about smack like these things you know they started off again like it goes back to just every other meta in crypto like they start out you know micro strategies pretty pretty pure and and And then the things, you know, it just spirals and you know that the market runs with that until until it can't. And one of the things we talked about a lot last week when discussing this just um at the conference was like you don't even necessarily need like these people to turn into sellers, but like how much of the runup the past 3 months like what if they just don't have the same amount of capital to buy? Like it doesn't even need to be that they're sellers. It's just that they aren't, you know, consistent bids in the market anymore.

I was just going to say like uh, you know, you know, you guys know my thoughts. I'm obviously biased. I think a lot of this stuff is pretty stupid. Um, I could I can somewhat understand at least like the ideological view of people that say, hey, they have a traditional operating company and, you know, whatever their their macro doomers, whatever, they want to have a portion of their balance sheet in BTC. Like, fine. And I I disagree with it, but I think it's at least a little like logically consistent if if they have an operating company. Um, like how would you guys stealman the question of like what is the purpose of a BTC treasury company? Like I I really haven't heard it articulated to me like to me the the purpose is to just increase the price of BTC, but like as an actual company,

what's the point? Like what what does it do? Like when you get to the end of the road when things have equiliiberated and like it's it's basically trading at book value. Like what's what's the point? What's it do? Does anyone know? The the denominator is worthless, brother. No, but I'm serious. Like what what is the point of it? Like once once the shares have been sold and it's been diluted properly and it's just trading at, you know, it's it's got 100 million of BTC on its balance sheet and it's worth 100 million, you know, common, like what is the point? What does it do? And I guess it's it's elegant in so far as there's no debt. So like, you know, I'm not concerned about someone cracking this thing open and, you know, they need to repay debt with it. I just I just don't know what happens. Like do we just

have a bunch of zombie SPVS in the future that hold a bunch of Bitcoin and do nothing? I don't know. Yeah, maybe like, you know, the historical argument was like there there's a market arbitrage opportunity like for maybe funds or investors who can't, you know, natively purchase these things. And so this this maybe opens that up for them. But if you yeah expand your view out into the future where you know maybe that's not a limitation for anybody anymore then and they're all trading like at NAV or like at par it's like what just go buy the underlying there's no point. Yeah. I think that that argument is like totally gone now.

Like if for for any capital market participant like globally it's trivially easy for you to buy Bitcoin, right? Like it's just I think that argument is totally done. It's totally accessible. I mean, if I'm trying to steal, man, it would be basically somewhat of a lever bet on Bitcoin. And you're basically you're taking the volatility of the stock and equity in being able to convert that to more underlying Bitcoin is like the idea. But yeah, like you continue to get diluted over time. It's like what is the value really? I don't know. It's kind of circular.

All right, I think we're I think we're tapped there. Um, I thought that was good conversation, though. Another another topic that I think's been all over the timeline. Um, and people are ravenously discussing is stocks on chain. Um, this is a big thing like multiple companies are jumping into this one at the same time seems. So, there's like X stocks with backed finance or backed FI. um that's like I think partnered up with both Kraken and maybe also Robin Hood. I'm not sure if that's the same or a different partnership there, but um Kraken for sure. Uh you can trade like these X stocks um tickers on Salana like you know via Radium DEX or just you know onchain essentially. So

there's Spy X, Tesla X, etc. Um and they they have some mechanism where you know they're backed one to one by the the underlying although they've you know they're there's not a lot of trading here and it it's like you know a few million a day I think we we've got the data on the site already um on Blockworks but there's like a few million a day already that's uh in trading volume on these things. Um and they're pretty volatile given that. But uh the conversation is very much here's what I have a gripe about and I guess I'd love people's takes and thoughts here is like the conversation is very much centered around okay this is either the future of finance or it's worthless and I personally like I have an opinion

here and I think it's somewhere in the middle but um I I don't know I've seen this conversation centered around like this is amazing it unlocks everything like going forward in the future and then the complete opposite where people say like no this is a bad product because of XYZ reasons, it's a zero. Um, what are you guys general thoughts here on just like bringing equities on chain? Like general vibes? How do we think about it? What's what's the what are the next few years look like coming out of this? Is the reason is the reason people say it's a bad product mostly around like oh you don't actually have ownership of the equity or like yeah combination of like you know naturally it's lower liquidity than you know

typical exchanges like there's going to be volatility you don't yeah you don't technically own the stock all those reasons yeah I think probably Danny agree with you I think it's I think it's directionally pretty cool I don't I don't think really groundbreaking I think it's going to be very beneficial for people like gambling on chain. Um, right. I think that's a cool market. That's that's what we've seen to your point, pretty low liquidity. Um, to Smack's point, like I don't know, does anyone really care about if if you own it indirectly through Robin Hood or Kraken, like ostensibly, they're they're titling this stuff properly. Um, so it doesn't does it really matter that you can't redeem spy, like who cares? Um, now Danny, to your point of like in the

future, I still think we're super super far from like real money coming on chain. I mean, I don't want to like derail it too much, but also like traditional equity trading, we had this conversation before, I think actually works pretty well. And it's not clear to me what bringing it on chain really does. Now, for like people trading on Salana internationally, they want to trade spy. Like, I get it. Cool. um don't really know why a hedge fund wants to come on to Salana to trade, you know, spy. It could in the future. Um but yeah, I think I I think I side with you.

I think it's I think it's cool. I think it's an improvement. It's good. Um it's not the future of finance, but it's also not stupid. As somebody who would like to never have to use a bank ever for anything, um I think it's like directionally cool, but I also recognize I'm probably not like the mass market appeal. Like most people are are totally comfortable being like, "Yeah, I'll just have a Fidelity and a Schwab and a Vanguard and also a Robin Hood account and also this other thing." Um I would love Sorry. I I would love like I personally would just it'd

be like I don't Yeah, if I if I didn't have to do that stuff um and I could just kind of like own all my stuff on chain, I would I personally would prefer that. But I also like I I have weird I have like other like yeah finance preferences that I know are not symbolic of like what the general population wants. So it's like doesn't really matter what I want. And um I also yeah am probably more comfortable with with synthetic assets versus um cool I know that Robin Hood is you know has legal rights to whatever equity they're holding on behalf of me. Um, but I yeah, I don't know. I think like the

more interesting stuff is maybe the things that don't currently trade on like public exchanges. Um, and that kind of feels the ethos of that feels more aligned with like the cryptonative user who's who's one more speculative kind of is like, oh, I want exposure to these things that um I don't know, maybe I can't get exposure to today. And if you put it in a synthetic form, I don't care cuz directionally I feel as if I'm getting exposure to it. Um, so like yeah, that's interesting. Doesn't I don't necessarily think that means the market gets massive for it. Um, yeah. Yeah, I think that's a fair take. Like that's the other piece

of this, right? So Vlad, Robin Hood, and also Republic um are both exploring products here where um they're looking to open up like basically like a derivative or like a you know some kind of vehicle that lets you you know sort of trade the the value of if it's open AI or if it's SpaceX or whatever private company's equity or you know stock via like a tokenized form of this thing. Um, I agree with the points you made there. Like it seems it seems directionally aligned with like the trader base today who just, you know, give me give me something that like maybe I can be early to and try to hit a 10x on. Um, and maybe a bunch of those people like, you

know, they're not going to look at the fundamentals. They're they're maybe not really thinking about like buying and holding something for 10 year time horizon. like they just want to, you know, they know what SpaceX does and they see the rocket launches in the news and they're like, man, I want to like bid this thing. Um, and I think it appeals to them. But I agree with that point that I don't know that this like that necessarily evolves into a massive market, but I don't think that it really has to either. Yeah. The only Sorry, go ahead. No, I was just going to say like to your to your point on debanking yourself, like if you were given the option, would you take all of your traditional assets and hold them in self- custody, like I'm I'm of the view that I actually

like as I'm in crypto for more and more time, I want to get less in cold storage cuz I hate it and it makes me feel like super super uncomfortable. Like every incremental Bitcoin that I buy is, you know, within my Fidelity account. Um, you know, maybe I'm a heretic for saying that, but I just like I hate self-custody. And the idea of hoarding like my entire, you know, net worth that's in traditional equities onto my ledger and, you know, having pieces of paper across the world that access that just like terrifies me. And like I just I just I mean I just know obviously 99.99% of the population's never going to do that. So, if you take that to the logical conclusion of like putting this stuff on chain, but it's still custody at Robin Hood or custody at Coinbase and

you're not holding your own keys, then you're kind of right back in the same place as, you know, having it at Fidelity or Schwab, right? Yeah, I think that's the way more attractive like actual user experience for 99% of people for sure. Um, yeah, I don't I don't disagree with you. Like I all I tell like all my friends and family like you should not self custody cuz like the odds of you losing your keys is infinitely higher than like Coinbase going bankrupt or Robin Hood going bankrupt and you like getting your all your money stolen that way or or lost that way. Totally. Yeah. Yeah. So, I guess my my point is just like if if that's the end result and you're just trading stocks on Coinbase, you're kind

of just trading stocks on Fidelity. And it seems to me like the same exact thing. Yeah. The only the only thing that the only reason I brought I I like said that it's directionally interesting at least for me personally is like cool if you do want like a world in which I can actually not deal with like Coinbase um is just like personally more interesting and okay if I can get exposure to traditional stuff or the synthetic version of them and then um like borrow against that the same way you could like borrow against you know your Vanguard account or something like that like that. It's just there's more flexibility for admittedly like a tiny group of people which is why I'm like it doesn't necessarily move the needle.

Yeah, I mean I would agree with everything you guys said. Um, I mean I do think that there is demand just like since Robin Hood launched that like just various chats like I think there is more demand for it like across the world than US-based but again it goes back to what we're talking about with you know the treasury companies in a way where like if you kind of you know there's so many ways to buy pure BTC now like but you know for the rest of the world like I I can see there are people that are excited about getting exposure to US markets on chain. I do think um the private market stuff like it's definitely I mean we saw OpenAI push back a little bit against Robin Hood's announcement but that stuff to me is like much more exciting especially as I

mean we've seen more IPOs recently mainly just crypto stuff but like you know you have private companies that are reaching towards like trillion dollar valuations like I think there's kind of some mutual benefit to the early employees there and to the crypto rails to kind of bring that early private stuff on chain and is it's infinitely more complex like that's there's there's plenty of stuff to work through there. Um, but I'm much more excited about kind of the the private stuff as there are more companies that are staying private longer. Espec The other point I would make on that is like you you like you saw this with like Circle, right? There was like a bunch of circle OTC stuff call it like 12 months ago and

not the entire world had access to be like cool I can buy like this circle OTC at call it X dollars but there were plenty of people and I'm sure a lot of crypto people who had a view of cool I would for sure want to have bought that had I had the opportunity or known it existed and so for them I think that stuff is like okay cool open III pushes back and it's like you don't have the equity blah blah blah like a world in which you have even like per on these things or synthetic versions of them. People will say cool like I don't I directionally want to own circle at X billion even though it's private and I think that it will go public in the next 18 months and like you have a view on that you want to express it and you

can't today. Um I think people will have will continue to have that feeling for for privates. Yeah. And I also think like just inherently how crypto works like it's not necessarily good or bad, but like if I was an early employee of one of these companies, I'll be begging to put it on chain because the speculative premium is probably raising, you know, the valuation of what I hold to what maybe would be worth in in the private market. I'd be like, hell yeah, put that on chain. Like maybe, you know, maybe it's only a couple hundred million or a billion, but like I don't know. Like you said, I mean, you know how crypto works, like the the speculative nature can kind of just take over. I would be all for putting my private equity on chain. Are are you are you suggesting as a as an

early employee at a company you would want to be hedging your internal exposure? Is this is this No, no, no, no, no, no, never. Just checking. No, you'd want to get more long. He'd actually go 100x long on top of on top of his holdings that are vesting. That's what I would do. I would just yeah I would just be confident that like I don't know like if you have open AI like if you put it on chain tomorrow whatever the private valuation is now like I would very confidently bet that like the onchain valuation would be higher and like it doesn't necessarily mean that the offchain valuation has to meet that but like maybe there's an incremental 10 20% increase just because obviously it depends on you know the liquidity and volume that are on chain but like if I

was holding it offchain I'd be pointing at the onchain market and be like look maybe it should actually be valued 10 20% higher. there. Yeah, I think I would agree with that take from the viewpoint that like I mean I think Smack kind of mentioned it, but like I think there's there's latent demand from just, you know, your average retail investor who is not allowed or enabled to invest in any of these things today. And regardless of whether or not that would actually result in them making more money than they do in the public markets, like I don't even think like that's not a factor in the decision-making. It's literally just like, okay, I know what open AI is. Like AI super cycle, you know, 2030 it's going to be the most valuable company in the world or whatever, you know,

whatever the the thought or the narrative is. But like, yeah, I think there's a ton of people who would like throw caution to the wind and be like, "Yeah, let let me get some exposure to this thing regardless of what the actual, you know, pricing of the privates are." Um, and obviously for if it's if it's Robin Hood, if it's Republic, like there's a ton of money in it for them. If you have a bunch of price insensitive people who are willing to just like eat a massive fee or spread on a thing like this as memecoin traders do on chain with like trading bots for example. Um there's a ton of money to be made in a business like that. So I think it's sort of natural that they're going there.

James though I want I want to get your takes here. Like we've seen some of the back and forth. I think I think Tolk mentioned like you know OpenAI statement regarding uh like you know this is not real equity like you guys don't we have the right of first refusal on transfer of shares and whatnot. Um what's what's like the the downside here? There's there's clearly like a regulatory and like legal question mark here that these companies are stepping into. Yeah. So like this stuff is super boring arcane document stuff that governs private companies, right? So like the vast majority of call like the privates that you'd want access to. So like OpenAI, Tesla, they all have roofers, right? So that basically means if if Danny owns SpaceX, he bought it years ago and he

wants to sell it to Westy, Musk and the team has the right to buy it at that prevailing price instead of allowing him to do it. Um, so right, obviously this matters in terms of if you care about the actual asset transferring over to you, which most people I think would if they think this thing is eventually going to go public. Um, and I think it it kind of segus to your point, Danny, of like, sure, you can you can put this stuff on chain, but it's going to trade in such a detached form compared to like what the actual price is that like sure people are going to want to speculate it, but my point to you, I said this to you before, is like if that's the logic, why don't and it's going to be so untethered from reality,

then like why don't like we just go on the pump fund and spin up like OpenAIcoin because it effectively is the same thing. Or you could even just incentivize market makers to spin up like a per market and that might actually trade even tighter, right? Just given the mechanics of how how per PERPS operate. Um versus like these ex Open AI. Like it's just there's nothing to to make it trade anywhere remotely close to the equity of OpenAI. And there's not going to be any market maker that wants to come in and like attempt to arbitrage that. One, because it's just impossible. Um and two, there's not going to be enough money for it. So like it it feels on the private side it's a total delineation from like listed equities that we've kind of just created meme coins which is fine. It's not it's not

bad, right? Like it is people want it. They can trade it. But like there was someone, you know, I won't name who on on Twitter was writing how like, oh, how did no one no one knew that these weren't actually equities? If you read the docs, they're like forward contracts and sales. And it's like, okay, fine. Yeah. Like if if you think the average participant on like Jupiter is going to spin is going to look into the docs and understand what they're actually buying, that's that's your prerogative. That's fine. Um, yeah. I don't know. I you just don't really get what it does. But whatever. Yeah, I I agree with that.

Like the average retail person like they they they don't care if if there's a right to anything here. It's like quite literally like it give me the synthetic thing. I just want to like bet on this going up. But to your point like and I would agree to an extent here. Um and something that I thought was interesting actually is on OpenAI's tweet the other day or this morning or whenever that was Elon Musk his like outrage against Sam Alman or whatever is like continuing. He's like you don't have real equity or whatever. I I would be curious to see like you know Elon Musk kind of is historically a little bit of like a a you know a fan of the people um in some ways. So I don't know you could have personalities who are open to exploring

uh a market like this and I wouldn't be surprised as well like OpenAI um what Stripe like I mean these are some of the most highly valued private companies in the world right like in the hundreds of billions of dollars like already um it wouldn't surprise me as well if like these guys have a ton of leverage right they're some of the most valuable you know of course they're going to you know show show their power and like you know flex flex their weight on that point. But, you know, there might be smaller, more overlooked private companies who might think like, oh yeah, man, like if we could have our if we could have retail like bid up our our privates on chain and like, you know, build some buzz around it, um, maybe that would be like a positive for us. Um, yeah, I think

there's an angle there. Don't uh don't forget for a lot of these like large companies like illquidity is a feature, not a bug, right? like Stripe is private not because they can't find a way to go public but because it suits their needs to do so, right? So, a lot of times they have a negative incentive to liquidize their their equity and allow people to trade it. Cool. No other big thoughts? Yeah, I I think the big takeaway for me is just like I I would expect and I'm curious to see cuz Vlad and I think even the Republic guys, they've hinted at this, but it sounds like there are maybe some companies who are actually interested in in partnering up to do this. Um I think for the the Robin Hood like presentation

that they did, it was like, you know, they have a a wealthy investor who has equity in some of these things. And so, you know, maybe in that specific scenario of of doing the open AI thing, maybe there's a maybe they're going to end up going to court over that or or there'll be a little bit of bit of a battle there. But for other companies who might actually be interested, I'll be curious to see if if that materializes and, you know, who who announces that they're I do wondered in opening a market. I do wonder how much negative uh selection bias you get from stuff like that as well, right? There will definitely be companies who are like "Oh like is there a way I can monetize this uh this like private equity that I hold that I don't actually think will ever

materialize into something. Uh but yeah, I guess that's a Yeah, I think Wolf Swap think is thinking about um launching on X stocks. That's a that's a that's a very salient point. Appreciate that. Yeah. Yeah. after right after you raise. Exactly. Yeah. That's just good business. It's Let's be real. Um, cool. Yeah, I think that's a great point and and honestly, I mean, there's probably already some of that bias in some of the uh online like angel platforms for retail that that pop up, right? You're you're getting the you're getting the last pickings of things that other people don't didn't want to invest in.

So, that's that's certainly going to be a factor as well. Um, Smack, I want to lean into you a little bit though, uh, and talk about the venture side of crypto right now. I'll preface this by saying, uh, me and the crew, Bach and Carlos from the research team, we talked to John Charb last week at Permissionless. Um, and one of the big takeaways from him that he was saying about the current current things like deals that they were seeing and and what people were raising for was the most the most active or like the most interesting things the you know the most like new products and and dev talent that they were seeing were uh working on prediction markets and launchpads. And my question to him was like are we just in this sort of like bias loop again

where you know when a bunch of big L2s came out you know then we went and raised 100 L2s and then you know now with big poly market raise and a big pump fund raise like now we're just going to spin out 100 more of these things. I'm curious your thoughts on like how how VC for crypto is looking right now like what sort of deals what opportunities and what's interesting. Yeah, I think actually um I feel like I saw more prediction market pitches um last summer almost like leading into the um Yeah. Yeah, it was pro it was probably last summer. Um, and I think that was kind of like Poly Market, you know, there was a bunch of interest there, but also um I don't know that that felt like people were trying to

viewed it as like, okay, here's like an event. Um, and this is like a way that I can grab users quickly. And I think there was like just a lot of that happening last summer. So I I actually I feel like I haven't seen that many new prediction market things recently personally at least. Um one I do think that it's still interesting like there is kind of this argument people are always talking about Calian Poly Market. I actually don't like I I used to use Poly Market a lot. I don't use it as much anymore and I just kind of feel like both of those products are a little bit stale. some maybe bearish th like those two incumbents today. Uh I think there's like more interesting stuff that you can

can do and so like I don't know. Um I don't think that world has been necessarily one. Um but yeah, I haven't seen too many of those. I think I've actually personally probably seen a bunch more. Uh, a lot of people are building kind of like mobile first stuff, which is I think exciting because to me, yeah, I mean to me just like we need mobile products. Um, and app store obviously always been an issue. PWAs are not good. Like that's not a good user experience. It's kind of the default that people used after Fr. And everyone was like, "Oh, cool. I'll build a PWA."

But it's just not the same as native apps. But I I've seen Yeah, there's definitely a lot of people leaning into I guess what would become competing with Robin Hood it feels like on a longer term term time horizon of like plugging into perexes and trying to be uh mobile first per trading which is directionally I think interesting but again it's kind of like devil in the details and you have you really have to build like an awesome product which crypto is not necessarily good at uh that that stuff I I don't know. I think that's cool because I think pers are we're seeing are just going to become like a legalized product in the US as well and and they're offered elsewhere

and it's just a better product in my opinion and better instrument than what people use today to do the same thing like zero day x-ree options or even options in general is kind of like more suitable as a hedging instrument not a like speculative thing for retail. Um, so I think that's those are interesting. I think that's going to be like an insanely competitive space. Um, that's I've seen, yeah, a ton of ton of things like that. Um, I I don't I Yeah, I I suspect that like a couple months from now there'll be, you know, a 100x version of that as some of them start to take off and people use them and they're like, "Oh, this is cool. I should build this." Uh, but I

think those teams probably are the ones doing it now probably already have a head start. Um, and then yeah, I don't I don't know. I think that's the dominant share of stuff I've seen. People are spending a ton of time on Hyperlid obviously that ecosystem trying to like build it out and see like okay, what do we need here so that it's more than just the purpose stacks. I think everybody's waiting for the core team or like some of the some of the um I don't know the architecture changes to go live. Uh so I don't know there's a little bit of a wait and see on stuff getting built there, but a lot of people are are spending time there for sure. That's maybe the the two things I've seen personally over the last like 8 to 12 weeks.

What what do you think? That's what I was gonna ask one about like um kind of early stage valuation wise kind of what you're seeing there whether it you know kind of remains a little elevated or um what that's looking like and then two like we see a lot of conversation nowadays with you know equities coming on chain and circle IPOing kind of like the equity verse token debate and kind of how you guys think about that internally. Um if you have thoughts on on those too, I'd love to hear them. Yeah, I mean it's I don't know crypto pricing even at early stage is always kind of I don't know there's there's still premium to like traditional venture which yeah it's you know like I

see I see the stuff that kind of other people at the fund do that on the trad side and it's it's uh it's kind of stark of like the team and how much they're raising. It's like, oh yeah, we're raising, you know, a million dollars on six posts and there's two people who have been working on like have PhDs and been working in this space for like 12 years. And then crypto is kind of like, yeah, a couple devs thought of this idea like three weeks ago. We're going to raise, you know, three on 30. And you're like, so yeah, that still exists. I mean, it's maybe not as extreme as it was uh a couple months ago, but um yeah, I mean, the the token equity thing is also

I don't know. It's it's never been I mean because we're do we're investing like preede generally. um we like the teams to like have an idea of whether a token makes sense or not and not necessarily hey this is what the token will do or the it's like it it's it's a little bit of like generally I think the token still gets a premium but also people are thinking more about whether or not the things they're building need tokens um especially because like the the trading bots right all of those businesses like who knows how long you can keep clipping 1% on volume. It's kind of insane, but like they make real revenues and have sustained like user bases. So,

there's maybe a little bit of a loosening on that side of people being like, "Oh, actually, you can build things where the equity is is worth something, but I I still it's still not like uh yeah, I think that most people are still interested in tokens. Uh yeah, for all the reasons that they've been probably overvalued over the last however many years. Are you saying the um the L2 valuations, you know, that we referenced a little bit ago to start this conversation, are you saying those might have been wrong a couple years ago?

Um I would say we have too many L2s with no users. Yeah. Yeah. We've continued down the um from chain to apps now. Like I think that is it's actually playing out to an extent where you know you don't just you don't just raise the L2 at a you know X billion valuation now it's you you build an app that that users use and you make money on like you know you mentioned the telegram bots. Um those guys are printing a lot of money. I will say uh this is something that gets talked about a lot right is like how long can you keep clipping 1% fees on stuff? Um,

maybe forever is my thought here. Like when you look at Coinbase or Robin Hood, like the retail users that just like use the simple interface for these things, like I mean they're paying massive spreads on their trades even for like, you know, Bitcoin for example. Um, and like I think fundamentally these people just like are not they're not price sensitive to like paying that extra 1% when they just like want to hit the bid button. I guess I'd be curious for some takes here. Like obviously, you know, some, you know, professional, you know, large institutions are not going to slam billions of dollars through a trading bot, but um the retail like audience that they cater to, in my view, I I

don't think that they care. I totally agree because you're you're you're throwing in like 200 bucks and you either you either zero it or your expectation, however misguided, is that it's going to go up 2,000%. Right? So I I think they even pay more than 1% if they're even, you know, aware at all of how much they're paying, which they probably don't even think about. Yeah. I mean, I I I would fully agree with that. Like I think I think the trading bot stuff like I mean personally still like I I mean I don't spend too much time in the trenches nowadays but like when I do like it's still through personally for me like still through Photon and that's cuz I don't know I just got used to to the interface and

like I know that you know the slippage and the fees like aren't great but I mean the stuff you're buying like it's not because you're trying to clip off you know 10 to 12% like you're trying like James said like you're trying to hit you know a,000% or more and so like that marginal, you know, some people I don't know, I would say talking to people that trade on chain often, like it doesn't necessarily matter to them. They care more about um speed than execution. Obviously, that you know, there's kind of like a a push and pull there. Like it depends on the valuation of the asset. But when you're talking like early stuff and just trading, you know, kind of onchain generally, like it's much more about um speed and easy UX UI than it is about execution. And I

mean that goes to a certain limit like you can't you know if somebody starts clipping two and a half 3% like people will start caring but you know the 1% like I think it's just kind of I don't know it's just kind of the cost of doing business in a way. Yeah, I I actually I tend to agree with you for the onchain stuff and and it's kind of funny too because like that was the right all of Wall Street was joking about how Coinbase is oh they'll never like these spreads will compress like these fees will compress they can't possibly char it's like okay well it's 2025 they're still ripping retail's face off on execution and people don't necessarily care yeah even on chain I guess the like you kind of see this sophisticated actor play out where, you know, the the mass

like factory memecoin farmers like, yeah, they're going to write up their own contracts and like their have their own setup to where they're obviously not using trading bots to like launch, snipe, and dump like 50,000 coins a day. Um, so obviously to them it matters, right? they're not going to pay an extra 1% so they can like, you know, mass farm new tokens and and, you know, flip them from 5k to 20k market cap or 5k to 8k market cap, like whatever the number is. Um, because they, you know, they're their margins are are much thinner and they're just they're just trying to eek out that little bit per per swap. But yeah, for like, you know, average Joe who wants to buy Bunkcoin or whatever, like he's just trying to he's trying to

hit the 10x and the 1%, the 2%, it it doesn't matter. Uh, I think that's a good point, Tulsk. Like it it would be very difficult for some, you know, a new team to come in and say, "Yeah, we're doing 5% on swaps." Uh, you know, I think the users would you'd probably end up feeling that one. But to stay kind of where we are, um, and they've actually compressed a little bit. I think like net fees um on a lot of these bots are down to like 60 50 60 70 bips now. Um, so they've come down a little bit, but the I guess the other factor there is it's like you're paying, you know, 1% to pump fun and then maybe you're paying 70 bips to Photon and then and maybe you're paying, you know, some other amount of bips to somebody else in between that

stack. Like that's kind of what's seemingly has been happening more so um is each individual layer has maybe been compressing a little bit, but we've been adding more layers and and people are kind of paying those, you know, for the extra services or like just for the the speed and execution or the extra pieces of the product that they like. Do you think do you think they're do you think they're um any of these things are durable beyond like shorter time horizon uh fee capture? When I think of like just thinking through like how this has evolved, right? You had UniTe, you had Banana Gun, you had like Photon, you have Axiom, all these things go in waves where people are like, "Oh, I like using this one. I like using this one." And some users get sticky like Toes likes

Photon and so he still uses that. But yeah, I I I wonder do like do you have a do any of you have a view on durability or like whether or not these things can build out uh products beyond the beyond what how they exist today? Um, or do you think they're all kind of destined to be good almost like lifestyleish businesses where cool if you're a couple founders and you can build this product and you can clip like tens of millions of fees over you six to 12 months or something like that and it's like cool yeah that's awesome product that made a shitload of money.

Um, or do you think one of these or a version of this turns into like a more I don't know like full like starts bolting on other other products or services beyond just um like a really good uh low latency bot. Yeah, I think so. I think we're already we're seeing like one step in that direction with what Axiom did, which was not I mean it's like revolutionary for memecoin bots, but you know they tossed in the hyperlquid ps in addition to the memecoin trading. Um, that seems like an inevitable line of like add these additional, you know, pieces and parts that retail traders or like that this

general audience likes to do. To me, like in my head when I think about what that like future state couple years down the road, like you know, you bolt on a couple more trading or other products that are meaningful, it's like it it kind of like looks like what Robin Hood's business is today, right? Right? Like you can trade crypto there. You can do zero DTE options. Like you can have your credit card on there. I don't know if like an Axiom or a trading V. I'd say it's pretty murky to like say that you'd pick one of those guys today and be like, yeah, in the future they like will be a new fintech, but that definitely seems like the direction they're trending is I would agree with that point.

Yeah. I mean, I would look at Axiom as a good example. I think they're all going to converge and there's a lot of the same features they're going to add and it makes sense as you play it out. It's like you start with your front end for like Pumpthon stuff, then you add the other launchpads, then you add PERS, and then you say, "Oh, I have all the distribution. I'm going to make my own launchpad. I want to make my own pers." And like you just kind of like continuously add stuff. At a certain point, there's like only so much you can add and and you like it definitely requires you to like always be on top of the ball of like what the DGEN crowd of money is doing. But yeah, I mean, they're all going to converge from the same things.

Yeah, I mean, you see it from even like Jupiter, too. Like, I mean, they obviously have kind of a different core business, but like they're starting to expand into, you know, the memecoin stuff. And I would honestly probably rather bet on a team or a platform like Jupiter expanding into what the bots do versus the opposite. Um, and then as far as like sticky users, like yeah, we've seen a ton of Axiom growth. Um, but the other thing is why these things are so sticky now is there's, you know, there's not really airdrops anymore. That used to be, it's the same thing you see with, you know, perplexes. And it used to be mercenary capital that would shift from, you know, one thing to the other to the other. But now it's kind of just like, well, nobody's really airdropping, so

like, why don't I just stick with with what I'm comfortable with? Um, is kind of what I think the the kind of broad view on that would be. And that's why these, you know, the kind of main three have remained pretty sticky. Cool. Yeah. And I I think maybe I mean we're maybe seeing the formation of like you could end up seeing stock zero DTE or like stock per um onchain as well. That might be like another product that gets knocked into the tool belt of these things. You know, you got X stocks, you've got what's the like OIM, like you can you can go long short like spy on there. You got like

some limited options, but you know, I could see similar to this view of like, you know, Robin Hood has all these trading things like, you know, trading bot could could get that in the arsenal as well. Just another thing for uh people to gamble on at the same time as their as their memes in their crypto per. Um, cool. Well, speaking of uh speaking of stocks, just kind of maybe close like overall broad market like some of the the various chats I'm in, like people are more I don't know, there's more talk about various stocks and and options right now than there is alts and and crypto market outside of obviously kind of BTC and hype, but like outside of that, like I'm just looking around like what what's going on here?

Yeah, I'll echo that. Like I don't know if you guys have seen it as well, but the I think there's definitely been like chatter of like the like the crypto to to equity rotation or like the alts to to stocks rotation. Um and maybe part of that is like alts are kind of eating, you know, they're kind of eating And in the meantime, like Circle ripped off its IPO. Like Coinbase and and Hood are doing very well. Um, I'm sure there's plenty other examples, but it's like all of the crypto-related equities are going up and then obviously all the Treasury CO like they're every time a new Treasury Co. announces like, "Hey, we bought this amount or we got, you know, we raised this much money. We're going to buy Bitcoin to get on the

Treasury balance," then the then the share price rips. Um, so I don't know. I think part of it is people are sitting around in their alt altcoin holdings and kind of feeling sad and seeing all these equities just running up. Yeah, definitely. I mean it's definitely a broader kind of overall crypto market structure thing that you know people have kind of been harping on for I don't know you know a year two years now like about alts and um I don't know like you look at again like outside of BTC and hype like it kind of seems like the past week two weeks like sentiment positioning everything like you know you just scroll CT like and you would think that people are you know just printing everything's ripping and then you know I

was looking at the charts this morning and like from the Middle least escalation on June 11th. Pretty much everything is down 5 to 10% plus still. Like I think people are just so desperate for like I don't know just for for alts and and green candles and it's just like I don't know there's there's some weird kind of sentiment like I don't know. I'm still trying to work through what that means. But I was just looking this morning and I was just like literally since June 11th you know the Middle East escalation stuff is you know still down. But you you look at the conversations and and chats and and on CT and again like you would you would assume that you know stuff is up 30% from the lows and you know it's it's bounced pretty hard from the lows but it's still you know trading below where

it was 3 weeks ago. So, it's really um I don't know. I mean, that was a lot of conversation that permissionless, too. It's just like nobody really wants to hold alts, you know? It's kind of like everybody's in BTC and hype and like that's fine and those are I mean those are those are good coins. Like I'm not really interested in in necessarily selling some of those. I sold a little hype the other day, but like alts I I don't know, man. It's just it is uh it's brutal out there. I basically everyone I talk to at permissionless is in the same five coins and on CT I feel like I see alt season calls like everywhere in the past like week or so and it's insane and every

single time people call for alt season it doesn't happen. It's the same five coins that go up. Um, yeah. I don't know. It feels like ETH BTC bottom. Yeah, exactly. ETH BTC forever bottom. Someone said that on our morning call today. Forever. Oh, no. Name and shame. That's terrifying. Yeah, that's terrifying. Can't do that. Um, but yeah, I mean it feels like the same a lot of the same patterns repeating themselves and then yeah, some the sentiment is kind of weird though. Like people do seem euphoric or like super bullish for some weird reason you'd expect the

prices to be at least of alts like much higher than they are. Yeah. I mean, we we've had the continuation of the dispersion, right? Like I think that's been a a part of the conversation for the past what year and a half, two years now is just like there's way way more coins and alts and tokens and meme coins than like could possibly be held up in the same way as like the market went up in 2021. And I I do think a large portion of you know people in this space um are are probably still indexing even if subconsciously to the market like performance of 2020 and

2021. Um and it's just not possible to like necessarily replicate that in the same way. But especially when you have like, you know, you went from maybe thousands of coins or tokens to like literally millions of them now. Um, propping up and having like all alts go up is just like a thing that's not possible. Yeah. The only thing we talked for revenue, God forbid you would want something to make money. Um but yeah, I mean it's just another thing, you know, talked about last a lot last week is just like

it's also the just the natural maturation of the market that's been around for, you know, 13 14 years now. Like obviously the old market has been I don't know really since like 2020. But I don't know, it's just kind of a thing that happens in markets like there's no I don't know like I think it's broadly healthy for the overall general market. Um, but it doesn't necessarily make people happy, especially people, you know, just sitting at all. It's um, but yeah, like I said, overall, like I just think it's the maturation of the market. It's, you know, the evolution of the market and and it's it's probably good and I know people don't necessarily want to hear that. Um, but for the space, like, you know, it's it's just where it was headed long term if it was going to

be, you know, institutionalized and adopted. I forget who, but somebody somebody said something to me the the other day or a couple days ago that I thought was really relevant to this point, pretty funny, and it was just I think it was related to the bringing stocks on chain thing. Um, and was the conversation was about like, you know, how do they how do they redeem like do you actually, you know, have ownership to the underlying or what have you. And the end of that conversation was kind of like no, none of that really matters. like you know people they just want to get exposure and like the details are I mean the details are important but it's not like really central to the point so much and they're kind of like so so this is just like again like backend tech like that's not that cool anymore.

Uh and it's like yeah man that's what it is. It's just you know you you put some stuff on chain it's just the rails to facilitate it. It's like when you think of it that way it's really not that exciting. Um how much money does it generate for you? Uh and what should that be worth? That's that's kind of where we're at. I think some people are upset by that because they thought like, you know, future of finance, you know, hundred billion dollars, send it to the freaking moon. Uh, and the reality is just like a little more simple than that. Cool. Any if anyone has any uh very insightful takes, I'll take them right now. But I think we can close out. I thought that was a good conversation uh and get everybody some rest before the 4th of July tomorrow.

Later, guys. Yeah. Um, yeah. I got nothing to close on. I mean, yeah. Everybody have a have a good weekend. Enjoy the holiday weekend. Yeah. Try not to look at charts too much. All right. Stay off the charts, touch some grass, go have some fun. For all the Americans out there, July 4th, tomorrow, uh, you know, don't don't get seriously injured if you're playing with fireworks or anything like that. Be safe. Uh, and we will see you all next week. Thanks for coming on, guys, and thanks for tuning in, everyone. [Music]