Is Distribution Crypto's Biggest Moat?

Transcript

This per market is far from being settled. I think there's a lot of room for new entrance. It is a imperative that Salana builds out a competitor to hyperlquid. Dex volumes on Solana have actually been increasing in recent weeks. So we can see in June it was just a month like no other. I do strongly think that distribution is what matters. Hyperlquid is actually losing market share in the ROWA per space to Binance. I think these partnerships between [music] token projects and big distribution brand names, I think those are going to become more common. We have this massive battle of titans being drawn out, right? Coinbase on one side and Robin Hood on the other side. And one thing that I've learned in crypto is

that you should never. Nothing said on inflection point is a recommendation to buy or sell securities, tokens, or any other assets. nor does it constitute a solicitation or offer to invest in any fund, product or financial instrument. This podcast is forformational purposes only. The views and opinions expressed by hosts and guests are their own and do not necessarily reflect the official positions or views of their respective

employers or affiliates. Hosts and guests may hold positions in companies, funds, tokens, or projects discussed. Everyone, welcome back to Inflection Point. I'm your host Mark Arjun and as always I'm joined by David Lewant and Michael Marantino. Hey guys. Um I know markets are up but World Cup sides aren't doing so well. How are you guys doing? I love the square mark. Uh yeah, you can try on us. Brazil had a pretty tough defeat. US as well. Other than that things are good. market has been recovering, but maybe should we start talking about the World Cup as we have been in the past few episodes. I think it's been a big week there, too. It's been a disaster here on the homeland

uh for the United States. I've just been absolutely outraged. Um I'm I'm in the camp that is not uh claiming a single moral victory over this. Okay. Um we're done with moral victories here. It's just tremendous how uh two things. One, we can't get a better team than this. I mean, this is the best that we can do in the United States. It's truly astounding to me. And then second is that um we're on the world stage. We create this big controversy about the red card. Donald Trump intervenes and um everyone hates us. We're the bad guys now. And then we go out there and we play absolutely

pitiful. It truly to me is it was an embarrassment. And um I don't know what we're going to do about it, but it's it's got to change because these World Cup games, they are absolutely massive in terms of viewership. I mean, I don't think most Americans realize this, how many people watch these games. And I wouldn't be surprised if yesterday um more people watched that game than the Super Bowl. And yet we go out there and we put on the most pathetic performance I've ever seen in my life. The United States has to do better. I we got to regroup. I didn't think it was a matter of coaching. I think I think our coaching was sound. I think it was just a matter of heart, a matter of fright.

The guys looked scared. They couldn't complete a pass. The goalie doesn't forgets how to kick. I mean, it's really just an absolute disgrace. Oh man, I wasn't expecting Michael to be this outrage. I I just for whatever is worth, think about Michael's outrage, multiply that by 10 and that's the outrage that you are seeing in Brazil for the Norway defeat. Uh but just to stay in the US for a while, I think this was this was a great team. I mean, it was definitely a bad day. Uh the defense was unforgivably bad. I I don't think there's a lot of questions on that, but

I hope this is the continuation of a trend. I I agree with you, Michael. I think this was the best team that the US has ever had, maybe ever. Uh it was a pleasure to watch the first four games. Uh I I don't know what happened in this one. Maybe it's a young team. Maybe they got nervous. It's a terrible timing for a team to have a bad day like that. But yeah, I guess that's how it goes a little bit with >> the reason why Brazil is such an elite team historically is because of what you just said that when they lose, they go home and it is an outrage. Okay. When we lose, they come home and everyone sings

Kumbaya and how we made such great progress this time around and we'll get them next time. We can't do that anymore. I mean, I actually am most upset because I think this set us back 20, 30 years. Honestly, I do. I think we had such good will. We had so much win behind our uh behind our backs and we had so we were we were going straight into a home field advantage where the world loves America and we go out there and we just weren't ready for prime time. It didn't look like I mean we made Belgium look like the greatest team of all time. Okay, we made Belgium look I don't think Belgium was sweaty. I don't I didn't see a single droplet of sweat on a single player in Belgium. All

right, they they were out they didn't start their best players. They Belgium didn't start their best players. Okay. And everyone's saying to themselves, "Oh my god, what a disastrous first half." And then we get into the second half and everyone's like, "Oh, looks like a totally different team. We're back." Yeah, we're we weren't back. We were not back at all. We [laughter] were very much We were very much not. Uh so I don't know. I'm I'm I don't think this was the best team that we've ever had. I don't think you can say that. Um I don't think you can say that because because of the results. I just care about the results here. It was certainly the most hyped team we've ever had. I mean, Pissic has been on every commercial I've seen for the past three weeks. Okay,

they're treating this guy like Michael Jordan. Um, they're calling him Captain America. Captain America fights when he's down. Okay, Captain America fights on one leg when he's hopping around. When he's injured, this guy stubs his toe and he's out. He takes himself out of the game. I don't want to see Christian Ballistic ever again in my life. Okay, that's it. >> Oh, okay. That that Okay, that was that that was very harsh. I'm Well, I guess on my end, I I think watching the US team play was an absolute delight until that game. and I hope they will carry the best moments uh from from here on.

Let's see how we go from here. Uh Mark about England, England versus Norway. What what's your call? >> Um [snorts] I mean I'm back in England. I'm going to say England England edges it. I think some of the England players, you know, Arsenal, Man City, I support Man City. They've played with Harlem before. Um you know, that X factor can be diminished some some bit. You know, Norway has autogard and some other really class players. But I think I think this England squad with Thomas Tuchil, who's a great manager, I think we're going to get it over the edge because I think tactics are probably going to win this game.

>> Nice. Let's see. >> Say on Holland, I mean, that guy is an absolute monster and it's just so hard not to like him. Uh I'm Brazilian. He defeated my team. I was there in the stadium and I still cannot hate Holland. Uh >> I'm hopping. I'm hopping directly on to the Norway bandwagon. You heard it here first. Okay. I am I'm going to if I would buy a Norway jersey right now if I didn't think it would take four weeks to get the jersey. I bought an American jersey. I bought an American jersey the week before the group stage. Okay.

And I still haven't gotten my American jersey. I guarantee it arrives today. Guaranteed. But no, I uh I like I like Holland a lot. Um, he's impossible not to like. He's a freakish athlete. I love Norway. Um, I'm actually quite impressed with England. So, I was very invested in the England Mexico game. Um, I thought that was one of the best games. >> One of the best games World Cup so far. >> I mean, the Mexicans, you know, say what you will about the Mexicans. They played with heart. They played to win. They were just so passionate, so fierce.

England played a phenomenal game, too. June Jude Bellingham. First of all, the most British name you could ever come up with. Okay. I mean, I'm [laughter] You can't get a more British name than that. Jude Bellingham. Actually, Harry Kane is close. Sir Harry Kane. Um I think uh that's a very it's a very sound squad. I mean, I can't stand Declan Rice. Uh I don't know why. I just don't like him. But um you know, you can't you can't help but like Jude and and Harry. So, um, you know, I'll probably I'll probably be rooting I'm I'll I'll definitely be rooting for Norway, but I I like uh I like what I'm seeing out of England.

>> Yeah. Let's see. Should we pivot to markets? >> Yeah, 100%. Let's do it. Um, and I wish stuff were up 100%. But, um, I mean, this past week hasn't been so bad. We We're looking at what BTC is up like 8%, Ethereum's up over 14%, Salana's up even higher. Um, yeah, I think it's it's been a positive week. Why why do you all think we're seeing these kind of moves now, >> David? >> I think there's been a couple factors. Um, first of all is, and we haven't discussed this in our last episode because we uh we had the special uh uh guest appearance of Hester Bur, but uh strategy came up with the big

announcement, right? So a framework uh on how to to conduct and to to run their reserves and I think that was a big reason why we saw some stabilization on most of the MSTR capital complex. Uh stretch is not back at par but last I saw it was trading around 90 which is a big change from the mid to low 70s when it was before that announcement came out. So so that was kind of interesting. Uh just yesterday we saw strategy do a $20 something million bitcoin sale. So I think strategy is showing um that they have uh flexibility and that maybe they have more flexibility than a big chunk

of the market was thinking. So I do think the first component here is that we saw some stabilization on on the stretch and and and strategy story here. The second thing is that and this is I think a more technical aspect and this is something I've been seeing at the desk and also when I'm looking at uh broader indicators um in the market whenever Bitcoin crosses under the 60K level the amount of capital that comes in to to buy and to support uh prices is is actually very impressive. You can see this in many different ways. the the my my preferred way to look at this is the skew of the Bitcoin uh order book, right? So, if you look at the Bitcoin

spot markets, you can kind of build an order book and see where all those bids and asks are sitting. And whenever we cross under 60K, the way that the order book gets skewed to the buy side, meaning that there's a lot of buy inflow into the market is actually very impressive. So this all I think points to that range that we have been discussing since we started the episode. 60K on the lower bound and 80K on the upper bound. It still seems that the market is very comfortable defending those borders.

>> Yeah, I mean I agree with the the stretch take and I think you know look as you just mentioned they sold 200 and something million dollars worth of BTC. I think that's not you know not material but not immaterial and stretch rebounded. I mean master's gone up because BTC has gone up but I think this bigger cell and a positive reaction to the strategy sweet complex is maybe kind of shows that the first sell did inoculate the market and then now it the they're coming to terms with it. Um obviously I don't want to make this a stretch episode. sometimes you go off a lot on it and I just wanted to interject before before Michael gave his piece but um but yeah and then I'm I love the the tweets the tweeter the

tweets that you put out David I don't even know what they call on X anymore but um yeah talking about that same options complex uh around um BTC I think they're really interested and anybody listening should def definitely check that out um but yeah Michael what are your takes >> I have said on this podcast the last couple weeks that Michael Sailor needs to do a better job of communicating his strategy. Um, I think he's done a better job over the last week in doing that and I think you're seeing the market respond somewhat more favorably. I also was on record in saying that I don't think Micro Strategy has a significant capacity to sell Bitcoin. I think that was proven wrong this week by the $20 and something million sale. So um

Michael strategy uh Micro Strategy continues to uh make moves. Um I think Michael Sailor is the X factor. He is the most important person. Um obviously at Micro Strategy, but maybe even in Bitcoin World, he is the most important person and what he says the market listens to. So I'm I'm I'm happy to see that. Um I am I'm a little confused otherwise as to why the market is up right now. I would not have predicted that Salana would be up by 10 12% over the last week. Um, and I don't see anything fundamentally that has changed in DeFi world or Salana world over over that time. Um, so I'm wondering, is this

just uh a bounce um from the $60,000 uh limit that we have been looking at and what David's talking about with respect to Bitcoin or is this something broader in the macro picture that I can't see? >> So, so I I think I will address that first. I'm just going to pull up on the screen, you know, just to touch on your point about transparency, about sailor, you know, being open to the market about what their plan is. And I actually think probably that's the biggest reason, Michael, more so than what exactly he did. He just put a little bit more clarity around it and and investors and and market participants can digest that and understand it a little bit more. He he actually gave himself, you know, in a

sense, he gave himself more power. or you know there was the BTC monetization or these fancy words saying he just wants to be able to sell more BTC, he wants to be able to repurchase MSDR. So he actually in a sense in one sense put more le levers in his toolkit. So in a sense more uncertainty but at least now the market kind of understands that toolkit a little bit better. So I think I think that's probably um the most important factor. And then on on the Solana side, what what I've been seeing um you know is a couple is is one thing in particular and if you chart out the price I wish I had this chart. It's it's on it's on the block works on my personal home dashboard. But if you

chart out the price of ETH, soul arbitron, a lot of these other tokens against DEX volumes, there's a very tight a very tight correlation and DEX volumes on Solana have actually been increasing in recent weeks and the two biggest reasons behind that are one real world assets. So real world assets on Solana are I think that you know they're at record highs. Um and then the second is obviously uh well not obviously but the second is meme coins or I actually do have a I have a chart of >> of Solana's tokenized asset volume here.

So we can see in June it was just >> a month like no other. I mean, I think a lot of this was thanks to, you know, Backpack and the SpaceX IPO and and Micron, a lot of these other AI stocks and space stocks that are in right now. And so, DEX volumes on Salana have increased. Not only that, but total weekly transactions hit all-time high non- voting transactions. And the the last thing is that active addresses have also started to skyrocket. It it it's actually skyrocket skyrocketing a bit too much. I think it might be bots, but you know, a couple of my colleagues don't like active addresses because it's not equivalent to users, but I think

because they say, "Oh, it could be bots." And I think that's a bit botist because bots pay the same transaction fees that regular humans do. So, I don't care who's using your chains if it's bots or humans. It's it it it equals to revenue on on the chain. or review on the chain the same way. So I think those are some many factors that maybe why Solana has not like massively outperformed but has had a better time with it in recent weeks. So, I will say the one the one change that I've seen over the last week on Salana, and I typically wouldn't mention this on this pod, but um I think it is relevant is the a massive memecoin has launched on Salana called Blackbull um by Anom, who

is one of the most uh important uh I would call him a uh he's very he's very highly regarded in the space in Salon. a very uh heavily followed. Um and he launched a memecoin that has just taken off. Um uh Black Bull I think is is is gotten the attention of a lot of people which I think is very interesting. And um I think that has uh accounted for a significant amount of volume uptake. I mean we've seen in the past guys that meme coins can impact price and can impact fundamentals. Look no further than the Trump memecoin launch, right? Obviously that was a

little bit different circumstances but um you are seeing a healthy amount of retail activity picking up on your on your comment about bots Mark um I think it depends on what you count uh active addresses for um if you are counting active addresses as a proxy for organic growth um then um you're going to have to figure out a way to limit uh syibles what we call syibbles or different uh addresses uh that are run by the same shop. Um if you're counting it solely as a proxy for activity just in and of itself, then I definitely think that addresses matter. Of course, um you can

have a situation where you have the same number of users on the chain and they just spin up, you know, hundreds of different addresses in order to engage in trading. And yes, they are paying fees. That's true. But if it was just one address, it would be paying and with the same number of transactions, it would also be paying the same amount of fees, right? So, um it's really a style of trading rather than um an actual uh uptick in potential activity. Um I can explain a little bit more about why you see bots um sibling a lot. So, it's actually there's actually an interesting uh reason for this. on Salana right now.

You have far more uh of an ability to limit um as a market maker to limit who you actually sell or who you buy from. Okay. When you are making markets on Salana, you can programmatically limit certain addresses based on the relative toxicity that you believe um the counterparty uh has. And in order to avoid that, bots will syble addresses in order to get around that. Right? So, um that is one reason for sibling. You see it in Tradfi, even though it's definitely illegal in equities. Um but you've seen it in the past. Um and um I think it's something that the market

definitely needs to figure out how to monitor for sure. But um right now that could be a cause for some of the increase in active addresses. Interesting. But it does feel like it doesn't matter how you count it, there is more network activity in Solana. Yes. And that's very interesting. I wasn't paying too much attention to this. It feels like Solana is probably dominating decentralized spot trading. Yes. >> While places like Hyperlid are more are stronger on the decentralized BBS trading venue. very interesting to see uh this kind of a little bit of a difference between the two main onchain trading venues today >> and I think that that cannot be a

sustainable long-term uh dynamic meaning I think that one h either Salana and Hyperlid have to dominate both or a third party's going to come around that will uh dominate both meaning spot markets I it it I mean David you you tell me but I historically, right? You don't want a spot market to be siloed off from a per or a futures market, right? It would be better if both were done on the same market. >> Uh, that's an interesting question. Um, you mean I guess if you have both the spot and the pers market in the same venue? Um yeah I wonder if this has

something to tell about the or because the one important thing about the per is what is the underlying index right that is tracking right and you want an index an underlying index that it's not easy to manipulate right uh most of these per exchanges will use some sort of a blend across exchanges and things like that that you cannot easily move the price >> um yeah I wonder if having both under the same roof could maybe make a little bit of a difference here, but yeah, it's a good question. I got to think about it a little more.

>> Well, well, my contention has been for the last year that Salana has to build out a competitor to Hyperlid. Um, >> it it it is it is a imperative that Salana builds out a competitor to Hyperlid. Um, it is been a big challenge for Salana historically. Um now there are three uh potential options today. There is obviously drift that had a terrible attack and is sort of not being taken um is not is not driving volume today. Um they have to figure out what to do there. There's Pacifica which is the leader right now on Salana in terms of volume for pers. And then there is

the new entrant which is Phoenix which um had a a very interesting implementation of a spot club for years um and is done by the Ellipsus Labs guys. Um and Phoenix is an interesting opportunity for Salana to start generating real volume for per um I do think that for vaults and for RWAs to really take off on Salana you need to have some sort of futures as well. Um I think that a integrated vault RWA and basis trade all composable all on chain will be a very powerful very powerful uh combination. That makes sense. That

makes sense. And I wouldn't even ignore the new entrance, right? Just I mean recently we saw Robin Hood come with the Robin Hood chain. So they are bringing a bunch of partners as well. So folks like Unis swap on the spot side and lighter which is kind of a smaller and newer hyperlquid competitor on the per side. Uh these guys obviously have massive distribution. So there's yeah there's it's a very interesting space. We'll see uh how it going forward. >> Actually that's a great point I wanted to raise David. Um, and I think it's very germanine to this pod, which is I wanted to ask the the pod, do you think that the di the dynamics have been set for pers or do you think they're going

to change marketkedly in terms of who is leading? Meaning, is is today even in this late hour, one could argue, um, is today is it still is there still a lot of room for new per markets? Um what we saw in the beginning of June was Kalshi launched the first US regulated per market and within the first couple weeks it had something like 5.5 billion dollars of volume which is quite impressive for the start of a per market. Per usually take a while to start building u to start generating volume. Um the KHI solution I think was quite novel um in how they were able to get regulatory clearance at the CFTC. I think they did a phenomenal job there.

Um, my contention is, and I'd love to know your guys' thoughts, is that this per market is far from being settled. I think there's a lot of room for new entrance. I think Robin Hood's going to make a run at it. Coinbase is obviously going to make a run at it, but I think that there's even new actors that have not yet popped up. And I think that ultimately pers are going to be a positive sum market. Meaning, I don't think with the more uh with more new venues, you're going to have uh you're going to have uh a a winner take all uh scenario. You're instead going to have um I think a larger overall market that is going to be more liquid overall.

>> So, yeah, I want I let me you you said a lot and a lot of good points and I want to like touch on some of them and just to clarify. Um, so I mean the an the memecoin activity is definitely helping Salan up right now. Um, an Simscoin I think it it became popular. Not it wasn't him who launched it. It was some anonymous anonymous somebody on on pump.f fun who launched it and then donated I think I could be wrong here but 65% of the supply to Ansom and then he's effectively taking control of it now and is giving it away and you know Ansom is doing Ansom things. And then and then if we just look at you know before we talked about like volume spotex volumes and stuff and then so this is I'm I'm showing here what the

spot landscape looks like and Solana is the leader but it's not like the dominant leader. Um Ethereum is in second place. Uh base is actually picked up a lot of of of market share over the past year. And then to kind of put some clarity or some numbers behind the question you asked about this per space. Um this is what the per onchain market looks like now in terms of market share and the orange is trade XYZ. So let's just count that as hyperlquid too honestly.

>> So that's like over 60% market share for hyperlquid and then we have like the the tail end and of all of these other products and all of these I mean these are AA's new variationals new lighters new. So this is still a very early market and what what I like about the Robin Hood chain is that I do strongly think that distribution is what matters and I have been a believer in the D5 mullet. And so here I want to show Hyperlquid is actually losing market share in the ROWA per space to Binance. Binance is is is taking is taking a lot of market share from Hyperlquid. Hyperlquid's volume

like notional volumes have been you know just shy of hundred billion dollars in the per space. Obviously this is trade XYZ I'm you know being I'm generalizing here um for the past few months and so and I and I don't think that Hyperlid losing market share is a bad thing. This kind of reminds me of >> Yeah. >> Sorry I don't understand this chart. You're saying in January Hyperlid had none of the Oh, the RWA per market. Okay. So, it had none of it because I guess Trade XYZ hadn't been out yet. >> Yeah, exactly. It wasn't. Yeah.

>> Okay. Got it. Um, >> interesting. >> It's important to keep in mind that this is a market share shrinkage amid an expanding market, right? Yes. Doesn't mean that Hyperliquid is seeing a decrease in the OI or trading volume numbers. It just means that other folks are growing more. And honestly, I don't think that should be very surprising, right? Because Binance has this massive user base, uh, very simple to use, right? You don't need to be onchain native. You don't need to set up a wallet in order to trade, uh, per on Binance. So, um, I think that's that's a very interesting trend and and I guess

you wanted to make a point, Mark, on uh, the Robin Hood chain. I want to I want to hear that one. >> Oh, so yeah. So, I mean, I want to highlight the the Binance because it Binance has most of of of the market share in the ROWA per space. And so, it's really about the distribution. They have 100 over 100 million users. And then Robin Hood has something like 27 million users, I think. Um, and so they're they're going to get that distribution. And so, I mean, obviously, Lighter I think I don't I think they're using lighter as the back end and they're they're spinning up their own instance on this arbitum chain. So I don't know how much it actually helps lighter the token. Um you know this is a growth strategy I assume maybe a

marketing strategy. I I don't and and Robin Hood is going to take their own fee. So it's not and it's going to be two separate markets because it's in its own instance. So it doesn't even help them necessarily from a liquidity point of view but I and but I do think the protocols that have these front ends like look at aerodyome and how much is benefited from Coinbase or more for how much has benefited from Coinbase i.e. eBay. I think these front ends are really what's going to be the biggest distribution and and even in this chart here showing that OKX, another centralized exchange with massive distribution, is also becoming a serious contender in the RWA per space. So, u you know, and this is why we're probably going to see more deals like these in the future if I had to guess.

>> Well, it's not surprising to me that Binance would uh have a majority of market share. They've been king of pers since inception of pers really. Uh Binance is the most uh uh the most traded venue in the world to this day. Um they have the most volume on pers um and they make every other venue look tiny by comparison. Um and it's always been that way. So it's not surprising to me that they would dominate RWA. I think what's interesting though is that um despite Binance's dominance, you have seen Hyperlid take a significant amount of market share away. Now, one could argue that they haven't taken market share away from Binance. They are just appealing to different users, namely those that don't want to KYC, but it's

not just that, I think, because it is significantly more difficult for a US user to trade on Binance than it is to trade on Hyperlid. I think this is a story that needs to be talked about more. It is fairly trivial to set up a VPN and trade on on Hyperlid. Um it is not sufficient to simply set up a VPN to be able to trade on Binance, right? You need to have a offshore entity. You need to be uh sufficient. You need to have no US nexus, no US ties. So, um I do think that Hyperliquid is filling that niche.

And the question is, is it filling that niche solely because of the AML KYC constraints or is it doing something else? I the bull case is that it's doing something in addition to it. Namely, it is uh generating new type of users because it has new types of trading products and a better experience. Um that's the bullcase. Um and so uh I think that there is a new paradigm that's forming. Um, in terms of your point about uh, Robin Hood chain, um, Robin Hood chain is going to take a play out of the Koshi playbook, which is that you can set up a regulated US front end, um, and plug it into a decentralized

backend. Um, and you're going to be able to, and that's what is happening right now with Robin and Chain and and Lighter. Um, I think this marginally um, helps the Lighter token. I would say um it depends of course on the fee split between lighter and Robin Hood and the economics there which I'm not privy to but um you can imagine that there's going to be more fees that are going to be generated for lighter by giving them direct access to US markets and those fees will likely go to buying back the lighter token.

>> Yeah, I I I want to double click on the point you mentioned Mark. I think these partnerships between token projects and big distribution brand names uh I think those are going to become more common and are going to be one big venue of growth. Lighter I I think of lighter as hyperlquid's kind of younger brother uh m much smaller than hyperlquid of course. So I think that's a way for them to speedrun and try to latch on to a user base that is uh obviously much bigger not only in terms of number of investors but also on the disposable income that those investors have right so the average I I I don't I haven't seen the numbers but uh I would guess

that the average uh asset on platform that the uh the the average hyperlquid investor has can be uh much bigger than in some of those crypto exchanges. Uh so yeah, I do think this is a trend that's going to remain. Uh I I actually think this is quite positive for lighter. Uh because I think now uh you can see a way or you can draw a path for them to develop into a major venue that can potentially even one day start to get into spinning distance from Hyperlid. Uh we're seeing other tokens doing uh platform deals like that, right? One team that I'm particularly a big fan of and and one project that I would

definitely not sleep on is Athena. So Athena is also included in the Robin Hood partnership. But perhaps even more notable um Athena was announced as I think the third crypto asset that was integrated into Black Rockck's Aladdin platform. So that was I think uh Bitcoin is one. I think the other might be ETH and then USDE which is Athena's yieldbearing synthetic dollar. It's kind of complicated structure product kind of a tokenized basis trade type product that started to become integrated uh with BlackRock. So I mean these are these are big deal partnerships and I would expect to see more of those.

>> Yeah. Um I think you're 100% right David on Athena. um one of the best teams out there. Um one thing that I think is worth noting when you compare lighter to Hyperlid um is people forget about how long it took Hyperlid to reach real scale. Um for if you look at the first year of Hyperlid's volumes, it was it was it was slow and it was up into the up and to the right for sure, but it was not a massive success overnight. Okay. um it did not attract significant volume and liquidity overnight. It took time and if you actually plot out where lighter is right now relative to where Hyperlid was at

the same period of Hyperlid's uh uh growth um lighter is actually doing quite well. Um so there you have to uh you have to totally contextualize it I think and by that by that same token you could even argue that Pacifica on Salana is doing quite well relative to where Hyperlid was at the same time. So um I think these things take time attracting liquidity is a chicken or the egg problem because you need to attract market makers but market makers are not going to go to your platform if there's not sufficient retail uh volume. So you need to figure out a mechanism for bootstrapping that liquidity. Um the typical way that it's been done and you've seen it with hyperlquid was the

uh points program and an airdrop. Uh lighter did something similar. Um it's been a very successful model. Um and I I think that is one of the big questions about Robin Hood. Will they drop a token? Will there be a points program? Um it you know it's it's typically I've seen with centralized venues um and with um obviously with uh L2s where centralized venues have have built out their own L2 they've been reticent to drop a token um and as a result I think that's hurt their overall growth and their overall decentral decentralized narrative.

>> I I I really hope that Robin Hood does not drop a token for their chain. Um, I think sometimes it's just too many tokens for for actually no reason. In terms of points, I I the lighter deal. Lighter did agree to something like 11 million lit tokens. Um, and and I think that'll probably be in the Robin Hood facing platform. So maybe they'll get those as part of the rewards. But then I mean lighter I mean apart from the Robin Hood chain instance, lighter doesn't take fees from retail. Not like how >> true >> um Hyperlid does, you know, they get money from like the float or from order flow, different order flow, stuff like that, right? And you know and and and

honestly they kind of had to because how can you how how else are you going to compete against Hyperlid? You have you kind of have to enter this zero fee environment. And I mean it in in some instances, let me see if I can I'll pull this up here. It's kind of hurt Hyperlquid too in a sense. This is Hyperlquid's quarterly revenue, right? So, Hyperlquid has for for for three quarters in a row now seen declining revenue and but at an increasing price uh an increasing token price um and I don't I don't think that these things are necessarily contradictory while they are counterintuitive because the you know the the growth is there the TAM is growing regulation is growing and

hyperlquid is going into separate markets outside of just per you know it's becoming there's the prediction markets. There's the RWAS and there's other things that we've discussed on this pod. And so it's it's it's going for that neo bank play almost competing with Robin Hood in a sense. And and I think that you know you could justify the kind of valuations especially because you know you can look at it and say it's very expensive by a price to sales ratio but then you know most of their sales converts into net income and you say oh by net income it's slightly expensive but then in reality it's actually just pure cash flow. It's not an accounting trick. it's just USDC going into it. So the proper way in my opinion to measure it even though it's such an early stage uh protocol is from

a price to cash flow perspective given how given how positive the free cash flow is and so from that instance u I don't think it's I don't think this chart is alarming. I think I'll probably put a write a article on Twitter about it next week, but >> I'm not sure that chart I'm not sure that chart says what what you suggested at first, which is that lighter is taking market share away from Hyper. >> It was more like the competition that has arose has hurt hyperlid in a sense because and I was just showing their financials. Not it wasn't a lighter.

>> But you could but you could also explain that chart by 1010 happened in Q4, right, of of last year, right? and 1010 rocked hyper liquid as it did with the entire market and that's why they've gone down a little bit. Um I will >> revenues have gone down to to your point Michael to to your point >> their revenues have gone down since 1010 and you're exactly right but their revenue market share within the crypto space has gone up. So the this this stock was doing well when the crypto markets were booming and then when crypto was not doing well Hyperlid went from an offensive play to a defensive play. it it went from increasing volumes in a separate sector launching new products while the rest of the crypto market was going down which is another

reason why the premium is also should be justified. >> Right. Right. Right. Um I'm going to push back on one thing you said Mark which is that Robin Hood should not launch a token. Um I actually agree with that position for most questions about whether someone or some business should launch a token. Let me just start with that. For per Dex's um and for L2s I disagree. Um, I think there's a very real actual utility and value prop in launching a token. So if Robin Hood were to launch a token and they were to drop the uh the token to uh users of the chain and specifically users of the the per uh integration that they have with lighter um they would generate

significant volume now to stave off the phenomenon that you see in which you get short-term volume followed by a massive drop off when the points program ends or the airdrop happens. um you need to make sure that uh one the tokconomics make sense right um nobody's going to want to hold onto a token long term if the tokconomics don't make sense and two that the airdrop was successful such that you now have created tens of thousands of bag holders of your chain who are now your greatest advocates for your chain this is what happened with hyperlquid everyone asked themselves you you made a great point earlier Mark Mark it is very distribution is extreme

extremely important, right? It is a critical factor. But Hyperlid had no real distribution. What they had was they distributed a massively profitable token to their users and th tens of thousands of users became acolytes of Hyperlid and they carried the distribution narrative and they carried water for Hyperlid that continues to this day. And so um rather than just be seen as a venue that you trade on, you are seen as an investment that many people have made and they're just like bit early Bitcoin holders are the most diehard Bitcoin people because they have

big bags of Bitcoin. So too are early hyperlquid adopters. >> I don't know, man. I'm I'm torn on this one. um especially because Robin Hood is already a listed company. So there is already a Robin Hood equity option that folks can can go after. >> To me, it's kind of a similar case as B from from Coinbase. If unless I'm mistaken, B doesn't have a token, right? And I remember that at least early on the value proposition was hey the value of this base network is this distribution that you can access uh uh related to Coinbase. So they if this distribution is actually valuable,

I don't think they should need a token. And and and the fact that they I mean I if they were to introduce a token in order to me it would be a little bit like masking the the actual value proposition that that they should have. I don't know. I think these guys already have a large enough uh customer base and that the distribution is already there. So if on top of everything that these networks are already providing and by these networks I mean the Robin Hood chain or even B uh from Coinbase uh also within the same context here if you have to add on top of that a points program I would see that as a a little bit of a yellow flag. Uh but yeah and I don't know I I I'm also becoming a little bit

of a maximalist on the token versus equity split here. I think you you need to go either and and I know this is a theme for a whole new and different episode. I don't want to start this conversation here. Uh but I'm becoming more and more an advocate that you either do token or equity having both like trading side by side. I think I think it's complicated and probably over overly complicated. Uh so yeah, I think on this one I'll I'll side with Mark a little bit. I I would not like to see a Robin Hood. So just just to take a different perspective on it though uh and I listen I know and understand the arguments against it um and those are good arguments. I think that um the

reason why it would be interesting for Robin Hood and even for Coinbase with base is right now the securities laws are limited in being able to airdrop your own public equity to users or customers of your products. Right? Imagine if for the last 20 years I every time I bought an Apple product I got a little bit of Apple stock, right? You can't do that. But you can do it in crypto. And in fact, that is like a pretty general theme in crypto is that the users of those protocols oftentimes become the owners of the protocols because they are able to uh benefit from points programs. I do think that um Apple would be better off if Apple users owned Apple rather than just simply not

owning Apple. Um and same with Robin Hood. Um you Robin Hood chain users are not going to necessarily get air dropped Robin Hood. Well, they're definitely not going to get airdrop stock, but um if they got air dropped Robin Hood token, I think it's just a great way of generating distribution and uh very loyal users. Oh, here I agree with you and and and make no mistake, I'm very bullish on the token form factor, especially long term, right? Especially once we have clear regulatory kind of guard rails on on how these things can and should interact, how regulated issuance uh of tokens could be executed in the US. I I 100% agree with

you. I think there is a a version of the future in which tokens are very key and and I actually think maybe Mark can talk about this more than more than us because I feel like Blockworks is building for that future, right? A lot of the initiatives uh with uh Blockworks research and the Blockworks investor relation initiatives, a lot of those are related to token as a form factor taking off. I just think we're it's a little bit too early. Yeah, I mean I agree I agree with both of your points. Um I the distribution stuff I don't think makes sense now to launch a token and I'm glad Coinbase hasn't done it either. And then there's there's this dichotomy between these are

publicly traded companies. They have a duty to shareholders and if why would they then leak some of that value to token holders? I don't think that's in the best interest of shareholders. And then we get into this weird like legal legal dichotomy here. And again, they're public companies. You can target them, right? And so, but I I do want to carpet what I've been saying with I I hope Robin Hood doesn't drop a token anytime soon. I think further out into the future might be in a more appropriate time. I'm glad Coinbase has held off for so long. Um, and but for right now, I mean, I've been saying this for years to be honest, but I I'm I'm tokened out right now. Um I mean a lot of the other if you look at the other comparisons um OKX

um Crypto.com like a lot of these these BNB right but I mean BNB has its own like ecosystem and stuff too and yeah so >> OKX had a token right for a while or at least they did. >> Yeah yeah yeah I'm calling the ones with tokens. Yeah, exactly. >> Okay. Yeah. Okay. >> Um, yeah. So, and I mean the tokens performance haven't done well and then Crypto.com had this whole thing where they burned two billion dollars year I mean two billion worth of tokens years ago and then they reminted them because they ran out and you just use them for staking and and these aren't publicly traded companies. So, I mean they're they can do whatever they want with this. And then another argument for it would be if the public company wanted to decentralize the chain that they launch and even that I don't necessarily agree

with. At least not now. I want to caveat everything I'm saying with not now, not next year, not not next three years. Yeah. >> Well, well, BNB has been one of the most successful token projects. I mean, it's top five token, right? Um >> um uh here >> by the way, one of the few deflationary tokens in the ecosystem. Yeah, very good toomics. They they pioneered good tokconomics. I would say I'm not sure if too many >> and I think and I think it's slept on a lot by US markets to be honest. I don't think we talk nearly enough about B&B.

Um that said, um I I have a question for you, Mark. Why should I use Robin Hood uh chain when I let's say I'm a Hyperlid user? I've got some nice Hyperlid bags that were air dropped to me for free. Why should I use Robin Hood chain when Hyperliquid has made me rich, right? Why should I use um any other chain uh any other per product except for the one that has done good by me, right? Um my use of Robin Hood chain um is going to be monetized upwards to shareholders of which I am not one. Now I could become one. Sure. But um the fact is is that

most retail users of Robin Hood um they should benefit in the equity or in some sort of price appreciation of the asset that they're using. >> Um why should you use Robin Hood chain? You probably shouldn't. You're not necessarily the customer. I don't think they're looking to tap into necessarily the hyperlink customers there. Why should you use Robin Hood chain? The answer is you're using it through their Robin Hood wallet. you can get 7% yield on your stable coins uh insured by Lloyd's Bank. Um you you can get access to per and and you you tell your friends, oh look, I I'm I'm who who are not using Coinbase, who are not onchain, who are who are not that techsavvy, and you say, oh, look, I'm earning 7%. Oh,

look, this is where I get access to my to my stock, or this is how I make my leverage bet. I think that's the market that Robin Hood is going after right now. So you're you're saying that their play is to convert new users, namely Robin Hood users who are not necessarily cryptonative users. >> Yes. Yes. And and and further entrench their existing user base into the ecosystem. >> And and and to to this point, I mean, we have this massive battle of titans being drawn out, right? Coinbase on one side and Robin Hood on the other side. Those two platforms are more and more looking like each other. Uh, I think actually the main loser here are the financial platforms that are not seeing this change and are not catching up with what

Robin Hood and Coinbase are doing. That's that's where I would be most bearish because absolutely I agree that the cryptonative crowd that they're they're on hyperlquid and they'll probably remain on hyperlquid. But if you are a Coinbase customer or if you're a Robin Hood customer and if you want to for example want to start trading BS, I just think that the path here is so much easier. And one thing that I've learned in crypto is that you should never underestimate the benefit of convenience. We saw that with the ETFs. We saw this with a bunch of these more Trafy type products linked to crypto getting launched. And the benefits of convenience for the broader audience, not for the cryptonative audience, but for the broader public, I think they're

they're very significant. >> How cool would it be? And this is going to be a totally outside of the box uh concept. Um but how cool would it be if Robin Hood tokenized their securities and air dropped them to users um that use Robin Hood chain? Now this is this would be uh redounding to the benefit of the stockholders I think in that you're not actually creating new uh equity. You're just simply repurposing the existing equity. um and um also could be used as a form of a currency for the Robin Hood chain. I don't know. I think that there's there's some interesting uh there there's something interesting there. Ignoring all the security laws

for a second and and what what issues would have >> No, I agree. And and I hope our securities laws will allow us to do something like that in the future. Of course, we're a long way off, but but again, I'm very very bullish on the token form factor. I do think that we're going to see a lot more things than what you just said in the next few years. We just need the right regulatory environment. We just need the onchain infrastructure to be more in place perhaps. But I think that's that's the path Mike. >> Yeah. [snorts] >> Yeah. So, so we we we've talked about Bitcoin Solana hype and and and everything that they're doing. Let let's let's end it on Ethereum because Ethereum's also had a semi-positive week. It's also had some big changes.

Um, mainly being that the Ethereum Foundation is stepping back. They've been, you know, telling the market about this change for some months now, maybe since the end of last year. They've they're planning to reduce their workforce by 20%, cut their budget by 40%. Um, and in the in the wake of this retreat, and I I don't know if there's a better word, but I'm calling it a retreat from the Ethereum Foundation, there are other entities that have spun up now. Um, you know, there's been Etherealized before and the Ethereum Community Foundation before, but I'm talking primarily about ETH Labs and Ethereum institutional and ETHLabs is and what both of these entities are.

What's interesting is that both of these entities are going to be funded by the largest treasury that goes um, Bitmine and Sharink. And I think that's one a sustainable form [snorts] of of of re of like income for these nonprofits. And two, I think despite what I'm probably reading on Twitter, I do think that the incentives are aligned there. These are some of the largest holders of ETH. And I think that while the Ethereum Foundation has done well for the Ethereum protocol, I don't think the Ethereum protocol can do well without ETH doing well. And I think there probably needs to be more focus on one ETH the asset and two inst institutional

adoption of ETH and Ethereum. And so um I mean now uh 10 years into Ethereum's uh history or just life we have five different I don't know what to call them entities foundations. Um and I it kind of shows the nature of how decentralized Ethereum or how large or maybe how embedded Ethereum is becoming in in the crypto space. Um let me ask let me ask you all let me start with you David. Do you think that do you think this pullback from the EF and then this these new entities do you think this is a bullish uh outcome?

>> Yeah great question. I think this is a major theme. We should probably bring someone from one of the large Ethereum DATs to talk about this in depth. U but yeah, no, I think this is long-term bullish. It has been a long time coming. For those who have been in the space for just a little longer, you probably remember uh I think that was early 2025, probably September 2025 when there was a big shakeup on the Ethereum Foundation because at the time there was this a lot of complaint coming from the community. At the time, Ethereum was underperforming Bitcoin massively. It kind of still is, but uh at the time, uh we started to see the ETH BTC ratio going to like multi-year lows. And there

was this impression that the Ethereum Foundation was not listening to their users, right? Which are basically the developers or the folks who are uh using the network. So then in early 2025, there was this big move by the Ethereum Foundation. uh they brought in two two new folks Tomas and Shiae. Uh those are folks who had a very like engineering mindset and the whole perception of the community was that okay awesome now the Ethereum Foundation will start listening to us and will start caring maybe a little less about those fiveyear road maps these super theoretical and long um uh uh technical road maps that the

Ethereum Foundation was focused on. It didn't take too long. It took maybe about a year for a lot of that to unwind. Uh and this is all to say that this has been a very painful and and long transition. But I think we're getting into a good place. So the place where we are now is one in which the Ethereum foundation is focused on the core properties of the protocol. Right? So uh Vitalik named them as crops which is uh censorship resistance uh openness uh privacy and security. I think that's these these are the four main factors that the Ethereum protocol should worry about and that's where the Ethereum

Foundation focus should be. So that's what the shrinkage at the Ethereum Foundation level is about. At the same time, you have all these other uh new entities that are springing up and they're much better positioned to talk to the black rocks of the world or to the big financial institutions of the world and showcase why Ethereum and and why they should be engaging with the network. So, I'm very bullish about the concept. I do think it took a little long or or or took us a very long time to get here. It was a multi-year process, but I'm happy with with the end result. Um, I don't think the market is going to reward ETH the token uh as

quickly because we have been seeing these backs and forths and these changes in structure many times. uh when that early 2025 changing structure happened uh there was a a little bit of a flurry and excitement with the ETH token that didn't eventually did not pan out. So uh it's been uh kind of a lot of backs and forths here. So I think the market is not going to pay ahead. Uh it will wait and see what the results are. But I do like the structure especially for a project that is as decentralized as Ethereum is. uh this idea of a small but very focused kernel on the neutrality and the more core technical aspects with

these other guys who are very well backed by the way here we're talking about the likes of uh Joe Lubing and then the uh uh aspat and bit mine I mean these are these are large folks with with deep pocket so I I I like the setup what what do you guys think [snorts] >> um I think there is a debate right now uh with respect to L1's about the role of their foundations or their labs and you have two models right now. You have the hyperlquid model in which the hyperlquid labs team is effectively controlling the entire chain for the most part. Um that has become somewhat decentralized a little bit with HIPP3

and of course with the success of Trade XYZ but they are still very much in the driver's seat and they are treating Hyperlquid very much like a business. um and they're able to scale quickly and they are able to um to innovate quickly and solve problems quickly. Um but they have all the responsibility. Um on the other hand, you have um you have uh paradigms like Salana Foundation and you have Ethereum Foundation which um by all intents and purposes uh these are more these are overseen more mature ecosystems now. They've been around for longer. Ethereum has certainly been around for longer. And the question is,

do they actually start to mirror themselves more like Hyperlid or do they go in the opposite direction and really just focus on the core development work of the chain and to make sure that the chain is censorship resistance and uh neutral. Um you have heard a big debate on Salana about whether Salana should look more like Hyperlid or a little bit more like the Ethereum Foundation. um on the the pros of what the hyperlquid model generates is that they can start to actually have the people in charge of the protocol or stewards of the protocol start to do things that are directly appreciative of the token and directly um accreative to the token um instead of

having to rely on third parties to do things that indirectly benefit the token. On the other hand, what you see is push back from uh foundations and labs um for getting a more business focused approach with respect to the chain because they can be seen as crowding out existing businesses that exist on the chain. For example, the more that Salana Foundation actually ships protocols or ships different uh markets um or gets involved with RP the RPC business or gets involved with per markets, the more existing perp and RPC and protocols are going to see that the government of the chain so to speak is interfering with their business and

they're now having to have unfair competition. So to the extent that th that position is is real and fair, Ethereum Foundation sort of saying we're just going to focus on core dev work and let others handle business. Um I think could be very positive, but we have to wait and see. >> Yeah, 100%. I think I think Solana somehow is maybe in the middle of of of the two of them. And you know, Solana is still thinking about they're still thinking about the token. They've had this recent proposals with SIMD 547 with increasing the burn and reducing the inflation over time. I think those topics have become taboo almost with in the original Ethereum foundation and and

what I like about ETH labs is that it's unlike Etherealize and you know to their credit they're trying to get institutional adoption. What I like about Ethab is that it has ex Ethereum Foundation members. So it has people with the technical capability in order to make proposals and get that facet of the community that I feel like have been underheard and I'm part of it that there needs to be more focus on the asset itself and the and the adoption by institutions. So I overall I do I do like this this move from from the Datos from ETH labs from Ethereum institutional. I don't think that's why ETH has performed well in the past week.

I think it has just performed well because honestly since since the start of this year it's just had a correl a higher correlation to Bitcoin. It it basically is has is higher beta Bitcoin or maybe even one beta like 1.0 beta to Bitcoin right now. And that's kind of telling it's kind of telling that Ethereum's lost its own narrative. It's just trading like a major crypto asset. and and I think that these new institutions and this new push and maybe determination can help get Ethereum back on track um to where it was like in the pre in the previous cycle. So yeah, overall I'm optimistic about it, but I like David said, I don't expect to see any serious outcomes from this for for

for some time. And I do think that we should probably have them on the pod and like dig a lot deeper into what what their plans are and and what their goals and how like tangibly they're they're aiming to achieve them. U we're coming up on time here, so any last thoughts um from either of you guys? >> That's all from me. I think we covered a lot of ground. I'm still interested in hearing what you think will be the score on England versus Norway. Uh I want to highlight that I called correctly Brazil versus Scotland and Brazil versus Japan. We were off air. Uh we skipped the Norway game, but my track record on that is very good. I want to see you now, Mark.

>> Yeah, you you you should have been placing some bets there as well, David. Um England, Norway, such a hard one with the Harland Xactor, but I'm I'm going to I'm going to go I think it's going to be a high-scoring game. I think England's defense is bad. They they cracked down in that 10 minutes in that 15 minutes with 10 men thanks to burn. Another good Thomas Tuch selection. I'm going to go for 3-2. England's favor. >> I think Norway is going to pull up the pull off the upset. Um and I think that because uh I just see them having all the momentum right now. They're obviously very well coached and I think Holland is uh gonna score a hat-tick.

That's my bet. [laughter] >> Good stuff. Okay, lovely. you're going to be front leader for the Golden Boot. Okay, so we'll see if our predictions come true in next week's episode. So, thanks for joining me, guys, and thank you everyone for listening. Um, tune in next week, guys. Enjoy the week. >> Thanks, guys. >> Week, folks.