Hivemind: State of The Market, Hyperliquid, Plasma & Tether's $500B Valuation

Transcript

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 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 [ __ ] posts. Today with us we have the usual cast. Cedus Parabus from research, Yan Liberman from Deli Ventures and

Venture Scout Duncan also known as Flood Capital um who Cedus described as a guy who who used to work here and now kind of just chills galaxy. I lead Deli Labs, our protocol R&D arm focused on incubating and accelerating new web3 primitives. So it's been a pretty busy two-eek period actually compared to the compared to the norm. We had our deli offsite and as is customary the market dumped uh horribly during it and then proceeded to recover as soon as we as soon as we got home. Maybe we can start with markets just going around the horn.

How everyone's feeling about about stuff right now. Um, how everyone's positioned. Maybe starting with Yuan. You mentioned you were pretty long heading into your end last time. I'm guessing you're still pretty long if not longer than you were than you were last time. And yeah, curious how how you're feeling here. Yeah. No, I uh I took off some pers going into it just because like it it would be too much of a mental burden. Uh but but I've kind of redeployed since. Um yeah, I know I'm pretty long. I think the like macro wise the setup is is really strong right going into year end.

Uh and I think the biggest concerns are basically that that crypto hasn't been following. Uh and I think you know the bulls see this as uh there being somewhat of a a lag and a catch-up trade opportunity particularly with kind of how gold's doing and then the bears are saying you know cycle kind of over if if we're seeing the bid elsewhere and and no real follow through here. Um, I think this is probably one of the the more divided markets we've had where you see a lot of big names being openly bearish and um, you know, to some degree there's kind of survivorship bias, right? Where uh, these are the people that have survived multiple cycles and and you do that by selling potentially too early,

right? but you still survive and and so you kind of see those guys continue to be voices in the space and and naturally it's the the mega bulls who on one hand tend to do well but also uh are are most likely to kind of blow up and and leave the space. So um I'm in in the bull camp. I think uh macro wise it's still really good. I think earnings are going to be coming up and and um things should continue to be strong. You've had two years of really strong S&P performance, right? and eventually the music kind of has to stop. But on the other hand, you have this one outside this kind of, you know, just the AI and and the capex spend and the growth and everything there. And so I think it's hard to be bearish. I think it's easy to be bearish

if you just look at um if you zoom out and purely just look at uh consecutive strong years and and and how many you typically have and then what what happens after you've had a few of them. But I think there's a a good argument to be made for this time. It's different. I mean, um I I think the market will will certainly have its pullbacks. There will be some uh point of contention whether whether it's geopolitical or or or um midterms not going uh too far in, you know, the Republican direction. And so there there always reasons for there to be sell-offs, but I think that the setup is pretty strong. Um I think the other element is you've had, you know, the the BTC run, the ETH run. I don't think

we've had the soul run yet because we still have the ETFs coming. Um, so I do think there's going to be something there. Um, but no, I mean I'm I'm pretty long just your standard BTC soul uh hype ENA pump bag, which you have that like Buzz Lightyear meme of everyone saying the same thing. But at the same time, I I I do think, you know, you're certainly going to have these runners and you just kind of have to be there and and ready to take a risk. I don't think it's it's easy to catch those because they happen to play out right like your aers and others and so you kind of have to be at your desk and and ready to fire but I think generally those names are are more comfortable holds and I think those are the ones that funds that get fresh

committed capital are the names that they can you know definitively deploy into. It feels like it's basically impossible for the market to go down when the capex spend is this high. Like, how are we supposed to have a recession when it's like we're doing the largest infrastructure buildout ever and it's like the government's backing it. It's literally an arms race for AI. So, I just feel like how are we supposed to have a recession during that? I feel like I'm like insanely bullish over the next four years, but like obviously there's going to be pockets of like bad pullbacks but yeah, I'm I'm with you. I think that I think the calls for like AI bubble are are pretty mid, honestly. Well, no.

It'll it'll happen. It's just too early. No, no. I think I think bubbles inevitably inevitably happen. Like expectations can always get ahead of fundamentals, but the fundamentals are just so strong. Underhyped right now. I think AI is actually underhyped. AI and robotics when you combine those two things are underhyped. Yeah. But you can have you can have um we might not get a recession for a while, but you can see unemployment tick up a lot. Oh my god, who cares? It's straight up and to the right. I'm like the next four years, I think as long as there's not a war, we're going to be really buzzing.

The one thing on like crypto specific stuff is these sold ads have been a [ __ ] flop, unfortunately. They're trading like zero volume. Uh so they need to go get those up. And there's also been like an insane leverage buildup into them. So I'm kind of worried about Ethan Soul just because there's so much leverage in the system. But what leverage is with the DATs? Uh, not not with the DATs with like just open interest is like on purp ETH and Soul. And I think with Soul it was like front running the DATs and now the DATs are doing a volume. Like last week Ford was trading like $10 million a day. It's just like [ __ ] Um, so that's that's the one kind of tactical thing

I'm a little bit concerned about. Um, and then also like BMR's premiums getting pretty low, but they're trading in like BMR is doing like two billion in volume a day and like Ford and Helas were doing like 10 million each, which is like really sad, but hopefully that that they'll be able to generate some more volume. But that's what I'm kind of like a little bit skeptical on in the short term on Ethan Soul versus you have like everything else ripping and like Bitcoin probably catches up. So, it's like two kind of forces. If Bitcoin pukes like I think there's like the chance of like a massive liquidation on Ethan Soul just because of this leverage build up from front running.

We had like the biggest liquidation in quite some time. No, but the like this big. That's the crazy part is is how much leverage there's built up in in such a tight Well, that's mean like man if we roll like Ethan Soul are literally get I the why are they trading so little volume? As far as I can I can tell, the MNAVs are still way uh are still like 1.5 and above. Yeah but that's probably why they're not trading a lot of volume. Probably they haven't distributed shares yet or something. Yeah, they haven't. They haven't. But like guys, listen, I want Those are kind of fake prices though.

It's Isn't it just on the pre pipe uh circulating supply? No, I want Ford to do as well as anyone else because Galaxy is a big part of it. But they traded yesterday 400,000 shares at $25 a share. Like what is that? Some quick math on that. That is that 10 $10 million 400,000. It says 1.65 on the Block Works. Um they traded10 million yesterday and filed a $4 billion ATM like anyways. Yeah. So the pipe shares need to get unlocked and they need to get options markets there and uh Mr.

Multicoin has to go out there really like he's he's doing it but he really needs to generate some more volume um for soul to to kind of carry through. But like that is actually like such a flop. like BMR is tra traded uh two days ago it traded 60 million shares uh at $50 a share so is that $3 billion like I that's that's going to be fine that's my I think it's fine it's just shares there's not just more trading right now okay like BMR trades at like one so it makes more sense that it has like trades at one point yeah okay the order It's a 3,000x different difference in

I mean I wouldn't f Yeah, but it's it's the the market cap. That's what I'm saying. Those shares aren't liquid. The market cap is 50 million. None like it's this is this is still pre pipe stuff. So it's it's it's not it's not like the the supply isn't there yet. They haven't once that's live is when they can start doing ATM stuff. They already filed it. I'm not seeing a filing. I'm seeing the market cap at 2.10 10 2.1 bill on you're probably looking at soul owned the amount of salon it owns not me no that's 1.26 26. Uh, like I see there's they have 1.7 million outstanding shares.

Let's ask chat. Are you looking at Ford as in but uh Yeah. What about you, Sed? Maybe you didn't you didn't uh say how how how bullish or bearish you are. Uh I don't know. I just feel like we've been in the same Yeah, I'm like all Well, I'm always long. Never have any stables. I'm always long, but I like there's definitely periods where I think there's like way higher risk of everything going to [ __ ] Um I don't I haven't really felt like this period was like that. Um we've just been in this like grind chop up sort of deal and I think it's just mentally exhausting for a lot of people. Um

Oh no, going up too high. Well, it's still I don't know. It's the same it's the same market it's been forever, right? I feel like a broken record, but the the market's literally been the same for the past like half year where you just have a few things going up. Um, but I mean, equities still look good and I am of the belief that you don't get a big crypto bare market until you get a big equity bare market. So, yeah, the weakness is is definitely slightly concerning.

um like with gold roaring and and equities and equities pumping is it's kind of weird. Um but yeah, for for me I think pump right now is the still the best best risk return um out there just in terms of of the upside I see. And then yeah, the usual candidates that that that Jan mentioned is the rest of my portfolio, but I'm pretty Have you bought overweight pump yet? Uh no, I haven't. Oh damn. I haven't bought any Galaxy. What about you? What about the rest of you guys? You bought Galaxy yet? Yeah. On Cetus?

I've had Galaxy for a while. Yeah. But I don't like think about it cuz it's like it's just a stock I'm going to hold for a while. Exactly. It's a stock you hold forever. Whatever. It's like I equate it to like the new Bergkshire Hathaway of the AI and crypto age. That's kind of wild. Yeah. I don't believe that. But it's got some good I've heard that one a few times and it was never bullish. The Bergkshire Hathaway comparisons for for what it's worth. Never bullish. The first time I heard it was Dxed Out was the Berkshire Hath. We don't know what the hell that is. Yeah. All right. And then one thing came out last last week that thought was interesting was just Tether raising it half a trill.

Like puts it up there as one of the most valuable I think maybe the most valuable private company on earth. Does that make like Paulo the richest guy in the world now? Like or one of them? I don't think so. He's up there for sure. He's up there. I just Who who is who is buying this? I don't I don't understand the uh 500 bill. Yeah, dude. I don't get it. At like what is it a buck 75 like 175 mil in USDT, right? You're owning earning like that's that's between you know 5 to 10 billion in in interest rate yield. So like that's only going to decline and what kind of

multiple are you slapping on that to to to rationalize like it's just I I don't get it. I don't get how you see it's just it assumes that Tether is always going to be able to like keep all the interest with Yeah. But like that that interest is going to come down. They're all front end of the curve. Yeah. I don't I don't really understand. First of all, interest is going to come down. Second of all, I do think Tether has has continuously managed to not pay out any interest and still keep growing, which is which is insane. They're like the only stable coin that that that can do this right now. But I think with USDH and just the shift I'm seeing behind the scenes with like this stable coin as a service, these white label stable coins that every chain is kind of issuing, I

think the the the meta is going to change where you just expect to get like the yield of the stable coin you're using. And I think most chains and and and projects that have a bunch of stable coins will try and internalize this. And I think that's going to be uh that's going to be a hard trend to fight. Still on centralized exchanges, they that's like I think they don't that's where their market is. Tether doesn't do much on DEX's. So like I maybe eventually, you know, if DEX market share really chips away, but in a in a in a you know, glass half full scenario, they don't have to deal with that. Interest rates will come down. And like how do you rationalize paying 100 times earnings on something like that revenue?

I mean I think it's going to keep growing. I'm very bullish on like Tether continuing to grow. But yeah, for sure I agree on that. I also think even on the centralized exchange like you're seeing like just even the USD integration on on Binance like I think it's up to to to nearly three bill in in USD on Binance since since then and it's probably going to I just think what is uh USD got integrated as collateral yield yield earning is that three billion on Binance but so isn't Binance doing their version of it what's it called? Aren't they as that failed?

Oh it failed. Uh yeah, I mean it's that that was a really interesting experiment cuz it never I think it never got above like two bill uh market. I thought there was a new one like USDH or something. That's hyperlquid. That's hyperlquid. I know. Okay. Well, I'm I'm saying the wrong one. It's Aster's doing it. Do you know what I'm talking about? Aster doesn't have their own stable though. That's just the per deck. I know. No, they they're doing something like an Athena thingy. Let me find. I don't know.

I think it's like part of their market making system too to bring liquidity. I'm gonna I'm gonna check quickly. But yeah, I do think like you'd expect people to over time, especially as as the yields like you'd expect people over time to just like not accept uh stable coin issuers internalizing the yield and for this to not stay like a massively high margin thing. Um but yeah, hopefully they just use it to buy Bitcoin, which do that. USDF has 365 million minted and you get a 15%. Maybe a better question is if you were them, what would you do with the 20 billion?

I think that the the reason why they want to raise honestly is just to get a bunch of US investors that are like important and kind of just bro down kind of just like help like cement them in the like they want I think they they have I mean maybe not anymore because I mean Trump literally invited him and gave him like uh kudos or whatever but I wouldn't be surprised if the tethered 20 bill gets filled by um like important people like systemically in the US and this is kind of US Treasury and more like a political thing to cement tether further because it's true like they don't

it's the you do it the other way around right it's it's the private investor that would support a US politician's business at an irrational value to to to to cement the legacy not a US politician investing at a I mean the valuation I don't know are they even going to feel that that's the I'm sure like soft bank will come in and true maybe Kathy and SoftBank actually I think I saw Kathy and Soft Bank were interested right I don't know what they use 20 bow for though to answer your your question that seems yeah it seems tough to to I mean if you can get it I guess you just get it and just start buying more BTC and yeah either BTC or just like a holding company of assets

okay this USDF has grown from 36 million and three weeks ago to 360 million on Aster 15%. Hey guys, I'm just saying do you know what this is? Like have you looked into it at all or you just on Aster? Yeah, but is it on Aster or are they doing it all on uh Binance and then it's just they're trading it? Like how does it work? I don't know exactly how it works but it's growing quick. It's like the uh the It's the Aster.

It's the uh True. It is It is the Athena. Yeah, I see your screenshot. It is the Athena thing. Wait, I'm My mind's I just don't think any Athena on an isolated venue is ever going to be particularly interesting. Like, you're never going to be able to match the yield at scale. Even Binance wasn't able to do this with their own with their own stable coin. Like, even Binance wasn't able to do this. It's like the biggest exchange with their own per stable coin just because they can't compete with the yield across all the different exchanges at scale.

Yeah. I mean the counter is basically what if what if the demand to go long is highest than Binance and it is then the largest source of funding rate and is actually bringing the weighted average higher than lower. But Athena would arb that. Athena would would overallocate to Binance and ARB that that like in theory it should get arbed flat evenly. I think it's it can work. market just doesn't doesn't scale to a large enough number, right? Like functionally it'd be the same because you'd assume that they would arbit it across exchanges. It's more just the the denominator can't get that big.

Wow. The Bitcoin chart looked really good right now. I just looked at it for the first time today. Yeah, I mean crypto has rebounded pretty well here. Um I don't know that weak that weakness could have just been somewhat of like an isolated flush there. Uh could have been like quarter end stuff. Yeah, it could have been that too. Like we started October 1st and we've been up only since we started October. Yeah. Uh what do you guys think about plasma 10 bill? Seems pricey. People are either I think and it like this is actually probably the right way to take it. you either become very gigabullish on it and you think it's going to get some Ripple XRP type valuation that makes no sense, but it's

got the tether ties and it's super memeable or anything or you just think it's like crazy overvalued. Um, and I that's kind of the the two buckets and I think it makes sense like on a fundamental basis it's a crazy valuation to me. Um, 100%. But like we'll see how they execute and everything and if they're able to I don't know. You listen to I've listened to like other podcasts and people are just very bullish on Plasma. Um I don't I don't have enough conviction either way to have a position like I I I don't want to get blown out on a short and I think there's easier stuff to short and I just don't have the

conviction to long it at this Valact feel. It's a pure sit out. What even happened? Like didn't it nuke a bunch to like see like the whole crypto trader is freaking out. No, it's like I mean it went up to what 1 16 1.7 almost so like 17 bill and it's back to a dollar 10 bill pretty much where it ICO price opened at. So it's just CT, you know, talking about three-day price action. Yeah. I mean the it's funny the tether thing I I heard I don't know if this is confirmed but Paulo put in a 50k ticket and that's like the tether connection are you talking about it's surely not that little

I heard I saw I've seen I've seen it and I'm curious to confirm if that's true or not. I assume it's not. But I assume Tether also invested separately, but if so, it's pretty funny because they've also invested in a bunch of other stable chains, right? Like um I don't know. Obviously, Tron has product market fit for this and like the bar is not high, but they also have just inertia from just being there first and being integrated into a bunch of OTC like Yeah, it'll be interesting to see what what stable launch is at because it's kind of the same thing, right?

I mean, I we we I passed on uh plasma like the the seed or whatever it was. Uh the it was like 100 mil or something. So, I'm I'm probably salty, but I don't really see the the point of a stable coin chain. Um still other, you know, I don't really see why we need a dedicated stable coin chain, but by all accounts, the team's like really good and is building some some really cool stuff. But like with Tempo and I think like every chain is is going to want to be a stable coin chain. There's like stable tempo like converge. Um, uh, obviously plasma. I don't know. I don't think the the market's big enough to sustain like a bunch of 10 plus bill.

Definitely not. Also, because stable coins are just the I've always thought stable coins were like something you need to make your chain be able to handle, but you were never going to make money on it, right? because there's no there just not a like most of the money in blockchains come from ordering transactions, right? And stable coin payments have no ordering that's like needed. Um, but you still want it because that keeps people on your chain and in your ecosystem and everything. So, it's very important for that. It's like this thing you need to have, but it doesn't really create economics for you.

I still kind of think that, but we'll see. We'll see how like the DeFi ecosystem evolves there and everything. Um I think that there are some I think like USDA is doing something there which people are bullish on that one. Um and so they do have like good projects I think just good stable farms. Yeah. Well yeah like I'm farming I'm farming there too. Uh it's a good good stable coin farm but like that's been the death of many chains, right? Like the the farmers are pretty brutal with their rotation games.

Yeah, especially stable farmers, right? Because you're like liter you're you're at least people farming in like other assets sometimes you can like make them hold but stable coin farmers are just pure like dumping. Yeah. I mean Tron generated like two bill I think in fees in 2024. Tron's such a weird outlier because they still make a dollar or two per transaction, which makes no sense for like stable coins, right? It's like, oh, we're we're we're banking the the all the little shops in uh like Thailand and and everything. And what people are paying like a dollar or two just on the Tron fee for these like aren't you buying like 50 cent purchases, right? So, yeah,

I don't know. There's definitely a market for it. Yeah, I think XPL also did a did a public sale and it seems like those are kind of coming like they've been coming back for a while, but it seems like now they're definitively back. Um I think the everyone's up on the on the on the XPL one. Uh Legion did Yield Basis recently which was like 200 million over subscribe for for 2 million for 2 million ticket. Um there's been obviously like uh Flying Tulip released their raise mechanics and they're also confirmed to be doing a public sale.

Yeah. Do you wanna Do you want to go into that one because that one is is different, right? It's they raise 200 mil out of one bill, but it's like this weird mechanism where the 200 mil is going straight to farming and then as an investor you can like get back your tokens, your your investment at any time, right? At entry cost. Yeah. It's like a put basically. So it puts in a floor for price. So basically the the team uses the RA funds operations through the yield earned by the raised funds. The raised funds sit in a reserve and function as a put allowing any investors the ability to to redeem just principle at uh initial cost.

That's pretty awesome. Yeah. Good. Who thought of that one? The king of yield farms. Yeah. Yeah. But it's been done before like from even from ICO days. I remember project you can get like 10 million. How much they raised? 200. So you can get like eight eight 10 million a year probably more. I mean I feel like well I guess yeah it depends how aggressively but No, I mean they can definitely I think 10% is is attainable if you're if you're savvy enough and have someone who's able to kind of rotate and do it quickly.

Obviously 200 million is a lot of size, so you start to get some serious yield decay, but if you kind of scatter it across a lot of areas, you probably get 10%. That's pretty epic. Yeah, it's an interesting mechanism. I wonder if more projects will will do it. Um, yeah. What do you think of it, Yan? Curious. I mean, then and then like I mean the psychological element of putting in a floor on price is huge, right? And then it just like rather than being an anchor, it's like a a spring away. Imagine Plump did that with your $1 billion.

Yeah. Uh that means that you can't touch the 200 mil like ever. Or does the put expire after a certain amount of time or what? That part I don't know. Um we can check but um be cool if it was like a fiveyear put or something. Two years or something. It was a good time. Yeah, I mean I think it makes sense. And then part like you could eventually raise at a higher val too, right? And and those that would be a a more standard approach and that way you can raise at two knowing that price will likely not fall below one. I mean it always can, right? Because you can have pers and and other market participants just sell the token down uh beyond that. So it's not like a

shorefire way. the the the impact of it decays over time as more of the supply gets out there. Um yeah. Okay. Because it's only for the it's only for the raised money. That makes sense. That's really cool though. I like that. Getting creative. Looks like it's perpetual. Oh, okay. H interesting. But I guess yeah, they could raise more money without that later on or something without that like from a different trunch of investors.

Yeah, I mean it all this and then like related to this zero also got a no action letter from the SEC which is what does that mean? Kind of wild to see. What does action mean? Means they won't be uh pursued or anything. Yeah. Were they getting pursued previously? Yeah, I have no idea what what was this whole situation. Um, no, it means they can they can basically launch their token without the fear of later being pursued for for securities violations.

Did they ask for that or like they applied for it? Yeah, I believe they went to the SEC. It's uh Yeah, maybe Cedar is actually you're probably the best to explain this. Kind of trying to build a new internet. Double zero. Yeah. So double zero essentially if you think about like high fre so you think about the way please just joking so okay so the way the way blockchains work today right is you have all these validators around the world and when they come to like agreement on transactions uh they need to communicate with each other right so you have validators in like Tokyo you have validators in Amsterdam and in Chicago

and there's like latency was sending messages across the world, right? And the way standard internet works is when you send a ping from like Chicago to Tokyo, the path it takes to get to Tokyo is kind of random all the time. So it could go like even backwards a bit. Um it could go like from Chicago, it could go to like New York and then it could go over to Tokyo or something, right? Or it could go to Amsterdam and then to Tokyo. What Double Zero does is you have all these HFT firms that built all this all these uh wires like underground.

Yeah. Uh for trading, right? A lot of their fiber is is like dark. Okay. Which means that like it's not utilized a lot of the time. And so what Double0ero does is essentially it gets all these validators to want to join the D0ero network and then D0ero kind of like negotiates to use this fiber on behalf of like all the validators in the network. And so now when you want to go from Chicago to Tokyo, you get a direct line and it speeds it up a lot.

They lay that across the ocean. Yes, across the ocean. So wow. floating or bottom. It's already there. Yeah, it's already there. That's the thing. Like all of this is already there and it's not really used. It's dark and they want to light it up essentially, right? And so um it's like deepen in the sense where it's this like and that's what that's what Hester Pierce I think she had a comment in here talking about how like deepen she specifically mentioned deepen. So it seems pretty bullish for defin projects in general. Um, but yeah, they're they're they're already live. Like I think 10 more than 10% of Salana stake runs double zero.

Their token goes live tomorrow. Wait, it's uh so so what's that? That was an excellent explanation by the way. Thank you. Sorry for trolling you. What um what is the actual use case of it though? Just it makes it faster like it makes consensus like Salana or trading or what any network who wants to run it. So any high throughput network, it's not going to be of much use to something like Ethereum with 12 second block times. Uh well, it would be of some use, but like you still have these 12 second block times, right? And it's not going to be helpful for like I don't know if it would be helpful for L2s because there's no consensus. Maybe it would be helpful with in like another way but

it essentially it's like this whole increase uh bandwidth reduce latency thing right? We're actually doing things with crypto now. That's cool. And so double zero. Yeah. So double zero is like not even this like crypto thing per se. Like it is but it's not like you could use it for other like not even blockchains. And is the token to just like get people on the network or something? Yeah. I'm not entirely sure what the token is going to be. I'm not entirely sure of like the economic model for0ero. I haven't uh I should probably look into it.

It's a typical L1 token. So the the the token is used uh we're investors by the way full full disclosure but the the token is used to um pay validators and and also pay for pay for resource provisioning on on the network. So um and and then also there's there's going to be some burn that that that happens there too. It's its own layer one along with like providing support for Salana. It's not really a layer one. It's not really layer one. Yeah. It's like this coordination. Is it Is there even a block? I don't Isn't it like a NMA in the sense that there's not like a blockchain? It's like this other layer that it is like is the zero tokens probably going to launch on Salana,

right? Mhm. Wait, so who else would use them other than Salana? Like Cassui could use them. Uh Monad could use them. Um any like performant chain with consensus? Yeah, I don't think it has a ledger or or consensus. I think it's literally just like a networking layer that that anyone can use. So validators can opt into it and then they're using zero to send data between them rather than uh yeah rather than traditional it's it's a cool project because like Salana for instance they can they can make the validator client better they can do all these optimizations uh but at the end of the day especially if you don't want to

colllocate validators like have all the validators in Amsterdam or something there's like only so much Um, if they wanted to like decentralize maybe, but I don't know if they care about that. Yeah. So, like that's a good qu. How do you know how long it takes to go from like one side of the world to the other with this? Like how much does it affect lat there? I forget off the top of my head. There was a good presentation actually from ECC on this. It wasn't about double zero, but it's with like some Google. It was it was fire. It was uh Flashbots and a guy from Google and he had a really good um it's like it it changes it it can change it from like over 100 milliseconds

to it can like cut it in half, right? Um and is it is that just capped by like the speed of light going through the fiber cables? Yeah. Yeah. I think 150 milliseconds is like fastest you can get. I think that's is there any way to to get faster than that or is that I don't I think that's like the limit that's a physics issue. Yeah, we need the alien tech for that so we can get zero latency trading. What did you guys do with this tech? Wow. Zero latency. My my HFT firm made a Yeah, top of book just got a lot better.

Yeah. But no, Double Zero is really cool. It's one of those like um everybody's bored of infra, right? And everybody's like, "Oh, we have too much infra." All this stuff. I've always kind of thought that we have too much of the wrong infra, but we actually don't have enough of the right infra. But like, and zero is one of those projects that I think is, you know, getting the right infra. Neat. So, like these trading firms historically just like keep this to themselves. Like there's no like way to tap there's no monetization for it for them. Yeah. So, this is a way for them to kind of like monetize it more.

How much you think how much do you think it cost to like lay cable from Japan to New York? A uh it's a big number. I don't know remember off the top of my head, but it's it's like a good build out. And then once you build it out, you have to maintain it and stuff. Is it like at the bottom of the ocean or just kind of like hanging? No, it's at the bottom of How would it hang, man? There's like boats and stuff in the water. No, like low in like kind of It's not like at the very bottom. I think it's at the bottom. Very bottom. Yeah.

Imagine like a animal or something just like it. Well, no. There's like sharks that have like chomped on fiber cables, right? And that's what I would suck. Yeah. But uh but yeah, that's double zero. I think the other kind of like meta going around is this whole like per deck meta, right? Do you guys think this will be like a real I think perplexes are always been this like thing in crypto that just has great product market fit and then I think over the last few months a lot of people started thinking like okay it's over now and it's just hyperlquid um and you have gotten a lot of things there's just a lot right there's a ton of like per decks that are pretty new

and coming out like there's even a there's even this per deck that lets you it's like pump fund for per deck is it's insane. It's called like orderly or something. You can just like launch your own per deck. It seems kind of ridiculous. It's like we we we've seen this before, right? It's it's um I mean I think all this stuff is is is a little bearish for Hyperlid because um you know the issues before were that uh you could only really optimize so much and then uh at at a certain point the the deck has become interchangeable. So if you're a trader you know I'm just going to kind of move my existing volume to the next

one that still has a token. And so that was kind of the issue for a lot of existing perplexes was when your incentives started to uh kind of slow down, you'd see the mercenary traders or just rational traders who were seeing who would get the same execution elsewhere just move their trading there. Um and and then we Hyperlid came out and and they kind of dominated for a while, but now you're seeing these other ones pop up. And I think um it it serves as inspiration, you know, for for an opportunity for builders to to kind of continue that and and you're going to see traders move, you know, from Hyperlid to to lighter and and and others. And so, um it's you kind of, you know, we'll see

when the the water washes when the tide washes away and tide being incentives who is still left standing and and where it makes sense. I think some of these are iterating in cool ways though. Um, I think lighter is pretty cool. Yeah, I mean they're they're they're Yeah, exactly. They are cool and and there is certainly innovation and you kind of have to do some degree of it in order to stand out uh beyond the incentives. But um yeah, it makes sense for some of these dexes or the the sexes to do one where you can try and kind of bridge liquidity across the two venues and ideally kind of improve the experience for sexes by bringing some DEX liquidity there and allowing market makers to kind of bridge it or um and on the DEX side you launch a successful

token and there's obviously monetary benefits to that. Yeah, I mean I think Dexes are the most like in in general prep dexes are I think the most profitable product in in crypto um and and arguably the one with the most product market fit. But it is like very competitive and the switching costs are very low, right? Like if you compare something like and we've seen it kind of time and time again that there's been a propex that was really dominating with with you know uh well over like majority of market share and then they got unseated by by someone new. Uh because when you just bring fresh incentives like already everyone's far farming lighter and edex and and Aster I guess to some extent. Um and the products it's it's kind of hard to

differentiate a lot on the product. Um, I don't know. Like I I missed uh like I missed Hyperlquid initially because I just didn't see that it was that differentiated from from like DYDX and things like this to where it would warrant, you know, like a whatever it is 40x or whatever valuation premium from them. Um, and I think it's tough to to tell like what what is what is the better product in this in this space. You have to use it. I do use it though. That's the thing.

Everyone, everyone who baited Hyperlid is like, "Have you used it?" They're like, "No." Okay. I I wrote a thread on this. Can I please share it? Can I share my screen? I literally this exact topic on I on why I sold all my hype for Galaxy at $54. No. Oh my. It's literally exactly what we're talking about. I literally put out exactly all the points you said, but with Say it. Okay. So basically the quality of revenues right um as we said the switching costs are are super super high and then as you have like these competition like if hyperl 50 billion like it kind of has this problem where it's like the higher it goes like the

bigger the prize is to come in and copy it. So like four majors, right? Like you probably just need like a pretty good team and a few hundred million dollars and you can offer like similar liquidity on kind of like major pairs and then you can run this massive campaign, right? Where like Aster has whatever billions and billions of dollars in tokens as incentives. So like it's kind of like as you get more successful, it's like a bigger prize pool to come after and then like a competent team with like a few hundred million dollars and some market making arrangements can come in and try and take a stab at your prize. So that's what we're kind of seeing with the Astro Lighter and all these guys. Uh and then why Solar for Galaxy is because they have very sticky contractual revenue. So

it's like the quality of revenue, right? Like how can you put a really high multiple even though Hyperliquid was like a 99% margin business? It's like how can you put a really like high multiple on that if there's like not any guarantee that it's going to be there in the future because these people can kind of just like suck it away. Yeah. Yeah. This is why I still think that Pump, which trades at a way lower multiple than Hyperlid, does have a path to like actually justifying a way higher multiple. Because if Pump actually breaks into the mainstream and they're successful on like the streaming and like Tik Tok thing or whatever, I don't think that's as easily disruptible as like a really good perex, right?

Because the brand matters way more and like the social 100%. Okay, second one is the flows in the absolute size of hyper liquid. Okay, so like at a 15 like at 50 billion FTV, this thing launched a year ago, right? Like it only TGED in November. Think how much like UPNL is there from like early buyers and airdroppers still and it's going to hit long-term capital gains for us people in November, right? So that's another thing. It's just like to to to get Hyperlid to like 10x from this price to get up to like 500 billion like ETH's valuation. It just takes like an immense amount of flows and there's just like a

point where people don't even care how cheap it is. They're just up so much like UPNL from like buying early that they will sell no matter what. So like already all the already all like the crypto funds have bought, right? Basically like any crypto fund has bought. It's like you need now like the next leg of buyers and like maybe the DAS will be able to do that for Hyperlid, but it's just going to take a long time for the market to digest that versus Galaxy at a 12 billion market cap. You know, no holds all the float. It's been trading lots of volume. Um I agree with you on pump too. Um, but I I think also like within the within crypto like stable coins have a are way less profitable, but they have a way bigger

moat like it's really hard to create a new stable coin and like get all those integrations uh you know across DeFi, across CFI, get the trust, get all get all that compared to a new um a new per exchange. So yeah, and I agree with like I still hold I think I haven't really sold much hype. still still hold most of the original position. I bought and I did buy on the initial runup but bought on the on the sort of FUD um for the when they when they closed when the jelly jelly fud went down to 10 bucks. Yeah, I think I started buying like 14 or 15 and and bought bought the way down. But I still hold most of that. But I agree the upside seems kind of uh tough to to see how high it can go from

here. People are up so much. It's not as big as people think. Like I think the SPV is overstated just because of the amount that's sitting in and we saw that John Charbano um proposal to reduce supply by 45%. So FTV is like roughly half of what it actually is. But um I agree and I think the the unlocks could be worse than people think and destroy some of the sort of aura that the the project has. Yeah, I I mean I think yeah, right now it's it seems like a better trading tool than like than than a like a longer term hold considering how soon the unlocks are coming. Like I my my hype bag is a lot smaller than it's been. And I think next

time I'd like to buy is if you get like a really bad flush um or or I think around uh unlock FUD because I imagine like Yeah, I I got to imagine they'll like sell a piece and then say we're we're sitting on the rest kind of thing. Yeah. Or just do like a schedule just be like hey we're going to sell a million bucks like and then it's just planned. The market knows it can get its head around it. I don't know when I think about um so when when I think about some of the crypto projects that could be in like a future I talked about this before but in a future like mag 50 or whatever hype is definitely one of them though top 50 like companies in the world like crypto

not not a crypto mag 50 like a total like when I think about what crypto projects could make it into the 50 top companies in the world in the future hype is is one of them I think like then an L1 and and in and something like a stable coin play would be the ones I I'd see doing maybe. Exactly. You said it, not your words, not mine. Um, but yeah, so I I don't know. I feel I feel I feel like I don't want to sell uh my entire hype bag, but maybe do a bit. Hip 3 could also be huge. Like although like the the interesting thing with Hip 3 is I'm I feel like the biggest TAM of HIP 3 is traditional markets and those are harder to execute than just adding the market right because there's like all this

stuff you have to do like maybe Yan you can speak to this but obviously we had Kadoro on she kind of explained last time a bit of what makes it so tough to offer traditional markets but it seems like someone like that the there's enough going on at Hyperlid that someone will be incentivized to like build basically osteium on top of on top of hyperlid obviously you can it's like an oracle based model but what do you think is is it going to be possible I think unit's doing it question I guess is if you're good enough to do it would you is it better to just own the whole pie like do you have it's 50% though like 50% seems pretty reasonable it's like are you going to be 2x more successful launching um on hype and benefiting from that entire user

base and stuff I think probably Yes. Especially because most of the people who probably will build it already have giant hype bags which which is another I'm pretty sure unit's doing it. Okay. Do you know how spot or I don't know but Shoku's tweeted about like what should I add like in stocks and stuff? So I don't know. I'm sure that he'll he's really smart. He'll figure it out. If they can do per and spot he'll do it with hip three. I'm Yeah. I mean, you basically need someone else market making in a really efficient way on trade markets. And also, but how do you do it like when when trade markets are are are closed? Like how do you do it on weekends and after 5:00 pm?

You hit a pause on the market and you limit leverage. Yeah, you definitely have to limitations on Yeah. Exposure. Um why can't you just pause the market and then limit leverage, right? Like obviously if you have 100x and then the weekend closes and they gaps you can't liquidate the person correctly. But if you have like you limit the leverage to like 3x or 2x or something or depending on how volatile the stock is then you can like be pretty confident you're not going to get bad. You have to limit OI and not not just leverage because leverage and yeah you can just do things like I feel like you just figure it out.

It's tricky. I think the the the the market maker or whatever pool they're using to do it just takes on a lot more delta. Um and then I mean then it's like the obviously the end goal there is you become the the oracle of uh closed prices and then when they open they converge to you but that's obviously a ways away. I mean uh if they open up 247 trading which I don't know if that'll ever happen. Yeah. This is where it does feel like the vision is just like so big and like 10 years it could be so so so so so so massive, but it's just like there's going to be so much competition along the way and it's just like a harder bet with certainty to make because there's

just going to be so much competition especially for this, right? you get into this token at like blockchain like you don't think you think people are just going to like the trad going to stand aside and let hyperlid like be the global trading venue maybe but uh I think it's like there's going to be a lot of competition I think the biggest risk for Hyperlid is just the like KYC AML stuff I think that um and just black swan from tech being a bit of a yeah I just think that Hyperlid is probably going to be pressured into u I think there's a lot of lobbying going on and uh I think there's a decent chance that Hyperlid may be forced to like KYC AML.

Yeah, at some point. Anyway, actually we we can I ask you guys actually do you guys have anything more to say on the Purp Tech stuff? I have a question about Are we holding or selling the Hyper NFT? I mean, I don't have any. So, yeah. Well, yeah. I think you're one of the few You're the only one I know who opted for both. Are you up or down? Had you just opted for There was no penalty to do that. There was zero penalty to opt for it. That was That was Well, no. It wasn't an exchange though.

You like sacrificed some tokens? No, people were flooding that. It was a I thought you had to pick one or the other. No, you could check both boxes. Uh, I'm going to go check if I did. Yeah, if you just put your address into OpenC, it'll show you. Okay. How do we feel about Mine's pretty rare, so uh I'm thinking is that should I hold it or if it was a floor, I would probably just nuke it, but given its rarity. Yeah. uh the I don't know about the the hyper NFT that what I wanted to say before I is hearing hearing um sort of the talking about it that that the SEC is basically bringing

back um or like trying to figure out a way to bring back ICOs to US nonacredited which would be pretty huge. Um, there also obviously this no action letter to double zero is a pretty good sign. Like they I don't I don't think they gave a single one of those during the Gendler during the Gendler term. Um, and that could open up uh a way for projects to actually do like pretty big ICOs and and and for like onchain fundraising to become like way bigger than than than even in the ICO boom which which was already like I think over 10 bill was was raised in ICOs. So I think that's pretty exciting. Um, what's going on with Legion in this? How does this affect Legion? Give us the

inside scoop. What's going on? I mean, Legion is is is doing well. Like, uh, obviously, Wheel Bases was a big success. I think it was the most it's that's ever been uh sort of deposited on Legion, the 200 million, and it's like insanely oversubscribed. And also like the cool thing about that was we're investors in yield basis and they they didn't do any of the standard like buying Twitter followers and and doing and doing Ks or anything like that. So people weren't talking about them. But now since the Legion sale, they're like all I see on my feed and like people are doing threads and and and shilling it and stuff which is kind of like what you want. You literally just got massive free distribution. you didn't have to do anything other than sell your token to to investors um you

know at the at a at a good price. So I think it's pretty good validation of the of the the way they're doing things and also even like the merit based sale like they're able to decide from 60,000 plus uh applications to narrow it down to 2,300 people were writing like cover letters to showing they really understood the project like uh threads that they'd written about it this kind of thing. So, I think it's it's pretty cool. Definitely validation for the for the way they're doing things. The Kraken sale was kind of less successful. Like Kraken, which is partnering with Legion, sold out in about a second and literally the entire website was was at least for me, it was down. Like I couldn't even log into my to my Kraken account. So, I think it was it's a kind of a good problem, but it was a lot more traffic

than than than they were expecting, which kind of and yield bases is is definitely like a high-profile project like it's ex uh co-founder, but there's definitely some some some projects that that have way more hype that will be doing ICOs soon. So, it's kind of interesting to see how that goes. Um, and obviously Ekko is is has been crushing it too uh with with Plasma and and uh and I'm sure they have some other stuff some other stuff coming. Uh it'll it'll be interesting to see like how the US rolls out this this nonacredited thing. Whether they do a pilot with specific people or whether it's like a general a general Yeah, it'll be interesting to see how they roll it out because I guess there's some worlds where they just work with specific partners on it. Uh and which would be pretty good for those people and pretty

bad for nonacredited so they're going to let everyone do it. I mean, no no evidence of this at all. It's like rumblings that I'm that I'm hearing. You should be able to be because like the whole thing is like if you're not accredited, then it's like you're too like stupid and poor to make your own decisions. I'm curious what you guys think of like if they open this up more and you have like tokenized securities and all this stuff, which I've been talking about for a while. I don't know if it's ever going to happen. Do you think that's like bullish crypto? Yes. Novo was talking about um Hester Pierce saying like talking about like bringing everything on chain. He's like this is so bullish. Like we get a market

structure bill. Like I don't even know how to explain how [ __ ] bullish this is. Like that's the guy you need to listen to. The guy who's talking to like literally all the Trady institutions. His calls are so good. Like when he's like ah I'm bullish BTC. I'm bear. He sees like all the flow. He's talking to all the big shooters. Like it's honestly a lot of alpha and just like listening to him whenever he goes on TV. It's definitely bullish. You You don't want just crypto crypto pro, you know what I mean? Like you don't want us to just be trading self-referential tokens. Yeah. The bearish argument is basically that it cannibalizes demand for crypto. But I I think it grows the pie to a much larger degree and and just brings more assets on chain which then will be flowing into DeFi which you know

obviously that becomes bullish for the fundamentals of of everything. So um I think it's net bullish for sure. Yeah. Like it depends what assets you're talking about. For instance, let's say Salana started getting a lot of legitimate companies, you know, IPOing on Salana. That's good for like Camino and and like all the exchanges. It's good for Soul, right? Is it good for like other tokens that are not like related? No. Right. And so they can catch a bid from some stupid narrative. What happens when people lose their shares? Like you can't lose custody of your of your shares. you can lose custody.

Yeah. You could KYC and like recover them. I'm honestly so like raise your targets raise raise your targets over the next decade. I was reading this. This is insane. You ready for this? Okay. Uh to be estimated wealth to be inherited through 2048 by generation, 40 trillion from to Gen X's, 46 trillion to the millennials, and 15 trillion to Gen Z. Like I'm pretty sure people like global allocations to gold are like half a percent and it's literally like doubled in the past like five years and it's like Bitcoin the global allocation of like Bitcoin is probably so small. So like if you actually put all the equity markets on chain just like naturally

they're going to get more comfortable with oh this is good tech and buy like blockchain stuff. It's just like oh my god raise your targets raise your targets long term. Just don't get liquidated. I don't know my I'm I'm more on the side I I do agree like a lot of infra crypto infra will some things will benefit but I am more on the side of if like real companies start having a really easy path to tokenization and and issuing on chain I think it's more so cannibalizes um a lot of the shitcoinery that's going on and like you'll have you'll have a bunch of the real companies Yeah but like we don't even want like you're still gonna there's still going to be the demand for like the

gambling, the getting like the 100x 100%. It's just the the the universe of of deployable cash just goes up through the roof, which is what you need. Like the whole reason the memecoin casino gets nuked is like everyone just ran out of money and that's why there are no more runners. It's like new money. Everyone got rugged. Yeah. the pre the president the president I guess do you think so so you think like um if people can gamble on like random private companies it's just not fun it doesn't itch it doesn't like uh fulfill their gambling itch in the same way as aping a memecoin does like if there's if there's imagine there's loads of startups here you can like listen to the founders or watch watch watch

pitches or whatever look read documents it's just a bit too serious and too too too complicated for most people and they just want to ape like with hat or whatever. I think it tickles a different itch, right? For for most people, crypto like people in crypto have the majority of their money in crypto. People outside of crypto don't. And so I think this just helps them get more money into the space, right? Like sure, they might shift some of their equity portfolio from one to the other, but I I think they will maybe take themselves off of zero or go from one to 10. one just being like, you know, like like previously mentioned, this gets them comfortable with with the tech and and how it works.

And then two, it's just money that they weren't going to touch. Like, oh, this is [ __ ] awesome, right? Versus using the bank, which sucks. But Jos, it's like, don't I think you have to think it's growing the pie a ton versus like replacing. Yeah. Yeah. I mean, maybe. I I think there's also a world where like Robin Hood kind of just just makes all the money from this stuff and like if if these things get tokenized like the some of the big company web two companies and and exchanges end up making all the money but uh I mean it's definitely bullish crypto as technology. I just think a lot of the a lot of the shitcoins um just feels more cannibalistic. Well, the cannibalistic like the notion is

basically that all the crypto money there's going to be more crypto users that get their money out of crypto and into startups than there will be new money that comes in, right? That's like basically the math. Yeah. And and like I think crypto people are more likely to put their money into startups to to recreate like the general risk exposure betting on innovation that they want versus startup people aping random crypto [ __ ] There's just so many people not in crypto that Yeah, that's fair. It's also like, oh, this thing is gonna like 3x in a year. Boo, you know, and it's like a best case scenario for crypto. These people have just and like we're in the same boat.

We're like, oh, this is like a guaranteed, you know, three 4x in a year or two and and it's just doesn't get you excited. Oh, yeah. But like you if you literally could do that for like 10 years, you would be a gazillionaire. If you could two or 3x your port over like 10 years, you lit. I know. But it's just like it doesn't get you excited. That's basically it. That's that that's the takeaway. We're insanely bullish. Don't get liquidated. I think more people these days get chopped than liquidated. The the the chopping has been really bad. Like the trench chopping. Um people need to zoom out.

I think you're there's a big overlap there. I think you're much more likely to get chopped when you trade per too than spot. Yeah 100%. That P&L that P&L number is is is treacherous. I got absolutely blown out on this ETH short I did. I was like I woke up and like you know how like the chart from like last night's like loading and it's just like literally like the green candle's off the screen. I'm like just like the old I like wake up the old chart's like still there and then it like refreshes and the green candle's literally off the screen. I'm like, ah, that is not good. Do I still have a position?

All right. Do you want to wrap it? Yeah. Yeah, let's do it. Uh, good pod, guys. Thanks. Thanks for tuning in, everyone. And we'll see you again in in two weeks. Yeah. See you everyone. Bye. Thanks everyone. [Music]