Hyperliquid Strategies CEO: Hyperliquid Is Extremely Undervalued (...And What Comes Next)

Transcript

Ladies and gentlemen, we are live from the tokenization tower. David Sheamus, welcome to the nest here. >> Nice to be here. >> It's good. Not a bad view, huh? >> It's pretty awesome. Yeah, it's great view. >> You're a a local New Yorker, New Jersey. >> I am a New Yorker. Uh I live on Long Island, town called Sands Point, but I've lived lived in the city for 11 years. U >> and I grew up on Long Island, so I've been a I've been a New Yorker my whole life. >> Great, man. Great. Well, I'm I'm sure you've been to the Empire State before. >> I have. Obviously not here, but it's good to have you. >> It's good to be here. My first job was at Solomon Brothers. Yeah. At Seven Wheel Trade Center, one of the buildings that went down, of course.

>> And my view was exactly the o faced exactly. >> So, it's kind of cool to face the opposite direction. >> Yeah, man. Great. Good. I mean, what a what a couple of weeks for the world, for for markets. Um, CEO of Hyperlquid Strategies. David, give us just a quick update on your progression here into Hyperlquid Strategies. I think a lot of our audience and folks will know you, but uh how did you get started and what is the state of Hyperlquid Strategies? >> Yeah. So, so I think everyone knows or at least some people know Hyperlquid Strategies, we're the largest DAT for Hyperlid. Uh we own something like 18 a little more than 18 and a half million tokens right now. Uh that number will be growing over time. Um and we got involved in this about a year ago, a

little less. Uh so my career has been almost entirely financial services private equity uh completely tradi with one exception which I'll get to in a second but um and and I'm the I'm the co-founder of a firm called Atlas Merchant Capital. Bob Diamond the former CEO of Barclays is the other co-founder. Uh he's the CEO. I'm the CIO. Um about, you know, call it 10 months ago, we got turned on to Hyperlquid by some friends of ours, partners of the firm. And the real argument they came to us with is that the world probably doesn't need another Michael Sailor knockoff, >> right? Bitcoin probably doesn't need

another DAT, but look at Hyperlquid. It actually kind of needs a it the world needs it. There's a scarcity value. Um, we can go through this in more detail if you want, but Hyperlquid at the time and even still now, um, is not easily traded in the United States. Uh, it's only really traded on chain. Um, and for people that look at it and it's sort of equity-like features that it has, and again, we can get into that. Um, there's a real need for ADAT. there's a real need to be able to simply buy the token or the equivalent of the token in an regular way equity account on your

Fidelity or Charles Schwab or whatever or Robin Hood. So, we spent kind of May and June sort of investigating that and really figuring out if that was true and how we felt about that. All the while, we learned more about Hyperlid. We got ourselves more excited. Um, along the way, we had heard through some, you know, reasonable sources that Paradigm was looking to do the same thing. we got introduced to them. It was kind of a match made in heaven pretty quickly. Um the the things we lacked, they were really long in and the things we they lacked, we were really long in as far as partners together here. So we went from, you know, sort of shaking, you know, meeting for the first time to shaking hands in, I don't know, two weeks, three weeks, not not a long period of time. Um and we set out in mid June to raise $300

million for this idea. And by early July, we announced a deal of $888 million. So obviously a very successful fund raise when you're almost triple what you expect. Um and I think that that proved to us at least that others besides just us believed that the world needed a hyperlquid debt. Uh we closed in December. >> You'll notice a long gap between sonni and closing and the re and it was a different kind of structure. >> Um lots of people contributed hype tokens for us to us not just cash. We did that in a tax-free exchange. I'm not going to bore over the details unless you want to hear it. But the big difference between us and most other debts is because we had that long period of time between signing and closing.

Once we closed, we didn't have that crazy like unlock where the stock gets clobbered because all these people, you know, get to sell their shares. >> The day we closed, everyone's shares were already fully tradable. And that drama didn't happen. So, we never had to go through that. and conveniently avoided the what is now in hindsight the the the top of the previous market cycle as well. >> Yeah, you know, sometimes it's better to be lucky than good. >> Um, look, we uh something like 2/3 a little less 62% or so of our capital that we raised was in hype token and that hype token was priced last summer.

So that was a higher price frankly than it is right now. But whatever 38% was in cash and that cash we really didn't start putting to work uh in hype tokens in a serious way until kind of early January. >> Yeah. >> And so that brought our average token price down a lot. >> Yeah. >> Our average token price is about where the where the price is right now. >> Yeah. >> Um which >> 39ish or so. >> Yeah. It's that that neighborhood. U so we feel pretty good about that versus pretty much every other debt. >> Yeah, for sure. The other thing versus ever the debt or at least not I shouldn't say ever the debt most ever the debt is um you know the day we closed there were a lot of people on crypto Twitter expecting us to you know spend whatever $350 million to buy hype

in 48 hours >> of course >> and had I done that I would have been a hero on crypto Twitter for 48 hours >> and then we would have had a problem right >> yeah we'd have no money left we probably would have bought at a higher price than we ended up buying Yeah. >> Um, so we've been much more judicious, much more thoughtful. >> Yeah. >> Um, we have this on the website, so these aren't any secrets I'm saying, but we probably have, give or take, you know, a little bit over 100 million in cash still left. >> Yeah. >> Um, it's nice to have that flexibility. Uh, we're seeing DATs these days doing a lot of unnatural things because they're so short on cash.

>> Yeah. >> When I say unnatural things, I mean like I mean a lot of things, but one example is like selling calls. >> Yeah. Yeah, >> you know that I mean if you're if you're a DAT, your job is to be giving upside to your investors. >> Selling a call, you're literally giving away some of that upside so you could keep the lights on. Yeah. >> Like that's exactly what we we didn't want to be doing, >> right? Yeah. I feel like the hype liquid thesis has evolved a lot as well as since you started. Yeah. >> Um I mean on the numbers here for for the DATs, yes, there are tons of DATs that are underwater. They're tokenizing jet engine shares, you know, being forced sellers, uh, you know, doing crazy option strategies. There's just a

lot. >> Yeah. >> There. And I I I'm not a proponent of what's happening. I don't know what's going to happen. And I don't even want to get into it too much, but I do think that there's something to be said about being the one DAT that is above water or at least at at the margin, right? Um, and so glad that that's the case and hope that that obviously continues to be the case. On the thesis side though, Bob, feel like when you started it was, okay, let's just have this revenue generating equity-like token. It makes a bunch of money on chain. There's a lot of these per contracts, these DGEN kind of traders. They they trade with size with high leverage. And this token and this exchange is just a really money a money-making, you know, it's a machine.

It's a true machine. >> Over the last couple of weeks, especially post HIPP3, which we can definitely get into. Yeah, >> Hyperlquin has gone from the crypto exchange for dgens to the place to do onchain price discovery for any asset in the entire world. Yep. >> Covered in Wall Street Journal, covered in tons of mainstream media. >> How has this affected the way that you guys are talking to uh mainstream media, to your investors, to clients, to people that are asking about this? Like what is your current, I guess, hyperlquid thesis now and how did that evolve since it started? Yeah, I would say uh a couple things. Last summer when we looked at this sort of from a valuation point of view, because I can't help myself.

That's how I look at everything. When I looked at it from a valuation point of view, I sat there and said, um, okay, this is a really good crypto exchange. Uh, it's growing nicely, really nicely. Um, and if you look at sort of traditional valuation metrics, it's probably relatively underpriced just as a crypto exchange. Um and then you know last summer there was no HIP 3 markets yet. Um and we thought generally speaking the market wasn't giving them any value for HIP 3. That's kind of how we felt about it um last summer.

>> Um I think once we did the deal, you know, we've been yelling and screaming about HIPP 3 to anyone that asks. Yeah. >> You know, you know, explaining to my parents what the hell HIP 3 is is not easy. Um, but you know, I still think the market had a little bit of a of a, you know, I'll believe it when I see it attitude >> because there's a lot of people in crypto running around talking about how they're going to attack the massive TAM of bringing real world assets on chain, right? Like on one hand, we're all spend a lot of time on crypto. It's a great thing. We all love it. The total market cap of every crypto combined, I think, is still less than like Nvidia's market cap.

>> Yeah. >> Right. Right? So like who are we kidding? They're still, you know, the TAM of other investable assets is just so much bigger. So there's a lot of people running around saying they're going to do this on chain, they go that onchain, they're going to figure it all out. And you know, with a few exceptions, it hasn't much happened yet. And I think the market saw HIP 3 or Hyperlid doing this as just another, okay, that sounds great, but I'll believe it when I see it. Um, if you look at Hype's price, you know, from the time we did the deal, which was uh we announced it in in early July until, let's just say mid January, it kind of moved pretty close to Bitcoin and Ethereum, probably a little more beta because it's smaller and but but it, you know, the ups and downs looked very

similar since mid January, which is when the hip three thing is really starting to to be real. Silver was January and oil was February kind of. >> Yeah. you know, Bitcoin and Ethereum went one way and Hyperliquid went another way. And it's really obvious when you look at that graph. >> Yeah. >> And I think um I don't blame the market for saying that HIPP 3 stuff sounds great. I'll believe it when I see it. >> Uh but when they saw it, they're starting to believe it. It's still small, right? I mean, it's >> I think it's 1.4 billion in OI or so, >> something like that. I mean, the numbers look great, you know, considering it was zero in November, >> right? Um but again, compared to the compared to the TAM uh the size of all these other markets, it's it's still

just scratching the surface. Yeah, >> I think that um you know, I wish we weren't at war. Nothing ever good at being at war. Um that being said, the fact that the war kind of broke out on a Friday late afternoon when the markets were already closed and the only place to trade oil for the next whatever 48 hours was on Hyperlid was pretty amazing. Yeah. And the world definitely took notice of that. >> Yeah. >> Um and that's it wasn't just that first weekend. There were a few weekends again like when you're in when you're in war, right? Like these wars don't take weekend breaks. Um and a war that is so you know that oil is such an important part of it. You know, like people want liquidity 247. And that's sort of the point here. You know, um you know,

people tra people have gotten you in the trady world. We've all gotten used to, you know, 9:30 to 4 p.m. >> Yeah. you know, trading with T+1 settlement. And then it's like, hold on, guys. Look over here. You got 247 trading with instantaneous settlement. >> Yeah. >> All on chain, all auditable, all all in the public. Like, what are we talking about here? >> Yeah. Part of my thesis as well that it seems like that you share here is that this kind of ever growing instability and volatility, it's kind of just like the law of entropy, right? Just going to keep accelerating more and more randomness in the world. In the Trump administration, it feels like he just turned that light on. It was just like, let's just accelerate all randomness to to the extent that the headlines these

days are just something that you would be used to seeing on a monthly or quarterly basis is a weekly or daily basis. I mean, anything from war to stock market prices to big acquisitions to other shooting. It's insane. >> Yeah. >> And so the thesis of the kind of like the hyper financialized world takes you into a place where there's going to be a stronger demand to speculate 24/7. Yeah, >> just because there's stuff that's going to happen that's going to move markets more. >> Yeah. >> Um >> it's also it's not 247 is important. Really important. >> Instantaneous settlement is really important. It's not only that, right?

Like the two of us are sitting here in the Empire State Building. Like it's really casual, really easy to say, well, we can trade on chain or we can trade in our Charles Schwab accounts. Like what's the difference? You know, there are a lot of people in a lot of places in the world who might want to go long Tesla or Nvidia or whatever. And it's not so easy to do. You know, if you live in Batswana, um, which is somewhere I visited last summer, so I choose them. You know, it's not so easy to just go up in a Schwab account and buy some Tesla shares. >> Um, and you know, again, we take that for granted sitting here in New York.

>> Yeah, of course. I mean, the access part, I think, is big, but I think my point was just more of a like in in the Western world, it's just this accelerating desire to speculate. Yeah. On on different types of assets. And I mean, uh, Trade XYZ had that deal with the S&P 500. They were a co-host of our uh little uh happy hour last night, SP Global. They have a you know huge product suite and Yep. >> So they actually gave an exclusive license to trade XYZ to trade uh the S&P 500 per. >> Y >> do you think that's another meaningful step or is commodities going to be more heavily traded on Hyperlid?

>> Look, I I think that's a huge step. We know the trade XYZ guys well. They're very impressive, really impressive. Um I would say, you know, when you're S&P the company, right? Like the most valuable asset those guys have is their name, >> right? And that that that name, that index is worth so much obviously. And that is something that is a reputation that they've that they've generated and and and nurtured over many many many years. And when they put their name on something, they do not do it casually, right? They take that really seriously.

That mean the fact that they allowed this means they did serious diligence on hyperlquid. Uh they did serious diligence on trade XYZ. Um they are highly confident of two things right. One trade XYZ and Hyperliquid by extension are legitimate businesses that are not fly by night that are not here today gone tomorrow. These are people they're willing to partner with. Um, and two, they're making the point that this is the future, >> right? Like I don't think trade, you know, I don't think S&P is doing this for, you know, whatever a fraction of a percentage of the of volume that this might get, you know, the first day it came out, >> you know, this is because they they're seeing the future and the future is on chain and the future is hyper liquor.

>> Yeah. And so kind of more on the on the nose here about expectations. Uh we had Santiago uh a former Parafi investor now founder of a company called Inversion. He he came on the show. He basically said that he's kind of bearish on tokenized equity trading relative to tokenized commodity trading. Uh for whatever reason he anticipates the volume on HIP3 to be stronger in the commodities area than in this product. Do you agree or or do you disagree? I I'm not sure. Um on one hand, we're seeing it live now with things like oil.

Um and I don't know if he made this argument, but I'll make it I'll make another point. You know, commodity traders, you know, are certainly very used to trading in derivative form and trading in futures form of one or another. So that's not that's not new to them. Um on the other hand, um you know, there are a lot of people that trade equities. It is a very huge uh addressable market. uh there's much more retail trading when it comes to regular equities. The point I made before about access about non- US or nonwestern country um that factors into um as well I I I I if I had to bet for the long term I would take the other side of that bet

with him. >> Yeah. >> Maybe we'll bet a beer or something if he's interested. Um but you know certainly like I haven't looked at the numbers yet but like for the month of March he certainly might be right. Um I just think for you know 2030 or 2035 equities are pretty big. >> Yeah. >> Uh the other thing I I talk about a lot >> is you know you look at something like Robin Hood >> a a big chunk of their revenue a decent part of their business more than decent part of their business are people trading options and you know quite short-term options. Um, I personally think the perk form in a lot of ways is a much better product, a much better contract for retail people to be trading than a vely zero

>> education gap or >> I just think you know first of all um when someone tells you let's just say you and I are looking at an option and let's say that option has a month to go just making up numbers here before before the exercise date and the premium goes you know from whatever ever $2 to $3 right now. >> Yeah. >> And I say to you, explain to me why. And the answer is, well, in other words, the stock price that didn't change, strike price didn't change, time didn't change, but the premium went up a lot. And the answer is, well, V went up a lot. And like, it doesn't take long for that conversation to become very complicated.

Yeah. >> And something that requires, you know, some serious people with serious brain power to really unpack. And you look at like any of the big investment banks, without a doubt, the highest IQ group of people at those places are the equity derivatives people. Yeah. And that's who you're on the on the other side of when you're a retail guy trading options. >> Whereas a per >> like you understand the math. It's kind of easy, right? You're you're the you know the the whatever we'll talk about whatever company Nvidia is at 180 whatever it is right now and you do it with five times leverage whatever that whatever you want to do. you know exactly the level at which you get taken out. There's a funding rate. You can monitor that. Like >> nothing's simple. Trading with leverage >> might not be advisable, but people do

it. >> Yeah. >> Um none of it is easy, but I think it's a lot easier to understand the basics and the mechanics of a perp than of a of a call option. >> Yeah. Yeah. I mean, I totally agree. I mean, it's it's a it's a massive learning curve to understand. Uh even even per learning curve, but options is is a different world. And I saw a stat that there was a massive increase in the amount of zero date options this quarter or it was either this quarter or this past month than in the previous like for for like years on end such that the amount of volume is coming on zero day options like options that that open and close in the same day which is like super high leverage super high risk.

>> Yeah. I don't know the number off hand but a high a more more a higher percentage than you'd think of Robin Hood's revenue are zero day options. >> Yeah. Exactly. >> It's pretty wild. >> And they're doing four billion I think in revenue or I think it's either topline or or bottom line per year just from options. >> Yeah. >> Yeah. >> Yeah. It's wild. >> And it's all these kind of like basis trading and hedging and they kind of trade with their users etc. Um let's talk about the TAM here. Like if we're going to, you know, the house of all finance, right? People are calling for $100 hype, $250 hype. We start to get valuations that get like really quite big. I mean Ethereum is trading around $250 billion valuation today. Um what what's the TAM in your mind for this uh

investment? How do you see the growth of the protocol and how does that reflect and hype the asset? >> Look, I would say the bullish story is really easy, right? It's the crypto part of Hyperolytica continues to grow. It continues to take market share from the Binances of the world. Uh we all saw how how sort of hopped up CZ has been particularly like last fall over hyperlquid. Yeah. Uh so people you know serious people in crypto are feeling that sort of pressure on the regular way crypto side that's there the real world asset side there you know any asset that could be priced with an oracle price could be brought on hyperlquid you know on chain.

>> Yeah >> that TAM is unbelievable. Um, as I said before, I think the market generally has a show me attitude. You know, I'll believe it when I see it. I don't blame people. Um, hip three is happening right now. Hip four, I'm sure you've seen it come out. Hip four is prediction markets, which is about, you know, the most interesting, exciting thing people love talking about these days, and it's options, which we were just talking about a second ago. It can even be used for insurance, which is like my old stomping ground, what I've been doing for 25 plus years. Um, that's also another massive tam. Um, and if you believe all those things and you think the the the the bullcase here is really easy and there's a lot of room to grow and if you valued this the way people

value Ethereum or people the way people value Salana like the number is we're nowhere near the number that it should be at whatever it is $40 a token right now. >> Yeah. >> You know, there's a bare case too, right? The bare case is um it's not traded in the US. there's still a tremendous amount of regulatory uncertainty as what's going to happen in the US. Um that probably I don't think there's something that can happen regulatory that'll kill this thing, >> but it could certainly slow it down. It could certainly create opportunities for competitors that might not be nearly as good, but somehow better positioned regulatory maybe.

>> Yeah. >> Um so, so and then look in in crypto as we all know in any in any financial services business competition is real, right? There's no such thing as true franchise value in financial services because people just move to the best priced, highest liquidity, whatever you know they can do of any in any business. Um so you know competitors show up all the time. Yeah. >> Four years ago never heard of hyperlquid. >> Yeah. >> So so like anything there's a bull case, there's a bare case. Right now that equates to $40 a token. We think that's you know there's a lot more upside than downside. That's what makes a market.

>> Yeah. there's um a new kind of policy division as part of the hyperl foundation. Jake Travinsky is leading that. Uh he's doing a lot of work there on bringing uh you know positive regulatory action and ideally like no action letters and these types of things into hyperlquid and obviously the hyper or hype EVM environment. Any rumblings from that? Anything that you can share about progress or just anything that is happening like like what is what is going on there? because I know that there was a good bit of tokens allocated to that. I think token holders will want to get a bit of an understanding of what's happening.

>> I was with Jake uh less than two hours ago. >> Cool. >> So, there you go. Um Jake is excellent. He's putting together a really good team. I think it's really simple that it's obvious there's a lot going on in Washington right now around crypto. Um that's good and bad, right? The good, you know, there wasn't a lot going on for four years during the last administration. Um, so I don't think Hyperlid thought it was all that important to have direct representation in DC because nothing was really happening good or bad. They were kind of had their head in their sand a bit. Um, there's clearly a lot happening right now. Um, the the various legislation that's supposed to that's the Clarity Act and other things. There's both legislation from Congress. There's also

regulatory actions from the SEC and the CFDC. And I think it became more and more obvious as 25 rolled on 2025 rolled on that there were some things that you know hyperlid was getting sort of free representation from other crypto >> policy people that where they were but there were other places where you know their interests were different you know hyperlquid's interest and Coinbase's interest are quite different when it comes to a lot of stuff in DC so I think I think Jeff and the team >> pretty much realized they needed someone on the ground. They needed people that on the ground. I think it was a very good decision. Jake's an excellent choice >> and he is all over this >> and um like

>> you know it's hard to predict what's going to happen anywhere. It's really hard to predict what's going to happen in DC. I was at a conference in uh November where a very senior um you know wellplaced congressman said to the room that he is absolutely 100% certain the Clarity Act will pass by the end of the year, end of 2025. Here we are. So that's what 100% certainty means in Washington DC. >> Um but you know whatever gets passed even if nothing gets passed whatever happens with the SEC and the CFDC and some a lot will happen there you know having a competent team on the ground specifically worried about hyperlquid was the right decision.

>> Yeah. >> And I think it's it's tokens well spent. >> Yeah. I asked that because I think I mean you laid out the bare case and I think there's a couple like pretty clear risks to this thesis. one being regulatory uh competition I think in the space is less I mean there are some other really solid purpeses but I think this is going to follow like a 40 30 20 kind of dynamic or maybe even 40 2020 20 something like that as as far as volumes and kind of how that scales maybe even more skewed in terms of hyperlquid's favorite in the power law or not um is there any other tail risks that you have that you have in in mind for investors here who are holding hyperl and looking at this and trying to understand just really everything that that they need to

know on on the risk side. >> Look, when it comes to risks, you know, I'm a private equity guy. I'm very good at putting together risk sections of uh of investment memos. You you can come up with a million endless risks. It's endless. Exactly. Like um this is a technology business. Yeah. >> You know, this is a technology business that's built for 200,000 transactions a second. >> Yeah. the company has 12 employees um and you know six of them or seven of them on the development side like things can go wrong and I'm not looking to like freak anybody out of here but like of course there are risks like this is this is equity style investing uh where you think you're getting equity like upside um it's not a it's not a good government bond

>> uh so there's definitely risks um and it's impossible to predict the future um but we think with a lot of work and a lot of thought and comparing a lot of things we've done in the past. Uh we think the upside versus the downside here is just a really really good thing. I didn't mention this before. Um you know as a as a you know we our firm is a bit over 10 years old. We've done close to 20 deals. I spent 15 years before this as the first employee at JC Flowers and Co. the private equity firm. I've done a bunch of many many many deals there. Um only I've only done one thing in crypto before this which was circle.

We invested in that in, you know, in the sort of early 20s. We were the spack that was going to take them public. >> That didn't get done obviously. Thank you, Gary Gendler. >> Yeah. >> Um but um we got a sort of consolation prize by investing along the way. >> Nice. >> Um I bought some Bitcoin in like 2015 personally. Yeah. >> Should have bought more. >> Yeah. In case >> you didn't know that. >> Yeah. Yeah, but the point is the the >> the vast majority of my experience and Atlas's experience is not on the crypto side, it's the travel side. And I think that's part of what what when I told you we we partnered with Paradigm, that's part of what I think part of the part of the attraction and the was between us.

>> Um I think they wanted this to sort of look and feel like Trifon. I think a big part of our job as the dad on Hyperlquid is to be sort of spreading this gospel not just to guys like you and your viewers who are all probably pretty >> crypto knowledgeable, but we're talking to people all the time. I mean, literally, I had >> three of these this week. Yeah. With sort of investment banker types. Yeah. >> Uh um all over the place, senior people, you know, let me tell you about hyperlquid. They've never heard of it. They have no idea.

>> Um let me tell you what a purpose. They've never heard of it. They have no idea. And that is a big part of our job. >> Yeah. Yeah. Yeah. Yeah. Um >> the the explanation of a perp is something that I guess I didn't anticipate just being so I mean I was trading PERPS in 2017 just like you know what I mean? Just >> um what you know who invented PEPS? >> Uh Arthur Hayes. >> Well, he invented cryptos. >> Do you know who invented the concept of an actual purpose? As far as I understand it, and I think I learned this from Wikipedia, it was Bob Schiller. Okay. >> Who is a professor at Yale? Uh he I took his class in the spring of 1995 when I was a senior. Uh he's the one that that coined the phrase irrational exuberance.

>> Really? >> Yeah. And uh he came up with that idea obviously not about crypto in the '9s. Yeah. >> It was about but an idea of sort of less liquid but priceable assets >> to be able to trade liquid and and leverable markets. And I think the idea kind of sat on a shelf >> until as far as I know author Hayes picked it up and said, "I have an idea." >> Yeah. >> Pretty cool. >> Yeah. Is the is the questions that you feel from these kind of more institutional types, are they very much like like what's the revenue, what's the fees, what's the business? Is it like who's behind it? Is it is it like like what are the main questions?

>> It's all the above. >> Yeah. >> Uh it's all the above. Yeah. Um, but generally speaking, I'll start the conversation by saying Hyperlquid's a group of people had been 11 people that just went to 12 recently. They've never taken any third party capital. Um, they've been around for just over three years and there's close to a billion dollars of free cash flow coming out of this thing. >> Like that's really impressive. If you just stop right there, that'll generally get people's attention. Yeah. And then you unpeel lots of things to unpeel and why we're here and why we did this and what it all means and what the future is. And again, it's an easier conversation having now >> having having it now now that the Wall

Street Journal and Bloomberg and FT have reported on things like oil and hyperlquid. Like now there's at least someone says, "Oh yeah, I did hear about that. I read that over the weekend or whatever. Tell me more about it." >> Yeah. >> And again, it's the same point I made before. It's a show me kind of market, right? You know, the people have heard a lot of cool stuff that crypto is going to do to revolutionize the world. Some of it's happened. A lot of it hasn't happened yet. Some of it might still happen, but people want to see it, you know, in real life. >> And so, are these investors looking to buy like purr or are they like going more direct? >> I'd like them to buy purr. >> I mean, >> Who wouldn't, right?

>> Generally speaking, um, yeah, the these are people. Look, it's all the above. our job our you know we're we're talking >> you know we're talking to conferences and not just crypto conferences. We want to be in front of sort of equity financial services conferences. We're doing stuff in the press. We're talking to lots of investors. We get on investor calls and there's a wide range of knowledge here >> and the investors we talk to who are super cryptonative and are already trading on a DEX like they just want to hear our perspective and maybe they'll buy some more hype or maybe they already own hype or whatever. But we talked to hedge funds that are very sophisticated equity long short guys that have never bought crypto before >> that um you know would probably pretty easily be able to set up an account to

at Coinbase or ever to be able to buy crypto but the idea of them buying something on a DEX is just not happening anytime soon. >> Yeah. >> And you know when they look at buying our stock you know at or around one times MNAB they're like well that's that's an easy decision. Yeah. Like I can make my compliance guy nuts for the next four weeks. >> Yeah. >> Or I can pay you know one times MN now for your stock. That's an easy choice. >> Yeah. Yeah. Yeah. Um question on the stock side. On the actual company side as you mentioned a lot of these other treasury companies are kind of open up new lines of business or like uh adjacent uh kind of quests in an effort to effectively figure out how to rectify the situation of buying the top more or less. Yeah. Um, are you guys doing

anything other than just buying Hyperlid, holding it, using the spare cash to buy more, and just focusing on kind of like spreading the gospel? Like, is there anything else? Are you guys staking it? Like, what's the >> Yeah. So, the answer is definitely yes. >> Okay. >> Um, I would say though that when you tell crypto people this stuff and you tell crypto people we're going to do things, you know, if you tell it to them on a Thursday, they expect to see it up and running the following Monday. Exactly. Um I tell you I will tell you we are thinking about lots of things. I'll give you some examples.

>> We are thinking about it in my own trad. >> You know we're careful people. Yeah. >> Um earning effectively earning more yield than the state. So we are staking by the way. We're staking more or less 100% of our >> around 2% yield or something. >> A little more but not much more. Uh we're staking 100% of it or awfully close to 100% of it. And uh that is a no-brainer. Um the question is what can we be doing with our tokens to be getting that that yield higher than just a straight staking yield. We're looking at a lot of things. One thing we've talked about publicly already is I they think it's very natural for us to be a validator ourselves on the hyperlquid network.

>> So we're going to we're in the process of figuring that out and we'll do that. That's not going to move the needle a lot. You don't make lots and lots of money being a validator. You make some money being a validator. Um but there's lots of other ways we're looking at. We had, I don't know, three or four meetings along those lines today at the conference. You know, today's the uh the the block works conference in New York. Um and you know, if if we announce, I don't know, two or three of those sort of things in 2026, >> I'll be happy. Uh I don't have to announce 10 of them by Monday to be happy. And that and that's kind of how I feel. So, we're going to we're going to work hard to get that yield above that, you know, staking yield level. Um, you

know, when you're dealing with an underlying token that's 100% give or take volatility vault, >> you know, sometimes people say, well, why even bother? What's the difference whether you're earning 2% or 4%. I think it matters. I think in the long run, in the long term, you know, it matters to your MNAV. >> And I think our job, among other things, is to get that MNAV up over time. Um, you know, we were sort of solidly trading at kind of 11. >> Yeah. >> A couple weeks ago. We've come down a little bit. We can all speculate why. We're probably at about 1.0 right now. Last I checked.

>> Yeah. >> Um, you know, we sort of dance on the head of a pin a little bit between 1.0 and 1.1, but that's the life we that's that's the that's the job we've chosen. >> Um, >> but anyway, the answer is yes. And obviously, if you can generate a lot more yield, >> right, >> you're going to trade at a much bigger. >> There's always going to be more risks. I mean, the typical way to go get more yield is going to be going into smart contracts on HIPPVM. Then there is a whole another level there of teams because right now the company and your entire thesis is structured around 12 people >> right and other you know subsidiaries and custodies and firms and accounting and all all the sort but like if there's like a 12 person thesis here >> start to expand into other protocols

other teams the risks grow quickly. >> Yeah. And by the way it's not totally fair to say it's 12 people. I mean technically it's 12 people. Um I when when I saw Jeff when he was speaking at token back in Singapore in in whatever that was September October someone asked him like how can you have a company with with or a group with so so few people and his answer was that they made the conscious decision to sort of have other people in the ecosystem as you just said doing different things and his example was you know unit brought spot trading onto Hyperlid. Right. And he said, you know, if this was a regular company, >> we would have a division called the spot division or whatever and it would be another whatever 20 people or 15 people and they'd be the spot people and then

their company would grow and grow and grow. He made the conscious and I think very wise decision. >> Yeah. >> To have the ecosystem doing lots of stuff, not just him. I mean, it's it's an extremely, in my opinion, humble decision he made. Yeah. >> Which is they're going to stick to what they're really good at. Um, I think he likes himself being behind that computer doing a lot of the coding and developing himself and he's gonna allow the ecosystem to build and he doesn't need to build an empire. He needs to build a really high functioning um, uh, platform and blockchain that he's personally in the middle of like you know every line of code, every thing that it does.

>> Yeah, David Sheamus looking forward to continuing the conversation in the future, six months, year from now. see where we're at, see where Purr's at, see where Hyperliquid's at, see where just the general crypto market uh kind of revitalization. I think it the four-year cycle is intact from the top, but I I anticipate it to be a little shorter. I anticipate risk to come back uh slightly quicker, not that much quicker, but you know, yet to see. Thanks. Thanks for joining part of the entire state building here. >> Thanks a lot. Thank you, >> wisdom.