The 4 Stages of a Bull Market | Roundup

Transcript

the like anxiety that you will feel which then comes at the detriment of everything else in your life if you're trying to chase every single narrative I don't think can be overstated if you're a full-time Trader sure it makes sense if you're anything else a Founder a builder you don't work in crypto it's just your your hobby if you try to chase every single narrative you will drive yourself and everyone around you mad if you are an Empire listener hopefully you've played around on chain and if you have on that you know that transferring assets across different chains is a pain to put it nicely that is why we are incredibly excited to have the Wormhole Foundation as a partner of the Empire podcast stewards of the Wormhole

protocol supporting over 30 different blockchains and six different run times stay tuned later in the show we have a cool thing that you can claim which is a wormhole nft just for Empire listeners this episode is brought to you by PayPal here at Empire you know that Santi and I are really into real world use cases and always on on the lookout for the next killer blockchain app we're excited to share that PayPal has arrived in crypto to unveil a way to seamlessly connect Fiat to digital currencies later in the show you will find out how you can use PUSD to check out at millions of online stores all right everyone eat Denver week Santi I are not at eat Denver we

stayed home to make sure we could get a good podcast in for you so Santi how you doing man kicha I'm doing great how are you I you you gotta give some context around that or that is going to seem quite odd to people uh I'm in uh Tokyo uh attempting to run the Tokyo Marathon this Sunday and I say attempting because I have I've been nursing this shin splin and ankle pain but I finally today I had this breakthrough where I I figured out what it was like the worst is being in pain and not knowing what it is because sometimes pain can like start you feel

like you have knee pain but the real issue is like your hip or something else biomechanically and I just felt a huge relief two hours before recording this pod I'm like huh it's here and then like the mind just plays weird tricks on you every time I'm running a marathon like leading up to it it just it's mental games which is kind of nice because it's so it's a bit distracting to what is going on in crypto I'm kind of focused on running the race and actually if I don't run it if like Sunday morning I wake up and I'm just not feeling it or I start running and I'm not feeling it I'm prepared to just walk away which is important I feel like it's a good

mindset yeah so lot of a lot of complaints seem to come around around these marathons sick the last some shin splint madeup thing hey I don't know man I'm you know I'm getting old I guess how old how old are you how old are you are you will you dock that this is like um zero knowledge proof I am above 30 below 35 so all that listeners try to guess nice cool we're not meant to run marathons I think people forget just become this huge popular read the book about um running

Barefoot yeah well it's documented in my hometown my home country Mexico the Taro Mara and it's kind of wild I've seen people do in in certain marathons you see all kinds of wild people that are like there's a guy that always runs with a pineapple on his head there's people that run Barefoot I don't know uh I prefer to run on my uh carbon plated Nike shoes that make me feel like I'm GNA run two seconds faster fair enough yeah that's what I would be on to I'm like give me the give give me those good shoes yeah so e Denver week why did you um so did you skip it for the marathon or you you're not a big conference guy in general no although e Denver historically it's been a good conference

um there's a lot of people there uh got so many of like are in Denver um there's some really good chanels I'll probably be what I like to do is I'll go to YouTube and like listen to some of the um uh you know panels in 2x speed because the reality is sometimes when you're in these conferen you can't even like listen well um the setup is not great they're all spread across the city and so and it also like you're catching up with people so you miss a lot of the panels um but I like to go to one or two conferences a year because it's kind of important to meet people in real life yeah yeah no it is it is I you've got some that's how you met stany right and

did the yes so I credit my best trade one of my best trades to going to actually out here before covid uh the last Defcon before covid was in Osaka and it was actually I was thinking a lot about that this week uh not only like this playlist of 2021 came about and it was it literally was like reminding me of the exact same moment Dev kosaka I was applying to a16z crypto while at the same time talking to Ben at parfi and this this this can't have been 2021 you mean 20 it must be way early yeah 20 the the playlist is a bit tricky but yeah 2020 I see 2019 2020 I think it

was 2019 or 2020 right when did you join parfi 20 great question we talked for like six seven months before I officially joined and in that process I was applying a6c because they were looking for a par and I got pretty far there they didn't end up hiring me they hired Ariana um oh is you versus Ariana I have a funny Ariana story actually yeah I do too um shout out to Ariana she's great um we she was running a uh she was running a Beday company or something oh no she was running a before she joined a16z she was running a um you know she had her different fund that like kind of got absorbed into Inu sff you remember that and we we want her to

speak at like one of the first um blockworks events and I think the company was called tushy so I just pull emailed her like every week it was just like got poop because you know no one no one knew no one knew block Works no one would respond to Mike and I we had to do ridiculous stuff to get people to respond so we sent that like 10 times and then she finally was like please stop please stop emailing me I it's a it's an important like uh pause there because we both if if you go back not too long ago this is 2020 we're talking about 2019 it feels like we were nobody you're lost you feel like you're I felt at the time like I was writing a lot I was

coming through trying to document and learn from my mistakes from 2018 i' done incredibly well but kind of I wanted to feel like I didn't was not feeling very relevant um and wanted to have a bigger impact I felt that joining a16z would be a good move because I think they have one of the best microphones as a tier one VC firm being the most aggressive in crypto at the time I felt that it was a great opportunity for me to kind of jump into like a step function and really um I don't know they had great podcasts like I love writing I'm like okay this could be a great move but it was like

you feel like you're a bit like lost because no one cares about crypto but uh going to conferences at the time was like the the best thing that for me was to meet people and in that process I it was right before I joined Pari just coming back to the story of Defcon uh and there was like 20 booths in Devcon and a was one of them and it was e land at the time but they still had that cute little ghost and I was like well this is interesting and so I I met St who was like sitting in the booth by himself and it was my second deal of Pary the first one was kyber but it was the same strategy at the time it was

like redesigning the tokens so that you would reward only stakers not everyone because a lot of these tokens were in exchanges run like Finance after the icos and you're like well you probably should reward active participants and at the time it seemed so obvious now and anyways it was uh probably one of the best deals that I've done Len was was at like 5 million market cap or something like that and it was hard to buy so we had to we had to go direct we had to go OTC and convince uh stany and the team that we were the right partner for them put in a lot of work to convince him and it was a great journey and I'm excited to go to London just to bring It full

circle to conferences because I will grab dinner with stanie who friend he's one of my closest uh friends in crypto I'd say yeah they had a they had a big Ann M this week so lens is now fully permissionless I think they had their their biggest or one of their biggest sign up days ever actually so yeah shout out to them um man Market's ripping this week we've got uh calm energy for uh how how what this week has looked like so Bitcoin ran up to I think it touched 64 maybe hit 635 yeah uh coinbase went down for a little bit um a little for a little bit zero balances on their account I was seeing zero balance is but that I mean that is about as clear of a sign as you

can have that the market is coming back is when is when coinbase fits is out for a little yeah absolutely yeah yeah it's been interesting the over the last couple days we've been having good conversations with the folks of like uh Jason Maple Leaf Capital who's been on the Pod again a great thinker he's out here in Asia at least and we were just talking about his positioning um he was actually fully deployed in October and he was telling me look I'm I felt uncomfortable and um we were talking about the relative opportunity um of going private more doing more private deals versus liquid

and in what ratio you would allocate to like your top three four positions how we would think this cycle would play out it was just a really good discussion I I love talking to folks like Jason there's a couple people that I go to to rebound certain ideas but yeah everything's uh um well I don't want to like dictate the I would take this conversation one of the things that I try to pay attention two things one the relative outperformance so when Bitcoin does 10 you know 10% 7% what is the relative beta on a one day 7 day 14 day 30day period of some of the other things that I like um and how do those behave and

the reason I look at different time scales is because as we all know you know often times Bitcoin rallies first it stabilizes it sets a new level and then everything else kind of flows right it's in the the E Souls of the world and then alts in that sort of sequence but yeah I sometimes wonder like why certain things are underperforming like you know narratives like AI are such clean bets because there there's not a lot of baggage from prior cycle it's uh it's somewhat mean because a lot of these things are not like really have much traction it's just sort of like a very hot narrative similar to meme coins um also Bitcoin is

like the ultimate meano and I was talking to someone else uh like Jordan who's ex synthetics and uh we were talking about just what Bitcoin can do the cycle that it hasn't that that hasn't done in Prior Cycles because of the ETF uh anyways a lot to talk about I'll pause there but I'm just giving you some ideas of the things that I'm thinking about the other one is you know I think people have already caught up to this idea that the ETF was certainly not priced in so again what is now people are thinking about okay there's the sequences probably aath ETF and then um you know how do you play that and yeah yeah I mean I think look I Bitcoin has is is about what 10% away

from 5% away from full price discovery mode it seems like it's you know it's you start to feel that time the market when things are entering real price Discovery and it feels like we're kind of on the precipice of that I I I wouldn't be surprised if we saw an all-time high in March for Bitcoin um I think uh there's a couple things going on like people are pretty shocked by these alltime by um by the uh the ETF flows so that's obviously the one of the big things um it's we'll talk about the Unis swap govern uh the Unis swap fee switch and um but it seems like coinbase may have won this big case behind the scenes which we can talk about in a little bit um and yeah this e ETF so I mean I had

some conversations with people over the weekend who it seems at this point there's like a greater than 50% chance this e ETF gets approved in May um and that's a May in May yeah interesting I mean I I know nothing I I truly know nothing I just spoke with folks who know way more than I do and they said look they'd put it at you know probably 55 45 or 6040 that an e ETF gets approved in May um so yeah it's cool I mean it's cool to see this happen it's you know what it is it's um you remember when salana was running this fall and I I kind of said I was like look this this is great it doesn't feel like a proper rally though it doesn't feel like a it feels almost more like

the 2019 B you remember the binance io run when like coin ripped but then like pulled back a little bit and it kind of quiet for a little and there's consolidation I was like that bull run reminded me a little more of what what that felt like in 2019 What's Happening Now reminds me of the early days of 2020 after covid or in like you know third week of March fourth week of March after Black Tuesday it's a it's a proper Bitcoin Le rally which is like almost every rally is every it's how it should be I guess I would say there's no there hasn't been a single rally it hasn't started with a Bitcoin rally just the nature of fund flows yeah there's also not been a

single cycle where you're 10% of the top of the prior top and it doesn't get blown past that in every prior cycle once you get to 10% of revisiting the prior Cycles top kudos to sha who brought this to my attention you blow through it so I I I'm still operating under the mind that this year will be uh very positive for just markets crypto as well uh very much risk on yeah and salana is interesting obviously uh the E so ratio has gone down what is it 40% since uh to quote some of the some of the good trolls out there that uh we

were uh hyperventilating the Solana narrative and now we've been quieter uh uh I continue L remind people that most of my portfolio is still Ecentric but I like to talk about things that are catching my attention uh and I still believe that there's no reason why salana can't reach ethereum's market cap I still hold that um so you know am I coping no am I crying I think the no I mean I think look my portfolio is certainly outperforming salana because it's still very much out look publicly look at the things that I've

invested most of the best l2s on the seed rounds and I'm still very much you know hold ethereum so and and ethereum exposure in the ecosystem so um but um yeah I think I think the a lot of the big Market participants are heavy overweight ethereum at the moment just given the eth narrative like a lot of them probably missed um and you see this time and time again if you miss a big narrative like the ETF for Bitcoin then and if you're seeing the price action for Bitcoin and the fund flows into Bitcoin uh being a three times larger

asset than ethereum more right four now uh but I'm thinking of like at the time of pre ETF then imagine what the price action does to ethereum not only because it's a smaller asset base so you're starting from a smaller base so the incremental flows into an ETF of ethereum has a probably bigger impact but also the proof of State component of it like there's just less float out there yeah so those two things anyways I think a lot of folks might are are piling on to this trade yeah all right so I laid out this tweet I had a I had a real bull market tweet here where it's got it's got It's got 985 th000 views almost 5,000 likes it's first time like

you know in engagement it's funny we had so internally we um in the bare Market we had we were kind of split on our leadership team at blockworks like some people really want to want so like Mike and I were like you can't grow top of funnel numbers you can grow like bottom of funnel like you can grow ARR subscriber numbers things like that but you can't grow top of funel like you can't grow your Twitter falling that much in a bear it's like no matter how much you press you just can't grow it um and you know some other folks were like no no we just got to keep growing growing growing I was like you I'm sorry you just you just can't it's just the nature of crypto you just can't grow and so now that the my user I looked at your

user base and my user base that you know you remember that competition that I won uh we probably each didn't grow more than a thousand followers during the bear yeah and now it's crazy there every week I'm gaining a thousand followers yeah same I'm yeah same same same so it's just with the bull Mark so anyways this is big bull market tweet so I want to lay this out so I laid out the four stages of a of a bull market and for context I think one of the biggest if not the biggest tweets I've ever done was the three stages of a bare market and I've got a lot wrong but I think that those three stages ended up being really right and they not only were good for these kind of py little tweets but they actually helped inform block works'

strategy and so I want to kind of share I'm going to quickly do the three stages of the bear and then I want to get into the four stages of the bull to hopefully help one or two people on who are listening to this if you're a Founder kind of like figure out how you should be kind of angling your company or if you're an investor like maybe think about allocations so as a reminder three stages of the bear you had the unwind this is like the excitement and the Greed from the bull market still exists you have these assets that still floors valuations get cut but companies don't really make the tough decisions like killing products doing layoffs things still seem all right it doesn't really feel like a bare Market stage two was forced cap uh forced capitulation and that's where it really started to get

ugly right narrative started to die prices fell 80% then fell another 80% layoffs started to happen mainstream media and like cynic kind of that's when you get like the cynic who really rise up in stage two they kind of laugh and Shout I told you and I would say luna last year excuse me this was 2022 Luna sent us into stage two it's like the diamond hands become the four Sellers and they sell not because they want to but because they have to right Celsius didn't want to sell they had to sell um and there were a lot of companies that blew up in that stage and uh that's kind of like the lower the prices go the louder the Bears got louder the Bears get the lower the prices go it kind of creates this vicious cycle and stage two that's when you get these like prices that crash

really violently and the excitement kind of gets replaced by anger stage three I would say is what the last was what kind of the early half of 23 was like which is just bottomless exhaustion and I know I mean you were mentioning this in 2019 when you're saying like I just want to be relevant basically like I want someone to care about crypto this is the bottomless exhaustion pain and it's it comes after the max pain there's Max Max exhaustion right there's no bounces there's no no narratives prices consolidate sideways or they just kind of trend down a little bit it's really boring um and at the bottom anger is replaced by silence I would say and those three stages helped I think

inform how blockworks thinks about when we should start hiring again what the market will look like so I laid out these four stages of a bull market and I want to lay them out here I'd be curious to see if you agree with this or not so stage one of a bull market is rebirth right the exhaustion from the bare Market still exists the you have you have these kind of Sparks of hope they pop up and they kind of fade away you have a few new narratives that arise but are kind of quickly killed by apathy and this is when a lot of the media or your friends if you talk to them about crypto are still really focused on the bare market blowups right CNBC they're still covering FTX your friends are still talking about s SPF um but all the while prices are kind of quietly recovering

right your your investment that went down 90% in the bare Market just went up 5x but you know still down 50% from the highs and only the the people who are in this cycle I think who realize that we're in a bull market are the folks who have probably seen two cycles so if you I mean were talking about this in when probably summer of 2023 saying look I think we're at the start of a bull market um and I think and and the people who I saw talking about that were like very deeply crypto native people who have seen multiple Cycles most people are still in belief disbelief at this point that it's a bull market that's stage one this is like I don't know what you think of this but I would say probably salana coming back a little

bit uh friendch like when FR Tech kind of popped up I was like that was a sign to me I was like like all right this Market wants something like maybe it's not friend Tech but the market wants something that's stage one I think we just entered stage two which is excitement the bare Market has officially ended coins are nearing all-time highs some coins have blown past all-time highs everyone in crypto understands that we're officially in a bull market but in I'd put quotes around this the real world outside of crypto people like they're not texting you they're not messaging you they're not like they're not pring back into Bitcoin um and that's stage two you kind of feel this like weird combo I don't know how you I saw you kind of I think

your Tweet was a sub tweet of Mike's Mike said uh I don't own enough coins and you said you do own enough coins um but I think you've kind of a lot of people feel feel this weird combo of excited and anxious right your your stack is growing your portfolio is growing but you feel like you don't own enough coins I said on Twitter your your company starts hiring you start ordering the guac again at Chipotle life is good all your crypto friends are winning this is the Calm before the storm so I think we're in this phase right now stage three is Euphoria right everything blows past all-time highs there used to be a new narrative every week now there's a new one daily gets super hard to stay on top of everything super hard to track everything private markets get really crazy so right now behind the scenes

there's a lot of funds that are raising these funds in stage three like the funds announc these $500 million funds they skip the DD they race to deploy every week There's a new company that announces $100 million raise we're mainstream again Forbes Bloomberg CNBC they love crypto um and then weird things happen we start to shift to stage four so at the end of stage three is kind of like Fortune 500 start buying Bitcoin athlet athletes and artists get involved right crypto kind of permeates mainstream culture everything everyone kind of starts to believe that we're going up forever and in this stage you're going to start seeing people saying this is the inst the real institutional cycle the ETF flows make it so that crypto goes up forever this this is what this is the stage when

you start to see those kind of things and what you want to look out for is like delusion seeping into your decision- making and then there's stage four right complete disconnection from reality uh could also be described as Insanity right nothing makes sense anymore you and your company have more money than you thought you'd ever have your friend who knows nothing about crypto launches a token and is worth hundreds of millions overnight right there's probably going to be a crypto person or a Founder an investor buys a sports team Justin Bieber joins foraster crypto company spends a billion dollars on marketing like that is the where a lot a lot of people get arrogant and lazy in this cycle and it ends up causing them a very tough so anyways I'd be curious what you

think of those cycles and like I mean you've you've lived through it even longer than I have like what what do you think about this framing yeah generally I think it offers a good blueprint of things to be aware of um most importantly avoiding catastrophic uh mistakes and I think it's a it's a good it's a good framework for most people I would say um I think people are people are are still arrogant and lazy I don't think that we need to wait for for the end there are certain things that are delusional and make no sense today as they did in the bare market like fch um

and so certain things like generally I do agree um but um yeah I think it's a good good framework for most I was thinking about uh you know last cycle going through um the bear and kind of making sure to be I think it's important to you asked me in I think last year if I was of the mind that you should always hold certain things like Bitcoin and ethereum and never sell or if there was a PRI price Target at which I would sell and I answered yes there is always a price Target by which I would sell um there's always an opportunity

cost and and I'm just of that mind that there comes a point where things don't make sense and that level no one really tells you what that is um but I'll I'll give you a perhaps a different perspective and I tweeted about this today I won't read the entire tweet but seems to have resonated with certain people uh you know there are many things that change and others that never change and I read this week on the way here this book by Morgan howel uh which has dubbed I think uh things that never change I think it's name of the book one second I will pull it up it is called yeah same same as

ever ever Morgan how highend book I read his first one psychology of money and it was really good yeah he's he's a great writer same as ever Morgan howel it's hard to read in the bowl I appreciate that read that it's really really good so um it got me thinking of things that never change and things that all will change and certain things never change like I think uh things will get crazier probably crazier than what you initially think that they can get um and it's always important when when you reach that level it's not you it's not that you're a genius it's that things are just getting crazy and that probably is a good uh indicator of being aware of what

you're doing maybe taking down leverage maybe changing your life if you can things like that um you know there will be pullbacks you know there will be whiplashes of minus 20 minus 10% days even in a raging bull market so it's important especially in alt so it's important to you know don't get liquidated yeah and survive um you know I think uh it is again you know I won't read through all them but I think that the those were the bigger points that I that I wanted to to emphasize the other thing is like you don't have to play every

hand right the best players don't play every hand and poker in the markets so your point around I think there's a part in the cycle where you know even in a bare Market it was difficult it has been difficult for the last you know since defi summer to keep track of everything that's going on and you know there's going to be incredible opportunities in deep in in AI in defi um in who knows what other like gamble fi like game fi social fi different ecosystem systems Cosmos l2s Solana filecoin you name it right so I think it's

uh you know some people may give you the impression that they're on top of it all but um I always like to remind myself that I need to do one or two things very very well just one or two one a 150x 1,000x in a cycle with decent conviction in size and and that should carry you through the day I think hey everyone wanted to give a big shout out to today's sponsor Wormhole Foundation stewards of the Wormhole protocol if you are like Santi and I and you play around on chain you know how bad the cross chain experience is today well Wormhole has set out to solve that

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we've entered the part of the cycle where it's probably best at this point to assuming you've spent the done the hard work in the last year to position yourself accordingly we've entered the part of the cycle where it's best to just sit on your hands here's what people want to do what people want to do and what people have the tendency to do is um both to take out a bunch of Leverage on their coins because they feel like they don't own enough coins that's definitely the wrong move um um but what people have the tendency to do is start to chase narratives because in the bare Market there's a new narrative let's call it every month to two months now there's a new narrative every like probably two weeks or three weeks very soon there will be a new narrative every day actually and you can't really fathom

that until it actually happens there's truly going to be a new narrative like you know at least three a week and you start to get I would say there's a money component of this but there's a psychological component of it you you start to basically first off trading in and out of these things I promise you you you will end down at the end of the day you will end down on your stack and but the other thing is the psychological component that comes with that the like anxiety that you will feel which then comes at the detriment of everything else in your life if you're trying to chase every single narrative I don't think can be overstated if you're a full-time Trader sure it makes sense if you're anything else a Founder a builder

you don't work in crypto it's just your your hobby if you try to chase every single narrative you will drive yourself and everyone around you mad and um I think I I'll add some I I definitely agree I'll add some Nuance the first one is so what happens if you didn't do the quote unquote work which I think uh probably the vast majority of people either feel it it because it's real or feel it because it's psychology they might be allocated but they still feel to your point they don't own enough coins they don't have enough exposure that's a percentage of their net worth whatever um I think uh I'll go out on a

limb to say that I think in crypto every time I think that I've missed a particular project coin that I like more often than not the market gives me an opportunity to buy it at a price that I like because it comes back to that level and I want to I keep reminding myself of that and I keep a shopping list nice and handy I L it have a written piece of paper that I carry with me with certain things to remind to look at it I have alerts and so you know because I think that's a position where perhaps a lot of people are in today because they feel like oh God you know they didn't buy a the at a thousand then they didn't buy

it to 2,000 then they didn't buy it at 3,000 they missed it or Bitcoin at 10 waiting for 10 they didn't buy it at 20 they didn't buy it 50 they're not maybe going to buy it now but so what do they do it's it's really paralyzing and you so and so forth right you can look at Salon as well it went down to 80 and then now it's 120 and yeah oh my God you know what's going on that's where I think it's just very important to go deep spend more time than you probably think to do one of two things one like just think about in whatever framework you have just think about what you feel comfortable holding what is most likely not going to shake you

out and again like you can add qualifiers you can add comps you can add whatever it is that you whatever analysis framework I don't want to say fundamental because I guess there's a little to latch on to but um just do deep work get involved in these communities talk to these Founders if you can most of the time you can uh and and I think that's like a really good like use of time um the other thing is you know if you look at defi summer and I appreciate things never um unfold the Same by definition you know man doesn't cross the same river twice but and during defi summer like compound

launch liquidity mining you had this huge runup and reating like there's these moments of r-ratings we're going to talk about the uni proposal and what seemed to be a quick reating of defi coins governance tokens shout out to Dean Spartan that has coined the meme worthless governance tokens so turns out they may have value after all but there's a there's a very quick reating the market like wakes up and it can happen like overnight a subtle Catalyst like a proposal like the uni one that have been by the way countless others before but what why is this different and I think we're gonna want to talk about that but in that moment I would argue that there is a difference between chasing every narrative but I would I wouldn't advise to do that like constantly trying

to trade everything I would advise to pay attention to every narrative that is unfolding as much as you possibly can and your time permits um of course there Comes A Time of diminishing returns if you never double click if you never spend meaningful time on one that you like but for instance now I'd be probably doing myself a disservice if I'm not paying attention to AI or deepen or Define salana or social fi or foraster or whatever even though I may not necessarily have invested there or not or it's a really small percentage of my portfolio I still need to pay attention to that because my role as an

investor is I cannot miss a huge vertical and category in crypto is in a state where we're still throwing stuff at the wall to figure out what's going to work and so I had a a poll a couple weeks ago of saying what what narrative is really going to make crypto very tangible and it was like gaming nfts defi deepen Ai and the top two number one was deepen which I actually agree with and the number two was AI uh which is a bit abstract uh I think AI certainly brings a lot of attention and you could reason that it might be really good exposure for a lot of people that can buy Nvidia to buy AI coins they also have you know it's more

elusive so you know people just really hot narrative outside of crypto as well um and but deep in is probably the one of those things where people really appreciate the tangible use case in their day-to-day life whether it's because you have free mobile uh you know I just invested in this company geonet um that has getting a ton of traction with like industry folks it's one of those projects that is getting more attaction outside of crypto than within crypto which I find really interesting so anyways to round out this thing I think you should always pay attention to every narrative that's getting decent traction uh you could look at coin gecko top categories and understand like

what's trending like there's a million ways that you can cut this pay attention don't necessarily trade it is what I'm saying um unless push people to um I would push people to do the hard work of basically it's not even that hard work but I would push people to basically sit down and say all right there's going to be like there's probably 20 different things right there's there's the L1 trade there's l2s there's nfts there's meme coins AI defi there's kind of new Defi and old defi there's equities right there's the miners there's the coin there's coinbase Equity um there's gaming obviously there's deepin um there you know there's a million things if you could only pick five or six of those what do you picking right

because if you buy everything but what you pick today might change what you pick in a month like a really good that's my but I don't know I would i' take the other side of that like I yeah a really good we're in just the state of the of of the infancy of crypto where a really good project can be a a industry defining movement in cist like like imagine if you were sitting in pred defi summer and compound launch its liquidity Mining and you had an opinion on other stuff you didn't pay attention to that the market gave you by the way nine months to a year to pile onto that trade and and outperform meaningfully you

didn't do that and you're getting paid to be an investor in the space that's a good point that's a good point like that that's I that's my Approach um I'm always curious and playing around with stuff which by the way that's when you think about doing work I think using these things you know the key thing is there though Santi there's you're an invest uh that that's that's actually the key thing I think you have to know the game that you're playing so I am not a professional investor I would I would actually rather sacrifice upside so like let's say you want to make a 100x this cycle I'd be comfortable but like but with that 100x it's going to take lots of founder calls

it's going to take spending time every day thinking about your Investments I'd rather honestly get a 50 I'd rather make half the money that you'd make if I can most ones 5x at best sevenx I'm making up the 150 what say 10 or 5x I'd rather get H I'd rather actually make half the returns that you make but be able to spend 99% of my mental energy on block works so I think um yeah I mean idea of like you got to know the game you're playing right like there's a lot of Builders and Founders who then bull market hits they end up spending like five hours a day trading and investing and thinking about the like that's not the game you're playing you got to know absolutely well we should have

started there right yeah yeah no the game you can't you can't yeah exactly um do you want to talk about this Unis swap uh governance yeah I'll just wanna I want to emphasize one thing uh because I I admire certain um professional investors one of them is George Soros which borrowed certain Concepts around thinking of probabilities like Howard marks and George thinking of probabilities Soros would change his mind constantly like he would be bullish in the morning bearish in the afternoon so this idea of like as CMS coined you want to be right or do want to make money um and being putting ego aside the other one is which is very relevant for this discussion I think is

Stan drunken Miller and he has this great quote uh when he gave a private conversation which is now on YouTube and he says look if I like something I don't wait to finish the work quote unquote by the way you never finish doing work you constantly are updating your thesis and models but if you like something it could be a hunch it could be doing five minutes of work put in the position and and then do more work and if you like it more add to the position if you don't like it cut and I think that is very refreshing by the way coming from probably one of the most successful fund managers um ever and it's very refreshing because

sometimes we're of the mind that we need to do a ton of work and whatever that means is like very very nebulous it's like very subjective you also hear uh folks like Bill Amman before covid he put on uh a huge uh he basically bought like quit default swaps on a lot of things and made a killer and he was going through that analysis and he said this took us an hour of less than an hour of discussion in investment committee you're like okay so what I'm trying to say is like time is not the barometer here and unfortunately that's all oftentimes what we are trained to think of it's like oh

I'm spending five hours a day you know I don't it's difficult because sometimes it's like these guys are not necessarily punting stuff it may seem like it but they're constantly observing the market to your point they are getting paid to constantly live breathe observe markets and if you're paying enough attention I feel that you can kind of get a feeling for emerging narratives and like when you tell me join forecaster I cannot not be a forecaster like I cannot miss it something good may come out of that because it's getting decent traction I'd be stupid not to look at it I'd be stupid not to look at AI coins um and so it is challenging because there are

so many narratives you can get lost you can be paralyzed but anyways I don't know to each his own right I'm not Stan rck Miller I don't have his success for track record uh but I I think uh it's also just very refreshing to see someone like that that has been so successful be very open-minded and like I think where most people I guess to finish this conversation most people probably end up spending too much time doing research not enough thinking about how they're going to structure and size the position which is equally as important if you're right without Size Doesn't Matter or if you're right with a wrong

structure it doesn't matter so it's very important to think about structure and portfolio composition um especially in crypto which you can express your you in so many different ways right there's liquid there's privates there are equities there are just so many different ways that you can um get exposure to the space so anyways it's fun have fun folks seriously like no no seriously like have fun it's it's uh most intellectually rewarding space I think especially as a trade like I I remember to this day I try to convince uh so many funds back in 2012 13 14 15 even 16 before Ico Madness

to invest in the space and even after the I Mania especially during the bare markets like my former boss at Sage we would reach out and we'd have lunch and he'd be like oh you still like this crypto thing like see I told you so I'm like what are you talking about we're up like over 100x by chwi a bar Market um and I'm like I say Ned like I've probably seen more Cycles than most professional investors is in their 880s at this point because crypto just is a huge learning curve uh and you have to like learn new things along the way Bea venture capitalist plus high frequency Trader at the same time and everything in between so anyways yeah it's a really boarding and fun

Journey all right so this week let's talk about this proposal um let try to find out I might just read Aaron's post here's the tldr never mind I'm not going to read that thread the first first the first tweet was the most important thing which is that um uh Unis swap is now considering uh basically driving fees back to token holders um the there it's basically this large scale upgrade where the fee mechanism would now reward uni token holders that have delegated and stake their tokens and the reason this is important is uh you were laughing at the dgen Spartan kind of Claim about useless governance tokens they're all these tokens that launched right there all these tokens that launched a lot of

them launched Def and defi summer and they gained a lot of traction and they were kind of the hot coins for a while and then they have basically trended down for the last three years and it's got you there's a Bloomberg defi index out there and it's down 85% from alltime highs right now whereas a lot of other things are nearing alltime highs it's uh and basically this defi token uh narrative has has completely died and it's caused a lot of apathy I would say in the governance space in Defi and um it's had a lot of people question like what are these tokens even doing and the whole the the solution to this is to drive value acral back to the tokens however you can't do that

historically or at least I'm not a lawyer neither are you but my understanding is that you haven't been able to do this historically because of the risk if you turn on a fee switch drive that value and dividends essentially back to the Token then it can be claimed as a security again I don't know if that's the actual reason but that's what kind ofar so um Unis swap turning this on is obviously a really cool proposal it's big for UNIS swap but it has massive ramifications across the industry you saw a day later fracks said look we're now considering doing the same thing I think every D5 founder is basically talking internally and saying look if Unis swap did this that means they know

something what we then then we can hopefully consider this um and I think there's probably a bigger I don't again I don't know anything but I think there's probably a bigger story here there's probably a big legal win behind the scenes um it probably didn't come from Unis swap I think um maybe coinbase won a dismissal and it's not public yet or something like that you actually had Paul this tweet from Paul grall the chief legal officer at coinbase who tweeted maybe two or three weeks ago he said look um if you're out word to outside council is a little bit of advice if you have a huge win let your internal lawyers tell the CEO before the outside lawyers tell the CEO so that me I in my I'm reading between the lines here but I think CO's probably had had a

decent legal Victory um and yeah there's a you're talking about big re ratings like this was the re rating 50 a lot of defa governance tokens were up uh big on the day and on the week and um yeah I don't know like uh you know there's been few proposals out there over time to turn on the fee mechanism it also was interesting because Sushi already had is Distributing that to stakers and it was also up like 20% that day yeah which is again markets are not necessarily rational it just brings more attention to def5 a category and oh by the way these Protocols are working and are generating a lot of fees and oh there's value here it's an attention game um and

I think a catalyst like this um a lot of people seem to be really positive on the fact that coinbase is probably going to win this case against the and that has I think really big um ramifications implications on the regulatory front just another win for the industry um so we'll see certainly encouraging I'd say here here's the counter is that um so Gabriel Shapiro from I don't know where was he at Del Deli he's at Deli now or he it's not in his um oh metalx labs this is the Dela thing they're building anyways um so yeah g Gabriel said I'm so confused by the this is the counterargument he said I'm so confused by this and why

what uni is doing would change anything the law hasn't changed one iota there's no special sauce to their quote new strategy maybe they just finally hired a lawyer who is an aoron only took them four years sorry to be harsh to Uno's doubtless pricely pricey lawyers but Howie case law was always clear that there can be an expectation of profit without receiving fees and distributions and dividends so it was obvious that the fee switch should not be the deciding factor in token security analysis um and I mean he goes on to call what Unis swap has been doing for the last couple of years predatory structures um but so I don't I don't know his beef with with unisa but yeah listen uh we can be uh have an intellectual debate of why defi tokens

rated the reality is the market maybe just put a little bit more attention the fees are going to the admin contract folks whether they distribute them or not is a difference between imagine a startup that is generating billions of dollars or hundreds of millions of dollars and they're having it in the balance sheet and you could see it in real time you're not getting that dividend oh by the way that has tax implications maybe they're reinvesting in growth maybe they're just there so like from a Enterprise Value component like market cap standpoint you're valuing these things off a cash presumably again presumably because the Market's not rational anyways um yeah yeah big shout out to um Matt fbec who was on

the Roundup last week Matt and Bo Spencer so so blockworks is um is a pretty active delegate in Unis swap Dow um we have about 500 500,000 uni tokens that have been delegated to us um I think we're one of the bigger bigger delegates in Unis swap now we also uh we also have a a seat on the kind of uniswap deployment committee um so but Madden Spencer have been doing great work there was actually two um in the in the official four post I call out three initiatives that delegates have taken in the past year and two of them were led by blockworks research so we have I'm excited to see what what Unis swap is doing I like it we'll see yeah um it's been it's good to have more

activity and shakeup from non VC holders because they've been there's been a lot of apathy because they want didn't want they have been reluctant to vote so they've been delegating votes to these like student run organizations who have no [ __ ] business like voting on these things I actually think real votes should go to more folks like you as opposed to the pen Club no disrespect but they I don't know feels like a bit of a bit of a theatrics there uh anyways uh like you guys are closer to the m folks in college I don't think so um I will say I spent time with with the pen folks last week at they are good and their thought I've invested I know what you're saying

I know what you're saying so I have a I have a prediction I have a prediction on Unis swap which is that if you think okay so Unis swap also launched Unis swap extension this week it's um basically uh it's it's like a metamask competitor it's a phantom competitor backpack competitor well I guess backpack and Phantom Merc salana base but it's a it's a it's a metamask competitor and it's really cool I actually got an early demo of it played around with it it's really nice instead of living in your Chrome extension it actually kind of Pops down into the sidebar of your screen um like in frame it's actually quite nice um you remember how people thought about coinbase two years ago bloated hasn't

innovated not really doing much we we want Alternatives outside of coinbase you remember how you know how quickly that has changed now and how I mean coinbase is now one of the most dominant most Innovative best companies in crypto hands down like no hold in my in my mind I think hasn't gotten enough credibility I think uniswap basically just had a huge sophomore slump and is about to just come out swinging in 2024 so that's good maybe that's uh what it takes to have a re Renaissance of defi um I have I have one more hotter take related to coinbase which

is I think this is going to pave the way whatever is happening behind the scenes I do not know I think coinbase will launch base token in the next 12 months oh the regulatory landscape shapes up in the way they might spin out Jesse's team yeah I think I think I think we see a base token even though they've said they're not launching a token and all that I think we will get a base token in the next 12 months yeah look I mean there's a version of the world where you have regulatory Clarity and you know tokens like we're dancing around something that will be largely

irrelevant I think in a longer time scale yeah and it's actually be quite refreshing that these things are seen as what they are and you know we there needs to be some rules in places in and guidelines in place and I think that will open up the design space for tokenomics and just be more transparent and focused on driving value to these protocols these Protocols are generating a ton of value I mean Unis swap at one point was generating more volume within coinbase with like 12 employees the market traditional markets are really focused on ETFs now when you have an ETF of a D5 protocol like Unis

swap or a basket of protocols an analyst Equity analysts start comparing this and they understand how lean and mean like crypto Protocols are they will be going bonkers like you value ethereum relative to SAS companies on their fee generation you can value these protocols relative to other companies and equities and like tech companies and they are vastly more Capital efficient on on numers metrics like it's it's just wild I'm waiting for that day to happen and probably happens in the next three years um yeah like to your point I want to go back to something that ties both

the defi discussion and the market discussion so like for context Bitcoin is down 10% from its alltime high eth is down 30% from his alltime high Soul still down 50 even though it's had a massive day it's at 132 um and defi so BTC down 10 eth down 30 Soul down 50 defi down like still 80% and certain alts still down 80 to 70% so yeah I think the important metric again to reemphasize Shia's observation is anytime btc's come within 10% of its prior all-time high it doesn't stop there and then everything else

presumably if it stabilizes should flow anything else from this week blastus you you um you want talk about blast huh you want to talk about blast blast Miss there's two two billion of tvl now in Blast two billion that's right I think there's M launch today it will launch tomorrow I believe Friday 30th there's no there's no uh no Feb no Feb 30 my guy oh sorry then yeah I guess today um today this is a leap year right leap year leap year nice nice Bitcoin always goes up in leap years you know

that I guess I do now causation correlation I do I do not know but correlation and causation uh nice well yeah I mean the happening is coming ETF what kind what kind of companies we building on on blast a lot of like very The Narrative right now is like very dgen let me give you some some inside view here I got for a Google doc with all the submissions across different categories different tabs of all the different categories decks perss nfts uh social gamei and other infra I looked at it and I tell Pac-Man I'm like dude I'm gonna pull an all

migher here and I got for a couple days and and he's like you're only looking at 16% of the submissions that we called like we filtered I was like Jesus Christ and very encouraging so there was a couple of mix new one completely new projects um two existing projects and other ecosystems that wanted to deploy on blast actually and some really good ones at that so those were probably the two different categories um very strong I would say like I had to rank them of like one two three one would be I would take a meeting two I would

definitely use it three I would invest with what I know um and in every category that was one three at least at least one three which I would invest and I've done that um I've invested in a few projects over the last couple days um and a lot of twos of things that I would want to use um and a lot of ones so anyways really exciting um I tweeted about the projects that I found most interesting there's a lot of winners I think the what's been obviously most interesting is sort of this Redemption Arc that it's going through right A lot of people you know were critical of the launch and I think the team acknowledged it and you know we'll get past that but I think

again important to pay attention to these narratives like Builders want to go where there's going to be users and the blast ecosystem is going to be among the best day one or in the first couple of months and you know without naming names I got a lot of L2 projects a lot of other ecosystem projects reach out and said what can we learn about blast um you know they've I'll I said this at the time I took heat Never Fade a good Builder my thesis for blast was to team to build blur would you fade the T the the tensor team

like no like you just don't and so anyways um there was a rug this week like there will be scams of course there's a lot of teams are you know eyeing the incent the incentives are right of course you know that there's a huge airdrop for Builders like you know again you want to be skeptical or critical of that like you have to incentivize this stuff it's a it's an attention game and and this is what it takes right so yeah we'll see you know I I'd say like everything it will probably take time but there's a lot of really I would say really solid projects that are you know when you think about the the start of most most

ecosystems like I think it it starts with defi right and it starts with a good Dex a good money market um and maybe hopefully pers right um and so there's really solid projects across those three categories and a very interesting uh um social fi project as well so but it's sort of D Genny and so yeah we'll see I think it's going to be quite interesting how it shapes up I think that's it yeah oh housekeeping oh okay Empire empire Meetup at

d right Wednesday shoot I forgot the time I think it's 4 P p.m or 6 pm. 4 pm or 6 pm on uh on Wednesday of d um so yeah be there we're also going to do something so um all right so permissionless who are we I'm not sure I'm supposed to sh I'll just share it because it's the end maybe people aren't listening to the end of the podcast permission list Launches on Tuesday permission list launches with the first 50 speakers on Tuesday um very very excited about that so are you are you did you make the cut are you there no idea probably not hopefully um so we've got a permissionless channel in

farcaster now so go join that um but also we are going to give uh five free tickets away to permission list top five Casters in the Empire channel so there's an Empire channel it's got like 350 people the top five most active people in the Empire Channel um on on warp cast are going to get free tickets to permissionless we'll take a snapshot April 30 don't say it no just don't say when the snap just kidding we will take a snapshot at some point in the future you don't know when though oh yeah I forgot see this is why I don't run a token I I don't know how to play the game yeah that gonna be great I'm I I finally finalized wow how very stupid I mean

finally final uh my travel for d uh so very excited um to meet up with a lot of people there and I think it should be a really good time and discussion yeah cool agreed this might be our first is this going to be our first like pod Community Meetup yes right we didn't have one in yeah first official one there's gonna be a lot of good stuff like we're gonna build a whole like Empire station I think at permission list we're gonna have the setup and do live recordings on site and all that all that kind of stuff but yeah this will be the this will be the first test run so you guys better show up so then I can convince the team to go go bigger permissionless nice amazing yeah um okay well again uh we usually close out with

recommendations to read or listen to I I'll emphasize same as ever Morgan housle I know bare markets are really hard to read but if you do have the time or audiobook I found it to be a very light read you'll finish it in a day really good all right sometimes also same as ever Morgan how same as ever Morgan hle shout out Morgan hle I also have one Avatar the last air bender on Netflix it's a band I have I need it I need I need I needed this because I'm like sitting here I'm not I'm not actually kidding it's a great show my wife is out of town for a week and a half or two weeks or

something um it's dangerous so yeah dangerous for for I'm firing into avatar the Last air bender I'm uh I'm like wandering around the streets of Tokyo and uh listening to like podcast and music and I will no I'm actually going to I'm actually going to Vegas tomorrow to go see um to go see you two at the sphere oh I know the manager actually well I'll DM you I've gotten know him really well of the sphere or of you two of oh no he's like the the right guy of Bono and all the oh wow that's cool and uh he's no definitely not no no the polar are like opposite of

C but uh nice so yeah that should be cool that should be cool oh that'd be great uh okay well anything else that's the Pod let's call it thanks for listening folks we'll see you next week hey everyone Thanks for tuning in to today's episode don't forget to claim your free Wormhole nft exclusive to Empire listeners hit the link in the description of today's episode and fill out the form to claim your unique wormhole nft [Music] today