LIVE | Kaito and Lighter | 0xResearch

Transcript

[music] Deep. [music] [music] [music] Thank you.

>> [music] >> What's up, guys? Welcome back to Xerx Research.

>> Thank you for joining us today, Danny. >> Welcome. >> How are you doing? >> I'm doing great. How are you, Bacio? >> I'm very good as well. I want to see Nope. >> You don't like He doesn't like the big faces. >> I don't like the big >> You know, we do that over on Light Speed, not the >> Do you? >> Yeah, we do the big ones. >> I find it a little awkward and a little jarring to be honest. >> Yeah. I I will say when it's three like one, two, three next to each other, it's weird. But if the two I don't mind the two. >> Yeah, we'll just keep it this way. It's fine. I wanted to share lots of >> They want to see your face, you know? I want to see the hairline.

>> They want to see my face, but [laughter] we'll find out. >> Um, how you doing, daddy? How's your I feel like you you weren't on here the last pod. Did we do a happy new year with you yet on the new pod or not yet? >> Uh, I've been on. Yeah. When who did we have on? We had Arrow. >> Yeah, we had Arrow on. Yeah. Yeah. Yeah. >> That's true. >> We chatted with them. >> Um, you were So, this episode is going to be a bit of a different style, particularly because Danny was actually away last week at our block works on offsite, not on-site. Um, so I think it might make most sense for since Danny, you didn't have a lot of

time to do research. I assume you mostly spent your time at the beach and talking to the team. I think it might make sense for us to do a little roundup of what happened. And then maybe it's also a good way to enter the year properly, right? I feel like most of the episodes we did were like very targeted. We did Aerod Drum. Obviously talked about Arer Drrome. We did Felix. Obviously talked about Felix. But we really haven't a lot of stuff has happened over the past few weeks. So maybe it's a it's [snorts] a good time to see Feel like teams are finally off of that funk of like, you know, end of December, early January. Teams also have like real humans working in them. So they take some time off. You know, projects get pushed to the new year. And now we're finally at that

stage where where they're releasing new stuff. um either tokens in the case of lighter which I guess happened last year um but new news about them is coming out and then pump has a new update and then also even large non-crypto protocols protocols products like Twitter are releasing new features which affect crypto obviously um so I think we should talk about those unless you have anything else urgently that you want to discuss >> uh no nothing nothing urgent let's very good >> let's get into it Okay. Um, >> I guess let's start it off with um, lighter. This is something that

broke I would say both of our hearts a little bit. I don't know when you longed it, but I was long um, for a while and then it went up and then it started to go down. And I guess like I want to share a few things and the main one being um I want to talk about I guess like their stats in terms of per. Um so first to start us off I want to share how much they bought back which I feel like not a lot of people um look into this one but they bought back around 1.4 mil split which is like what 2.8 mil in dollars. Um this is since December 29th.

So 17 2.8 mil divided by 17 is their daily buyback which is actually quite significant. Um but the issue here is that now what was the main thing with lighter was people were worried that it would lose um revenue and fees and market share and I feel like it has. So 21st of November is the highest it's been. It actually rebounded in October quite well like post 1010. So it like kept growing and then now we're at 1.2 mil per week. Let's do dailies. I feel a better like 150k 150k 200k 64k.

This was like I think the bottom to be honest with you. Um, and then holders revenue is going up because they're buying back with the fees, but I think they're just using some of the past fees done. Um, I guess like two questions on my mind is one Oh, there we go. Uh, how do you see the lighter? You're first of all, you're not a big perks trader. So maybe like it's good to ask if you have a preference in terms of the protocols that you have used previously or is it more like a farming type of thing for you or um what you see is like what was your case for the lighter buy and then what do you want to see going forward and

>> what are you board? Um, so I'm not a per trader, so I'm not long or short it via pers, but I have lighter spot. Shout out Blockworks disclosures. You can you can actually it's not on there yet because I think I bought it uh maybe right into the new year, but um I think for me, and I wish I had the chart, but I think there's a broader thing here of per's volume across the board has been declining. So like you could pull up the hype pers volume chart and like that's down from since you know July or August uh in basically a straight line as well. Um I think yeah naturally like post launch there is

probably some activity that's uh got to drain out. Um if there were just raw like hey I'm farming this and now there's people farming like what variational and there's always there's always perexes right? I'm sure you know the names um that that the farmers kind of jump from one to the next. I think the I do think the thing that I've liked about the lighter team that I've seen is that they seem to be you've been on the opposite side of this for me actually in previous conversations. But uh I think they are fast shippers. they've had been, I would say, been relatively clear in terms of kind of like where they want to take the product. And I think they've

been pretty quick to do so. Um, like I I know that the mobile app just dropped, was that this week or last week? Like pretty pretty recently here. Um, and that's something that I'm, you know, excited to see. I guess what I would say generally speaking of per is like I'm not a pers user but I think you know the category I see there's potentially still you know a ton of value there going into the future and so uh I'm not I'm not bearish hyperlquid by any mean but um I think I I just like what I see out of this kind of like smaller uh team or competitor. Um but I could see both of them doing well into the

future here. I think I just like this this concept of I think there's a difference here in terms of we're going to build it all ourselves or we're going to um kind of build some like a layer and then you know have the ecosystem sort of build on top of that with sort of like alignment around the token. I think both models can work. Um, but I've just been uh largely interested by like kind of what I've just seen from their messaging around, hey, we're going to build out these products and then, you know, month after month those products come out and, uh, they've continued to ship that. And I think the model, the fact that they've switched to this sort of like, you know, Robin Hood style model with zero fee trading, um, and they, you know, they make the the fees, you know, via the API or whatever you

want to call it, it's it's a PFO model largely speaking. um or simply put um I think can be effective. And so in my mind like the longer term implications of like who's going to be who's going to be really successful here is like who builds a really good platform. Like more broadly speaking, you know, Robin Hood isn't is not like purely successful just because like just because of the options. It's like because people go there to trade options and they put their cash there and they earn, you know, they earn interest on that cash and they have, you know, XYZ, all these other different programs, um all these other things kind of tied together. And so I think that's kind of what we're seeing for pers. Um you want to see this wide expansion into you know the equities equity per you know forex

commodities you know offering yield offering you know >> interest you know cash equivalents all these all these things >> you really want to become the product layer on that end right like I guess you want to really productize it as much as possible the way that the others have done released an article about this I guess he like mostly covered hyperlid in this one and it was about NASDAQ versus Robin Hood. I feel like we've already discussed this with you as well, >> like the models and >> it really does seem a bit like Hyperlid's taking the NASDAQ model, although some people like to say they take they're taking the AWS of liquidity. I don't know how reasonable of a take that is. Um, and you can see

this like kind of debate that they have within themselves as well. oftentimes they'll just ship a feature that like the BLP which is probably something that should have been outsourced realistically. Um if you're outsourcing a lot of things like that's also kind of a thing that you could have outsourced or like you could have used I don't know Felix and do like a hypervm hyper core type of thing. Um I'm not smart enough in terms of margin and cross collateral systems and figuring out how that would have worked but that would have to me would have seemed reasonable. Um and on the other hand you obviously see like them using HIPP3 and then spot markets are obviously by unit. So they're they have this like I think internal debate on how they should approach it. Um

versus lighter very clearly seems to be like we will just build everything in house. Um Hyperlquid still doesn't have a mobile app. Um although their progressive web app using the just using Safari on the iPhone is not um is not bad. I've used it. It's not horrible. >> Yeah. >> It's not an ideal experience, but it's not a bad experience. I guess like in terms of maybe like what you mentioned um which is that pers have been in general like declined since July. I think that is the case. Um it seems that however post like leading into launch December 14 token launch December 29th um that week was the last week that

lighter had an edge on Hyperlid in terms of volumes. Um and then following that we very clearly see lighter volumes drop off um below in terms of market share below Hyperlid. Um nevertheless it is still the second largest um per protocol by volume. Edge X is actually Fred which but I think they have some volume um discrepancies in terms of like I don't know how real some of it is and then it's followed by extended and paradex which are two other names that are like frequently mentioned in terms of open interest. It's still not a competition, but I think this is like largely expected. And one of the arguments is people make against lighter is that because it's zero fees, it's like it

doesn't matter that much. The fact that there is um a lot of volume, I don't know how much I agree with that because I don't really know their pricing model. Um, open interest is definitely the one that matters the most, but if market makers are able to make money on the volume that they're generating, then I imagine they would still pay for it. Something to look into, I guess, like on our end. Um >> I think the the model like the the mindset I have around it is if they given the pricing model and the fee model like I would imagine the meaningful thing is to lean into this like you know uh non non-toxic retail

flow. So like doing the mobile app and and just getting kind of like regular users in their trading and um as that type of non-toxic volume shows up then you know market makers will be they're happy to step in and sort of like make trades for those for that type of activity. Um, and I imagine it's easy for them to segment it out as a platform, right? Because you have a clear differentiation between like free retail users kind of like hitting the app or the or the front end versus the API access addresses. Um, so I think it gives them a very simple way to sort of like, you know, what what type of flow they're they're going after.

>> Yeah. And then maybe one more thing to look over at this point is only around 37% of the airdrop is still being held. Um and 82% has decreased. Now these figures are always kind of wrong because they count transfers as sales. >> Um just because of the way like it looks at address >> one is the original holder. If that address one doesn't hold the token anymore, it's counted as sale. um obviously not the case that could be like like I transferred my tokens from one wallet to another so and it would have counted me as a sale um but regardless of that it does seem like 82%.

Now there is this general approach to airdrops which is above 80% if it's been decreased that's probably like the time you want to look into the token if you're interested in it. um hasn't always been the case, especially in the case of Hyperlid. I think it was like much less the sales initially and then that's why like people had to keep buying as it went up. Um but general rule of thumb I think has been 80% or like 65 to 70% you start looking into it. Um I avoided like I not avoided but I didn't do this and I was just like yeah it 30% change [laughter] that's good. I don't know if anybody else >> um mistake in hindsight. Um, >> but yeah, I think we'll see. Mobile app.

I don't know how many users use mobile apps for persspecially if like I don't use mobile apps for purps. Maybe that's because I haven't found a good mobile app for burps though. So, you know, maybe maybe I should be using them. Um, >> yeah. I don't have >> I think it's an inevitable thing though. We've we've talked about mobile a lot and it's like the this industry I think not just per but like everything is we've seen it with like you know Phantom and wallets like those have become really successful and like I would imagine that more of your net new kind of like onboard to crypto for the first time people are probably like trading or like holding coins on a on a mobile

wallet on their phone and they're not like downloading Rabbit Rabby on their browser and then you buying an ETH and putting it there and um going through the like those extra steps. So, I I just see it as a a natural trend that that more of this stuff is certainly like for re for the retail crowd anyway. >> Yeah. And I think people like like clearly people don't have an issue with trading on their phone as we've seen through the proliferation of Telegram bots. I don't know how much of that was on mobile to be honest with you. I don't know if you can track it. I'm sure some team has kept internal data about it like bonbot or something and if they have and if they end up hearing this segment please share it so that we can know but like I was also using that on

my laptop quite a bit to be honest with you. So >> yeah I guess since a bunch of them are are with they're within telegram you can use telegram in many places but I I'd imagine a bunch of it was happening on mobile as well. >> Yeah. Um next up the economy of entire countries being ruined by um as some background maybe I can a past few weeks have been now this concept of CT has changed so drastically. It used to be like a small niche group and then it grew and then everybody hated them because they made a butt ton of money on board apes and whatnot and then it like everybody started mocking it with FDX

and then recently I I would say like the most recent change has been that it's grown but I guess like most of the internet has grown like this like it's grown I think almost everybody always expected a lot of CT to be bought but like now it's very apparent how much of it as botted activity. Um, and I guess the large driver has been Kaido and the other InfoI applications. Now, I don't really understand why this has been such a big driver. I haven't looked into the way that Kaido works in a very long time. And that being like, I was promised an airdrop. I got the airdrop, I sold the airrop, and

then I stopped looking at Kaido. We've covered Kaido at Blockworks Research a few times, but I think mostly we've been interested in the capital formation aspect of it, specifically like their launchpad platform. Um, first question to you is can you I don't know how much you've looked at it as well to be fair, but why do you think so many people were just botting for Kaido? Do they get allocations? Do they get tokens? >> Yeah. >> How does it work? >> It's both. Um, from what I understand, shout out to Canal on the research team.

Um, a part of the ICO platform that they have is when they would do sales or raises, they had some mechanics around, you know, if you have Kado tokens staked, then maybe you get some allocation, but also I think if you're like an active um, Yapper or whatever, that also maybe played into like sort of allocations that you could get into some of the sales that they hosted on the platform. So, there's some value there. But then of course like I mean I think everyone knows that like you know the when those when tokens like do the lab YAP leaderboards and then they launch the token and they they were giving some allocation to the people kind of farming that I think the reason that that pops off so heavily and like becomes so botted is because while it's probably for most of these things like not a

meaningful amount of money to um like a first world type of person with maybe a full-time job salary like >> you know maybe a 50 or a couple hundred bucks is pretty meaningful in you know Africa, Southeast Asia, like various countries around the world where you know you might be earning like a a wage or a salary by just spamming posts on Twitter which is very low effort. Um I think I saw I forget what it was. Somebody somebody posted a chart of uh the breakdown like a pie chart of the countries like the regions where maybe some a lot of these accounts were located.

>> Oh yeah, let me find that. Um, and I think that kind of it kind of confirmed that idea to some extent, like a lot of African and Southeast Asian representation there, which I think just it just makes sense from uh if you can go online and earn some money that like somebody in America or Europe um does not care to to do, then you're going to go ahead and do it. Oh yeah, this is great. >> Yeah. 26% from Nigeria. actually 12% from United States which is kind of crazy but I imagine a lot of that is VPN botting um 8% from Africa um 2.5% from Turkey very good um >> yeah I think it's just an imbalance in

terms of the the value of those drops compared to the effort um and like who that is valuable to and so that you know you get a lot of a lot of people um who are willing to spam that. >> Yeah. >> But I think it's interesting that they took this particular approach around like those apps specifically, right? Like it's a very it's a very specific like, okay, we we basically we have blacklisted this app, but that, you know, it doesn't mean that it couldn't happen again in a different form, right? like they're going to have to, you know, maybe we won't call it infoi, but but if some other app comes up that like incentivizes people to spam replies to things, um they'll have to go out and

blacklist again. So, it's not really like a an actual solution to bots. It's just like a hey, we didn't we don't like this activity of this app. We're killing we're killing this app. >> Yeah, it's Yeah, completely agreed. And the issue is that they promote like Nikita gets upset about all these things, but he clearly has the power to promote and demote things, right? And like it can't be that difficult to decide on how an activity is generated. Um like if it is through agents surely you can tell that like there has to be some way to tell it and you can ban that or you can demote that. Um, also this is like

>> I wonder to what extent like I have a thought here just to interject on is like on the agent piece and the LLM piece is like how much of this do they have conflicting incentives around like such that views from the flot bots like pumps the ad numbers >> to where it's like well we don't actually want to get rid of them because think about all the you know think about all the ad rev from the sponsors but then it's like okay at some point it starts to really deteriorate create the experience. >> Yeah. I um I read this book called Subprime Attention Crisis and it's like the the guy tries to compare um advertising revenue, specifically digital advertising revenue to the subprime mortgage crisis. Not a good comparison. But one thing that he

discusses quite a bit is like this idea of digital ads clearly not being useful. like how many ads do you see per day versus like how many are caught in some ad blocker system that you've set up, right? But like they pay for clearly you you're trying to avoid them and I'm trying to avoid them and everyone's trying to avoid them and clearly like Twitter is boosting the views and the engagement numbers because of like you said these conflicting incentives such that I mean the system it's not like whatever 2008 as this guy was suggesting in the book. Um, but it's clearly built on some form of shaky foundation. And Twitter's entire system

is also kind of built on this shaky foundation. It's like they're trying to incentivize creator revenues and then they're also like obviously they're very happy if we're getting views and they're very happy if people keep staying on the app, but the end result is that and Ryan Connor would say stated preference versus revealed preference in this scenario, but I don't I haven't used Twitter in two months. like I tweeted once or twice. Um I don't think a lot of people enjoy it. There's no alternative. I will give them that. Like there's clearly no alternative to Twitter right now. And there probably won't ever be an alternative that is not facing the same like structural issues of incentives and agents and AI and bots and how to monetize it etc. Um, but

specifically in the terms of crypto Twitter like [snorts] like you said, I don't ever see there being like a massive way to fix it because there's also like you can make a lot of money on Twitter by scamming and like by doing those scam advertising links, right? Because I can't imagine the cost per tweet is more than less than a penny or less than a cent. I don't know what the term is. And then but the payoff is potentially really high. So, and if you're just spamming tweets, that's good for the Twitter metric. So, like you said, like you're banning these guys specifically, but you can't ban

everybody. And then the only way to actually ban everybody or like at least ban a significant chunk is by doing identity verification. Obviously, something you don't want to do. And they started doing that. And then for Twitter Blue, you had to do identity verification, I think. >> Um, clearly it also hasn't worked out because there's tons of these bots that just have like verified Twitter. It's like clearly a scamming bot. It's like CZ Binance real and then has like a organization badge. It's fake. Yeah, it it just I think it fundamentally seems like a an unsolvable problem like to to the design in the sense that like

there's money to be made for the website from them. You know, if you get thousands of bot accounts that are willing to pay a couple bunks a month so they don't get booted from the site, then that's free money. You know, that's some good money for the business. um as a user. I mean I think I mean people say this over and over but like you if you don't want to see slot then you have to be very um persistent about blocking and muting accounts and like muting >> words and and that's actually that's just like the only way >> to go about it. And you have to like be very uh like careful about like every post that you click on or engage with because that's how all these apps work nowadays is like they're hyper sensitive to like

oh he clicked on this and he looked at it for 15 seconds. Let's serve him a thousand more of those. Uh because that's like that's going to keep their eyeballs on the screen. Um so you have to be like very I don't know. It's actually funny that the way to like most effectively use these apps is like the inverse of what they're designed around, right? Like they want people to glaze over and just scroll through and like stare at it all day. And like if you really wanted to like use it for whatever your purposes are, like stay up to date on things, then you have to be very like aware of what you're looking at and and kind of keeping up to date with and blocking stuff that you don't that you don't want to see.

>> Yeah, that's Laura. Sorry. Um, one one thing here is you can use that. I have one extension that's like Twitter for you remover which is pretty good. But even without that, like even with that, I don't think it's very good. Still, it's just all the interesting people are off it. Everybody's on Substack now. Um, or like they're they're on Telegram. Like anybody whose views I cared about are like trying to write more long form stuff, which I I'm actually quite happy about. Um because I think they end up developing their their writing more versus like before you'd have to reach out to them and be like, "Hey, what do you mean by X sentence?" But now they're like >> kind of writing it out.

>> But I think this is kind of a timeless problem. Like if you think through like kind of the old telephone age, it's like you get, you know, spam calls to your phone number and like you just like you have to like block numbers. And then in the email age, it's like you get a bunch of like crap, like dog in your email and like crap and you have to like constantly unsubscribe from stuff that you don't want to see and like, you know, get stuff off your lists and like in the in the age of social media, it's the exact same thing of like they're going to spam you with countless countless and like constant ads and you have to like be very like >> cleansing of your feed. And I think the same will happen even for the same happens for all these platforms. So like

even if people are they're going over to Substack or they're going over to Telegram for private chats and things like like all of these platforms are going to find like try to find new ways to monetize and and it'll be >> you'll see a lot of those same strategies like end up evolving I think. So it's just constant it's a constant thing to kind of >> work through. Yeah. I guess like last thing on this is the issue is that social media is something that a lot of people end up spending eight to 10 hours a day on >> versus you can't really check your email for 10 hours a day. Like I'm sure there's one person in the world that's like, "Oh, actually I'm actually on my email like six hours a day." But realistically [snorts] you can't. Uh phone back in the day, you

probably can. One thing that I will I got this like dumb phone, you know, like the clicking one and I think I'm honestly I think somebody sold my data that I bought it because the moment that I got it, I started getting scam calls and then I thought about it and it's like only old people get dumb phones. So they were like constantly calling me and be like, "Oh, like the police are after you. You need to give [laughter] you >> wires of $100,000 immediately." Yeah. [snorts] Um I guess social media is unsolvable problem. What do you think about Very good segue coming um this being an unsolvable problem for Kaido?

So, they recently announced that they're sunsetting their YAPS program, which is what was the problem, and they're going to offer a more curated marketing experience being that they will essentially connect people to key opinion leaders that they have vetted and know instead of allowing for this like I feel like their pitch was like, oh, we're the anybody can become an influencer if they have enough yaps and then, you know, allowing for that versus now they're like gonna be as they say, closer to a tier-based traditional marketing platform. Um, with I guess like analytics tools and stuff. I first of all, clearly like cookie announced something similar.

Cookie is the other infoy platform. Um, clearly there was some discussion beforehand with Twitter, which I think makes sense because I imagine these guys are like massive enterprise level customers for um, Twitter um, marketing agency. I don't know the business around it at all, but now that it has officially become a marketing agency, maybe something that we need to write an update on at Blockworks Research and see how this can be like a product on their end. Um because we did cover Kaido before and like I said, mostly capital side, but um >> yeah, when we I have thoughts here like already when we talked about it originally, I mean this was like a year ago now I think. Um when we talked about Kaido originally when they launched the

token and all that um I I had thought in my head that that was kind of a like it seemed like that was the entire point at some point was to basically become like this uh like you know disintermediate marketing agencies and just kind of have like this platform where people just they go their they shove their info in there and it and you know teams can go and run you know guerilla marketing campaigns and just you know you onboard 100 kls really easily. you can like pick out your niches and your categories and all that. I don't know whether a like you say like I'm not a mark, you know, I'm not a marketing campaign guy. I don't I don't know if a platform specifically like that already exists.

It might it might not. Um maybe they maybe you know these teams do have to just like go around and like DM people on Instagram and and Twitter and it's a pain in the ass. So there might actually be like a reasonable product niche to fill there. Um and that's kind of where I thought this platform was headed. So be interesting to see if that works out more broadly like beyond just crypto because I would imagine that's more than just a crypto thing. That's a you know all all marketing these days is you know you get Tik Tok influencers and you get Instagram influencers >> to to promote your products.

>> Yeah. I I will say I think this could be a really good business for like eight people not as like a publicly traded token. Does that make sense? like a very cryptonative marketing agency where you actually understand like whose thoughts have value and like who you want to get involved in XY Z and what platforms you want to hit and stuff. I think that would be like potentially very valuable. But first of all, I don't know the fee structure of how a marketing agency works. So, like I might just be talking out of my ass here, but assuming like a 5 to 10% thing, I don't know if there's enough tokens out there, enough protocols out there that can cover that

and that will use Kaido and that would make Kaido's valuation reasonable. Um, they do have the launchpad. I have to take a look at that. But, um, I guess like on that note, we did see a pretty significant and this was I'm going to show Ian here. I know he's watching as well, so he'll probably be happy. But [snorts] this was >> like on the Nikita tweet >> and it's just like insta >> down to I think 560 mil. I don't know what it's at right now. I can check. Um yeah, still down.

Yeah, still around the same price. So like 5 550 mil. Quite hefty for a marketing agency at the FTV. Um, and I know our very own uh Matt Costa was also looking into some potential pre-sale pre-decision unstakings as well. >> There was a big unstaking block that >> was unstake was it before the announcement or at the announce like very very timely. So they definitely there was certainly some heads up. Um >> four days before the announcement.

>> Yeah, we >> it's not a good look. It it might be nothing though. The thing is that we don't know. So >> could be nothing. Very timely. >> Could be nothing. Just like somebody got really lucky. >> Sometimes we can call, you know, we can call it is it is what it is. >> Yeah. Talking about calls call out. [laughter] >> Oh, Ryan's gonna be so upset if I keep doing the news bit. Um I don't get this. You have to explain this to me cuz even though you are significantly older than me and I'm Gen Z and you're a millennial, >> bro. Significantly? What the hell is that? Like a few years maybe.

>> Yeah. Um >> Okay. Yeah. Keep going. >> Is this a big thing? Like call like Okay. I know I know about cops. >> What are your What are your thoughts on paid paid alpha groups? Huh? >> On FNFS, friends and family groups. I love them. >> Here. This is my first thought was like, "Oh, nice. They're disintermediating all of the join my paid group, you know? It's like you don't you don't have a paid group anymore. You just go on pump and you just you just make your token calls directly to your followers there. >> Yeah, it is.

>> Yeah. I don't know. I don't I don't >> I don't know if this is like that meaningful. I think it's more of just like a there's plenty of these accounts who, you know, buy coins and then they like talk about them on Twitter, maybe like in Telegram chats. So, I guess now there's a just a direct way to buy and it automatically gets called. But also, if you're trading in a doxed address on chain, then everybody knows what you're buying already anyway. So, I'm like I'm not I I think it's more of just like it's a social feature for uh people who are are trading memes, which I think is good.

Like I don't know in terms of the the game aspect of it, you've got people trading these coins and like send them sending them to each other in TG. So presumably if you're using the pump app, it's like a little more convenient of you buy the thing, you can make a call, it goes directly to your friends. Uh a bunch of apps have played with this, right? Like um >> Tensor >> Tensor played with this. Uh I think I think Bags and like FOMO and a couple of those like they all have like their own, you know, you can have your little like group chats. I have not used it but I've kind of like I've used it but I've not used it used it if that means anything.

>> You haven't actively >> gone through the flow but I've not you know I don't Yeah. >> Yeah. >> I um I I pulled this up. Um Pump's revenues are actually kind of up. I mean obviously it's been two days so it's like it's not a very significant but was at like 1 mil around 1 mil the past like late December. Now it's at 1.8 1.6. So it's been steadily going up. >> Yeah. Yeah, I don't know if we talked about it. We had uh there's like a few co like white whale went to 200 million and so you know people are gambling. You know, a coin goes up and then everyone's like, "Oh, it's, you know, it's time to gamble on whatever the meta is."

>> Trenches are back. >> There's a little bit of a clawed There's a little bit of a clawed code meta from what I understand. >> Yeah, I saw that. I saw >> they're doing AI again. >> Because it immediately mimics like past stuff like AI agent stuff. Yeah, >> because >> I swear somebody sent a coin in a chat today and was like, "Oh, this one has 13,000 GitHub stars." >> Yeah, dude. I saw the GitHub star chart and I was like, "Man, we're we're actually just rerunning. >> Didn't we just do this?" Like, we did. I swear to God, it's so um callouts I don't really get. Um I'm sure that somebody will make some comparison to e Toro and copy trading and like how it's generated a lot of revenue for them. Or

is it Weeble? I don't know, whatever. One of the two. >> Yeah. >> And then they'll be like, "Yeah, this will go up." Um, I'm sure it can. It does like it is good to see that. >> I think most of the token launches are still happening through pump or it's at least like not dying out when there's like I think you would be concerned if that 900k or 1 million did not go up to 1.8 um mil like over the past few days given that there is more activity. Yeah, White Whale did fine. Um, there's another one. James Kristoff is a lot more active in group chats which always mean that there's tokens launching.

>> Yeah, I mean he's sending me a to buy. Um but yeah, how do you >> It's still not there. I don't think it'll >> I think it that's an idea that I think a many people have like yeah you I think you me you know we e Toro like these other platforms you see it I think even Robin Hood as well they've pre-announced some social platform where you can like share your trades as well. I think it's an idea that everyone thinks is a slam dunk somehow, but no one has really done it and like all of that stuff still just happens on the social media platforms where people interact already. You know, it's, you know, instead of using some

app that's specifically designed to like, hey, I just did this trade. It's like, oh, you talk to some guys on Discord or you talk to them on Telegram or you talk to them just, you know, texts or or whatever. like you just send it, you know, you send it via the normal ways that you communicate. Um, I'm that being said, I'm sure there's some people like who will use these, they'll be early adopters, but I don't know, we just haven't really seen it like everyone thinks this is like a slam dunk somehow, and it just hasn't really like exploded and been like a super viral thing for anyone uh take on it.

>> Yeah, it it I get why they're exploring it though because it like leads to vendor lock in at that point. if if everybody's calling it. Unironically, I guess like Fentech was the most successful guys to do it because they actually make quite a bit of money. Not for the intended purpose, but they did make a decent chunk of money by only doing this >> and they tried to do it. The app was horrible. >> I made money on it, which was nice. [laughter] Um, >> yeah, I think it makes sense why why a lot of these businesses want that to take off for them because, yeah, to your point, it's like I mean, you make your users that much stickier, it probably promotes like even like a more of a flywheel of of activity, right? Somebody

posts a trade and then 10 more people like instantly take another trade. It uh probably kicks off more activity, leads to more more revenue. But to be seen to be seen whether it whether it actually works. >> Yeah. I guess big takeaway is that on my end it is happy it's just crazy that they don't tweet out for 6 months, right? So I guess I'm happy. >> Yeah, that that was the interesting part. like out of come out of silence to talk about calls and then he and then Alon tweets and says I'm going to call a 14k market cap coin uh soon so putting me on notifications.

>> So funny. [laughter] >> No one's like >> didn't we do this with I feel like we did this with Jesse Pollock. I don't I don't know that people actually want I don't know if people want like you know head of head of these products to just be like calling out random coins. >> Yeah. Also, like if everybody's calling coins, there's no meaningfulness to calling coins. Like if if Coinbase is listing every token or if Binance is listing every token and then there's no point in listing to like then there's no Binance token bump, right? Because they're listing every token can't bump.

>> And the big problem is always it comes back to bots. >> Yeah. uh just like the Twitter bots, like if you're making explicit calls about something, then all of the bots that are set up to automatically snipe the ticker that you send are going to pump and dump the thing. Uh and it it ruins the experience for everyone else. So, it's like um it's like a game that's already been I don't know, I guess you could call it solved in the sense that like, you know, they they'll snipe all the supply and then just slowly drip it onto the people who are manually pressing buttons afterwards.

Yeah. Um, yeah. I'm trying to think if there's a way around that, but there's not. We've tried so many of these like auction mechanisms like in any form. I guess like memecoins didn't really try it that hard. Um, >> well, I guess like the entire >> problem with the live coin, right? Like it's it's a live thing. And so I I just don't know. There's no way around it unless you're gatekeeping who can actually buy and sell in the first place. Yeah. And even if you do try to gatekeep it, like Echko and Soner are clearly doing a pretty good job at gatekeeping, but then you get CBB who ends up buying 15,000

um KYC's from a small French village, pays them 200 bucks each, and then just uses those to make the >> to make an investment. So, it's >> it's it's certainly more of a problem due to the size of these things. Like if if your if your favorite influencer calls Google, it doesn't it doesn't matter because they're a multi-t trillion dollar company. Like they're not going to pump the stock. But if you're calling a 10K market cap coin, then one guy buys 5,000 and it's at 300K instantly.

>> Yeah. Although in crypto it also like even if you are calling a multi-billion dollar FTV project, sometimes it ends up pumping. >> Sometimes there's no liquidity in the thing. liquidity is so bad. >> Which was it? There was something that's like >> I can't talk about this token, but there are like I just realized can't talk about token, but there are some tokens that are like so funny. It's like $600 million market cap. Onchain liquidity is 4 and a halfk. What are you doing? Um, yeah. Last up, we're hitting all of the big ones today.

I realize I'm not sharing it on my screen. There we go. Oh, awkward. Pepper. Pepper is one of my favorite Twitter guys, and he talked about this thing called Poly Market Traders is the worst account to follow. All they do is pitch and I saw this thing that's like wildest mispricing. You're risking 0.08 dollars to make $1. This one is not so bad because this one's clearly just gambling. But the funniest one that I saw was creation of this and Tulip King, my go also talks about this. It's creation of these prediction market bonds and basically you take this thing that is guaranteed to happen and it's only trading at like a 97% and you just do you just capture that 3%

and if you do this theoretically now they always use the word theoretically which I really appreciate because clearly in practice it might be different theoretically you could make upwards of like 40% APR per year guaranteed. Um, this ties into this general thing that I've seen James be very angry about and it's the promotion of prediction markets as financial platforms as opposed to I would argue uh prediction market is a very good way of saying betting platform. It is in its like purest form a better betting in fact I would say it's the purest betting platform that there is out there.

>> Huh? >> Good branding, >> right? It's very good branding. It's fantastic branding. Um, and [snorts] then recently they actually did this ad and a lot of people were upset about well they got sued over it. So I guess a lot of people were very upset about it and it was like um it was on TikTok and it's a Keli ad and it's this girl saying I'm unable to pay my rent this month [laughter] but I ended up hitting like a couple wins on Koshi so now I I got money or something something Tik Tok speak some form of Zoom or Tik Tok speak. They got sued over this clearly and I think the language was like investment. I I was able to make a few like investments or like predictions prediction investments or something. So

they got sued over this. I'm not sure. Nobody quote me on this. And if anybody from couch is listening I think it was a bad advertisement but good luck. Um and I might have been wrong about the language. Anyway um yeah how do you see these guys position themselves going forward? Um, they're getting they're getting some heat over this. How do you see like all of this shape up? Uh, what are your opinions on prediction markets >> here? Wait, we need to have the source. >> What is the source? Oh, here. Let me show this. Um, >> oh, there we go. Okay. I was about to pay my rent, but I got two years of rent through Kashi's predictions. It's amazing.

So, it's not promoting it as a it's not saying it's an investment, but the official law document says Koshi Tik Tok ad portraying Koshi as a financial tool. So, I was not wrong, but I was kind of wrong. So, I apologize to Koshi for saying that they said it was an investment. They did not say it was an investment, but the legal document said that they were promoting it as a prediction tool. >> Yeah. Um, I agree with James on a lot of this. Like I think [snorts] and the part of it is just like the way the strategies around this gorilla marketing like get a bunch of Koss who aren't professionals to just like make statements. I don't know if that's like

a legal loophole in the sense that like you can just have people who like don't understand anything about risk uh or finance just being like, "Yeah, it's like free money. Like you can just take all these like trades that give you 0.01% when you're right and you stack all of those over the whole year and then you make 20% free risk-free money on your call sheet gambles. It's like >> okay no that's not how it works. If any if you're if you're going all in every bet then if any one of those turns out to be wrong you lose all of your money. So, uh it's not not not in anything like holding a bond in the sense that the like a bond doesn't instantly go to zero um if you're a binary outcome necessarily un you know the one binary

outcome is like your country collapses but um if you're taking thousands of of binary you know option trades in a year then like any one of those could be wrong unexpectedly and and you lose the entire stack there if that's kind of your strategy. Um, I do think, yeah, it's just it's a bit unfortunate that like that is the approach, but I I guess I get where I I see where these teams, Poly Market and Cally are coming from because I think they both genuin genuinely believe that they need to like, you know, we need to do whatever we can right now so that like we end up winning this like little war or race over the future of like gambling basically because even you know the the prior you know the DraftKings and the

FanDuels. Like they had a long like several years of let's crank all the promotions. Like we need to make sure we we can burn a ton of money. It doesn't matter. We need to like get all of the gamblers onto our platform, get them like locked in so that we can like, you know, win for the next decade or whatever. And I feel like we're seeing kind of a similar thing here for the prediction markets. >> Yeah. Yeah. For context, like I don't think people should not be able to gamble or bet. I if you want to gamble or bet you're you should be more than welcome. I do think that it is a bit risky to and I think Kali and Poly Market are not I don't know how the dynamics with the

influences were but I would say there are a lot of influences out there that are going out and writing these and I imagine like part of it is because they want publicity. Um, and this kind of ties into the general like social media incentive structures, but like there is a large portion of influencers out there who are writing these like long thoughtful posts about the bond structure or Tulip King had like a few funny ones actually, but like and in theory right >> become the president. Yeah. >> Yeah. [laughter] And like the the president one where you're like >> you bet no on yourself becoming the president with a sufficient amount of money and then somebody you know people will come and make it happen for you

basically >> like in theory these are very very like this is like Danny I the thing is that you never spent time in this form of academia because you have like a STEM background right but like I spent some of my time doing humanities and the arts and the letters and like oftenimes you'll read something and sometimes it'll be like kind of like this and I think it's like a very academic mindset to say oh like logically this works therefore it'll work in real life and it's like the same thing as like all of the economics field assuming that all be like consumers behave rationally. It's like, yeah, I guess like technically, but also there's

people spending like 36 grand on candles a month, so it's like it doesn't really work very well. Um, >> and like all of those arguments, but the issue is that >> I guess like when Tulip King, not Tulip King, I don't want to isolate him specifically. So when somebody writes like, oh, you can build a bond around this and maybe they're even suggesting like some form of hedging strategy such that you don't get if it goes to zero. Um it's first of all it's a very complex thing to build if you were going to do hedging but also people are not going to hedge and also even if they are going to hedge I don't think they're going to know how to and people never really like take that double like step of thinking of saying like oh like oh I should do this and

then they're like oh like well what if it doesn't work out etc. And if you have like people promoting this because it's gonna get them publicity or it's gonna get them bookmarks or it's gonna get them some deal, then it's like then you're getting in kind of a tricky situation. Um, and there definitely needs to be like I think a lot of people do not like the SEC and regulators, but I will say one thing. There definitely needs to be some form of reform around a h how influencers can show that they're getting paid or not paid or like if how much money they're making through certain things. I don't think Kali and Poly Market are paying a lot of these people. Um, and I'm like not at all putting the pressure on them

and saying, "Oh, you're paying." >> And that's been an issue in the past as well, >> like exchanges as well. Um, decentralized protocols as well, like they're suggesting building out these complex strategies sometimes and sometimes even like very non-nefarious things like airdrops. People will say, "Oh, you might get an airdrop about this. You should use And then it's like what they're telling people to use is like either something that isn't audited and like is actually quite complex smart contractors that might arise from it or it's like a protocol that in itself might lose money. Um I don't know. I think it's like it's probably fine if you have 15 followers and it's all your like friends and

you're just talking to them and as a diary. But >> yeah, >> something to consider like going forward. I I don't know what the solution is. I guess the solution is probably never we need a lot of regulation, but maybe a little bit. >> I think it's um it's always it's always uh iffy for me when you get a person in a position of an influencer, whatever, a celebrity, who cares? Doesn't matter who they are, but you know, they have people who will basically do whatever they say. Um, as weird as that sounds, like I think to your point, like you know, there's a lot of like economic theory about people being rational actors. And I think

anyone who lives in the real world knows that the average person is incredibly irrational um and does not think about anything like logically before making a decision. Uh so it like I think when you just combine that with the fact that people will take any financial product and say wow risk-free 30% per year risk-free 5x like you know you just get you're just opening the door for you know people to just lose their money immediately on something that they were kind of led to believe was uh going to make them a ton of money.

>> And uh this isn't like a new problem. I think we see this. >> I mean, we had this Yeah. greed and stupidity kind of like fuel that in a lot of cases, but certainly like the framing here of it's quite literally a gambling product, but then to frame it as like a lot of this like guerilla marketing framing it as like risk-free opportunity uh in some scenarios is just >> that's a bit goofy. Let's just let's just admit >> that it's goofy. >> Yeah, it is a bit goofy. >> We can be honest. We can be honest that it's, you know, if you want to, it's like a better, it's a better form of gambling. Like maybe it opens up new types of market that were never, you know, there were markets that were never

previously tradable and like now you can gamble on those too. And like that might be fun for you if you want to gamble on, >> you know, the weather or like, you know, strikes on countries and things like that. But >> yeah, well, I mean, I think I think that is like actually quite interesting because there's this now way for you and I to like realistically we're not going to like short a country's bonds if we think that they're like going to be insolvent right? >> Or whatever, like complex stuff like that. A either you don't have the the relationship, you don't have like the tools to do it, you don't have the size to do it. Um, but this does open up. So like that kind of stuff is the interesting thing like and potentially like allowing

>> uh I don't know if the term consumer maybe proumers. Yeah. Like to to to bet on interesting outcomes in a because so far I think the only thing that you can reliably bet on is like politicians. Um this is without poly market and calcium prediction markets. Like you could bet on politicians and you could bet on sports. Um, but you're opening up like this whole new venue of betting and predictions um that are actually quite interesting. And then I I don't even see there's there being a reason to go out there and say >> this is risk-free.

>> Go ahead. They're they're trying to operate in this line, I think, where they're trying to secure this regulatory advantage by running this like, hey, it's not a gambling app. It's predictions. This is different. Like, these are, you know, it's a different type of contract. It's a different type of this or that. Like, therefore, it shouldn't be regulated in the same way that, you know, gambling or like these, you know, these types of like betting contracts have been regulated in the past. Um and maybe the contracts are technically different like whatever. Um the activity is certainly still gambling. So I I think they have to kind of like they have to in some sense sort of like

take on that air of this isn't necessarily gambling. This is like oh you can you can be really smart and you can predict and like you can make money off of predicting and like that can be you know it's like it's like operating within the stock market. It's, you know, it's very professional >> um to to sort of run that line of thinking to regulators around no it's not a gambling app. Like of course it's not. We we shouldn't be treated like a gambling app. Um when in reality a lot of the activity is gambling. So >> make that about zero day options as well. Like realistically a lot of the activity is gambling especially from the retail side. So >> yeah, >> I don't know. I'm not a lawyer, so I don't know how to classify things. But I

guess if you can make that argument, you can probably make like both of those things can be true, right? Like some people use the product for gambling and also some people use it for as a legitimate like financial thing. Maybe not investment in the way that like >> I don't know putting some money away into like an ETF is, but it is in an extent a financial product in that sense, >> but also a gambling product in another sense. Like very clearly the sports side is a gambling product. I would say it's not >> it's definitely just more of like what the the entrenched sort of laws are around the types of products. So, like if gambling apps are prohibited in a lot of states, like if mobile gambling apps

are prohibit prohibited in 20 states, then it's like, well, we don't want to be a a mobile gambling app because we want people to trade this everywhere. So, we have to be something else. So, we have to frame it as something else >> and then fight that in court. >> Yeah. Maybe it's about like not offering certain markets in certain jurisdictions, but they make a lot of their money on sports markets, so it would be difficult for them. It is it is like I don't know. We'll see how it resolves this whole thing. I I imagine they have quite a few years for prediction markets to actually get proper regulation. It does like crypto's just starting to get it. Um and then I don't know if we have time to cover that today. Um but do you want to quickly chat about the bill? I kind of took a

look at it. >> Let's uh maybe let's save it and there'll be more maybe there'll be more to chat about. >> Yeah. >> Next time. I don't want to we don't have to rush it in because I think there's going to be more development here. Like I think there's some active conversation around, you know, will stable coins be able to pass back yield? Will how how is that going to shake up? >> Equities is the big one. >> Yeah, that as well. >> Big big one. Okay. Um Danny, always a pleasure. Um to our listeners, I know I didn't get to anybody's comments today, especially Ian who's been spamming comments, but I didn't get to see them because the app didn't show them to us, but um next time I'm sure we'll bring some of them up. Um, and to the rest of our listeners who are normal and can be

trusted, thank you so much for listening and joining us for this. Um, Danny, anything you want to share? >> Uh, [snorts] I think if Ian was watching, he would have definitely been saying something like Blockworks data everywhere. >> The true Blockworks Chad and lover that he is. >> I'm I'm sure of it. >> I also think so. Okay, perfect. Um, [clears throat] great. Have a good one, guys. >> See you guys. Catch you next week.