DAS Takeaways, Crypto’s Largest Liquidation Ever & Have We Peaked? | Weekly Roundup

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I think we we ought to just zoom out as an industry and say is this the best product that we can offer users because by the way it's not just the people that were 50x or 20x or 10x levered. It's you know people that were one to two times long got liquidated. >> The answer is we need better institutional infrastructure at the centralized exchanges and we need to continued innovation at DeFi, right? And we need those things to exist together side by side. >> This episode is brought to you by block Damon. You'll hear more about them later in today's episode. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only.

And the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Block Works. Our hosts, guests, and the Block Works team may hold positions in the companies, funds, or projects discussed. What's going on everybody? Welcome back to Empire. We got the round up. We got Rob. We got Santi. Rob. Santi. How was D? >> It was great, man. I didn't see you there, though. Were Were you in London? >> You guys both trick your head like it wasn't good to the side. You're kind of like, what's I agree with Rob. I didn't I saw Mike. I didn't see you.

>> Yeah, I'm I'm just, you know, puppeteering over here. What' you think? What' you think of the event? >> Yeah, it was So, listen, it was a um What I really liked about Dask, which I like about them all the time, is that you get kind of a different crowd, right? So, you know, we were at Token 2049 3 weeks ago at this point, right? I'm losing my time a little bit because I'm traveling too much, but you know, you get there and, you know, Token's probably the biggest conference in the space, but it's very retail driven. It's very heavy on the booths. It's very heavy on, you know, trying to get this, you know, excitement for the broader universe of what's happening in crypto.

D is very targeted. It's got a really good set of people who are really focused on institutional use cases, really focused on kind of the, you know, enterprise adoption of crypto. And so I like coming because you get a different flavor. You get a really different type of conversation and it allows me to really hone in on the types of people I want to see on that side of the world, especially when it comes to stable coin, especially going to tokenization, um, things like that. So, so I really enjoyed it and you guys have put on another killer event. >> Appreciate you. >> Yeah. Yeah. I I mean echoing a lot of that. I think what's useful now is uh gathering a crowd that is not cryptonative and it's good to see more and more of them coming and having those conversations

and obviously there's a lot of excitement around stable coins tokenization. Rob and I were on a panel talking about tokenization. I was in a panel uh with hib also talking I think like every panel had a different title and it all eventually like all roads led to some flavor of tokenization stable coins and that was I think a reflection of the times. The only thing that was a bit weird was the silent um in in the room there was like in the main stage >> the silent disco was was it was just eerily quiet and you're like am I safe?

>> Exactly. >> For people listening like like describe exactly what it was like. >> So So we're in a room of probably a couple like a hundred people plus or so and they all are wearing these headphones with neon lights and it is I mean you could hear a mouse fart in the room. You know what I mean? It was too quiet and you're sitting there, you're like, "Do people actually like what we're saying or not?" And it was I've never seen it at a conference. You best you mean >> we look we uh we got a great events team. They try a lot of stuff. They we we try a new thing every conference and you got to you got to try new stuff to make these events.

>> I will say it can work because there was no echo. Sometimes you go to these events and and the acoustics are totally off. But >> that was a great event. I mean Rob, you and I were in a panel. Who else was on that panel? >> It was Paul TVL. >> Yeah, it was Paul from Plasma and Simon Taylor uh from who's now at Tempo, right? And so ours was, you know, ended up very much being about stable coins, right? Um and there's actually I'm I'm going to take that back for ours was about corporate chains.

>> Yeah, ours is about I was on How many How many panels were you on? Three. >> I was on two. I was on two. >> Yeah, I was on three. Ours was about corporate chains and they try to peg a version of the corporate chain. I'm like I brought my pit bull called Rob and he defended me on stage. >> Can you Can you believe what I just did though? And I'm going to give a little shout out. I just talked about my other panel which was Dio Monica and not Santi. And so I was like it was Dio Paul Simon and me. And you know what it is? It's kind of the dark hair the the beard. So I I'll give it to you. But then so we did the stable coin one and then and then Santi and I did the uh did

the corporate chains one with um with Andrew Peele. >> Yeah. >> Exorgan ex Morgan Stanley. We the panel that I really enjoyed um I was actually with Rob's counterpart which was on the first day. We ended up talking a lot about what had happened that Friday. It's always good because we we had that Black Friday event which I think we should talk about on this podcast. There's a lot of really good insights that it was a very heated debate and discussion. We ended up talking about you know what had actually what had worked and what hadn't worked like the difference between a and Binance what actually went on with Athena. Rob I know you're super involved in Athena, right? Then you had Binance come after there there was a lot of

>> Let's go there now. Yeah, let's go there now because it feels like I mean the dust has settled a little bit but you know we're we're one week after just the you know it's really really large flash crash um that liquidated a a lot of people um a lot of people lost a lot of money a lot of funds got really really hit badly a lot of the exchanges got hit um a lot of lot of individuals got hit and really if you were I mean we already did I did a solo episode with Doug Kolkit so you know if people want to get into the details we can you guys should go listen to that but I'd be curious just like Rob and Santi now that we're a week removed from it. I'm sure you guys had a lot of conversations about it at

D. Like what are your what what's your what are your takeaways, conclusions, thoughts? Like what's how do you feel like a week after and like the aftermath? >> Yeah. So for me it's something that I'm actually quite concerned about, right? And it's just a broader point around like micro structure within crypto, right? And so, you know, in some exchanges, I mean, I think we saw Adam, Adam's like $3.35 today. On some exchanges, it hit like a fraction of a penny, right? You saw a lot of the alts were down 80%. You saw basically mass dislocation of pricing and dgging um of all of the wrapped assets on Binance, right? Essentially,

Binance's oracle setup was not as robust as it should have been. You saw a you know even Bitcoin was down I think at about 15%. It almost about touched 100k or so had been about 120 beforehand. So you know almost 20%. And it what one of the things that you really realized when you like dug into the data a little bit is you essentially had this mass kind of liquidity vacuum, right? So as these you know cascading liquidations happened, not only were you know the stress of the sell side of the order book creating you know kind of these these continued you know discount in pricing or decrease in pricing and it also caused some of these like wrapped assets to have this

dislocation in pricing. um you saw that also the liquidity got pulled from the market makers and so it kept coming down and these like any sort of AR any sort of like filling up the order book like just didn't happen right especially on on Binance was probably the one where we saw this 80% of the same time this was happening right and you talk to some of the market makers about it and they'll tell you well there was just um it seems like there was just an issue for them getting new capital into Binance at the time.

And so they there was latency concerns. There was there were just concerns of of congestion on them getting being able to get new capital into their account to continue to go and head and and you know kind of you market essentially. But it highlighted I think a little bit um just how fragile the micro structure of crypto is today. It highlighted how fragmented it is when you see these really big you know dislocations happening between you know uh cross exchanges and because of the way the liquidity dried up and because of the concerns at the market making side you actually had arbs cross exchange that didn't weren't able to actually close particularly quickly I think there was a $10 ARB on Salana across multiple exchanges that was open for like over 30

minutes right and this would never happen in in you know typical um you know equities and then on top of that the I think other biggest concerned for me is just how little like real buying pressure there was or liquidity there was for a lot of the alts right and so one of the things I've heard from some of the large traditional investors that I talked to who you know were in you know Bitcoin and ETH and have been thinking about you know uh they have a real interest in some of these you know alternative uh tokens um some of them have said listen like you know going down 80% even if it is temporary and most of these things have recovered a little bit but they haven't recovered um you know 100% they've they've recovered maybe 50% of the loss. Um they're like that's not volatility that we are able

to stomach, right? Like that is not the type of thing the asset that we want to trade. That shows to us that maybe there is a lack of maturation in the market structure. And so, you know, that's we don't want to actually go and end up, you know, trading, you know, that type of token on on exchange. And so, I have a little bit of concern what that conversation or or what this implies about some of the liquidity dynamics and the micro structure dynamics. And I will also tell you that this has permeated into some conversations with regulators. It's permeated into some conversations with um you know some of the uh uh what I would say you know more interested parties outside of crypto right as well.

And you know we have things that we have to answer. We have to get better right we have to have better oracle construction. We have to have better liquidity management. We have to have better collateral management. We have to have more triparty uh agreements. It's like we have to continue to get better if we want this space and we want these tokens to be traded by, you know, the largest exchanges in the world. >> Yeah. Well, I'll I'll add a lot of that is is is very true. I think the it puts into question my first reaction was like, hey, we're going to bring more real world assets on chain because you saw like two worlds. A flawless performance, another stress test, flying colors, no bad debt. It actually made a bunch of money. was stunning. So it it

was able to absorb and and and a lot like that's just one example of more lindy. So who wins in in all this? I think D5 proved quite well. Um you could argue hyperlquid also performed quite well. The auto deleveraging kind of thing that kicked in for the first time since it's you know two years of operation I think worked quite well. Some traders probably didn't know the mechanism didn't read the fine print. Uh but I will say like me mechanically Rob I don't know if you would disagree but it worked as intended and and you know um however Binance and some other exchanges didn't work as well and that's where I think

you have to the reality is there's an over reliance on centralized exchanges in the industry. Um, and and when you think about some protocols like if you're pulling your oracle price feed from Binance, like if your oracle construction that relies on uh like centralized exchange price feed, I think you have to really sit there and think twice about how you're going to construct your oracle and what are the what is an accurate price feed for these assets, right? People should remember just because there's a ticker that says, you know, this particular token is worth $2, the reality is doesn't mean you could actually execute size at that price. Most people, I think, you know, realize that the order book can be super

thin and very dry really quickly. And so anyways, it's just there's a lot of fragility in the crypto market structure, but you know, important to highlight the winners here. And I think you know a protocol like a was very performed very very well. >> Yeah. You can actually see we just launched a new dashboard. Um it was a big biggest week at 85,000 in uh liquidation fees. their average is like you know what are these numbers 40,000 50,000 and obviously had a very big week >> and and look the last thing I'll say is go people should go listen to that discussion that we had with um it was h Matt Hogan I think for bitwise and I'll forget someone else

um oh um Richard Mirit from um what is it e not ethereal uh >> fabric >> and I mean users got liquid liquidated uh going because a lot of times like we understand if someone gets liquidated they're going 50x lever right and Brian Armstrong funny enough had a tweet that Coinbase you know was like Coinbase now supports 50 times going long on on your shitcoin of the day it's like I think we we ought to just zoom out as an industry and say is this the best product that we can offer users because by the way it's not just the people that were 50x or 20x or 10x levered it's you know people that were one to two times long got liquidated

Across 30 plus networks and 180 endpoints, Block Damon Earnstack unites staking and DeFi into a single institutional toolkit for crypto rewards with multi-layered security, full asset control, and 247 support. Block Damon Earnstack is built for scale and regulatory clarity, non-custodial staking, and seamless DeFi access allin-one stack. Direct access to DeFi with no intermediate smart contract or vaults. To book a demo, make sure to click the link in the show notes or head over to BlockDamon Earnstack to find out more. Thanks to BlockDamon for making today's episode possible. The machine economy is here. Devices are monetizing data for their users all over the world.

Tokenized robots are generating revenue for token holders. The first machine economy free zone is live in the Emirates. And it's all happening on Peak, the machine economy computer. Head to peak.xyz. That's paq.xyz. XYZ to find out how you can benefit from the age of automation or click the link in the show notes to find out more. As always, investments in blockchain technology involve risk terms and conditions apply. We have a we have a friend who I won't mention his name, but he he messaged me the day after it happened. He said, "Hyperlquid failed. I don't care what nonsense they preach. They sold our our funds eight figure position. Pretty much an existential day for pers in my opinion. Not sure how anyone can trade

on them. We were one we had 1.2x leverage on and liquidated us fully, which is insane. So yeah, if you're 40x levered, you you that's the risk you take. But if you're one point, you're levered up 1.2x. >> I mean, but I was talking with this guy and look, crypto is a volatile asset class. You just sort of assume that even an asset like Bitcoin can go down in 30 30% in 20 minutes. Like that should be your operating assumption. And it's a so any leverage is is a picking bomb. The other thing more interesting is you know that I don't know if this actually true but we should run the math. This guy was basically saying the optimal strategy is to go along the S&P one to two times levered. He's like

because it's you know it's not as volatile. But if you ran that and back test that you would have gotten liquidated at some point because you know 1929 and 1988 or the signing loan crisis and then 2008. So even if like this is the problem that we have with the industry the default like the default leverage on exchanges on some exchanges is 10x. Now, that doesn't mean that everyone's going 10x long, but like imagine if that's like the default when you log in. And I appreciate not all users go there. Like if it it then is the anchoring of like one and two doesn't seem that much, but the reality is if you're going even one and two, you're going to get liquidated at some point.

>> Maybe the one thing I would point out is, you know, our our friend Jana who you mentioned, I know who you're talking about. Um I will say that, you know, he kind of he put a you know, kind of a list of his positions and they were all like really long tail, right? Right. So even though it was like 1.2x, it wasn't ETH and Bitcoin and Salana and, you know, even things like hype, right? It was like, you know, very longtail stuff for the most part. And again, I think it highlights the risk of liquidity right now that exists in a lot of, you know, the non- majors. And I think it's really important to understand here or just I mean you know you you had the the podcast with Doug already but like ADL is very focused on like what your risk

is right so it is it is leverage but is also about like the exact the liquidity right and so the um you know bit at least on some exchanges there was actually zero ADL for Bitcoin and ETH and there was only ADL in other tokens right and so it again it I think It underlies the major major issue. It's like yes, there's too much leverage in the space, but that we're not going to stop that. Like I I think to your point uh Yano, there was a a conversation like, oh, maybe like per are done for. They're not done for, right? People are gamblers, right? It's just going to continue to happen. And maybe you'll see less institutional leverage when that's probably a good thing, but a lot of what we define as institutional in this space anyways is like, you know, basically

just semi- richch people and, you know, with with small funds. But the there will continue to be a lot of retail leverage. There will continue to trade longtail things because that is just human nature. That is what we're seeing happen. But I think it under uh it underscores what we need something different for, you know, the 90% of of volume, right? If I go and look at Coinbase, right, and 80 to 90% of the volume is institutional and 10% is retail, but you kind of put that on its head when it looks at their revenue. Like that 80 to 90% like that needs something better, right? like that and we need if we're going to have all of the biggest you know takers in the world come into the space they need something better than what's happened but I agree with Santi that you know it's clear that

you know many ways DeFi you know performed better than CFI in this case but I I don't think the answer is that we're going entirely DeFi right because I don't think you know you talk to the institutional the institutions that are coming on chain they're they're not there yet but the answer is we need better institutional infrastructure at the centralized exchanges And we need to continued innovation at DeFi, right? And we need those things to exist together side by side. >> Yeah. Do you um uh do you think that anyone has blown up badly from this?

This is always the big question, right? Like >> Well, uh well, you see the leaderboard in hype. Uh I think in hyperlquid, I think there's a lot of large whales that got blown out, I would say, and liquidated. But funds, I was going to ask you, Rob, like you guys don't I don't think you if anything like you're not you don't put any leverage and if it's leverage, you're probably >> Yeah, you don't trade. But I'll tell you, look, my first as much as I love DeFi, it it is awesome to get a call from >> your counterpart saying, "Hey, you you get a that margin call."

>> It's it's pretty nice to get a margin call. And I remember like during COVID, you know, we got a couple calls that day. Um, and it's nice to be able to have some time to refill collateral. It's not so nice to you get liquidated by some mechanism that you may or may not agree with in how it went about doing it. And so I think a lot of people >> one of the controversies though, right, which is like um, you know, so I I give a lot of credit to Guy. I think Guy was extremely smart. People realized that it sounds like Athena had negotiated some of these like no no ADL contracts. Oh, is that >> I don't think that's true. No, no, that's a that's a thing that people, you know, have said on on Twitter, but um I do not believe.

>> I think that's I I was like that was very savvy of guy. Um >> but but know if I think there's a point here to be made and sorry to to interrupt, which is that like again it's how ADL works, right? If you're not levered and you're in the most liquid tokens, you are unlikely to get auto deleveraged even in the worst of times, right? And so like what is Athena trading? are just trading bases on ETH and Bitcoin for the most part. There's a little bit of soul in there, but it's mostly just ETH and Bitcoin and they're not on leverage, right? And so like if that's the case, like the likelihood of you getting auto delever is like close to zero, right? You're going to be this the last person in line.

>> So you guys don't think any of the market makers blue like big, you know, big tier one like big bigname market makers or any centralized exchanges or you're not concerned about that? So, I I do know of for a fact a few funds that have gone under because of this or closed their funds. All of the ones I know are, you know, names you might not know. Sub $200 million. There's going to be no systemic risk from them. Um, there's a few of them. I have not heard of any real I've not heard anything credible about anyone of real size that anyone would be particularly concerned about. Um, I, you know, I've talked to a lot of, you know, our friends at the, you know, the biggest market makers, the biggest trading shops who are all like, "Yeah, it was tough, but actually the

rebound has kind of been okay and we actually made, you know, we were able to trade around it a little bit and we're we're doing okay. It's not that bad, right?" >> Yeah. Yeah. Um, anything else on this topic or move on? >> I think we can move on. I I do want I think maybe it's it's worth um >> highlighting. Wait, sorry. You want to go to Santi? Well, I was just going to invite if you're a builder out there, I've had this idea for a while, but like can someone build like a the flow of getting a call from to refill your collateral on chain cuz like I could tell you a lot of funds when I was like it would be a good functionality to express that in some sort of logic where there's a buffer, there's a time period. I think I think

some protocols have like a a mechanism where you have a like a NFT protocols have like 15 minutes or like a couple days to kind of refill. I don't know actually if it's possible or not. My my brain is not big enough. But like if you could if you could create a protocol where you have a little bit of buffer in there or some sort of mechanism, it would be interesting. Like I would actually be interested in investing in something like that. I mean, even something as simple as I mean, you if if you like right now, one of the problems is how do you get in touch with someone? It's just a wallet, right? So, there's no email address or phone number connected to it. So, even just the ability to connect opt into connecting a phone number or an email to a wallet would uh like I mean that's

>> I can tell you a lot of funds have shied away from putting funds on chain because they are too afraid that this flow where the oracle fails and you you get you just you're Yeah. Yeah. >> Well, and I think it's I think it's important, right? Because like if you we're talking about Athena, right? If if a oracle on on chain had been referencing the curve pool, the curve was never more than 3 to five pips off, right? Resting liquidity on curve was higher for USD than it was on any single exchange, right? And the oracle references Binance's order book and the Bartets order book, the actual resting liquidity there is actually very small, right? And because of the you know USDA had just been started to be supported as a collateral asset um uh pretty recently and so uh I think it's important that we

need to be more thoughtful around you know oracle construction and I think to my point earlier how do you you know C5 defi need to exist you know next to each other it is actually really important though that we have DeFi and I think the institutions are starting to understand that as well it's just going to be some hybrid for the interim but to Santi's point earlier a performed really well hyperlid performed as expected I think there's a conversation around should they be a little bit more sophisticated in the way they think about ADL, right? It's a little bit tougher because you don't exactly know how people are handling like basis or like net leverage, right? Um but there's a I think there's a world where where you can potentially make some improvements.

But um it's clear that you know when you have this transparent set of rules that is programmatic like you just don't have a lot of these you know same uh you know kind of like out ofthe- blue micro structure problems that just like completely you know take everyone by surprise right like people are at least more aware often of what that risk looks like. >> Yeah. All right shifting gears a little bit. Um, one one last thing here. >> Yeah. >> One one other thing to call out. Um, >> can you guys hear me?

>> Yeah. >> Yeah. Look, uh, there's a very clear divide between how Salana handled this spike in load and how Ethereum L1 handled the spike in load. And I will say again, it it just it is tough when you're interacting the L1 and fees go up to a couple thousand bucks and you can't get, you know, so as much as I agree with Rob, like D5 performed flawlessly, you you just can't be in a world where you don't see a viable path going forward of increasing activity in an L1 like Ethereum when you have the congestion and the fee spikes that you have. And Solana from everything that I saw just didn't have this problem. But people aren't even arguing that anymore.

Like I don't think anyone thinks things should happen on the main on like the main, you know, L L1 anymore, right? It's all moving debate L2s. I >> I agree. But I I would say the if you want to bring RWA like I'm thinking about RWAs and the that type of like onboarding and like five years time like >> because I've I've talked to a lot of folks that's like hey I don't want to deploy in L2. But we're going to deploy in the L1 because fees have the average of fees >> has been low over the which is true but it's like how the person drowned in a river that was on average 5 ft deep.

Well, no. Like in this in this world, you have to think about that spike in like what is the worst and and I think hed made this point at the panel which is if you have you just have to bake into your math that there's going to be a spike in load and if that happens of a couple orders of magnitude fees are going to go up the wazoo and then you have to work backwards from there and say hey maybe we shouldn't be deploying the L1 because if we need to quickly do ADL or do these things you're not going to be able to do it and that has a whole set of implications. Yeah, I will just say on that point and and not I'm definitely not arguing for Ethereum mainet uh as a place where we're supposed to be trading per right

um but I think some of the L2s didn't have this problem either right and they were they were all fine as well um and if you actually look at like volume by protocol like there's actually like on a relative basis for like Salana owns a lot of the trade and economic activity but uh for per there's actually not that much happening on Salana on a relative basis right it is still very much like a a spot market for certain types of tokens. A lot of the largest or basically all of the largest per protocols are are mostly on other chains >> across 30 plus networks and 180 endpoints. Block Damon Earnstack unit staking and DeFi into a single institutional toolkit for crypto rewards. With multi-layered security, full asset control and 247 support, Block Damon Earnstack is built for scale

and regulatory clarity, non-custodial staking and seamless DeFi access allin one stack. direct access to DeFi with no intermediate smart contract or vaults. To book a demo, make sure to click the link in the show notes or head over to Block Damon Earnstack to find out more. Thanks to BlockDamon for making today's episode possible. The machine economy is here. Devices are monetizing data for their users all over the world. Tokenized robots are generating revenue for token holders. The first machine economy free zone is live in the Emirates and it's all happening on peak.

The machine economy computer. Head to peak.xyz, that's peaq.xyz to find out how you can benefit from the age of automation or click the link in the show notes to find out more. As always, investments in blockchain technology involve risk terms and conditions apply. Related topic, but I want to talk keep talking about Binance a little bit. So um this was in the uh so this guy CJ who runs Limitless which is an up kind of up and cominging prediction market on base I think it is um posted his offer so Binance has these listing fees right and um he post he posted publicly the offer that he got from Binance and this has kind of been a taboo topic in the

industry I feel like so I I don't know even how much you guys are open to talking about this but I'll I'll share what CJ said. He said, "Offer from Binance, 1% of the airdrop on day one alpha listing, 3% of further further air drops in 6 months, 1% for quote unquote marketing at Binance, full discretion. Provide 100% of the TVL for token pool on Pancake Swap. 250k security deposit 3% reserved for BNB hodler program. 200k worth of tokens at MFN price for Binance affiliate marketers. 2 million BNB security deposit for spoting. Offer from Coinbase. Build something meaningful on base. So, I think this is what he's really saying is, you know, Binance is asking for like 10% of our listing, uh, 10% of our FTV to get listed on Binance.

And, um, you know, you see Dud just tweeted a similar thing. He said, confirmed with double digit teams that they've received the same Binance token supply proposal for listing in TGE. Binance wants to take a nearly 10% tax from any innovator in the uh, in the industry who launches a token. This is 10 times worse than Tradfi. Enough is enough. Do you guys have uh I'm curious like even you know Rob how you advise port codes to think about like the exchange listing process and Sante I know you've been through this a million times with other investments that you've made. I'm curious how you guys think about this and and will this dynamic change over time and >> yeah so so I'll say two things. One is um so the Binance you know in my experience the Binance ask for listing is actually

extremely variable. So, I know, you know, uh, Mike put that tweet out there that, you know, they're asking for 10%. Um, I I in my experience, that's pretty rare, actually. Now, they do ask for, I would say, too much in most cases, and they ask for a lot, but um the really the really the way to think about uh the listing teams at these exchanges, they actually have a lot of leeway and they want to see the things that they want to trade listed, right? And so the more that it is a thing that they want to trade, the less the fee is, right? And I have seen people get on Binance who have paid zero fee, right? And that happens.

And I have seen people who have paid 10%. And so often times when you see these prices that are call it closer to 10%. It is usually tokens that you know these listing agents at least whether they're right or wrong feel that there's probably not a ton of demand for necessarily within their user base today, right? and they think that Binance adds a lot more value than they than the token itself adds to them. Now that's not to say that you know there's a lot of in between between zero and 10 and we see a lot of people in that in between and even you know I think there even 5% is too much in my in my opinion and so you know I I think it's very clear that people need to be thoughtful

about this. We have probably seen more protocols be I think um at least putting it out there that like maybe they're thinking about not listing on Binance if that is the ask right and they're you know only listing on places that ask for less right I think what we see actually is more typical is like 2ish% across a lot of the other exchanges right uh and a lot of that goes back to the ecosystem a lot of that goes into some of that goes into market making um and so there are probably more than ever a lot of protocols asking should I be paying a real rake like this for a uh for a listing and a lot more I think than ever are making the decision if that is the

type of offer not to do it now I will add one thing to that though which is that Binance is still 35 to 40% of the market volume right and so there is still I I don't think it's as clear-cut as like hey we just don't pay this and we you know hope that we get, you know, volume elsewhere. Now, if you really believe in yourself, you don't pay it and you work over time and people show a lot of interest to your token over time, you'll get listed anyways. That's definitely absolutely true. And so, there's a I think a decision around, you know, the the sequencing around, you know, if you just list elsewhere first, and we've seen that work. Um, but I think it is still important to, you know, at some point probably listed be listed at Binance, but it's also important to, you know, not uh really

screw over your token holders. And so there's there's definitely more of a discussion today than there ever has been. And we advise people to be thoughtful around that. We we definitely don't advise people to pay 10%. My so I think the the other analysis that you can look at is um the IPO listing process and what traditional investment banks have historically charged and what they charge now. And you know it's you can't it's sometimes hard to analyze but like you know clearly obviously 10% of your token supply is a lot and obviously investment banks don't charge typically investment banks when they do a road show and an IPO they'll charge you kind of like one to 5% of the offering proceeds. So

if you're going to raise a billion dollars like you know Figure did they're going to charge you 5% on the total funds raised. very rarely now will they get some sort of equity comp like they will get like uh you know warrants that's sort of rare now typically it's you know Rob correct me here but it's mostly for for most deals it's it's just a percentage of the total funds raised and they'll you know you hire them to build a book to talk to market makers to leverage their relationships but they're lead left lead right your JP Morgan Goldman great you know you're you're going to be successful so I think that's um when you do the calculus obviously you know if you're going to go list in the traditional markets um you're going to work try to want to work with the best and clearly you know there's no

disputing here that Binance to your point Rob has the most amount of users and liquidity and it's important to be listed right there's no top 10 20 token in crypto that is not listed in Binance it's as simple as that so navigating that obviously they're sequencing like all the meme coins got listed because they just had so much flow that you know Bonk didn't pay a fee and you know uh uh WIF didn't pay a fee to list as as far as I know. Um and so I think like to me that's the real comp. Um like let's go look at the fees and the structure that investment banks, merchant banks were charging companies maybe 20 30 years ago and compare that against Binance. I

don't think it would have been like crazy in my opinion. It's just like in the state of the market. But I will say um you could then maybe to take a little bit of leeway there's this thing of called the IPO pop which is these things for whatever reason don't seem to be priced uh efficiently. The average pop of US-based IPOs can be you know I think anywhere from like 15 to 25%. That's a lot of inefficiency. Now, it's hard to do the analysis of like what would happen if you didn't list on Binance and what is the average pop or not, but I will say if if these terms are correct, the terms that you just put up,

there is no pop. There's actually a lot of selling because those tokens are not locked. Uh they can do whatever it is that they want. A lot of the airdrop will be dumped because it's not locked. And so I think um yeah, like my brain just immediately went to that like the only reason why you would want to list on Binance. And I think look, every project can offer whatever it is to market makers and uh exchanges to board approval and whatever. Make sure if you're going to structure these things, lockups work well to really understand the alignment. And it has never served anyone well to give tokens

that don't have as, you know, if they're going to work for providing liquidity and reputa, you know, marketing and all that. It's, you know, create aligned incentives. That structure is not very aligned in my opinion. >> Yeah. I would just point out on the IPO side you it's usually typically like 4 to 6% of raised capital right and so like you know to your point right $3 billion company raises $300 million in IPO it's 46% of the 300 um and it's also paid in cash of the cash proceeds so it's not like there's like sell pressure on the equity right um typically now there is like some green shoe and there's you know some other things that exist right but it's it's not necessarily a dilution or sell pressure in the same way um I think to your point like aligned incentives around lockups

are really important. You know, anybody who participates in, you know, an IPO who does take equity and we're seeing also more of these this equity get um put into retail hands these days than we have through Robin Hood and other brokers, right? And um technically the way it's structured is that your Robin Hood if you get a if you do participate in an IPO through like a Robin Hood today, technically the way it's structured is like Robin Hood is actually a counterparty. So they're the ones who are locked up. Now they but they do have a lockup and so if I sell or if the retail person sells their equity uh they Robinhood actually has to warehouse it back right because Robin Hood itself is is uh is not able to sell during that period of time and I think you know that is something you can

improve here of course which is that like you know Binance can kind of distribute whoever they want their ecosystem but Binance users have some sort of lock up right or they at least contribute that lock up to those users. Um and so I agree with you totally that that's that's important. I think uh a lot of the token incentives that we see that have call it you know um you know they TGE and they immediately have you know some amount of the token that's liquid for people who are kind of just speculating on the pre-market price is is always bad right it's always misaligned incentives it's anyone in my mind who is doing some sort of like you know pre-listing um you know buying of a token or airdrop or um maybe not airdrop sorry I'll take that back but pre-listing buying of the

token or pre-listing like sort of um some sort of like lending or you know liquidity provisioning or whatever. All of those people should have some lock up and I think in most cases they do today but not in all cases, right? And so what you really want is you want to incentivize liquidity. You want to incentivize um getting this token into the hand of as many retail users as possible. And you really want to incentivize this thing hopefully trading well and having good, you know, liquidity market structure because that gets people excited and that gets people to continue to invest. it's able to continue to hold and then you don't have you know a lot of this you know volatility or you know downward price pressure that we've seen. Um, and I mean, if you look at all of the recent

like high-profile listings, right? You look at Pump, you look at, um, uh, Plasma, you look at, uh, Double Zero, all of these things kind of like, you know, they traded at, you know, multi-billion dollar valuations pre-market, then they kind of went up, um, and then, you know, and then they kind of all like got lost 50%. Uh, or more, right, in many cases. uh now they're trying to finding their footing, but you know I I think um does that you know kind of price action that way does it make it harder for them to find their footing now as the market gets more sophisticated and as they they start to find some you know maybe um floor price where people actually want to own that token.

I mean that's the challenge here that I don't think we're ever going to get rid of this liquid venture asset class that companies are it's the only it's the only asset class where companies are actually going public sooner way sooner whereas in the other part of the tech world companies are not going public they're taking too long they're staying private like open AI you have you have companies that are worth a 100red billion plus that are still private and that value creation has stayed mostly concentrated I don't know what the answer to look it ties into the market structure discussion like you know high the low float high FTV in many ways like you sort of I want to say sympathize but you understand the the the the issues that potentially a market maker and an

exchange is going to have right and and so they're in the business of protecting their book and their users right and so they're clearly going to negotiate because what you know Binance in their defense um have a very um rigorous listing process that they will kind of ask for team wallets and advisor agreements and a lot of the that information in many ways is like what the SEC would do when you're going public like you know it's it's thorough Rob I don't know if you would disagree with that but from what I've seen it is incredibly thorough so I will say at least from a consumer protection standpoint I think it's it's quite

positive bought the um from a founder perspective, from a team perspective, you know, giving 10% of your supply. I'm not here to tell you that's good or not. That's your decision to make. >> Um but not good. 10% is not good. >> No, no, it it's definitely not good. Like I will say and and and it tends to be the projects that have the least amount of traction are willing to pay the most. Uh because, you know, it's more marketing game. However, um I guess the point I'm trying to make is um you know, if you're a if you're if you're a team, you're you very likely want to go work perhaps with I mean I don't know

you guys are invested in other exchanges, Rob, like uh I don't think I haven't seen us these terms in a while. >> No, but Binance is definitely Yeah, they're definitely the highest. Um, and then some of the I would say exchanges that we talk about less, but even of the other kind of like large Asian exchanges of which we're investors in a couple of them that are, you know, in that top five, they're not near uh, you know, these these types of numbers um, ever, right? Even on on the >> Yeah. And and obviously Coinbase is and Kraken is it. And so I I I do think to the point that Yano maybe to get all the way back to the question that Yano asked in the beginning. Um I I do think that this, you know, type of offer is probably going away over time, right?

This is not sustainable and it's definitely going to come down. It's not going to be zero, right? It's not not everyone's going to go to the Coinbase. >> In Trapi, it's not zero either. Like NASDAQ and charge money, right? You've got the up upfront init initial application fee. You've got the initial listing fee. You have an annual fee that I think you have to pay them. Um but it's like you know hundreds of thousands of dollars you know >> and the last point I'll say is it's it's difficult to do an analysis in isolation right and and it's unfair to say because projects the last four projects that were listed you know went down 30%. I think that's more of a reflection of the tokconomics more so and the current market environment and the high like high FTV low float versus what what any market maker exchange may or may not do.

I mean the market is just you're in that state where you know it most of these projects just to your point there's no liquidity for these type of tokens and and you just saw that last Friday. There's no interest there. So >> shout out to today's sponsor Katana. Katana is a DeFi first chain built for deep liquidity and high yield. No empty emissions just real yield and sequencer fees routed back to DeFi users. Incubated by Polygon Labs and GSR. Katana is launching with notable ecosystem of primitives, assets, and partners like Morpho, Chain Link, and more. Katana's 1 billion CAT campaign is live. Bridge and deposit directly into vaults in one simple click and start

earning immediately on your Ether, Bitcoin, USDC, and more. Follow the link in today's show notes to get started. As always, investments in blockchain technology involve risk, terms, and conditions apply. Let's let's shift to a different topic I just saw come up which is um uh Tom Lee who's the chairman of the biggest Ethereum DAT obviously Bitmine um says that uh says that the DAT bubble has burst and I would love your guys's uh take on this and Rob I know you've been involved in a couple of these uh and helping I think you've seen a lot of the structure of many of these different tats but yeah I would love your guys' take on this comment.

I mean, totally agree, right? Like the the the reality was, and I've been I've been talking about this for a long time, the vast majority of the debts had absolutely no reason to exist. They I mean, I think we saw um we started to see the SEC and the the exchanges themselves, um sorry, not not the exchanges, but like um maybe some of the exchanges as well, but we started to see people start to push back on, you know, certain types of structures here, right? And so I think it was uh last week that um the kind of canonical tandat got delisted uh on maybe it was maybe it was Tuesday that that that happened right and it was because they you know hadn't gotten the appropriate shareholder

approvals right you know this goes back we talked before about heritage distilling we've talked before about a lot of these other pipes where they could took the perspective that they could kind of do whatever they wanted by stuffing a a you know public company with as many tokens as possible in kind as well as you know you know buying or raising you know cash to into these pipes and buying these uh buying these tokens no matter the liquidity of the token no matter like who it was from or what the type of structure was and you started to see a lot of push back from the regulators and from uh the the the exchanges. Now that doesn't mean that these aren't going to continue to exist.

the regulators are going to continue to allow the ones that have gone through the appropriate approval processes. They're going to continue to allow the ones that are you know structured in such a way that um makes it so we are clearly taking care of the shareholders right and are not doing something that has a lot of contingent liabilities etc. I think the the market is going to continue or or the regulators are going to continue to be um very open to and they're probably going to approve the vast majority of them, but they've they've really started to take notice for a lot of the kind of I I would say that the the tail end or the shenanigans that were taking place in the DAT market. But then you have, you know, the the actual and probably more what Tom is

talking about, the actual traders of these things or the um the investors. And one of the things that happened is that there were a lot of people that were looking at the premiums that all of these things were trading at, especially after Bit happened. Um, and they were saying, "Oh, like this is structural, right? We can just go and put money into every single DAT that's run by a decent person and that's backed by a decent sponsor and it'll structurally trade at some sort of premium and we'll make money." And so if we're already long whatever your token is ETH and then like oh well structurally this you know pipe into this thing will also mean that I get to be you know I get to make more than one times my money if if if if goes up I make 1.2 or 1.5 or two right um

what these people are realizing now is that um liquidity is also can be a problem in the equity markets right and so all of a sudden when these things >> surprise Yeah, but it's like it's like people like completely forgot that that was also these, you know, kind of a highly illlquid like, you know, micro cap uh equities like also have that problem, right? And so um they're starting to realize that there is actually no demand for the fifth Ethereum debt or the 17th of Ethereum debt. There is no demand for, you know, most of the Salana debts.

There is no demand for name altcoin. Most of the altcoin debts have no uh liquidity whatsoever. You know, maybe like the top one or the canonical one um has liquidity, right? And so they're starting to realize that that micro structure actually matters there as well. And then you're starting to see these sponsors get really um I think uh trying to figure out what's happening and how to kind of save, you know, these premiums, right? I think we saw um it was Ford Industries um by shareholder vote uh decided to extend their um their registration going live. So they were supposed to all the uh pipe investors were supposed to be unlocked. I think it was end of last week or maybe no it was earlier this week. It was like Monday or Tuesday and the uh the sponsors of that deal decided to extend it for 30 days.

Well, why did they decide to extend it? They decided to extend it because they didn't want Citadel and Jane Street and a lot of these other um you know, Pipe investors to go and crush the stock uh at a time when the tokens have all traded down because of what happened last Friday, right? And so, you're starting to see a lot of these like kind of games being played because people are concerned about this liquidity problem. And so, I think completely like this is just a this is only the beginning of that story. I mean, look, if I the phenomenon of shitcoins is not only true in crypto, ladies and gentlemen, go look at some charts in traditional finance and I got uh pink sheets for you. Go look at those and go look at that those charts. Not too dissimilar from your your shitcoin dour. And so, uh, look,

the the thing that I've issues with dads and Rob, I hear you dads are the structure is different for many. The nuance is different, the terms are different right? However, it is an arbitrage game. Some people like Sailor can play it very well, can negotiate terms, and know how to play in the big boy table. Most other people don't. And when you're playing the big boy table, you're going to get eaten by a shark like called Citadel and called all most of the rupt maybe you've been on the front lines more than I have. The vast majority of people that are investing these dats are very sophisticated.

hedge funds a lot of people invest a lot of retail >> crypto natives >> crypton natives but like retail but but they're they're what I'm trying people trading around that >> in a very systematic way are they're trading around them not so much investing >> because like then that's the issue that I think is happening here which is there's all these unsuspecting retail say I miss micro strategy and I missed the first Ethereum DAT and so I'm going to do the third fourth fifth and I should make a re levered return on my if I'm long Ethereum, I'm going to go this. However, there's there's just a lot of trading around these dats and very sophisticated players that are investing in the primary and then they

just know how to hedge and lock in a decent, you know, profit or whatever. And and that I think is just doesn't bode well. like the the the ARB eventually goes away and if you're not sophisticated enough, you're like you're going to get crushed and and arbs never persist in perpetuity. >> Yeah. I mean, I think one of the important things here too is like there there's two different pe group of people. There's the people who are like the pipe investors and there's the people who are, you know, buying in the open market, right? The pipe investors are interesting because you have really two groups of people who have done those deals. The vast majority of those deals have been done by highly cryptonative funds who are like, I am long this asset already and I think this is some sort of

ARB or that will exist and it'll trade at some premium. The vast majority of crypto native funds, I don't know this to be true. I'm speculating, but I would guess 90% of cryptonative funds who have played these dats in a real way are actually underwater what they would be if they had held spot right at this point because a lot of these things are now trading at a um at a at a discount and also they've had some ill liquidity. So they might have traded out or traded traded in etc. Right? And the reality is is, you know, I talked to a lot of these crypton native funds and uh some of these guys are the smartest guys in the world when it comes to crypto have absolutely no idea how to think about warrant dilution, right? Like they just don't it's a different market and

they're not as sophisticated in that market. And so um we've seen I think some people c um kind of miss certain things about how these things are structured, right? Um, and then you have the the traditional guys who are investing in these things. And, you know, I've seen this firsthand. And, you know, I think um, you know, we we've publicly um, were uh, you know, behind and being helpful with the um, uh, the Avalanche AVAT uh, debt that got um, announced a few weeks ago. We um, helped sponsor it because we're we're long uh, Avalanche investors. We've been an avalanche investor in every single round they've ever done. I've also been involved with the Athena one. Same thing. We're we're, you know, very involved with Athena. Um, and so I talked to some of these investors and when I talked to the the

traditional guys, there's really two types of traditional guys as well. There's the ones who actually have are long-term buy and holds. They want to be part of the thesis of, you know, institutional financial market structure coming on chain. They want to be part of stable coin uh growth, right? And they see this as a way to play that in a levered way potentially, right? Then there's the Citadels of the world, and I'm not, you know, singling them out personally purposely. they're just, you know, a name that everybody knows who are clearly playing a short-term ARB, right? They think they can like, you know, buy this thing, especially if it's coming at a discount to NAV and then they can, you know, uh potentially hedge it out on the other side with a per or something. Um, and those guys are all sellers on day one of the unlock, right?

And what we've seen a lot of the, you know, sponsors or management teams do in these dats is they've they've been making tradeoffs between, oh, do I want to be bigger or uh do I want to have a more curated investor list? And if you're bigger, that means you're probably taking money from Citadel. And if you're taking money from Citadel, you have to understand that on the day it unlocks, they are dumping all of those shares, right? And that's just who they are cuz that's that's the reality. Tom Lee who's been the most successful DAT CEO and DAT SP I guess not I CEO he's the he's the chairman and the sponsor of that he made the exact opposite choice which was I'm only going to raise $250 million and then I'm going to go raise

capital other ways and then I'm going to do share buybacks to make sure that you know this um you know when people are selling into it that I have some like resting liquidity there and so he's made the exact opposite choice of of which a lot of the sponsors have and he's been the most successful. So, I think it gets back again to the idea around this. This is actually a very sophisticated game that um I think a lot of people who were playing it were wholly unprepared or just had different incentives. They didn't actually care if these things traded well. They just cared if they were able to get it to market and clip some advisory fee or something. >> All right, Rob. Um to round out this discussion, the tide has gone down.

There a couple people that are naked. Uh the music has stopped. Does the music come back? Who actually survives in this game? We talked a lot about M&A and DATs, right? Like maybe larger Dats like you know absorbing uh underperforming like Dats. What's uh what's the do you a do you agree that the bubble is burst and is it over or what? In what reformatted because markets have a memory of a goldfish then they do it again and again and again and again. Um in what format do we see these evolve and is there a path forward here? Yeah, I I don't think it's over. I think we in the near term we will get maybe one more of any real size that comes to market.

And when I say real size, I mean like over $500 million, right? I think maybe we'll get one more, maybe two more max. I think for there's just a there's a lack of liquidity at the investors who are doing these things. People are being more careful. Uh some of them are just completely turned off altogether, right? And so I think the the raising new capital into new DATs is mostly over for the short term, right? I don't think it's a long-term point. And I and I'll I'll kind of, you know, talk a little bit about like I think the parallel here is spaxs, right? And we had this like spa boom in 2021 where all of these like companies who were not public ready ended up getting taken public. Many many many of them have completely traded down

or gotten delisted and have not done well. Right. But we've had kind of a a bit of a resurgence of the best spa sponsors with, you know, certain types of companies and they've figured out how that market makes sense for certain types of people. I think that'll happen here as well. But I think, you know, to again to the the Spack point, a lot of the DATs that have, you know, gone been listed and that are trading, I think a lot of them will trade down, you know, until they probably just get bought out and they and then I think there'll be just a a um kind of a thinning of the herd essentially. shocking that you need to have an underlying business model to go public and have a viable business. Um you can't just list vaporware but okay the thought that I have here is like uh Chimath is

back with a spa. So you're right about that. Um is this is this a greater indication of the sign of the times? Like we we've talked a lot about like are we at the second stage of the cycle? How much we were talking about like do we have one month left? Do we have two months left? Do we have six? never like you know um is this more should we read more into this of like okay institutional demand may not be there uh you look at Friday you had these tail end of assets that just didn't have and have not recovered and just have no buying pressure um we talked a lot about institutions the reality is they're only buying ETFs and the flows are coming in to you know the majors uh Bitcoin and Ethereum uh we're going to have more ETFs how do you

how do you think You guys have been out like talking to allocators all the time. Are we over the cycle? Like not just for that, but are we like just coming to an end on on just the overall like parade? >> I I'm going to keep saying no. Right. I just like I just do not I just don't buy the the cycle story. >> People who are watching on who aren't watching on YouTube listening on you know Spotify or Apple to missed Rob's like massive eye roll. I've never like I just saw all the whites of your eye. Yeah. No, but I I listen I it's funny because you know we talked to the VC allocators and we talked to some of the liquid allocators. Um and the VC allocators right now are like I don't

know the the conversation is as constructive as it's been since you know pre Luna if I'm being honest right and so they're really thoughtful again around you know what's happening. We just had Poly Market announce a $9 billion deal with ICE like like two weeks ago, right? That if you go and talk to the VC allocators, the people have long-term oriented perspectives are saying, "Oh, this is this is the AWS time of crypto, right? We're now starting to get the infrastructure there that we're going to have the applications, right? And now we're starting to see the use cases, right?

I'm at a um I'm at an event right now and the reason I'm in a hotel is I'm at an event right now put on like one of the biggest asset managers in the world where um the conver everyone here except for me and and Paulo from Tether um is a non-crypto person and and they asked us to come and and talk about crypto right and I I went into this room and I had a discussion with there was probably 60 people in this room I I counted probably 20 billionaires in that room people the CEOs of the biggest uh funds the biggest um banks in the world, the biggest asset managers. And it was probably the most I felt behind enemy lines in a long time in terms of just like a lot of skeptics, right, for crypto. And I had a long

discussion with Paulo around, you know, why does why do stable coins make sense? How are they going to reinvent financial market infrastructure? What is happening in tokenization? What are we seeing and hearing? And I will tell you after that conversation I and and I'll during the conversation the the moderator who is the the the CEO of one of the largest news organizations in the world said who here owns what they would say of 1% of their net worth in in crypto and a room of 60 people there was probably eight hands right um and so not that many people right but but but a few and then after that conversation a bunch of people came up to me who did not have their hand raised and Listen, I

understand what you're saying and that sounds really promising. I want to see that succeed. We're retaking a look at that. I had a conversation with somebody yesterday who said, you know, they run a a multif family office and they said, you know, we don't actually right now give any liquid crypto exposure to any of our our families. You know, what do you we're now starting to think about doing that? What do you think is the right amount? You know, and I said, okay, well, Morgan Stanley just said 4%, right? You know, I think it could be as much as 10%. You know, what what makes you comfortable, right? and they kind of got to through the conversation that maybe 4% you know made sense for them but it was I will tell you very much Bitcoin Eve maybe a Salana was where they were at right and it's very clear

that all of these people at all of these large banks all of these large asset managers see this now as an investable asset class in a way they hadn't before but that doesn't mean that alts are going to trade well because that is not what they are focused on they're focused on the future of financial market infrastructure the future focused on innovation at the tech layer and then they're focused on Bitcoin, ETH and maybe Salana, right? And that is kind of the the whole focus, but they're coming into the space in droves now with people like me and people like my my my peers who because they want exposure. They believe in that story. So, I don't think it's over when you have those conversations. But I will tell you that they're not going to buy your alts, right? Maybe the VCs will. And then I've

talked to several liquid funds over the last, you know, week since what happened on Friday who were actually even maybe dipping their toes into so these are traditional financial firms who had said this market structure tells me that maybe I should not actually be trading those alts and they've kind of regrouped in the majors. And so I think we definitely have you know these tailwinds but I don't think it means that the whole market is going to trade off. There is going to be a lot of bifurcation between the halves and the have nots. So I um I heard it in uh one of our panels in D Matt Hogan who's uh was CIO or Bitwise and he said something to the effect of we're we're talking about debating the hyperlquid and you know what had

happened on Friday. He said, "Listen, most of the people that are putting new money in a in a crypto can't even pronounce Salana." And I think it's it's it's true, right? I mean, you're getting people off zero and they're going to go to like it they're now starting to understand Bitcoin because it's above 100,000 and they're maybe starting to understand Ethereum candidly because of someone like Tom Lee who was a JP Morgan before. >> And perhaps that's the only benefit of of that in in that regard. Um hopefully the blowback of some of the fallen doubts don't really counteract but you know sometimes because we're in crypto Twitter all the time listening to podcasts and in our own kind of circle jerk we forget that like people again

are finally now coming around to this idea that crypto is a legitimate asset class and it's regulated and you know I think they're it's going to take maybe more time than what we think for them to really start buying into anything other than Ethereum and Bitcoin. And so going back to DAT, yeah, it's going to be hard to convince anyone to really have a long-term position in a DAT. Um, and the reality is those DATs will not will not endure unless you build a viable business model. I'm not saying that forward or something like that can't build staking revenue. And if you have cash flow, the market is going to wake up to that. The problem is you can't justify a premium today because that's not there there now. But if you have a DAT that survives that discount and can build meaningful staking revenue and

meaningful validator revenue and you know have infrastructure some sort of infrastructure revenue come in and the market's going to understand that and and do a fundamental analysis on it and so I I personally investing would actually look at some of these dats that have a viable competent team that is going to interact in DeFi and stuff like that. forward seems to be, you know, perhaps well positioned in that sense. If it trades at a discount, yeah, I'm going to take a hard look at it. You know, not just because I like Kyle, but I actually think it's a viable like, hey, yeah, I think these guys can actually pull it off. And you look at like validator revenue and and and you know, that that's interesting for sure.

>> Yeah. All the stories we hear right now from, you know, call it the best performing ones or the ones who want to be the best performance are all that, right? So, Ford obviously been talking a lot about DeFi and validators. I think the AVAT, the one that we were involved with Avalanchide, that's been a big part of their story, right? And I think there's a lot of people starting to come to some sort of realization. There has to be more than just the the pocket of tokens. It's an access vehicle, but it's not just just that. >> Yeah. Yeah. >> The last I'll sum crypto is going to have less patience from investors on not producing cash flow. You're not Amazon that can, you know, can wait until you launch AWS 20 years later to show profitability and still trade at a premium. If you're a dad and you're an

al dad and you don't have cash flow, you are going to get smoked. >> Yeah, I agree with that. I'm going to I have to I have to jump for a client call in a second, but speedun Yeah, speedrun a little bit of news. Arabore Palmer Ly's company got OC um uh approval. Uh Kraken acquired CFTC regulated small exchange for 100 million. Uh Coinbase invested in Coind DCX uh at a $2.45 billion acquisition. And while we were recording, Ripple just announced a new acquisition which is um a billion dollar acquisition of G Treasury. This is a 40-year-old company, >> right?

>> This is not This is not a debt. This is not a debt. G G T T T T T T T T T T T T T T T T T T T Treasury is a is a very legit company. They do they do corporate they do uh treasury management actually for they've been around four years. Yeah. They do treasury management for um big Fortune 500s, Toy Toyota, Subway, Goodyear, American Airlines. Um, >> do you think they're gonna do treasury management for for uh crypto protocols? >> I mean, I think this is Look at Look at what we've been saying. I I think the um look at what they did with the Hidden Road acquisition. Look what Look at what they did with uh uh their their stable coin RLUSD. They what this company does is they do a lot of like risk and hedge

hedge management where they help Fortune 500s manage exposure to foreign exchange risks, interest rates. Uh they centralize and secure a bunch of corporate payments. Uh I I don't know. I I I've been saying this on Empire. It's kind of controversial, but I think Ripple is gonna buy their way into a massive business here. >> This is clearly a stable coin play to your point and I I will tell you when I have conversations with corporates right now, the number one thing that they're people are bullish about in stable coin use cases at large corporates is treasury management right now. It's crossber payments, but treasury management is probably the thing that comes up the most at the moment. So, this makes complete sense for them. It's like it sounds like a great acquisition.

I'd have to I don't know the company that well, but I'd have to learn more. >> Yeah. Cool. All right, folks. >> We're gonna skip content. >> Skipping content of the week. >> But >> Rob, you got a couple flights lined up. You better watch something interesting and then let us know next Thursday. >> Double content of the week next week. >> But I'm going to bring it. I promise. >> All righty. Have a good weekend. >> Bye.