Hivemind: Pump.Fun Sale, Prediction Markets & ETH Comeback?

Transcript

Yeah, this is probably the biggest news happening right now. Pump just like there are a lot of whispers about their ICO. They just came out with a tweet where they sort of confirm it. They confirmed the date. It's Saturday, July 12th. People are very split on this, right? There's some people on the timeline saying that that it's max extraction, max greed. Others are are pretty excited about it. Yeah. Where where's everyone landing on this? Nothing said on the hive mind is a recommendation to buy or sell securities or tokens. This podcast is strictly forformational purposes only and any views expressed by anyone on the show are solely our own opinions, not financial advice.

[Music] Hi everyone and welcome to another episode of the Hivemind podcast. The goal of the podcast is to provide an inside look into what we like to call the deli hive mind. Bringing together some of our brightest minds from each of the divisions to share insights, alpha and ship posts. Today with us we have the usual crew set from our institutional research arm. Yan who managing partner deli ventures and a ventures associate actually venture partner Duncan um also known as flood capital. And I'm Jose. I lead Deli Labs, our protocol R&D arm focused on incubating and accelerating new web3

primitives. So been an interesting two weeks. Uh as always, we want to probably start with markets and then I think we want to chat about the pump fund launch which has just been announced probably like an hour before we recorded this. Um and then maybe end with some prediction markets and some other stuff. So markets, what are we how how's everyone feeling? Maybe Yan, you want to kick us off? Yeah. Um, so it's been kind of a Bitcoin strength, alts, choppy, but but generally not not doing too hot. Uh, you have like

these select all moves. I think it's just become increasingly hard to to be a a longer term holder in a lot of these and and that unfortunately is a self-reinforcing situation. So, right now, we've seen Bitcoin just continuously retest all-time highs. Um, equities are are at all-time highs. Uh, but Bitcoin seems to to be stuck. I know, you know, leading up to um beginning of July 4th, there was that big options expiry and and that thought, you know, there was thoughts around that being kind of what was generating a lot of the uh artificial supply. So

basically people were selling calls, which means market makers need to sell Bitcoin to hedge. And so, um, there was a, you know, a chance for there to be a squeeze as those options expired and and market makers needed to close their hedge and and we did see a pretty strong pump, but um, you know, proved to kind of come back down again. I I'm still in the camp that we're we're going to see all-time highs soon because it doesn't seem like there's a slowdown in these treasury companies and and as more come up and and they bid uh I think it helps the environment for all of them. So I'm I'm still in the camp that we see

alltime highs soon. Um Sailor's been deploying. He's doing another uh at the like a big at the money raise for I think four billion. he announced on the on one of the the the preps in the stack, the STRDS, which were trading well after the issuance. So, it made sense to kind of tap into the demand there. Um, I think there's going to be we haven't seen a a big one uh pop up in the London market and and so I I think that's probably going to be a big source of of demand for BTC. We did see that big wallet move, right? That was the the scary thing over the past week where um basically 80,000 BTC moved and you know

speculations obviously in like 14 years, right? Like that's Yeah, it was like it was five figures uh to to to nearly like 10 billion dollars. Um and everyone's trying to speculate what it was or who who it was. Obviously, uh Ross Albbright was was his name was thrown around just based on the timing of things, but um haven't really seen any movement happen there. Um and then like yeah, just reading people talk about the the wallet that it was stored in and and just the insane fact that it was all it's all been sitting there from from day one. And obviously had the jokes around no test transaction, but apparently there was one on on BCH. So, I think that that was kind of the

Well, I also think people don't understand how Bitcoin's model works. Like, when you send from a UTXO, it empties all the coins. Like, it has to, right? So, I saw people like, you moved all 10,000 in one transaction. It's like, well, yeah, because like that's how it works. Moves them all. Um wait on the treasury companies how much of these like new ones that are popping up are like you think in kind contributions like you know they're doing a BTC treasury company people just like contribute in kind BTC versus like new money or do you think like is that where the buying's occurring or the buying is more occurring on like you know when they they issue equity at at a premium?

I think only the caner one or I don't I don't know if I I don't think I think that was the only one I saw that was in kind. the rest seem to be fresh capital from either debt investors or um or equity guys. And so I think one interesting kind of uh element is is thinking about you know the the size of these de debt markets in different uh countries and so Japan has a very big one and I guess it's particularly relative to the equity side and so there's a lot of appetite there for um or a lot of capacity for for uh debt investors to to to participate in in the upside of of BTCV the equity markets.

And so I think you see a similar dynamic that can happen in London as well. Um and and so it yeah it seems like those are going to kind of continue. IBIT has been like the numbers that that the ETFs are putting up are are nuts and that's you know straight cash that's coming in as as those shares are created because people are buying uh I I bid and and the APS need to go out and buy the Bitcoin. So that's cash into into BTC. It seems kind of inevitable. Uh and then you have uh crypto week next week as as described by the US government, although I think that doesn't really materialize into much. There's like a few bills being

passed. Um I don't I don't know that we'll get any kind of surprises outside of that, but I mean really been talked about much. Yeah, all the Trady stuff has been doing well. like the the the treasury companies like ESB and some other ones all kind of dumped, you know, a after that these things get announced and then they trade at stupid multiples that aren't going to work and then I think Espit was trading at like 10x or something or close to it and then it dumped that big candle in like one day like 80% or whatever. But like it's been doing well over the past couple weeks and like ETH has been strong. Um the other ones that have dumped have like seem to have come back. The the ETH ETF

is like getting good amount of flows. Now this new soul ETF that launched is honestly been it's got like 40 mil in the first few days. And this is kind of like a small ETF with like not one of these big names with their big marketing. Like this isn't a Black Rockck Fidelity um Bitwise whoever ETF, right? Um, so you're seeing like, yeah, you're just seeing good demand on like the whole Trafi side. What um what do you guys The reason those things usually sell off like the the pump and sell off, those are all just very fake because none of the shares have been issued, right? So it's the same tiny pool of of capital or of shares being traded around on on the liquidity. And so eventually the way

basically the the best case scenario is it it it pumps it it dumps it settles somewhere above uh MNAV um or MNAV above one the shares unlock and then you kind of have this market clearing event where okay these are the investors the investors that wanted to sell are out and and and we can it sits at this premium and now we can kind of begin the flywheel of issuing warrants which you've had on on a bunch of these actually like you you've had what you just said play out on like I guess ESBAT I think that that we're investors in had a similar process. Most of these things are settling above MNAV. I agree this this this game isn't over. I'm I'm just I think that I think the ETH one is

around 2x now. Wow. Which is pretty high because it dumped down to like I think 1.3 to like 1.4 on that big dump. Uh just one um I haven't looked into these as deeply as I want to. It's actually on my on my list. Also to read the accumulators report that that Deli put out. I've heard really good things, but um what's the how do these get how does this stuff reverse and and this these things get sold? Like um I know most of these can't be forced to sell, right? Uh you need like shareholder takeover or something. Yeah, it very I mean some some have

collateralized by Bitcoin actually. So Micro Strategy could be forced to sell I think at some point they even said it like 21K they'd be forced to sell some Bitcoin or whatever. Um there's no like it's not uniform they all have different terms. Okay. Is it it'd be interesting to do an analysis on like how many are collateralized by Bitcoin versus the equity and but I guess even in a case where they're collateralized by the equity at some point if the company is can't pay its debts right they the the debt holders can appoint new management that will assuming these things are trading below NAV at some point which seems inevitable just given crypto cycles like at some point it feels like all this stuff will be trading below NAV

um and and it'll be like Even if they can't be made to sell, I feel like once some start selling, it could it could I don't know. It seems seems pretty apparent to me that every cycle we get the the like the places where leverage build up is also where the blow up happens. I'm just curious like how how bad Yeah. I think the danger here would just be if these were used as collateral for loans and then that's what would cause like a lot of bad stuff. A lot of the smaller guys can't really issue debt. They they've been issuing equity. So there's there's less of a blowup risk there. It's just this it's more potential forced selling of the native asset to buy equity at a discount if MNAV is below one then then like you have some of the debt

based ones uh but there zero interest converts with very long maturities. Yeah, I feel like there's still a long way to go before it gets what do you think there's going to be? But yeah, obviously this is kind of like for sure actually the grayscale the grayscale dynamics in a different way. But yeah, we're not nearly as far in into the trade. But yeah, but again it's because that was used as collateral throw that was the like real problem. Like GBTC trading at a discount on its own is not really an issue. It's the fact that you had like all these all these loans.

Well yeah. People would borrow against GBTC to buy Bitcoin to mint more GBTC. Yeah. It was like this isn't happening with these. It's like they're issuing equity. And sure, it can start trading at a pretty big discount, but what are you going to do? Like you have to do shareholder activism takeover. There's nothing. Yeah. I think some management teams will just be like forced. It will just do it. It varies by by by company. Like some have control and mandates that don't allow it. Some have the flexibility and it's part of the strategy where trading below MNAV of MNAB below one you sell the asset to buy back shares and some I mean but but in the worst case if your if your company can't pay its debts right you you do have to sell assets or the debt holders will take

over the company. Yeah. You sell assets to sell assets. So that's true. Um, it just seems like there's a lot of cuz a lot of this Bitcoin is is like these people don't actually want like Bitcoin exposure, right? Like that's that's kind of the the danger. They just think it's this is like torque on. They just think it's leverage on Bitcoin which like Micro Strategy so far has proved to be true. It's volatility. The whole Bitcoin per share thing is like that like they want they think this is a better way of owning Bitcoin essentially.

I think they 5x that since the beginning by the way since No, it is pretty crazy. It's it's wild. But just one. So if let's say like this thing was trading at NAV and you redeemed all the Bitcoin to the shareholders at some point like how many of those guys would want to hold the Bitcoin? That's I think I think it's literally just leverage on Bitcoin. Like it's just an easier way. I don't know if that's the right question though because if you think about like the the holder base of Micro Strategy now, these these are all people that are Bitcoin aligned for the most part. you know, you you filter it out of the people that are like skeptics. Same similar like where you have these tribal ownerships, you know, Tesla similar where a lot of these people are just like me Elon bulls and and everyone

who's bearish shorts and stuff and so um that that being said, Micro Strategy is case where they they I think he has controlling rights and and that won't really be that much of a concern. Yeah, I think it's the debt side that becomes more. He has some I think he has some loans that are collateralized by the Bitcoin Bitcoin itself though. Yeah, nothing matures until like 2030 I think. Super low information price. Um yeah. Although yeah, it's going up. Basically the reason they need Bitcoin to go up though is because um so you know part of the flywheel is the convertible debt funds, right? which they want the the volatility of the

underlying assets. So the more volatile that micro strategy is, the more attractive the convertible debt is to these uh convertible debt ARB funds. The the tricky part though is they they do get capped one on on on ownership percentages but the other on on uh like LTV of the entire business. So if they won't issue they won't buy more debt of Micro Strategy at a certain point if BTC price doesn't really go up because then LTVs are starting to become risky like these are very savvy investors and and um they understand kind of the the risks here to some extent and so or to to a great extent. So I think like you do need these other guys to come in, buy

it, raise Bitcoin price because then now the leverage on Micro Strategy is much smaller and they can get another tunch in. So like you really need these other guys to come in behind to help just break through this seemingly infinite amount of supply here. Yeah. What um what do you guys think about ETH? I've seen some bullish takes on like all these ETH treasury, you know, have ESBth and uh Tom Le's doing his ETH treasury company. Like do you think that like we could be a little bit back on on ETH? The chart looks pretty good.

I mean, ETH looks pretty good. I think that it seems like it'll hopefully keep trending well, but like I don't think ETH is going to go on some idiosyncratic thing where it's like just ETH and everything else does poorly like a Bitcoin type rally, right? Mhm. Yeah, for sure. Because like I think ETH going up is good for the rest of crypto whereas Bitcoin going up is not necessarily good. It's actually it seems like it's bad. Literally since like December or like even before that like we've been trashing ETH pretty hard for the past two.

I have not to be clear. I don't know. I still like it's just I mean like relative to like other stuff you could buy where it's like it's way too expensive. Like do you think that anything has like really changed or maybe it's just his like short-term flows could be pretty good? I think it's a momentum trade. Yeah. Yeah. Yeah. I don't know. I I feel the same way. I still think it's I still um Yeah. I feel the same way as when we last discussed it. I still hold my same same eat I had before. Um yeah. I don't know. the the some some part of me thinks it's kind of like binary where either ETH is like valuable as as an L1 and like the properties that

it has are are valuable uh and we shouldn't price it on cash flows or anything like that in that case. um and and the whole of crypto is is sort of valuable and justified. Or if if ETH's properties and don't matter, then it's like the most overvalued asset on Earth and the rest of the crypto industry is all comp to that. So, it's all overvalued too. The thing is though, Jose, is that you don't um need to hold ETH to get those values, though. That's the thing. Like, you can use Ethereum.

This is the 2018 uh like ETH shorts Tetris Capital, right? Like and and John Feffer and stuff argument on the on these things like you don't need ETH to go up for ETH to to Yeah, but that was after like a 90% draw down. Yeah. Well, it was after like I think they started posting it at like 500 bucks and the bottom was like 70 or something. the biggest I mean ETH was ETH has honestly been a victim of its own success like the NFT bubble really did kind of like distort expectations and stuff and I think that's just kind of the reality of it like I don't even know if Ethereum did anything super wrong to be honest

it's just expectations got so high I mean it never scaled well yeah I don't know for me my opinion hasn't really changed on I think Tom Lee is a spokesperson that they got and he's pushing this whole like if you're bullish on stable coins you got to be bullish on ETH like not really true but hey it's like a good pitch right if you can get people to like get on board this u I think he's a really I think Cyber Fund wrote a pretty good but it's but it's like I don't know I don't think ETH is going to like 10K or something yeah I think you you can get maybe a move to three and change I see it getting back I think it like if ETH goes back to 4K. I just think that's good for crypto in general.

Like I don't see a world where ETH gets bid and other assets don't. No, me neither because you're getting this non Bitcoin flows, this non- Bitcoin bid and and ETH holders are just more are more shitcoiners, right? I think like the stars are aligning for a for a move higher, right? where where sentiment is generally bearish, people are underexposed and then at the same time you have the stable coin narrative. You have Tom Lee coming in who's who's a great uh shill. You have these Treasury plays popping up which are actually, you know, you kind of need someone to kickstart the bid and and get momentum going. So the stars are aligning. Um, I but I just don't see there being

enough broad-based interest in the asset to carry it too far because it's so big. Like you you you you need everyone to think it's going a lot higher for this thing to to to double. Yeah. Like a lot higher. GCR 10K call still intact. Was there a date on that? No, he just said eventually. Yeah, Tom Lee's a great Yeah, Tom Lee is honestly a huge win for them. I'm looking at like some of his tweets right now saying some some bullish things and it helps that he's very bullish

Bitcoin, right? So, as that gets proven, right, then then people lend credence to his other ideas, crypto specifically. strategy now holds 600,000 BTC. It's so big it might have a sovereign put. I don't know what that means, but it sounds really bullish. He compares the BTC treasury valuation to model to Exxon's premium on oil on proven oil reserves. All right, keep bull posting. [Music] Do you guys want to talk to pump sale?

Yeah, let's do it. Um, so yeah, this is probably the biggest news happening right now. Pump just like there are a lot of whispers about their ICO. They just came out with a tweet where they sort of confirm it. They confirmed the date. It's Saturday, July 12th. Um, it looks like they're raising 1.3 billion, so 33% of the token supply will go out in this ICO. Um, and then 24% reserved for community and ecosystem initiatives, which I assume will be an airdrop. If not, the trenches will be in in in disbelief. At least part of it would would should be an airdrop, I guess. Um, yeah, 20% team, 2.4% ecosystem fund, 2% foundation, 30 13% existing investors, and then two and

a half for liquidity. Um, it says airdrop in the announcement. They are doing an airdrop. Oh, does it? Yeah. I didn't see that. It says air drop. Nice. Um, yeah, this is like people are very split on this, right? There's some people on the timeline saying that that it's max max extraction, max greed. Um, others are are pretty excited about it. Yeah. Where where is everyone landing on this? And maybe I can I can share my opinion last.

I think uh well, first of all, we got a report on this coming out tomorrow. So, if you're not a Deli member, yeah, sign up. Um, I think the original rumors were 25% in the race and now it's 33%. That seems kind of bullish to me. Like there must there's probably a ton of p and the private side is all sold out. So, out of the 33% it's 18% private, 15% public. So, the public ICO is like 600 mil. Um, I personally think that this thing is going to sell out really quick. I'm kind of rattled that I'm blocked from it to be honest. Um I think the the main risk here is just what we've seen over the last week with

this bonk launchpad. And I'm not really too worried about that. I think people are kind of overreacting to that a bit and maybe that'll keep the demand for this down a bit less than the public. But I think Pump has like much more broad ambitions than what like Bonk's Launchpad is trying to do. Like Pump is trying to go after streamers, going after like Web 2 general public.

It seems like Bonk Launchpad is just trying, it's just a bunch of people that don't like Pump. Um, and they're trying just to do the memecoin thing. I think it it it's really taken off because of this useless coin and this Bonk guy on Twitter who people follow who made a lot of money on Bonk. His name is literally Bonk Guy. Um, so yeah. Yeah. The initial raise was was they were trying to do 200 mil private, which is uh yeah, the 5% and then 800 mil uh via public.

So, I think the 200 mil I know filled up pretty quickly in June and then they've kind of rejiggered and I guess taken 200 mil out of the public down to 600 and then bumped up the private from added another 520 to the private um on top of the original 200. Right? So, you see you got the 18% and 15%. It's and then they've also Right. So the the all of the salana they've accumulated and sold that's still on their uh treasury like that that they they still have all that cash. So if you think about how much they how much money they have like it's it's

it's an obscene amount, right? they and and and it it like if you think that they're not g if you think they're going to fail, it's going to take a while for that to happen and a lot of money spent and marketing and growth and I think like you know there's a world where they could create something very compelling because they are really good at at growth as seen from from uh what they've done with pump uh very ambitious right their their tweet was we're going to take down Facebook, Twitch. Um, so they're basically going after the the streaming market and and thinking about how to capture the the the Zoomer attention. So, I think this is going to create a lot of buzz and and should

hopefully, you know, I think there's a world where it can actually bring decent amount of capital back into the crypto markets if they can start to really appeal to the normie audience and and you know, there are second order effects of that, right? as as capital flows in that means you kind of get into these alt cycles and and and capital flows and then that means capital that wasn't going to be even related to anything on pump fund starts to flow in because other stuff comes in and so and then once the money is in you kind of have these ideas and and use cases that didn't really exist before because they're they're kind of dependent on some degree of of speculation and and just um risk-taking. And so um you know

we we've seen the the broader reflexivity there. Um I think in terms of the impact on markets we saw you know naturally this is a very big drain of liquidity right the the the prime example was kind of what happened with Trump and and how everything kind of dumped because everyone's piling money into that. Um I think that part is behind us because you've already had two instances for that to get priced in. one was the the June announcement where you saw an alt selloff and then more recently earlier this week when the Gate stuff launched and you saw you know some assets rapidly sell off and so I think Gate then took back that announcement but it was

clearly a a very polished one like the site was was polished the the the stats were correct so it seemed like it was more of a early release than an incorrect one so I think you've multiple opportunities and then today as well. So, you've had all this stuff get priced in. So, I mean, you probably potentially get another um liquidity drain when this actually takes place, but I do think a lot of the liquidity has already been set aside for people to participate. So, I I I I do think most of the pain from that is behind this.

Yeah. I also think that the people are like, why are they raising so much money? You don't need this much money. It's a It's a wrong comparison um to like a normal crypto project because it's not like they're raising this money for engineers. Like obviously some of it's going to go towards engineers, but the main is just like the amount of money that they're going to be spending on like streamers and marketing and everything. And you've never really had a crypto project that's needed to kind of like do this because they haven't been going after this market, right? Um, so I'm curious what Jose thinks because you like Jose, you've been pretty vocal about like teams that raise too much money typically doesn't work out well, but do you think it's different here?

Um, I mean, it definitely generally doesn't work out well. I I don't really ever want to hate on ambition, uh, especially in crypto. Like, we need more of that. Like, them going after Facebook and Instagram and stuff is is pretty dope. Um but yeah, they have 700 million in the bank. Um they're raising one, well, we can assume based on how much they've made in in in Rough Burn, they're raising 1.3. They're literally going to have a $2 billion kind of war chest. Um and even when you look at it in the context of like social media platform raises, it's probably like the third biggest ever, right? I think I think Snapchat series F was 1.8 billion. Bite dance raised three billion um in 2018

but that was a soft bank round was the most valued startup in the world at the time bank. Yeah, like all all the other ones were much smaller. Like even even Reddit uh raised their series F in 21 peak peak bubble at at like it was a 700 million raise. So kind of um and when you look at like just the raises happening right now even like figure probably the most hyped humanoid robotic startup raised like one and a half billion, right? So it's it's uh it's a lot. But yeah, I mean the the thing with these big raises is is they have the potential to um like startups have to focus on just

one I kind of said this already but generally they have to focus on just one core thing or like a few priorities to get right. Um and that's the most important thing like you you and that's the what the best startup founders do. They're really good at identifying what the best highest leverage thing they can do is and relentlessly focusing on that. And that's what we really see with the best people in our portfolio like guy and stuff. You bring them an idea and they've already thought about it and why it's not a priority right now. Whereas the the kind of lesser founders will like see, oh that's a good idea, maybe we'll do that and like add it to the list or like and when you have $2 billion suddenly you have too much money to just focus on three priorities. You have to do like 10 things at once,

right? because if you don't uh you're like why do you have $2 billion? So that's like the the main concern. Um and and and just like it seems like they haven't deployed that much of their 700 million. And so going from sort of a a run rate, I don't know what their run rate is going to be, what their plans are for these funds. That's also kind of a an interesting part of this. Like I don't think you've ever had such a big raise with so little uh like transparency. Maybe EOS in crypto was the last one. Um, but a little transparency in terms of what they actually want to do and stuff. Um, I hope I really hope they succeed. I'm like excited for it. I would uh I'll I'll be trying to participate at the

this valuation. I think it makes sense. I do think there's the potential for it to go wildly wrong and bring some bad attention to to crypto. And I hope that that doesn't happen. Basically, I don't know if like bad attention to crypto at this point. get a feel like we've got a lot of bad attention. I think one thing though on the big raise like Yeah. Yeah. I agree. One thing on the big raise though, like did you see today that Monad bought this stable coin company? Yeah. So, it's like you're seeing some of these projects that like Monad was the was the one that raised a ton of money, right? They raised which actually pales in comparison to this now. I think they raised like 200 or 300 mil or something and everybody was like this is so much money for an L1 and now they're straight

up doing like M&A with that money. Um. Mhm. So, it is kind of I don't know. It's like a weird kind of like dynamic now. Um I don't know. Yeah. I mean, four billion FTV with a with a company that's got it's going to have like one and a half to two billion of cash on the balance sheet seems like a pretty good bet to make. Yeah. I think I think they said what 25% they're going to send to the token of revenues. Okay. Ask. So 25% of the top line revenues.

Yeah. I think like basically the the the if you comp it it on trailing three month fundamentals uh to to some of the majors, it should be in like the 8 to 10 B range. Makes sense. Um yeah, it says revenue I'm just on DeFi. It says revenue analyzes 400 mil right now. Uh but then why do they do this? Fees versus revenue annualized. Uh they fees annualized is 700 mil but revenues 430. I don't know why they do that but I was just looking at Bonk versus them like what Bon's numbers are just like going vertical. What what is

do we think this is kind of like them trying to like ride off the attention and maybe plowing some money into their own platform sort of thing or what do we think's happening? Like Pump Today has made like 500 grand and Bonk has made 1.3 million or sorry Pump's made 900K. Bong's made 1.3 million. Anyone have a take on that? Um, I mean the Bonk thing, it seems, as I said before, it seems to just be this useless coin really kind of propelled it. This like one meme coin and then they've got this Bonk guy who's been

chilling it a lot. And then there are a lot of people within Salana that are big like bonk holders and they never liked Pump and so they've been kind of pushing this. It does seem like some token deployers have moved over recently, which is kind of who you want to get. Um, so we'll see. But it's like I do think that they just have completely different ambitions. Like I think the pump team has always had this vision for like they want to be Tik Tok, financial aation of Tik Tok, all this stuff. The bonk guys are just like doing like this launchpad because they didn't like pump I think and it's more like a

crypto only type deal versus the pump thing has a lot bigger ambitions. Yeah, I think the bunk guys are are more soul aligned which which resonates with the community and and older base. Yeah. So so that's a good thing to go into. I definitely definitely feels like that as well. So, so for Pump, what what do you think happens to Soul? And do you think like I'm not sure they really care about it as much if their ambitions are, you know, much bigger? Yeah. I mean, I think it makes sense for them to stay on Soul for a while, right?

There's there's liquidity and just building your own chains of distraction, I think, right now. And so, eventually, sure. But um the this the simplistic push and pull is they will bring a lot of capital attention to soul if they're successful but they will also be selling soul on the back end. So it's like do you think leave at some point? Sorry, say it again. Or potentially like leave at some point. Yeah, but like assuming that's um probably like a year away or something. Um the the the big push and pull is basically attention and capital coming in versus soul pressure on soul um as they get out. Uh

yeah, it's hard to say what it'll be. I think um I think the the the positive side happens more quickly than the negative side, right? The the the selling of soul is this kind of drawn out scenario. whereas if they really take off to a a wider audience that is felt much more acutely. So I think on a short-term basis it's net bullish soul and then maybe longer term the the uh because all the the flows happen up front the uh the selling can can offset that. But I I do think it's net short-term bullish

long term. And what about like Soul Eco? Like you know with the Trump stuff we saw like basically every single and obviously that was like a surprise and unannounced but like literally every single Salana coin just got wrecked like just insta dump to buy Trump. Obviously that was also on chain. This is on sexes and everything too. Yeah. I think it should be bullish for the eco. Yeah. it sells out quickly because that's also again sure there's probably a lot of money that is selling soul or already sold soul or sold soul coins to do this but there's also a bunch of just money that's on centralized exchanges

um and people would maybe sell some other assets too like people can trade this thing with per too um that doesn't really require as much selling because of the coin margin I think any soul weakness related to this is kind of over now. So if you get soul weakness, it's like for another reason. It's not cuz like pump people are prep prepping for the pump sale or whatever, you know, unless you have the ETFs coming soonish. Well, the sold ETF that launches honestly it's been doing pretty well. Um and so if you get these big ones that actually come in again, that should be pretty good. It'd be interesting to see like the one that's live now is staking. The ones that are going to be coming aren't going

to have staking, but they're with like bigger firms. Wait, so do you know what the net because it has a 75 base point fee, but do you know how much they're giving back and staking? I don't know. No, I don't know what percent of soul they stake because with an ETF you need to have available for redemptions and it takes like a day or two to and who are they using for staking? Uh I think they're using uh I don't know 100%. For some reason I thought they were using like Marinade, but maybe that's a different one that I'm not uh look it up.

Yeah, it's like the Osprey, right? [Music] Um uh yeah. Um do you want to talk this GMX exploit or like the prediction market stuff or I think the the the big thing is going to be how quickly uh it sells out, right? that that's going to be um yeah, I think it's definitely bearish, right, if it doesn't uh just as a reflection of capital in the space in general. Um whereas if it does, I I'm I'm in the in

the camp that it'll happen fairly quickly because you don't have a lockup. So, it's it seems like a a pretty easy asset to bid with relatively low downside. Um, yeah, to be honest, you actually could see onchain kind of nuke after the TGE because of this because people bid it on chain. Yeah, but not sure. It's not It's different than Trump. Trump thing was was just like very different. Yeah, I think it could there's also the argument where that it it it could actually be a bit stimulative to the onchain stuff because it can be a transfer of assets from on

exchange to onchain, right? Because you can have the centralized exchanges bidding it and then the effect. Yeah, the the GMX was a re-entry is the Yeah, re-entry. It's a [ __ ] always and EVM is a thing that always does it. Re-entrancey every time. That [ __ ] sucks for them. This This has also been around. It was the V1 which is kind of insane. This goes back to like, you know, they exploited they stole USDC 40 mil and then Circle didn't freeze it. Arbitum didn't try anything with their centralized sequencer.

Um, and this kind of brings us back to like that sweet hack that happened a few weeks ago. And everyone everyone was talking about how like oh sweet is not decentralized all this they they froze this hacker's money and everything but I mean credit to sweet they're not pretending that they're super decentralized right and in this case it's what like arbitum and circle are just going to pretend like this hack didn't happen didn't do something if they had the power maybe they're worried about legal stuff but like GMX literally like builds them up yeah it was GMX was arbitum for a long time right?

Yeah. Until Hyperlid came along. Now they just care about Robin Hood. Maybe. Yeah. That's pretty [ __ ] annoying. That really sucks. $40 million. Brutal. Yeah, it's bad cuz Yeah, because it's been around for so long. It's like It has to have been upgraded or code updated. I can't imagine there's been a re-entry bug out there in production for four years. I don't know. the curve exploit and the balancer exploits from like last year or whenever those happened were like four or five year old bugs that were just sitting out there. Like these things are just it's scary. Um because these days the the way you hack

is actually not this like these days most of the hacks are social engineering. their like front end. Like hacking a front end is way easier than hacking a smart contract now, right? Like we've learned a lot. They've gone pretty robust. But if you can just change the website of a front end and get people to sign a bad message, it's like way easier, right? So those are most of the hacks you see now. This is what the buy bit hack was is like they changed the front end. That was crazy though. That was crazy. That was crazy. No, I know it was crazy. But it's like this is where hackers are going now because smart spark contracts have gone pretty good. So it is it it always is yeah kind of I guess

scary when you see old protocols that have been around for so long in use for so long get uh get hacked. Do we think there's 1.3 billion dollars of demand for pumps? Sorry to go back but like do we think there's $1.3 billion of demand to like sell this out? Well, you need 600. I don't think they already sold the private. That's the thing is I don't know if the like the last the private was initially 200 and then um that that got filled up quickly but they've upsized it quite a bit. Yeah.

Like they I don't think why it seems kind of bullish like if they upsized it from it was going to be 5% now it's 18%. Like it would have been way more bullish if they didn't and then just everyone had to buy liquid. But like in terms of like the chart the chart but they obviously like have taken that to an account and like feel there's more than enough demand. I know they were limiting funds by size to ensure that if you wanted to get your full ALO you needed to buy on on just live token.

Yeah. So I I I don't think they would have done it without like they would have wouldn't have upsized it this much without like kind of having a decent pulse on demand. Yeah. I'd love a poly market which I know is a is a good segue to our next topic on whether it sells out in like 15 minutes, an hour, three hours. Curious where do you guys put it? I think it sells out like pretty quickly. like under an hour. Under an hour.

Oh [ __ ] I was gonna say uh within the first 24. But like how no they are blocking us. How are you guys expecting it to rip to 10 billion so quickly? If you think it takes 24 hours to sell out cuz it's very different. 600 the group of 600 million of like if you have 600 million of buyers that's going to move price. Yeah. 600 million into an order book is is a lot different than I don't know definitely but I mean like you 700 million of private demand gone and then you take 600 million of this more public demand and then it's like you're going to get an incremental how much to

like pump this thing up two 3x like it's but it's true if they have two bill of cash who's actually selling it at the four bill so much cash it's like your max I think four bill is like a pretty good floor for sure. But I think in practice to that cash though like yeah but it's more like this cash is going to be spent on growth put it back in have the most profitable business in crypto and two bill of cash like it should definitely trade at least double hyperl is the most profitable business in crypto you know maybe maybe they might do the old hyperlid playbook just just market ape 100 million into the chart. Yeah, they do the

do some painting of the chart for sure. I I would I would I would expect some painting. H you definitely care about the chart. Yeah, they do. They these guys are moonmecoin specialists. You don't think they care about the chart? So, they have your they have your 1.3 billion and they own 75% of the revenue in the equity. I mean, I'm I'm I'm sure they care about the chart, but there's there's no guarantee that they will. There's been a lot of crypto projects with a lot of money that refuse to bid their token with it, rightly or wrongly, but anyway, um, prediction market. So, we had this Zinsky suit thing. I don't

really have a great or interesting take on it, I don't think. Um, but prediction markets generally have been purring like the Yeah, like Poly Market has grown a lot. I mean, Poly Market and Cali both just announced those raises a few weeks ago, right? Both at like one to two bill valuations. Are they going to do a token Poly Market? Like probably at some point. Unsure. Is that like Yeah. Is that still the best way to go for a successful project? I think that they're like alluded to hopefully man it's not the best way to go then what the [ __ ] is yeah I mean 28 you think I guess that's the question do

you think poly market equity or token trades higher at this point well it depends with the split like it depends they send value to the token I think it would trade if they do this is the biggest fundamental problem that has to get fixed in crypto though is like we just cannot have dual equity token or is that what that's trying to do? I think so. Yeah. Yeah. I mean I I think I think I think it's okay to have dual if you have like fixed and transparent value flows and then ultimately the question becomes is the sum of the parts greater than what they'd be if it was all focused towards one.

I don't know. I think it's like when you buy a stock you own the company like Yeah. [Music] No, I mean I prefer it for sure. The best way now is like all token and then have an equity company that just um commits to like putting all the IP and trademarks and stuff there and then going public and and running a a treasury play on itself. Like imagine like unis swap labs just like all the front end fees and stuff using all that to buy uni tokens and then having a public token that you can ape a public sorry stock that you can ape to to get exposure to unis swap and that stock is just buying back the token. So

everything gets funneled towards the token but you have like an equity vehicle just as a as a way to reach the stratifi market. That's my preference. But yeah, that would be nice. Hopefully someone does that. But yeah, prediction markets are doing really well. Um, yeah, and everybody like thought they were going to die right after the election. After the election. Yeah. I mean, Poly Market's done really good job getting integrated places and partnerships like the All-In partnership and getting integrated into into X and stuff like that.

Yeah. Yeah. Wait, what's going on with the X thing? Like I saw that headline, but I haven't like not much news since then. Yeah, I also saw the headline and haven't had news since then. I think the idea is that it was going to be like actually integrated so you could do poly markets bets on X, right? Yeah, the the the tricky part on the poly market stuff is just like it's expensive or just prediction markets in general is that it's very expensive to market make. uh this is mostly an issue when there was only one, right? Because market makers can't hedge elsewhere and and so they need to get compensated a lot for this risk. Um and that's what they were spending quite

a bit of their money on was just getting these markets off the ground. And so that's kind of what you're seeing with some of these other guys raising with novel mechanisms that help bootstrap for the long tail, right? It's like I'm not going to try and compete with Poly Market necessarily on um who's going to win the election, but I I can do a much better job creating an environment for users to generate markets that will have deeper liquidity than than other platforms. And I think that's kind of been the pitch uh with with Koshi. What helps is that they can obviously just tap into some of Poly Market liquidity.

Um I haven't really tracked how how the the two have done in terms of volume relative to each other. I'd be curious because I know call she raised at a at a really rich vow. Oh. Um not rich because that's implying it's expensive but just a high vow. Yeah. Um agreed. But yeah, I mean that that and what are the most interesting mechanisms you've seen I guess in the private markets for that or or just anywhere? So just like novel mechanisms on AMMs, right? these things need to be decentralized. So we invested in one called EXO um where uh it uses you know a modified AMM where rather than when

you with an AMM it has two assets you're buying one and selling the other. So you're you're depositing liquidity of one asset and withdrawing the other. here the mechanism basically when you're buying you're just creating new call it yes shares right and so the the liquidity just goes into the into the pool uh and you're creating more shares but it doesn't necessarily withdraw and and so it gets withdrawn during the redemption process but it helps that early stage liquidity because in order like with each new participant liquidity actually grows rather than in a scenario where you're just buying and selling and it grows via fees to some extent. Um, so there's that. There's another one, Contra, which which we're investors in, which uses something called a gradual

limit order book, which uses basically it's kind of a timebased mechanism to for for price discovery. But, uh, it it helps a lot on the uh customization of of orders and and basically allowing people to express um directional bets and and have these these assets sit there and basically allow it. It it's all for this this idea of how do you create usergenerated markets where a a random spat on Twitter can actually be turned into something that everyone can participate in. Um so there are those I think like what what's been really cool with prediction markets is is uh the fact that this is where some of the the smartest money ends up going because

it's like this is where insidefo gets gets uh monetized. Monetized. Exactly. And so if you know whether something is going to happen, whether you're in Congress or whatever you're doing, this is a great way to to to to get info. So it's almost just like not not even trading there because oftentimes for some of these events, you're you're the dumb money if you're just purely speculating, but using that info to then make other decisions, you know, in a world where that market has enough liquidity that that it can be signal.

Yeah. Yeah. And it's been remarkably accurate. And I feel like right now and like it's it's just harder and harder to figure out what's true, right? I think AI has made this easier if you know how to use it. But in general, like it's really hard to figure out what's true in the world. And I Poly Market's actually a go-to for me, especially when the war was happening and stuff like uh it's it's it's pretty interesting the way that um it it it actually like works much better than the news than like pundits on Twitter. You can you can you can just see like this was the theory behind it, right? Why academics always loved it so much and why I actually got really excited about it too when first joined crypto and read Vitalik's post about it. But it's cool to see it

actually play out like the way it kind of front ran the election in the Iran war. It had some pretty good pretty good picks. Um yeah, it's it's been cool to see. Yeah, I'm trying to get the volume, but Kashi's website kind of sucks to get the volume. You have to download it. But I think they've done a lot on sports sports betting. Yeah, they kind of like legal loophole. You can do sports betting because it's like well you're not betting on sports, you're predicting on sports. Um what is that?

That's how they ended up betting. You're predicting. Well, it's different. It's different. It doesn't count as gambling. It's like prediction market. It's different. Um, how is it they like you like aped the Super Bowl on your in your brokerage or something? Well, not like Kali did, but I think Well, actually, I think Kali did, but like Interactive Brokers even had these two and they're not like licensed to be gambling, but it was like no, it's a prediction market. Is it because it's peertopeer instead of peerto house? Because I mean a sports bet is a prediction, right? Like I'm giving I'm getting certain odds on a team and that's a function of my predicted probability of them winning.

Yeah, there's a bunch of weird rules in gambling. Like the whole thing with DraftKings was like it's a game of skill and so it shouldn't be regulated like gambling and then it's like some states align with that, some don't. Um I don't know. There's a lot of weird gambling and there's like this new tax code thing that might only make you be able to write off like 90% of your gambling losses which would kind of ruin that industry of like poker and stuff. Um, use the guest. Just be a better gambler, dude. If you could only write off like you're screwed.

Yeah. 10% haircut. It Yeah, it's an interesting one. Like, what do you guys think of that? It's probably not a not not something. What? Only being able to write off 90% of your gambling? Just gambling generally? Like, how how gambling is [ __ ] so bad. Yeah, gambling I think is very bad, but it's like some people are professional poker players and this is how they make their living. Yeah, but vast majority I would consider poker is different. Yeah, I think if you want to get rid of gambling, you shouldn't do it in weird [ __ ] backdoor tax like uh regulation. You should just actually make it illegal, right?

I don't No, I think I think it's I think that's pretty effect. Like I think making gambling companies able to advertise the way they do now. Like the way stake is No, no. This is what I'm saying. I'm saying to do it this way by changing the tax code is [ __ ] Like it's like how the people tried to get rid of the crypto industry by going back door to banks and everything. It's the same thing. Like because they couldn't make it illegal directly and feels like a slippery slope. Like you can't tell people they can't do something. I don't know. It's not the government's role to stop them from doing that. That's a little like same way with cigarettes, right? It's just like you put warning labels and you do all this stuff, but ultimately people need to have agency.

Yeah, for sure. But it's just like the amount that it gets pushed on and like the promotions and stuff like I'm thinking like a lot of people around my age, like university age just like go and just get [ __ ] But and then you learn and they're like, "Okay, I'm not gambling ever again." It's like they get burnt. It's like you touch the stove, you get burned, and then you don't go back. But like some people can't really help themselves. I agree. It's you don't want to force people what to do, but it's like just the accessibility. Yeah. I think the big thing is basically you need to put in um you know people can input like salary uh into what they're doing, right? So you can limit the amount that they do based on their earning capacity or or their assets, right? And so there it's it's protecting

them. It's like listen you're gambling more than you you should be able to. Like I think stuff like that can help to to to taper you know the people that ruin themselves completely. I actually disagree with Saters. I think that is the right way to do it. Like tax code like taxing them more and not letting them advertise these things. Think about someone I just think that they'll just get completely [ __ ] They won't understand. Yeah. It's just too They're just getting double whacked. I was kind of a capitalism uh or like not a capitalism but like a free markets I guess or more of a free markets maxi since I've been kind of reading more about the Chinese model and how it works. I actually think there's something to some state direction like in the sense that like you

in Yeah in in the US like you have the the smartest people in the world can go do whatever they want, right? like in and you add for for for I think before AI like all the smartest people were just basically trying to get us to click on more ads and spend more time on social media and it it it [ __ ] worked, right? They're really smart. They they they they succeeded like everyone was [ __ ] addicted to social media depressed like especially for for kids getting bullied and stuff. And in China they they create subsidies such that if the smartest people go work on solar panels and electric vehicles and chip companies and it turns out that like works pretty well like and gambling like porn only fans all all this stuff is just attacks

on society like all it's just people losing money or like wasting money on [ __ ] that's like really bad for them. Um, and I don't know that like I think I think it's kind of a bug in it's like similar to how you have like uh you know public goods that that are underweighted by the market. Um, and then the other one right like uh pollution and stuff these negative externalities and positive externalities that aren't accounted for by the market. I think it's the same thing with these gambling and and uh only fans and and like porn and and all this stuff. And I I really do think the government should try and and set an overall direction for where human capital should be focusing on and like have cuz like in the in Europe and

in the US we we try these subsidies things and then there's one case of fraud and the the the newspapers that's another thing I've I've kind of like changing my mind on is just freedom of the press like the I think our press is so poisonous like they just they're just like there's there's very little really good journalism where they're going doing these deep investigations and and presenting facts. It's more just like look at th you know like uh this guy is friends with this guy and like uh maybe there was a corruption and just like slandering people's reputations makes it so that no one smart ever wants to be in politics and also like the fraud like when in we have these subsidies but then there's one case of fraud and it's we remove the whole thing whereas in China they just accepted of course there's

going to be fraud and there was a lot of fraud with the like hundred billion plus subsidies they did in EVs but they got um you know they got one they got BYD out of it and that was worth the whole Um, I don't know. I just feel like there's some stuff to learn. I definitely would not want to uh make the trade-offs that China made. I would not want to live. That's the thing is it's all trade-offs, right? Like if you have I'm saying we can shift the trade-offs more. If you if you have like the the news the reason sucks is because it's for profit and and so you're just doing whatever gets the most attention, right? So then what's the solution? Stateowned media.

That's horrible because eventually I think I think broadly with with the stuff is like you know with the US you have these the the beauty of democracy is that there isn't really this totalitarian control but the issue is you're operating on fouryear cycles and and and so you can't really do any kind of long-term planning. You're just like playing constant short-term games. Whereas China gets to play the long-term game but the big trade-off is it's a dictatorship. So like in a world where you can have this like benevolent dictator that that helps you also have these lobbyists that like are there all the time that push through rules like industry pushes through rules that like stay there throughout the cycles like all this and like maybe you know a good example is like maybe it'll

change with like a radical administration change like the RFK and make America healthy again stuff but like why the [ __ ] are you allowing like provenly cancerous causing dyes in like food or like the number one item on government subsidy food support like um food stamps is like Pepsi or whatever soda. It's soda. It's literally [ __ ] soda. And it's like they have like the industry has captured a certain amount of the regulation where that goes through like multicycle and then that's just like bad, right?

Like you have what you know far like some pharma stuff that's bad like some health stuff that's bad like though and that's just crazy like the incentives are just completely out of line. I think Jose's original point was about like letting like Hu remember Hassu had this post a few years ago about like you should be limiting how much like kids should play video games and stuff and everyone kind of like ripped them a new one for it. It's like it's it's a hard discussion because gambling gambling for instance is they they've done all these studies in the UK after they like legalized and everything and it's really bad, right? Um there's not a lot of good that comes out of it. You see people like Harleis who's like this famous

gambler in MBA talk about like how bad it is that it's being legalized and all this stuff. While he is like an outlier, right? And you you look at this with you look at this with like crypto too. There's a lot of, you know, I think we're all kind of happy that there weren't laws preventing us um from like buying stuff early on, right? Um because we thought we were like it's just the smart enough to like actually promote it so heavily to like young kids.

Yeah. The advertising is crazy. It's It's always sad when I see like a commercial and it's like Wayne Gretzky shilling gambling and it's like dude why are you like you should be a better role model I feel like like than shilling bet 365 or something on TV to it so much money dude like down your throat it's like drugs like you know I feel like you can get them but the god can do see there's that that one billboard what you see there's that one billboard it's like 20% of gamblers go bankrupt it's like bro Those are pretty good odds. I'll bring that up to a gambler.

Well, did you see the south there's a there's an ad from South Korea or something and it talks about it's before the FIFA World Cup and it's these like kids a commercial and these kids are talking. It's like who do you want to win? Who do you want to win? And the one kid is like I want Germany. They're like why Germany's like cuz my dad bet all my money on it and then Germany won and it like totally backfired against them. It was like this public service thing. Yeah. But no, I mean, yeah, I this is a hard top. We should probably end this. I I do think one way though is to just limit the the downside that people have by by putting in earnings requirements, right? Because then you really reduce the the chances of people going broke.

And so, you know, we have this in Canada. You have Yeah, I think that makes a lot of sense. Yeah. Or you just you just can't limit advertising. Why should Why should they be able to advertise so much? Yeah. Like just like cigarettes can't advertise anymore, right? Like that's like basically banned. Yeah. Yeah. And they have freaky drug companies can't advertise. I think that makesense. Well, they still they still the biggest advertisers. In the US can in the US they can not any other country in the world basically. Yeah. The biggest difference from anybody that's not American, cuz maybe a lot of people listen to this American, they don't understand, but like when you visit the US and you watch like cable TV, it's all it was always like when I was growing up, it was always such a

crazy mindblowers. Like there's so many ads for drugs like Yeah, it's just crazy. Yeah, every like that [ __ ] is the stuff that like you shouldn't be like I fully think anyone should be able to do like you know free will do what you want but you can't be like pushing it on kids right or pushing this stuff on on people. Step one get rid of the lottery. Yeah, that's just such attacks on on the poor. What pisses me off in in Canada is like they you could play DFS here for a while and DFS actually requires some skill. Um, and you can't do that anymore. And now you just can just daily fantasy sports

and now you can only do like the gambling where you're guaranteed to lose basically with like the bookies and you're betting on spreads and all that and you're never going to make like money on that. Um, yeah. It's like getting rid of the game of skills and and so like that's why I sympathize going back to the original point with the poker people who make their living off of this because they actually this is their how they they live and you can say this is like not a a way you should earn a living or whatever but which is such a small the issue is with a lot of government stuff is like if if once they get too involved there's eventual capture and then it's it's perverse and it's not even done the right way and it's just all the bad parts.

I mean, but there's capture now though, right? Like the the reason these the drug companies can advertise and the gambling company can advertise is because there was capture. Like there's no sense in which this is good for society. Oh yeah, it creates jobs for people at these companies where like you know the revenue all comes at the expense of well for drugs it depends obviously but but for for for gambling is coming at the expense of a bunch of bunch of addicts losing money. I don't I just think high level we're there's there's stuff that's not profitable that's clearly good for society and there's stuff that's really profitable that isn't good right and the government you kind of want to funnel people you kind of want to correct those two imbalances and also funnel people towards more long-term like help people encourage people to think more long term

about what the country needs um and just one last thing we can cut all this stuff by the way if uh if no I thought this was a good discussion dude I have I have a question on you on what you're saying with this China. Oh yeah, sorry. Go ahead. So what um like what do you think in like let's say like 50 years from now that China is going to have like some of the biggest companies in the world because like all like the really innovative big companies are in the US, right? Like almost. So that's really interesting. That was a really interesting thing from this report. It was actually linked on the BG Squared podcast. It's like a 100page uh report on on China and their various like innovation programs. I highly recommend people read it. Uh it's actually like an easy read. Um and the

conclusion is is basically that so they've done subsidies for a bunch of different industries. Like we're talking tens to hundreds of billions of subsidies depending on the industries. Like they did chips, they did um um obviously EVs, they did uh solar panels and renewable technology and then they did AI too. And I think they were doing they did something on humanoids as well. biotech. I think biotech was the robotic and and it's really interesting what they found is that the subsidies worked really well when there was no zero to one innovation required but just one tox so for instance solar panels making them more efficient battery technologies making them more efficient EVs um like making them better and cheaper like that

worked really well because you kind of have if you think about it you're giving subsidies and then you have a hundred different people competing and so they have to just be extremely efficient and find the best way to do things. They did not work well for places where you required zero to one innovation. So they failed in chips and biotech. Like China despite all the money spent on chips doesn't have uh really a leading like chips companies chips company like all their chips initiatives failed. And the same thing with with with biotech. Um and to some extent the same thing with AI like the only one that that came out of it was was deepseek and they didn't benefit from any of the subsidies. So but for EVs you had BID for battery technologies. they're leading for for the photovoltaic stuff they're leading.

So it's kind of interesting. Um I don't they don't sort of posit a reason for why that's the case. It might be that 0ero to1 innovation just requires like more freedom, right? It comes out of creativity and and being able to to think for yourself and and and have time to to to Yeah. I don't know. I don't know exactly what it is, but that all continues to to the zero to one stuff seems to continue to come out of the US more than anywhere else in the world. Interesting. Yeah. Yeah. I thought it was pretty interesting. So, so do you think that like back to the qu like do you think that they'll have like be some massive Chinese companies that are like bigger than US ones in in a few years or do you think like the head start that these US companies have is is

like too big. I don't know. I'm I'm like I honestly on China I'm so I read I'm really fascinated by it. I read about it. I listen to the Roy Cash podcast and I'll flip like bullish to bearish every week pretty much. So I I don't really like depending who I who I listen to last. Like on the plus side, they have insanely good hardware chops and insane power like uh access to power. I think it's like 3x the US and they're adding it at ridiculous speed and they have energy stuff is bad because it just it's it operates on such a lag too. Like it's not like we can get it up.

That's the thing. That's the thing. And they have the whole supply chain like all the rare earths like 70% like on average of the rare earths like processed rare earths are coming from there. They have like Yeah. three times the power and it's growing like I think 5x faster something than the than the US. US is like going sideways and they're going vertical like on charts. I think that's scary. That's pretty scary. Isn't that like the biggest or like one of the biggest kind of caps on AI is just like access to power and China critical at it and the US is stagnant.

Um yeah, it is. That's the worry. Um but the we're not there yet. So it's not like a hindrance yet, but the issue is like once you build out all these data centers and and there's and it's just ubiquitous, then you start to hit the cap and and yeah, it's such a limiting factor because it like takes the the fastest I think is I mean you have coal and stuff like that, but I think solar is is is the realistically the fastest to get on online in large size. Yeah, solar relies a lot on on batteries and stuff, but I mean the the US is also like deploying uh like can deploy partnerships with with Saudi and stuff like this. So there's it's not capped by

its own power, although obviously that wouldn't be wouldn't be great. Um but Saudi seems like a pretty close ally right now. Uh, I think China, yeah, those are the advantages, but then like there's definitely some some like really good bare cases for China. And especially when you speak to founders that that work there and that got burnt by various shenanigans that happened there. Like it's it's a weird place. Like we know some exchange founders who just got shaken down by local police there. Like they got put into a room and asked to transfer tens of millions of dollars of crypto to the to the to the local police.

You know, and there's there's founders I know that that took a company public, like an e e-learning company, public on the NASDAQ, and then one day the Chinese government woke up and said, "We don't like e-learning anymore." Like, "We want people to learn at schools where we can control it." And and the company literally went to zero like the next day. And there's there's all sorts of like things that are Yeah, it's tough to have a a strong take on it either either way. I think I'm I'm really excited to go there next year. We're planning a trip there, I think, between us as founders and maybe some some some other people too and like actually meet some people on the ground and and understand what's going on because it's definitely a cool place, right? And so going back to those trade-offs of of of being able to scale

infra and direct it or or whether you're the best place to build, I think the ladder is still the harder one to solve because there you need so many things to to align there, right? between just people, the environment, the the government, all this stuff. And I don't necessarily see China releasing like relaxing their grasp there. And so, um, that that's probably how like going back to your original question of whether China will be the place to to be, um, if you think that he stays in power for a very long time. And then you know it seems like from again not my opinion but just people who are in the know is just that

the party has really strong control and and the successor will likely just kind of follow that path. It's hard to see how you know that's going to be the place where people want to keep building. Yeah. I think the innovation versus just like ramping the [ __ ] out of existing technologies and making them better is like a pretty key distinction because like you know they can just like ramp up manufacturing massively electric like everything that exists already that gets invented in America they could basically just ramp up an insane I mean but this is changing like they're definitely like there there's a lot of scientific papers coming out of China

now also in biotech like they've relaxed rules on biotech stuff. I think I've read some stats on this. So So it's changing. It hasn't sort of like there hasn't been I think uh maybe I'm wrong, but a success story like a zero to one real real success story there yet, but they're definitely trending in the right direction. Um yeah. Anyway, guys, I think we're good on this on this pod. Yeah, went a bit long, but yeah, I thought it was good. Um I enjoyed it.

Yeah, didn't even talk about ECC, but I thought it was good. Yeah, I was going to ask you about that. I thought it was like really good location, really good event. Everybody like ECC was actually packed every day. Um, which hasn't been the case in a while. Like there weren't an overbearing amount of side events. Uh, everything was walkable. I didn't have to take an Uber, taxi once. Uh, the only downside is that it was like literally too hot. It was a heat wave, but I mean, you're right by a beach and everything. It's hard to complain. They're doing it again there next year, which I think makes sense. I think it'll probably be bigger next year because I think a lot of people are skeptical this year of the location, but now that they hear that it was like good, um, they'll probably So, it'll suck next year.

Yeah. So, it'll suck next year. Um, it was cool. I ended up going to Nissa and Monaco after, too. So, pretty cool to check out. But, uh, yeah, I think the vibes were good at ECC and everything, too. So, Yeah, it wasn't like ETH Denver where ETH Denver I think people were kind of disappointed and ETH Denver was also just a ton of like AI agent stuff. Um, this was more back to like you know the Robin Hood thing was big. Uh, there's some cool talks on like solvers and stuff a bunch of like DeFi uh big like institutional all this stuff, right? So, stable coins. So, um yeah, I thought overall it was a good

ECC. definitely was like a few orders of magnitude better than Brussels. So, but yeah, anyways, this podcast went kind of awesome guys. Yeah, we'll ask everybody in a in a couple weeks. Couple weeks. [Music]