DAS London Stream With Paul Faecks & Guy Young

Transcript

Hey Zerax research listeners, Picacho is at DS London this week and this episode features his conversations with Paul, founder of Plasma, and Guy Young, founder of Athena, recorded live from D London. Enjoy. A quick shout out to today's sponsor, Katana. We'll hear more from Katana later in today's episode. [Music] Nothing said on Zerox 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 live from the Digital Asset Summit in London. Today, I'm joined by Paul from Plasma. Paul, how are you doing? >> Doing well. Thanks for having me. >> Thank you for coming on. Um, you must have had probably the busiest like three weeks out of anybody in this venue right now. How's it been? >> I'm I'm not sure that's true. I think there's a lot of very busy people here, but uh No, it's been it's been busy. I mean, leading into launch and then post launch, it's it's been >> it's been it's been busy. >> Um how would you say it went? Are you are you happy with what you guys have accomplished so far?

>> Yes. I mean, I think we we um the the launch went incredibly well. Um and and I mean for us kind of getting USDT flow specifically and and um in particular kind of getting the exchange to exchange our USDT flow and really kind of starting to build like a a massive stable coin ecosystem. I think that that went incredibly well. Um and and um especially on the kind of um just seeing like the the scale of capital that that is being moved that that's been incredibly cool. like we we have those like data dashboards and and um we're averaging between four and six billion in in in transfer volume uh a day which is incredible. Um and and so very happy

about that. I mean market has been very volatile uh and and uh um that that obviously is is is kind of the the other side of that but um we have a lot of work ahead of us. >> Very good. Um yeah it's a bit insane how much USDT you guys managed to attract onto the chain. Um, your original thesis was that you were going to be overthrowing Tron um or I guess like fighting against Tron. Um, but it seems like you actually took over a lot of capital from Ethereum as well just like how has that experience been like how do you keep all of these um new DeFi users happy coming into Plasma?

>> Yeah, it's a complex question. I think in the end is more about just winning against Tron. I think um like stable coins are this incredibly kind of expanding pie and and Tron obviously has a like very good chunk of that. Um I do think the kind of net new dollar coming into kind of the stable coin economy overwhelmingly doesn't choose Tron and like our job is to make sure that like the net marginal kind of inflow uh chooses plasma. Um and and that's something we're very focused on. Um on the default like you do need very deep stable coin liquidity on on the chain um for that and uh I mean plasma still has the the second largest a instance for example after mainet um and and so I think we've um we've done quite quite

well at that um and now kind of just in the process of like productizing all of that but like defi is a is a means to an end like you don't build kind of a large DeFi ecosystem as as like a like this is not a a goal in and of itself I think that that is kind of um just a baseline that then unlocks kind of many many many things around it. Um and and uh so like I think that that is um like we we now have this ecosystem and then now we like need to use it productively basically. >> That makes sense. I want to get to that productizing bit but um before that so I think like around 3 weeks now since you guys have launched what would you have done differently or what would you have wished you had known before you had

launched? >> Sure. I mean, I think um there's so many like variables in this that are like ultimately not fully within your control, right? Um we're like drum tweets about tariffs and and and all of a sudden kind of uh >> every altcoin I mean SUI was down 85% intraday. Uh and and and and so um I think like we probably would have done things differently had we known kind of the the the landscape we we launch into. Um and and and so um I think that that that's very easy to say kind of exposed.

Um and and and so um I don't know. I think like overall on like I'm I'm incred on on on on wood but um chain has been incredibly stable uh and and we had our kind of first true stress test obviously on on on on Friday um with just incredible demand to to to send transactions and to move collateral around and um everything went flawless again knocking knock knocking on wood here um but that's actually been very very gratifying I wish we didn't have this stress test quite as quickly. Um like it's you never want to be in a position to to have the stress test basically. Um but if you have it, it's it's better to pass it than to not pass it.

>> Definitely. Definitely. And with the product, I assume that's plasma one, right? Like that's what you guys are building the entire DeFi back end for. Yes. >> Um >> do you want to talk a bit about what you want Plasma 1 to look like and how you want it to interact with the DeFi? Yeah, I think really the the high level thesis and and connection on our side is stable coins are this incredibly nent like emerging economy basically and no one has kind of truly productized that economy well in my opinion where you still and like we've all spent time in in these space where you go to to Al Salvador and and Turkey and and Dubai UAE as a massive stable coin economy and um stable coins are really kind of

something that has emerged in the last four or five years at at meaningful scale. And you can see that in in a massive way where like you have these kind of stitched together convoluted um things to to actually interact with them. And I I do I mean we talk about this on on Twitter and it's a bit of a meme. I I do truly believe that the stable coins are like money 2.0 and and are basically kind of the the the next iteration of money, but that requires kind of productizing the usage of that money 2.0 extremely well. And that is kind of the the the the underlying thesis to to to Plasma 1 where I don't think anyone has really figured out a way to do that. I know it's not going to be Deutsche Bank

um or or JP Morgan um who are very good at what they do, but like they won't win the kind of stable coin uh like productizing stable coins for for actual kind of end consumers. And Plasma 1 is is is our is is our product um that is that is built to basically how do you the the the value proposition of stable coins is incredibly clear and and like I don't think I have to like do the whole like this is why stable coins have value and are interesting. I mean, you have a very crypton native audience, right? Um, but I think that to to an extent hasn't really been unlocked in in in kind of a truly kind of distributed and and and well functioning way. And Plasma 1 is is that basically

productized stable coins that are actually usable in in in kind of the real economy. >> I think that makes sense. Um, with plasma one, I've been I don't really understand how the I guess like the go to market works on your end. Um, specifically in terms of like banking licenses, it must be a mess to deal with like going to these payment providers in countries like El Salvador, Turkey, etc. How are you guys I guess how much time are you spending building these relationships? How much time had you already spent and what is like a realistic timeline for I know you probably don't have an engineering work always lasts a bit longer than it should and you never know, but how when can people expect Plasma 1?

>> Uh, at the end of this year I mean we're doing a bit of a stage roll out um for it. And you you touch on a good point where like obviously payments is a like highly jurisdiction specific and and uh and and complex business to to build. Um for us it's always been clear that like Plasma 1 is basically the kind of poster child distribution wedge customer of like this is what kind of the the new economy of of payment systems looks like. And so for us that that means we're very focused on on kind of doing it in in the in the proper way. like it's it's very like you can you can go out and just like work with someone who who just does the entire kind of payments back end. Um and that is not the approach we're taking. Um we're very

kind of aggressively um um both acquiring regulated entities that that allow us to to onboard users um directly there. Um building out a compliance function in in in the Netherlands now um and and and kind of getting getting the licenses in in the kind of appropriate jurisdictions. And it's interesting like some of those businesses are like standalone not actually all that interesting but as a kind of puzzle piece in the larger puzzle that is like Plasma and and Plasma 1. They have incredible kind of strategic value for us. And and so for us, it's been about how do we how do we kind of verticalize as as as aggressively as as as we can and and as quickly as we can into kind of owning this entire like stable coin

payment um um vertical basically and and there's a lot of things we're working on on on on that and and um I'm genuinely excited for Plasma One as as a consumer like I'm I'm I'm going to be the the the the biggest kind of uh um fan of of using the product. I think the entire team is looking forward to to to using it too. And uh I think it's it's it's very it's very gratifying to to work on something. It's very real like it's like it's you can touch it like it's it's it's a >> it's very fun to build. >> No, I can imagine. I'm also very excited for it. I I signed up for the weight list. Um one thing I've been thinking about is to me Plasma 1 seems more like a cryptonative product and I guess your integration with centralized exchanges

is more of like a emerging markets product. Do you think this like viewpoint makes sense? >> I think to to an extent stable coin payments are a crypton native phenomenon right now. I if you have like a very honest look of like where does stable coin flow actually happen now. It is overwhelmingly just dominated by centralized exchanges, right? And actually, interestingly, I mean, obviously the the big ones are incredibly dominant, the Binances and OKXs and and Bibbits and and um we we have the pleasure of of working with all of them, but um you then also have a like very very wide network of of of local players in in in that like um today we partnered with BitCup and and

they they have extremely high market share in in Thailand and and most of the kind of stable coin crypto economy in Thailand. is is kind of routed through BitCup. And so for us, it's very much about like how do we go to like the key jurisdictions and and partner with with the kind of largest and and most relevant players to kind of truly distribute kind of the the plasma USDT um rails everywhere and and and also kind of have direct access to to users. This episode is sponsored by Katana. Katana is an L2 built for DeFi and is pioneering the ecosystem category of productive TVL, believing that change should be graded on how efficiently assets are put to work in DeFi rather than just total value locked. From now until the end of November, users that

bridge the Katana can earn boosted yield from CAT incentive campaigns, added vault bridge yield, and other chain revenue. Follow the link in today's show notes to get started. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. I wanted to bring it back to the DeFi side for one second. So you guys mainly the stable coins on plasma are USDT. We see some USDT. Um how many more stable coins do you expect to onboard onto plasma. What what is the cuz you guys are not shy about being very pro tether but from what I remember you were also saying this is for everybody. We just want as many stable coins as possible.

>> Yeah. I mean I think um we have 13 or 14 different stable coins on on the chain right now. Um, I'm a strong believer in a kind of multi-stable coin world. Um, and I mean it's very topheavy obviously, right? But like as long as like as soon as you drop out of the like top four or five they become quite small actually which makes a ton of sense, right? Because like liquidity begets liquid liquidity and and a a larger more liquid stable coin is a better product as a function of being larger basically. And so I do think stable coins are going to stay quite topheavy and and and USDT I think is of a very logical place to be to be focused given how much of the kind

of global kind of non US payment flow they they they they they kind of tr truly command. Um I don't think that changes but I think for us like we we we do have like we we work with a lot of different stable coins and and we're keen to work with anyone. >> Perfect. Um, one thing I've been thinking about is USD is the most dominant stable coin like the dollar stable coins. How is um are you guys looking to on board like Euro um the pound uh LRA? Is this something that you're actively working towards especially with plasma one? I assume there it's going to be like conversion in >> I think actually LRA is a really interesting one. Um I mean we we we work

very closely with Bera um um which is a kind of exchange and and stable coin issuer in in in Turkey. Um and uh and and uh they have a TR stable coin um that that that we now have on plasma too. I think it it's really it matters a lot for the kind of both first and last mile. Um, especially on on the payment side of things where people that want to use stable coins but have local currency need some way to obviously get into like on on the both on-ramp and and offramp. I think um like local currency stable coins play play a massive role.

>> I I I I do think that USD dominance probably goes down. I mean it's 99% right now. Um I I was I was talking to to to Rob Hadock actually actually yesterday on on on the panel uh and so I'm quoting him here. 68% of of all kind of global trade is is uh is settled in in in in USD. And so I I do think that stable coins are still going to have a higher share of of USD denomination just given because so much of the value proposition of stable coins is just access to USD.

>> Yeah. and and like you you like if you are in in in in an economy that has unpredictable central banking and and high inflation, the reason to like use USD stable coins is like you want access to USD and that's the most liquid and and easiest way uh to to to to do that. And so I do think USD stable coins stay extremely dominant. >> That makes sense. Um, in terms of DeFi, a large portion of Plasma is um, lending and vaults, which seem natural given that it's a stable coin ecosystem. Is there any are you guys planning on boarding more dexes, more per platforms?

What is the I guess like developing the DeFi side of Plasma look like? >> Sure. I mean, we've been unusually opinionated on on that, I think, as a as a chain and and that that's a choice I'm personally happy with. I mean, um, I would much rather work with a than with a compound fork. Um, and and then, um, because like they're just more capable and and very good and they like can do this at scale. Uh, and then so you like I feel much better having money in in a than having me like >> some like L2 ecosystems forked uh, uh, whatever lending protocol and and so I think that that choice has made a lot of sense and we will kind of continue doubling down on that obviously. Um I

think for us like step one was getting the the basics right where especially in kind of this kind of larger complex system of of kind of having having a stable economy a stable coin economy. Um I think lending is a very very central part of that just for capital efficiency reasons and and for yield generation. Um you demand for borrow and so for us really the initial goal has been how do we bootstrap that system very very quickly. Um but then also how do we how do we like basically make the demand for that organic over time right where like we we incentivize pretty heavily. we're now tapering that um pretty aggressively um just because

we like needed that kickstart to kind of really have have capital move >> um and and um like there is no like the the delta for us right now and having 10 billion versus 15 billion in in in in the A instance is pretty marginal um and and um so it's also about kind of being thoughtful on on how do you design incentives basically that you can then very quickly transition into like how do we you want to incentivize as as as as little as as needed basically.

>> Yeah. >> But you still want to incentivize efficiently to kind of really achieve the goal you you set out to to to to achieve and and so you mentioned meeting meeting River who's fantastic and incredibly sharp and and uh um we've had very long discussions on on kind of uh the the complexities and in managing that. >> Yeah, I can imagine. um incentives are very very difficult especially cuz you're trying to move stable coins which is which wants to stay where it's but it's it wants to be as safe as possible um to a new chain um but I think a probably helped with that as well because people can trust a they can trust >> 100%. Yeah, >> I I feel much better having my money in a than having it elsewhere.

>> Yeah. Um one more thing that I know you guys are working on is PBTC. Do you want to kind of talk a bit about why you guys want to launch your own native version of um Bitcoin for for your chain? >> Sure. I I do think there's incredible demand to save in Bitcoin but spend in USD denominated assets and rap Bitcoin is flawed for like a very long list of reasons. Um I I don't think I'm like this is obviously a very biased um um view of this. Um, I do think that is pretty widely shared and and I don't think anyone has truly kind of built a fantastic version of a like native Bitcoin that is on a on an EVM chain and and that is kind of highly composable

and and and can be kind of used productively. Um I think that that that is a a massive unlock um for us and and then so that is something we're kind of building right now uh just to kind of figure out how do we I think also from a savings uh and and and payments angle there is just demand to to save in bitcoin right and and but I don't think anyone wants to spend in bitcoin no just looking at the data that that seems >> like very very evident uh that like there's zero demand for people to to truly kind of spend Bitcoin at scale. Um they want to spend USD. And so it's about like how do you how do you marry those th those two realities?

>> And that'll be plasma one. I assume you're going to >> like plasma one is going to be a component of that. Yes. >> Um one more thing is the UST free transfers. I remember last time we chatted you said it is a very complex thing to solve. Um how are you guys approaching it now? When will it go live? >> It is actually live. Um it's uh um we we have it on a dashboard and we now um I mean we have a a bunch of payment partners we're integrating into into that. Um it's actually worked extremely well. I mean it's really hidden away right now. Um we've done 150 million in in transfers on it now. Um that order of my haven't checked in a couple days. Um but that that kind of scale and um

especially on the of payment partner side of things um where you you do have a lot of those entities that just facilitates so much payment flow and um we're onboarding a bunch of them onto onto on onto kind of that that product feature now um and and and that has been uh that that's been a a very easy sell um actually to to them which is great to see. Um, how do you think about cuz to me plasma seems kind of like a two-prong chain. Like you have stable coin defi and then stable coin transfers. How do you think about balancing those two?

Like is there something that you're do you have separate teams working on separate sites or is it like your main goal is to just combine these two eventually? >> I think it's two subcategories of like the same thing, right? But it's like how do you build the kind of largest network for stable coins? And I think that like just needs to involve both, right? Where you you need sticky capital on on one side and then you do want velocity uh at the same time as well. And and so um those are not separate teams. This is like one kind of like in the end those two obviously do impact each other and and and so you can't really view them in in in isolation and and and and so um I do think those are highly connected and

and a kind of one in the same goal which is uh just building a stable coin economy. >> Yeah, I think that makes sense. Last question going forward, let's look over the next 6 to 12 months. First thing is for plasma, what should everybody expect? What are you most excited about on your personal um as well as like what should people look forward? The second thing is whole conference is basically about tokenization and stable coins. What has um what have you realized or like what what is your hot take or big prediction over the next year about like tokenization, stable coins? What do you think does very well? What do you think doesn't do very well?

>> Yeah. Uh I have many many hot takes. um um some of which are probably not in my interest to to uh to to publicly state. But um in in terms of like what to look forward to, I think we we do we do have a lot to prove. I think we're in a in a very good spot where we do have a lot of the kind of USDT flow um and and specifically going the the net new flow um um because we do see a lot of that kind of just happening on on on plasma. Now um we will continue pushing that extremely aggressively. Um I do think that there is um like the the the plasma one roll out um and and and that is deeply exciting to to to me uh and and I think that that that's going to be a

fantastic product and and um I mean we have a lot of when you mentioned that like we've been very busy the the last couple of weeks um I don't I don't plan on taking vacation. >> Very good. Very good. Hot take prediction. hot take. >> I mean, basically, no one understands stable coins. Even a lot of people who talk about stable coins as a living thing. >> Um, >> I think people like stable coins isn't one product. I think stable coins are probably four somewhat separate products. Um, really and I think people don't like I think that that is an underappreciated fact. Um, where people always kind of lump a lot of things that are wildly different into one category um because they like generally trade at

a dollar. And I think that is that is not discussed enough. >> Okay. Very good. Paul, thank you so much for coming on. This was a pleasure. Appreciate it. >> Shout out to today's sponsor, Katana. Katana is an L2 built for DeFi and is pioneering the ecosystem category of productive TVL. In just 2 months, Katana has surpassed 500 million in TVL with over 90% of that TVL being productive in ecosystem apps like Sushi and Morpho. From now until the end of November, users that bridge to Katana can earn boosted yield from CAT incentive campaigns, added vault bridge yield, and other chain revenue. Follow the link in today's show notes to get started. AI is fragmented. Every team is scrambling to pick, swap, and manage LLM models that can't keep up. Allora changes that.

Instead of choosing models, you set your goal, and Allora unites AIS into one smarter system. The result, a new AI standard. Predictive intelligence that adapts in real time, outperforms any single model, and gets better as more people contribute. From powering DeFi strategies to nextgen AI agents, Allora is the intelligence layer of the future. Learn more at X Allora Network. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. >> What's up, guys? Welcome back to ZeroX Research today. Now, I'm joined by Guy from Infina. Guy, how are you doing?

>> I'm all right. Yourself? >> Very good. Um, as well as David, Carolina. Yes. Thank you guys also for joining. >> Thank you. Um guy, very busy weekend and a very busy Friday. What did you guys see on your end with all of the volatility across markets? >> Yeah, I was actually stuck on a flight coming back from New York uh with Wi-Fi that was cutting in and out, which was not the funnest experience I've ever been through. Um yeah, I'm not sure where to start. I think it was just obviously a pretty insane the scale, speed, depth of how everything sort of collapsed. I think um pretty eye opening experience I think for me where I thought alts just generally had a bit more liquidity than it appeared and it just feel felt like the floor sort of like fell beneath the entire market. So

um I do have some concerns like longer term ramifications. Does anyone sort of infy look at this market now and think it's like an investable >> space when the floor can just fall below your feet and like - 60 - 80% in 5 minutes. Um, so I think there's going to be a slow sort of rebuilding trust building exercise that we need to go through sort of an entire space. Um, so yeah, sounds like a pretty negative comment, but it was a pretty eye opening, I think. >> Yeah. One thing I wanted to bring up is we talked about this last time you were on the pod. Hardcoded dollar one. I think you were kind of proven right.

Right. What would you say on the Friday thing? >> Yeah, I mean it wasn't um we obviously don't set the oracles on a ourselves. Uh we uh did support that idea. I think the basic idea and I put a thread out on this on Twitter this week was kind of you're really asking a question of what are we trying to solve for with oracles which is a temporary dislocation of price. Are you scared about that or are you scared about a permanent impairment behind the collateral? And I think the point that I was making was that actually in most scenarios you're wanting to actually >> just stop people getting liquidated for an unnecessary reason which is actually what DeFi achieved I think in the last weekend. But then you can always have something that actually flips to like a proof of reserves which is saying we we

demand Athena to prove like how much is actually sitting within the collateral and if there is actually a full impairment then you can adjust the oracle to reflect that. So it's one piece that I think Chaos Labs is doing pretty uh pretty good job on which is actually allowing that toggle uh to exist and I think that's sort of direction where we need to go with these things. Yeah, >> I think that makes sense. Do you guys have anything you want to add since they're the risk people? >> I'm less risky. >> Less risky. Um, no. I just wanted to add that actually it would also probably be fine onchain. Um, Athena's price well's price was pretty good and it would still probably have um holding up.

>> Yeah, I think that that was one piece of misinformation spreading around the market which is like if a hadn't done this D5 was a zero. Actually a was completely fine like literally dep less >> than USDC did in curve >> with n like nine figures of liquidity sitting in there. Even if a had just tracked the car price sitting in there, nothing would have happened on >> I do think that I correct me if wrong you probably know better than me, but I think Chaos Labs had also mentioned that currently they obviously have the P or O or O or O or O or O or O or O or O or O or O or Oracle, but it's not embedded into A's infrastructure, but I do think that they're planning on iterating on the current Oracle infrastructure. So it's no longer hard pegged to one, but

it actually will be, you know, primarily using the P and maybe have a fallback mechanism after that. So that is >> yeah, that's correct. I think you should sort of view this hard coding piece as more of like a temporary stock app temporary thing with the the view of getting towards proof of reserves and in many senses I think that's where every single RWA uh asset issuer who's doing anything which isn't fully verifiable on chain >> you need some sort of uh verification meth method for >> how did how do you like during this 10 sigma event like how obviously you guys handled over $2 billion redemptions within like a 24 36 hour period which is obviously really impressive um was there anything that you were not obviously didn't expect the event to happen, but was there anything that I guess happened that you maybe weren't

expecting giving given the ramifications of like all that kind of unfoiled in on Friday? >> Yeah, I think it was just kind of market structure breaking down on venue specific places. So, um there's obly pretty wide dislocations in pricing between Curve and then a bunch of different exchanges that set around it. Yeah, I think that's one piece that we just want to work with different platforms that we're working with now to actually just make sure have we actually aligned with the right oracle decision here because at the moment everyone's actually applying something that's slightly different across every venue, >> right? >> Uh so I think the disparity that we saw like dispersion between different venues was a pretty shocking like thing to see and you kind of see it in the data um as well. Um but yeah, I think from our perspective, uh people sort of forget a

little bit that actually Athena is pretty well positioned going into these events because when people are getting liquidated, the pers tend to trade at a massive discount to spot. And so in many senses, the only thing that we're actually doing when the market is imploding is just trying to close those positions as quickly as possible to capture P&L. >> And it's just I don't know, people freak out every time the market crashes and we're sort of sitting there like going like we're actually in a better position than we were in like yesterday while it's happening. Uh, but it's I've guessed the trigger. But >> yeah. Um, one thing I wanted to bring up is I'm noticing more and more that you guys are getting the white labelled stable coins like the Mega E1 was one.

Um, with Jupiter as well, if I'm not if I'm not mistaken, is this something that you're going to be more and more focused on going forward? Like with um I guess fiatbacked stable coins launching over different protocols and chains. >> Yeah, for sure. I think um the week where we came out with uh mega USDM and that was the week that coincided with hyperlquids USDH proposal. I do think that there was a very sort of a shift in like the Overton window for the industry on that that week where everyone sort of woke up and said if we have distribution if we have users on our platform how are we not thinking about sort of trying to capture some of this value and I think there's been a very noticeable shift as well. I think even with like infrastructure projects now when everyone's focusing on the revenue meta

which uh obviously is in the meta it's just kind of like it's capitalism corporate finance um but uh the revenue meta itself uh chains are sort of asking the question of like what happens when me as a percentage of like transaction volumes is like trending towards zero what else can we do to actually generate revenue as a as an layer of infrastructure and the easiest answer is like if you've got billions of dollars of stable coins there's has nine figures of uh interest income that's actually sitting within those balances. So what I can say is like we really only launched this product two and a half weeks ago.

We've got Megarath Sui uh Jupiter and I'd say four of a similar level coming out within the next sort of two to three weeks. Uh I I honestly think within the next month you'll have 50% of every single app, wallet and chain uh producing one of these in the market. It was probably the busiest two weeks we've ever had in terms of like inbound BDS after that whole hyperlquid proposal. Um, I think there is a question of like is this the correct user outcome because like do we really want a thousand stable coins with like everyone's got their own little branded thing creates friction. It creates all these different pieces that are suboptimal. But unfortunately I think that is where we're going. I say unfortunate for like the user users perspective because we like I think the great thing the real outcome that everyone wants here is actually we all

just agree on one token and you share the economics with everyone basically but unfortunately I think people's sort of egos and own uh economic interests drive us away from that outcome. Yeah, I think that makes sense. >> Can I actually lean on what is um >> what do you think this means like what's the long-term implications for Athena's business model with like the stable coin as a service offering >> in terms of our distribution? We make slightly more on the stable coins as a service than we do on just USD and USDTB. Um and you can really think about it as if a project is starting with USDTB within the white label offering, they've always got the option to switch to USD in the backing if they want to.

And the view that we have is that people start with USDTB which is obviously lower margin to start with but as interest rates start to decline and everyone gets more comfortable with us as a partner they go okay well maybe I can get 10 instead of three in a year's time and so really it's a way of us distributing USD in a month phase process. Um, but yeah, we make more money on those products than we do on like the underlying themselves. And uh, so it's I wouldn't sort of say it's like us disrupting ourselves. It's more us really undercutting the margins of competitors. >> Makes sense.

>> One last thing I wanted to ask is about HIP free. Is that something that you guys are focused on like hyperlquid integrations? >> Yeah, I think uh, we spoke about it publicly within that USDH proposal. there is going to be a front end that's launched uh with USD collateral redenominating the whole exchange. Um I think from my perspective that's two of like the killer products within crypto jammed together in the same place which is like dollar worth a return plus per trading and when you put them together it's a pretty cool uh user experience. So there is a team that's picking that up and building a front end there and obviously Hit 3 came out yesterday so um should be pretty soon.

>> Very good. Um I'm going to do you want to ask something? Um yeah just um I had a question and we were talking about um money uh making money with the underlying. I feel like there has been a shift like right now there's a lot of liquid stable backing in USC. Is that like a broader move to to have like backing assets on chain or is it just like uh it's just happened because yield is better there. >> Yeah, it was just a rate driven decision. I think um the market's been in a funny place I think in the last six months where you have a bit of a spot- driven rally with like Tom Lee and Sailor buying and then everyone's like all right they've stopped buying so then the market crashes and it's just this sort of like endless loop where I think

no one has the confidence to be fully levered long in the same way that they were when Trump was sort of coming in in Q4 last year. That's kind of like the perfect scenario which is um everyone saw this this sort of great tailwind that was there which is like Trump's coming in and there's going to be deregulation all these different pieces. let's frontr run those spot flows via derivatives and we could sort of like benefit from that. It's almost been the opposite now, which is like sporadic spot flows come into the market, everyone's like, "All right, well, when this runs out, do I really want to be long ETH ETH above 5K?" Like, I'm not so sure about that. Um, it just makes that as challenging environment for a consistently like frothy rate environment within per. So if if we had capacity to do 15 bill, which is where

we were sitting last week in per I'd like to be 95% in Pers, but um the market didn't have capacity for that. >> Makes sense. I >> think that makes sense. Um guy, last question. Next 6 to 12 months, what are you most looking forward to within crypto? >> Within crypto? >> Yeah. Or anything. It can be personal as well if you want to go to 100 billion USD. Sorry, I thought you meant Athena invest crypto personal life. Um uh I think equity perhaps are probably the most exciting product that isn't scaled but is like the opportunity size is like bigger than the market cap of Robin Hood I think it might be. Um so I think someone's going to make a uh incredible business out of something attached to

that and I think um it just feels like one of the most obvious opportunities where retail flow on options doesn't really make sense as like the instrument of choice to express leverage. Um >> they're not really there to price a Greek or price V. they just want leverage and I think crypto has shown that people prefer perhaps over options when you're given the choice. So you've got a asset base which is 30 times the size of crypto i.e. US equities and a superior instrument we think and uh yeah I think someone's going to do very well in that space. Yeah >> I think that's that makes a lot of sense. Yeah, like I guess briefly, have you guys shifted your attention towards like this white label stable coin service product and also maybe like the hip 3 maybe it's a separate team that's building u the Athena based uh

hyperlquin market but um any thoughts on what's going on with converge is that taking a step back are you guys >> yeah I'd say slightly dep prioritized versus the things that we've been uh talking through here >> you have a lot going on so I get that >> yeah and slightly small lean team and I think um there's obviously been a lot going on with DATs I even think uh DATs as a potential consumer of our product is also an interesting avenue which we haven't spoken about as much which is a lot of these DATs are going to be competing on the axes of how much money can we raise from trady to deploy into stuff like USD on chain. Uh there's a bunch of them who are beginning to work with us now and I think that that's actually one of the most interesting conduits for tradi

money to actually come in at scale on chain because it's almost like an open-ended format where they're just like here's my money go and take as much risk as you can to like generate return. Yeah, it's kind of what the mandate of most of these things are. And so I think for the first time you could have like real connective tissue from trad basically for them to come into there. So I think yeah um they're changing sort of priorities through time. >> Makes sense. >> Guy, thank you so much for coming on. This was a lot of fun. >> Appreciate it. Okay. [Music]