DAS Livestream with Blockworks Research & Advisory

Transcript

What's up, guys? Just wanted to give a quick shout out to today's sponsor, Apptos. We'll hear more about how Bitcoin, DeFi, and Apptos is heating up later today. But for now, let's get into the episode. [Music] Nothing said on Xerox Research is a recommendation to buy or sell securities or tokens. This podcast is forformational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Pokio, Ryan, and our guests may hold positions in the company's, funds, or projects discussed. What's up guys? Welcome back to Zerx Research. I am joined by Westy Capital from Blockworks Research and Teddy Sterban from Kyros Research. Did I say that correctly?

>> Oster Osterban. >> Very good. Thank you very much. Now, >> how are you guys doing? >> Doing pretty good. >> Doing good. >> Yeah, D has been great. >> Having a good time. >> Very good. >> I'm doing well. London's been awesome, too. It's my first time here. Can't believe you guys had me on the podcast in person. >> Very excited. >> Honored. Um, one fun fact is that Teddy hasn't been able to fit into any form of public transportation. >> Yes, >> only the tube. Um, everything else has been fine. There's only like one the Jubilee line I think is not built for me. No, >> everything else has been >> pretty nice.

>> Okay, very good. Um, how's the Did you do any speeches? Any talks? >> No, I'm talk free. >> No, very lucky. No, not that I don't love doing the talks, but >> No, I'd love to do um >> Yeah. >> Teddy, how's it been for you? >> I'd say it's been great. I mean, again, I this is my first thing that anyone's asked me to do, but uh I it >> hopefully not the last. >> Black Block Black Works has never paid me, but this has been the best conference I've been to. Um so, that's a sincere statement. Uh I feel like >> flipping the 20 now.

>> Yeah. Very good. >> Every panel I've been to has been interesting and like captivating. So, >> yeah, that's that's what we go for. Huge shout out to Bennett who does all of these things as well as >> everybody else but Bennett mostly. Um, we had a very stressful weekend. Were you flying while the everything happened? >> No, I flew in on Sunday. >> I was I was AFK though on Friday. >> What were you doing? >> I was just logging off. >> Oh, very >> just enjoying life, you know, away from crypto and I Yeah, I didn't have any lever positions open. Simplified book and yeah, all of a sudden I got messages on Saturday. I'm like, "No way that those prices are real." But yeah, >> Teddy, any pain?

>> A little bit of pain, but it'll be okay. Um, it seems to happen every time I go to a conference, too. It's been like once a year for the past four years. The the like I'm supposed to get on a flight and I get liquidated. Uh, so get liquidated once a year. It's always right before flying. So then I get a few hours with no Wi-Fi just to think about my actions. >> Just focus up. Yeah. >> Um, no, Friday was pretty insane. I mean, like you were flying. We have a guy Luke on the research team and he was out hunting >> like all week. >> What was he hunting? >> Uh, bull elk is what he said. I don't know what it is. American thing. Um, and I think he came back on Monday and he was like, "What? Like, did Adam go to

0.01?" And we're like, "Yeah, it did, buddy. Like, best of luck going forward." >> It's crazy. Everything dumped. >> It's insane. >> Um, >> how are you doing? >> I'm good. I I I I can't do pers. I have a very addictive personality, so I try to stay away from whatever I can get addicted to. >> So, you're more of like you're a hype holder, but not user. >> No, I use it to buy more hype on spot, >> less so on purpose. I I generally can't do pers like actually. I um you know, other people can generate the fees for hyperlid. I just want to benefit off of the fees by my >> um they made $20 million. That's a significant amount of money for one day.

Okay. I mean, if you analyze that, we and we should, should we analyze it? >> Uh, I mean, but how much of that came from, you know, traders, you know? >> Yeah. >> The HLP vault >> milking traders. >> Well, it's not really milking, is it? Like you >> if other traders can't take on the position, it goes to the HL. I'm doing auto deleveraging talk on camera. That's not a good thing. But we're going to take a risk. Yeah. So, >> traders, if traders, if the order book doesn't work out, goes to HLP. If HLP can't cover everything, then auto deleveraging. That's fair. No, >> that's pretty fair.

>> Yeah, I think it's fair and it's the state of the market, but I don't think it's a good thing for Hyper. >> No, definitely not a good thing. >> Like even the amount of money they made that day, it's like, okay, how much have they not made since that event because that happened? Like I >> Yeah, >> it just feels weird that prices go down to a point where they're not going to stay for more than five minutes, so they probably shouldn't go down there in like a healthy market. Um, I say as I'm coping from um, but yeah, it just seems like it's not a great event in order to keep trading sustainable.

>> Yeah. I mean, I'm just regurgitating what I saw on X after the fact. People comparing, you know, HLP to lighter. >> Yeah. And yeah, there's been, I guess, some talk on the sort of trade-off between uh traders winning and losing ADL and the benefit of this like back stop liquidity providing. >> Yeah. I mean, you never want the protocol to acrew bad debt, right? >> Yeah. >> Like that to me is very basic. So if if the HLP is designed such that the protocol can never acrue bad debt, to me that doesn't seem like a bad thing. Like no one would be like, "Oh no, a uh >> it's a trade-off."

>> Yeah. It's like, but if you're prototyping the protocol, you might hurt the traders or get less traders because they don't feel as comfortable. >> Yeah, that makes sense. It definitely hurts because Teddy was like, "Oh, I got liquidated." And I was like, "Oh, wow. Hyperlid made $20 million. This is fantastic." And it's >> But yeah, I I think it's much better than things would have been three years ago or four years ago. So, it's it's definitely trending the right direction. Um, and nothing broke. Um, I like that we say this every time something bad happens. were like, "Oh, like three years ago, you know, everything would have gone to zero. Now we're doing okay.

DeFi, it just works, you know." >> Yeah. Yeah. I think there's some truth behind that. That definitely means we should quit, not do anything from from now on, but I I think that there are massive improvements and like I'd still like to use I mean Hyperlid fared better than Binance did and that's speaks to >> like there's a lot >> and they shut down Binance which is insane. like it's the largest exchange in the world and they you couldn't get orders for apparently. I just talked to Adam from Rockaway X and he mentioned that they were like surely a lot of people got liquidated just because they had like naked longs left because um a lot of them hedged for Binance and Binance API just was down completely.

That that's a ridiculous thing to have as Binance. Like can you imagine? >> It definitely felt like your like CFI front ends didn't hold up very well. like a lot of the stuff that people use that are run by centralized companies, but DeFi held up just fine as a whole. That's what it it feels like to me at least. Okay, let's um let's move away from the very depressing topics and say what are you guys looking forward to over the next six months? >> Um monad cards being worth 100k? No, >> I think they got announced it's worth minimum 100k.

>> Really? >> Yeah. >> No, I think retire if you got a M card. Uh, I don't know. Nothing really comes to mind. Uh, yeah, I guess Monad and Mega ETH finally going live. Hopefully seeing mainet and seeing the rubber hit the road because yeah, I mean, it's been a bunch of hype for a long time. So, I want to see innovation and cool stuff happening. So, that's like the first thing that comes to mind. >> Are you going to be a big Monad guy? >> I mean, depends how much give to Monad cards, I guess. I don't know. And how much there is to do. I'm also, yeah, I'm a mega ETH fan as well.

>> Very good. Just whoever gives him more money. >> I just whoever's got more motion, you know, more more cool stuff happening. >> How do you think about those two? Cuz like I know you are against the spot specifically, but like the L1 premium versus L2 Premium. Do you think like inherently Monat is going to command a higher valuation because it's just a layer one while Mega E benefits off being an L2? I think in the short term it might be priced higher, but I think in the long term you should not have like an L1 premium should not exist and it's been compressing over time because it's all just chains and bridges and your chain should be optimizing for rev or if you have like an application

revenue and everything else like your tech stack or you're posting data somewhere is irrelevant. >> I have a question for you. >> Go ahead. Is staking actually would you say it is like a a black hole for tokens like just having staken which staking which is obviously not necessarily like a good thing for your token long enough token sync. >> Yeah. Like does that get rid of a lot of the supply at the launch of these things that can kind of command the premium? Um, I think with liquid staking it's like been dramatically reduced to like what it could have been. Like if you could What was What did the Cosmos do where

they would like you could you can unlock it and then you have to wait 3 weeks to get your token back. Right. >> It's the 21day unlock. >> Yeah, the 21day unlock. Yeah, like that I that's a token sync, right? Like that actually is. >> Yeah, I was going to say the same thing. >> Like soul is like is it two epochs? I think it's like three days that's native. Obviously, everybody uses JO. Yeah. >> And then JTO will have its own sole reserves to like I imagine fulfill immediate demand of like >> unstaking. So I guess not. >> Is that does this answer? >> No, I think it does. I mean I'm always curious of just like giving people something to do with the token like throwing out an arbitrary number and being like 7% APR >> if you stake it. Um, I think that that

gets enough people to be like, "Ah, maybe maybe I'll do that rather than sell it." I mean, if you add a third option into buying and selling and it's people already have tokens, then maybe staking rather than selling kind of happens here and there. Um, >> do you think people overindex on the token sync stuff? Because now people would talk about pump fund launches and like oh it's yes they're like they're getting soul but soul is also being locked in LPS but when you actually look at the numbers it's like not that much soul actually ends up in LPS over time. So I think people just overindex on supply syncs in general it's more so like are people bullish on this asset?

Will they hold it? Like the sinks themselves largely are relevant. >> Yeah I can agree with that. I I I saw a few of these tweets today and it's like um like Pump is still making a million dollars a year. I mean it's revenue is declining. Um >> a million a year. >> A million a day. Sorry. >> Yeah. >> Um revenue is declining but I mean a million a day at what is it 3.5 bill market cap? FTV whatever it is. >> FTV. >> FTV. Like that's quite cheap. Um but I mean the argument here is like do people want to buy it apart from it buying back its own token and it seems to be no like do you think that also like okay staking you can give utility but even if you

have your like buyback some form of value acrruel unless you can command enough attention such that people are like okay I actually want to buy this token it doesn't really matter like we saw with roll bit as well there was probably some crime there as well but you know it's like if if people don't want the token you can buy it back as much as you want they're just not going to buy it back like they're just not going to buy your token. >> Yeah, I guess that's true. But at what point do people run out of tokens to sell? I mean, if they're able to buy this much back every single day for the next two years, like at some point it's going to hit a wall where it will have enough price impact. Um like they can't just mint infinite tokens to sell. Um so

my opinion is like on a long enough time horizon, if you think that pump will continue this amount of activity, you should probably own it. like yeah out of everything in crypto then it it's attractive but again like I think there's worries that if they start making more money they can cut buybacks back to 25% of revenue. Like I think that there's a lot of unanswered questions and like they've done a good job to show that they are willing to support the token but that people don't know that they're two billion in cash might be do token holders get any part of that or is it going to be used to build out the protocol? I mean, I don't think there's been anything officially or legally said that >> Yeah.

>> people know that. >> I also wonder how much of it being cheap is is relevant to how ephemeral the revenue might be just in the nature of you need new token launches constantly. We saw what happened with Bonk. It took a good amount of market share at one point of new launches. So I think there's maybe some concern on the sustainability of the pump sort of revenue model as a whole. >> Are you concerned? Are you a pump holder?

>> I I mean I was concerned. I before you know Bonaf fun and and pump and radium's launchpad. I figured Yeah. I mean just the nature of pump fun is you need constant new token launches. Um, and so as a result, I I figured it's pretty ripe for market share to be stolen. And I still think that's probably the case. Um, and I think we'll see some back and forth. Maybe a new launchpad comes out. Maybe a new chain becomes the place people trade. I don't know. It's a hard thing to like look 5 years into the future and think, "Oh, this is the thing going to continue to be the thing that people trade."

>> Yeah. Can you imagine looking back 5 years ago and thinking, "Oh, this has to keep going." >> Exactly. Bitcoin DeFi is heating up on Apdos. With nearly 400 million BTC assets on chain, APOS users can now earn yield on their Bitcoin via EcoABTC and OKXXBTC without the typical bridge risks and high fees. To explore BTC yield opportunities on AppOs, follow the link in today's show notes. >> As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. >> Teddy, what are you what are you excited about over the next 6 to 12 months? Uh, I think based on your earlier conversation with Paul, I am excited about um Plasma One and we're investors in Plasma, so I should say that. But um I'm also on the wait list for Plasma 1, right?

>> Um and I think all these cards are generally interesting to me. I just know kind of how the offboard offboarding process goes and it's kind of painful and I think that there's a lot of people that would like to make that simpler. like you try to withdraw through Coinbase and they try to auto stick you with the instant withdrawals with like a 3% fee on your money. Like every time I have to like go back and like exit out of that, it's like no, I'm not paying 3% to get one day shorter into my bank account. Um, so I think that there's a lot of things that are interesting happening over there. I think that the DeFi ecosystem has been impressively built out so far. You can probably >> shout out River.

>> Yeah. attribute a lot of that to the incentives program, but I also think that they had a lot of things to do and like USD AI, like whatever you want to say about it, I I think that there's questions to be asked there, but like they're building a kind of interesting novel product that there's like demand for um >> GPU powered stable coins. >> Um yes, and I think of it more as like a vault too rather than a stable like similar to Athena. It's like >> strategy back. Yeah, >> you don't want to hold your life savings in it, but it's worth getting the extra yield if you have to. You can mix and match a little. Would you agree?

>> Uh, somewhat agree. I mean, you're you're you should be confiscated compensated for the amount of risk you're taking on with this kind of thing. And I'm not sure like the reason why I'm not participating is I don't think it's sort of worth it. Um although maybe in the short term it's worth farming, but that's just the way I see it. Yeah. >> Sorry, finish up. I was going to say I have no idea how well the collateral holds up. Like if you use GPUs for six months, are the are they worth 80% of what they were when you bought them? Are they worth 30%? Like does it depend on who's using them and how they're taking care? Like I just don't know that. So I think that's the right question, but I know that like you see Sam Alman going on podcast saying GPU financing is like

a completely underserved market and it needs to be done. And I think crypto is a great spot to uh kind of just serve as a base for allocating capital and pooling capital. So it's cool to see it in the credit markets as well as just random tokens and memecoin launches as well. I think that makes sense. Um to be fair, they are like 98% backed by stables, but but then they they announced their first loan last week and I have a few friends who were like, "Oh no, like I thought this was going to be fully stable coin backed. I didn't actually think they were going to get any GPU loans yet.

>> Yeah, they're farming the token, the USDA token. But like at the same point, the token could be worth something if this loan like is interesting. It's $500 million. Like I don't know who the borrower is. I should probably look into that. They don't have any money there. Um but I think that's interesting. I think like if Plasma can become a place where you have like a a bunch of different options on the credit side and like tokenized asset side as well, it's like okay, it's coming together. It's like a not only a payments chain, but like a place you want to hold. Stable coins are like real value in crypto. >> Yeah.

>> Um so I think that's just like an interesting concept that we haven't quite tapped into yet. >> No, I definitely agree and I think USDI is pretty cool because like you said like we need some new um interesting things coming on chain as opposed to like what we've been seeing. West, you're not really a big yield farmer, I realize. And you also don't lend or borrow a lot. You kind of just buy and sell. >> Yeah. >> Yeah. >> It's kind of >> Have you been burnt before? No, I just don't think you're being adequately compensated for the risk you're taking on. In most cases in DeFi, people I think get too comfortable placing their money somewhere on chain and like yeah, just like don't appreciate smart contract risk and whatnot. So, I'd rather not like pick up pennies in front

of a steamroller getting 13% yield. I'd rather, you know, trade assets that I feel like I have, you know, good alpha on or a good judgment on. Yeah. rather just sell calls. >> I mean, not that I I'm not maybe covered calls, but but yeah. No, I'd rather not like chase yield. I'd rather >> rather trade. >> I think that's >> Yeah, I I very rarely I don't even stake anything to be fair. I'm not a big staking guy as well. Um I get nervous. I get very very nervous. My another thing is that I like immediate liquidity. I feel like I can make a lot more money if I'm just like if I have cash to put in at the right time as opposed to like if

I'm just infinite farming a like 4%. Yeah. I mean I think these assets are volatile enough where 5% on your money a year in like dilutive tokens is not enough for you to be like I want to be locked for a month. Um, no, I think at some point in time maybe that's true and it's not just dilutive yields and the assets become less volatile. But one thing I feel like we don't talk about enough is that soul talking about dilution is like soul has hit its 2021 market cap way like months and months ago and now it's like double it. Um, if you are thinking about like how you want to allocate to these

things, are you actively considering market caps and in the way that you trade, in the way that you buy and sell, or are you still mostly thinking of like direct comps? Because this is something I was thinking about like when you think of ETH, it's actually not hit alltime highs. Um, no, it has, but not to the point that Solana has. Is what I'm saying making any sense? I know I'm asking very horribly, but >> I think it makes sense. I think it depends on your time horizon completely. Um because yeah, I'll have trades that are a day long or or a week long, but if I'm holding something for a very long period of time, I'd certainly take into account changes in issuance and supply and I'd mostly go off of FTB um versus market cap. I think it yeah, entirely

depends on the time horizon of your trade or investment. >> I think with something like Soul, it's different than like Lido as well. If you look at the Lido like FTV chart and it's like you watch Lido just get billions and billions and billions in deposits and like the price never >> No, it's always $1. >> Yeah, the market cap chart looks great. You look at the price, it's been the same. Um, so I think that one's a different one where it's like token holders aren't getting any of that inflation. So, it is all delilution. I think that with Soul, like again, maybe we don't want to stake, but you can stake. And I think with the staking ETFs that will hopefully be approved, like then it shouldn't matter as much. But I

think it's definitely tough for like an investor to want to own something that they're going to be diluted in and they don't want to necessarily have to stake. So like I think it's something that chains need to think about and it's like do we need to be paying this much and the valid validator commissions need to be this high? Um >> yeah, I think that's a great point. like where the issuance is coming from is super important because if it's a proof ofstake chain like you as a token holder have the right to the new issuance versus if the issuance is being used for farming incentives or the issuance is just unlock tokens completely different.

Um and that certainly changes yeah like the investment perspective of the thing to end things off. I already asked my typical ending things off question like the six to 12 month thing. So, I have another one. Um, if you could only bet on one chain going forward and Teddy, I'm going to ban you from saying plasma because you're investing. You already said it. Um, which chain would you bet on? >> What's the time horizon? >> 12 months to 24 months. >> And I'm betting on the the native token.

>> You're betting on a native token. That's a good question. Probably Salana. Maybe Hyperlid. >> Yeah, >> I'd say Salana and Hyperliquid are >> You have to pick one. >> Out of all my live chains, >> I don't know. I'd say it's definitely like the way that Salana feels like they're making improvements and kind of targeting the right things compared to ETH. It's not like a big gap between Hyperlid and Salana, but it does it does feel like Hyperlid has a lot of momentum right now. Um, so I wouldn't bet against them. Um, very good. But

very good. I would also >> That's the right answer. >> I think that's the right answer. Wesley, we're going to be having a chat later on. >> Um, guys, I really appreciate you coming on. This was really fun. >> I agree. Thanks for having us. >> I appreciate it. With nearly 400 million BTC on chain, supported by a secure, fast, and affordable move VM environment, APAs has become the BTC growth chain, APAS users can now earn yield on their Bitcoin via ECO's ABTC and OKX's XBTC without the typical bridge risks and high fees. With support from Echo, OKX, and Stax's SBTC, Apptos is the place to go for best-in-class yield on Bitcoin. To explore BTC yield opportunities on Apptos, follow the link in today's show notes. As always, investments in blockchain technology

involve risk. Terms and conditions apply. Do your own research. >> What's up, guys? I am here together with two millennials trying to figure out how to retweet a live stream. How you guys doing? >> We're great, Boach. How are you? >> I'm very good as well. Um, how's Das been for both of you? >> It's been great. D is honestly my favorite blocks conference. >> Not permissionless. >> Uh, nothing is permissionless. I just like DS a little more. Um, >> ticket prices are higher for DS. Yeah, it's good for the good for the >> I love that. >> No, I think the uh the quality content is good. I think that the natural evolution of crypto is that's going to mature as an asset class and like this is this is the future of crypto whether or not crypton natives like to hear it or not. And I think that there's this

probably the highest signal conference to noise ratio out of everything else out there out out there in the industry. And yeah, >> anything you want to add? >> Say that again. >> Anything you want to add? >> No, I I think that's about right. Um I think that you know having now been to a few DASES um the um you know you it's very much like teaching moment for our team um whereas like in permissionless like we're learning but I would say that this is like the most educated educated crowd that we've had which is pretty cool. Yeah, I agree with that. >> And I feel like we actually have the opportunity, it's educational for us because we're absorbing try fivey best practices and lessons learned and and language. And I think they're also we have the opportunity to educate them as well.

>> So we're I I I like see Black Blockworks is like a bridging a brand that's like bridging and crypto and I think like we're able to put our best stuff out there in moments like this. Although I will say I feel like at DS New York um I felt a lot more like I was teaching people versus now I feel like everybody already knows like everyone's caught up and that like I guess that learning curve that I would have expected to be much longer was not as long as I would have hoped for it to be. >> Well, if you bring up Hyperlid on every podcast eventually everyone will hear it. >> Everyone will figure it out eventually. That's good. You even figured out a way to mention Hyperlquid on the Athena podcast with I was like >> well no but to be fair HIPP3 and

Hyperlid and Athena is very relevant. It's going to be a movie. >> It's going to be a movie. Um, lot of volatility on Friday. Tough weekend. Do either of you care? Were either of you liquidated? What are your thoughts? >> Uh, I remain bullish. I think that it's a great time to own risk assets. I think that um any volatility along the way should be welcomed. We don't get enough of it and it makes entries really hard. Um, you know, I think Friday was useful in that one. It exposed a lot of the problems that we still have and still need to fix. And, um, for investors, it was a short but much needed entry into a lot of things. And frankly, a lot of tokens that stayed where they are

>> they they kind of deserve it. >> Um, >> yeah. So, it was just like a nice a nice repricing for some assets and um and then um a nice entry for um things that were, you know, thrown out with a baby out with bath water. >> Yeah, I think a couple things. No, one was not levered long or short. uh >> because you like leverage. Like I I asked I knew who wasn't levered on, but I I imagined you might have been >> Yeah, Pikachio's uh I guess shedding light on my gambling problem live on on live stream, but that was that was David of old. Not anymore. Um spot it's a spot only meta uh from here on out.

>> Uh I think you're going to see a flight to quality hopefully because I do think that there's a lot of like under uh under undervalued assets especially after the move that happened on Friday. Um, the one thing I'm thinking about the most is how does Binance's market share change from here. Um, other exchanges did have some issues, but Binance clearly was like the lead the driver of the dislocation of the market and is because of like their own issues with um with their pricing oracle for some assets and ultimately exchanges just like banks. It's like a trust and brand thing and a lot of people lost a lot of money on Friday and maybe this is you know good for hyperl maybe this is good for OK you even saw

like OKX and some of the other like major centralized exchange founders like >> kind of going after the 900 pound grill in the room that is uh is Binance so I'm really curious to see like how I guess market share changes uh from here because obviously like the market structure we have now where most price discovery is happening happening on Binance uh and you know they own I don't know how much market share something crazy probably 70 80% of all market share I I have to imagine um is obviously not good for the industry >> that's fair I um I think a few people I talked to today said similar things like one was um that actually like like you said Binance was the one that had issues and I mean onchain was working well DeFi held up well lending held up

surprisingly well if you think about it >> yeah when you hardcode things to one it's simple right >> don't get you should have gone smart 20 minutes ago. Not now, buddy. I I would have liked some of that fire over there. >> We're all friends here. >> Very good. Very good. Um >> I'm just kidding. >> No, it held up quite well. Like everything held up quite well. I'm not going to do the hardcoded thing again, but what he's saying is correct in that we won't do this now. Uh >> Oh, no. Hold on. We should because I I do think like I'm not saying what a did was right or wrong, but what I think in the moment it was >> we're going to lose Ryan.

>> No, in the moment. In the moment it was the right thing but I think a proof of reserves a twap based like delayed oracle the industry is learning how to do proper risk management and proper oracle procedures and like this is just another learning lesson. Yes, it was a very expensive learning lesson but a learning lesson nonetheless. If anything this is going to make crypto more antifragile moving forward. >> I agree with that. Um >> sorry Ryan I'm here. >> Very very good. So, one thing is like that I always kind of tune out is all the D that talk.

Like I'm not a big digital asset for a green guy. Um, but it seems to be like very very popular almost like yesterday I imagine Felix talked about it for like half of the time of his life. Do you are you guys still very very excited about digital asset companies? >> I think that there's a lot to talk about. Um, you know, I kind of ignored it. I mean, I definitely ignored it when it first started. It did seem silly, like you're just wrapping assets the other way. But I do think that it raises really interesting questions about, you know, power in these systems. Um, especially now that these DATs own a lot of tokens and have a lot of influence and um are um incentivized differently

than, you know, the, you know, the institutions that were stewarding these ecosystems before. >> He really wants me to ask about it. What do you think? >> No, that that's what that's what's interesting about them. Like the premiums were interesting because they were ridiculous and now they're less ridiculous. And so what are the interesting things to consider on a forward-looking basis? It's it's leadership of ecosystems. >> Do you think Tom Lee will actually start demanding that certain things go different ways for Ethereum? >> Uh it's there's a nonzero chance. I believe this is just like a Ethereum and there >> it's also for like >> it's all right >> all non-zero chance. Yeah, of course.

>> Yeah. >> But is that like 30 or is that like five? >> Um >> like how involved can you get? That's >> the average of 30 and five. Yeah. >> Very good. Okay. >> So something Yeah. It's a it's a non-zero chance. Look, I mean, you have um I mean, you already saw it in the Salani ecosystem where, you know, we used to be we used to want to kill the inflation rate and now we're like okay with the inflation rate because it has it adds income for DATs. And if the DAT has income, it's eligible to be included in an index. Whereas, if it didn't have net income, it would not be eligible to be included in an index. And getting the DAT in an index would further the um further things for the DAT and

potentially for the ecosystem. So, you're already seeing it. I mean, Tom Lee showed up and ETH went from 1,800 to 4,700. Like, the influence is all is already there. >> You'd have to be you have to, you know, have your eyes closed to to to think otherwise. >> I didn't I used to >> I don't want to say I didn't understand dats >> similar to like when they first came out. I was like I was probably on a Zerx Research podcast and I thought that I would never touch an asset that had a DAT behind it because I was worried about the the KA risks tied to them. I was tied about worried about potential like hidden leverage risks tied to them.

But ultimately what it is, it's just an actively managed fund that has a base denominator instead of USD. It's based in the native asset of that ecosystem. They're trying to get as much native asset per share. uh fund is trying to get as much USD per you know under its AUM and try to you know generate uh you know uh alpha or generate returns for their their LPS. So it's the exact same thing. Um I don't really know what's going to happen moving forward. I think it's pretty clear though that DATs are going to be moving on chain which I'm really excited about. Um I think it's be really interesting how DATs that are these crypto equity companies but they're going to have a material portion of their business live on chain. You're obviously seeing a lot of, you know, other the Coinbases of the world, the

Robin Hoods of the world, a lot of other Trafy firms starting to move onchain. This be really interesting like in quarterly shareholder letters, what have you, like how they represent their onchain business in a way that TRFI can understand and digest because right now it's a foreign language to them. But I'm really interested to see like how that verbiage and like how that how they structure I guess like the their business forward uh forward looking. >> I think that makes sense. I similarly um my main thing was I guess I didn't understand why it makes a lot of sense because a lot of these assets now have ETFs right so like if you are an institution you can buy the or get exposure for the ETF or like I honestly don't also don't think it's that

difficult for some of them to just buy stuff through like Fireblocks copper um what are the other ones Bitco etc like these these providers um >> who buy who buy you talking about >> buy yeah >> no for them not to buy like why would you have to buy at that as opposed I mean we're talking about this like three and a we're talking about this like three and a half months way too late though like so I'm right >> I would like to yeah it would it would be cool if something else was happening >> I mean there's a few things happening but you don't >> you don't like them >> let's example >> free yesterday >> next bill going that we've known about that for

some time as going live. They launched equity pers. That's pretty cool. >> That is cool. >> Yeah. >> I was talking to Guy said equity pers is the biggest unlock over the next 6 to 12 months. I mean, he's also probably they're probably also going to do equity per on there and so he's like >> equity ps is a new product. Yeah. you know, um, we saw the explosion in popularity of, uh, zero zero day options on Robin Hood because that was a new product for retail and perks have been wildly popular and now that you could do it on Nvidia, that's a new product. It's so yeah, it is definitely very exciting.

>> Do you think we're seeing a prediction market top with like the recent call sheet and poly market raises? >> I really don't think so. I think we're going to get I think first of all I think you can't just have two of them dominate. I think what we'll probably see is like um a lot more competitors come in maybe smaller competitors >> that'll actually eat into material market share >> because historically speaking like there's always a coconut Pepsi but there's usually never like there's a huge drop off between the third like Dr. Peppers right >> see the thing with crypto is that in crypto everybody wants to be early >> for Hershey's and Reese's and Twix.

Yeah, Kit Kats are my Coca-Cola, but Twix are a little under the Pepsi brand. >> Um, like in crypto, everybody wants to be early, right? Like nobody really need needed at ADAX or Luna, but they came in like it could have just been if you're in Salana, but it doesn't work that way. So people want to be early and Founders Fund was already early to Poly Market like six rounds ago, you know, like people want to get exposure to these new primitives. Um, so I I imagine some will at least make a valiant effort and let's not like pretend like Kali is and or Poly Market is like at their final form.

They're there's going to be I think there's going to V2 is always better than V1, right? Like there's going to be incumbents coming in um that Calian Poly Market probably still features from, but like those are still going to capture maybe not 40%, maybe not 60%, but they'll capture 10%. I I wouldn't I wouldn't like per I do. >> So you're saying So you're saying Hyperlid's going to lose significant market share soon? >> I think there's a chance that they could lose significant money. Like I I >> I never thought I heard you have an objective opinion about Hyperlid. No, I I I always talk about I was talking about this with Carolina today um on the pod and I mentioned my bare case for Hyperlquid is it it goes the Ethereum way like the team get lazy and they say we already have such a massive leap and

then some underdog like lighter um or like in Ethereum case Salana just comes in and like just does everything at the same level but um just like much more focused much because they have something to lose which is not winning Um to your point going back to the prediction market thing, I think it's interesting. Khi partner with Robin Hood to like launch prediction markets on Robin Hood's UI and I'm pretty sure like two weeks ago or three weeks ago there was a rumor going around that Robin Hood's not watching their own prediction market and not I don't think it's part of call sheet. I could I could be wrong but I'm pretty sure I saw that. It's like there is there's credibility behind the fact that like yeah these two leaders right now are market leaders today. It doesn't necessarily mean the market leaders tomorrow. And if Robin Hood comes in

with the distribution that they have and decides to create their own product offering and they now have the data to know like our users do like prediction market so they don't like prediction market they like it. So now they can pretty much use Khi as a guinea pig and then come in prediction market available. >> Kali versus Poly Market with sports book. Kali is 70% without the sports book. Poly market is 85% of volume between the two. It's ridiculous how much first of all distribution like Robin Hood. Second of all, betting on sports >> all through Robin Hood. You I have no idea.

>> I think Kelsey's Yeah, I think it must be like it's on college sports, which is which I don't know anything about, but apparently it's very popular. >> Yeah, they have a partnership with Robin Hood um distribution. Um >> yeah, I mean I think there's validity both ways. It's pretty early. The volumes are still very low. Um, but I don't know, Polymark a deal with with Intercontinental Intercontinental Exchange and I think it's always a distribution game. >> Yeah.

>> Um, and it seems like they're really like they're putting, you know, they're getting >> distribution in a few different ways now and it's going to be really hard to compete with that. So, it's like how do you wedge into the market? You offer markets that they don't offer. >> Um, I don't know who's doing that. And >> yeah, >> Poly Market has an edge there, right? Because you can permissionless create pools or is it the other one? Which one allows you to permissionless create pools? >> I have no idea. >> Very good. Where >> I've never trai I am a normie.

>> It But I agree with you on that. Like listings is I've always said listings listings velocity velocity is all that matters. Like you want to be the first thing. You want to have the most interesting markets. >> You know Yeah. You know who's very well positioned to do a prediction market is is X. X is very well positioned. >> I would like it if they fixed their application first and then focused on the prediction market. >> They're like syncing drafts between devices. They're actually rolling that out soon. But no, they're like yeah, I think that they're really well positioned for uh for prediction market.

I think a lot could be going on with X and crypto. I think maybe over the next 12 months you're going to see that. I they've been a little slow like with like literally nothing. Um, but the cool thing is that Elon has for a long time had a financial super app vision. So I wouldn't like count them out. I think prediction markets very naturally fit in that UI and with those creators. You have like all the intellectual capital there is there and everyone's arguing about what's going to happen next. Like I should be able to reply to that tweet >> and go short that opinion. Like I want to do that so bad. I want everyone >> to short Ryan. Can you imagine Ryan's opinion? It it would settle a lot of a lot of debates and then you retweet when you've won it and then you know it's a

fun. >> Well, the issue there is the oracles, right? Like how the hell do you solve that? We can get into >> Yeah, you're just some guy at X. He's like one guy in a ring and it's his job of clicking yes and no on who won and he literally hands you paper money after the bet is settled. >> I I do think at the Saratoga racetrack. >> I do think X is probably the dark horse on like fintech. It's dark. It's like the dark horse for still becoming like the largest social media platform. Um I mean Elon's a mad man, so you never know what he's thinking. But I agree. I think that I use I use all of us. We're all like addicted to it pretty much. We use it day in and day out. I use it more than any other social media platform.

The thing is like I don't know if that's normal though. Like my wife doesn't use X at all. I don't know if your guys' like significant others use X, right? >> Like 500 million monthly activives I think. So pretty. Yeah. So what is like Instagram is 34 billion. >> I don't know. >> Sorry. Instagram's two billion. The total like maps on met is 34 billion. >> You don't have an X count. >> It's a lie. All right. In other news outside of Poly Market, what about Monad? They uh announced air drop claim window. I didn't check >> but I saw >> Did you get a card?

>> Yeah, I did. >> Did you claim it? >> Wait, were you wave one or wave two? >> I don't know. >> I don't know. I don't understand these games. Just take the free money and shut. >> I don't get it. >> Oh, don't worry about it. >> Where do I click? Where do I click? >> I didn't check it. But did you check? >> I did not check as well. So, it's free guys who didn't check talking about the check. >> I don't I heard you could sell at OTC for >> That was a lie. >> That was a lie. Oh, they were trying to steal my >> No, what I don't understand is I didn't read all the details. I literally like looked at it for two seconds before I came onto the pod.

Um, I'm pretty sure I saw that like Monaded's airdropping a portion of their supply to like Moonbird holders and every other NFT holder under the sun. That's a major NFT collection. And I don't understand that. I don't understand that. Like that that irks me and it's nothing against the Monad team. >> Uh, it's pretty common. >> Yeah, it is pretty common. >> But I don't get it. I don't get it. >> The thing is if you're users, >> if you're an L1, you have to airdrop tokens somehow, right? >> And like >> I guess like I'm thinking of two recent examples like plasma did I would say probably the most productive way which is like pre-eposit vault move all that capital over there and then you instantly have a capital base to say like okay look you know what like >> trillions >> um the alternative there is like you

launch the chain without a token I guess but that >> hyperlquid airdropping to dydx holders >> I don't think it makes a lot of sense um >> like it's not a good like it's not a good strategy those aren't your users those aren't they could be potential users. But let's be honest, the people that they air dropped to the monad card holders, think of the amount of overlap between the monad card holders and the moon bird holders. You're telling me it's not nearly one to one. >> I would say it's probably not one to one. I would say it's >> pretty close. >> The van diagram is like I don't know how you do like a 40% thing, but I would do like 40%.

>> It's um >> logically makes sense. >> It's a high customer acquisition cost. >> Yeah. And sixman did a study on this like a year ago that just like everyone sells their airdrop. Everyone >> not me. I always hold it. I fake it. >> Like I I hope I mean look for for my own internal or my my personal benefit. I hope they don't make me do anything. I hope I can just claim and get it and I probably will sell it. But I'm >> Don't give it to him. Monad.

>> I'm hoping. No, I'm truly hoping. >> Give his to mine. I won't sell I really hope that >> he hasn't claimed it yet. There's still time. >> But no, like I I hope that you force people to when they claim they have to auto deposit into like a lending platform or something like that to like create a strong capital base for your ecosystem and I can generate yield off of my holdings by like people borrowing against it, but like force me to become a user. You're not gonna you're forcing me to become a token holder. You're not forcing me to become a user and it's a completely different thing. >> Yeah. Please deposit the vault I think is the way to go for a new >> I agree. I like it. I will say that um Manad the one thing that they did that

was really cool that no one else did was they cultivated a very like intense community way before the I thought that that was really cool. That's like Harvard Business Review Study worthy on how you make uh people excited about your product before you even have one. >> I um >> I agree. >> I disagree. >> Really? >> Well, it's just all bought it. No, look, I have nothing against Monad. I always say this on every pod. I say Mon is really cool because they have designed this entire thing from scratch, right? Like they're not taking it from XY Z.

>> I think people really like Monad. >> Um maybe we're on different parts of like we're always on different parts of Twitter, right? Like you're on the >> the deep dark. >> I don't think there's a single human PFP on your Twitter. Like no one's face is on Twitter. It's just it's just it's just NFT PF. Yeah, it's nice. >> Yeah. >> You don't think it's nice? >> I like to know kind of um >> Yeah. How good has that been for you? >> All right. Before we end seem personal.

>> What What do you think? Uh do we know when Mega E uh like >> I don't know. Going live. >> No idea. I think it's going to be a movie though for my portfolio between Monad and and Fluff. >> Did you get a fluff? >> I got a fluff. >> Do you have a fluff? What the is a fluff? >> No clue what that is. >> Movie. It's like a bunny but NFTts. >> It's a cute It's a cute bunny. >> I don't know. I wouldn't say it's a cute bunny type. >> It's cute as long as I get Did I have to go get it myself or was it >> You have to pay for it. So David paid >> it, right? It's like I had to >> Yeah, that's I' I makes a lot of sense.

I don't think >> proof of capital. >> Proof of capital as in the team gets more money. >> Um guys, before I end things off, last question. What are you most excited about over the next 6 to 12 months? I also wait I have a second question that I also ask if you guys want this one rather. Um if you could long one chain apart from Solana apart from Hyperlquid >> apart from Solana what would it be? >> That's easy. It's base.

>> That's fair. >> It has to be B. like they have the best distribution in the industry. I mean, you could even argue BSC, too, but I think Okay. Or maybe they have the best brand. They have a strong brand between Tradfy and Crypton Natives. I think it has to be base. Um, but what am what am I excited about over the next what you said, six to 12 months? >> Yeah. >> Um, I'm really excited to see TRDFI continue to tap into DeFi protocols. Um, so I think the Coinbase Morpho integration is just like the tip of the iceberg. Um, obviously Coinbase is also like routing their front-end user flow to decentralized exchanges in the back end.

Um, we're finally starting to see the DeFi mullet actually come to life. You know, the DeFi mullet that we talked about in like the last cycle or two. Um, I'm waiting for like a JP Morgan or like a Goldman Sachs. I don't know how far we are from that world. Is it six to 12 months out? Probably not. you're really going to have these like fintexs that are already like tech forward as you can start to tap into DeFi liquidity. But I don't know like I I think I'm really excited about that coming to fruition and I'd like to one day be able to take a mortgage out on chain but and like have like one of these front lines like underwrite the my credit risk but we'll see.

>> That makes sense. I was going to say nothing. Let's continue. >> Just such a high risk with the mortgage thing. No, >> it's really not. >> I don't know. You're already starting to see under collateralized lending with like a three Jane Wildcat does some under collateralized lending. Like that's all it's literally that. >> So you mean none >> Ryan? >> Well, I think that the thing that's so I think that prediction markets are going to very obviously be a big deal given the distribution and the land grab that's going on right there and the um the cultural moment um that they're having. Um but it's hard to get exposure to that. So, I would just say generally like um from the commentary that we get

from both asset managers and that you see on the timeline, there's incredible amounts of bearishness around valuations and risk assets. And I would just say like I'm totally on the on the opposite side of that. I think if you just want to just like make easy money for the next six months to just be long risk assets like like the the warnings of of um you know a market that's overvalued are objectively false. Um it's it's like very selective um uh metrics that you could do to paint equity markets as expensive and uh rates are going to come in and that's going to you know markets are near all-time high that's going to cause a flurry of economic activity.

There's already a big wealth effect and risk asset AI is um you know ushering in a manufacturing renaissance in the United States and uh risk assets are going to do fantastic. >> Kind of says I've never >> crazy how I left the energy industry to go into crypto right before like data center build out thing. I literally sold the bottom of mechanical of my mechanical engineering degree. >> That's all right. >> No, it's not. >> No, it's okay. It's okay. >> Sold the bottom. >> It'll be fine. I will say one thing. I've never heard >> it's the most valuable profession right now. What? Mechanical engineer. >> Yeah. Like I could have literally been building >> a data data center and >> same thing happened to me but >> and now I'm over here talking to Pacio about >> fluff. Fluffles.

>> Um to be fair I've never heard Ryan Connor I was going to say >> he's never been bearish. >> I've never heard him be >> perpetual. >> It's cra like you're perpetually you I mean I like it. You bowl me up. >> But to be fair he also joined at the bottom of the like I've I've known him since the bottom of the like >> he's been right every time. Every single time the market's had like a 10 to 20% decline, he's like, "Buy, just buy." >> And I'm like, "No, like this might be it." And he's like, "Just buy." >> The thing that's different is AI. >> Yeah. >> It's like it makes all the bare posts are relevant. All the bearish data points are relevant. They're not relevant. All that matters is that, you know, SAS is a $300 billion market and

SAS is coming for labor and labor is a$15 trillion market and that's all that matters. And crypto's great, too. Buy Bitcoin. Not financial advice. All right, guys. Thank you so much for coming on. This was very, very good. >> Thanks, Pacio, for having us. Thank you. [Music]