Into the Next Cycle: Jito Airdrop, BTC NFTs, and The Return of VCs | Roundup

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the coinbase ads we haven't really talked about this but those that series of ads I think is just so good um because it really does it it hits an emotional cord with at least me and clearly a bunch of other people as well it's just like yeah there's I see no viable path to it's really Financial Freedom you know they talk about all these things like debt and I just feel like that's that's a narrative that's going to emerge amongst young people is crypto is a is a viable more viable path to Financial Freedom than the Boomer bags all right everyone we will be back to the program in just a moment but before we do I want to share something that blockwork has been cooking up for these last couple of months March of this coming year in London blockworks is hosting D London the largest

institutionally focused conference in all of crypto Goldman JP Morgan 72 all in one room so you can know what the big money is doing so click the link at the bottom of this episode it'll take you right over to the homepage and use Bell 20 for 20% off I will see you in Sunny London Town in March all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone welcome back

to another episode of B curve you got Michaels one and two Advance fellas how are we doing it's hanging out it's been a week one it has baby busy end of the year I know yeah um we got to do a predictions episode actually I thinking of that I got some good ones I got a couple up my sleeve I do too I went back in listen Wars I think we did pretty well on the whole actually from last I mean we've just always been bullish so it's you're gonna be right every once in a while you know do you know what actually is really fun Vance um I was talking to one of our LPS about this when we had our fun three announcement we came out with and and it's on our

website anyone can go and check it out we came out with some 2030 predictions and some of them are actually like already starting to come true which is super interesting um so you know maybe we sped run 2030 as well let's go we love to hear that you know actually I was reminded of something remember I like I don't know a couple months ago I like brought up this predictions from Goldman Sachs and it was like money market funds moving on chain and you guys were like actually some of that will happen I have a well I don't want to front run actually I don't want to front run the prediction yeah yeah all right I'm all right so um speaking of front running jeto jeto launched jto launched today uh I'm I I love the I know you guys are investors I

also have a bag of jetos so I guess disclosure there but um you you can go back on bell curve and listen to episodes that we've been doing with Lucas for the last year or so gigantic fan of that project um and I think what I we can talk a little bit about the the airdrop today but I also I really love the business model and I'm starting to see this narrative now of jeto being Lio plus flash Bots and I just want to do a descriptor of why that is and why I think um it was really smart of the jeto team to pick up on the connection between Mev and liquid staking because I feel like that's a really smart that's a really smart connection um but in terms of the in terms of the airdrop I guess just to give the just to give the

overview you know the token so we're recording this we're recording this literally 30 minutes after it went live so it's or 45 minutes it's 11:45 now uh GTO is just under or GTO is just under $2 um this was kind of an interesting aird drop because I think if you there were a lot of farmers that got a surprise the upside like if you had been holding like staking even like a couple eth like a hundred dollars or something worth of uh salana through jeto you done pretty well you know by some estimates you might have gotten five or $6,000 and that's that's very different from sort of the the very civil almost like do sort of airdropping that goes on on um some of the l2s for instance so I think it was a very positive surprise for many of the people that were farming jeto um

yeah I have no I'm just not really Savvy enough to be like this is where I think the token price ends up shaking out or or anything like that I've got no idea uh but yeah I mean I know you guys are again caveat investors in know but what did you what did you think about all this or how to get into their business model or why I think it's interesting on on the liquid staking side they're in the early Innings of bootstrapping you know what we think is going to be the biggest LST in salana and like we can pull up like jto WTF or or one of the analytics dashboards but they're at about six and a half million soul and they're running liquidity mining right now which is kind of like you know if you think about what Lio did

with its tokens in the early days versus what jeto is doing with its tokens in the early days Lio as you remember the bridge contract you know there was no withdrawals so jto or Lio had to spit all of its inflation at a curve pool to get the LST to be one to one pegged and that was a huge use of tokens and now what jeto is doing is they're doing liquidity mining you're going to be able to kind of earn rewards via staking jto soul and like you're you're kind of in the early Innings of what we think is going to be the aggregate stake rate on Salon is about 70% um and so it's it's very possible that the aggregate stake rate for the winning lstd is is higher than that on ethereum the inflation is also on salana

about 7% right now um compared to like 3% of ethereum uh inflation roughly so there's kind of like a number of differences between the two but I think the comp is is pretty clean um and then I think kind of you know once that phase of growth is kind of uh conquered for goo I think what's next is like building really robust lending markets on salana and the thing that kind of sucks about um not not Sal specifically but like a lot of chains that are are not eth L1 is that maker is just like this always on it's kind of like the Unis swap model um where you want a stable coin at you know midnight on Christmas Eve and you need like a hundred million of them like you

can actually get that if you post collateral there isn't anything that's that reliable that cheap on any of these other chains yet I think with a maker endgame it it will kind of make strides towards that but I think that's kind of the next big thing um for successful lsts is like how do you build that you know that looping Dynamic of the LST the lot of it's you know a lot of the defi use case on existing e chains is that um so maybe that's in the weeds but like that's kind of how I think about the first you know few Innings of growth for for what's going on yeah I think maybe just to give for folks who might not be as in the Weeds on jto just a bit of a a history so jto actually started with the me use case so

they have a a client which at the current current time has about 42% uh market share in salana and the way that I would cons it's almost like the you know there's an analogy to um you know Mev Geth you know so the the origin the the client that flash Bots developed which has much higher Market penetration something like it maybe 95% I'm actually not not really sure but basically what that is very similar to Mev gu and the original um you know Meb boost product from flash Bots is you're basically running an auction so not to get too far into the weed but block building on salana is different than it is on on ethereum it's continuous as opposed to these discret 12C blocks on ethereum which makes Mev a little bit

more challenging so you know basically the what you're trying to optimize for an ethereum is actually extending the amount of time that you have to run this auction that goes for every single for for 12 seconds um and at the end some very specialized at this point block Builder will create this block that gets distributed over this Marketplace that's run by flash Bots to a specific proposer they'll sign the header the block gets propagated what jto essentially has to do is slow down time um and create these I believe that the auction time is 200 milliseconds where they'll run a discrete flash Bots like auction so that was product number one then I think very intelligently they identified you know who their customer is is Salon of validators well what else what's like a

cross- selling opportunity that I could do to other Salon of validators I could sell them a liquid seeking product and the Synergy in between those two products outside of just an easy cross sell is if I'm running this auction on behalf of my validator clients then I can actually extract a little bit of Mev and I can move up the yield that they're earning so easy cross sale Synergy between the two products and that's why people are saying it's this cross between Li and Flash Bots over on ethereum and overall it's just a really intelligent product Suite that makes an enormous amount of sense together at least I think what one additional kind of variable that maybe more aligned with the institutions I think one of the one

of the uh critiques that we hear is well you know there's whatever a 70% stake rate on salana um and one of the reasons why Lio became so popular on ethereum is because there was that two-year period of the beacon chain being launched no liquidity for anyone who is a Staker if you were staking to earn the yield you literally were were kind of stuck until you had the opportunity to get liquidity with that um um State deth token or wrap state deth in the salana instance that's not the case but what everyone has realized since and one of the the advantages of this token model is you're able to take all the things you just said the the Mev um you know components

you're able to take the yield you're able to take the inflation and you're able to wrap it in a token that switches basically the taxability and the way that income is generated into a single token that accumulates value over time in the same way that rap state eth does and and this is the difference between earning income every single day that you're earning some of those tokens versus capturing that in a capital gain in the form of GTO Soul uh and so there may be you know easy onboarding easy offboarding there isn't the same waiting period for for staking Salon tokens native in the protocol but you're subject to you know unfavorable um you know tax and financial implications over time and so institutions definitely

favor a wrapped token model and so the expectation as well is that you know some of that 70% starts to shift over into this favorable token model too yeah I think if you're a sole bull um and I think investing in goto has made us like more interested in the ecosystem as a whole and I think more specifically in D5 because like if you don't have defi on the Chain that's kind of like the Bas level Bas level primitive what you need to have it be money um and if you think about how to build an ecosystem you know the number one use case is is looping lsts like that is the bread and butter of what D5 should be on salana and you look at things like blast where they're like

taking you know people's you know say they took people's soul and then they Stak it in Jos soul and they're creating like this sub ecosystem and you know it will have a token that Launches on S like there's so many other cool combinatorial things that you can do once this ecosystem is real um and as as I said before the next thing is the lending Market but if you get those two right you really do have a shot of having defi um and I think maker and especially the backend being put on the svm is going to bring that source of liquidity closer to to this which is cool yeah really good points there I I think just to maybe underscore Michael something that you said a little while ago the there's a path dependence which is pretty interesting difference in

between salana and eth so salana started as a proof of stake Network ethereum started as proof of work and you know as like Cosmos and salana both have really high stake rates compared to ethereum um you know somewhere around 80 80 plus percent I'm not 100% sure where they are exactly eth is much much lower than that but conversely there's like inverse uh adoption of liquid staking so the liquid staking penetration for G even with jto and marinade or sort of the two on salana is very low as opposed to being very high on ethereum is because the pain Point uh of being able to stake in ethereum originally was was very difficult so uh you know Lio stepped in to fill that Gap and so it's just an interesting thing to point out

that GTO has a lot of room left to run even on its just core you know liquid staking token I would say um the the other you know Vance you mentioned something really interesting about the defi ecosystem building out and one thing that I have tried to think about a little bit and don't have great answers for is what what is the fee you know obviously fees are much lower on salana how is that going to impact Market structure on defi so one interesting Quirk like you can already see this sort of playing out so Jupiter obviously very successful as an aggregator of exchanges uh that's not the case on ethereum right you have Unis swap which everyone just goes to Unis Swap and like the one inches of the world are like great but not ultimately very successful and I would uh I would point to gas cost is

probably the reason why right because you have to Route One You're Just routing multiple Hops and each has gas so it it'll be interesting to see as dii gets built on salana how the market structure is different than it is in ethereum you're not going to have the same like you know gas Wars from like a hundred different meev Bots creating like a ton of fees to try to ARB something you're probably going to have like a more professional Mev operator set where the margins are a bit thinner um but those people are also part of the ecosystem in a strange way it's like the Bots can actually be good for you in times where they drive like Network Revenue you know to stakeholders but we'll see um the jto people are just awesome like they could

be building Rockets or doing you know any any number of crazy intellectual things but they've just eaten glass for like the past two years and it's uh it's awesome to see them kind of launch and and have a moment yeah I would tend to agree big uh big and just to maybe to plug if if folks want to get like much more even in the weeds just about jto as a as a business model I would recommend going back to we did episode with Lucas and Xavier Megan the CIO at chorus one um where you get like a super it's like an hour and a half long episode just super in-depth on their whole business model we did that a couple months ago and we can we can link it in the show notes one last last last point I have is um just like the hesitancy of a lot of people to

use things as collateral so like a lot of how Michael and I feel about like doing things actively on chain you know strategies where you borrow strategies where you farm like you need a very agile collateral and you need to be able to borrow against it and you need need to be able to do different things with it stake it you know swap it just just do different things most tokens people will not take as collateral on lending markets most people people most tokens people don't even really trade and I think like if you like getting people to start using salana for things doesn't really even matter what they are it could be nfts it could be defi it could be borrowing whatever like that is like that's what you're trying to create because that is the the path to money

and I think that's like kind of like there's going to be plurality of crypto money um but the thing that's going to distinct distinctify them is just like do people use it for anything because it can't really be money if you don't I that's a really good point and one thing that at least I've been thinking about recently is it feels like it feels like salana at some point I think they're doing what they should be doing in terms of their fees today but there's probably there are a couple holes I think with Solana's design so so even local fee markets which we've talked about on this program like they're not really in implementation today like there there are a lot of problems with how they're implemented and you know I think people talk past each other on fees a lot of the time because again Protocols are at different

points in their life cycle but it does feel like at some point in the future salana will have to do its version of 1559 something like that yeah nothing's Perfect by the way like no one has solved the the scalability problem the only people who've solved the fee problem is still eth um and sustainability uh and that getss glossed over definitely but like all of these approaches have relative strengths and weaknesses or holes yep I tend to agree with you um all right I I want to talk a little bit about um nfts but actually specifically I don't know if you guys have seen what's going on on bitcoin these BRC 20s uh ordinals really taking off um I'd be curious I I have I have some thoughts on this um but I'd be

curious have you guys paid attention to that Market at all I know it's still a pretty small Market uh today I just added this now but uh wait what is this I just saw un added oh my God that's so funny um his name congratulations we're right at uh we're still at free money yay yeah free money y that's that's amazing oh yeah jetto is at two bucks now well good for good for jto I again not a not trade or here so I we haven't done much in ordinals we we just did Babylon which is BTC reaking um but I've I've seen the uh I've seen the brc2 takes they're

hot can I can I give you guys maybe a uh a hot take on bitcoin nfts and then you guys talk me down and tell me why it's a bad take your take didn't you go too much into nf's last Market no no no not at all I've I've never made money on nfts but I've turned uh pretty yeah not Financial advice but here's here's my general framework for nfts the L1 token goes up people look for what to do with that token and they invest in art culture whatever I just think that's the the core use case for it and Bitcoin Bitcoin is suffering from this problem which is there's not actually that much to do it's still the largest pool of wealth in crypto and despite what the

sort of Maxi Twitter would have you believe these people actually do like to do things and what I would point to as evidence for that is centralized Finance or CI right you used to be able to park your Bitcoin in blockfi and get a yield but that all blew up so now there's this gigantic pool of crypto native wealth and there's nothing to do with it outside of these silly nfts and I think you can see like you can look at what people are doing with ordinals people are buying these things and there's a bunch of uh of Bitcoin nft projects that are launching soon tap Wizards is my person personal favorite just because I like uh um Eric and udy but yeah I again not Financial advice but I'm kind of looking at that being like I bet

everyone's fading that and it makes intuitive sense to me why did you see ud's comments in the block I did I thought hilarious this was the Luke Dash comments about how calling it an exploit or vulnerability or something was like thank you for contributing you don't own the chain like thank you for storing all of our jpegs on your nodes at home it's pretty funny but I do think that's like the bull case is like look people were buying ether rocks for like a million dollars last cycle I'm with you on on whatever you're pitching I'm with you but I think I think the risk with Bitcoin is Luke Dash Jr he is like a Bitcoin cordev and he was saying like you know don't worry we're gonna patch

this bug and like eliminate the spam it's kind of like a dangerous place for for a network to be in controlled by just like ideological people but you know like we do own Bitcoin we we've like invested in the Bitcoin ecosystem so you know we're we're also exposed to it we're we're rooting for tap rot Wizards and all those people though that's that's been my you know when people talk about building even like defi on bitcoin I think nfts on bitcoin make a lot of sense defi I'm less sure about I love babon as a project by the way I think David is a like a great founder he makes a lot of sense um you know he's been on the Pod before but I think um yeah obviously not Financial advice but I think it'd be it's interesting um we're excited to be able

to do stuff with our Bitcoin yeah just sit there right now no yield baby people love yields they really love it um it really is trafi or defi gold like it just kind of sits there it is more use cases will be good for for that hopefully all right everyone we will be back to the program in just a moment but before we do I want to share something that block has been cooking up for these last couple of months March of this coming year in London blockworks is hosting Das London the largest institutionally focused conference in all of crypto we are gathering 1,200 of the world's largest asset manager so think trafy macro funds Crypton native funds big allocators and financial institutions so Banks payment processors Etc all in one spot it's very rare to

get the likes of Goldman JP Morgan 72 whatever all in one room so you can know what the big money is doing we're diving into the themes that they care about so we're talking about the intersection of macro and crypto where we are in the gol real world assets so everything from stable coins to unchain treasuries to tokenized assets it's going to be a blast but the other reason you really want to go is London baby center of the world at one point you got Pub culture you got fish and chips great beer it's going to be a blast so because you're such a great listeners to bell curve there's a Code Bell 20 that's going to get you 20% off so click the link at the bottom of this episode it'll take you right over to the homepage you'll see all of our speakers and use Bell 20 for

20% off ticket prices are going up soon make sure you go use that code I will see you in Sunny London Town in March I have a question for you guys actually maybe on a related note for for Bitcoin um I I had a conversation with someone this Meek week who it doesn't feel like retail is really back yet um like not at all I did see some people today you know coinbase moved up to like 300th on the Apple App Store like a big jump but 300 is still 300 baby that's not that's not here um I would be curious I remember when it was either one or two any given week during 2021 that's that's when for a year that's you yeah for a year that i' I'm already noticing people getting fatigued by like the bull the bull run the early stages of a bull run

I so maybe this is the direction you're going Mike and sorry to to jump in but I've had the same experience uh you know friends or you know friends of friends who are not in the space we basically in the mindset of like wow you're you're still doing crypto interesting like H I didn't realize it was still happening it's like best forming asset this year uh I don't know where you've been living but the normies are not back yet only only small like the the forward deployed ones are The Adventurous ones but nowhere close to real retail I think that happens when you break the all-time high like think about last cycle when when when we broke 20K it was

on and and it just became a frenzy I I don't think you can expect that until the alltime high that was going to be question to you guys like when is it is it around alltime high and that to me feels like because I remember what it felt like last time when it broke the all-time high it was just like oh we are back but I didn't really feel like it before that because maybe I just wasn't as in it as I am did we break alltime High last cycle I think it was December I think it was December 2019 or no sorry 2020 no 2020 right okay y yeah I mean but then just think about it after that you still had another year of price discovery and then there was another like six months after that post alltime High

where things were just kind of like consolidating obviously we had structural issues six months after that with Luna Celsius and then everything else that happened but to say that we're like back in the bull market from a perspective of Normy realization and you know coming back like that's the furthest component that we're seeing right now I mean I think about the timelines and it seems super rudimentary but like we are in December 2019 times right now yeah we this just every single week that goes by I am furthered with the point that we're we're reliving the cycle and and it's not going to look the same it's going to be different ways it's going to happen in different ways it's GNA it's going to rhyme but it's not going to be the same

and if you just keep your mental mind uh mental map of here is where we are in the timelines it's a pretty good barometer for what to expect yeah yeah I think about the people people that are doing you know are moving the markets around it's probably crypto Natives and then institutions like we have you know lots of LPS now kind of like reaching out again we have people at the office this week like people are re-energized about the space at the institutional level in a way that hasn't been the case in you know two years so yeah I I would also expect the cycle to be slightly different in the sense that like maybe the coinbase App Store ranking is not the most relevant thing if most of the bid is coming from people like ETFs or

hedge funds um right like it's always different like I was even thinking about like what does the crash look like after this this cycle um and there and there will be one crypto is just like prone to these things but like I could see it being like a traditional institution that accidentally blows up or like a staking slashing incident or like it but it's tough to relive the last cycle unless there's like the same level of outright fraud and scams and I think the whole point of the past year is making sure that doesn't happen again I hope so too I I also think this cycle I mean fingers crossed but it seems like um you know with all the moves that are happening in DC there will be some

regulations that happen this cycle I I don't think that we're just going to like sit and let that pass I think staple coins is probably going to be the the first to move fit for the 21st century Bill probably need some you know adjustments to it before it's ready for for prime time but all of those things moving in that direction are like exogenous factors that we couldn't even have imagined in 2021 or in 2017 uh so I mean there there's also a lot of positive catalysts that could totally change this like fouryear structure that we've been reliving over and over again like ground hod day uh but yeah to Vance this point it's not going to be the like retail and and so to take it back to nfts I think nfts will get a bid I think that you know

those that is just kind of like the natural thing what like you're talking about but the the really big thing too is we're going to see Bitcoin and and probably eth every two weeks just get a natural bid of people who are allocated you know one to five% of their you know retirement accounts or their managed accounts that every two weeks when they get their paycheck allocate whatever that money is into those ETFs like that that is a structural Market change that we we absolutely haven't seen before I agree with you and I agree with you that I think institutions have been it looks like if you just look at CME volumes it looks like around July um is sort of when they started moving in a

little bit or some of the quicker moving ones so yeah I I I still think it's you know not Financial advice I just feel like it's still pretty early like even one of the things that at least I pay a lot of attention to because it's relevant for our business is you know we primarily monetize via ads from companies that have had a really rough 18 months or so and the cycle that I see starting to happen now is VCS are raising again VC's raise again maybe that happens by like December Jan of this year but then that takes some amount of time to deploy out into the market and then even then it takes a little while for people to start spending again because they need to think about marketing for the first time in 12 months so like that to me is still

like six months out into into the future I I would I would guess um even if the market really takes off so I don't know I see these people I see my whole feed is filled with people calling for local tops and I will just say that's not the type of thing you see when it is a local top you know that tops you see everyone saying this thing is going to go to moon and infinity and I still think there's a lot of healthy I would argue it's healthy PTSD in the market and yeah I just kind of feel like it's early and anyway lot lot of room to run it's early we have a lot of the markers of of kind of leaving the bear as well like one of the classic ones was uh in in 2020 um people were overwriting options on

crypto because you know they would they would write covered calls and you know they would think that crypto wouldn't go up and some of it obviously was passive income on crypto that you hold but like sometimes you can get into the naked realm of like writing options on crypto that you don't hold and um last cycle 3ac bought all of these options and I think those were like some of the legit trades that they did do but just like you know cheap ball and then crypto exploded and then you know they they kind of reaped the benefits and you kind of had that same thing happen with you know has gone way up um people were selling crazy amounts of of of options uh throughout this year and just like a recognition that that strategy is no longer going to fly kind of removes a

lot of the ceiling that you see on these crypto assets because like at a certain level you're just not going to be able to overpower a Trad five bid if you're if you're writing a lot of these calls so that activity largely ceasing is is kind of like one of the markers that at least I have for okay you know it's not maybe like a bull market yet but but we're just seemingly slowly drifting higher and and that last point I think is the crucial one when you don't have as much naked uh call writing going on it was uh what was it it was right before Thanksgiving I think when you know this whole thing kind of came to a head maybe it was the end of middle to end of October um and we we kind of had heard that there was a large option

seller call option seller for eth in particular and this is right when it was around 1400 and that they had these price points these strikes at the end of October around the like six 1650 17 1750 that violent move up uh in our estimates was basically a a covering of of that option seller um and so when you don't have when you're selling all these options and you're trying to make yield and and you know maybe partial uh coverage but partial naked uh you're not going to have the violent moves up and that violence I think is um you know not having that I think is is a testment of a real kind of solid institutional Market as well uh where you don't have an unexpected you know 10% day or or 15

or 20% day uh maybe over the course of a week or a month you move up 10 to 15 to 20% but it's not going to be over the course of 24 hours yeah well I mean even last time what I what this reminds me of is actually like the 20120 period post um you know post the massive sell-off it was this I would call it like a steady grow price action you know it was just like every day was just like up a little bit more there were a couple dips but they clearly they quickly got bought and like that's what I you know my memory is like kind of looking at Bitcoin around like 15K and being like oh wow this is the highest it's been in a long time and then it just kind of steadily got up and as it got closer to the all-time high

you know people started looking at it more and I that's what it sort of feels like a little bit at least to me and and what I would say is uh the two things that you didn't have back then is the institutionalization and the product availability you didn't have you know the CME the ability to write or buy you know calls and puts so you didn't have that violence you also didn't really have I mean you had some uh per but you know those are pretty pretty much contained um into the binance ecosystem or or you know FTX at the time um but I think that that natural bid was mostly just covid because remember that was summer 2020 people realizing oh wait maybe there's a different model people are stting at home they're getting free

paychecks like that was sort of what a natural spot bid looks like in a progression in into a bull market and then it got over at skis and and all the above but I I think that that's right in that you know as we start to see that slow grind higher that's the marker for the start of an interesting bull market I agree one thing I wanted to get your your guys take on is I I I'm curious like so my mental model for this has always been price sort of moves first there's a bunch buch of raising money and then onchain activity really takes off and that has implications at least for Defi and one of the things that I saw this week that I thought was pretty interesting is synthetics um they're voting to not only uh stop their

inflation but they're actually voting to you know considering a burn um a burn mechanism which would be be pretty pretty un Unthinkable I guess like a couple of years ago I mean that was not that was not something that I feel like was even in the cards and you know I know you guys are um you know pretty positive on protocols that that have a sort of like a burn mechanism and I'd be curious to get your thought and I know you guys are like synthetics ogs as well so obviously not Financial advice or anything like that but I would be curious to get your thoughts maybe on the synthetics proposal is this something that we're going to see much more in ethereum moving forward um yeah I would just love to get your thoughts I mean uh can't speak to what other protocols will do but I think

other protocols will look at the the success found uh amongst protocols that do have some sort of value distribution model um and and to be clear um there's two separate proposals one is to stop inflation and inflation has been a Mainstay within the synthetics ecosystem basically since for the last four years um and um it has turned into what I would call terminal inflation it started off really high to bootstrap liquidity and it slowly week by week went down over time and then it hit this like two to two and a half% terminal inflation and that's where it's been for the last um three or four months and and so really turning off inflation is just turning off that terminal inflation and

um and so that's vote number one hasn't gone through yet vote number two um which I I actually don't know if it's gone through but I think it will is to test out a lot of these mechanisms on base and so to build the per uh model on the base ecosystem bootstrap liquidity um have fees uh partially flow to the LPS on base uh fees will also partially flow to integrators who build UI on top of the ecosystem and then fees will also flow into this um buyback and burn mechanism um so really it is a test of that it's not you know let's flip the switch and and um you know uh steer the steer the ship completely to the right

um but it is uh it's a test in that direction and this is coinciding with a ton of work that the team has done to change the token economic model to change the the collateral model to change the the useability and and the product Suite that they have um so this is not just happening in a vacuum it's it's all part of the same plan um but I I think we're going to start to see you know the models of you decentralized long-term protocols who are you know cash flow generative looking to um change their their token economics to be more favorable um and we'll see how all this works you know can't say whether or

not it will even uh or or even get uh integrated into the main protocol but um these types of tests I think will be good canaries in the coal mine for what could happen yeah like they found product Market fit with perss obviously and and that product is really growing and the deployment on base will even make it more so um and you know as volatility returns it's like we see the open interest growing daily which is cool and I think now the impetus is like what do we do with this token um the like the synthetics token and the synthetics token is interesting in a number of regards most people don't know that about 60% of it is staked um and like what asset other than Bas layer you know

cryptos that are proof of stake networks are Stak it's like it's kind of unheard of in a strange way um but that's the collateral that backs all the trades and you know more collateral types and specifically like economic flowing back to the Token that's kind of like the last piece of the puzzle in in my mind um and yeah I I think it's going to be a huge year for def5 perss um with with kind of binance you know kind of fading in in relevance a little bit um there's just a huge Market one one of to take it all the way back one of the predictions that we had in our 2030 uh fund three launch was decentralized markets uh overtake

centralized markets on both spot and futures um that be awesome that' be awesome yeah that like I feel like so much of this this uh this price action as well as the bid is just like the real work that's been done and there's maybe not like 30 teams that have done real stuff but like 20 I think in def5 at least um but that's enough you know that that's a whole ecosystem yeah I'm with you there I like you know we talked about a little bit just even what's gone on on nft marketplaces blur in tensor but perss you know have put in tremendous work uh so whether that's synthetics with Kane or you know we just

spoke to Antonio over at dydx I mean Antonio is a great example of a guy who's just very he lives in the future and I I think is a really good bellweather of um where the industry is going I think almost the risk might be that he's a little too early on some stuff I think but but yeah I think but he's he's been doing this for like seven like we were trading on dydx when you were literally trading like the tokens like The Leverage tokens like you know he's just gonna be around forever and he'll figure it out um yeah I'm me too me too um so yeah I but I agree with you Vance I think there's been that is the that is the cheesy thing that everyone says about bare markets but it is true like you

know if necessity is the mother of invention you know a lot of lot of companies had to do layoffs uh you know you have to focus a lot more on your product what's working what's not it it leads to results so um hopefully that's what we'll see um I guess like maybe just to to start to wind down here you know one thing that we haven't talked about I saw this chart today of like the the percentage of stocks uh that that are owned by generation and yeah and you look at it and it's like here I'll actually I'll grab it here but basically it's just super heavy I mean it's exactly what you expect it's like extremely heavy Boomer and then a little bit Gen X and this really tiny percentage Millennial and like non gen Z

basically so and and one of the things I was I thought was interesting is like the coinbase ads we haven't really talked about this but those that series of ads I think is just so good um because it really does it it hits an emotional cord with at least me and clearly a bunch of other people as well it's just like yeah there's I see no viable path to it's really Financial Freedom you know they talk about all these things like debt and I just feel like that's that's a narrative that's going to emerge amongst young people is crypto is a is a viable more viable path to Financial Freedom than the Boomer bags which is like stocks and bonds I uh I also I'll I'll summarize this article real fast but I read an article I think

it was in Business Insider Asen atance and a couple of our other friends um that had uh Gen X Millennial and um gen Z yeah um broken down by what income and what net worth they expect to be considered you know quote unquote wealthy and um gen Z was like $130,000 and like 400 grand um Jen Millennials was like $772,000 in income and like $1.7 million in net worth and then uh Gen X was um uh I think it was like 130 and like $1.1

million basically like Millennials is completely out of whack with expectations of income and and net worth and and I think the the you know that's the symptom of the root cause of Millennials are now you know we're all Millennials it it's at the age where people are starting to look at buying homes people are starting to look at starting families people are starting to put you know that foot forward in terms of you know the life progression of settling down so to say gen Z is like happy go-lucky they're still having fun you know just getting out of college type um and and obviously Gen X is they're they're set because they bought houses 15 years ago 20 years ago and um

you know got married 20 years ago um and it's going to be a real issue I think for Our Generation where um you know you could look at any of the sociology or psychology studies and people are just generally way unhappier now and I don't think that it's because we have less uh but I think it's because we want more and that difference is leading to you know General unease and unhappiness but you know the financial outcomes or financial realities of what everybody is staring at um are real and impending and they're not changing yeah and just to summarize this this chart which is for those of you who are listening the silent generation owns

17% this as of 2020 17% of the stock market Baby Boomers own 53% Gen X 27 Millennials I think that's three three% down there did you read the uh the Galaxy research report on the wealth transfer this week no thought it was really good um Al something Thorne wrote it alexor yeah that guy um but it kind of gets into this with a lens to like where does the money go um and obviously like Millennials are so the the way it'll work kind of cyclically is you know this 53% of baby boomers they will pass on their money to uh Millennials like you know our parents I think are all probably Baby Boomers um and you know that's the largest wealth transfer

in in history from an inheritance perspective and then you have Gen X the generation after the Baby Boomers who gives their money to the Zoomers and and generation Alpha which is the generation that's around right now and so you kind of if you think about it like from a like what what happens perspective so by the end of this decade uh Millennials will control five times more wealth than they did by the start of the decade um and you're going to have you know if you think about if you think about crypto it's it's a demographic phenomenon it's more popular with young people it's also a geographic phenomenon it's more popular overseas um there's higher adoption rates in developing countries and so it all kind of like leads to this question of like you know if if you if you believe in a super cycle like if if

you believe in that concept like it's largely made up of like kind of generational change and generational preference shift um and you know the Galaxy report it it has all these amazing facts you should definitely go read it but at the end of the kind of article the net net of everything is that you know if you assume all these numbers are right uh you know there's going to be about 28 to 29 million dos of daily buying pressure from Millennials uh and and you know Zoomers but mostly Millennials um because where most of the wealth is um and that's a lot of buying pressure and so you know like it's a crazy world like do I think like a million dollar per Bitcoin at some point is possible like if a lot of these demographic phenomenons play out

and you know the world gets crazier and alternative store values really kind of like pick up like that's kind of what like I don't think that is like out of the question in terms of you know the price targets we hear today are like you know it's going to go to 100k from like friends and trafy people whatever but like it it feels like that's like kind of only the short-term Horizon that people think about so to tie these two things together I like the wealth transfer is absolutely real I read the same article the the thing that I would say is it's not happening in the next two years it's happening in the next 20 years and we all of that is absolutely true but you know from a generational perspective if the vast majority of

wealth that that generation has is passed on through inheritance that means that you know a it's not going to be spread evenly and B it's not going to happen all at once or or frankly happen evenly as well and so like it I think there's going to be like economic realities of like what's your day-to-day like what's your job you know where do you live all of that stuff that people are going to have to sort out and figure out and and that will probably drive them into more you know in our minds not the case but more esoteric things like crypto versus like the S&P 500 stock index or like you know treasury bills and bonds like they're going to look for more advantageous way ways of creating wealth which means they're going to get brought into the ecosystem and then as

they start to receive more wealth through you know inheritance I think that will just double and triple down in terms of you know where they will be deploying that um and how they'll be looking at financial markets like like think about Millennials buying small cap value stocks it's just not gonna happen that's that's how I feel too that's exactly how I feel too and actually this I guess isn't a front run but this is this is what I was going to say about the Goldman thing like money market funds all that stuff moving on chain I think that was directionally correct like the equivalent of a money market fund will be built on crypto but it's not going to be a onetoone copy it's like there will be a Crypton native version of that built and it will be like our new money market fund not your

Boomer money market fund and they're serving the same purpose and but I I think they end up getting sort of rebuilt and it's this gradual shift over time and actually just to Michael to to just underline what you were saying about expect there's a great um weight but why or whoever Tim uran his blog on this a very simple definition of happiness is like happiness equals reality minus expectations or something like that it's what you it's what you uh what you want over what you have right exactly so all good stuff to note um all right guys unfortunately gotta got to end it here but this was a really fun one see you next week later [Music]

bye pap