ChatGPT's Breakout Moment, Binance vs Hyperliquid & The Exchange Wars | Weekly Roundup

Transcript

This episode is brought to you by Scale, the next evolution in layer 1 blockchains. Explore the gas-free ecosystem at scale.space/ecosystem and follow their journey on X atcale network. Thanks to Scale for making today's episode possible. All right, everyone. Welcome back. Happy Friday. Happy Saturday. Santi, what's happening? What's going on, man? We uh we are still we coming out of D. We're not sick as far as I know. Knock on wood. I'm sick as a dog right now. Oh god, I'm sick. Is this Is this a constant thing? Like, look at this. I got this stuff. I got this stuff. I got I am loaded up on so many espressos and drugs right now. Jeez. You You mean like homeopathic remedies from

Whole Foods. Vitamins. Vitam. Yeah. Nice. Yeah. So, you spoke too soon. I am sick as a dog. I actually didn't get sick of DS though. Dwars conf blocks conferences. You don't get sick at our events. Yeah. We don't let people get sick at them, right? Institutional crowd just does not get sick. No, never. We would never allow that to happen. That's more of an ETH Denver phenomenon, right? It was Should we do I mean there's a lot to talk about. Should we do we So you missed So Mike and I did this Dash recap, but I will we I mean there's a lot of news this week like uh there's M I want to talk about M&A stuff, stable coins, um the hyperlquid drama. There's a whole bunch of stuff, but I would just be curious to get your take from from D. Yeah, look, I mean, at

this point, I've been to a lot of DS um conferences, London. Um I was in New York. Uh I've done a few. It's always interesting because you get the institutional crowd. I I tweeted before. I mean, I just think this cycle you're in the this interesting state where institutions are more excited than crypto natives. Um and you definitely saw it in the room. I mean, [ __ ] even uh you know, President of the United States did a stream, didn't he? He did. Like, wild. So I mean could could you have imagined that could you have imagined the prior administration going on in D and and like you know I mean that was one of the crazier moments of of my life actually like the whole story of how that came to be was just ridiculous but yeah that was uh yeah and

even I mean I think you were there days one and one and two I'm pretty sure what uh yeah I was there I was there days one and two days one were a bunch of meetings like a lot of large funds were there any like good meetings interesting takeaways like would love to Well, yeah. I mean, I you know what I'm doing in a version, so I met with a lot of the people that are participating in the round were there and it was just good to catch up with people. Um, a bunch of people that I'm hiring were there as well. So, it was just really good, but very well represented that I was spending time in the speaker room and you know, people that I guess you never thought would be involved in crypto four years ago were in the room where they're

going to speak, where are they going to participate in panels? It was very, very interesting. Um, and also, you know, a lot of people that continue to build, you know, like folks like Stani that have been around for ages and just those people are like rarer and rarer to find these days, I think. Yeah. Um, but it was a treat. Then obviously day two um it was sort of I had the opportunity to talk a little bit more what we were doing at inversion and then um we had a live panel with um the scale founder and Stani and uh I I felt that that conversation we could have taken it far more and gone much deeper. Um but you know the conversation really hit a wall at one point which is uh when you started to [ __ ] on people who sponsor conferences

at a conference. Yeah. No, I mean I didn't mean it like that, but um I'm kidding. It was uh I'm kidding. Yeah. Yeah. Yeah. No, it was good to have it was good to have you there. Um Yeah, absolutely. Yeah, we did. We I won't go into too many dash recaps because there's a bunch of news this week and Mike and I did ours, but actually there's a a tweet related to this about like institutions being really excited. It was Eric Balcunis. Uh there was just a big survey by I think it was who's BBH? Is that Brevin Howard? Brevin Howard. Uh Brevin Howard Holdings Digital. ABH actually. Oh, not Bren Howard. No, it's uh BH D. Brown Howard Digital is what I was thinking. Let's see. BB Oh, Brown

Brothers Heramman probably. Oh, Brown Brothers Heramman. Yeah. Yeah. Eric Eric Balcunis. 95% of investors surveyed by BBH said they plan to increase their allocations to ETFs this year. That's up from 78% last year. I'm old enough to remember when it was below 50%. And then actually the next one is 71% said they aim to increase their allocation to crypto ETFs in the next 12 months. That's higher than I would have thought. I would have guessed 40 to 50% and I'm pretty bullish on the space relatively speaking. So Mhm. I mean those two stats it's like you know what I would love if these folks are listening because you always see surveys if if someone could just extrapolate and like plot survey to actual allocations

you know like because a lot of times post you're saying yeah pre and post um obviously we're getting started with ETFs and crypto but you see all these survey sentiments that JP Morgan does and all the major investment banks do and research desks do but I've never actually seen like I think JP Morgan does a recap of the year and says like this is our survey respondents. They do it every week. They do these surveys for institutionals clients, how they're feeling about the market allocation, you know, what have you. And then they they like sort of like um correlate that to what actually ended up happening during the year.

Yeah. Um all right, before we talk crypto news, I want have you seen this new open AI model 40? We We got to see it. Yeah. It's it's like everywhere in the timeline. Have you used it? No. Have you actually like used it? Okay. It is the most It is one of the craziest product moments I've ever had in my life. If people should pull up Patch GBT, I don't know if it's for the free model too, but it's uh it is the most it's probably like I remember there are these moments in time where you have these like crazy feelings like uh with products. I remember the first time I called an Uber. I remember the first time I used Uniswap. Uh, I remember the first time I got on AIM, like a AOL, instant messenger as a kid. Yeah. This

was one of those moments for me. You mean the first time you fell in love? Yeah. I wanted to DM a girl. Nerve-wracking. Every everyone. Um, all right. Here. Look at I'm going to share my screen. I'm a prompt. Like, I just pulled it up. Like, what do you say? Like, hey, create a Look at this. Look at this. Can you see my screen right now? Yes. All right. This is a picture of you at D. Oh, interesting. Make this this is the this is the classic one that everyone was doing this weekend or this week. Make this studio Giblly style. Oh, that's And then you wait and I'll uh it it'll it takes like you know maybe 20 seconds, let's call it. So I'll I'll we can we can talk throughout it. But it is

the most amazing like you know Block Okay, Block Works has 80ome employees right now. probably 40 work in content and creative and stuff like that. The impact of this is so massive uh across all areas of our business. I can't even Okay, so like let me just walk you through some of the takeaways like online ads like creating an ad online is just Oh, here it goes. Actually, before getting into the the takeaways, we can look at your here. I'll show you this one while we wait. I I saw the one of you and uh Oh, yeah.

So, this is our permissionless landing page. I just put in I was like create this in bow house style and it it gave me this in like 20 seconds. Then I said create this in you know I think it was studio Giblly style and it created this. Then I said create a vintage ad and it gave me this. It's just so this was another one I was like create a an old magazine from the 70s with Blockworks Research. It gave me that's like med that's like med style you know. It's so clean. It's so clean. Don Don Don Draper at his finest. This one was awesome. So, Mike and I posted this like kind of cheesy post like ah, you know, my partner in crime, whatever. And then I made this and I love this picture. Like, this is an awesome picture. And then the

Blockworks team started creating nice pictures of us. All right, let's go back. Let's see if the image is created. But, but like so when you think about like the impact of your business, like is it is it that like you don't have to hire as many people and you just um you think about it smaller team? Yeah, I'm less interested in hiring less people. Like I don't ever think about like, oh, we we can now lay off our creative people or we can lay off the designers or we can h It's more um the output. Yeah. No, it's the output of a person should 10x, right? It's like if you were uh if you're a designer, like the expectation around how the quality of your work and how how much work you can

do and the quality, it's both the quantity and the quality just just 10xed this week. Um, and it is now, this is the classic VC term, what is it? Javvon's paradox, which is like an increase in efficiency actually translates into more overall consumption. It's not to say that you're going to have you're just going to do more. You're going to have more like you're going to just increase your throughput. Right. Right. It's uh Yeah. Exactly. Increasing the efficiency actually leads to increased consumption. Consumption. Yeah. Whether it's you hire more people, you have more ads, you have more footprint, like you just do more.

Yeah. So, all right. So, let's go back to Chy. Let's see if the image is done. All right. So, this is the original image of you. Look, it's just like it's just so fun. Like, it's just it's just a fun fun. I I look like some sort of messiah there. I mean, it doesn't look just like me, but it's like your yours I thought looked better. This looks weird. Like, it's about the base that you start with. And, you know, I had a stronger base. though. But look, I mean, look at this. This is actually a more real example for block work. So, we we create all these thumbnails, right? We create we publish like, you know, dozens of podcast episodes a week. So, I put in this white image that is just a picture of Michael Sailor and this text on Google Slides.

This is how Bitcoin hits 1 million. That's all I put in. Then, I prompted it with turn my Bitcoin sketch into a YouTube thumbnail, 1920 x 1080. I added another image for inspiration, but get creative with it. Optimize for virality. Add in background images for virality, but they shouldn't be cartoonish. Add laser eyes to Michael Sailor's face. Center the text. Boom. And it gave me this. This this would have taken hours for a designer to make. And I was able to create this. Then I said then I said, "Research everything you can about what makes a viral YouTube thumbnail. Send me the summary here." It sent me the summary. I copy pasted this and said, "Hey, create a new thumbnail based on all of your learnings and it gave me

this one, which is even better." Like this, you know, it's kind of a cheesy thumbnail. It's but like it works. It works higher. This is a damn good thumbnail. And uh yeah, I don't know. I just think this is going to change everything. Like this changes um so so let me ask you a question. Like if if everyone levels if the playing field is now so easy, right? The paid version is not that more expensive. Everyone now has access to this. The skill really is the prompting, right? And then the the the what you just did. People just need to have an understanding how to work the model.

What what it's sort of like focus on the type of question that you ask. But if everyone now is doing that and is hacking this, so then like your engagement like you have like a very small gap when then then it's just I I get what you're getting at. This is an extension of what's been happening for the last 20 years, which this makes it easier to build a business. And I think if there's one metric that is like so important to the world, it's how many founders are there in the world who are able to build the businesses that they want to build. So if we look back throughout history, there was it was extremely hard to get a business off the ground, right? It's very very very tough. And let's let's maybe focus on the tech industry for example, extremely tough. you had to get like spend

hundreds of thousands on or maybe even millions on building databases on prem databases and then boom we get we get SAS and we get well yeah before well people should know like there were business models like pets.com and all these things that you had to buy these licenses and it was incredibly expensive and then software as a service allowed you to buy per seat meaning you didn't have to like you you could buy for one employee not an entire organization so the deployment you have to come in and install stuff on at your office and then Salesforce obviously created the the SAS industry as we know it today. So there's things like SAS. What does SAS do? It makes it easier for you to start a company in one sentence. Lowers the cost for lowers the cost. What does uh what what did cloud do? What did AWS, Azure,

Alibaba cloud like what do these do? Makes it easier to start a company. It it turned capex into opexics and also lowered the cost and it was more flexible in the consumption pattern. Yeah. So that allowed many many different business models that were unviable before that. I just think about like think about block works like if we had to go build a database. We had to get like what do we what did we do? We just created our first website on Squarespace. Like you just like these no code. So no code was an extension of this. Like I didn't I was not a good engineer good enough engineer to build a bunch of blockwork stuff. We had our fir we had our website on um combination of web flow and Squarespace for the first five years of the business like no code made it much easier. Um and now these AI

tools are just making it even easier. So yeah I think like I mean you even extend that further to I mean certainly like AI like the the productivity gains right of anyone can now be a good designer anyone can now create like really good content. You're just checking off the boxes to make it easier to build companies. That's what that's what you're So the question is like where is the value then? the values in the idea, the execution like you're still have emphasis on execution, right? Um but but I do wonder like so so there's folks like Naval and these folks like it's going to be you're going to start seeing unicorn companies with like one employee, two employees, five employees. Yeah. Then what is that archetype like? Where how will you acrue that how will that value be created? Is

and are most just lower in this state of affairs which is like it's just way more competitive. This episode is brought to you by Scale, the next evolution in layer 1 blockchains. With a gas-free, invisible user experience, instant finality, and robust security, Scale allows for limitless scalability, and has already saved its $50 million users over 11 billion in gas fees. scale's high throughput, zero transaction costs, and powerful web 3 infrastructure make it the ideal platform for gaming, AI, and other high throughput apps. To explore the gas-free ecosystem, visit scale.space/ecosystem and follow their

journey on X at scale network. That's scale spelled with a K. Thanks to Scale for making today's episode possible. This episode is brought to you by ZKYNC. In 2024, ZKSync took a step toward a multi-chain future by transforming from a single L2 into an everexpanding network of ZK chains, the Elastic Network. To onboard the whole world into crypto, many specialized chains must be able to coexist, work together, and share liquidity. Institutions and global financial leaders choose ZKSync for unmatched security, scalable infrastructure, better onboarding, gasless transactions, and privacy first design. Join over 20 chains, including Abstract, Sofon, and Kronos in the

elastic network. Today, behind ZKYNC is the ZK stack. It is a one-stop platform for building private blockchains on Ethereum. The stack solves all the typical privacy, regulatory, user experience, and deployment concerns of blockchain without compromising performance or security. Join the Elastic Network today at zksync.io/mpire. Thanks to zksync for making today's episode possible. Yeah. Okay. So, I'm seeing a lot on Twitter right now about and there's this, I think, prevailing idea that ideas used to be worthless and execution was all that mattered. And now I'm seeing a lot of people say, "Look, the the idea is now all that matters when execution becomes so easy." I fundamentally disagree with that. I

think building a I think it's really easy yet to go build these images, but the execution of a company is about how all of these millions of different parts, not just your images and your transcriptions of the podcast come together, but how your people come together and how you hire and how you go to market and your story, like all of that actually remains the most important thing. So I think the the thing that is getting harder is for many businesses are valuable because you're able to capture attention. Capturing people's attention is becoming harder. Yes. And therefore and therefore you have to create good content. You have to create good you might be able to create a good thumbnail but if the content underlying that thumbnail is not good then you're

still stuck in that state. Uh I go back to this idea like it's a constant debate whether would you rather invest in a big market subpar team or a great team terrible market that 100% a great team for sure for sure because you're saying okay they're about to pivot they expand out they they you can expand the you can expand markets and pivot you can't pivot a team that's my that's my take yeah although I I will say like I just I do think that timing is very important meaning if you're at the right place at the right time say DeFi summer or early crypto like a lot

like a lot of protocols that I guess are hard to explain why they're value what they're valued are sitting still in the top 10 because they were like just early and they were able to create this community they captured attention and they made money for people and then but there's there's better pro there's better protocols there's better tech that has come you So, so I I don't know like I I go through this debate where I think I I fundamentally I hear your point like a really good team is going to be able to like out innovate and like find a good product, but I've seen it time and time again from my perspective. I've invested in phenomenal like super sharp high IQ teams that just didn't make it because they were they were just fundamentally

the way they went about the the way they went about finding product market fit was not great and I guess I but you're talking but that's a different thing you're then then I guess that doesn't make him a good team then. Yeah, I think yeah you're talking about high IQ and intelligence which is overrated for building a company. Yeah, exactly. Yeah, I guess how you qualify a great team by default is uh I guess it's a truism which is a great team will always find a big market. That's what I think and sol and solve a problem that really matters and be able to talk to the customer and iterate like like let's just say was Instagram like Instagram in the early days there was shutter stock there were

so many other companies they launched at a time where uh they had these simple filters but it was it coincided with Facebook and social media there's some really good like um archives that have surfaced when Zuckerberg is asking one of his engineers like should they buy like three companies and one of them is Instagram. In Instagram. Mhm. And that just like it just like highlights so much of like was Instagram the best photo editing like sharing app out there? Maybe not. But it was just at the very right time and they had someone like Facebook really feel threatened that they acquired them for a billion dollars. Is Bridge the best API orchestration company out there? There's five others but you know they were at

the right time. They got the right customers and got acquired by Stripe. and then they will be kingmate, you know. Yeah. I would argue bridge is the best stable coin provider cuz they're the they're the best the best engineers. They're the best team. They're the best team. We had Zach on the pod and he we was like he's not a big organization, but he had like really good talent. Yeah. So anyways, I just like going people should play this is a crypto podcast. Not here to talk about these AI tools, but like you guys should really really really pay the 20 bucks. Go use this tool. It is it's going to change movies. It'll change how you build websites. It'll change how you create decks and slides. Um I, you know, I really like people at Block Works get very frustrated with me because I care

so much about good design and good slides. Um and uh you know, should I post should I post mine? I mean, I guess the recording is going to come out, but I was thinking about like posting my slides on on Yeah, you should. You should put your slides, even just two or three of them, into this tool and say, "Make this Bow House style. Make this Studio Giblly style. Make this the style of a Dawn Draper 1960s madman newspaper ad. Put your slides in. It is amazing what it comes up with. So anyways, I would just recommend people send me that pig. Yeah.

Yeah. Um the last thing I'd say is like there is no excuse not to be able to do something anymore. Like internally at a company if someone tells me like I can't do anything. It's like oh my god the tools are right in front of you. you just don't have the the like I don't know the uh the agency basically to go figure it out and uh no excuse not to be able to on on this point this is an anecdote that I love sharing I think I've shared in the bot before so Henry Kissinger used to have this style in anyone that worked with him is so they would imagine Henry Kissinger Secretary of State he had to have his handle on million different things and his staff members would come to him and said hey Mr. Kissinger, here's a paper on so- and

so policy matter. And he he would always look at the staff member and said, "Is this your best work?" before even touching it. And and the st and the staff member would unequivocally say, "No, Mr. Ker, I'll come back to you." And he would come back again. He would just repeat repeat until like until the fourth time. It's like he would respond be like, "This is my best work." And it was like, "All right, then I'll read it." Yeah. Do you want to know what the modern day version of that is? What? Have you put this into an AI yet? Yeah, exactly. Literally, I got someone sent me a I asked someone to do research on a pricing model at Block Works. Um, and we're doing this new thing and not going to share it publicly yet, but I was like, I need research done on like how to price this out

because a new new thing for me. I don't know. I don't know how to price it. It was like seven out of 10. I could ask a question, is this your best work? I could also ask a question, have you put this into deep into OpenAI's deep research yet? Because I can tell it's it would be much it would be much better if you did that. Yeah. So, anyways, why hire why why keep that person around? There's a there's a um 2025 is a transformational year where the I actually think founders right now are way more obsessed with these AI tools than employees are. Um, yeah. And I think it will be there was this idea that like you should maybe shouldn't use it

for your work because it devalues your work or it's kind of cheating if you use it for your work. And I've noticed at at Block Works, this is kind of maybe I'm being too public cuz I'm maybe people at Blockworks are going to listen to this. There's probably like 25% of people at Blockworks use these tools 30 times a day. And I can tell, man, I can tell in their output. Their output has gone up 10x. I can tell in their efficiency. I can tell them their productivity. I can tell them like the quality of their work. Then there's like 75% of the company where I'm like I just know you're not using these things and you would be better if you used them. It doesn't matter if you're in It almost reminds me of like just around the discussion like you remember when it was

like felt dirty to site Wikipedia. Yes. And then it became like Yeah. Like you should information through Wikipedia. Yeah. Yeah. I I got a C in my economics of Brazil class because I cited Wikipedia. There you go. Stupid professor. I'm sure he's no longer there. All right, let's get into some of the news. Um, uh, IPOs and acquisitions. I think we're going to have to start making this like a normal section of the podcast because this year finally, finally, finally, I think is the year of M&A in crypto. Um, so I mean, let me just run through some of the big announcements. Uh, f first one was E Toro. E Toro filed uh to go public. Uh if you remember a couple

years ago, E Toro actually filed to go public. This was maybe 2020 or 2021 in the last like hot cycle. Um they filed to go public at 10 billion. They just filed to go to go public again at $4.5 billion. Um E Toro, if people don't know them, they're kind of the Robin Hood of crypto. They kind of sit in between like Coinbase and Robin Hood, I would say, but but in Europe. Um, and the reason I say in between Coinbase and Robin Hood, they're very much like the Robin Hood competitor in Europe, but actually 96% of their revenue comes from crypto right now. I think I think I found I was looking through their filing and I think I got that stat right. 96% of their revenue comes from crypto assets. Um, but the the the scale and the size of it

Toro is actually much smaller than some of these players. Again, because they're in Europe, they're an Israeli company. Uh, Yonyi Yoni, their founder, is amazing. You've been building it Toro for like 15 years, maybe maybe even longer. 16 17 years they have three and a half million funded accounts on the platform. So really impressive but much smaller when you think about compared to scale 130th of the size of Coinbase. Yeah, Coinbase has 100 million accounts. I don't know how many are funded. Okay, got But but yeah, so anyways, but big like the IPO market is definitely loosening and opening back up. Like we saw outside of just crypto like CLA, StubHub, uh E Toro all filed. I think

Coreweave comes this week or next. Um Google just announced this huge deal of uh of Whiz, which is a cloud security provider. By the way, Whiz, crazy deal. if people want to dig into it. They started like four or five years ago. Uh $ 32 billion acquisition. Wow. Um yeah. So I mean like pre pre-Trump obviously a lot of people have been scared away by the FTC and the IPO markets have been pretty closed. Um and now things have like really opened back up. So I guess later this year things I'm paying attention to Circle IPO. Um this e Toro IPO. It'll be interesting to see a if they get out, which I I think they will get out, but b what the market values them at, I think is really important. Uh the only comp in the market is Coinbase

right now for the e Toros and Krakens. So I was talking to some of the c uh custodians at D, some of the founders of some of the custodians, and they're like, "Look, it's really tough to get public right now for us because the only comp in the market is Coinbase. We're so so so different than them, but like the bankers don't know how to value us because the sellside research is so so crappy." So anyway, Circle E Toro, I think Kraken is looking like maybe not. Yeah, maybe not 2025, maybe early 26, but but I don't know. They they had a huge acquisition this week or last week of Ninja Trader, largest crypto acquisition in history. 1.23 billion.

1.5 billion. 1.5 billion. Yeah. 1.5 billion. Uh largest Tradfi crypto acquisition in history. Um Chain Analysis probably is a 2026, you think? Um I mean it's kind it's kind of pretty down now. Yeah, but their revenue I think is up to like 150 million now. Probably a lot of that is from services, not subscriptions. Oh, I see. Non-recurring just but I'm sure it's contracted. No. What's that? With services? You mean like non-contracted services like one time? Yeah, exactly. Exactly. like uh you know they might sell to the US government. Hey this is a million dollar recurring annual like a arr deal but we'll add in another million for our

team to go in there and it's almost like consulting consulting. Yeah. Yeah. Yeah. The you need a when I was at Sage View we would only be investing in enterprise software. There's something magical about having 70% most of your revenue coming from subscription like ARR and getting 100 million. That was the bogey. 100 million AR you could go public. Yeah. Yeah. Yeah. So, I think some of these guys are close. Like, chain analysis maybe is close. Um, I think Galaxy could finally list in the US this year. Uh, that, you know, they've been in Canada for a while. Be in Canada for a long time.

It's always interesting to try Galaxy and the premium or a discount that they trade to book value. Yeah. As as a sentiment. Yeah. Um, Naidig, I think maybe could I think Naidig I think uh who owns Naidig? It's a stone something or another. Mhm. Get the name. But I think they're doing a restructuring. I think Naidig is trying to maybe get out. Um, anyone else that you think could uh I think Consensus will try to IPO this year probably. Anyways, so IPO markets Oh, Gemini or Gemini. I don't know how they would get out because they're smaller, but I heard they're trying to do something. So interesting. Anyways, maybe a combination of Gemini. Well, it's hard to stitch these things together, but yeah. Yeah. So, those are things I'm

paying attention to. And then the acquisition side, we just talked about Kraken. Kraken, just two cents on my two cents on that acquisition is uh with the market structure bill, every all these things are going to merge like Robin Hood will add a bunch of crypto assets. They're already doing this. Coinbase and Kraken will try to add equities. Um and I think the Ninja Trader acquisition is that for Kraken is them just accelerating adding equities. Yeah. Yeah. Tokenized equities is is I think everyone internally is like just trying to scramble on that and they're ch they're Robin Hood. you can just feel you feel it's going to come. People should watch their presentation from yesterday um that Vlad was presenting.

Again, I'm like I've been buying up Hood. I'm I really like Robin Hood as a business. I think it'll come down to like probably Robin Hood verse Coinbase. Um uh speaking of Coinbase, Darebit deal is very interesting. Um uh I'm hearing like three billion is the acquisition price. I don't I don't this is from like a doesn't three arrows own a bunch of dare bit and so therefore like all the creditors are going to be made whole similar to like FTX that wouldn't surprise me entropic FDX that would be even two even two billion right even even one and a half that would be the largest crypto acquisition in history so that's quite interesting derbit owns I think still over 80% of the uh options market options market

yeah yeah yeah this episode is brought to you by scale the Next evolution in layer 1 blockchains with a gas-free invisible user experience, instant finality, and robust security. Scale allows for limitless scalability and has already saved its $50 million users over 11 billion in gas fees. Scale's high throughput, zero transaction costs, and powerful web 3 infrastructure make it the ideal platform for gaming, AI, and other high throughput apps. To explore the gas-free ecosystem, visit scale.space/ecosystem and follow their journey on X atcale network. That's

scale spelled with a K. Thanks to scale for making today's episode possible. This episode is brought to you by ZKYNC. In 2024, ZKYNC took a step toward a multi-chain future by transforming from a single L2 into an everexpanding network of ZK chains, the elastic network. To onboard the whole world into crypto, many specialized chains must be able to coexist, work together, and share liquidity. Institutions and global financial leaders choose ZKYNC for unmatched security, scalable infrastructure, better onboarding, gasless transactions, and privacy first design. Join over 20 chains, including Abstract, Sofon, and Kronos in the elastic network. Today, behind ZKYNC is

the ZK stack. It is a one-stop platform for building private blockchains on Ethereum. The stack solves all the typical privacy, regulatory, user experience, and deployment concerns of blockchain without compromising performance or security. Join the Elastic Network today at zksync.io/mpire. Thanks to ZKSync for making today's episode possible. Should we transition? Speaking of options per uh Yeah. You want to talk Hyperlid? Yeah, let's do that. Let me give my I actually didn't pay too close of attention to this, but let me give my quick overview and then correct me where I'm wrong. I just took some notes on this before, so I'm going to um Okay, so here's my layman's understanding of this. So, a trader basically opened this

big uh I think it was a $6 million short on on Hyperlid on this token called Jelly Jelly. Jelly Jelly is actually a to it sounds it was just a memecoin stock or memecoin token. It was actually created by the Venmo co-founder, this guy AcroM, and then uh this investor called Sam Lesson who runs Slow Ventures, his wife, Jessica Lesson, runs the information. Um, okay. So, the trader took out the short position. They then deliberately pumped Jelly Jelly's onchain uh the price of Jelly Jelly, which forced their own liquidation on Hyperlid. The short gets absorbed by Hyperlquid's vault which is this communal risk pool backed by the HLP token that inherit inherits positions when users fail to cover margin. So what

happens is this Jelly Jelly price keeps pumping the vault starts to bleed out and then eventually is sitting on this loss of like I don't know 10 to 15 million. Uh so then Hyperlid goes into like damage control. uh they delist Jelly Jelly, they pull the chart, they basically take Jelly Jelly off the platform, they hide the vault's exposure from the public view. Um and I think there was uh then there's this other angle where Binance and OKX went into like I think it was really Binance because I saw the Binance co-founder like tweeting tweeting about like, "All right, we got to list Jelly Jelly."

Binance kind of goes into like chaos mode. They list 25x leverage lever Jelly Jelly Ps. Um, and uh, actually, if you remember back in January, I had I found this tweet from CZ um, where he tweeted, "Hype may hype may win short term, builders will win long term." So, uh, okay, back back to the overview. Basically, then Hyperliquid kind of convenes the validator set uh votes to dellist Jelly Jelly Ps following I think they said signs of suspicious market activity. Um and the re the reason this was so important was

uh if the if Jelly Jelly had hit like 15 cents or 16 cents uh you know 15.15374 okay there you go. The vault would have lost their entire entire 23 30 million would have been wiped. Okay. So to kind of TLDDR TLDDR on this, there's this like whale trader on Hyperlid. They put on a short position on Jelly Jelly. Jelly Jelly saw that, tried to do what they had could to liquidate the short by pumping the price. They then like started tagging Binance on Twitter.

Binance listed Jelly Jelly on Binance futures knowing it would cause a pump, liquidate the whale, and cause harm to Hyperlid. Hyperlid delisted it which cause calls into which obviously saves them um but calls into question like hey if you can just change the oracle price um and close the position in without really getting wrecked like are you really decentralized? Okay, that's my like kind of crappy explanation but fill in the gaps. No, I mean I think um I don't want to speculate or anything who this trader was, but the the the thing I'll add is um so Hyperliquid pulled kind of this trump card, which is they liquidated the entire position that they

absorbed, the 392 million of Jelly, which at the time was valued at like 3.72 million at 0.95. So they actually made a profit on that of like 700K. So they forced delisted Jelly entirely, but the market price at the time, and here's the difference. The market price at the time of Jelly was 50 cents. They kind of like, you know, arbitrarily like liquidated this position at a price that they kind of took, which was not the market price. And so that was um I I guess people were you know gravedancing and saying yo this this trade exposed everything wrong with quote unquote decentralized per protocol which is

um a lot of per protocols not just hyperlquid have gone into hot water even money markets where there's no size limits on especially liquid positions even like curve you know like if there ought to be like parameters of like setting like limits on the amount of size to avoid this type of manipulation. Um the other thing is like I'm sure we'll have Omar from Chaos Labs like we've had him on, right? And just talking about like how oracle pricing works on chain is still very much the biggest attack vector here. The way you calculate the price should be weighted. It should be some sort of guard rails in place because that always ends up being like um the issue in a lot of these uh

attacks on chain that you just sort of like manipulate the oracle and there ought to be even though you're waiting and like problem is like it's a combination of like it's an liquid asset so you can manipulate the price you can manipulate the oracle and so it just has a cascading effect on things. Um I don't know like I ultimately think that the question here is I think you covered it well. The discussion around on on Twitter was, hey, listen, um, is Hyperlid really decentralized? Uh, you know, this is not DeFi, the whole ethos thing. At the end of the day, like, you know, did they do the right thing or not? Um, you know, I think I don't know. I don't know if you

have a strong opinion on that. It was clearly an attack. people I think like arguing around decentralization is a bit of a mute point. I mean I think people understand the I mean there's this did you see this tweet here? This is the tweet. Hey okay so there's this what's what's her name Yehi. Mhm. Which is she's the co-founder of Binance. Yehi please quickly launch the spot of Jelly Jelly.

If Jelly Jelly is launched, Hyperlid will probably be over to be on. And then someone goes, "To be honest, you can really consider buying Jelly Jelly now. You don't even have to buy it." For example, Ye, take a look at Jelly Jelly. Uh, Hyperlid may be gone. Don't use innovation as an excuse. Binance and Hyperlid are rivals just like FTX back then. At this moment, it is just like that moment. And and the Binance co-founder responds says, "Okay, got it." And they say, "Great. Let's see what or let's see what happens next." So, yeah. Yeah. I mean, for anyone who thinks CZ is not running Binance right now, there's your there's your uh this is a this has got CZ written all over it, you know.

Uh yeah, it'll be interesting what the fallout of this is. Yeah. Um do you trade on Hyperlid? No. I don't have much time these days to Yeah. to be a DJ. Earlier in today's episode, I mentioned Ledger's latest products, the Stacks and Flex, and I wanted to take a few seconds to tell you more about them. These wallets feature the world's first secure touchscreens, which don't just simplify your digital transactions, but also keep them extremely safe. These wallets are virtually impenetrable to online attacks because they store your private key in a secure offline chip. You can manage more

than 5,500 tokens and install up to 100 apps. Choose the most trusted name in hardware wallets and take control of your digital security today at ledger.com or hit the link in the description of today's episode to check out their latest wallets. Hey everyone, Jason here. Wanted to uh just take a quick break and highlight everything that's been going on in the Mantle ecosystem. In just one year, Mantle has seen its TVL surge by over$1,100%, now reaching $1.69 billion. That's just such a crazy amount to think about. More than 225 protocols have made Mantle their home, while the platform's ecound has invested

$ 38.5 million in 51 pioneering projects through strategic partnerships with Bybit, including Mnt as collateral, supporting Athena to scale, and the first Ethereum L2 to integrate Ono Finance. They just continue to be on the bleeding edge of L2s. Be sure to stay up todate with what's going on by giving them a follow on X at0eroXMantle. Special thanks to the incredible Mantle team for sponsoring today's episode. This episode is brought to you by Wallet Connect, the connectivity network shaping the future of onchain UX. From DeFi to NFTts, swaps to staking, Wallet Connect is the backbone of connectivity in the onchain economy. Seamlessly bridging wallets,

apps, and blockchains. With over 220 million connections and 35 million users worldwide, Wallet Connect is the place to power your web 3 experience. With the launch of the Wallet Connect token, the network is taking the next step, paving the way for a fully decentralized, permissionless, and community-owned future of connectivity. To learn more, follow Wallet Connect on X and Telegram or visit walletconnect.network to stay ahead of what's next. Let's talk stable coins.

Uh, four stable coin launches this week or announcements. One was FYHXX. Horrendous stable coin name, but that's okay. Uh, from from Fidelity, which So, okay. So, there's the Fidelity stable coin. There's Wyoming, the the the great state of Wyoming announced a stable coin. Y, no. Wys ST PDIA. Caitlyn Long's thing launched or announced AVIT stable coin and world liberty launched or announced USD1 in partnership I think with Crypto.com and Bitco maybe I might get that wrong. Um definitely the most

interesting one is Wyoming, right? Wyoming is a uh it's the first US state to issue a governmentbacked crypto. Like this kind of I feel like kind of got swept under the rug but like and just not much attention. But yeah, I mean we have a US state launching a governmentbacked cryptocurrency here. Uh so just just think about that statement for a second. Um it's going live on seven different chains. Avalanche, Salana, Ethereum, Arbitum, Optimism, Polygon, and Base. Uh Layer Zero landed the deal on the interop side. I read the press release.

I'll just read one line. Govern uh Governor Gordon highlighted the benefits of the stablecoin for both the state and its users. These include a statutory requirement to overcolateralize the stable tokens backing with cash and US treasuries to mitigate the risk of deping. And then this is interesting. And the de and the deposit of interest derived from those treasuries go into the state's school foundation fund. Um so I think people are you know there's a lot of businesses looking at like Tether seeing how much money they're printing.

I think there are states looking at this too being like hey yeah we're not doing so well financially. uh can we get some of that money and yeah goes into schools foundation fund. There's one argument that says like why would you need a state stable coin? This is stupid. There's another that says like look I mean this is a kind of a far out view but like move all of Wyoming's finances on chain reduce transpar uh increase transparency reduce fraud. Get some interest for the state. Yeah, not too shabby. Uh Bridget from Founders Fund had a good blog post about like just stable coins in general and what the impact is. I mean we don't have to cover it here but people just go we'll link it in the show notes. Uh it's just a good observation around like how

people think about stable coins what the actual impact is of that. The the common argument we hear is obviously like it's very bullish for demand for dollars right if you open up access to just having digital dollars is bullish. you know the US has a reserve status you know it's benefits like you know so many people that want to have access to dollars but they don't but anyways yeah like how do you how do you think about like a world where okay there's going to be a proliferation of stable coins actually we have an awesome like hundreds of stable coins like who is the is it gonna be a rapper on top of a rapper no no okay uh Monday we're I forget if empire does empire release on Monday or Tuesdays Oh god, we just changed it. I should know that. I think

it's Tuesdays. Tuesday. Tuesday. Tuesday. Um, we keep we keep changing. But, uh, we have an episode with Charlie Noise, who's a G who's one of the GPS of Paradigm, and they just, uh, they just led this round into mesh, which is, uh, they led an $82 million round into MESH, which is kind of this like stable coin settlement network. Um, founded by this guy Bam. And Bam joined the show, too. And we talked like all about this, so people should just listen to that episode. Basically what I think will happen is there will be a proliferation of stable coins. Uh you could own PYUSD. The merchant might only accept USDC.

Right now you have to flip your PYUSD into USDC. That that eventually will like it'll all just automatically happen. I think yeah. Um, so I think I think they'll be I actually think there will be hundreds of stable coins because I think these stable coins just kind of become money market rappers. Yeah. But and you just kind of sit in your money market rappers, but then it but then like there's something on the back end like some API that basically just changes it into whatever the merchant accepts. I also think it's a good reminder that maj the majority of these things are just money market rappers and they don't really resemble money. Like I think there's I think there are stable coins that will resemble money. USDC is obviously one.

USDT I would argue those are the only two right now that resemble money. Maybe PYUSD gets there. And actually PayPal. Yeah. Um but most of these are just we'll have hundreds just like we have hundreds of ETFs. We'll have hundreds of mutual funds, hundreds of money market rappers. Yeah, you're right. They don't they're not money. They're they're they're a money market account. um and the fungibility of that. It's like my observation of having invested in so many different stable coin projects uh from like Basecoin the early early days to everything in um after that is that distribution always wins and and ultimately like you have to think about like where if you have massive

distribution you're going to launch a stable coin and then you're going to roll that out to your user base and that's going to be the de facto like PayPal, so integrated with all these merchants like PYUSD is going to be dominant. If you're a JP Morgan, you're going to have probably your yours. If you're a retailer, you're going to have yours and you're going to roll that out to your user base and you're maybe going to offer incentives and some other capacity to you're you're just in a way better position. So as I think about how this is going to evolve, I think you know we talked about in a prior episode like what is the composition like if if you were to fast like right now it's like what two three three quarters of the market cap like market share of stable coins is

tether and that's been fairly stable. Circle has you know the second largest but that share is marginally coming down. I think that was this was one of our predictions like for the year is that that that probably is the one that is at most riskier. Um yeah, within the US, right? Because if you have all these different retailers are going to launch around. Yeah. Um actually I I I missed this in prep, but the full draft of the stable act of was just released. Um really again I think people think this is going to have get get through this year sooner than most people think it'll be in August. I'm pretty sure from conversations at D that it'll be like sooner than that May. I don't know. Like next year. I've heard like next couple

of months, not like later this year. Yeah. Yeah. So I think I think it's a Q2 thing. Um let me just uh I actually haven't read it, but I will pull up Nick Cannon from Gauntlets overview. Uh okay. Full draft of the stable act of 2025 was released yesterday. Thread with a few takeaways. One, no yield bearing stables. So that's that's very important, right? Because no yield bearing stables. I think if you look at a lot of the new stable coins that have been funded, they are actually yield bearing stables. So who's this bullish for? USDC and Tether, right? USDC and Tether. Banks, credit unions, and approved non-banks can issue. That's big. That means we're just going to see a proliferation of these stable coins.

Every credit, every fintech, uh, credit union, small bank, local bank, big bank is now thinking about issuing a stable coin. uh three must have 1 to1 reserves of cash T bills uh with a maturity of 93 days or less or other highly liquid safe assets. That makes a lot of sense. Interop standards may be required. That's interesting. Um, you know, again, we called out that layer zero won the Wyoming deal. Will be interest. It It feels like there's this like battle right now between actually chain link, wormhole, and layer zero and will be very interesting to see who starts winning those deals. States can certify their own stable coin regimes,

but they must meet or exceed federal standards. No Algo stables for two years. Huh. during so during the 2-year period beginning on the date of the enactment of this act, it shall be unlawful to issue an endogenously collateralized stable coin not in existence on the date of enactment on this act. Okay, that's interesting. And then a 2-year resignation grace period. Can we look at the comments? Yeah, comments are this basically turn stable coins into digital cash with none of the upside. Feels like a step backwards. Someone goes, "I like the distinction. Payment stable coins, Algo stable coins." Yeah. Um, this can be summarized as the what's

good for Tether. I mean, stable coin act will kill a lot of stablecoin projects. This is from uh Jyn. Uh, here's who will win. According to this person, Jen, traditional bank banking institutions emerg as clear winners. Um, it's going to kill a lot of stable coin projects. Big win for Tether. I think there's uh, yeah, Gabe Shapiro, the USDC USDT model is now enshrined in regulations. Yield, this is probably the best. Yield paying stable coins will be securities and don't qualify. Stables backed by exotic or volatile assets don't qualify. And if neither one of those can be mark and neither one of those can be marketed as payment stable coins. Okay, so this is

what I was talking about earlier. There's going to be like payment stable coins then just like money market funds. Uh from a policy POV, they want these things backed by treasuries. They want to prioritize safety. Yeah, that's makes sense. It's a win. Makes a lot of sense. Uh obviously Figure Figure is the only one that's like got approval right a couple weeks back for their interest like it's a security. They filed an S1. They got like a it's like a yield bearing stable. Yeah. Yeah. Uh GameStop adding Bitcoin as a reserve treasury asset. Uh massive amount massive amount of engagement. By the way, company had cash and cash equivalents of 4.7 billion at the end of Q4. Um let me just read the press release. GameStop announces proposed private offering of 1.3 billion of convertible senior

notes. Very similar to like a MetaPlanet micro strategy, soul strategy. Um yeah. Uh, so I got dinner with Sailor after DS on Thursday night and I was like, "Do you really believe like this stuff?" Like, "Do you?" He gave me the 30-minute pitch for why Blockwork should become like a bit like move on to the Bitcoin standard. Like, we should like everything we're doing basically in his mind, everything we're doing useless, useless. All this activity not as productive as just buying Bitcoin. I was like, "Damn, you really you really believe that?" He's like, "Yeah, yeah."

So, as uh I think it's funny, man, like I think I mean, yeah, too much. I like I like Quinn's Quinn had a good tweet. With such highly regarded and well-known capital allocators like GameStop, North Korea, Bhutan, El Salvador, and Micro Strategy adopting Bitcoin balance sheets. I'm surprised there isn't a mad rush of more countries and companies racing to do the same. Oh, well, that's I mean the Bitcoin Strategic Reserve. So, they're technically not buying, but they're absorbing it. So, yeah. Yeah. Not much else. I mean, I don't know if there's um anything else to cover. Um no, I think I think that's it. We just released um the

ind the industry's most comprehensive dashboard on pumpf fun and and uh pump swap. So, pump swap is the new AMM by pump. Um it's really good data. Most of the data providers haven't even indexed pump. fun or excuse me, pump swap data and we we've been sprinting like working seven days a week to do this. So if anyone cares about this kind of data, Blockworks Research now has it. Um it's you can just see a lot of it for free. It's on the Block Works Research Twitter page. So just go there and we're still hiring for senior producer. So people want to work with Santi join us. Yeah, that is true. I was going to say I'm I'm hiring too. Let's go. What What roles are you hiring for?

uh principal assoc principal or VP role of uh like private equity uh someone that can own a deal beginning and end and an associate below him. Um head of product and head of engineering. Nice. Nice. And there there's other roles like community and design maybe design not so much now that we can do this uh with Chad GPT but uh you need design. I I've had a lot of really interesting I mean the pipeline is really interesting and yeah really strong candidates. um coming through the pipe, not like outside of crypto. Nice. Companies that have built consumerf facing applications that have like now dabbling in crypto like you know the Robin stripes of the world.

Nice. Um last but not least, permissionless speakers are live. So I can't believe we're shilling another event already. But in 90 days we have uh permissionless. So the way that I think about this is permission D is for the people who invest in the protocols. Permission list is for the people who build the protocols. So we have really really good lineup already. We've got you know Hayden from Uniswap. Um we've got Shri Rom. We got Sam from Fracks. Ed Ed Felton from Arbitum Togil. We got Alex who's the founder of Worldcoin. Um Stanie John Charb way die from 1KX. We got Andre talking about Sonic Z from Inisha. Merty Alexander Ksmani. We got Smokey. We got Guy from Athena. Brian

Pellegrino Lair Zero. Keony from Monad, Jesse from Bass, Kane from Infinex. It's a it's a stacked lineup. So, I guess my we have our call for speakers is live. If you are an investor, we don't want you to apply to speak. We're looking for uh technical founders, engineers, product managers. Is this going to be a what type of format? Debate, not debate, panel. There'll be a lot of debates. Um the debates went really well, D. So, we're just going to keep doubling down on these debates. um a lot more individual talks that are shorter I would say too like I thought your talk at um Dash was good, Dan Smith had a talk, Melt had a talk. These talks are really nice if people actually prepare for them. Um and I think less less panels just because

panels just feels yeah I'm very much bullish debate controversial debates and presentation. Yeah. So, if you're technical, uh, yeah, hit us up. Very cool. That's in New York. That's in New York. June 24th through 26th in Brooklyn. Big warehouse vibes. We got like eight warehouses. It's going to be a crazy event. So, we'll do June 24th through 26th in in Brooklyn. And then I think we'll all head out to ETC. All right. It's in It's like the first week of July in Can is this south of France? He's out of France. That's good.

Nice. Let's go. Let's go. That's great. Cool. All right, I think that's it. That's the pod. Yeah, that's pod, guys. Well, thanks so much for listening, guys. Uh, we'll see next week. See you next week. [Music]