How The ETF Floodgates Are About to Open with Steven McClurg and Eric Chen

Transcript

If Micro Strategy is included or any other DAT is included, then you're getting indirect access to cryptocurrencies via S&P index, which I think is really really interesting that that's never happened before. >> And also, coincidentally, it's also one of the largest underwriters, which could have a lot of, you know, synergistic nature of it uh with the overall blockchain ecosystem. >> And the idea that you're paying for security is kind of a meme. And so he also agreed that these staking yields were going to come down. But he followed that up by by saying, look, with these digital asset treasury companies, that was that was sort of false. What the actual state of these ETFs are, the Injective ETF, the the staked ETFs, the

Pangu ETFs, the Litecoin, Dogecoin, etc. I know that you guys have filed a ton of them. Welcome back to the Rowup. We are your hosts. I'm Andy. I'm Robbie. And this is your home to learn from the biggest guests, the brightest minds at the tip of innovation. >> Our goal is to help spread the collective knowledge of everyone in our community. We are breaking crypto out of its echo chamber and taking it to the real world. >> Welcome to the show. It's good to have you guys on. >> Thanks for having us.

>> Happy Friday. >> Absolutely. >> Happy Friday, >> guys. Congrats on uh all the all the good work and uh the first US state uh ETF and filing that with the SEC. Uh this is something that I think we're going to see a lot more of and you guys were were pioneers in this place. So, congrats on that. um what what was the experience like kind of kind of working on this uh project that's a little bit uh less familiar of a structure than maybe some of these other treasury companies and and other ETFs are are uh working on.

>> Yeah. Well, maybe I I'll start off by talking about the the ETFs and then hand it over to Eric to talk more about the treasury companies. But uh you know, I I've been involved in ETFs since really around 2009. Uh I was a an institutional money manager mostly managing insurance companies and sovereign wealth funds and pension funds and and the like and hedge funds and uh the firm that I was with at the time decided that we were going to buy an ETF company. So we we went out and bought a Ryex and Claymore put them together and and I became the portfolio manager for for all of that and decided we would uh you know launch our own flavors of things. So I'm actually used to uh attempting to launch and launching

very esoteric style uh offerings in the ETF world uh even in traditional finance. So launched the first asset back security uh ETF um you know was what did the very first build America bond if you remember that and uh and of course launched uh other products around that. So some of those took a long time. uh it just takes a lot of patience and grit and and some of them are um are easier. So when uh the last firm I started which was Valkyrie, we filed for the um you know some of the first uh Bitcoin related ETFs. uh we launched the first Bitcoin futures on NASDAQ, Bitcoin mining companies, and then of course uh we were one of the many on Bitcoin spot

and uh you know, we're always looking for unique angles that uh the market might be interested in, might be looking for uh that doesn't exist and that's really where where we're focused. So for instance, when uh when ETH all the ETH ETFs began to launch, we just didn't think it was going to be that compelling unless you had staking involved. So, we decided to bow out, let Black Rockck take all the all all the gains. And then, of course, when we started Canary, um, we took a big risk. Um, we didn't know who the president was going to be, what type of administration we were going to have, what the SEC was going to be like, but we decided that we were going to plow forward anyway. So, uh, we filed a bunch of the early, uh, altcoin ETFs last year. Uh, one of them, of

course, um, being being staking. So um we try to uh incorporate staking in every ETF that we file that uh allow staking. We think it's a very important feature of the network. We think it's very important feature of the coin itself and of course it's an extremely important feature for investors uh that want access. >> Yeah, most definitely. I mean, I think that I I'd like to get into some of the nuances of how you guys are thinking about liquid staking versus, you know, validator withdrawal cues, these types of things. But Eric, just want to give you a chance to kind of put it put this from the builder perspective, right?

Launching an ETF, trying to, you know, get these things or sorry, filing an ETF, trying to get these things uh moving to open up the the type of capital allocators which can allocate towards something like uh Injective or the INJ token. you know from from from your perspective uh kind of similar train of thought how are you thinking about the ETFs for uh you know uh token projects staking etc. uh what is your frame of reference for for uh launching these types of things? >> Um I think for us there's really two ways to think about it. Um one is you know more on the technical aspect of things where we had to do a lot of work to support these type of product and making it much more you know institution forward and friendlier uh for a lot of

these platforms and issuers and um you know institutions to be able to you know hold and be able to you know uh mobilize these like stake tokens. So one really interesting part is we decided to create like a specific you know feature module um in anticipation for uh the ETF and also uh for you know uh the the most recent DAT dedicated towards INJ which allows for you know the transfer of uh um uh state uh inj positions between addresses uh so that you know different types of escros can be moved uh uh you know amongst them uh freely and it also allows for you know uh um kind of like the skipping over on bonding period uh for you know uh um the list of like

different types of like stake inj amongst various whitelisted you know permission addresses and so that's really really cool feature that we did to like support um um kind of like all these features in anticipation for the institutional adoption and I think as an ecosystem and as a you know blockchain especially um in this extremely you know innovation forward uh type of administration and this political luh landscape um we've just been you know doing our best to be able to support to be able to, you know, push forward with a lot of these, you know, very innovative products like the stake DTF and on top of that, you know, uh, uh, the DAT that's recently launched as well. Um, uh, overall it's just extremely exciting time for us and we've just been, you know, keeping our eyes

peeled with the overall progress for the commentary period for the NJ stick ETF as well as, you know, like the uh, you know, announcement from the pineapple financial. Introducing extended exclusively on Stark, a nextgen ps trading platform live today with 50 plus trading pairs from crypto to tradi. You get the best experience on chain today. Deposit in the community vault for attractive returns compatible and engage in unified margin spot trading lending and per trading exclusively live at extended.app on stocknet today. Yeah, it's pretty it's pretty uh it's pretty interesting times in the in the world of financial engineering. And Stephen, I'm I'm I must say, you know, in response to

what Eric uh has kind of laid out with regards to these treasury companies. I think a lot of people in the space were surprised at the way in which that this kind of market cycle, if you will, has played out. You know, you mentioned that when the Ethereum ETFs came out, you know, you thought there would be little demand for those outside of just, you know, without staking, let's just say. And, you know, I think a lot of us thought that a lot of the demand for the market to move this cycle, let's call it two years ago, was going to just come through these ETFs, was going to come through these 401ks. Really, I mean, what Eric and a lot of others have realized is that a lot of the demand is actually coming through these more treasury type vehicles. Um, you guys at

Canary have I mean I don't know exactly h how many but probably upwards of a couple dozen ETFs filed uh for various assets and I think a lot of us in the market are kind of waiting on the floodgates to open right a lot of us haven't really been able to uh participate in debt. Also they've only really affected the top couple assets in a meaningful way at least up to this point. Um, what I'm getting at here is I think a lot of the community is curious from your perspective what the actual state of these ETFs are. The Injective ETF, the the staked ETFs, the Pangu ETFs, the Litecoin, Dogecoin, etc. I know that you guys have filed a ton of

them. What is the state of these? What is it going to take to actually get these through? And would love to just understand if you had an estimated timeline as well or any predictions and thoughts there. Yeah, look, I'll give a guesstimate because the reality is is I know nothing. >> Okay. >> Um, but the the the bigger reality is is I know some things and what we do know is that the exchanges have filed for generic listing standards with the SEC. Uh, that is going through public comment period. They're going through revisions as we speak and there is an expectation in the market um this again this isn't for certain that those generic listing sta um standards should get approved

sometime by the end of this month and then uh the SEC will work on ways to actually uh open up for tokens that qualify under the generic listing state uh standards to be launched in an ETF. So my expectation is probably sometime in October is the right date for anything that has a current US futures market. So that's the that's the first stage of these generic listing standards. Uh there were conversations earlier for other uh qualifications that were more quantitative such as market cap and trading volume in the US and it seems like that has been put on hold for

now but there is an expectation that those more quantitative measures will probably come out you know three to four months after the first round of generics come out. So, uh, so look, if you just look at CME, Coinbase, um, those are the probably the two biggest markets for futures for crypto. Anything that's been, uh, that's had a futures market for over six months would qualify once those get approved. So, um, again, my expectation is sometime in October, maybe pushing into November, and then next year, probably in the spring is when we get the the new standards, which would include uh, a lot of the other things that we're working on.

Very cool. >> That is an accelerated timeline. I'm >> Exactly. >> Well, in my opinion, I mean, I'll just I'll just say this. There's a few things that probably should have should have been approved a little earlier. Um, you know, but um, you know, it it is what it is when you're working with the government. >> Yeah, we we've seen that. Um, I I I have a question kind of for for both of you guys, but I'm sure you have you you have some unique perspectives on it. um in stake staking in general. We had uh a live stream actually at Permissionless in New York. We had uh asked a couple of really smart guys, Tun from Robot Ventures. Uh he sort of explained, look, we're seeing staking yields go down

across the board. Um he said he was he was uh bearish on built businesses that were built around staking revenue uh LSTs, protocol validators, but but very bullish uh on businesses bringing stablecoin demand and companies on chain. Um but those the staking yields were coming down quite a bit. And then his buddy over at at Dragonfly, Hibb uh agreed. He said, "We're going to go down downhill from here. Staking mania uh was a bit of an illusion." um and and the idea that you're paying for security is kind of a meme. And so he also agreed that these staking yields were going to come down. But he followed that up by by saying look with these digital asset treasury companies that was that was sort of false. And and in fact these

companies are making quite a bit uh and and increasing their MNAV as a result of staking yields. And so I'm curious, you know, Stephen, from from your perspective with respect to these ETFs and these particularly these staking ETFs and then Eric, you know, just generally the builder perspective on the chain, where do you guys see staking yields? Are are they trending down or is there enough demand from these treasury companies and these ETFs to to really keep these staking yields alive? >> Go ahead, Eric.

>> Yeah. So, so I think one of the most interesting part about um uh a lot of these like LSD uh type of protocols and LSD product is that they're typically, you know, extremely utility focused. Um they serve a very uh you know, uh a precise and interesting value proposition for a user and it's typically you know like I said a smart contract um that's typically open source etc. So it makes it so that like it becomes a very very competitive field um because there's no specific differentiation between different types of LD LCD protocols. So it could be, you know, like a kind of like race to the bottom. There's not necessarily like a mode or network effect uh between a lot of these, you know, like um uh kind of like staking protocols that are happening on chain. And if a user wants to migrate, it's honestly, you know,

maybe a waiting period as mo at most. Uh but it's honestly just a transactional way. uh this is very different in terms of um what the ETF uh you know space is trying to offer and what the DAT space is trying to offer because uh first of all it has a very distinct advantage of kind of like this uh differential capital flow uh between you know the institutional capital flow you know wrapping it under like a compliant and regulated product uh to interface with the general public the general like investment investor crowd within like a traditional financial rail that they're used to and this creates a completely different uh kind of process and access which gives it you know a significant uh advantage and obviously like value proposition uh that can't really be easily beaten by you know just another

like uh commoditized protocol and I think that's really like the different uh differentiation here is that um you know like staking yield is probably going to collapse and the fee for it is probably going to uh uh kind of like compress over time but uh that as a product uh you know that's being commoditized versus an institutional product that's being you know uh uh where there's a lot of effort going into you packaging it into a compliant uh uh kind of like structural product or compliant you know like offering uh to be interfacing with you know like a massive set of tradition uh traditional investors. That's a completely different type of product we're seeing. It's to you know expanding access uh it's the you know grow the influence of uh um or you know like uh grow the kind of like

uh the beauty of crypto to a bigger investor base. So from that lens then there are still these structured products or these kind of financial uh uh rails that provide yield on a token like injective which are interesting to a a subset of investors. You're saying that basically this concept is still somewhat new enough or interesting enough from their perspective to uh want to allocate to these types of uh of investments then.

>> Yeah, exactly. Yeah, I think and I think that's why it's very very exciting. Um because at the end of the day like um it's almost like saying like you know bridge protocols um uh can be commoditized which is certainly not the truth. Bridge protocols have you know like a very very strong mode. Um it has um basically like a network effect as it congregates more like a usage and flow and like you know like a TDL and basically a lot of these products are like the bridge protocol where you know they bridge between uh um the bud 3/5 world with uh you know the trapi world and obviously as it expands in size um the moat just becomes stronger and stronger and stronger and therefore you know it becomes a very powerful uh and very longlasting moat.

Stephen, do you agree disagree with some points? What are you seeing on the staking demand yield side of things? >> Yeah, look, I I think there's a ton of demand for for the staking and and I actually find it quite interesting. Um, you know, my my previous background was more in fixed income. So, I I completely understand that, you know, a staking yield is is is indeed in in some ways income that you get for holding on to holding on to an asset. And uh that's something you don't get with everything, right? So um you don't get that with with with fine art unless of course you lend it out. Uh you don't get that with a lot of things unless you lend it out.

But uh for you know equities that have a dividend or or fixed income or or a protocol that u that you actually earn the yield for the transactions uh that that occur on the protocol. Those are all very interesting and um and people love yield, right? So uh when you have for instance the difference between an ETF and a DAT is uh you know in a DAT you're investing in the business of the yield right so in an ETF you're uh investing in the yield itself uh and you do have two different types of investors investing each one um ETFs are mainly um you know it's a big financial advisor type instrument because it's it's pure it's clean um financial adviser might

put their clients in a portfolio of 90% ETFs uh with with maybe some mutual funds or direct stocks uh or even a direct fixed income whereas um a DAT is going to be probably a lot more retail um a lot more fast money or or hedge funds and then of course um you know institutions are going to be split between the two. Uh they may not have it in their mandate to own an ETF but they might have it in their mandate to own a corporation that has a treasury. So, um or or vice versa. So, you really are looking at, you know, very little overlap in the investor, but you're also, uh you're also investing in two different structures. And I like both

structures. Uh they both accomplish a different goal, right? I kind of mentioned already with with with ETFs, it's going to be you you buy it, you have direct access to underlying, it's probably a little bit less expensive, and then you get a you get a yield out of it. the DAT is going to be a lot more speculation on um not just the token itself or the yield itself uh but also the discounts and the premiums. So right now most of the DATs are trading at premiums. I do believe they're a point to where they'll trade at discounts and they'll keep going back and forth. It's just the nature of capital markets. So whether it's a closed in fund or or or an equity. There's a lot of companies out there that trade it below their their book value and uh right now DATs

are trading uh above their book value based on the understanding that they'll likely utilize that book to issue more shares to buy more of that book. Right? So that is that is really the play right now. So it's a it it is a very different instrument that does different things. And if you look at something like Micro Strategy, it's very possible that it's included in the S&P where an ETF cannot. So, uh, that makes it, uh, a really interesting play, uh, when you start including these treasury companies there. >> What do you think are the the knock-on effects of Micro Strategy getting added to the S&P?

>> Well, I I'm I'm probably the biggest doubter out there. Um, you know, that's that's in crypto that that'll actually get added. And one of the reasons why is because its operating business is now such a small part of just the the overall income of the company and and a large portion of that is is is Bitcoin. Whereas on a DAT like um you know for like Injective for instance um you actually have an operating company that operates validators that does active that does active things you know with it with with its treasury to create value and to create income. So, uh, in and of itself, it is a it is an operating company. It's a tech company. So, um,

that's that's what I like about something like that. I think that that's probably a little bit more um of a of a fit for an index like the S&P if, uh, if some of these get a little larger. But, but look, the knockown effect is this. Um, if if Micro Strategy is included or any other DAT is included, then you're getting indirect access to cryptocurrencies via an S&P index, which I think is really, really interesting. That that's never happened before. >> It certainly has. And I think that the, you know, the next order becomes these ETFs. if you know if if if we follow your timeline that you've you know guesstimated for us um by the end of the year you know we could have mom and pops

buying uh cryptocurrency ETFs in their favor and I think this opens up a whole new horizon and Eric I think you know just as well as us there's only so many injective ninjas out there warriors or whatever you guys call them there's only so many folk in crypto Twitter left there's only so much liquidity that we've kind of you know got here in our little bubble and and I the the next step is really getting that next, you know, phase. I think there's a acronym called Henry's. Uh it's like uh something something not rich yet, but it's like these >> I earning not rich yet.

>> There you go. That is kind of like the next big target I think for a company like Injective. So question for you becomes let's say we follow Stephen's timeline, we get a staked Injective ETF, we get an Injective ETF. Obviously, you've got the hund00 million pineapple DAP DAT uh for INJ, but I'm curious from your strategy perspective of expanding, you know, distribution of the token. How does your strategy as a protocol CEO change once an ETF is live right there? Now, there's this massively new market of available buyers uh who may listen to a finance podcast or may subscribe to a a newsletter in this category or they might go to those meetups, you know, from a marketing from a a strategy

perspective. How do you how do you envision Injective kind of getting into those Henry's? >> Um I I I think like uh overall like first of all like it's just about you having like an amazing team and just do what we do best. um you know keep doing our job and building and expanding out the protocol and uh kind of like uh um approaching and growing the DAP base uh to be much more um kind of like general uh facing to to be a lot more consumer friendly to on board a lot more users um that are not necessarily completely cryptonative and that's the work that we've always been trying to do uh to create the best possible financial infrastructure for that and then on top of that you know it just means that like

our work gets uh uh more u intense and like harder to like uh try to like advertise to try to you know like uh put ourselves in front of a much broader uh user base, a much broader audience. Um and making sure that you know we're being considerate and we're trying to uh make sure we're getting enough facetime in front of um different types of like channels and different types of avenues. Um so you know overall it's just about like more work for uh our engineering side and more work for our you know BDM marketing side. Yeah, Eric. So, if I may, man, then in that case, right, I mean, in our show, we're taking it more into this in institutional realm, getting the this type of audience, trying to grow that and trying to, you know, provide that kind of bridge as you

say, in a different way, right? You know, you're talking a lot about bridging in a financial way. We're talking about bridging in an educational way. But when it comes to your pitch to institutions or to Henry's like you know if I may you know you know entertain us here with what is the injective pitch to institutions? What is the institutional appeal for injective and you know what is the appeal to these Henry's for uh why they may want to consider investing in Injective. >> Um oftentimes we like to let let the product kind of speak for themselves. Um but typically if this is like a institution that doesn't necessarily have a lot of knowledge or experience about DeFi or about you know like crypto

uh in general which has been you know predominantly the type of conversation that we have to you know get really really uh used to these days. Um it's really about like a framing objective as uh a finance forward blockchain that houses um uh kind of like the next iteration of the financial stack. Um being both you know extremely performant and at the same time extremely um uh kind of focused on different types of financial rails on different types of you know like efforts including tokenization including um um you know like different types of consumer use cases. So we are taking care of both as a enterprise use case and as a consumer use case both at the same chain and that's really like what we're uh trying

to pitch to you know different types of institutions. It's about you know kind of like bridging both being like the nexus of like financial activity for both institutions and the general everyday consumers uh in the same place and you know doing that within like a blockchain infrastructure. I I got another follow-up question on the on the staking side of this. Um my understanding was that there was no staked ETFs that were live and so I I just did a quick search and it looks like there is a Solana ETF that also offer staking, but there's still no Ethereum ETFs that offer staking. How are you guys able to get this through and and why do you think the other ones are getting held up?

Yeah, look, the uh >> uh Stephen's on mute, but >> Well, look, the uh the ETH uh ETF uh a lot of the issuers have applied for staking and it looks like it will get approved um very very soon. The Salana one is sort of tricky. The one that's out there, it's not a true uh it's not a true ETF. It's a it's a 40act that holds um it it holds other ETFs and other and other things. So, it's not a really direct Salana. So, so that one doesn't really count. Um, but we we do expect that when gen the generic listing standards get approved, uh, it's going to approve staking across the board. So, we we do fully expect, uh, for instance,

um, you know, we've got a, um, a couple of other ones on file and and one of them, you know, will probably be the will probably be the first one, um, uh, here in October. So, um, we're we're kind of keeping our fingers crossed there, but we we fully expect, uh, that next batch to include staking if staking is available. And then, of course, um, you know, all the all the subsequent ones will have staking day one. >> Makes sense. Quick, another followup. This is aside from the ETFs. I think we're kind of flip-flopping between the ETFs and the DATs here, but I saw an absolutely ridiculous proposition of a DAT to invest in other DATs.

Like how I mean this just screams mania, but I'm just curious from your perspective like I think you're generally bearish DATs, but just explain to everyone else like what this could possibly mean for like the MNAV of a company that is betting on these other MNA. like is this this is just this is just an accelerant to what these these more vanilla dots are doing. >> Yeah. Look, I'm you know and and to be clear um I'm actually I actually am bearish on a lot of the DATs that are out there, but I'm bullish on the on the concept in general.

>> There's a lot there's a lot that have been done wrong and there's a few that have been done right. So um you know for instance um you know there's there's some out there where you know the managers are are charging anywhere between three and five points to just basically hold a token for the company which is not market. It's absolutely ridiculous types of fees. The ones any any anything that's like more in the realm of like 1% is is reasonable. There's also a lot of DATs where they rewarded people with, you know, a lot of warrants. And I mean, there's a lot of hands in the cookie jar on a lot of these things. And I think it's all going

to blow up on their face. But uh but but but then of course there's some that are very clean, you know, like the one that we worked on um Eric and I together where uh it's, you know, it's very limiting on, you know, giving a lot of free money away from people that are participating and and high management fees and and and we just basically eliminated all of that. We're like, look, we're going to do this what we think the market is or what the market should be. But uh but no, we've seen a lot of them that have just absolutely done poorly because of they're just they're just they're just, you know, scraping scraping fees, scraping um uh money early on from investors, whereas the ones that are thinking more long term, I think are going to be big

winners. >> Um so, so yeah, I mean, look, we're we we also at Canary, we invest in a lot of DATs. uh we probably invest in 20% of the ones that we see because you know once we see oh we're paying the asset manager 5% we're like we're out you know 3% we're out oh look at these massive warrants that we're paying we're out >> um you know but those are some of the biggest questions that we ask and um you know so so there there are a lot of good ones out there and I think those are going to be the ones that that are very successful long term uh but you just have to avoid the bad ones as as with anything >> and to tie these these things together.

We if we do have staking yields coming down and we're we're we have these fees that we have, you know, that these DATs are paying these advisers at a certain point these we're going to find an equilibrium here where it's going to make where it's going to make, you know, the MNAV um either positive or negative if you extrapolate this to the long run. And so what what you're describing is that by keeping those fees low, even if we have some staking yields compressed, there's still there's still some some clearance there where the adviser gets paid this the holders of the DAT and the ETF, they still get their their room and they can get their yield and the and the operating company can make remain profitable even as they're operating and they're they're running these validators

and they're collecting this yield and that is what you're saying makes a good DAT different from a bad one. Yeah, that that that's exactly right. So, look, I I I look at the treasury as the treasury. It'll fluctuate in value and you just have to like you just have to understand that it's no different than in my past when I invested in emerging market bonds, right? So, there might be a company in Brazil that its balance sheet is Brazilian Royale and you know that it's going to fluctuate against the dollar and you just have to understand that that's the case. But regardless of where what the treasury does or the balance sheet does uh there has to be income that's earned and that income if

if operating costs exceed that income >> then it's a bad company. If uh if if operating costs are underneath the income and and then it's a good company. I mean it's it's really basic stuff here. And a lot of these DATs out there, you know, they might have, you know, like an Ethereum DAT for instance that yields 3% and then they're paying their manager 3%. Well, how do you cover the rest of the operating cost if that's the case? So, those are some of the some of the analytics that we're looking at when we're when we're deciding on what to invest in and what not to. So, as long as the staking yield or or other types of of operating activities exceed your expenses, then the company's profitable

and it's going to continue to grow. >> Yep. >> Yeah. Um Yeah. Go ahead, Andy. >> Yeah. Just um one thing that you said prior was about the nature of some of these companies and so I'm curious when you guys went to build uh Injectives uh data out, right? Uh one of the things you mentioned about strategy was that it's basically its entire operating business is more or less just accumulating bitcoin now and issuing debt and a lot of these other dats you know that that the businesses which they were uh prior things from like whiskey businesses to like furniture to uh other kind of financial services very kind of broad scope. How did you guys form injectives that such that uh you guys were able to uh ensure that there's

longevity with this while being able to uh you know run the accumulation strategy because I I mean I I don't mean to like send fear down our spines here but I do feel that there may be some issues in in in the future where it was very clear that these companies didn't actually have an operating business and that you know whatever happened with the DAT happened and there may be some scrutiny or push back. How do you guys avoid that? what structure did you guys kind of follow and and orient around to make sure that uh in the future uh you guys you know steer clear of any issues.

I think uh first of all one like truly aligns with um basically like what Injective is about and what you know like the space is about and luckily enough I think uh Pineapple Financial is a mortgage underwriting business which has a very very successful presence within uh Canada and although coincidentally it's also one of the largest underwriters which could have a lot of you know synergistic nature of it uh with the overall blockchain ecosystem and uh this is you know I feel one of the most important thing that was like oftentimes missed by a lot of the uh uh you know deaths out there.

>> Yeah. >> And then second of all it's about having like a good management team uh a management team that's like there to uh ensure the longevity of both the ongoing business and also uh for the overall like uh you know that strategy and it's about being long-term aligned. It's about you know um having a very much uh um a long-term minded uh incentive structures. It's about um basically structuring it in a way where like not u you know uh short-term minded where it's not uh you know a one-time payment and then you know uh they're free to do whatever they want. Um so I think all these like factors come in together to make sure that first of all like this whole offering is extremely clean. It's non- extractive. Um it's it's long-term minded. It's it's about you know having

the best possible you know like treasury representation of uh uh you know both the inj ecosystem and you know be the best representation of like their ongoing businesses. Um and yeah like we're very very excited about like uh Bible financial uh obviously and you know how they uh kind of like took like a leap of faith and like believe in us as well. Um and we are obviously like uh very very picky when it comes to you know uh um standing behind like a certain firm that's you know decided to adopt the strategy. So we we've done a lot of you know like research and uh you know background and we just think that uh they are probably like one of the most promising firms out there uh that are looking to adopt uh you know uh that. Yeah, I appreciate the candidate

answer, Eric, because I know it's it's it's kind of a pointed question and uh it's I I do think there will be uh in the next 18 months we will see scrutiny amongst some debts. Stephen, I don't know if you had anything to add there. Again, I know it's a touchy subject. >> Yeah, look, I mean, I I it's it's not touchy at all. I um you know I think it's going to be even sooner than that because there I mean we've seen so many deals where again you know and I hate I hate to like just kind of you know blast all the other deals out there but um you know but there are some where it's like this operating you know I saw one where was like the operating company um has about $500,000 left on its balance sheet. It's burning 2 million a month

and they're like yeah we need a debt. we needed that and uh it's like you know crypto bros bail us out you know we're about to go bankrupt that's that's that's really how it feels and you could tell like you know right off the bat so I mean I mean first thing we look at is the P&L and if it looks like it's a company that's just going you know just straight down in flames um you know it's it's time to back off because usually what that means is let's say you raise $100 million treasury they're going to they're going to take 10% of that just to bail themselves out and uh try to you know keep running the operation company underneath and that's that's not a good situation at all. You you want most of that treasury staying in the treasury and >> Yeah, of course.

>> I mean that's that's that's the whole purpose of this thing, right? >> So, uh but yeah, no, I mean I think there's going to be a lot more scrutiny uh in the coming months, not not not not even a year out, but but >> yeah, >> even by the end of the year. And I think some investors are going to look at deals that they're in and and realize that it was a bit of a stinker and um try to, you know, try try to get out or or take other action. So, you know, that's that's one of the most important things of, you know, when you're dealing with a public company is I mean, you've got to you you you really have to operate it well because all eyes own you and you're all of a sudden transparent.

So I mean that's going to be very important to us and that was very important to us when we were um you know when we were getting into you know whether you know investing in some of the data that we're investing in or being involved you know more directly in a lot of other ways that that that's that's a very important uh place to be in. >> Yeah. Steph last question for you. Um just a couple hours ago uh the NASDAQ approved Soul Strategies uh to get listed. They had pre previously said that they were they were going to start to scrutinize these uh dats a little bit closer to make sure that they had uh you know a lot a lot more legitimacy around them but then they come out you know and they approved the soul strategies one.

Just wanted to get your reaction to uh to that approval. >> Yeah, I actually just just saw that coming across the the ticker as well. So first of all big congratulations to my old friend and former colleague Leo Wald who's the the CEO over there. um we've we've we've we've we've been friends for a long time and built companies together. So, uh you know, big big congratulations. Um so, uh and and I think that that's that's warranted, too, because you know, Soul Strategies was the first Soul, uh DAT, uh up in, you know, and and they were up in Canada, and they were really the first ones to take that risk on Soul. And um and again, part of their business is running a Salana validator. I mean that's that's the business of the company. They're

running a validator. So it's not just their own soul that they're staking. They're staking uh other people's as well. And they have a a quite a large community that they're staking. So um so so that is a that's a tremendous business. You know, it's not just, you know, 7% of their treasury. It's it's it's way more than that. So to move that over to NASDAQ, I think is a really big accomplishment. and uh and I believe they'll they'll they'll be extremely profitable uh through their through their uh validator activities. >> Amazing. Eric, also just want to give you a a chance to sign off, man. Where can our community find you? How can we get involved? Uh >> yeah, >> absolutely. So follow at Injective or follow me at Eric Injective. And honestly, I think the best starting

point for the overall Injective ecosystem is honestly Injective.com. We spent a lot of time rebounding and make making sure all the information is there. Um and yeah like uh um definitely you know stay tuned. I think uh there will be have a lot of very exciting stuff coming up uh especially with EDM mainet etc. We already had to deal with a lot of you know uh activities that are coming in from the test net even though it's supposed to be a very very short testing period. So that's been you know what we've been uh very very excited and busy with. >> Yeah. Yeah. Awesome man. And uh wish you the best of luck through Stephen's firm with Canary again. I I mean Stephen's timeline was was the highlight of my of my questions today. If this plays out, this will be happening sooner than than

expected. We could see 20 to 50 crypto ETFs passed this year. One of them being Injective, hopefully a staked Injective ETF as well. Eric, also Eric, I just applaud you on your journey, man. And I also dropped out of university fully, you know, six years ago and just have been bootstrapping businesses on online and kind of Rob and I have grown this one together and uh yeah, going from going from dropout to uh you know millionaire to ETFs to crypto to institutions to growing up in different things and just kind of having your own journey is uh you know it takes a lot of grit and uh also just willingness to be embarrassed. So, I know what it's like to just kind of be like take the other path and uh hope you hope you're glad

that you did. Stephen, appreciate your time as well. Would love to have you guys both on in the future again. Talk more and kind of see where we're at in a couple months. >> Thanks for having us. Thank you very much. All righty. >> See you next time, guys. >> See you next time, Jen. See you.