I founded WonderFi Then Built A Crypto Treasury Vehicle - Karia Samaroo

Transcript

This is Bit Tensor and it's taking Bitcoin structure and applying it into creating useful AI and it's really early, but it's starting to to pump out some really really interesting things. >> Yeah, I'm a little bit worried about how uh a 60% drop on some of these tokens affects these uh these treasury companies. >> I think you need something that's generating revenue. You need something that's sustainable and that can make it through the next bare market. 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 guest, 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. What's up, Gar? How are you man? >> Hey, Andy. Doing good. How are you >> doing? Pretty well. I just talked to Kyle from Milk Road. We're one of the uh co-founders. They're a pretty big media company in the space. They just did a a podcast about Ethereum DATs. Uh I think that the topic of today's show is certainly around these crypto treasury companies. >> No better guy to talk to you or to talk about it with than you, man. Uh good to have you on. Um and yeah, man. Welcome to the show.

>> Yeah, appreciate you having me. >> Yeah, man. All right. So, you you're uh involved in multiple things in the space. I think the the pressing thing that I'm curious about is around your involvement with Bit Tender, XTAW, your thoughts on these treasury companies. Would love to talk about WonderFi, Robin Hood, how that kind of all came about. But um I think you you guys were one of the first kind of like non Bitcoin or Ethereum treasury companies. I feel like you guys started this before it was kind of the hot thing to do. Um how did you guys find out about this opportunity?

what you know what's the story behind XTA and your involvement uh in Bidensor? >> Yeah, for sure. So I'm going to date myself by telling you the origin story because the inspiration for XOW was I I had been building invitens for I guess about a year or so saw the incredible potential just wanted to dedicate kind of the next like next chapter to that after Wonderfy and it reminded me of when I first got into Bitcoin and this was 2016.

it was ju really just crypto community that was focused on Bitcoin. There wasn't really anything that was getting like more of the broader public in uh into the space. And then the first Bitcoin miner went public and it was a business model people could wrap their heads around backed by this high growth asset. And to me that created this huge inflow of just interest and understanding about Bitcoin. And so that was the inspiration uh for Extile when I started this in October last year was create something that an investor and a Bitcoin miner can understand and uh have have a sound business behind it.

Something that's cash flow positive, generates revenue, but then it's also backed by this asset that you know I think is going to be a top three crypto asset in the next uh four or five years. So um is the publicly traded company is that called XTA? >> Yes, it is. >> Okay. What is the uh what is the premium to the NAV as as it exists today? >> So we are we're announcing our holdings actually tomorrow. So uh that will you'll be able to be able to >> it's not public.

>> It's not public yet. Um but we you can kind of reverse engineer it a bit but we yeah we raised 23 million um US and the majority of that has been used to buy Tao. So I think that that'll make us the largest uh public holder of uh of Tao and we're going to be aggressively accumulating more but really also focused on I mean the core focus of the of the business is operating this validator and growing that and then investing in other infrastructure in the ecosystem. I think there's a ton of value. I mean, you guys are are talking a lot about the the DATs, you know, for for good reason. I think they're so so great for the ecosystem. Um, we obviously have a large treasury, but

will continue to run the operating business that I think they're they're complimentary and I think that's important for an asset like Bit Tensor. Um, I look at it a little bit differently than um than some of the bit like the Bitcoin treasury companies and some of the more established assets. >> Yeah. So, so you're not just running this exile company just to accumulate as much Bitensor as possible necessarily. You're also trying to run validators and invest and expand the BitSensor ecosystem basically. >> Yeah, exactly. Exactly. I think that's that's how we can bring the most value and we want to be an institutional product for Tao that has the most credible kind of capital struct like I think you know I'm a my my background is a kind of you know finance and and and

securities law. So, I'll never be able to get away from how important I think capital structure is in in these vehicles. And I think it's it's so cool to see how many different styles there are. Uh, but I think for for us that was a focus from day one was just having a very sound high integrity capital structure that can last because again I think for for assets like Bit Tensor, they're they're way more nent than Bitcoin, ETH, Salana, of course. So you you potentially will have much larger draw downs. And so I think you need something that um I think you need something that's generating revenue. You need something that's sustainable and that can make it through the next bare market. That's that that's key in my in

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Yeah, I'm a little bit worried about how uh a 60% drop on some of these tokens affects these uh these treasury. >> Yeah, I I am as well. Yeah, >> that that's I think it's a big issue because especially I mean you guys are I'm sure experts or becoming experts in the in the DAT structures, but it's interesting because a lot of the pipes are they're going into existing NASDAQ operating companies that have an existing business. They have, you know, relatively high burn. They need to keep the existing non-crypto business going for regulatory reasons. And so that that that looks fine right now. And that's great. Um I think that and especially

with something like Bitcoin Ether Soul, I don't like for Bitcoin, you know, I don't think you you were going to see a 90% draw down. Um but >> but I think when it's something that's newer and people are not as bought in on um you know there's going to be more conflict that comes up when we go into a crypto bare market and you know a company has 100 million or 400 million or whatever it is of um of this uh particular crypto asset and then it draws down. I think there's going to create it's going to create a lot of pressure um around what the company does next and how um you know how it how it can sustain itself and then also if it's burning that much and it's it's then going to be burning cash

it's going to be create you know a forced sell like draw down of the assets and and and force sales I think so I think I think something that can be cash flow positive despite a large draw down is I think is really critical for doing a treasury strategy with something like like Bit Tensor or other non kind of uh non OP3 assets I'd say. So I in today's um ETHZilla I think is what was announced 425 million or something uh in the last post of their tweet they said uh normal operations of our company will continue basically uh and you're saying and this is a known fact that effectively these

companies can't just turn into straight uh you know crypto accum accumulation vehicles they need to for the sake of of optics per they they need to keep their business going, earn some revenue from that. Uh but then on the side they can do these crypto accumulation things. >> Yeah. So basically the structure for the and I I need to dive deeper into into the the one that was announced today, but basically so like with with ESP for example um the the you know the the the ETH um treasury strategy that I think was kind of the the big first pipe.

>> Yeah. Um there's yeah there's a legacy business. I think typically the you know the company the investor groups that are putting this capital and are sourcing NASDAQ operating companies that are sort of between like a5 and $10 million market cap. Um and then they're typically burning, you know, maybe between 4 to 8 million um a year on the on the on the legacy business. And then the investor group comes in, puts in all this capital, it gets allocated all under a asset management agreement. So it's kind of it's it's basically ring fenced from the existing legacy business. So the existing operators, you know, CEO, etc. are focused on um, you know, the gaming business or the solar

business or whatever that whatever that might focus might be. And then all the all of the new capital that comes in is or or, you know, the vast majority of it is focused on just, you know, accumulating ETH or whatever the asset is. And then you kind of have usually one person like a CIO or something like that that is responsible for that. Um, so that burn is going to continue. I'm a lot less concerned about that with something like Bitcoin or ETH when they're raising these huge pipes. I just feel like that will resolve itself and they'll be able to sort of slowly transition the um you know the board and and things like that to just truly become like a pure pure crypto treasury play. But I think with something that

that is a lot more volatile, there's way more risk around it. Um so that that yeah that that's a concern I think in in in my eyes. >> Interesting. So, so when when you were looking at the landscape for um you know doing one of these DATs or pipes as you call them um you know you settled on Bit Tensor, you know being previously ex you know exposed to the ecosystem and bullish on it you know what makes you so bullish on Bidensor like why is this something worth accumulating? Uh why why do you want to accumulate more? You know what's your what's your frame of reference for where Bidens is going to go? Yeah. So for me, I think that spending a lot of time in the ecosystem

and just seeing what is being built gives me the highest conviction and how much talent is being accumulated within Bitensor. Um you know there's over 100 subnetss everybody is heads down building and it's still early so some of the subnets are not really creating value. a lot of them are starting to do that and um I think to me from a time evolution standpoint it's pre first having for bit tensor so it's like bitcoin in the first part of 2012 um so really hard to see exactly um exactly kind of how big this is is going to be but I think that it has all of the um all the right indications so far and um and so that you know that

that's a big part of it for me and then I I think that more kind of superficially I think the one of the key things of creating a you know a massively success successful crypto asset that we've only seen with a few is something that non-crypto people can understand and wrap their heads around and so Bitensor is not quite there yet most people in the ecosystem can't really explain what Bitensor is but I do think that having the same tokconomics and a lot of similarities to Bitcoin is is going to help u bridge that gap for for people. And so that's um I I found that that is is a um a really helpful way to bring people into

Bit Tensor is just saying okay you understand Bitcoin you invested in HUD or Marathon or Micro Strategy. This is Bit Tensor and it's taking Bitcoin structure and applying it into creating useful AI and it's really early but it's starting to to pump out some really really interesting things. >> So So you're going to accumulate a ton more then? >> Yes, we'll be aggressively aggressively buying towel for sure. >> Do you have like a supply goal like a supply target? what what percentages >> I feel like uh yeah I don't I don't want to put out a number yet but um I think that we yeah I think that you know particularly because we'll be we'll we

will be investing in infrastructure and then we are going to be looking at um uh working with different subnets also that I think is you know there's a key gap there where subnets need to be able to reach mainstream investors also and I think that is really well positioned to do that. So, um we're going to Yeah, we're going to be aggressively growing, but yeah, don't have a specific uh number right now. >> Yeah, I think some of these uh ETH ones are trying to hit I think Tom Lee said he's trying to hit 5% of the ETH supply, >> right?

>> Yeah, that's a big number. >> It's a lot, you know. >> Yeah, >> it's it's actually quite the paradox here with with these uh accumulation vehicles. It's like you know you accumulate all this supply of these networks you know which is great for the asset price but then you get a lot of the ownership of these networks effectively in traditional finance vehicles. >> Yeah it is it is very interesting and it's and then you see and then you're starting to see the like Robin Hood um or you know and FTX had done this previously but tokenized equities. So you have now tokenized versions of the stock that is a holding company for the asset like >> Yeah. It's like a full circle, right?

It's like it's like the snake eating its tail. >> Yeah. Exactly. >> Yeah. Yeah. Yeah. So do you think that this entire concept of these pipes or like is this going to end um at a certain like point whether it's because of like blowups or deleveraging or people just you know moving on to the next hot thing? like like maybe if you could take a wild guess or prediction like what does the next 6 to 12 months look like for these uh companies like are we going to get them for every asset or are people going to start copying you and just bit tensor ones and just like there's going to like like like what is your like vision for how this is going to play out for the industry?

Yeah, I think I definitely think it's it's extremely hot right now and so I I feel like we're somewhere in the, you know, in the peak of of that or or at least approaching it. Um, I think that I I think they're they're great for the ecosystem just in general. I think that being, you know, just going back to Sailor, what Sailor did, being able to create this uh bridge for investors that can't invest in Bitcoin to come into Bitcoin, it was genius. And you know, and to you know, as he as he admits was sort of a mistake almost he just kind of stumbled into it. is like, "Oh, we have this uh massive Bitcoin holding and now when I'm talking to um

these different group like you know bond investors or or convertible investors etc. they're like oh we can actually you know we can actually come in in this way. So I I think I think what he created is really um really you know amazing. I I do I do feel that it will reach a saturation point at least with new treasury companies coming in um for for for the for the leading assets because I think it becomes harder to differentiate why would I invest in in this versus a micro strategy or versus something and al obviously there's there's there's always going to be nav kind of arbitrage opportunities and things like that. So maybe that just kind of keeps it going for longer than I'm thinking. Um, but I do think that being able to differentiate with kind

of, you know, a business model that um that that is investable and that is is is sort of is high growth or has the potential of high growth is is what what this will revert to. And um and so that's that's kind of how we've we've position positioned ourselves. Um but uh but yeah, I think I think we we probably still have quite quite a um a lot of legs left right now. So um yeah excited to see the next six six to 12 months unfold. >> So maybe like more alpha more opportunity in like in these data pipes for different tokens like Bit Tens or Suite whatever the newer ones are maybe less differentiated opportunities in the big tokens might as well just buy the established players.

Um yeah but but I think generally accelerating here >> I think yeah I agreed I agree. >> Yes. All right, let's shift gears. Uh, Wonder Five, Robin Hood, you worked with Kevin Olirri on this or at least had some sort of association. >> Call Mr. Wonderful. You sound Canadian. My parents are from Barry. I've got the Canadian blood in me. >> Um, >> so yeah, how did you meet Kevin? How did that unfold? Let's talk about Robin Hood. They're in into crypto. >> Yeah, so I founded WonderFi in 2021, start of 2021. And the the state of play basically was Canada was not relevant from a like in the

crypto landscape. And but there were lots of good teams that were building and lots of smart people, good tech. There were dozens of different crypto exchanges that were in Canada all competing for the same customers, but nobody had kind of taken the lead. And so the vision with WonderFi was to create a Canadian crypto company that could compete on a global scale. And so basically came in um we created the exchange and brand um which Kevin Olirri was a big part of. And then we just started bringing in the best tech and talent and we grew Wonderfy to the largest crypto exchange in Canva in the first sort of two and a half years. Um but Olyri so we had just closed a

financing or we're in the process of closing it and then we got approached by Olyri and his team. They were looking at investing in regulated crypto assets and WonderFi really was was well positioned for that. And so yeah, we brought him on as a kind of a lead investor and um you know, I considered him more, you know, more of like a co-founder because he was so involved with it with the company and yeah, was really really great to work with him and helped us um yeah, helped us get that to uh to where we got it. So yeah, and then I would say when so when I was still running five CEO, we had a bunch of plans for expanding into the US and Australia and kind of globally. And then at the same time, we had a bunch of

inbound from different companies that were looking to enter the Canadian market. And to me, you know, what's what's transpired with Robin Hood? It's, you know, a best case scenario because it's um it's even more exciting than a crypto company acquiring uh Wonderfy. It's having a transfire is like it's it's just great for the industry. It's really cool to see. >> Introducing Asset Runes, the future of decentralized finance. Stable coins natively on Bitcoin. Hedge against volatility.

Diversify your portfolio all directly from your Bitcoin wallet secured by ZK technology. This is asset runes available now exclusively on Starknet. Yeah. So, all right. So, quick step back. Um, Mr. Mr. Wonderful, as they call him on Shark Tank. um one of the more uh one of the more you know direct blunt investors on the show. Uh we'll definitely call you know straight shooter. Was there any uh was there any times in building WonderFi together that Kevin was a straight shooter to you and was like,

"Hey, Gard, listen man, we this is to be done this way or you're not thinking about this correctly or broadly like was there any like key lessons and and uh experiences that shaped your entrepreneurial journey that you would share to others as advice whether they're investors, speculators, builders etc.?" >> Yeah, great question. I remember when I first met Kevin and we were already on this path and had a very clear trajectory for where the company was going and when he came in, he shared his vision and what he thought he could bring to Wonderfy and um and it it really was this kind of inflection

point and and decision decision point which wasn't clear to me at the time. And um I think basically what he said is you know car like car you need to go and do some soularching and see if this is what you want you know this is what I'm going to do. Um and I think that so I yeah went back thought about it and was like okay yes this is the direction to go and then once we we got a deal sign the next day and then within a week I you know I was meeting with um like you know CEO of circle um CEO of FTX like all the well obviously FDX you know that in hindsight issues there but it was it was really he was opening all these doors to um all these different crypto companies that were focused on uh you

know regulatory first and I think that um yeah when opportunity comes knocking you got to answer. I think that's that's that's really one one lesson and uh and then I think the other is that or um you know some people just love doing deals and some people just are you know that's what they eat, sleep and and breathe and um I would put uh Oly in in that category um just put so much energy behind a company and um yeah it was it was great to great to to work with them on that. Yeah, man. I mean, I think um people thought that when Robin Hood was going to enter into crypto, then this Wonderfy announcement came out, you know, they thought that with Kevin Olri with what you guys were building, they thought this was the Robin Hood, you

know, kind of announcement. Obviously, they ended up launching their own chain. But what I came to realize was that they they like some of the reason why they bought Wonderfly, why Robin was interested was for some sort of licensing or some sort of licenses that they needed. like what was the uh actual details there? >> Yeah. So in Canada, the reason that Canada is lagging in so many areas, not just crypto, but just in business in general, is overregulation >> and amongst other things, but that is something that Canada has very much overregulated is crypto in general, crypto exchanges, etc. So we had gone through all of the time, cost and energy

to get all of these licenses in Canada to operate these regulated exchanges. And so that, you know, that is a big piece I think for for Robin Hood or, you know, anyone entering into that into into the market is is being able to shortcut that process and get entities that are licensed, have a track record, all all that stuff. So I think I do think that's um that's a a big part of the equation. Um, one other one other uh quick quick answer to your last question though. I do think that um and I don't know if it's a I don't know if it's a lesson or not, but I do think that as an entrepreneur, as a founder, you have the choice when these types of opportunities come, whether it's a new partner, you know, funding,

um you commercial stuff that's going on. I think it's really easy for especially um first-time founders or or those that are earlier in their journey to really get stuck in the spreadsheet uh of like you know what are my economics like all of that stuff and I think that in the the the current environment is you know being able to collaborate and bring together a lot of people that have a lot of momentum and force means maybe your economics look different than you know when you had initially structured things but I think it and create this like velocity that's not possible just sort of on your own or with your with your partners. And so, not to say that's always the the right way to go, but I think that I I I've seen I've seen like

huge opportunities just um getting missed because somebody kind of has too tight a grip on on things. So, I think there's a a bit of a um a bit of a balance there that they that can be struck um to to to open up these opportunities. >> Yeah. Yeah. I mean, so we've been building the role up this media platform for four and a half years. And the way that we kind of think about it similar to what you're seeing is we're very, especially in crypto bull markets, very tunnel visioned on like we have our business model, we have, you know, we have our our team maybe scale a little bit, we have our offer, we have our systems and processes. Like we're just very focused. Um, and we don't try to jump on every single opportunity that

comes and try to like expand there. Like we're just like no, no, like kind of like less is more, but some sort of some sort of line between that of balance in terms of this fluidity where it's like okay well realistically there are there is going to be an opportunity that comes up at some point in time if you're properly positioned which is just you know kind of being in the right place at the right time working etc. And like there is value as you're saying in in in having that agility. I guess like the question is is like how good of a decision maker are you to know which which ones are are worth hopping on?

>> Yeah, absolutely. And I agree, it's such a it's such a balance because you need to be laser focused on what your core business is. And um and and then you also need to depending on your role, you need to be able to kind of pull yourself out of that and pull yourself out of that execution mode and and sort of see the opportunities for what they are in really an egoless way, which is really hard es because it's it is a push and pull, right? I think the more you're the more you're relentlessly executing and doing a great job of that, I think the harder it becomes to kind of be um object be be truly objective in the way that somebody that's not as attached to the business is that could see what a what a growth opportunity looks like.

But and then to get to your point in in bull markets you're probably seeing you know dozens of opportunities a week or a month and it's and and and like that that pursuing that is just uh um can can be really futile I think as well. >> Yeah. Yeah. Yeah. I have a I a saying in bull markets I mean goes for life as well but just less is more less. >> Love that. >> That's my that's my bull market uh mantra. All right. Kind of coming to a close here. what is uh what is your uh you know kind of like when you're looking at again kind of back to stats back to AI landscape back to bitensor um what is it that you are most uh interested in inside of the bit tensor

ecosystem talk to us about some some of the subnets some some of the projects like what is the actual substance underneath the uh bitensor ecosystem that is compelling um you know if if I'm a a traditional finance allocator I want to know what I'm investing into. Talk to me about the ecosystem. Talk to me about Bit Tensor. >> Yeah, I think it's definitely the the talent acrruel that gets me the most excited right now. I think it's important to contextualize where Bit Tensor is at in its evolution. It is to me it's it's by far the best shot on goal for a decentralized AI network that competes with any centralized uh competitor. And I think you're seeing

that on specific subnets where they are matching or outperforming centralized models, but it's still it's still so early. So I think the the the keys to pay attention to really is yeah talent acrruel, how much activity there is on the network. And then you are starting to see some products come out of bit tensor that are getting really high usage and that are high high performance. So shoots I think is a really good example. Shoots.ai is the website. It's a it's a you know open source LLM um and allows you to use DeepSeek and other open source LLMs all run on Bit Tensor and I think it's products like that that you don't necessarily need to know that it runs on

Bit Tensor but it provides something that's super useful. It's an alternative to chatbt that uh doesn't hand over all your data to um to open AI um which I think is uh you know is a really massive problem and something that's just growing exponentially just how much how much power is accuring to a few of um kind of the the large players and so I think it's products like that that uh provide a really kind of simple interface for for people to onboard into bit tensor that that get me really excited and you know they just announced Um, I think it's kind of the first series A for a bit tensor subnet. Um, as of yesterday, I think they did a $10 million round from um, some VCs and um, some of the Google DeepMind guys and and

things like that. So, that's that's really exciting to see and I think it's an indication of where things are going to go with with the tensor in the next little while. >> Yeah. Yeah. I mean, I think it's it's always a good sign when ecosystem projects are getting funding from like a broader kind of like L1 uh, company. Um, do do you think that there's a chance that Bit Tensor becomes like the AI project for crypto? >> Yes, I think it it will. >> I think that it's I think that it's it's on the cusp of that. Um, I think that it, yeah, it has all it has the I mean the the structure is there and I think the the fact that, you know, you have so many different teams that are building

and building really useful AI products is is there, but I think the one of the challenges with crypto is everybody's sort of segmented into different projects and there's kind of that cult mentality. So I think that it's really going to be Bit Tensor getting more mainstream adoption that will start start to kind of like um make it clear that it's the it's it's the leading um decentralized AI play which I think will happen very you know in in in in the in the short term for sure. >> Yeah. Yeah. Yeah. K man I appreciate your time. Thanks for joining on on Rollup TV today. Congratulations on the success with WonderFi. looking forward to the announcement tomorrow where you guys unveil your holdings. Um, and

hopefully you guys go out there and raise raise another eight to nine figures, buy some more tile, get the get get the market fired up, man. So, uh, best of luck and I hope you manage your risk. >> Thanks, man. Great to great to chat with you. >> Yeah, cheers, man. See you soon.