Crypto's $150 Trillion Opportunity

Transcript

So when you take that 3 trillion and you make it 150 trillion with the asset base that's sitting underneath it, I think you're going to create some very big businesses in the process of that happening. >> But I think having access to a much higher quality or group of quality assets is really exciting. >> It's just a much higher utility, much better product market fit for the existing user base. >> I think if once you get these things on chain, uh you can do some cooler stuff with them, right? The upside for this, while people are bullish bullish on it, is uh bigger than we're sort of like thinking about right now.

All right, welcome back to the Deli Hivemind podcast. Unfortunately, unlike last time, this one is back to our regularly scheduled virtual programming. Uh but we got some really good feedback on the Inerson one. We're definitely looking to do that more. So, thanks everybody for tuning in. If you haven't checked that episode out, definitely go and check that out uh before you even listen to this one. Um we've got another special episode today and I won't give it away quite yet. You know the reason why, but we've got a close friend of Deli who's going to join us in a few minutes. But I wanted to start off with over the last couple weeks, you know, last time we recorded this market was doing really well. We were kind of in this not necessarily like a blowoff top phase, but the market was definitely gaining some serious momentum. things

have cooled off a little bit, I would say, in the last couple weeks since we last recorded. So, I'd love to just kind of start with what's our current feel on the market. Are we losing momentum? Is this just a nothing burger and like we're going to continue going up only through the end of the year? Jason, maybe I'll put you on the spot to kind of kick us off with your your highle, you know, markets thoughts, but uh yeah, let's start there. >> Sure. Yeah. No, I um I think everything looks pretty good to be honest. Uh, I think equities are just grinding higher. I think kind of like paying too much attention to like the Iran stuff, pretty much anything at this point has kind of turned out to be a mistake, right? Like markets have just chugged higher. And

that's generally like how this stuff goes, right? Um, everybody freaks out for a while. Market kind of shrugs it off and then three, four, five months later, you're at all-time highs again. And that's kind of where equities are, just chugging along. And Bitcoin looks great, right? Like you you continuously see good ETF flows since the you know the Treasury Bessant kind of pivot a couple weeks back or at this point what was it like a month and a half back. Um and so like I'm just like my my whole like thesis for being long risk was essentially just like I'm long risk into the midterms. I just don't see how, you know, an administration that kind of has made it its calling card that comes out and sues markets or kind of, you know,

tells markets what it wants it to think throughout the last several years is going to not do the same thing heading into midterms right now. Um, and that's kind of like what you've seen. And so I'm still like I I kind of took off a lot of my leverage um last weekend and I'm just holding spot. Like I just I I have no I don't see any reason to sell right now. just kind of long into uh long the core things, right? Like like hype for me. I know a lot of you guys hold things like Zcash as well. Um pump, I'm so glad I sold that at the lows. I think it's then completely just ripped. Uh but I think like it's just like the cycle's kind of turning out to be it's like I think you could just hold like the core good coins and

just not do much else. Kind kind of a lot like 2024. Um, I think the onchain stuff is looking pretty bad to the point that you were making. Um, I think >> pawns and Robin Hood is pretty cooked for a while. Um, >> I think Stonk and that Eco is pretty cooked for a while, right? It kind of goes back to all the stuff we were saying, right? Like how sustainable is like a, you know, a 3% trading fee memecoin that's paired with a stock or or a major, right? like at some point that game ends um when the trading activity kind of decreases, which is what you're seeing or which is what you're seeing. You're seeing a lot of the rugs and things pop up on on on Robin Hood chain and and Stonk and stuff, right? Like it's it's how all

these onchain games kind of end and play out, right? Like they start out PvE, everybody makes a bunch of money, and then it's like, oh wait, now all the PVP extractors come. You see it time and time again on like the pump eco, seeing it now. So it's just like kind of what I was expecting to happen. So, it's kind of why I never really got involved because I didn't really want to play the, you know, >> I I think I think what's interesting about this on chain is that there it's like they're kind of just been up only and then down only, right? Like pawns went on this insane run where there was no entries and it went straight up to basically a billion and now it's just down every day. Same with uh AI. Um Ston stuff did similar. There was that period

where literally everything in Ston Eco, you could buy any cat on that platform and 10x your money in like a day. Um, and it's just distribution everywhere. But like you look at Hype, Zcash, and Pump and which are those are like the core three for me now. I like kind of put Pump back in the core three. I think that at this point you have to just respect Pump. Like I thought a few weeks ago it was like okay pump missed the Robin Hood thing and then FOMO came along and FOMO was like the hot mobile app and then Stonk came on Salana and it's like wow Pump is they missed Robin Hood FOMO's like the new app Stonk is now doing stuff on Salana but then like I was looking at the

metrics and they were still their revenue didn't really change that much over that period right and now you see all those other things cool off and pump is just back looks like it's going to new alltime highs soon. And I think that you know if there's like one launchpad competitive to pump that's a problem. I think if there's 10 it's like those are just like future features for them right because all these all these launchpads are also doing things a little bit differently like long is doing something where they add liquidity to the coins.

Stonk did like the reflection thing. There's these new ones called uh hook hooker on Robin Hood and Hooked on Salana which have hooks and it's like where you can put all these like interesting custom rules in and all of these launchpads are kind of trying to win on like some new feature um and it seems like pump is just the behemoth where this is a playbook that's not new to like crypto like there are a lot of companies like Meta did this right where Instagram basically just stole a lot of stuff from Snapchat like remember when Instagram added stories and it was like, "Oh, they're just putting Snapchat in Instagram." Like, that's never going to work. And then obviously you can just do things like that, right? So, I think, yeah, Pump is pretty strong, but yeah, Hype Pump and

Zcash all look very, very good to me. Bitcoin looks not bad. Um, and then there are some these like good onchain pockets, right? You're seeing you're seeing a lot of good onchain coins recently with like grass and um ENA, you know, obviously uh >> you have that Orbio one with like Venice too right? >> Venice has been looking pretty good. There's a lot of strong geo geoet. Tempest wrote about that the other day. A lot of people are talking about geo these days. Um it's actually interesting geo and grass too like kind of deep type. I don't know if the grass is deep in but it was kind of originally in that bucket.

>> It's definitely deep in >> Yeah. So you're >> not I mean physical I guess it's it's software but it's using bandwidth which has a physicalish comp I don't know hardware. Yeah. >> Yeah. You are seeing that kind of like some deep penny tokens actually showing that they actually did make sense. Um >> pump was so painful to me. I like I didn't sell the bottom but I sold it like 2 cents. Yeah. Yeah, dude. I want for like die >> cuz my my initial plan was I'm going to buy this and I want to I want to be out before unlocks and uh so like basically heading into unlocks I just sold.

>> You got the reverse with the reverse price >> and I sized it as well so it was just like a very painful. Um but I bought it again. >> Um but yeah I it's so annoying. >> I had it for like >> they're annualizing more revenue than Hyperlid now. I think like they're doing like uh I think they were doing like two and a half mil a day this weekend >> which is and it just stayed consistent all through the bare market. Like I just that whole time I was like how is this happening? Like this crypto is literally dead and these guys are making printing like a million a day on memecoins. Like who is who is paying this you know? But uh I mean you got >> somebody's bang it apparently.

>> We need to get the we need to get some like real trenchers on this this show one day. >> But yeah market definitely looks good you It's it's it's this kind of ideally how you want it to go after a long rally where you kind of create some wall of worry and and doubt and and chop and accumulation and reason for people to kind of get short again. Um and and have this kind of grind higher. And I'm I'm fine with the trenches getting nuked ultimately. I don't think trenches coming back are what brings capital in, right? Like you're not going to have larger players deploying size knowing that the game they have to play is this 90 second hold for for like four to five figure size positions. No one's really

going to be doing that. And so having majors lead being a good sponge for outside money, which is ultimately kind of what you need for this market to keep going is is I think uh is huge. And and you have people getting behind or just the ability to get behind a thesis with some conviction. um versus these kind of just pure trade opportunities that I think just end in youth in Asia roller coaster. So yeah, there's there's definitely market leaders and they kind of continue to look good. I mean, Bitcoin looks good. How close is Sailor to getting his STRC repe? That's a pretty big one, right?

>> Yeah, he's also been a non-factor. I think he he bought like 300 BTC last week which is >> it seems like he's trying to get this to be repegged maybe before their earnings call which is in like a month or so. >> Yeah, I don't know what OI is on STRC but that's that's going to be a big hurdle for them. >> Yeah, it's good to see him not driving the market like he used to and being just less and less of a factor, >> right? And I think it's a it's a good time to as we mentioned at the top of this bring in our our guest of this week. Uh, as I mentioned, close friend of Deli, founder of Athena, Mr. Guy Young. Guy, welcome to the show. Good to have you, man.

>> Thanks for having me. >> So, let's start here. Let's get you in on this round table. What is what is your current read on this market right now? >> Um, yeah, I wouldn't uh I'm probably not the person to ask for advice in the market to think every time I'm sharing opinions with Zan. And >> you've been pretty good to be honest in in our personal chats. You've been pretty good. you like you you were you were bearish close to the top last year. You got pretty bearish. I think you've been Yeah, you're underrating yourself there. >> Um yeah, I think I I was personally quite surprised by um the recovery in the market. I think uh you know 2 3 months ago. I think uh in my mind I thought you always needed some sort of catalyst like we had with the ETFs at

the beginning of last cycle and I couldn't really point towards what that actually was this time other than you know crypto was just down so bad versus every other risk asset in the world and it just seemed to kind of uh start to mean revert. Um, I think Sailor in the, you know, middle of the year even shook me out of some of my longerterm Bitcoin bags where I kind of just looked at what was happening with Stretch and uh, I kind of thought that Bitcoin was actually kind of a tainted asset with him being as involved in the way that he was and you kind of, you know, the thesis had drifted quite a bit through time where the, you know, Micro Strategy was a smart vehicle to give people exposure to Bitcoin with a small amount of like intelligent leverage and And that sort of transformed into him day

trading it uh at like $50 billion of size and it's just like do I want to be long an asset that this guy is kind of day trading on leverage at that scale. Um so I got I actually got shaken out. I think Jose's overstating uh yeah my my positioning like going into the whole thing. Um I don't spend like a ton of time now on the markets. I think I used to do that a little bit more last cycle and kind of just feel like I'm long enough now with what I'm doing on my day job that I uh if it goes up great but I'm not kind of spending that much time thinking about it. I would say I don't really have like a clear view on kind of where we go from here. I was quite surprised with how strong the move was

and especially how much like alts moved relative to Bitcoin. You know, a ton of them are up like three, five, you know, sometimes more X and Bitcoin's only up like 40% or whatever it is in the last couple of months. So, I wouldn't be surprised if we sort of cool off for a while. >> Yeah, I think that's a that's a good read. And one of the things that or themes that we've been talking a bunch about um that we've been bullish on, I think took some of us by surprise is just how strong this let's call it tokenization, RWA, onchain stock wave has really taken off especially in the last couple months, right? And I know there's a good amount, this kind of overlaps with a lot of what you guys are doing and you've got some announcements that we'll get to

that we'll kind of work into this conversation, but like as a as a founder in this space, price obviously it's hard to get away from price, right? Even when you're kind of heads down building. I'm curious just how you're viewing this whole tokenization wave, right? and and hopefully getting away from crypto and some of these products being very very let's say cyclical with the crypto market and kind of diversifying into much larger potential revenue streams and just potential markets with you know this oncoming call it tokenization wave really curious just to see to hear kind of what you're seeing in your seat right now with that >> yes I think um you know it's pretty incredible I think the stuff that's actually happening is all the stuff that we're talking about you know two three

four years ago in terms of like the dream scenarios of what crypto would enable and what the technology could enable. And then I think that's actually was one of the largest sources of kind of people's despair in this last bare cycle where I kind of felt that sentiment might have even been worse than like post FDX. And I think the kind of root cause for that was actually in some senses you got everything that you ever asked for right, but the prices of the assets that you owned didn't reflect like your thesis being correct. I.e. like all of the adoption of stable coins, all of the growth in tokenization, fintex plugging into DeFi backends, all of these things we've been speaking about for 4 years kind of happened and then the coins that you owned like didn't go up in the process of of that sort of being true. Uh so I

think that there was like a real disconnect between, you know, the reality of like pretty amazing things getting done and then just asset prices disconnecting from that almost entirely. Um, I think we're the most excited we've been in terms of like real businesses building real products and sort of being recognized for that now more than ever before. And uh, yeah, I think you know more specifically to the question that you had around tokenization. It's not like fully core to what we do as a business. So we're not like a tokenization issuer, but we obviously work with quite a few of them. I think Athena is like the second largest holder of RWAS within crypto in total. I do think that there is like a split in this market when we're talking about tokenized equities and then tokenized sort of fixed income or you know savings

products. Uh the tokenized equities I do think is quite exciting and I think the analog here is just thinking about you know what did stable coins do? They just kind of uh created a digital version of a dollar and really just exported that out to everyone who wasn't in the US. And that's really where it found product market fit which was giving access to a dollar for someone who is not sitting within the US financial system like tokenized equities. I don't think that there's anything actually interesting from like a technology perspective that's going on. It's all like a regulatory arbitrage piece that is actually interesting which is broadening access for these assets to people who don't have a brokerage sitting in the US. Uh so you know there's I won't name who it is but there's a podcast with odd odd lots with one of the large exchange

owners and they asked like a very simple question of like explain to me why this technology actually enables something new and why this isn't just kind of like uh kind of ignoring securities laws to just uh you know sell equities to people who can't get access now. And he didn't have a straight answer to that question at all which is kind of the first thing that you'd expect him to be able to answer. Uh so I do think that a lot of this stuff it's less of like a tech story. It's really like crypto enabling broader access, permissionless access for these assets, which is still a valuable thing to do, and you can build a very big business around that regulatory arbitrage. I think my cynicism is more just around uh I don't think there's anything like super interesting from a technology perspective that's going on there.

>> Yeah, I would tend to >> the vibe. You're still cynical. >> Markets up, sir. >> No, but I think I I do think it's a it's a it's a good point, right? and and us as call it crypto optimists are obviously being very very much in the um this is very much in our day-to-day. I think one of the things that it's less on the technology side and more just on the distribution and increase in service area of highquality assets, right, that can now be traded across these onchain rails, right? And I think that opens up obviously a ton of opportunities. We've talked a little bit about and the other guys, you guys can chime in if you have

thoughts like the experimentation that this opens up, right? Where you can actually be have some of these assets on chain. I personally don't get super excited about tokenizing Nvidia stock, right? didn't have and maybe that's just I sit in the US and that process is relatively easy but I think having access to a much higher quality or group of quality assets is really exciting because then these rails don't necessarily solely depend on you know a handful of or a small handful of like what we consider high quality assets in crypto today or cryptonative assets or a bunch of these tokens that let's be honest have pretty shoddy value acral mechanisms but we're just kind of almost trying to like copium our way into them having value like this just

gives a lot more volume for high quality assets can be traded can be used in innovative ways I think that aspect is is exciting or at least yeah I would love to hear others thoughts >> I mean if we never tokenize Nvidia >> yeah I was say I think the per side is is more interesting for a lot of these assets it's just much higher utility much better product market fit for the existing user base um more volume easier to create liquidity especially once you get those funding rates low. Uh which would be a nice segue into what you guys are doing. But uh I I do like you know if you can get them relatively low then it becomes a very attractive product for for the international

audience versus is my paired with boner and am I getting some Yeah. >> Yeah. I mean I think if once you get these things on chain uh you can do some cooler stuff with them, right? I mean, yeah, hims paired with boner is maybe not the, you know, maybe it's the innovation we deserve, not what we wanted, but what we deserve. But, um, I think there's going to be interesting stuff. It's it's kind of the same with stable coins, right? You you could also say, and you can say that you can say this regulatory AR stuff about a lot of crypto. Um, but yeah, I'm curious. I don't know if you want to go into the the real world asset purpose thing or maybe just like what you're bullish on right now, guy, like what you're what you're excited about.

>> Yeah, for sure. I think um >> what's happening in crypto? Yeah, like I definitely agree with Yan's view. I think the stuff that's going on with derivatives around these assets is incredibly interesting and actually like we created something that was net new, right, which is kind of moving these markets to 24/7 which actually just didn't exist at all even 12 months ago, which is a pretty incredible thing if you think back uh that we pretty much had like sub 100 mil OI on any of these names like a year ago. And now Tradfire is like looking at these markets and actually like using it to inform the way that they're pricing things. So, uh I think that that's been incredible. Um I do think the upside for this while people are bullish bullish on it is uh bigger than we're sort of like thinking

about right now. I think the very high level kind of framework that we think about this is you know we created a few hundred billion plus businesses just creating derivatives on a $2.5 trillion to $3 trillion asset class with crypto being the underlying. So when you take that 3 trillion and you make it 150 trillion with the asset base that's sitting underneath it, I think you're going to create some very big businesses in in the process of that happening. Uh so yeah, I think my high level view and I kind of wrote about this the week that trade XYZ came out with the first per on hyperlquid I think within like 24 months. RWA per flip crypto per in OI volume. I think it's already got to like 50%. You guys probably know better on Hyperlquid like a couple of months ago.

I think that that number like fully flips the crypto perhaps in the next 24 months and um yeah I guess the way that we or like the piece that's exciting about that to us is uh we came out like a couple of weeks ago sort of expanding what we did uh the core idea obviously has expanded beyond just crypto basis and that same sort of thesis that I was describing there of sort of taking the asset base of what got us to $15 billion at the peak last year when you move that from 3 trillion of crypto to $150 trillion of other assets it's obviously just a really exciting sort of like expansion in TAM in that process. Um I think one of the other things without trying to get like too uh like nerdy around the smaller details is also just thinking about like the nature of the

funding rates on these assets where if you kind of uh look at things it has a much more positive skew uh in terms of how consistently positive the funding rates on equities are versus crypto. And the intuitive way to sort of think about that is that like you know every 3 or four years crypto goes down 80%. And so, you know, it's pretty logical that you don't want to pay a positive interest rate to be long. Uh, crypto at the end of that 3 to four year cycle while equities have just been up into a straight line for 20 years pretty much where it kind of at no moment in time did it not make sense uh to kind of be long uh equities and and sort of pay for the privilege. Um, so I think that just the nature of the underlying in terms of

what is actually sitting within these products and sort of the shape of them actually lends itself better to the sort of product that we uh yeah that we sort of bring to users. >> In previous cycles, you had every reason to kind of pull money out once you thought the cycle was done. But now with increased utility and increased uh asset exposure, you can just kind of rebalance and continue to operate your day-to-day and and keep the money in the system, which then I think makes it much easier to to redeploy when when when things are going well again, whether it's just like a yeah mental block or or just, you know, the the hurdle of of kind of having to deposit again. I I think people kind of underestimate how much capital just gets stuck not coming back

in as a result. Yeah, I mean even like at the end of last cycle, right, if you remember, that was like when the first T bills were being brought on chain was like 2023 and lending rates in DeFi were like a full 150 basis points below the risk-free rate and like it was literally trap capital that couldn't even get into a T bill. Uh like that's how crazy the mismatch was between like tried rates and what was happening on chain. Now obviously that's not even that's like an afterthought completely now just in terms of the access that you have to these products sitting on chain where you can kind of actually see that in the stable coin supply figures right they it barely kind of dipped on an aggregate basis at the end of this cycle it kind of I think maybe came down 5%ish in

total like total stable coins while at the end of last cycle it was down 40% because there was just a drain of capital out of the system to go chase uh risk-free rates in in TRFI so I think that's actually a very good like indication that stable coins didn't really leave the system at the end of the cycle because there was so much more uh to sort of leave your money and and benefit from on >> curious how you think about uh interest rates within crypto. Um right, there's there's genuine gen generally a complaint that you're not really getting paid adequate yield for the risk you're taking on. Um, but I think it's it's very tricky because there's so many various risks that that different yield products are exposed to and and so it's

it's hard to kind of view them in the same standardized way you do in in Tradfi where it's just credit generally and then obviously like duration and everything else but or like the tenor and stuff but um you guys have have kind of gone through a bunch of stuff and and and we've mentioned this multiple times but I think you guys have have handled and and dealt with everything really well both in terms of transparency uh immediate responsiveness um also just not actually suffering any any uh you know financial damage and it's it's kind of just kind of misunderstandings from from the market and then you know immediate clarification. So I think you guys have a very unique Lindy position. Um and and

I think you know the broader integrations that you guys have are are further evidence of that. But yeah curious how you view the the evolution of of kind of yields across the space and whether it kind of coaleses to a handful of players or or people will kind of continue to allocate to some of these more esoteric elevated yields. >> Yeah. Yeah. So I think like since Athena kind of came to market, interest rates have basically just converged across every source that you can imagine in crypto into one rate which is kind of the USD rate which I kind of view as like the reference rate now um in DeFi at least. Uh if you remember when we first came out you had like an insane disconnect between funding rates that's out within CFI that would be paying like 30 40 50% and then the lending rates in

DeFi were at like 10. So you could actually just borrow dollars off of RV and put them on Binance and you'd make like a thousand basis point spread which is obviously just an insane concept to think about now but that was like the practical reality like even two years ago. So I think like one kind of forcing function that Athena created was just like the convergence of all interest rates in crypto kind of came down to the same number just because you kind of uh provided capital into so many different pieces of the system uh through USD. Um, I think one of the misunderstandings or maybe pieces that I disagree with like the simplistic analysis when people look at like Ave lending rates or other rates in DeFi and then compared to Sofa and just say like this makes no sense that you're lending to AR at like 350 basis

points when Sofa is at the same. I think the piece that people misunderstand there is that like the option value of having a dollar in crypto is worth a lot when it's immediately liquid. And so your ability to pull out USDT or USDC from a DeFi app within a block and then go and do something with that dollar sometimes is incredibly valuable where it's much more valuable than uh being stuck in a T- bill that might take you a day or two to get out. And so if you think about like trading entities that need to be able to provide liquidity within CFI or even just like the you know every like three or four months we seem to have a uh three sigma event in crypto that you just want to have cash to be able to buy some sort of dislocation within the market and you'll

make five or 10% on the day. Uh I think people do like understate how important having like immediate liquidity is within crypto and how much that's actually valued where I would actually take below sofa rate if I could get close to it but then always have like on demand liquidity to be able to go and do something with those dollars basically within the system. So I think there's one piece there that like people underestimate relative to how valuable a liquid dollar in crypto can sometimes be. And then I think the other piece is also um like yeah a lot of the capital that I think sits within D5 is kind of trap money uh in Asia that can't actually go in like KYC and touch uh like regulated products that are within the US. And so uh lending within a D5 application is kind of the best that

they can get. And so if they're getting close to sofa, that's like the only option that there is. And so yeah, as it relates to some of those questions around like why do we see rates get to the levels that they are? I think that there are some of these softer points that you know aren't immediately obvious when you're just comparing them to to risk-free rates. Yeah. >> Are you not to totally put you on the spot, but I I know you launched the um trying to launch the equity per or using Binance. We've had a lot of discussions on this show around obviously PERS, but we've got some hype longs, some lighter longs. What's your general take on those, let's say, more cryptonative per platforms versus some of like the centralized exchange players and

distribution going to be part of this too and like how you guys are thinking about that. But more broadly, like are you are you bullish on it's called the cryptonative versions of this actually being able to win out over incumbents over time? Uh yeah, for sure. I think um you can just kind of look at that very basic. I think it's the only important graph to like answer the question is just like percentage of DEX volume versus sex and it's just been like up into a straight line for the last like 2 to 3 years. Um I do think that that continues and that's cuz they kind of have uh if you can produce something with a relatively comparable UX, which is where I think that they've got to.

you just have such an unfair advantage as a business because you're not running a full KYC compliant sort of department and then also you don't have custody costs like a centralized exchange would with all the security cost that comes with that. So just at like a structural level uh dexes are just kind of in a much more powerful position from like a um you know the way that you can run your business and how efficiently you can do that versus a centralized exchange and uh yeah you can kind of see that in the numbers in terms of dominance increasing through time. Uh the reason that we haven't done this on chain from like an Athena perspective is that while I'm bullish on those platforms and that trend continuing in the direction that it has uh like our principal job is like to not lose

people's money and that's the thing that I care about the most and it's just objectively safer to do what we're doing in CFI right now than DeFi which is kind of maybe not what people would expect me to say. Uh there's a few different reasons for this. So, uh, one of them is that, uh, on on Dexes, uh, there isn't really a recognition if your account is delta neutral or long. And so, if you're doing this in CFI and the exchange clicks like, yes, this is a delta neutral account, you get moved to the bottom of the ADL queue, if something ever goes wrong, while in D5, you're basically all all treated as the same uh, account basically. Uh, another one is also just like the aggression of the ADL mechanics. So in CFI BTC and ETH contracts on the venues that we're on

haven't actually been ADL since 2018 and that includes 1010 at the back end of last year. So even with what happened on 1010, there wasn't a single ADL on the venues that we were touching while Hyperlid did ADL and that's not a knock on Hyperlid by the way. It's just in the docs and that's the way that they set up their ADL and so you can choose to participate or not. It's just not set up in a way that is like favorable to the thing that we are trying to do. Um and then I think the final piece is also just around insurance funds which uh yeah I think people forget that like the centralized exchanges have quite literally billions of dollars sitting in like dollars not in tokens uh behind the contracts where if something ever goes wrong there's just a pool of dollars

that they can dip into uh to make sure that we're whole and a lot of the dexes have taken the decision to sort of take excess earnings to buy the token which has obviously been a great uh you know uh move to sort of get people excited about the business and for the price of the token. But it also just means that you have less of a safety buffer versus someone who decides to keep that in dollars as a safety net behind the product. >> Yeah, I think those are great points and I I I think it's interesting too like this question around distribution integrations. I mean one of the big ones I think this happened after the last time we recorded, right? So we haven't really touched on this yet, but Robin Hood for example going with Bitstamp, right? versus lighter which a lot of

like the you could argue some of the price runup might have been pricing in that integration because it's such a massive distribution partner. I'm curious you other guys you can you can jump in like do we think that that's like a material change to the thesis for lighter or is it just a matter of time? It's a It's more of a when, not an if question on their integration. >> Seems like more of a when than an if, but I I think still potentially a little damaging to the thesis because I think what was assumed was that it was an absolute and and almost not exclusive, but uh like the the the priority partner was was kind of I think what was assumed. Um >> yeah, it felt more of a sure shot.

>> Yeah. I feel like if that was assumed, it should have traded way higher than than what it was. And it kind of traded heavy going into those news going into the >> Well, that's because people knew. >> Yeah, obviously. >> Did you guys Okay. Did you guys >> Somebody above $5. I was like, man, this dude is unloading a ton of tokens, man. Hopefully, he's wrong about some medium. >> Did you guys read um So, my new favorite account is definitely Tulip King. That makes me laugh so hard. Um, I don't agree with everything he says, but I really like like how he thinks through things.

>> I love his energy >> and I love >> He did have a he did have a good that recent uh post on or like walkthrough of like how he thinks about crypto cycles. I actually thought was was pretty good. >> Right. So, his point here is like you kind of just want to own the best of each category and because not only are they the best, but they actually deserve a higher premium than everything else because of that. And so it's like, you know, own hype over lit, own pump over all the other launchpads. Um, own Bitcoin and Zcash over like other That one's a bit weird, but his point I think in that one is Zcash. Um, do you guys like believe in this kind of like theory? Um, like should people just own

I mean I own hype. I don't own lit. Obviously lit you look at it and it seems like it has way more upside than hype but um >> I think it depends on how plugged in you are into the market uh for like very extended period light smoked hype um right so you do have these extended periods of outperformance when the two get too dislocated or one has catalysts or or there's you know a mismatch in expectations where you know everyone thought lighter was kind of dead but But in reality, there was so much stake, so little floating and and and it just didn't really take much to to then move it off the bottom. Um and and so I mean, >> do you agree with his point that like

the earnings multiple you should give a bigger multiple to the top one versus the other ones? >> Um yes, I think it kind of depends on Moes, right? earnings multiple growth and combination of growth and durability and and so you could argue the the smaller ones have more growth potential and and thus maybe you know it depends on how much of a moat the the top ones have. So like you have moat generally going for the top but but growth probably favoring the the smaller players. So it it it really depends on their ability to kind of eat into the the TAM and and how kind of commoditized the offering is or if there's like a unique approach that a smaller one can offer that that'll allow

them to capture a certain pocket of the market where if they capture even that smaller part it can lead to a lot of kind of fundamental uh results for the for the asset. And so, uh, I I think it it it really depends like you you have just periods of outperformance going back and forth and and so if you're trying to maybe do like a a cycle long set it and forget it, maybe, but it also I don't know. I think it's team dependent right? >> That's fair. >> Yeah. I mean, I would say probably generally agree with with the take, right? I think it was pretty similar last cycle, like um I don't tweet a lot, but the only tweet that's ever done well was actually kind of like about this last cycle. Um where I was pretty much

just like why is everybody fighting this whole like meme thing? Like the market has clearly told you that it likes memes. So just like buy the couple good memes, right? Like the obvious couple good memes and just like it is what the market is. Just accept it and either you know respect the pump in those assets or don't. But like it's up to you. And like I think it's pretty clear this time around that like you can probably like to Yan's point, right? Like I guess it Yeah. Like if you just want like least amount of stress and just kind of want to chill, like I think you could probably very easily get away with that strategy and and be very very happy with the outcome. Um for things like lighter like I think this whole thing like I'm kind of trying to like re-evaluate it because I was

like relatively bullish and then I was kind of like thinking about this whole like Vlad stuff, right? Robin Hood like I wouldn't be s like I don't think it's an excl it's it's clearly not an exclusive agreement with lighter right and everybody's kind of waking up to the fact that lighter success at least in part depends on external parties not necessarily themselves right everybody's kind of looking at this Robin Hood distribution as like the ump to kind of get them to the next you know next part of their their journey and so when you kind of like rely on that or the market kind realizes that it kind of just kind of takes your destiny out of your own hands to to a certain degree and like what does that look like if say six

months from now Robin Hood has integrations with both lighter and hyperlquid right like and so uh I'm just trying to re-evaluate it and obviously lighter has a lot of investors that are up a ton unlock start in a couple months and so that's obviously something that kind of weighs into how I want to like position with per I don't know. I think I like lighter. I use lighter. Um I still own some lighter, but I'm trying to kind of figure that out. Like I I I think height trades better than light or lit into year end. Um because of all of those things.

It is quite interesting as well. You seem to um kind of get away with being long beta, but only like the number two basically. And as you fall below two, it's like a graveyard. And I think there's just so many examples. I don't know why it is the case where you always have a duopoly across almost every market segment in crypto except for centralized exchanges maybe is the one exception but you have like the tether and circle you got the a morpho you got the hyperlquid lit it always seems to be a pair unisop a drrome but then when you go beyond that uh there isn't just anything that sort of comes close so I don't know why why that is the case but it always seems to be come in pairs >> yeah I agree yeah I think it also depends on where you are in just the

maturation cycle of each of these sectors or verticals, right? We talked about last time, you know, I asked the question around options, right? And options being one of the the last remaining, let's say, like frontiers or primitives that a lot of people here are bullish on, but because it's still so early and that that TAM is so big, maybe owning the top three or even top four can make sense depending on where you think because it's just too early to like call a winner. I feel like with hype and lit, it's you're further along on the journey to to take let's say larger positions or have more conviction in like that duopoly doing well >> versus earlier stage stuff.

>> Also to that point, right, like in the per like if you if you uh rewind like a year, there was a lot of per deckes, right? You had you had Aster come out. You had Pacifica. You had Paradex, which is kind of shifted more toward towards the options things recently. Um, you had a ton of these per deck's come out. Uh, and like didn't work out for most of them. And so, >> last year was perplex summer. This year's Launchpad Summer. >> Launchpad Summer. >> Well, I think that the the the thing was like with with Perpex is prior to RWA stuff coming out, you were all competing. It was like the ultimate race to zero. There's only so many assets that are gobbling up all the volume and you're just offering a commodity. With RWA, you can actually differentiate

>> with, you know, com tech and and asset exposure and and so um and the expansion of surface area on the RWA front makes it so that there's just like infinite obviously it'll get saturated at some point, but I don't think we're quite there yet, right? even the guys the number the numbers that guy mentioned earlier about just the the size of the markets uh relative to each other and so there's a lot of growth there and I think that's probably why uh what makes options even more interesting to make multiple bets in because you know one of the issues is you just you have so many different order books to make liquidity in and so it's it's really hard to be hyper competitive and and and there's just a lot of assets that that can be tackled here and so uh I think the same

reasons that lighter and and hyperlqu would make are able to kind of coexist and and and still gain market share. The option stuff is that just an order of magnitude higher because of the just the the complexity of of market making adding liquidity and and the variety of assets that have no liquidity. >> Um did you guys see this morning that hyperlquid got added to Bloomberg terminal? Like that's one of those things where it's like no other per exchange crypto per exchange is probably going to get that. Like why right Bloomberg's just going to add hype? >> Yeah, there's a screen. It's WSL go hype. Maybe you could pull it up, Kev.

>> Yeah, give me a sec. I got to log in. >> Oh, yeah. You have an actual terminal. >> I do. It just slows slows my comp down. >> Oh, jeez. >> You just pause the Bloomberg terminal for one month subscription. You could buy a nice computer. >> What a ripoff that thing is. >> As a former Bloomberg employee. >> Hey now. Hey now. Hey now. Don't Don't be Don't be dogging. That's a That's a personal opinion. That's not the uh opinion of the firm here. But no, I mean I think it's Kevin or >> No, not at all. I'm not paying for that myself.

>> You guys are subsidizing my Bloomberg terminal. Uh no, I I do think it's a good point though. I mean, it's it's funny because like again, I think Guy mentioned this at the beginning 2 3 4 years ago, like we're talking about a lot of this stuff eventually happening and now that it's here, I do think that there's another rerating and for some of these apps and tokens that we're talking about, the rerating will come, but the rerating will not be evenly distributed, right? And I think like it's that question around whether the dispersion that we thought would happen throughout this year, which has happened like would continue. And I definitely think it does. And it's it's but it's there's also the flip side of this where if you

look on like Bloomberg TV for example, like they still list, let's call it five crypto assets that now are permanently on the screen, but it's like Bitcoin, ETH, Soul, XRP, and Bitcoin Cash. So like there is still like this disconnect between yeah between that I guess but for launchpads I mean it's a similar type of argument like you just made right there's if this is launchpad summer pump is still like to say that pump has a windy effect I think is probably a little bit too early or maybe a bit of a stretch but it is impressive how they have survived throughout like the rise of of all this competition.

Yeah. I don't know. It's like last year they had all this competition. You had like Bonk Fine, this thing Sugar, uh some other things that I forget, but they were all kind of doing the exact same thing as Pump. >> Sugar. What? What? What? What the hell are you talking about? >> Sugar. >> It has sugar like you own like 10% of this thing and you're trying to get some exit liquidity. >> I never owned it. I I only own Pump and I just had that Radium guy on my replies every day yelling at me. Um but only own Pump, but they were all the same as Pump last year. there's like some small differences, but I mean I talked about this at the beginning where like now you actually do have like innovation in

Launchpads where people are actually doing some more interesting things, but it's like yeah, pumpkin kind of just wait and see like what features are worth adding and it's pretty trivial for them to do that. Uh and they just have like so much money still. So I do think that there will be especially in like EVM land because pump is not really ventured out there and so there's still a chance for someone to kind of dominate that but um it's just hard you're seeing like both Radium and Salana have you know pump bypasses them all they have their own AMM and so Radium has barely been pushing ston uh Meteora has working with the hook stuff.

Um, so you see that like competition within the eco. Uh but yeah, I don't know. And I also don't agree. Some people bring up this like whole trust thing with pump because they don't do the air drop. I I just like don't think that matters. I really don't think they ever need to do an airdrop or really should. Honestly, I know people are going to hate that. Um, I don't think they need to like rebuild trust of people they didn't get an airdrop to. Like they're kind of irrelevant in the token price performance to be frank. Um, will they do something someday? Maybe, maybe. We'll see. But it's like it'd be much better spent just trying to incentivize something new. Um, if they really want to go down that route. So, and it's like they still have a pretty

low multiple too, right? Just compared to a lot of other stuff. People still don't a lot of people just still don't want to admit that like memecoins have product market fit. entrenching has like product market fit and it does. Um I guess it's hard to to digest for most like how this this giga extractive shortterm trading can continue to have legs when majority of people lose. It's clearly there and I think just the the the the issue of understanding how it can persist is is what like gives them multiples or makes them as low as they are. Even with all the other launchpads, right, they trade even more cheaply.

Some of them are like, you know, sub 2 to 3x revenue type thing. Um, it's just like it's a hard thesis to to get behind to do some like longer term discounting of. That's so crazy that they still that they just make a million to$2 million a day. It's just I got to meet these people, man. >> Who who is betting on pre >> I'm telling you, we got to get some actual trenches on. We got to get some actual trenches on >> like the pregraduated coins, right? Like who is betting on these?

>> Yeah, there are people who only play the bonding curve. >> Who is buying this? >> Like their entire their entire thing is I saw this tweet the other day and this guy was this guy was boasting about how much money he'd made and was like telling everyone to follow him and his average exit was $8.9,000 market cap. And it's like, >> isn't that the bulk of their revenue >> is making money. Your average market cap exit is a $9,000 market cap. Like you're literally just >> I'm a fundamental investor. No, but isn't that like where the bulk of their revenue is made to because that's where the fees are the highest.

>> Yeah. So like so like pump versus ston it's it's it is actually really good to understand like how they all make money. Like >> Stonk makes its money off of all these transfer tax fees, right? And it actually is more beneficial for ston. They make more money when you have like very high market cap coins and a lot of trading activity, right? Whereas pump coins getting to really high market caps isn't >> doesn't help them. >> Doesn't help them as much. What helps pump is just the mass deploying and like all of these launches and it's different like from other kind of models, right?

But >> they're just still able to like kind of do it. It's >> Why is that? Because don't they have the DEX trading fees? They do. >> It's just so much higher on the bonding curve though. >> Yeah, so much higher. Um, that's crazy. >> So, are there just like two to three big deployers that just deploy a shitload of memes on pump pre-bond and then everybody just gamble? Like, what is those? No, they're the top of the poop tree and then there's like a bunch of these dudes that just straight up like bundling and Yeah, it's it's I know a dude who does it and and uh >> is that kind of what it is? Is it just like, oh Jesus, I got to I got to get where do they trade on like photons still or like what like where are these people trenching?

>> Is there like a better >> I think if you're buying bonding curve you're probably on the front uh >> well like Photon and Axiom last year. I don't know if people are still using those to >> No, Axiom is gone down so much with FOMO. FOMO's kind of like totally taken over a lot of Axiom yeah users. FOMO is a good app to use. Like it is it it can you're probably not going to make money using it, but it is like a nice app. >> I agree. And you get all like the uh the people just posting funny. >> It's like good for discovery and everything and discovery to get dumped on, but like still discovery.

>> But I don't know. I thought the app was but it's funny. Yeah. like I I created FOMO account and did really well for like a week or two and then luckily I was like taking profit but um it uh yeah it's it's tough. You see someone big buy and then you're like oh I got to I got to tail them and then that's like you're buying >> oh I got tail. Yeah. >> Oh man. >> So it's literally just going to the casino is what this is right. It's just it's effectively just so that's like what it is. That's all it is. >> It's just worst. It's worse. It's worse, but it's better. Like your your EV is less, but you have a chance of a bigger payout than you do at the casino.

>> There. >> I mean, you can just bet on a number instead of red and black and you get like you get a pretty good payout. >> Yeah. >> Um, but you're I gen I don't know, man. I think that there there's definitely some skill entrenching and if you're really plugged in, it is definitely way higher EV to figure out. >> I think the metaphor is like uh if you're counting cards in blackjack and you know the deck is heavy with tens, you can size into stuff. And so if you're in a bullish environment where just a bunch of the are going up, then you play. And then once it's cooling off and the deck is full of low cards, you kind of take chips off the table.

>> Yeah, I think that's that's definitely fair. And I think you and you need to you need to be selling. Like you should pull up you should pull up the the pawns that I just don't find this interesting at all. I don't know. Like how is this sustainable? Like you just have everyone's losing money. Um like there's no because you need some some PV, right? You need you need you need the possibility of a coin just like breaking out and getting like outside external bids, you know, for some reason, whether it's it's a store of value, there's a narrative around it or it has cash flows or whatever. Like you can't have this this game of like eventually enough people go go broke that surely this like >> stops having legs.

>> Well, es and flows. I mean, I think I think it's it like it's it's a like a centimeter deep and and many many miles wide where there's people trenching with like tens to hundreds of dollars and are just getting in and out with with positions that they hold for less than a minute. So, it's like high school kids and all this other Um, >> yeah. Honestly, >> one dude in your school makes some money and everyone's go nuts about it. This is the kind of the social element where you see somebody win and then everyone's like that could be me and then they keep playing. Honestly, that's that's sustainability.

>> Like I was talking to some family members like some, you know, younger nieces, nephews, friends that are younger and stuff. It's so prevalent. It's like kids are just ripping coins in class. Um, probably like, you know, what kids used to do, go outside, sneak a sink behind the bleachers or something. Everybody's just ripping coins on their phone in class. I don't know, you know, it just is what it is. Um, >> what's what's worse for your long-term health? Ripping sigs. >> The coins. >> The coins for sure. >> But one thing it's like, yeah, you make money smoking.

>> True. >> Like, click on these charts, Kevin, and like I'm sure they don't look too different today, >> but it's like these are just interesting charts, right? Like, and then go to the next one. Just click that. It's like they look exactly the same, right? >> That one got trumped though, right? As an SI, the one that after he renamed it, this thing got cooked. That's so that's why it's sold off. >> Yeah, it's no longer artificial at >> even though it's it's backing and pairs Nvidia. It's just oh my god. >> But yeah, I mean we'll see how the Robin Hood stuff does there. There's some more interesting parts on Robin Hood that have been doing well. Like Orbo's been doing well.

>> Or there are a couple other things. So yeah, I'm not sure if like the launchpad stuff is going to >> What's that support at 10 cents, Kevin? Is that what your chart looks like? >> It's It's nowhere near support. That's what the chart shows. >> Or is that three cents if you go down to that? >> Throw some fibs on it. >> This is This is Yeah, this is Yeah. 15. >> Honestly, this chart is kind of why I'm pretty bearish Robin Hood chain right now. at least in the short to medium term. Like it could pro it'll probably come back at some point with activity, but like um like it's just like the wealth effect type thing, right? Robin

Hood chain didn't have a wealth effect. Pawns effectively was the wealth effect and nobody's taking profits because all of their favorite social traders are sitting on $10 million unrealized P&L in their, you know, FOMO wallet clearly not selling on the side or anything. Um, so like if this retraces, I think a ton of the activity, ton of the, you know, quoteunquote wealth effects that happened on Robin Hood chain just evaporates and everybody is just going to be buttth hurt for a while. >> Honestly, man, Salana is just >> I'm kind of already seeing it on the timeline. People are just capitulating.

>> Yeah. >> Um, and being like, we should have gone into the good alts like red dominated into Zcash or whatever. >> Yeah, me too. a lot of the seems like people seeing a lot >> which is the like I think that is like the the right takeaway right like I think people should just like most people aren't the you know one or two% of people who are going to make money trading alts and you know change their like they're not you know the top 5% of perp traders they should just like listen to the market and take and just bet on the things that the market has kind of said that the market has said for years will go up right like for the last two years hype has just kind of been grinding higher for the last year Zcash has pretty much just been grinding

higher pump more so in the last 6 months but like there's things out there that like you just have to be a little bit patient on I guess people don't want to hold like >> so >> hype has only been out for 24 months right not even like 24 month hold period for like tradi is table stakes a lot of the times for things right and you're getting a 40x 50x from TGE on hype 18 19 months out it's kind of like just have a little patience believe in something what happened >> yeah what do you think of the option stuff actually guy curious if you've used any of them or we're pretty bullish on it as a category.

>> Yeah, I think um it always made sense to me that I think like perhaps we're just a better instrument for like the simple leverage speculation versus options and I think we just kind of saw that in the volumes in crypto. I think it was like 95 to 5, you know, derid versus peps and everything else. Um it does have a place though in the sense that like you can do some things with options that you just uh you know cannot do with perhaps in terms of like risk management and creating different payoff structures. Um so I I do think it has a place. I just think that the predominant user in crypto is just I want to get X long the underlying and I think a per is just a better way to do that. Uh but options should have a place and and can get to

some scale. I think the issue is that we just never really had a good options platform until the Rive basically came around and sort of properly started to scale this year with proper order book and stuff. All the stuff that we saw last cycle was a pretty kind of mashed together weird kind of virtual AMM something, you know, some sort of duct tape over the fact that it just wasn't a performant order book that was sitting in the background. And so I think they did an incredible job. I think want to also just call out Nick, the founder of Dive. We actually kind of worked with them I think over a year ago uh at Athena as well. Had just seen sort of like the struggle that he went through uh chewing glass for like five to six years uh with different attempts and it

was just pretty incredible to sort of see that comeback cuz it was like one of those really just good stories of like a solid team you know honest vendor that's just working for very long until they sort of see the uh you know overnight success in five years uh this year. So um it's been really cool to see see them come through this year. Yeah. Why do you think it's so much so different in Tradfi? Like the options are such a big portion in in in Tradfi. Is it just the use? Because even in even at not even sort of institutions, right? Even on Robin Hood, retail traders like love these these options. Uh it seems like it should be I don't know. Seems like there should be a way to make it work in crypto. The drive like drives crushed it. Uh I tried to use it the

other day. It's still pretty complicated for someone that that isn't familiar with options, >> but uh yeah. Yeah, >> I've been told that if you're trying to buy options on derive, you have to use the RFQ. >> Yeah. As to like why is it so much more popular on tribey? Um, you know, I just don't think retail users on Robin Hood had the option to do something else other than uh trade these like a per wasn't sitting there wasn't available. And I think if the two were side by side and all you wanted was just leverage on the underlying, the PP is just a much more intuitive way to do that. to your comment, you know, Z around like the ease of even understanding what you're getting into. I think at like the most simplistic level, right, it's like when you're buying an option, you're not kind

of expressing a view necessarily on just the price of the underlying. You're actually pricing volatility like Greeks. Like there's a lot more that's going into that and that's not really what a retail user is signing up for when they're just saying, I want to get X leverage long. Um, so yeah, I think it's just that there wasn't really actually the ability to use other instruments and this is just what was around. And there was also just a very nice matching which is you had like retail that wanted to use them for leverage speculation but then there's actually a lot of institutional hedging on the other side of that uh which doesn't exist at the same scale within uh within crypto.

Yeah. So there's a much more like two-way market there in Tradfire I think. Yeah. And maybe uh I know today is today or yesterday is the the FINA last unlock, right? Don't which you've >> Don't remind them, bro. Yeah. Going to get their coins. >> I think they know. I think they judging by the speed at which those coins move. I'm pretty sure they know. Um what what uh how does it feel, man, to finally be free of uh of of this overhang that has kind of haunted you? And have you had are there any learnings from from going through that other than just like don't sell so many coins pre pre-launch?

>> Yeah, I mean um obviously some of that is uh inside of your control and some of it is outside of it where um uh yeah, you obviously need to fund raise if you haven't made money before starting something, but I think there was like a very harsh lesson that I learned just in terms of who you got around uh the cap table. Um, so yeah, I made a ton of those kind of mistakes uh very early on which just took a long while to course correct um on our side. But it's not the good thing is that it's not like a problem that you that is impossible to solve. It's just a painful thing that you need to solve over time. Um, so yeah, I think just a lot of the pools of capital in crypto are kind of uh hedge funds like masquerading as VCs and um,

you know, I think that uh, uh, yeah, just being aware of the type of people that you're getting uh, into bed with to work with for a multi-year sort of horizon is just something that you should be a bit more thoughtful of in the beginning. But I know, you know, a lot of people that are starting businesses for the first time or fundraising for the first time, it's just not something that you're necessarily thinking about in the very beginning when you're excited to bring out a product and that's kind of what you're most focused on and you know raising money just feels like a happy thing in the beginning rather than a problem that you're going to have to deal with uh later. So uh yeah, sort of glad that we're getting towards the end of the whole thing. I think as I said a

lot of the pieces of this were mismanaged on my side but we've tried to course correct with some of the stuff that we did this year and I think we just kind of tried to put our hands up and acknowledge some of those mistakes and um yeah some of the things we try to just address this year was kind of in in some senses I think Athena was sort of seen as the poster child of kind of uh low float high FTV BC kind of like scam extraction scam was kind of the uh oneliners that I would probably see the most on the timeline and I think we just tried to address a few of those head head on which was just uh buying out kind of the weakest hand of VCs uh you know pretty close to the lows in the summer of this year. uh being a lot more

clear around how we sort of capture revenue and value back to the token which is something that we was long overdue on our side to sort of do in a proper way and then uh also just aligning the token in equity where I think you know when we came out it was just a slightly different error in terms of having these uh disconnects between a foundation and like the entity that was kind of creating the IP and that kind of stuff. So I think we went one step further than most people have, which is actually kind of actually moving the IP over from the equity entity and any future sale proceeds actually being uh due to the token rather than the equity. So I think we've seen a few of these cases, right, where token project kind of gets bought out and then the team

walks off with 20 mil and just kind of zeros the token on the other side. Uh all of those kind of protections have now been taken out of the equity and given to the token. Uh so yeah, I think we try to, you know, address a few of the pieces that uh we'd been listening to the market in terms of what they didn't like and uh yeah, feels good to be able to just go focus on building product because I think I've wasted a lot of time in the last few years just trying to kind of manage this entire piece of uh things which has been a pretty yeah uh unhelpful distraction. >> Do you think it would have been better if like all investors were basically just unlock day one?

>> Uh yeah, potentially. Um, I think that there is some, um, there is some benefit to having like a one-year, you know, runway of not having to worry about selling at all to just kind of like grow into your valuation or go and build and try do something that can kind of justify the valuation that you have in the beginning. Uh, so in some senses that like first year when you don't have to worry about this at all is kind of the moment that you can spend the most time on actually yeah growing into uh, you know, people's expectations of you. But I think on that first unlock after the first 12 months, uh it is probably better to just find like true price discovery for investors. I don't think that's the right thing to do for the team by the way. You obviously just need

to keep the team locked up and incentivized to continue building this over 5 to 10 years. But like the whole the whole investor thing is just like if they want to sell, you're kind of always fighting gravity, right? which is like if you're trying to de delay these things and kick the can down the road, it's just uh yeah, you're just fighting gravity and the quicker that you can get them out and uh you know, get new supporters on, it's actually just the better for you, I think. Yeah, >> I kind of feel like a lot of projects that have this long vesting. I actually think we'll see a lot just um unlock everybody at once very early um over the next year or two. And I don't know if I'll be like proven right on that or not, but for instance like Monad's a good example

like I'm an angel as a disclosure, but it's like wouldn't it just be better if like everyone it's an L1 like you just unlock the investors right after a year instead of just having this drip for like four years? Like the drip I just feel like the drip is the worst part. You'd rather just have the big event and then let whatever happens happen. Um because the drip is also just a psychological thing. >> I'm not sell I'm not selling Mod here, man. I think I think it has a I think Mad legitimately has a shot still to be one of the main EVM chains. I'm not like a big fan of L2s. I just think they're just I don't know, man. Like Salana is I just find Salana to be such a better

complete blockchain ecosystem than all these L2s. Um >> I just feel like who who still cares about blockchains though? But like L1's >> I think builders. I think feel like it's it's it's over. It was over like three years ago. I don't know. >> Do do we still care about blockchains? >> I mean, people who are building on them care >> on the on the the unlocking though, I think if you raise knowing that you're going to be unlocked day one, you could probably get higher vows too from >> so like like at the worst of both is if you raise with a lock up because people demand a discount and then unlock it later in terms of like raising most capital at the at the most efficient price. But if you say day one you're unlocked. I think they're the propensity to spend.

>> Some of these are down 90% from their raise val. And so it's kind of like >> that's a skill issue. >> Maybe just like get it over with. >> Yeah. I think that >> there's a lot of projects. Sorry, go ahead. >> No, sorry, I didn't mean to cut you off. I was just going to say um you know a slightly unspoken thing as well which is like uh yeah people probably don't want to talk about it but it's also like you uh it is very dependent as well where you think you are in the sort of maturity of your own product or like finding PMF where you know us doing it this summer was kind of a bit of a you right to the rest of the market which is like if you guys want to get out then get out we're just going to

continue building and we have sort of confidence in ourselves that we don't care if you dump everything now and that was kind of the message that I was sending to But I think other you know if you don't have the confidence in your own product it is helpful for you to actually like find PMF if you have a big FTV which is something that people don't talk about much which is like if you have a big FTV you attract more talent to your company you are able to strike better commercial deals with distribution partners etc etc you just have a bigger you know even if the number is somewhat fake as you're sort of like growing to that FTV the practical reality is it actually does allow you to get closer to PMF uh when uh that is the case and so I think there

is a bit of nuance there which is like if you have the confidence that you don't need some of those more gimmicky pieces around having a large valuation that you know everyone doesn't really think is real um you know if you don't think that that is important then yeah unlock everyone but it does sometimes actually help you kind of stop pretending and grow into the real thing when you do have that >> yeah I just wonder what kind of founders are going to want to do go through this like that's my kind of like sort of bare case for for token in a sense it's just like you can do equity rounds right and it's in a sense it's the best high FDV low float scam especially in a bull market right in a in a like private markets bull market you can just have

you literally get priced by like two or three investors and then that's your mark for for all your employees and stuff like that generally there's enough liquidity to take secondary if you're hot right now um so like what's the advantage of going through this gauntlet of public token and retards on the timeline, you know, saying to you. And yeah, >> I think it depend if you need a token for incentives, that that's one. You can't you can't do that with equity. And then also if how acquirable your business is able to, though, right? >> And then how acquirable your business is.

>> I think doing that with equity would be such a nightmare, man. Like, so I don't I don't think that it will be. But um and then yeah, the your actual long-term exit path is are you acquirable? Is this going to go public? or is this just going to be a standalone business that may be best monetized through a token? >> Yeah. What do you think, guy? You you've kind of been through it. Maybe probably got to get founders asking you for advice on it. >> Yeah, I definitely don't um regret doing that or going down that path in general. I would just say like sometimes the nature of what you're building isn't rewarded when you're doing it as a token. So, if it's like a almost casino type business, you know, the ones that trade at like 2x revenue or whatever it is and they print a ton of cash, I think

you'd actually be worse off financially kind of trying to put that cash flow into a token to appease holders rather than just kind of monetizing a dividend basically with the business that you've created. So, I think there are just some types of businesses that people look at and just say, I'm going to ascribe basically no multiple to it at all. And so if you're going to just be shoveling all the cash to kind of make token holders happy into something that not valuing at a high multiple, that's probably the uh one one time that it really doesn't make much sense at all. Uh but I do agree like the whole kind of calculus has changed massively over the last three to four years, right? Like people were rushing into tokens because of the froth that kind of existed around them. And then last year we were trying

to take tokens and put them into equity and sort of sell them as DATs in the opposite direction when uh equity markets were more frothy. And so you've almost seen it invert, right, which is like uh crypto lost its froth while equities had all of that last year. Um and yeah, I but I I definitely don't regret like the broad sort of decision to go down that path. Yeah. >> Yeah, 100%. I think one last final question we had that definitely want to get your take on is I think at the beginning of the year we all expected stable coin supply to be considerably higher than it is today. it seems like it's plateaued a little bit. Um I think some of our predictions were 500 million maybe even you know a billion by the or

a trillion by the end of the year. Do you have any thoughts on why that is or why we've seen this stagnate and what kind of restarts stable coin supply growth? >> Yeah, I think um you know it is one of the examples of like a nonspective use case that kind of found proper adoption and product market fit outside of crypto. But I think that that one liner that I just gave you there also misses some of the nuances which is it is still driven by speculation. Uh uh the majority of like the sharp growth that you see on stable coin. So if you just chart like Bitcoin price versus stable coin growth, it's actually pretty correlated. Like when Bitcoin went down in 2022, people in Argentina weren't waking up and thinking that this wasn't a useful piece of technology to them

anymore and the supply shrank. It's cuz like crypto imploded. There was no basis. there was no nothing interesting to do in terms of like generating yield or return and so the the supply shrank 40%. And in the sharpest sharpest periods of growth, right, when Trump was coming in, ETFs were being announced, etc., etc., stable coins are going like ballistic, adding one to two bill a week. It's because it was just chasing like the returns within crypto as that was happening. So, uh I do think the trend is up and to the right and it has like become less reliant on crypto speculation, but like still the biggest demand driver for like the biggest changes or rate of change that you see within stable coins is still related to I want to get dollars into crypto if it's going up and I want to pull out

dollars when it's going down. Yeah. >> Yeah. No, I think it's I think it's a really good take and we'll see how it plays out, right? Maybe we'll have you we'll have you back on uh in a few months or something and we can compare notes and and see if a lot of these things actually played out. I think that's a good place to end it. Um, big shout out to you guy. Really appreciate you hopping on and and joining. Like I mentioned, been a close friend of Deli for a while and we've been wanting to get you on the show for a bit. So, appreciate you you hopping on and sharing your takes. >> Yeah. Thank you guys. Appreciate it.