The Hyperliquid Stablecoin Wars: How $200M in Profits Could Change DeFi with Vance Spencer

Transcript

But I think there is some sort of component of do you want this to be a maximally decentralized exchange in terms of not like the speeds and feeds of it in the functionality but like of the jurisdictional basis. Um or do you want to bet at all on the US? Right now >> how do you reasonably see the market uh accepting hyperlid in the 100 200 300 $400 range? >> We're just continuing to hear this administration be champions of not just crypto in particular stable coins like for the long haul. And and so I'm just curious what your macro view is over the next 1, two, three years.

>> Welcome back to the RUP. 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. >> Vance, welcome to the show, man. >> Good morning, guys. What's going on, >> dude? >> Morning. Morning forms are back going on. Yeah, public >> all the stable coins. >> I mean, we had that layer zero wormhole thing a couple weeks ago, which kind of like was like, okay, Dow governance is coming back a bit, but now it's like, all right, we've got some of the largest DeFi protocols and institutions in the space bidding for bidding for a ticker in public. I mean, it gives you

something to live for. >> I know. Gives you a reason to get up in the morning. It's uh I mean, it's great to see everyone putting their proposals forward. I think um no matter what Hyperlid has already won and kind of whatever happens, Sky is going to be building there and just the opportunity set has really been revealed to be massive. Like there's five or six billion dollars of USDC in the bridge and um I think for a lot of startups this is kind of a makeorb breakak moment. Like they either kind of get the five or six billion or they don't. But there's a variety of other players that you know I thought the um the native markets proposal was really good and like you know that's kind of an option if you really want to be native and I think you know the framework for

thinking about these things is you probably want someone that's either really aligned and native like native markets or you want the best absolute deal which we think is is sky obviously um but there's all this detail and stuff that's getting lost in the middle in terms of you know even things like okay Why should the stable coin be genius compliant? Are we sure we want to put all the the eggs of the hyperlquid basket, you know, right there at this moment? Um, and even for people who, you know, like like I'm I'm not going to disparage the other contestants as I tweeted, but people that are just so small where it's like, look, if your stable coin has less uh volume than Mudang, like it can't really be a serious proposal.

and and like if they're to win this, I think, you know, Hyperlid should get their tokens or whatever upside they're they're here to offer, but there's a lot to consider. >> Yeah. So, so Vance, maybe just taking a quick step back as the uh current work that you guys have done in the Hyperlquid ecosystem or just broadly your investment and interest. Obviously, this is like one of those no VC this is like the epitome of the anti-VC movement that we've seen, right? And not going to single you out here, but uh that's kind of the whole community vibe of hype. Uh obviously, you know, you're then forced to buy on open market, participate either in the EVM, in investing in some of the early stage companies or just being a large hypeolder generally like what is framework's involvement right

now in the hyperlquid ecosystem? How do you think about the project? And then yeah, I mean, I'm sure we'll get into some of the nitty-gritty here. I think it's also important just to just to say like what what is the the relationship with Sky because that is that is another uh angle in which you you guys are approaching this. >> Yeah, maybe maybe do Hyperlid first. So um we have a lot of Hyperlid as framework. Um not going to really get into like specific dollar values but um I think at one point you know we checked and we're like top 20 so we have a lot. Um we've also incubated one of the top market makers on Hyperlid. So, you know, our our our interests are represented in multiple different ways across Hyperlid through owning the token, through being

one of uh the people who've incubated one of the largest traders on Hyperlquid. Um, and so I would think that is kind of our involvement and and I would also say our cost basis for the Hyperlquid is not $50 like a lot of people who've just been buying over the past couple weeks like we've been on this for a while. Um, we've also got prominent team members like Rajie who are contributors to the open source hyperlquid ecosystem and we're proud of that. Um, so I think that is kind of our current involvement and I think going forward with things like HIP 3, you know, we do have enough hype to create our own markets. uh and we have the ability to not just be a venture capitalist but also use our arms and legs of our relationships network the

the market maker that we incubated to actually um really drive home a lot of change and a lot of progress for the ecosystem. So I think that's like the first thing. Um and I I think a lot of the proposals that have come, you know, more recently in terms of like expressions of goodwill or intent, um you know, we've done we did the spaces today, but like I don't think having uh like letters of reference written on Twitter for the first time in terms of like here's who we are and all that stuff like it kind of seems too late for that in some degree.

>> So that that's all I'll say about that. And then in terms of Sky, um I think you know Rune and us are are kind of the largest holders of Sky. We're extremely active in the ecosystem and people forget but Sky does almost 300 million of profits per year. Uh it has about a$8 billion balance sheet. We are the largest uh LP in a lot or most lending protocols within DeFi. And so we have a significant significant amount of weight that we can throw around. Um, and all of that can be brought to bear for Hyperlquid and and like if the USDH ticker, you know, whatever happens there, I don't think it's make or break for Sky in terms of us being interested in this ecosystem. We're going to come regardless, but that $8 billion is something that we can wield that not

many people can. >> Yeah. Yeah. And just one last kind of broad one because I I think we can make this really fun is what is your take on the growth of USDH and the like Hyperlid's general move into stable coins? I've seen, you know, I've seen tweets floating around recently saying that there's only a couple good business models in crypto. There's trading, there's stable coins, there's well, exchanges kind of like all three in one here. Um, you know, what's your what's your take on why these stable coin teams are really trying to win this and and um you know, just generally this direction for Hyperlid like what's the growth opportunity here? What's the 10x?

>> Yeah. So maybe just to dig into the why derivatives are such good uh kind of syncs for stable coins. Like there's very few places that people naturally hold stable coins. A centralized exchange is one of them, but a derivatives platform where you can margin with that coin is is generally the best. And there's no surprise that the large centralized exchanges have the largest pools of stable coins. This is the first time where we've ever seen that kind of be flipped on its head where a derivatives exchange that works on chain is a natural sync for stable coins, but it's also a place where you can use those stable coins to be composable, generate yield, and do different things that are creative to the business model. And you know, if done right, you're adding another 200, $300 million of buybacks or yields or whatever you want to call it to the

assistance fund. And so it's it's it's not just an afterthought. This is kind of one of the two really proven out business models within crypto. Um, and so, you know, that's kind of I think the the current opportunity. And, you know, if it's a five billion today and it can double its open interest, I would think that the stable coin growth would roughly track that. So, you're probably looking at anywhere from 10 to 20 billion, uh, which at those levels is 500 million to a billion dollars of buybacks. And so, like, if you're thinking about Hyperlid as like a $500 coin, you kind of do need that other engine to be firing. And you know, if you really think about it, um I totally get the genius compliance stuff and like that's great and there's three years for everyone to comply and there's a variety

of different jurisdictions throughout the world. Um as interest rates go to zero, which you know, sure as you are sitting there, they will go down. Uh that opportunity also disintegrates if you are, you know, an only genius compliant stable coin. And I think Kyper liquid should want much more than that for the stable coin that they're working with. Um so that's kind of the opportunity. Um and yeah, you know, I I think over the long long term this the stable coin opportunity on Hyperlquid will be multifaceted. It will be multi-ticker. There will be a HIP 3 component. There will be a a variety of spot quota assets that people can use and they'll all have their own value prop. So like I get why this is so interesting and it is awesome to see the community representation here. Um but getting the ticker is like

the first inning of the first, you know, it's so early. Um, it's great to see, but you know, there's going to be more to come from this. >> Introducing extended exclusively on Stark, a nextgen perspective on chain today. Deposit in the community vault for attractive returns, EMV compatible, and engage in unified margin spot trading, lending, and per trading exclusively live at extended.app on Starknet today. At the very least, it's been an incredible marketing campaign.

The best since John win put a trade on Hyperlid. >> Yeah. >> Um, one thing that I think is important is call out the unique value propositions of each of these proposals. This is what we've been trying to do. The last stream we had, uh, Nick from Agora, we had Sam from Fracks, um, and we also had Bo from Paxos. And so one thing that stuck out and it seems like you know the 100% or 95% plus of buybacks and revenue to the to the hyperlquid ecosystem is essentially table stakes at this point. I noticed in Skye's proposal there was 4.85% where most other companies are are offering 4% which is just basic T bills some advanced risk management that can get some additional yield and potentially more. But what what really stuck out

that looked unique was that Sky can provide 25 million in capital to create an independent hyperlquid star. I'm not entirely sure what a star is. Maybe you could help unpack what that is on Sky and how that could benefit the Hyperlid ecosystem beyond what some of these other proposals are offering. >> Yeah. So um look the the math on Skye's proposal is about 112% revshare and like the whole idea of like I'll give you 95%. You you are earning money from the stable coins that you are being given. I don't think that really should be kind of the goal here. Nor should the goal be strictly sofur. Like if you want sofur there's a bunch of protocols that can go

put these coins and tea bills for you and hold them at State Street. That's basically kind of what I see from the other proposals. And so like what Sky is proposing specifically is um something that as Sofur goes down will not just track it but beat it. And the reason that it's able to do that is a variety of things. Number one, it has a way of allocating capital through stars and and we'll get to what the hyperlquid star means where um Sky is generating yield from T bills. It's generating yield from the Athena basis trade. It's generating yield from uh serum USDC. generating yield from AAA, Janice Henderson, CLLO ETFs. Um, the diversification of risk collateral and the ability to beat sofur should be table stakes, not just 100%

sofur. And then I think kind of the next point on the star is kind of um like, you know, if we weren't going to vote for Sky, we'd probably vote for for native markets for this reason, which is um the stars of Sky. And you know, I know for people who are just learning this terminology could be a little corny, but bear with me. Um, there's a star called Spark and if you want to check it out, it's data.spark.fi. Spark manages about $3.6 billion of the eight billion dollar balance sheet of Sky and they make about $110 million a year of run rate profits. And that is directly cycled back into the ecosystem, which generates more yields and more risk capital. And so really like if if Hyperlid is looking for a DeFi partner

that can inject serious amounts of capital, risk capital and earn yield on that, that is what the Hyperlid Star would be. And so it that Hyperlquid Star would also have its own token which we would be farmed out to Hyperlquid users which would give it some of that nativity and community upside that the native markets proposal has. And um yeah, I mean you know the the hope is that we can cover all all bases here. And if we don't win USDH again, we're still coming. Um, but this is what Sky has to offer in terms of not just, you know, Sofur Plus, but also real tokens that are uh in the community that are going to have tremendous upside.

>> Got it. Um, you mentioned earlier that you guys are about somewhere somewhere in the top 20 in terms of holders. Are you guys also staking and and running validators and therefore going to be voting on this proposal? If so, how does your voting? Like earlier before you came on, we were talking about CL 207 who said publicly he controlled about 15% of the voting power. He's like he like >> hypers scan does. Yeah. >> Hypers scan. Exactly. And and he would like you know uh Vanax proposal uh given to him as a cat. But you guys h you know >> a direct quote tweet of Jan Vanek the CEO of Van a d absolutely ratio too.

We're not we're not going to explain things to you as a cat, but I'm curious like how much voting power do you guys control if if that's publicly available and uh and yeah, I mean where where do you see the other validators? I'm sure you you have a general understanding of the landscape. How do you see these things shaking out? >> Um so I don't think we've disclosed how much hype we own. It's significant. Um and the validator list, I've seen it. uh I I can't you know mentally calculate what's been uh you know delegated to them but it seems like a lot of hype and we would be a minority of that uh you know in the scenario where we are delegating to that you know validator set um so I don't think you know we have

enough hype to sway the proposal on our own and and that is not really our goal anyways um and and sorry the the question was you know how are we going to vote >> well I think you've made it clear how you're going to vote I was curious how you guys um were positioned if you were running validators yourself and if you had a a hype position that was significant enough to to make us you know a material impact on the vote. >> Uh we we have enough hype to create a hip 3 market you know minimum which is you know some sort of guidance for you guys. Um and in terms of you know us whipping the vote our our process is look like we just want to explain our proposal and I think we have put the best economic terms on the table. are

different than everyone else's, but it's a I think no matter what you think of it, it's an interesting proposal. Um, and so the hope is that, you know, it's not just kind of like we offer $25 million and someone offers 26 or like, you know, that type of thing. I think the best thing for the Hyperlid community would be to consider the proposals on different dimensions and decide what what they want. Do they want the most interesting, you know, max value in terms of like they think Hyperliquid's going to go to $500, but they need that stable coin engine to get them there? It's probably Sky. Do they think that Max V and native markets are really really bullish and interesting uh and can kind of provide that next huge community airdrop? Probably go with them. Um but you know, disparaging people, trying to fund people, that

that's kind of not our strategy here. Um and again, whatever happens, like we're coming. >> Yeah. So I' I'd like to ask you about some of the uh stuff that's in the Athena proposal just to get your uh perspective from the hyperlquid community perspective less so the I want to uh you know kind of see sky win perspective which is you know how how valuable do you think uh Athena committing anywhere between 75 to$150 million in incentives for HIPP3 frontends as well as uh you know launching this USDA being backed by USDTB uh being like how how important are those two specific things to the hyperl

uh community? Uh you know, should we value that more than other other parts of their proposal? Um yeah. >> Um yeah, not to beat a dead horse here, but I don't um I I think the Athena proposal is is top, you know, four or five. Um, I would say the the best ones are kind of Sky, Athena, Native Markets. Um, I think Paxos, you know, has managed a large one. Like those are kind of like the ones that are are kind of table stakes. Um, Agora as well. Um, just because of the VANC backing. Um again I I don't fully I think so like maybe one way to think about USDH is uh it should be a wrapper that has compatibility with

multiple jurisdictions in the same way that you know hyperlquid validators are based in a jurisdictionally distributed way. You should probably think about that for the same you know context of the stable coins that are underlying um the uh exchange. And there's a couple of reasons for that. I mean, one of the ways that Hyperlid does not go to $500, it goes to zero is there's some sort of bridge hack. There's some sort of jurisdictional seizure, um, there's some sort of accounting issue of the stable coins on that bridge. And I think one of the most likely vectors that, you know, I've personally experienced is um, when USDC deped uh, because Silicon Valley Bank went down. And so, like, it's not just a theoretical experiment. And I I think this is maybe one area where um

there's no hyperlquid mission statement, but I think there is some sort of component of do you want this to be a maximally decentralized exchange in terms of not like the speeds and feeds of it in the functionality, but like of the jurisdictional basis. Um or do you want to bet at all on the US right now? Um given that you given that Tether, the largest stable coin in the world, has not even launched in the US yet. Um, I don't know why today would be the time to make that decision. >> Very, very good point. Yeah. Interesting. Well, that's that's been kind of the entire community vibe around Hyperloop has been this kind of um I mean, you could say it's about no KYC, but really it's just about this uh yeah, they've kind of not played by the same

rules as everyone else, you could say, or they they've they've kind of engaged in a very very uh you know, new way of launching a purposeex in terms of their their validator architecture as well as just the way that they've operated within uh kind of the broader KYC and uh per rules, but then at at at the same time, we've seen the US kind of become far more lenient in the coming or in the past few weeks. So, >> it it has, but I will say um like when you're running a stable coin, uh if you're short by even $10, that's a huge problem. You you kind of need to like wind up the whole thing and and turn it back over and figure out who's owed what and wind it down. um and jurisdictions seizing stable coins I is something that

has happened before um both at the bank level and at the stable coin level and so again you know like think about the stable coins the sky produces one is die it's the largest decentralized stable coin in the world it's only backed by ETH I think there's three billion in in existence but that's for a segment of people who just say like I want the fully decentralized like an rand version of the the stable coin and then there's another one which is USDS which is you know a again a generated asset by Sky that is primarily used for lending. It does have a blacklist function so it can be more compatible and so like the idea of the hyperlquid stable coin should be probably designed to be somewhere in between those two and not like all the

way of like let's just give state street all our money. I don't think that's really where we are today. A strategic move to give all of our you know communal money to um just the US. I'm not sure that is the right path, but it's certainly one that can be explored with something like Sky where, you know, you're creating an asset that has, you know, varying functions, not just being genius compliant. >> Yeah. So, we ran the math on this and I think it's somewhere around $200 million of profit a year or so uh up for up for grabs should the should the $5.5 billion of USDC that is on Hyperlid today earn the current, you know, shortterm interest rate around like four and a

halfish percent. um when you're looking at the actual path to hyperlquid to something like $500 uh and and kind of trying to articulate a thesis around how this thing could grow really at 10x in price from here and 10x in market cap um you know price predictions and whatnot aside generally you you know you've mentioned a couple times about how you feel this stable coin piece is important or at least the community could see it that way you know how how do you reasonably see the market uh accepting hyperlquid in the 100 200 300 $400 range you know if if you know next year the following year five years whatever the timeline or prediction has been kind of leave that

out but I'm just curious what you think the necessary steps for the market to accept you know this this token as one of the top five or top three um you know you know is that possible how do you how do you see this actually tangibly playing out >> yep and Uh this is usually where I say not financial advice. >> I mean look like you know right now my personal calculations are you know it trades at you know2 to3 billion of earnings per year and like I see people using the circulating supply versus the fully diluted supply. I I personally use the fully diluted supply. I don't even think you need to use the circulating

supply because it's growing so fast. But, you know, I think it can probably get to 100 just based on the per volume that exists today. Um, and probably higher. But like if you want that rate change in terms of like why are people just now buying hyperlquid at $50, you probably do need another economic engine to turn on that can be something like unit listing stocks, bonds, uh, you know, commodities and allowing large leverage on it. That's certainly a path where it can get there. Um, another is hip three markets really kind of take off in a different direction. Uh, maybe options launch. Maybe that's interesting. I think those are probably other than unit lower probability paths.

I think the higher probability path is the stable coins continue to grow in the bridge. You get to $10 billion of stable coins that are earning, you know, 5% per year and that's all profit. That's $500 million of profit that you can then add on to your existing earnings. And so there is a path here I think for it to trade substantially higher than 100 $200 $300 but it does need to have some sort of other economic engine and you know just having laid out all the paths those are the ones that I can imagine. Um and again if interest rates go down and you're a genius compliant stable coin only I you know who does that serve and and like >> it's not what I'm trying to say is not you know if USDH goes to the wrong people it's just like this this like

forever zero of of earnings in the wrong way. the stable coin war will be multifaceted, but you should kind of be rooting for someone who has a different approach at least to take on some share of the stable coins that are in that bridge and do something different with them. And part of it should probably be a very native team like Native Markets and part of it should probably be a genius compliant one and part of it should probably be something like Sky. Um, and I think that is where we will get to. Um, but like the USDH uh beauty pageant is like kind of like everyone gets to present. Everyone gets to show what they're what they're doing. And I think that's a hugely constructive process.

>> I'm curious where where you may see stable coins going in like the 3 to four year range. And I haven't really seen you tweet about this, but I have a feeling you might have a take where there was a video yesterday that came out of this Russian finance minister, I think, talking about how the US is going to basically they have this $35 trillion pile of debt and they're going to try to use crypto to devalue it. And I'm curious if you think there's any validity to this claim and if so, how how do you see the administration progressing the stable coin agenda? Besson has said that there's going to be three trillion of stable coins, you know, by 2028 with rates going down. How do you how do you think this landscape shakes out as we're just continuing? It feels like on CT, everyone is calling,

you know, there's going to be one more rally and then everything's going to die. But we're just continuing to hear this administration be champions of not just crypto, in particular, stable coins like for the long haul. and and so I'm just curious what your macro view is over the next one, two, three years. >> Yeah. So, um I think uh the Russian minister's comments were uh taken literally and and probably like a literal basis to understand that is not the right one. But I do think he has a point on a on a larger scope where it is um you know Besson has laid out this framework of we're going to have uh 3% inflation. I think we'll we'll get there. We'll have 3% in growth. I think probably we'll get there and then we'll

have 3% in deficits and that is not where we're tracking today. I think it's more like 337 or 338. >> Um and that's assuming no recession. And so I think what the Russian foreign minister is trying to say is that um there is a debasement trade going on and there is going to be a new home for this money and it's probably not going to be bonds and whether you read you know Michael Hartnett who's the bank of America CIO or you read Zultan Posar you know it's pretty clear the governments are just going to be printing more money the debasement trade is just starting and that's kind of running into this idea of like cycle thinking and the reason that I don't like cycle thinking is not because I don't believe in

cycles. Um I think the reason I don't the re the the reason I don't like cycle thinking is because it kind of makes you like this imprecise person. >> It's like a it's like a it's like you know like people throw around words like okay like fascism. It's like what does that even mean? Like what does cycle thinking even mean? Like what point of the cycle? What inning? It just like doesn't mean anything. What does mean something is that this debasement trade is starting and it's not going to stop for a very very long time. And what I've been tweeting recently is like the cycles that I can see them as of now are gold rallies, then stocks rally, then coins rally. And it kind of goes in a circle in terms of they search for their valuation

ceilings, they search for kind of the riskadjusted return that they can get and then they pass the baton. And unless there's a war or 500 basis points of interest rate hikes that are coming, you know, I don't think that's really going to play out. And so I don't think uh the Russian minister is lying. I think it's kind of uh a little bit of you know a imprecise term to think about it with but you know he's definitely right on some degree. The debasement trade is just starting and the cycle thinking is probably not as relevant in that context. Mhm. >> You know what's funny though, guys, is I' I've found that each time that the crypto market heats up since 2017, the the fiat is dead or fiat is hopeless idea resurfaces, especially within the small community, but each time that it

happens, it's more and more real like it becomes more and more compelling of a of a situation like like this this time around compared to like in 21 it was what inflation and you know, oh man, like we had this inflation rise where oh god Now it's like, oh man, like stuff's breaking. You know, things aren't things sell. There's always a more kind of compelling reason as to as to why the debasement trade is going to happen. And while I do agree with you, Vance, I think there are probably people out there, you know, including in including Robbie and myself who've done pretty well this cycle and we'll do well by taking some chips off the table. Um, but we'll also, you know, ride for for the long term.

>> Yeah. I mean maybe a different way to think about cycles and and you know if you're building a capital base or if you're deploying a capital base is um number one you measure your net worth from cycle low to cycle low not top to top. So that's the first thing and the number and the second is just um for each cycle um you need to build a more uh stable capital base for the next cycle. And so um you know things like cash or things like real estate where you can lever that up over 30 years you know that serves as a very stable capital base kind of a a base of operations for you to go off and take risk. And so I think in that framing you know in running it up and running it

back cycles are real. Um, but at the same time, you know, there is this whole idea of the power of staying put. Like if this podcast, you know, framework myself, like I've been in crypto for 13, 14 years at this point. It's wild. Most of my adult life, like >> yeah, >> pretty early on I realized that there were not that many uh people who are, you know, really bought in over the long term to this industry and community who are really intelligent and sharp and willing to work hard. And if you have all of those things, like there is no other place that is better for you to create wealth than crypto. Like people, you know, they joke about, you know, this is my last cycle. And my answer is like, where are you going to go?

>> Right? >> Like what's the trade after the trade? Something we talk about a lot here, too. >> Like, and sitting on the beach is pretty boring. Um, like the purpose, the struggle, all of that stuff is what makes life interesting. Like, and crypto is generally the most is the best place to express that in my view. I'm I'm curious how that translates into venture investing. You know, we've talked a lot about like a liquid bag, you know, being hype. They'd have no VCs, right? So, it's all liquid. But, you know, when when it comes to venture investing, how do you think decade time scales? Like, do you ever think like what is the likelihood that this thing really takes off? Do you do you have to have that mindset with every single deal that you do or is there a play where you know

maybe you get in contact with with a founder they have a great idea but you know it is it's going to work on a two to threeyear time horizon and that's where your vesting is up but on a 10-year time horizon maybe it doesn't make so much sense. How how do you how do you play with the time horizons given given, you know, the the long-term thinking and mindset that you just mentioned, but also with kind of the the moment in space and and the the you know, evolving metas at play here where some something might make sense for a time and place, but but not so much on the on the multi- you know, cycle, if you will, time horizons.

>> Yeah. I mean, I think uh we have a long-term closedended fund, which I guess puts us in the category of VCs, but we play whatever game is on the field. And I think the worst thing that you can do across all investing is try to force it. And you can tell when you're forcing it. Um and I I think, you know, if you ever get that feeling, you probably just want to back off. >> Um you know, our bread and butter is working with founders. Um whether that be in the liquid markets or the private markets, it really makes no difference to me. um when you know uh FTX and Luna collapsed, we were primarily a liquid fund because we thought those prices were advantageous. We were trying to do things like we tried to buy Celsius, you know, because we thought that could have

been an interesting investment. Um and so there's a lot of things that just come your way in crypto that you need to be kind of moving your feet for. I don't know what the best sports analogy is, but you know, like just be ready like ready yourself for. Um over time, we've gotten better at founder selection. Like I started the firm with Michael. I think I was 26, he was 27. Like, nobody gives you a handbook for this stuff. And so, you know, there's been capital that's been incinerated along the way. There's been bad decisions, there's been bad founders, there's been people who haven't even tried to start a startup that have just walked away with our money. All of the bad things that you can imagine have played out. And I think where we are today is the sum of all of those learnings. Um, and so we get

better over time. And forecasting the long long term is, I mean, like basically impossible. I think the best thing that you can do is get a pretty prescriptive vision of where you are today. And because crypto moves so fast today you can extrapolate really quickly. Um hype opened at four and went to I think like 20 in the first 48 hours. Uh and if you weren't buying on that first day, you know, you kind of had to wait for the Trump tariff tantrum to buy. And you know that's the other thing I think about venture investing in a liquid context is um you know when the Trump tariff tantrum happened that was when we bought a lot of our hype. And I think about it in terms of yeah, it was great, but like it's also like >> we were oursel fans. We got in

that $2 first minute on launch just jamming it and just watched it all go down and I was just, >> you know, th those feelings are good because like you do need to touch the stove to realize that it is hot in a lot of investing contexts. Um at the same time like you have to have this idea of the hardest day to invest for is today. Like there's the also this thing where it's like okay after the hyperlquid unlocks happen like then I will buy. It's like well you're talking about investing at a date in the future. Um think about today not not really the future is kind of my my idea. And if you ever see someone building like real technology like you have to nurture those people. Um and I think that you know Sky is a pretty good example of this where they're building real

technology. Maybe they're overlooked by the market but like just like a dog on a bone not going to let this go. We're going to build it. and like through all the building and all the time compounding that will be what makes the difference but um trying to big you know do big ideas about the future very rarely can that happen I think you know maybe a couple of people like Peter Teal are capable of it but uh certainly not me you know >> kind of a kind of advice would you give to your 26-year-old self and Michael uh back when you were starting the fund given all the lessons >> two uh two future fund owners here we've been uh you scratching our chins wondering how to do this media VC thing. We've we've done one fund already with just our own capo, but the whole raising process, you're

looking at two young bucks here. >> Andy and I toss around a lot of ideas, right? So, and we're you started the framework. >> Look, I mean, go for it first of all. I think second of all is uh you know, our first one was basically our own money. We tried to pitch people. It didn't work work. And the first one I think was 15 um with one outside LP. Uh and I was living in Michael's parents basement at the time. So pretty pretty much as dire as one could possibly imagine was the setup for that first one. And um man, I mean we launched in the first DeFi bare market and kind of like just blitzed it immediately. So we we did get, you know, fortune, whatever, luck, skill, preparation, some combination.

Um, you got to look for things that move the needle, you know, like if you do have a hyperl to a thousand thesis, never let that go. Well, reason it, you know, but like just be there. Um, but you know, you do need some sort of divergent perspective from the crowd. Um, especially as you kind of get on to your second, third, fourth fund. >> Appreciate the sage wisdom, Vance, and and and the time today. looking forward to seeing the next I guess 24 hours or so of this hyperl liquid battle into tomorrow which will be the decision date I believe and uh I mean as you said look I think there's going to be obviously one winner for the ticker but at the end of the day the market's clearly

signaling where it wants to go which is more stable coins on Hyperlid really it's competitive to Circle is going to have to really you know make a make a stance to get USDC native on Hyperlid as they've previously done for Ripple Cardano uh Hideera and others. And so uh looking forward to to kind of just watching this unfold and um also looking forward to Plasma's launch. Uh we invested in that one. Talked to talked to Michael about that quite a bit a couple weeks ago. That one's getting close. So a lot of interesting times in the stable coin space and I hope this podcast changed your uh podcast current crypto meta view tweet that you put out about uh only talking about treasury companies or you know other stupid So thanks.

>> Look, the bar to be bullish is extraordinarily low and you guys are succeeding. So thank you. >> All righty, Vance. Speak soon, buddy. >> Take that as a compliment. Thanks, Vince. >> Yeah. And she's red.