Jake Brukhman on institutions, layer 2s and zero-knowledge

Transcript

GM. Good morning. Welcome to the Milkroach Show, the daily crypto show where summer's here, the bulls are loose, and SPF 100 won't save the bears. I'm your host, Jay Hamilton. It's Tuesday, July 29th. Ray Dallio just said everyone should allocate 15% of their portfolio to Bitcoin or gold. Could ETH reach 6K by Christmas? The options market is giving it a 30% chance of doing so, up from 7% a few weeks ago. WorldCoin is adding 40 to 50,000 verified users per day right now. Should you be paying attention? Today we're joined by Jake Brookman, founder and CEO of Coinfund, one of the first

cryptonative investment funds to discuss this and so much more. Before we jump in and hear from Jake, I've got to tell you guys that we are so excited to finally launch a new podcast, Milk Road Macro. And if you subscribe to the YouTube channel of Milkro Macro this week, you could get a free subscription to Milkro Macro Pro, which gives you weekly reports on everything that is happening in the macro world. How do you separate the signal from the noise with tariffs and central banks and rate cuts and all of that? So, go to Milk Road Macro on YouTube and hit subscribe to enter this week. Today's episode is brought to you by Definitive, the leading multi-chain trading terminal trusted by funds, Dows,

and Pro Traders. It's also brought to you by Letin. Get cash without selling your Bitcoin. Without further ado, Jake, welcome to the Milk Road Show. >> Hi, Jay. Thanks for having me. >> Absolute pleasure to have you, my man. We've been uh trading emails since consensus. So glad to finally get you on the show. I want to start with a a very bold take that you had, which was you had a call that or I guess a bet that by this Christmas, Bitcoin will trade at $475,000. And you called in on July 21st, you said, calling in a favor, crypto Twitter, help me out here. Uh, first I've got to ask, what's the origin of this bet? Who is this bet with? Yeah.

So, every every Christmas I go over um to my in-laws house. This has been going on for the better part of a decade now. And I tell them to buy Bitcoin. And they uh you know, they're very slow to do it. And if they had just done it in 2019 or whatever, we started this uh they would have made a pretty good return. But this last Christmas, you know, I kind of said, look, this is going to be 2025 is going to be like the first year of real enterprise adoption of crypto. So why don't we like take a bet how high Bitcoin is going to get? And so I had to I had to demonstrate some hubris there.

So I picked like the biggest number in the whole, you know, in the whole group. And now I might need a little bit of um help from Crypto Twitter, you know, to buy up a bunch of Bitcoin and get it there. But, you know, there's a bit of a range where I can still win. It's a little bit below 4752. >> How do you feel about this prediction now? Do you think this prediction is realistic? Are you going to try to go back to the in-laws and see if you can negotiate a different prediction before Christmas? >> Um, I generally actually think that most people are probably underestimating how um rapidly Bitcoin can raise in price this year. I mean, there's like a lot of catalysts for for buying. There's a lot of demand drivers. I think it's been a while since we've been on a kind of

roller coaster like Bitcoin trend. So I don't actually think that 475 is untenable. I think it's a little bit lower probability, but I I think with the right conditions, we can we can get definitely get there this year if we just buy a little bit. >> Yeah. Yeah. Everybody just keep buying Bitcoin. I mean, well, you know who helped you out big time was uh Ray Dio. That's right. who yesterday said that investors should allocate up to 15% of their portfolios to Bitcoin and gold as a hedge against growing US debt and macroeconomic instability. So, uh you must have uh put in a call to Ray to help you out.

>> That would be nice. >> But it certainly does feel right now in this year. And it's funny you bring up your in-laws because I have very similar stories with my in-laws. And the line that I keep repeating is people aren't giving it enough credit to government adoption. That was the final chip that we needed to have. And we didn't know really, we didn't know before this year if governments would truly adopt Bitcoin. And now with the Trump administration and not just them, also sovereign wealth funds around the world buying Bitcoin and likely some buying Bitcoin that we don't even know about yet. Uh and many more governments. We've had a bunch of guests on the show talking about governments that they are

working with actively to help them figure out how they can start to allocate to Bitcoin. That was the final chip to fall in my mind. And now that that has happened, it feels like this is now reached the level of adoption where I am comfortable saying to any friend, family member combined with the fact that it is an easy long investment. It is not a trading type of investment which I am always hesitant to advise to my family members. >> Absolutely. I mean, one of the original anti-bitcoin arguments, of course, historically is that, you know, you shouldn't do this because this is going to be outlawed by governments. And actually, if you think about like the reason why Satoshi Nakamoto is

anonymous, like one major reason is because whatever the creator of this of the blockchain is, we're really not sure how governance governments would would react to this new technology. as you're saying, Jay, we I think we're well past that and and especially because it's the American government. Um I think that'll set kind of the tone and standard for the rest of the world. But um I don't know if that's a final boss for me. I also think that there's a lot of institutional and enterprise adoption kind of left to do here. For the last 10 years, the crypto space has been in this mode of like, hey, we can get crypto adopted bottom up, you know, through, you know, more or less like activist consumers. And I don't think we've

achieved zero doing that. We've achieved 8% penetration of the world population in terms of people like holding some kind of crypto. We've achieved a bunch of blockchain technologies and and and developers. we've achieved a $3.5 trillion asset class which is nothing to sneeze at but at the same time you know blockchain developers are like 0.07% 07% of developers in the world. Um you know very few retail users actually use things like DeFi and very little infrastructure for example at banks has actually been converted to blockchain.

So I think there's a lot more work to do to sort of proliferate blockchain technology. 2025 in my view is really the first year we can do that especially in the United States because of our change in regulatory uh posture because of our passage of a recent legislation for stable coins and and and two more bills in the hopper. It's a really really exciting time to be getting involved in crypto and every bank and every institution that I've talked to who are working on projects in the space you know they say that the number one reason why they're doing that and why they're doing that with high priority is because of the regulatory unbottlenecking.

>> Yeah, it's uh it's so exciting to see that. I want to jump into another prediction and everybody listening in, make sure you go follow Jake on X because he's got a great X account where he's putting out he's not shy to make bold predictions, but this sort of ties into what you were saying where we are in the adoption cycle of Bitcoin. You said this is uh July 21st, so just about a week ago, you said, "I predict a lot of enterprises and institutions will roll their own chains or will roll out multiple products across multiple app chains." Dive into this prediction a little bit more for us. Absolutely. Just from talking to a bunch of enterprise and institutional customers, you know, I can give you kind of the average view.

The average view is they're looking at blockchain technology with higher priority now because of the environment. I think most of them are not in a place where they know exactly what product they're launching and exactly what technology they're launching that product on. I think they're doing research and development. I think they're trying different things. There's some players like Black Rockck that are actually launching products uh on multiple chains. There's other institutions that are shopping around and just trying different chains. But the trends are very clear like the vast majority of the chains that they're building on are EVM chains and the bias is toward L2 chains which is really bullish for a kind of modular blockchain

thesis that started five to seven years ago. people started to make the case that when you have a lot of customers with a lot of divergent requirements and different kinds of needs, then it'll make a lot of sense to give them a technology where they can roll their own chain that they can optimize, they can customize, that they can um create kind of throughput on. And so this is what we're seeing. We're in the early stages of institutions doing exactly that. Like if I'm a big bank, I am probably looking for, again, this is based on averaging a bunch of conversations, you know, I'm probably looking for a new product line

that will generate incremental revenue. I think that probably works that way because the blockchain lead at whatever this institution is probably wants to show their boss that, hey, this is like an interesting area. This is somewhere where we can generate a new revenue for for the business and expand the business. And if they can successfully do that, I think they will get more attention and resources on on blockchain adoption. If I'm like a really big enterprise or like bank or something, right? Like and you can imagine me wanting to do multiple products. Let's say like one of my products is a is an exchange and another product is like depository account where I can earn yield. It would be very very natural for me to try to allow my users to move

their assets between these two products, right? like that happens already like in centralized banking. And so what that also motivates is a high degree of interoperability between you know these app chains. And so really like we're living through this modular thesis where there's going to be a lot of blockchains and they're all going to be like really interconnected together. Some of them might be public, some of them might be private, some of them might be permissioned. These are all just tools in our toolbox for building, you know, great products. In traditional finance, whales use the Bloomberg terminal. In crypto, they use Definitive, the trading terminal built by Coinbase alumni, which lets you trade across every major chain out there. Definitive's combination of

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long-term hodler, this is the move. Get liquidity without selling at milkroad.com/letin spelled ln. The thing that stands out to me in what you said is this question of how blockchain tech will be built out across institution and enterprise. And when Robin Hood announced they were building an L2 on Ethereum with in partnership with Arbitrum, that really felt like a big signal to me of okay, here's yet another large fintech that is signaling we are building on on top of Ethereum because we want to build our own chain

and be able to control some of the things within our own chain but have the decentralization of Ethereum beneath us that supports us. It feels like that is the path and that's what I'm hearing you say is this is the path forward for institutions and enterprises particularly in the finance space. >> Yep. Absolutely. Let's talk a bit more about EVM adoption because I know you've been working a lot on ZK sync and ZK tech and for our audience I think that they often look at the tech side and they think I just go make the tech great so it works and so price go up and my investments do well. What do investors need to understand about where EVM is now and what is coming with ZK tech that

is going to allow adoption to get to that next level. One thing we can definitely see in the market data is that EVM is going to be a major player you know in financial technology that is just evident from where the developers are where you know again where where these institutions are doing R&D and what is actually kind of coming coming to market. I would say my view is that the L2 space is very very nent. So we have only been, you know, in production with L2s for just a few years and only very recently have we started to convert kind of quote unquote larger projects with some traction onto L2s. And so of

course I'm I'm referring to World, which we're investors in and very excited about. world is just crossed 31 million users this morning and has their own chain world chain which is built on optimism technology and that's doing like over 1.5 million transactions a day. They have something like between 1.6 and two million of daily active users in their iPhone app and that translates to 1.5 million transactions a day on chain and of course 1.5 million transactions is more than you know the Ethereum base layer L1 is doing every day. So, you know, it really shows you that um like if you look at EVM as a whole, there's something like or at some point there was like 20 times more

activity, not sure what it is like this minute. Um you know, in in L2 versus the base layer and that makes a lot of sense. But here's the, you know, a lot of people, they kind of look at L2 and they and they sort of assume that, you know, whoever has the early mover advantage and whoever has a little bit of traction will win. And I actually think that's really really not the right time to call it right now. And this is because I do think in the case of L2, unlike in a lot of other cases, technology will really, really matter.

And the reason why is we don't really know the broad spectrum of customers that will come to demand this technology and we don't really know what their requirements are. So I can tell you that for example, you know, for for a project like World, one of the key things that they're going to care about is they're going to care about throughput because World is a project that I think by like May of 2026 will have a 100 million registered users on it and over time, you know, I think their opportunity is to go to a billion users and beyond. So I think like for world like throughput and scalability is going to be a top concern. But again when you go to talk

with um enterprises or banks one of their top concerns and this is uniformly across all of these conversations is user privacy. Like they do not want to put user data on chain. They do not necessarily feel comfortable even like encrypting it and putting it on chain because it becomes a honeypot for hackers. And what starts to the picture that you start to kind of draw there is that they really want zero knowledge technology because only using that technology can you have user data offchain and you're just kind of publishing the proofs of validity on chain. So like long story short certain technologies for L2 provide better

privacy profiles than other technologies. I happen to think that ZK sync which is also uh a portfolio company of coin funds is at the forefront of this with their product called providium. The other issue is interoperability. What does that mean? Oh, by the way, just on one more thing on the privacy, what do we really mean when we say privacy? Well, we could mean like customer data. We can also mean transactional privacy. we like we don't necessarily want someone to read how much money we have in our wallets at the bank, right? So, the best kind of blockchain tech that's positioned well for those kinds of use cases with with banks and financial institutions are the ones that can keep the key things

private, that's user data and transactions, but keep other things public. Like, I want to know how many units of a stock there are in the world. this is actually like a a huge problem in a traditional world, you know, where they don't always know that or I want to know how many units of a cryptocurrency exist. So the perfect chain for this purpose is one that can support, you know, a high degree of secure privacy but also have public data when you need it. And then I'll say one more thing which is the other the other aspect that I think financial institutions want is a high degree of interoperability. So this is what we were just talking about with you know a bank that has multiple products that wants to allow you know

different or their customers to to transfer their assets among their different products and the natural way to do that is through like a blockchain interoperability protocol. Now does that customer want that interoperability to be native or do they want to rely on some third party to do it? My suspicion is that they want it to be native, right? They want strong guarantees about that interoperability being reliable, being cheap, being fast, and kind of coming as a service that's bundled into, you know, the quote unquote blockchain product that they're buying. And this is not really what we see in L2 today. A lot of the interoperability in L2 today is facilitated by third-party protocols

that introduce new risks that introduce new costs and that are not necessarily native to to those things. And I'll say one more thing, I don't want to get too technical here, but you know, one really important thing about interoperability is that it has to have good finality. And what I mean by that is in a lot of the optimistic rollup kind of blockchains, you know, you can certainly send data very quickly across, you know, two different chains, but it doesn't necessarily settle, you know, to the data availability layer super fast. So there's some nonzero probability that that some transaction is going to get rolled back at some point and that's not necessarily the correct profile for an enterprise customer. So the picture that

I'm painting here is it's early in L2 and the requirements of the customers are really going to dictate like which technology is going to be better suited for their purposes and also the audience of customers is going to be very diverse. They're going to have different needs. Some will focus on privacy, some will focus on throughput. What that tells me is that this is going to be not a winner take all market and there's a lot of opportunity to compete and whoever has the best interoperability will probably have the best some of the best network effects and we'll be able to retain great ecosystems. So, it's an exciting time to be betting on L2.

>> Yeah. Yeah. What I'm hearing is there's obviously a focus on a need for scalability, a need for privacy, and a need for interoperability. And the L2 framework with ZK offers that in a way that no one else can. >> Well, I would say you know ZK sync in particular and you know some other platforms as well. I think what they're doing is they're solving what in technology we call horizontal scalability. If you build a product and you run out of throughput, you spin up another chain and that chain can service additional throughput and those two chains can can talk to each other. So they're still part of a coherent product. When you look at, you know, ZKSync's elastic chain, these chains are

so efficiently and quickly interoperated together that it almost kind of feels like you're in a single monolithic chain that can grow its throughput as needed. I'm someone who used to work at Amazon and you know we at Amazon we had these things called autoscaling groups. when we had to throw extra machines to service, you know, extra demand for our like Amazon web pages and so forth. Similar thing with with blockchains. Now, there's also projects we see out there in our space here that are saying like we want high throughput blockchains. We want vertical scalability. We want to scale by making the nodes of the network more and more

and more powerful. And I think that's totally fine. It's just a different kind of scalability but it will decrease decentralization and it will top out at a certain point because there's only you know machines can only get so so powerful before it it stops making sense. So I think even those projects understand that ultimately to serve demand of like the whole world converting you know think about like Visa and Mastercard and all the banks and Amazon and Google and Apple you know all these people contributing to the throughput requirement of blockchain you really need horizontal scalability to service all of that demand in the future. Yeah, very well said. I've got to ask the obvious question here, which

is L2s have not had a go a good good run in in price in the market. A lot of that led by, you know, the anti-thereum narrative that was pretty persistent, particularly over the past year. Obviously, a lot has changed in the last month on the Ethereum side. Uh, and we're seeing a great uptick there. Are you optimistic, and I don't mean to use that word as a pun, are you optimistic about the future of L2s from an investment perspective? >> I absolutely am. I think this price situation is mostly a reflection of the market beta. I think it presents an opportunity to go into L2.

um especially certain projects like ZK Sync or check out Fuel Labs too if you're interested in high throughput L2s at prices that are significantly cheaper, you know, than than other things in the market. And I am very bullish in L2 because as I just laid out you know I just see EVM L2 as being the primary solution for enterprises institutions and and you know and even like a lot of web 3 projects as well. So like all the core customers that we know about are really focused on uh that area as far as I see it. Okay, let's shift gears uh to actually you know what before we I want

to talk more about world and worldcoin because it's so interesting what is happening there and those numbers that you threw out around new users is it's incredible the adoption that they're achieving and nobody really is talking about it at least not not in our world and not from the investment perspective as much but before we do I just need to touch quickly on Ethereum and I want to remind everybody none of this is financial advice uh and you should always speak to a financial professional if you need financial advice, but you threw out a couple tweets recently and ETH is the talk of the town. It's obviously on an incredible run over the last month. One tweet you talked about was buying ETH now is like buying Tesla in 2019. You were quoting somebody else who was comparing Tesla to ETH. And very

interesting comparison here. If you can see the chart, you see that basically Tesla and ETH were on a very similar pattern up until they had their breakout and when they broke out, they broke out in a big well Tesla broke out in a big way and prediction is ETH is likely going to do something similar. You also talked about quoted somebody else who said Ethereum will hit a new all-time high very soon. They were comparing Coinbase to Ethereum and making the correlation that Ethereum's price often follows Coin's price. coin reached an all-time high recently and it looks like okay if you map those that Ethereum could follow and then today we saw that the options market is now pricing ETH at

$6,000 30% chance of $6,000 by December of this year. Uh wanted to get your thoughts on Ethereum price predictions for the end of the year. Look, my my general thought is that there hasn't really been a lot of activity in a lot of crypto markets. You know, historically, crypto markets are supported by whom? By crypto enthusiasts, by web 3 natives. And you know, like just going by me personally, like I really just in the last year and a half, I think I only really purchased two assets in the market. Like I I built up my position in world personally and I bought some ZK sync as well. I think a lot of crypto people are in that boat.

Like they've been in a 4-year bare market. They've been holding and so what I'm trying to say is that when we get new demand for crypto, it's really got to come from new entrance. The market is waiting for, you know, more new retail adoption and more new institutional adoption. So when we did see a lot of negative, you know, sentiment around Ethereum on Twitter and and of course like you really shouldn't use Twitter as a gauge of anything. You really should do your own research and look at the actual you know data which is all available on chain by the way guys. It's just a matter of you know organizing it and and and taking a look. But the

sentiment was pretty negative. However, these sentiments were driven by people who were really like neither buying or selling the stuff. Price was just kind of flipping around. I think the situation is different now. I think we are again heading into institutional adoption. I think we're seeing a lot more pickup of ETFs and treasury companies and you know we just had the circle IPO which is putting another pin on the map of like crypto companies are now legitimate and and look pretty traditional and can have pretty big IPOs.

I'm sure we'll see a bunch more of that coming up, you know. So I just yeah like I think that everyone should be bullish on on Ether. I'm not saying Ethereum doesn't have like any project its share of problems and things that can be improved, but you know overall this is a major ecosystem and we're heading into an inflection point of mainstream blockchain adoption. There's no doubt in my mind about that. So, how could you not be holding some? >> Yeah, very well said. Uh, okay, let's talk about World Coin or or World Maybe you can explain the difference between the two names there quickly.

Yeah, world coin as it was originally called got rebranded into world and that's because they have a number of products under that banner. So they have something called world ID which is a way of disambiguating humans and AIs or bots online. They have world chain which as we covered is a optimism based EVML2 blockchain that they're using kind of to back their ecosystem. They have also a world app which is something that people can use on their iPhone or mobile phone and get all the functionality you know of this ecosystem. As we mentioned world app just crossed 31 million users this morning and they have something like 14.4

million verified users which means users who actually use the device to scan their biometrics and prove their humanity. And finally, and last but not least, and to me this is the most exciting part is the world mini app store. So, you know, as a crypto investor, I've seen we're celebrating, you know, Ethereum's birthday today and tomorrow. Um, I remember back in 2015, uh, like the day after Ethereum launched, there was already a project which was doing an app store for web 3. So there's a long history of making web3 app stores, but none of them have really been very successful. Why is that? To have a successful app store, you need probably tens of thousands of

developers. And those developers only come to ecosystems where it's worth their while, where they have, you know, they feel like there's um tens or hundreds of millions of people who could potentially be customers for their development efforts, for their apps. You know, if you look at the iOS store, uh, App Store, if you look at Google Play, you know, together, they put in about 80 to 100,000 new mobile applications into the world onto people's phones every month. And out of that 100,000 applications, you know, a couple become long-term successful, you know, growing, sustainable businesses. We do not put out anywhere near that many, you know,

applications in web 3. We probably put out 10 web three applications a month or 20, whatever it is, right? But it's not it's definitely not a hundred thousand. And so to me, world is the first project in the world that actually is converting tens to hundreds of millions of users and is actually creating an ecosystem where it is worth a developer's while to go and build on it. I think Bass recently, you know, launched a base app. I think this is validation and confirmation that it is now time to go to market with with consumer app stores and I think that we've also seen some

really encouraging early results like for example Morpho you know has an app actually I believe on both of those app stores but on on world I'm pretty sure they're getting a lot of you know mainstream users now kind of through that channel and it's not hard to extrapolate that with a little bit more growth you know, a few of these ecosystems like world will be major distribution channels for consumer web 3 apps. So, not only do we have the technology now to launch great web 3 consumer products, we also now are building out the distribution channels for those things.

And I think that's really really exciting. I will bet you that the average consumer like 18 to 24 months from now will be getting into crypto through something like world's web 3 app store and hopefully it's literally that. >> So these 50,000 or 40 to 50,000 verified users on world that are joining every day they're you know scanning their eyeball. Who are these people and why are they joining? So, first of all, it's it's these days it's between 80 and 100,000 a day. I think it was just like two days ago, we were doing like an average of like 104,000 a day.

>> You know, about 40 to 50% of them get verified. They're normal, you know, mainstream people like world has a 40 country go to market. Just a month and a half ago, there was a surge from Southeast Asia because they had rolled out in a couple of Southeast Asian countries like Thailand and Vietnam. There's a world flagship store in Miami where I where I live, right? And I see people in Windwood just kind of walk in by and sometimes, you know, someone gets curious and they walk into the store and then they like learn about world and they learn about blockchains for the first time and people put products in their hand like in their phone, right?

And it's just kind of an educational experience. So like unlike everything that came before in web 3 where we were saying like look we have to have this cult and everyone has to get their own wallet and go to Coinbase and buy Ether and you know overcome all of these frictions to get into web 3 and that's why we have those memes like you know I'm at a party and like nobody knows like I'm a web 3 secret like crazy person right unlike that adoption strategy we're now in an adoption strategy where we're meeting customers where they are. giving users like usable apps where they can onboard quickly, when they can try out crypto, when you have a little bit of world in your wallet that you get for free when you

sign up, you can instantly try using DeFi. You can put it into the Morpho app and earn an APY. So, like, you know, I had the experience of being able to onboard my mother-in-law, you know, with the orb and then she like loves playing Wordle and there's a Wordle Wordle game, you know, on the mini app store where you can earn tokens by playing. So, like she's in crypto now because the user experience of coming in is now so low friction. >> Okay. So, the reason to join is financial incentive. Is that the main reason why somebody would join world and get their world ID and scan?

>> I think I think certainly like a lot of people are you know attracted to that and we know from 10 >> how much do you get how many world coins do you get and what's the value? I don't know the the latest numbers, but it's like tens of dollars, you know, every month, right? So, it's it's definitely like >> Oh, it's every month you get if you're if you're active, you get like a monthly stipen thing, a monthly fee. >> Yeah. You have to go and periodically claim it. Um, well, I can tell you that between all of the promotions between the referral fees and between the, you know, they announced this like pioneer US pioneer grant as well. And I was one of the early US pioneers of world, but I I I collected about $650 of like free

crypto, right? So, it's nothing, you know, for like the average person, that's like nothing to sneeze at if you put in a little bit of work to to work with the app. Like you can you can earn hundreds of dollars and then you can start like taking that money and like spending it on games or or investing it and earning a yield or whatever it is that you're inclined to do. But I I'll just say this, Jay. Like, you know, in crypto, we know very well that economic incentives are great for capturing attention, but they're not necessarily so great for like retaining people.

They're not great for retention. It's great for attention, but not great for retention. And this is my next question was going to be here. >> Well, I'm just saying that this is the reason why these app stores are like so important because we need to iterate. We need to be putting in tens or even hundreds of thousands of of new web3 apps into the market every month to find the apps that have product market fit like for real with customers. And you know, this is really the right time to start to do that again because we have all the tech. We we're starting to have the distribution channels. We're starting to have the eyeballs and we're starting to have the developers who want

to do it. And by the way, it's easier than ever, you know, to to launch uh such an app because of like AI automation for example, right? So, you know, we're just really heading into a time where uh there's going to be an explosion uh a Cambrian explosion if you will of web 3 consumer tech and we will find that product market fit and it will be big. >> What's the investment thesis for world? Because the the challenge that I see is the inflation as a result of all of these economic incentives they have to give in order to attract all these people, which is, don't get me wrong, incredible. If they're, you know, they've achieved 30 million, they might be at you're you're projecting a 100

million within a year, a billion, you know, I don't know how long after that. Like, these are incredible incredible numbers to achieve that many users. But obviously, there's concerns around the inflation. If I'm an investor and I'm thinking about going and investing in the world. Now that being said, it is up I think about 50% in the past month. Correct me on that number. Uh but just break down the investment thesis for those of our listeners who are listening and thinking, hey, should I go maybe invest in this? So just to be like totally technically accurate, the world coin token supply is fixed. So there's no like new units being generated. So it's not inflation per se. I think what you're referring to is the kind of the reward unlocks. like most of the supply is kind of essentially reserved for distribution to people in the world.

Now, I'm actually like really bullish on that. If we rewind back to CoinFund investing in Worldcoin back in, you know, late 2020, early 2021, the the original underwriting thesis for Worldcoin for us was this can be a more widely distributed cryptocurrency than Bitcoin. And like personally I don't find any model of valuing Bitcoin compelling. You know we've seen MV equals PQ and we've seen stock to flow and we've seen electricity models and we've seen this and and that. But like the only thing that really makes sense to me is that Bitcoin will become more and more valuable the more of a consensus asset it becomes. The more

people collectively agree, you know, that Bitcoin is valuable. And today we have something like, you know, about a hundred million users of bitcoins. And of course, institutions are starting to come in and buy it. But there's not actually that many users. I think Worldcoin is poised to overtake Bitcoin. And I've said this like multiple times uh in various contexts but like if you look at the um acquisition of user rate like I think it will if not sooner than May of 26 I think it'll be like at 100 million by May of 26. I think that um you know the DAUs are already

outstripping Bitcoin DUS today. I think the month MAUs need just under 3x, right? So we're going to be bit beating Bitcoin on on this dimension and the more widely distributed that worldcoin is and kind of Bitcoin distribution size is sort of the the baseline for you know starting for this thesis starting to play out but the more widely it will be distributed the more valuable it will be. So I'm not really like actually that worried about the reward unlocks because they're doing what they are supposed to do. They're they're going to tens of countries all over the world to build the consensus that WLLD, you know, is a

store of value, is potentially a currency in in the mini app store, you know, is a native asset of the world chain blockchain, etc. And that is the thing that to me makes it valuable. And so while there could be sell pressure uh as like unsophisticated users you know maybe like kind of dump it and you know get the rewards and etc. I think that a certain critical mass that doesn't happen. I I think at a certain critical mass of users that becomes more of like an asset that people want to hold or huddle just like Bitcoin, right? And then so the investment case is look it seems like a an expensive token supply today. I get it. It's worth, you know,

over10 billion dollars in FTV. But I also think that it is the project that more than anybody else in the consumer web 3 space is accumulating users. I think that accumulation rate is going to skyrocket. I think it's going to become exponential. You know, I think even if you just assume linear growth, you know, you're gonna you're going to surpass the distribution of Bitcoin like fairly quickly in a matter of months and maybe a couple of years, but not like a decade or anything like that. Not even five years, I would say, right? And so, you know, we can criticize it, but at the end of the day, like it's not that different than any other, you know, fixed supply token, and it has the best

prospect for global distribution of anything in web 3, period. >> It's a great uh investment thesis. Thanks for breaking that down for us, Jake. Pleasure to get you on the show today and uh hear your thoughts. I really uh really wonderful to dive into them all and particularly to learn more about World Coin. Want to remind everybody none of today's episode was financial advice. Jake is not your financial adviser. I'm not your financial adviser. You do your own research. As Jake said earlier, you should actually just go on chain and look at this data yourself. But if you don't want to do that, you can tune in to Milk Road Show every day. Jake, thanks again for joining us.

>> All right, Jay, thank you so much for having me. My pleasure. >> Thanks for listening in everybody. One more time, as I said at the beginning, we just launched the Milk Road Macro podcast. If you want to understand what is going on at the government level, at the macro level, what's going to happen in the FOMC meeting this week, go head over to the Milro Macro podcast. Hit subscribe on YouTube. You could win a free subscription to Milro Macro Pro and you'll make sure you're up to date and not blindsided by rate cuts or anything that's happening at the government level. Thanks for tuning in everybody.

Have a wicked awesome day. We'll see you back again tomorrow. And finally, I've got to give a shout out to our partners over at Nexo have just partnered with the DP World Tour, one of the leading golf tournaments in the world, 45 tournaments across four continents, and they're going to have the Nexo Championship debuting this August in Scotland. So keep an eye out for that because this is one of those things that feels very marketing talk, but I get super excited because when you think about sports and the crossover with the attention that it has and how many leading global brands are sponsoring massive sports tournaments, it's pretty exciting to see crypto brands sponsoring

large sports tournaments as well. So hat tip to Nexo, way to go, guys. Thanks as always for doing what you guys do in the space. Thanks for tuning in y'all. Have a wicked awesome day. We'll see you back again tomorrow. As always, if you liked today's episode, please hit subscribe and make sure you follow us so you don't miss out on the next one. There's also a link in the description to our free 5minute daily newsletter where we simplify crypto for you while making you laugh. And if you're willing to step up your crypto investing game, we're going to also leave a link for Milk Road Pro.

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