The Bull Case For DePIN, RWAs on Hyperliquid & The Onchain Endgame | Weekly Roundup

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So we think people are just misunderstanding one like the valuation multiple should be applied to deep pins but more broadly like the real story like those that's a two or 3x difference you know what I mean like me and you might disagree between 10 and 30x but the size of the revenues and how long they can compound is the real alpha like you can grow 30% quarter over quarter for several years for half a decade for a decade it's a massive massive business >> nothing said on empire is a recommendation to buy or sell any investments or products this podcast is forformational purposes only and the views expressed asked by anyone on the show are solely their opinions, not financial advice or necessarily the views of Block Works. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds or

projects discussed. All right, everyone. Welcome back to Empire. We got the roundup. Not only do we have Santi and Rob with us, we have special guests, friend of the pod, friend of Blockworks. We got Sal, who's one of the founders of EV3 coming off the back of a huge fund raise today. They just raised $61.74 million for their new uh fund there. The uh best fund in the deep pin space. So yeah, really excited to have Sal on. S, welcome and congrats, man. >> Yeah, thanks Jason. >> 61.74. You couldn't get another 20 260K rounded up.

>> So it's a I I probably have to change it after this pod now, but I've been using 616174 as like my debit card pin since like I was probably like 11 years old. It's just like this is how me one of the reasons me and Hash became friends actually. It was a really special number. So if you like take any four-digit number has to have at least two digits. Order them from top to bottom, bottom to top and subtract those two numbers and do it recursively. Like any number will get you to 6174 within like three, four, five, six iterations. And I had like a terrible memory for anything administrative. So I used to forget my debit card pins all the time.

And um anyway, 6174 is a special number to both me and my hash. We decided to rip it with the with the fund raise. >> Dude, >> so you sold for exactly 6174 like you told the LPS that >> Yeah. Well, we had up to 62 and then you know the GP commit has some flex and we decided to go for the special number. >> So it's an interesting it's an interesting number right because uh it feels like this iteration and subtraction like deepen is in that state where probably the first instantiation was not really good. Uh you invested in a number of projects but like everyone you know tell us what the conversation was with LPs. Um, a lot of what we talked in the pot is the deep end, a lot of the protocols just for uh, better or for worse, it just not pound out in the

public markets. Um, what are we missing? Like what what what is the alpha here? >> I think definitely like the first iteration, like you said, the first iteration wasn't perfect and you can't expect it to be. Neither was it for DeFi or really any other spaces. Um, for us raising this fund, like fund one was such a bear for us. We raised fund one in the middle of 2022. We felt like we raised it three times because we kept getting cut back as LPS like died or went bankrupt or whatever. Um, and back then when we started raising it, it was basically like Helium has already taken over the space. You know, Helium was at 15 bucks. They were like, Helium won like how many more D pins are there?

Then Helium went from$10 to $2. And the question was like, okay, Helium's broken. Like why would you invest in anything that looks like Helium? And as they started sort of growing revenues, the question was like, okay, Helium seems to be doing okay, but there doesn't seem to be there's like 15 companies in this space. How can you build a venture fund focused on a vertical with 15 companies? Um, and so after, you know, like raising fund one took us a year of basically like answering those questions. Uh, fund two, we felt like we had a pretty good sense of the both like the underlying fundamental data. The space is generating revenues. It has real customers. Like there's real entrepreneurs that have raised real money. Um, and so frankly it was a lot easier. I think like it's a little bit decoupled of the sentiment we see on

Twitter, CT and and prices relative to people who are actually underwriting businesses and like they look at SAS companies, they look at payments businesses, they look at these things and they're like, "Okay, SAS businesses aren't all that great. These deepen projects are actually growing much faster. The multiples now are cheaper or on par with what you would pay sort of like in the public markets for a median style company. And the markets are absolutely like gigantic." And so, um, frankly, I was super impressed. I think like it can be hard to wrap your head around deepin, but a lot of the LP community understands that you're basically buying infrastructure businesses when they're cheap and they're growing fast and they're hard to, you know, there's there's not a new DPIN wireless network that's global spinning up every day. Like these things are defensible and hard to build. Um,

and all those ingredients make for what look like a really asymmetric venture fund profile. mention your um the like how's the conversation been for you during the fund raise especially you know for for deepen where you know these are you know have real world applications like these are in many ways businesses that have attached a token to them so when the LPs ask you like equity tokens like how is value going to acrew what are you investing in what is the focus for you like how do you answer that question right now especially at a time when you know to your point around helium you can say helium is uh growing very quickly right from a protocol perspective and the token's been basically straight down.

>> Yeah, I think this is extremely tough question for later stage VCs at the the right answer for LPs at our stage is like well if you're investing at the preed or seed round, you get both. And so regardless of what we may dream up about our opinions or our biases around which one of these is going to acrue value, you as an LP are protected by owning both of these things. Obviously like at late stage these things decoupble and you may only invest in the token or the equity and like we saw that with Helium. Um I will say that like the teams that are serious and have built real businesses in the space are trying to unify those things like Helium teams focuses on trying to tokenize their equity or merge it or somehow and there's obviously real barriers to that regulatory wise and practically but um

the intent is there for it to happen as soon as it is feasible. So s on the um I think just to like some context. So like when I was at investing in DeFi early on like you would always think about like what percentage of DeFi as a percent of the total market cap and you're like god like this should grow and you know I would say like it it didn't grow as much as I wanted. It still made for a phenomenal return. The deep end right now is like less than kind of 1% of the entire market cap. Um, from a revenue perspective, you know, depending on what your classification of deepen is, it's you could argue it's like, you know, the revenue is just not showing up there. Like there's some highlights like Helium I think is at

like 13 million annualized on the MBNO side. Like Geonet has like close to 10 million of AR. These are like the revenue base is you know to your point like businesses are using GeoNet. you know, helium has an MVNO like Hivemapper has like pretty big customers that are using them from a data streaming perspective like a do you think the deep end deserves a greater market share as today given the revenue opportunity or is this a lot of like hey it's on the come the tokconomics are just broken for a lot of these deepen projects we're going to see the second iteration and that those projects are going to have like just a better value acrruel and that's how you see a path towards deepen being 10 15

20% of the entire market cap like what's what's the thesis? >> It's it's both revenue growth. One is like the revenue growth like these things the real world industries like if you have something again you're not spinning up a new worldwide RTK or he or wireless network in like a day or two. So these things are really defensible and the revenues compound at like 30% quarter over quarter. Like those are the growth rates that go and helium are putting up and it's not like this is a one-off quarter. They've been doing this for two, three years consistently now. Um, and so part of it is just like these markets are huge and they've proven you can just steadily compound revenues over and over again and eventually like they're going to get really big. The second piece of it is also the multiple sort of like what valuation multiple do

we slap on these things. Like people I think are crypto investors specifically like a DeFi revenue is not the same as a deep pin revenue. Like one of these is cyclical and one of these is not. It's like commodities versus like a SAS business in the regular industry, right? Like when commodity prices are high, your earnings look crazy and the multiples look really low, but that doesn't mean it's cheap because when you go through the commodity cycle, prices go down and now your earnings get decimated and actually like your normalized multiple is much is actually really high. Um, >> so we think people are just misunderstanding one like the valuation multiple should be applied to deep pins, >> but more broadly like the real story like those that's a two or 3x difference. You know what I Like me and you might disagree between 10 and 30x,

but um the size of the revenues and how long they can compound is the real alpha. Like you can grow 30% quarter over quarter for several years for half a decade for a decade. It's a massive massive business even starting off the basis that we're at today. >> Back to like tokens versus equity. Uh, I get why a token allows you to bootstrap crowdfunded infrastructure and convince a bunch of people to basically front the capex as opposed to a trimol versus a geonet. Great, you get the network coverage, but then there's like a why do you need to have a token after that deployment? Because the reality is most helium miners immediately dump to recoup the capex spend. So you have like

Bitcoin in the early days kind of had this problem where like miners just constantly dump Bitcoin to recoup you know their capex and then opex and and then that you just sort of assume that like you you hit some sort of you you are able to break through that sell pressure but you know as I look through most deepend projects like it's clear that you haven't and you you have this sell pressure that constantly depresses the price. What's the solution? Like we've thought about it a lot from the inversion side like hey if we're buying a business where we can use deep in lower costs we don't necessarily feel the need to sell a token that we might be acrewing but you haven't really seen that much yet.

What's your take on that like token equity? Are these businesses better off being like private companies and just enterprise software and somehow subsidi like somehow find capital to invest in the capex versus having the community like depend on the token? >> I mean if it were going to be done it would like all the biggest and fastest infrastructure buildouts of the world have happened with DPIN at this point. Like there hasn't been any other RTK network built out as fast another mapping network another wireless network. So I think like if you believe that speed matters and we really I think all of us on this call like really do then deepen is just an accelerant to get to get there. Um I I think though that like the I disagree with your premise that bit it's similar to Bitcoin in the sense that

people are the miners are constantly dumping like that the actual behavior we see with deep pin miners is you sort of like get your payback you take that out in cash and you feel like we recouped your hardware and then you let the rest ride and so it's really like a fixed cost right like a helium miner like it cost you $200 for the device and then it maybe cost you like a few cents a year in electricity cost and and your bandwidth connection that you're just already using for free. It's not like a Bitcoin miner where you're pouring massive amount using massive amounts of power. Um, so that's the core thing. It's like these things, they have a fixed cost base that you build and yes, like it's expensive to do that with tokens. Uh, but that's the way you do it fastest and after that it's not these

perpetual emissions that constantly need to be repaid. Like they're getting paid by revenues and usually they're keeping their machines on and letting the the gains ride. Um, so I think it's just a fundamentally different market structure than than Bitcoin. >> Yeah. uh how much of your thesis for deepen and this next iteration of deepen projects is predicated on like a change in regulatory environment where you can tie more closely value curl to the token. >> It's that's that's a really tough question because I I feel like for us as VCs like we're good at underwriting how big things can be. We're really bad at underwriting like when things will happen. And for me, it's inevitable that there will be regulatory sort of like merging or clarity in the sense that to

make these businesses more legible and more investable. If it's going to happen in this administration, the next one, like we have a 10-year fund, we can wait through two and a half administrations. And I don't know exactly when that's going to happen, but um I you know, the the hard thing for in my mind is making the businesses work. >> Uh being able to navigate regulatory and sort of like optimize the capital structure is is like secondary to that. And we've already gotten most of the like by tapping into debt financing through infy which a lot of the leading defense are doing now. You've already sort of gotten most of the way there in optimization of lowering from like your >> what is what is infy s what is infr.

I've never heard that term. >> Yeah. So we you USDA is the poster boy for for this sort of like movement. But effectively like if you were launching a deepen in 2021 the capital out there to get was speculative util like you launch utility token it gets bit up in speculative value use that speculative value to incentivize hardware buildouts today like that game doesn't work. We've seen on exchanges like there's very little speculative bid but there is a lot of demand to earn yield on stable coins. There's now over 300 billion dollars of stable coins. There's like 15 billion of maybe a little bit less than that sitting in yield bearing stable coins and people have like there's a extremely proven demand for people to like ape basically a black box that you

put your stable coins into and it pays you yield like USDA they open up their caps by 150 million in like 45 minutes that it's sold out and they're basically today just paying back uh T- billill yield and points um and so this is like the new financing mechanism the more efficient and new financing mechanism that we have to to bootstrap infrastructure that we call infr which is debt and not estate. >> Let me let me ask you a question on that. Um and because you guys are investors in daylight as well uh which I know they're starting to do some of this. Um so we're we're also investors in USDA and so we're we we share that cap table. Um the you know one of the questions that I've been talking to them about is to your point I think there's still like how many loans are

outstanding today? It's it's like relatively dimminimous right? And so I think there's this question that I have around um the you getting a lot of there's a lot of capacity on chain right to um go and put you know stable coins into these these protocols um the origination is a lot harder I think and the um kind of the connecting of you know these real world asset um infrastructures and being able to win those deals and then being able to be credible to like the counterparties I think Nissant's you dealing with some of this as well and how in his conversations with bankers and counterparties etc on inversion like how do you when you talk to the founders how do you um figure out if you think they

can actually make that connection and what matters more to you in terms of um whether it's you know call it cryptonative you know mindset and cryptonative backgrounds versus like being somebody who can like really go and credibly say I've operated in this you know area or I've operated in this u this vertical I think both can work. What what we really look for is like an understanding that with credit you really can't lose people's money. Like it it's very very hard to build the trust back. And you can like let originating isn't the hard part. It's like originating safely so you get the money back, right? It's the the magic of the lending business. And what I like about David and USDAI team and also daylight is like they're yes

the goal is to scale as quickly as possible and get the loans out but only if it doesn't like lower your credit quality and your ability like when things go wrong to get money back to the depositors and so um there you know that it's obviously a tough balance like it's not like it's not like a a or whatever where you can just like instantly come out loans like you have to go and like do you know the GPUs have to get installed in the data center somebody has to go out to a homeowner's house and install a battery and get the local permitting and all this stuff before you can start earning yield. Um, but I we're we're always like what what really matters to us is like that the number one thing they understand is like you cannot lose money in a credit

business. That's just the name of the game. Um, and to do that you have to originate really safely and that means sometimes not putting the pedal to the metal but operating at whatever 60%. I think the USDA guys have uh the more you can give transparency to the market as to like when those when the originations are going to happen, why they're taking longer, obviously it builds more trust. Um but that is the number one question is like how quickly can you safely scale originations given that the capital is available for everyone, right? People are just seeing a blackbox vault that they put stable coins into and they're going to put the their stable coins into the one that pays the highest number as long as they trust the that they're not going to lose money.

>> Yeah. because I think in nearest DAI it's um like 640 or 650 uh and like almost all like 3% of that u or all but uh sorry 99.5% of that is in uh is in T bills at the moment right and they announced um I think a a facility yes to yesterday or earlier this week that you know could be up to $500 million but them actually like going and like deploying these facilities has been really slow and so I think I I mean those guys are great so I I I think they're going to figure it out. But I I do wonder about when the market depends on the, you know, getting capital from like, you know, uh, whatever, like proumers and consumers

who like, you know, want to put, you know, these stable coins in these black box, how long they're um, like how sticky that capital is and how long duration that capital is relative to like the duration of like the thing you're trying to do on the other side. Well, I think uh like when I think about like the rotation of capital in DeFi is very real because it's it's chasing hot ball money like all speculative stuff but like the case of like daylight for instance like solar financing is a [ __ ] It's a super opaque market like JP Morgan and two other banks control it. When I was JP we were looking at like some of these businesses like Vivvent and Solar City and it's a very opaque and and illquid market. Um, in theory it should work. Like if you bring like a quality product like of of energy

into a liquid market called DeFi, then people should in theory want that yield because it's attached to like a very concrete real business as opposed to some sort of token emission that is, you know, vaporware. Um, and and then and then second of all, like I think you you can have more transparency in the origination and the underwriting. Like in theory, if it's tokenized, like you shouldn't be able to do what first brands did, which is just double pledge in theory. Well, well, I think that I think the question Santi is like and we've dealt with this for years on like private credit on chain, right? Which has been uh is the money that is already on chain is this actually what they want access to, right? Like the I mean you you can look at like the history of goldfinch I think like every goldfinch

loan is now in default, right? Like to Sal's point earlier, not losing money is, you know, obviously one of the most important things here and having good loss ratios, but it it's also just, you know, people put money into Goldfinch, I think, in part because they wanted, you know, Goldfinch tokens in the future and had back to them. Uh, but like do does anyone really want access or do they know do do they are they sophisticated enough with the Capital One chain to know that hey like you know this motorcycle or motor it was they were like lending against like mopeds and like Thailand, right? right? Like is that something that like really makes sense for me? Obviously now now we're talking about okay GPUs and USDI's uh point or you know in daylight we're talking about solar financing but but I do wonder if um and this is a a question

we're always asking ourselves is this is the capital that's already on chain the stable coins that are already onchain do they actually want access to or do they care about access to you know GPU financing or do do they just want you know what they hope will be future token emissions right and then they're going to rotate and if that's true then is the story that we actually need to actually bring more people on chain. There needs to be an easier way for people who would actually want to invest in this to come on chain. And I think that's the question that I've always asked myself around especially around I think a lot of these like real world vault products and and DeFi is like how do we get the money that has actually long duration that wants exposure to that thing onchain relative to you know all of

these traders who exist today. >> Let me ask you let me question for the group like why haven't we seen fixed fixed paper like like It's all variable like short duration variable rates on any money market like what I've invested in like two or three like yield protocol and like a bunch of others they haven't worked and I think they haven't worked because you have an adverse election problem historically the like people that have to have come on chain are the bottom of the [ __ ] barrel like it's just they can't get money in tradi they come on chain but presumably that changes when you have you know a daylight or some other deep in project where the quality >> I mean right now like the the user behavior on chain has been entirely around liquidity is king and that's

because people do rotate, they do move, they do like want access to their capital. People hate locking up their their money and they're willing to do it sometimes for like airdrops, right? But they're not typically willing to do it for anything else. I don't know, Sally, you have maybe a perspective on that. >> I agree. I think it's path dependency. I mean, like whenever I just for my personal lesson, it was like Olympus. Like we probably all like lost money on back in the day and it's like that was like two, you know, you would stay for like two weeks or that you would lock your money up and it got proven like how expensive those emissions were like very quickly how expensive it was to even like incentivize people to lock their money up for two weeks. So I think there's a big path dependency in the

user behavior on chain. Um I do think this changes especially like like what we've seen in the even in the money markets is like you know now you have curators who are basically like the middleman interface layer managing these things and if you'd imagine people just come on chain with stable coins and they want yield and they trust some curator then that curator is going to be able to you know put in a portion of their book into longer duration things and they're more well positioned to understand maybe solar or GPUs and the underlying yields and so um I do think it'll happen. And I think there will be some really big winners on like like Pendle and other types of protocol or these CDS protocols that are spinning up which are like sort of necessary once you start extending duration. So like new opportunities for

DeFi as well. Um but the user behavior has to change. >> Yeah, Pendle's the closest one to starting to do this I think. >> Can we s Can I have a different Sant you have anything else on this topic? I just have one thing about like just the bare case for deepen like I get that the their network effects more hotspots more coverage strengthens the case for enterprises like Moss like AT&Ts and Verizons and to use it we looked extensively into that there's like Google's also doing this without a token um my question to you is more like is there is there a scenario where like the price can just not like not move much and like it creates like how durable is the

network and is it tied to the price? Um or is there a possibility where like just miners just go offline because there's a to Rob's point like there's just a better opportunity to deploy your infrastructure, compute, whatever into another project. And so I'm just trying to like poke holes into this argument that like networks are strong and but they can be very reflexive if price just doesn't go up and like the ROI is not there for the incremental minor and then just how durable are these networks? >> Yeah, I mean the the longest empirical data point we have is the Helium IoT network which like the traffic has rounded to zero for several years now.

They had close to a million hotspots at the peak and today it's like 550 600,000 or something. Um, so you can, you know, that's like maybe 10% churn or something over several years of having basically no earnings, which I'd argue is like actually pretty sticky for people having boxes like put up in their homes. Um, for me the bigger bare case on deep pin is that when I look at like what Apple has done, like I think of like all the cool things that Apple or Google like you mentioned is able to do like you know your phone can be like not have battery but it can still ping some low Bluetooth signal and they have this mesh network where like your AirPod even though you and I have never met or we have but say we never met in person like you you have lost your AirPods like they

can use my phone in a completely encrypted way even with no battery to send Bluetooth signals and locate it where we're like on the beach next to each other. And this is a vision for deepen but like Apple does this today like Google does this today in different ways. And so um for me the hard the the bare case is just like we can't actually build something that's different like meaningfully better because these closed ecosystems are just so powerful today and they have a lot of talent. They have a you know all the engineering capacity. They're able to optimize their hardware at a scale which deepens are not able to um and aren't able to stand out. So that that for me like when I think of like what the what's the smart skeptic take on deepin it's just like Apple and Google do this better and they do it

today not three four years from now. >> Sal who are the um if you if you had to bet on only like three or four deepen companies right now who would it be >> they don't exist yet. That's the whole point of the fund man. >> No they could you could double down on could could double down from the first one. >> It's true. Um, all right. I'll I'll stick to liquid tokens because it's more fun anyways and that way I don't have to choose favorites. But I think like I we just wrote this big state of deepen annual report uh that we published a couple days ago and so I spent a lot of time like in the data in the blockberg's dashboards and Dune and stuff looking at all the Dpens. I think there are the three networks that I can make an

unambiguous argument right now that are just like cooking are Helium, Geonet, and Grass. Helium and Geonet because they've gone through like now multiple cycles of growing revenue. They're pretty much at scale on the supply side and they have these big enterprise contracts. Um, grass is earlier in the life cycle, but I had, you know, there's this big question on like is the revenues real? They tout like 50 million of annualized revenues and everyone's sort of like dogs on them for not having it on chain or not being transparent about it. Um, we had the chance to basically sit down with uh with Andre G the grass CEO and go through like 80% of their customer contracts with top AI labs and you know actually like saw the invoices, saw the monthly revenues that these guys are paying and it's all real.

I I was shocked too like I I was the biggest proponent of this like if it's real put it on chain. Why would you hide it? Like the pricing is not that much of a secret. Um but it turns out like that they're really just cooking and it's all real. So those are the three networks where I'm like >> so why don't they put it on on chain? Because we we have this issue when we're building out these dashboards for deep ppins which is with deepin revenue a lot of it ends up being offchain like we were I think we were going to go build a dashboard for I think maybe hivemapper they had the same thing like yeah why why is this the case >> part of it you can imagine is customer concentration so there's not that many AI labs that are willing to pay like you

know $10 million a quarter and if you have one customer that's the bulk of that you don't want to p you know and they know the number they're paying you you don't want to publish a number that's like 20% bigger than that because that you lose all your negotiating power. Um, so I think a big part of it is uh, you know, a lot of defense are like very small longtail supply and then a concentrated set of enterprise customers on the one side and these guys know how to negotiate and they know if you tell them your margins you're basically shooting yourself in the foot. Um, and so I think that's that's the main reason. >> Who are the three best? You remember DeFi summer and kind of these like founders came out of it. It's like Lesnar and Kane and Hayden and things like that and they're kind of seen as

like I don't know. Yeah. The founders you think of when you think of like OG DeFi. Who are the founders who you think of as being like the best founders in in deepin today? >> I think when I think of like the elder statesman type role. I mean Amir from Helium has to be up there. He's an investor in our fund and we've been obviously close to the Helium team for a long time. They've been like they're just relentless about I mean they've been at it for a long time. You know they were at at it for four or five years before crypto even and now they've been at it for like seven years with crypto. And so I think they're like true missionaries. they've basically like any idea of a new sort of like protocol architecture or structure in deepin they've thought about it maybe

not pursued it um but I think when yeah when we look back at like who's going to be the the leer of of deepen or you know to to take your pick of those guys um air is probably at the top of that list for me >> yeah s any super interesting LPs that came into this that you I don't know how much you can talk about the LP base but >> yeah one that we can talk about is uh Sana Capital it's a You know what we found is like tough fundraising for for cryptovc specifically is like pretty tough right now. Like a big part of the reason for that is because two years ago, three years ago, there was this cohort of like 10 to 15 cryptofocused fund of funds or maybe like 8 to 15 crypto focused fund of funds.

>> That capital today is like pretty much disappeared because these guys either they don't have distributions or the fund of funds game has just gotten more competitive. But it's basically like maybe this was 20 30% of cryptovc capital last cycle is now like gone. And so you need to make that up with non-crypto fund of funds of which Sana is one and we're one of their only crypto bets um or to you know other sorts of like endowments or bigger pools of capital but they've been great. They back I I had not you know when you're investing or an employment investment firm you don't have a reason to like really catch up with all the LP community stuff but Sana's been backing emerging managers for almost a decade now and they back some like incredible funds across all different spaces. So super excited to have them on our side.

>> Nice. So one um so you guys I think are the only like deep pin only fund uh that exists or you know of any kind of real size. Um who else do you like to co-invest with? Like who else do do you think is like good at deepin uh that invests alongside you guys? >> Yeah I mean we have a couple portfolio companies in common Rob obviously like uh Dawn from back a few years ago inversion USDA. So I think you guys have crushed it at at the growth stage. Um, we've seen >> for this question to be about I just but so so who else?

>> Totally. I think I mean look Kyle and Tushar at Multicoin have been investing this for a long time doing things like Helium and Render and Hivemapper uh even before you know way before we had a fund and actually like Tushar signed me my first Helium hotspot back like whatever like six years ago now or five years ago now. Um, Vance from framework has been at the top of this like the infr movement. I think he saw very early in DeFi that like there's capital out there now to get and his invol like you know he's got a [ __ ] ton of capital from maker now which is committed to helping bootstrap these in for fivey projects.

So he's very very deep in that space and they've done super well. Um and the Andre team has also done like guy there has done a fair bit of investing in deepend projects and they they've uh you know even like doubled down on some companies. I think they have a lot of independent conviction in the space. >> Let's go. I liked your guys' launch video. It was good. >> Thank you. >> Also, S, do you have a do you have an EV3 tattoo? Is that what I'm looking at on your neck here? >> I do. Yeah, I got it. Right. Uh, I actually got this and Mahesh told me the next day he wanted to change the logo. So, it was a little bit of a first first founder co-founder disagreement. Um, but it's it's for life now.

>> Rob, where's the dragonfly one? Can you show us, please? >> I can't show you where it is. >> I'm not safe for work. He got a big dragon on his back. >> Coinbase cryptobacked loans powered by Morpho empower users to borrow up to $5 million using Bitcoin or $1 million using ETH as collateral. Loans originate in seconds with no additional credit checks and competitive rates typically between 4 to 8%. Use USDC for down payments, debt refinancing, unexpected bills, and more. repayment anytime with no fixed deadlines. Over $1 billion in loans have been opened through Coinbase to date. With the Coinbase app, you can

manage cryptobacked loans with ease. To learn more, click the link in the show notes. As always, investments in blockchain technology involve risk, terms, and conditions apply. Let's get into uh some of the news of the week. Where do you guys want to start? So, here's here's what's on my mind. So, we've got uh stablecoin stuff. Tether launched their regulated stable coin USAT with BO. Um, by the way, I heard an interesting fact which is there were 50 different companies that were trying to hire BO and Tether outbid all of them. Uh, a little fun fact of the day. Uh, Fidelity launched their stable coin. Um, Hyperlid, RWAS, gold. I mean, I don't want to really talk about gold. Um, but we could. Uh, Rob, where do you want to where do you

want to take this? I mean I think the hyperlquid like hip 3 markets uh and like you know how well trade xyz and rwas is like very topical for the crypton native audience. I think some of this stuff around there's been you know this debate around crypto becoming fintech or co-op being co-opted by fintech and what that means. I think that's interesting. >> I don't know if we need to you know talk about all this specific stable coin stuff that's happening. there's because that's every week and I feel like people are sick of me talking about stable coins. But um yeah, those feel like the like the topics.

>> Yeah. I mean, what do you make of um so yeah. So so basically I'm sure everyone who's listening to this knows, but gold and metals, copper and metals have just ripped obviously in the last week. Uh today I think gold, we're recording this on Thursday, gold's down like 7% but um you know I think yesterday it was up 8%. So yeah, these the it's the first time I've ever really seen these commodities move from uh they're now just these like crazy swing momentum trades it feels like. Um so it's really interesting to see this play out. Um but the one of the more interesting things is that uh if you look on Hyperlid six of the top 10 assets by trading volume yesterday were RWAS. So if I go down the list, it was Bitcoin, ETH, then silver, then Salana and Hype, then XYZ 100, then gold, then

copper, then XRP, then silver. Um, and I was trying to find the volume. It looks like the silver USDC pair, which is it's a new pair. I think the pair went live at like the end of December. It did a billion in volume in the in 24 hours. Uh, s silver alone brought in a did a third of the of Bitcoin's volume on Hyperlid. So yeah, it's just interesting to see. I mean, I think the tokenized stocks narrative and idea was yeah, relatively new thing. And I think oftentimes with these narratives, the narrative gets a little out in front of its skis and then the products need to catch up. But I actually feel like this is a pretty unique example of the products are keeping pa products and the demand is are keeping pace with the narrative. But yeah, I would love to get

all your guys' takes on this. >> I I think it's it's actually quite interesting. So the um you know this the silver and like the gold rally and just like there's also like broad metals rallying happening right now. I think uranium is like ripping today as well and these are all I mean they're all related but like there's also like different stories. Uranium obviously a big part of the story there is around nuclear energy and um and what's happening around it you know uh energy generation you know more broadly and especially with around AI. I think on on Hyperliquid it's quite interesting because you know Osteium kind of started with this market originally and they never quite took off and there's definitely there's a lot we can talk

about in terms of the way that osteium um has built their business relative to the way that the infrastructure works for for hyper liquid and hip 3 markets. Uh but it's also I think just somewhat of a story around like who owns the end consumer and people there's these network effects and liquidity effects around just people already having uh capital on you know in an platform that's actually not that easy to take money out of um more similar to like a centralized counterparty from at least that friction perspective. Um, but I, you know, I think I don't know the I heard the same thing you did that I was thinking the thread guy who said silver was one-third of Bitcoin. I think if you look at in total in the last 24 hours the hit markets with trade XYZ was like

three billion of volume and so that's inclusive of all of the, you know, I think silver, gold, etc. and also some of the equities. Um, and that that is about a third in total of all uh hyperlquid volume, right? And so that tells you that because hyperl did about 9 billion in the last uh last 24 and that number has been like steadily increasing and it tells you a lot about like what's happening towards just you know the trader mentality of like what's interesting what's moving people want to chase these things that having kind of high reflexivity and and big um in a lot of volatility and but it also tells you a lot about just the disinterest I think in a lot of what's happening in crypto

because then there's Bitcoin and then there's is Ethereum and then there's basically no volume in almost anything else in crypto right now. And so I think it's like quite interesting that one, Hyperliquid's been able to have this success and the Hip 3 markets are working so well, but two, just how little interest there is on any alternative token across all of the trader ecosystem. Is it is it that the traders are now like moving and buying copper because Dan Dame Miller and a couple other billionaires are punting it or like like where to your point around like uh where's the demand coming from? Like is it just crypto people saying [ __ ] this I don't want to buy a token I want to buy metals and just like like because like it always goes back to like are you

solving a problem like who's the audience? Is it like crypto native people that want exposure to this? Because you can buy these commodities in like traditional brokerage account. >> So >> I think most I think most crypto traders and we've talked about this a bunch Santi most crypto traders are momentum traders >> right like they're chasing momentum. It does like the asset could be anything right there's >> there's we've talked a lot about how and S kind of brushed this off earlier. I'm not sure if I totally agree with him around like if we need more regulatory clarity for the tokens to do well over over the long run because I think you need that like fundamental long-oriented buy and hold type investor for these things to do well over the long run. But when you talk about these like short-term, you know, volatility uh that we're seeing

right now in in metals, I think most of the crypto traders, but whether they're institutional or not, are chasing short-term volatility, short-term momentum, and they're happy to rotate into anything. It doesn't matter if it's a memecoin or if it's Bitcoin or if it's metal like they will rotate into anything that they feel they can chase this momentum. It's um and those markets have kind of acted quite a bit uh like you know memecoins and frankly if you look at like the funding rates right now on hyperlquid I mean there are huge negative funding rates uh or positive funding rates but the funding rates are blowing out in these times of these big moves right now because everybody is just trying to take you know this asset and put a ton of leverage on it the same

way they would on you know anything else that's >> isn't isn't that what it actually comes down to Rob is so s to answer your question why are they using hyperlquid trade gold. It's because the leverage, right? I actually am not entirely sure how to go get 10x leverage. I I know how to buy gold. You buy one of the gold GLD or something like that. I'm not sure if I want to get 25x leverage on gold how I would do that other than going to Hyperlid. So, I would I would assume I haven't looked into the numbers. I don't actually know the I know what what pairs they're trading. I don't know with what leverage, but I would assume that's why people are using Hyperlid.

>> Let me ask also just money is already on chain, right? And there's this like, you know, there's this anonymity and, you know, regulatory arbitrage, I think, for Hyperlid relative to some of these centralized platforms. >> Let me just get this straight. Like, if you're if you're in a world where like not these platforms start working for non-crypto traders, the perp the perp could attract non-crypto traders like I get that. Uh the question is would a Robin Hood kind of just launch this or Coinbase launches and then like you know at that point or an IB like Interactive Brokers launch this versus like you know setting up a new account and going on chain through Fireblocks the hype. Uh >> that's no different than that's no different than traditional like Bitcoin and ETH and >> yeah you know I get that. I'm just

saying is is the per uh val is a per feature like worth the hoops and then what do you have to underwrite to like the there's a lot of debate around the funding rate like osteium like there's this is a heated debate on chain like on Twitter about like hey what's funding rate um I don't I I'm not sophisticated enough to have an opinion on that but I'm just curious like are you taking it's always like how many more incremental risk units are you taking for the value of trading a per on these things versus remaining in your brokerage account and that calculus is not clear to me right now.

>> Well, the easier thing about uh so so I mean there's one there's I think there conversation around like whether or not per products and to your point I think we a lot of us probably all of us believe pers are better products and like options and like retail are going to like pile into pers over time. I think there's also the idea around you know uh so commodities are working right now in part because they're moving so much in traditional markets but also commodities are an easier thing to trade on chain 247 than equities are because you don't have these closures of the market right in the same way like the commodity markets were open almost the entire week right not quite the whole week but almost the entire week if you move with the sun right but it's I think it's very clear I mean if you actually

look at so it's the volume on trade.xyz XYZ right now is about a third of hyperlquids, but the open interest is only about uh onetenth or about 10%. Right? And so what does that actually tell you? That these are people that are short-term trading these like, you know, highly volatile moves and not people who have like long-term oriented perspectives on what silver is going to do over time. >> If you guys had to bet, do you think that one-third number like a a percentage of hyperlquid that is coming from HIP 3 broadly including commodities and equities? think the one-/3 number goes up or down say over the next 12 months?

>> Well, I think >> volume or is it like because volume like if depends on like the asset price itself, right? So, you could be trading a a whole lot more velocity on a crypto on a crypto asset, but not much. I don't know. >> I think it probably stays roughly here. Uh I think we probably trend higher in the near term and then we normalize back to 25 to a third. I I would guess, but that's because I believe that eventually people will care about crypto tokens again. Uh which I think we all do. Uh except for maybe Santi and >> refresh.

>> Uh I'm like Yano. I'm the the best part of all this is I haven't refresh checked Trading View, Coin Gecko. I'm disconnected, man. I'm just fully >> I actually I I will admit I I didn't even know gold went down 7% today until I got on here and Austin, our producer, was like, "Yeah, gold's down 7%." I was like, "Oh, I'm I I've never checked the markets less than I checked them today." >> Yeah. I mean, it's it's about that today. I I I I will tell you I did um I bought a bunch of ETFs earlier this week uh for like a bunch of different things.

Um but including commodities but also including like nuclear I bought a bunch of like uranium related nuclear energy related ETFs as well. Um, and so I have been checking it a little bit this week. And I've actually never seen my equities positions like move around as much as they have this week because also like you know the NASDAQ's down two and a half% two and a half points today as well because people are concerned about AI uh AI fears and it does feel like the um uh like like it feels a little bit weird to see my Fidelity brokerage account move around as much as it has this week. I don't know if I like that. >> God damn Rob, you know what's doing well? Western Union, man. this stable coin of 9 bucks and 43 cents. Love to see it.

Um, >> all right. I'm taking us into the next topic. >> Yeah, I I did notice. Can we talk about like uh D you guys announced a huge fund raise prop today, I think. Is that right? >> Uh, we announced it on on Tuesday. >> Okay. Uh, match. Yeah. >> I didn't even see Oh. Oh, around uh at least someone has money invest these days. We well sal's now got money. Sal's got $60 million. So uh that's great. Um no no we so we announced a we led out a investment into a business called mesh $75 million round um you know unicorn business. They uh they are by far the leader in um essentially connecting all of the exchanges, all of the uh

liquidity providers, all of the wallets uh to make like a really easy interface to uh basically deposit stable coins, right? or not just stable coins but any token as asset any crypto etc. So uh like right now if you go to some e-commerce websites not all of them there's like a PayPal has like a pay with crypto widget in the same way they have like a PayPal widget if you click on that widget uh it'll pop up an interface that and it'll give you some selections. It'll say Coinbase, Binance, MetaMask etc. And you can basically in one click if they already know who you are, if you've already signed up, uh, and and you don't have to have KYC, you just have to have like, you know, signed up with your wallet. Um, you can, uh, your one of your wallet addresses, you can in one click, uh, deposit uh, your

any sort of crypto, pay with crypto, etc. >> And so, yeah, so essentially it looks a lot like a plaid and or stripe link, you know, some sort of combined of the two u for crypto. and we're starting to see a that part of the market uh pick up quite a bit. Um they also power Kelshi. Everything that you do on Kelsey in the in the crypto side is powered by them. Um they're going live with I think they just went live or they're going live pretty soon uh with one of the largest fintexs in the world to power all of their uh crypto deposits and withdrawals. And so they're doing um they're just making it very easy in a fragmented world. And I actually do think crypto is getting more fragmented in the near term because of the fact that all these fintexs are going to pop

up because of the fact that everybody wants to start moving on to tokenized assets. They are the network that makes it easy to move your capital between any of these different uh different use cases and not have to go and you know what you do now right which is that you you you pull up the the wallet address you click copy you go to the other one you the wallet you like put in the address you confirm the transaction and you don't have to do any of that with them and they're connect making all of these connections so >> do they compete with the on and off ramps Rob like do they compete with a like a zero hash for example >> so zero hash mostly today what they do is they take uh fiat in and then they swap it into crypto or vice versa.

>> Right. >> And what these guys are doing is right now is connecting after you've on-ramped connecting every single source of liquidity. >> Oh, I get it. I get it. Okay. Yeah. >> Yeah. >> So, I mean they they they will launch some fiat uh capabilities this year as well. Uh and they already kind of work with partners to do that so they can offer like a single uh an easy UX. But um the the right the right way to think about them today is that like if you are doing an on-ramp uh you want to connect to them because that then immediately gives people at call it you know someone like a revolute maybe uh immediate access to easily taking >> you know some sort of crypto from you and and sending to them or vice versa.

>> Yeah. Yeah. It's very interesting. the things that are I'd say the hottest in in the funding markets right now are the things that enable fintexs and payment providers to move onchain and do things in crypto like um we have an episode coming out with the the rain founder um which was fantastic episode and uh yeah he talked about how they you know they raised three rounds in 2025 like their business is just exploding right now uh Rob I know I know you know this very well because you guys are an investor but like you know mesh again and these are the other thing is these are great founders I think the early wave of crypto was a lot like yeah 23 24 25 year old founders first-time founders I think we're seeing a lot more like like Bam I know Bam the founder of Mesh like he's a

very very very good founder we've actually had him on the podcast folks can go listen to that we had him and Charlie noise on the podcast maybe six months ago um uh the the the Rain founder is very very good s I'm curious when you look at the uh curious when you look at the deep end space like I guess two two related questions are have you seen the founder maturity start to happen like you know the 35year-old founders instead of the 25-year-old founders because that's an interesting sign of uh kind of a sector inside of crypto growing up and the other thing is are there is there infrastructure that's needed to take deepin to the next level in the same way that you know revolute needs mesh it needs rain is there are there things that deepen needs right now >> yeah I think

deepen is a little bit different because we never went like infrastructure never went through the the fintech phase like you know that there was for 10 years basically like a huge amount of VC funding and really great entrepreneurs going after like the last mile of financial services and they called that fintech and like now we're replacing the entire back end and of course like you need a middleware layer to interface between those two things for deep it's like like there is no like you know fintech version of like AT&T that you can go out there really like that there there was never that like 10-year phase of like deep investment in web two like last mile rails and So, I don't think there's the same opportunity, frankly, to to do this, at least not yet today.

The closest I can think of are for example like multicoin funded a company called Oxio um a number of uh a few years ago which enabled like a if you're like a large retail chain or a media brand or or you know news channel or something in primarily in Latin America you could launch a phone service plan uh that was like white label branded to you and they would be the interface between AT&T maybe in the future between Helium and who all the other carriers and those brands and so um what we've seen though is that like Hey, those companies don't really tend to lean into the deepin branding. Um maybe inversion is like the you know the one counter example to that where like you're they're very publicly being like hey we're going to use deepen and go build a real business but

primarily like those guys they may might use helium or geoet in the back end but they don't need to talk about it and they never do and it's not an advantage for them and so there's less of this uh less of this like uh bridge opportunity that I I think like is really really attractive in fintech and and DeFi. Do you guys see Robin Hood's announcement said uh in the in in Europe in the coming months we're planning to unlock 247 trading and DeFi access which will allow investors to self-custody their stock tokens with possibilities of lending staking and more. This is kind of related to our RWA chat, but yeah, I think the I think the mega trend if if you had to define a mega trend of 2026, I think it'll be very clear that the mega trend of the year is companies are

moving on chain re. No, we're talking about the people who enable it, Mesh and Rain and things like that, but like yeah, everyone from the uh the Telos to the uh you know, I don't know if Santi is going to, you know, maybe buy some of these Telos, put them on put them on a blockchain, but uh you know, clearly the FinTax and payment providers are coming on chain and I think you'll see this with the brokerages, too. Um it's not just that feel like Robin Hood three years ago is like, oh, we're turning on trading for 100 assets. Now it's hey, we're turning on Yeah, onchain trading. So, it's very it's very cool to see. I don't know if you guys have any takes on this. I'll tell you like my my thesis to summarize for for this like coming years is like to your point companies are

coming on chain and they will reap most of the value and adoption doesn't translate to value cruel in infra tokens necessarily and like the tech is very real u like if you if you want to go structurally long that thesis like how do you like would you rather own like a CLA uh Robin Hood PayPal maybe PayPal not so much it's just slow uh a new bank maybe even a Revolute if it goes public like versus Soul, XRP, Ethereum, Bitcoin, any of the other majors like even maybe DeFi projects on the margin maybe because they have been depressed for a while. But I I I think like investors are not dumb and I think

they're just other than momentum traders like I think there's going to be more adoption but it doesn't acrue to the underlying infrastructure tokens but it does materially improve the business of a CLA like I'm really excited to see how CLA kind of transforms itself in this proform after adopting stable coins and if that's the case and other public companies are going to do that and other private companies are going to do that And that's where most of the value capture will happen. >> Yeah. Yeah. It's like when um it still feels very risky I think for a public we we had a call last night with the head of crypto at a public company and he's like I spent half my job convincing people internally that this needs to happen. Um but do you I don't know if

you guys remember when Toby from the founder of Shopify wrote the piece about how all of Shopify is moving on to it's basically becoming an AI first company and every single person at the company has to start using AI. And then it was kind of I remember this in like the founder group chats and stuff. It was kind of like the ah okay like we can push this too now like to Toby it was uh and you have these moments in time I remember May 2020 Paul Tudtor Jones calling Bitcoin the fastest horse in the race. Boom. Now hedge fun managers can allocate to Bitcoin. It's safe now. And uh I think that'll you'll see. I agree with Santi. I don't know if it's Clara.

I don't know if it's, you know, Vlad at Rob, it's probably I think Vlad at Robin Hood is starting to be this character, but um yeah, he's he's unlocking the ability for other people to be like, I can do this. Robin Hood is doing it. >> I I think with with stable coins, with tokenized assets, like I think we're already there actually. So, I think for finance, I think when we start talking about Deepen, we start talking about, you know, other traditional companies using blockchain rails for parts of their business, we're not there yet. Uh we have I think we've seen a little bit of this. I know there's, you know, non-publicly there's like, you know, traditional manufacturing companies and commodities traders and uh utilities that are looking at like stable coins for uh like treasury management and

stuff like that. But if they're going to do other if they're going to like tokenize like you know some sort of like hedging contract or like you know commodity like that I think we're still pretty far from that being mass market. But when it comes to finance, I mean we had the NYSC come out I think last week and say that they're putting up their own order book for tokenized assets. DTCC has specifically talked about how they're going to tokenize equities. We've got, you know, Fidelity announced their stable coin I think today. They've obviously been at the forefront of thinking through how to do more in crypto. uh where you know I think uh we I think Santi and I talked about this a little bit on the pod that you weren't on Yano but just how crazy it was what um what what Larry Frin said at the uh

at at the World Economic Forum where he was basically like all of future finance activity is like coming on chain and everyone is going to be interacting in a shared ledger and that is required for us to continue to grow these markets. So I think you know Robin Hood obviously has been a big part of that. So I I think for finance for tokenized you know uh equities tokenized like railroad assets uh that train is off the station now whether or not it's in a what type of like a permissionless form factor and you know it's you know freely tradable and you know how we think about the regulatory environment in terms of KYC IML and if these can be in you know traditional DeFi protocols etc. That's still to be decided. But is Robin Hood

gonna launch their own chain? Are they going to put it in their own walled garden? And is, you know, probably hundreds of other types of, you know, finance first or or fintech type companies. Are they going to do the exact same thing? Like, absolutely. And it's happening. I I think that's you can't put that genie back in the bottle. >> Rob, I have a question for you. Given you guys have done so much investing in this like the bridge between fintech and crypto, what's your take on like the state of compliance? Like we it's top of mind for me because there's I'm from Venezuela. There's this Venezuelan startup called Contigo which has got like very popular a lot of people doing finance offramps and like it was like a known secret within the Venezuelan community that these guys are basically just like laundering money for Pedvesa

the the the stateowned oil company through this like it's basically an entire career in Venezuela like you can like you know buy buy stable coins on Binance P2P or KI or whatever and like offload money for for the state oil company which have sanctions against them. Um, so when you see like these when I see these crazy growth numbers for, you know, card issuing companies, for like pay on and off ramps, payment trails, I'm like, you know, it it could be or it was very probably pretty likely they're in the past or today that a large part of this is like elicit proceeds just because they're the first adopters of new finan new lowcost financial rails. I'm curious like when you think about the state of compliance today, what's your are you feel like there's a lot of work to be done there?

You think we're all the way we're most of the way there? >> No, there's a lot of work to be done. I I think that's very clear, right? So, you know, Contigo was an interesting one because we passed on a couple rounds there and uh then they came out and they got like really hot and they were saying they're doing $20 million of revenue and uh you know, it was growing really quickly. Uh and I looked at I was like, what did I I miss? Because I always try to do these these kind of you know, retros. Um and uh interestingly, the first time we looked at it, they weren't even in Venezuela. Uh they were they they were in Venezuela. They kind of came in Venezuela late. Um and and I think you know having seen there's a number of companies where if I scroll

through Twitter where there's a lot of people excited about them that having looked under the hood it's like very clear to me that they are not doing the appropriate levels of of you know compliance and they might be serving customers that uh that the US government would not be okay with. And we spend a lot of time in diligence looking at that because while I think it's very important for startups to get very close to the edge and to move quickly and be okay with taking risk. Uh you it's certainly you don't want to be, you know, a backer of a startup. I'm sure you feel the same way of somebody who like is knowingly probably go crossing the line, right? And uh but but that line can be pretty thin for people, right? And so you you have to a lot of it is also just judging the character of

the uh of the founder and like what are they going to do to to grow. So we care a lot about that. We think a lot about it. There are the tools in place today though to do the appropriate compliance like you know now you know according to genius act if you use chain analysis you do the right transaction monitoring you do the right KYC at the end points depends a little bit about what happens in market structure bill but there are ways to make sure that you're operating within at least you know close enough to the white area that it's like an appropriate level of gray uh to grow your business but a lot of people are taking shortcuts right and so it's you just have to really thoughtful about that as a VC investor, but the the tools exist. It's not it's it used to be in my

mind that it was hard to do compliance. And so if you uh you may not even be able to get appropriate the appropriate level of transaction monitoring, the appropriate level of KYC to serve certain clients. That is no longer true. Now it's just about willpower and about willingness to um find that line but not cross it. so that and compete against people who maybe are willing to cross that line. Uh and it's something that we think a lot about and and I know our our companies do. >> Rob, speaking about compliance and whatnot like um I haven't heard chain analysis, cipher trace, some of these companies that you know raised a ton uh in 2021 like any update there like are they going to go public or they going to

get acquired? >> I think chain analysis is a is a 26 public company. Um, so I think they're I don't I don't know. >> You think they get out this year, Rob? >> I do. I think Chan gets out this year. >> Who else? >> Who else do you think gets out this year? Grayscale, Kraken, >> Anchorage, maybe. >> So, I was having a discussion with the leading IPO underwriter about crypto IPOs uh earlier this week >> and uh this person was telling me that they have seven people that they're currently working on their IPO with right now. M >> uh and I did ask him because we were talking a little bit about the Bitco IPO and you guys remember last Thursday how bearish I was on the Bitco IPO and and

and Inano was I think pretty bullish and then it was down 30% the next day. Um but >> I didn't say I didn't say I was bullish on the on the 24hour chart. I said I'm I'm bullish on MCI as a human being. >> Correct. >> I think I found it around where I said it would which is around 13 bucks. >> You actually did call the price pretty nicely. is at $1261. >> Yeah, Rob did say it was going to 13, so I will I will I will tip my cap. Rob, go ahead. Seven people. Seven companies. >> Um, yeah, but he was saying seven people. And I was asking, I was like, well, how many of these companies do you actually think are like good public companies? And this person was like, I think maybe two to three of them are actually good public companies. And uh,

you know, maybe five of them are better than BKA, right? And it I think that there's this thing happening right now where everybody in crypto feels like, you know, okay, we have this window and we need to go get liquidity and we need to try to get out into the public market. But most of the companies, there are very few companies that are actually the right size, the right scale, the right growth, the right compliance infrastructure, the right accounting infrastructure, and the right leadership to go be a good public company to get large hedge funds excited, right? and not just the you know the trading hedge funds but like the fundamental long only buy and hold type investors. Uh and so I think chain analysis will be one of them

because they just absolutely dominate the US government markets the and especially in this world where everything is coming on chain like everybody uses them who uh is willing to pay the who wants to operate you know legally and appropriately. I I think I have no idea what their financials are, but I think they're over 300 million of run rate uh or of ARR now and and growing. >> 300 of of run rate. I don't think it's AR. >> Sorry, of AR. Sorry, of AR. >> No, no, no. I don't think it's AR. I think because there's recurring sticky revenue, which are these software contracts, and then there's a lot of services work like any of these. So, >> yeah, I don't I don't know the revenue mix. So, you're I don't know the revenue mix.

>> Um and so like they're probably on the edge of big enough. I think you probably have to have I think closer to 500 million of revenue is is right right now considering how big the public markets have gone. I mean we're going to get two or three over trillion dollar IPOs this year, right? Like the public markets have changed so much. >> Who who anthrop anthropic SpaceX? >> Uh we're you're going to get Open AI and SpaceX for sure this year. Yeah. And both of those will be over a trillion dollars. >> Yeah. Here's my here's my market prediction. the equities market tops in June or July whenever SpaceX IPOs. That is my I think we go on a ripper of a run up to the SpaceX IPO and then top.

>> There's um there's a SpaceX round happening right now at 800 million and it's like it's overs by 40. >> Yeah. Like people are are diving into it at 800 million. >> Rob, you saidion. >> It's what did you say? 40x overs subscribed to 800 billion. Yep. >> S, you guys doing that? >> Yeah, it's crazy. I I do think >> the work. >> It's going to be bullish for deep pin actually. Like I I think like very few in very very few investors have looked at a wireless business.

>> Dude, every investor in the world is going to be looking at a w like trying to understand what a wireless business can do now. And they're going to look at uh yo this business doing like 10 bill run rate revenue that's growing like 50% year-over-year. Um, and I I do think it'll be super bullish for people as people just like start to understand that this can get [ __ ] huge again. >> So, I do get asked this question a lot from people when we're like underwriting the Helium story um and coverage. They're like, "Hey, wait a minute. Uh, talk to me about Starlink. What does that do to Dawn? What does that do to Helium? Does that for someone listening asking that question, what would you say to them?"

I mean they're compliment one. I'd say like if you think about the physics of it like if I wanted to send you a piece of data, I'm not going to send it out like whatever 10,000 12,000 miles into space and then back down. Um it just like it takes slower and it's longer. Two, I'd say like the pieces where Helium's making money today are like indoor hotspots in highly populated areas, which is exactly where like a satellite pointed at a big area is like not going to be effective. So um I I think it's like super bearish for the telos because now you have like from the bottom last mile grassroots end you have helium and dawn and all these deployments like putting routers on the ground and then on the back haul end you have like satellites forever to cover huge areas but I don't think there's

actually that much competition if you think from first principle that's like get one piece of data from point A to point B in the world where it makes more s like you either should use one of these things or the other like it's very rare that like both of them make sense. I don't think it's super competitive with with deepen. >> I spoke with Neil about it and he said the same thing because the physics just make it that the mesh network will always be cheaper. Uh it's really on the remote areas where it makes sense to have Starlink um where just don't have code just don't have. >> Yeah. Going to be a good year. You guys remember IPO uh 2021 where all the IPOs started ripping around like Q2, Q3 was like Roblox, SoFi, Toast, a firm, Robin uh Robin Hood I think was 2021, Bumble,

um New Bank I think. Yeah, I mean I think you'll see the same thing this year. >> What's Bumble doing now? >> Oh, not Well, I know. >> Let's see. I'm not sure. Yeah, their market cap's sub a billion now. >> Yeah, 900 900 million. >> Oh, that's a gnarly chart. They uh they're down 95%. >> Gosh, what a time 2121 was. >> Great year. >> Great year. I was so I was reading um I've been reading a lot about just old old books uh and about what finance kind of looked like like in the even even

like 1940s 1960s hedge fund managers it got started there and it was just like you're almost like reading you could control F >> and you same phenomenon in crypto uh but like people forget like you know illquid markets and and tokens are not the thing that goes down 90%. Um I will say like sometimes that happens and like doesn't necessarily mean that the project is not good, the business is not good. It was just that markets are not necessarily good. um you know they sometimes you have this irrationality in the market and it should have never been valued at that price but that doesn't mean the business itself is not good which is I think probably a lot of defi

a lot of deep and a lot of maybe gaming re resurges but >> the question just becomes who is who is the carvana right because a lot of tokens are about to look like this and then who who comes back I would say but yeah >> what' you say >> I I wouldn't say like about to I mean it took two years. But yeah, like there's like the the climbing up where people are like, "Oh [ __ ] you know, not going to buy it. Not going to buy it. It's just, you know, still not a good business." And >> there was an amazing episode on uh Invest Like the Best. Let's see if I can find it. Invest like the best with this uh Yeah, this guy. I forget his name. Um here, let me pull it up. We can find it.

It's this episode called uh Investor Details Carvana's Wild Ride from down 99% to market leader Cliff Sawen. An amazing episode about just Yeah. basically bet the firm on Carvana and it went down 99% and he I mean he just kept doubling down and yeah I don't know if it's a good bet or a bad bet because I think it's now back to like break even but uh you know good >> you have to you have to pick one public one token that you think is going to do a Carvana that will be now a term that we use in this what's going to be the Carvana crypto >> which one NFA >> for me helium Helium the MBNO or Helium the toen.

>> I think on a long enough time frame they're both the same. >> I mean Salana did this. Salana hit 260 and went down to $8. Um I think there's a chance Hyperlid gets completely crushed at some point and goes and then comes back. Um >> I think >> for like the North Korea hack when they get hacked by North Korea back the truck and buy hype. >> I'm uh long-term very bullish on Athena. I would say like I think I've talked about ad nauseium but like I think Gu is an amazing founder. The tok the token's getting crushed. It's down to 15 or 16 cents but you know off a off a high of like uh a buck 40 a buck 50 but you know long long term I think Athena will do very

well. So Cvana did a 100x, right? 4 to 400. >> Mhm. >> Coinbase is now what? 200. Went all the way down to 20 when the like we're talking about in this plot, right? So it's a 10x. >> I don't think it went all the way down to 20, right? I thought it was like a >> Yeah, like a 60 70 bucks, but >> maybe it did. >> No, no. Coinbase went to like 35 bucks. >> Yeah, 30. Yeah, >> this is like a 10x. >> I mean, a lot of these a lot of these a lot of the best stocks have have done this. Um, uh, Robin Hood, remember Robin Hood was that like 50 60 bucks went down to like I think it was down to like eight or

>> $9. Yeah. Now it's at 110 or so. >> Yeah. So, all right folks. Um, good. S, thanks for joining. Content of the week. What do we got, S? We always do little content of the week. Rob likes to choose a horror story. Santi likes to change normal, but uh >> I'm the only one who like actually does, you know, some sort of fiction here. I want people to enjoy themselves. >> I took your I watched I watched Sinners. >> Did you like it? >> Best movie of the year. >> Both liked it and didn't like it. I thought it was like such a good such good um like showing Mrs. I don't know when the time time was like I don't know some somewhere between 1890 and >> the prohibition right like the 20th.

Yeah. >> Okay. 1920 like showing Mississippi in the 1920s, 1930s was like they did that better than anyone could do. I thought I thought it was amazingly well done in that sense. I didn't it was too jumpy of storytelling. It was like boom boom boom vampires like boom boom boom we're killing the Kullex clan. Like I was like where where there's no like oh all the characters are dead. All right. Like just boom all the So yeah, it was a little it was a little jumpy in terms of the storytelling but >> 16 Academy Award nominations. 16 >> nominations.

>> Also, I mean, Michael B. Jordan Gordon's amazing, so good, good on him. Content of the week, Rob, what do you got? >> Uh, so I am going to go horror. Uh, so 28 years later, every everyone knows 28 years later, the original movie. Um, they they're doing like a new trilogy. So, the second of the new trilogy, uh, called 28 Years Later, Bone Temple, uh, was I think it was like it came out like two weeks ago or so. Uh actually great movie. I saw saw it this week uh in probably my only bit of free time. Went to the actually went to the theater. I'm still keeping theaters alive. I'm the only one. Uh and there it was just like it was funny and it was um you know it was really I think nuanced and

interesting about how you can think about like society and how society constructs itself uh and how they might fall apart and how it might construct itself when it falls apart. So uh go see it 28 years later. Bone Temple. is actually doing quite bad in movie theaters even though it has great reviews and is a fantastic movie. >> Go see it. >> Go see it. It's doing horribly. >> I mean has 92% of Rotten Tomatoes. Like it was better than the first one. The first one did really well. So like you know go see >> Rob Rob was a principal of GoFundMe campaign and so you know stands to benefit from proceeds. >> Listen if you have a horror movie uh an indie horror movie that you think will do well and you need funding come pitch me. Dude, isn't the >> sidekick after after Dragonfly?

>> Isn't that like the best performing category in like uh movie business? Like indie horror movies? >> Oh, incredible. Horror is the only place where indie film continues to do well. And you see these the it's kind of like a venture outcome because you it's like power dynamics. You see these um franchises that get built off the back of like the first, you know, movie gets built uh or gets um funded for like 5 to 10 million bucks and then they do $120 million at the box office. Like Smile was one of these. Uh there's >> Paranormal Activity was one now. >> Yeah, Paranormal Activity was like that.

Obviously, that's an old one. Um Smile was one of these that's more recent. Uh there was um there's this one I'm I'm forgetting the name now. Uh but there's a a kind of a a killer clown uh which has like this like really just like deep like niche rabid fan community which now has made four of them and has made the and they're they're you watch them like really low production quality but people just love them. It's it's it's basically venture returns uh in indie horror. It's the only place that you can do that in film today. Look, please send me the deck to Horror Capital Management LLC.

>> Santi, content of the week. Hit us. >> So, I I started I'm halfway. >> We need to serve. We got to survey the audience at some point to be like, do you guys like the content section because it's or I bet if you looked at our our listen rates, it's like good, good, good. Just drop. >> Okay. But we're still gonna This is where the market's wrong. We're gonna keep doing this. Okay. We like doing it. Um I'm halfway through the book uh the making of a parab bear uh by Jeremy. He's kind of an engineer investor built um kind of early on the indexing trend uh based out of Boston.

Um he also has a couple YouTube videos if people don't want to read the book. He at the peak managed like 120 billion then went down a ton. It's just, you know, it's a very se like, you know, old-timer. Um, and I always enjoy reading uh those kind of books. So, it's called The Making of a Perma Bear. >> Seems apt for where we are on the market too. >> S What do you got? >> I'm halfway through this halfway through this book called The King of Oil. It's just about this trader called uh Mark Rich, I think his name was. It's super good. This guy was like absolutely insane. He basically pioneered like oil used to be traded bilaterally between companies and countries and he like created a spot market for it and he's like super under the radar but would do all these insane things like at like it

was like the Iranian revolution he was like buying oil from Iran and like selling it to the Israelis like under the radar like without telling either side just like crazy insane [ __ ] and the CIA was looking after him for a while like he actually couldn't come back to the US uh because he he was getting uh he was getting they wanted to arrest him So it's like a a crazy crazy book both in the sense of like him as an entrepreneur and then actually pretty informative on just like the history of commodities markets as well. >> I'm like 100 pages into the beginning of the the beginning of infinity by David Deutsch. Um and I think I think yeah I think I like it so far. So it's about like um >> yeah he argues that explanations have are like a fundamental place in in in

the universe and it kind of explores like human knowledge and um argues that like good explanations and unlimited human progress through through through like the refinement of knowledge basically. Uh well then I don't know what he argues. I haven't gotten to that point but that's what it seems like it's about so far. So >> last question. Last question. I think we're going to have to embed this. Are you which is the LM of choice this week? >> Claude. Oh my god. Okay. Sorry. I should have I should have gone on my rant. I didn't go on my rant this week. I set up I I set up Claude co-work finally. I've been a little behind on setting up Claude co-work.

I mean, you know what I'm going to say. It's incredible. It's incredible. So, you got to So, I didn't realize this. So, you have to download Claude as an application. I I always use Claude in the browser. I I finally I download Claude, you know, the application, set everything up, connected it to notion, Slack GitHub linear email calendar our Stripe, our ramp account, everything. I can now ask it anything. I can ask it any I can be like, "What are employees at Blockworks debating? What are they arguing about today?" And it will tell me. I can be like, "What are the 10 weirdest outlier expenses of the last nine months?" found out someone expensed a Herman Miller chair. That's not on the expense policy. Uh yeah, so

you know >> that person they're going to pay you back. >> They actually already left Block Works. So um you know I think they might get the Herman Miller chair for free. Good. Good on them. Um but >> you know when you think about how much time people sit on a chair, you know, it's not >> I know I know there's an argument to be made that that we should but um I I also did one. So, we have a we we sell with a deck like we have like a deck that outlines Block Works, like a 15 slide deck or something. I said, uh I said, "Look, um here's what I said. I said, let me pull it up." I said, "Imagine you're an incredible product designer and front-end engineer. Turn this deck into an animated, beautifully designed

website that we can send to prospects instead of sending them a deck." In six minutes, it created probably an eight and a half out of 10 website. So >> nice. >> Yeah. Yeah. All right, that's all I got. That's the pod. Good pod. Thanks, folks. Good listening. Uh, we got an episode with Belshi coming out on Monday. >> He addresses all of Rob's concerns. Um, stock is >> Do I just get ripped apart in this pod? I can't wait for it.

>> No, he actually ends up talking, we ended up talking for like 45 minutes about what it's like as a founder going through the IPO process, which I'd never really heard in that much detail. But we didn't actually talk too much about Bitco's business. We talked about like just how crazy the IPO process is like, like what it's actually like to do a road show. So, it's really yeah, really interesting conversation. So, see you guys on uh see you guys on Monday for that episode. See you next Friday. And S, thanks again for joining and congrats on the on the fund raise, man. >> Thanks, fellas. >> Change that credit card pin. >> Yeah, seriously. >> All right, folks. Thanks, guys.