LIVE: Lighter, Uniswap Launchpad and Markets | 0xResearch

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[music] Hey hey hey. [music] [music] [music] [music] >> [music] >> Good morning. Welcome back to another

Zerox Research live stream. Your host Danny and co-host Salvacio, ZK Bacio, Triple Bacio. How you doing today, Boach? >> I'm good. How are you? How's your David >> doing? Good. It's a little cold today. I had to uh bring some fresh water to the chickens outside that wasn't frozen. Uh >> yeah, it's cold. It's It's below, you know, it's like freezing temperatures.

It snowed yesterday. >> Okay, that's fair. Um yeah, that's about how interesting the crypto markets are. Well, [sighs] it's probably not much to do. >> Yeah, it does feel there's not a lot going on. We've got some topics. Um I don't know. Do you want to talk about the markets generally first or you not have anything strong to add there? >> I don't jump in strong. I I I did the newsletter today and I looked and it's it's like we've regained 92k BTC which is great. At least the last time I regained 92k BTC. Um hype's been

underperforming over the past few days. Um, rest of the tokens have kind of rebounded a bit. And by rebound, I mean like soul's at 140 instead of 130. I don't even know what E is. I imagine it's at three or 4K somehow in between there. Um, market's definitely at the stage where it is a lot more boring than I would have imagined. And I I can't remember I don't remember if you remember this feeling but in like 22 it was really bad November FDX collapses and then but what was really really bad

was um just the sheer boredom that you got for like four or five months because markets just wouldn't go up. There was no bid. Um, and it feels like there is kind of a bid here, but it's like mostly like mostly mean reversion. Like nothing's actually getting bit up to the point where it's like, oh, like this thing is going up versus and then you're like you're looking at stocks and um seems a lot seems at least semi more exciting where it's like this stuff being really really up. Um, but yeah, like the markets don't have any strong thoughts. I saw that um Trump wants to or at least the guy that

Trump wants to bring I can't remember his name now but he's like Trump friendly is it Hasset can >> Kevin Hasset >> yeah he um he is at 78% on Khi which is pretty good as like the next Federal Reserve chairman um next Federal Reserve chair not chairman Um >> yeah that those are like literally the only two things that I looked at. Apart from that I've been honestly reading more and more I tried my stuff. [laughter] >> Yeah I think uh I guess on the majors like I don't know micro strategy or strategy bought bill a billion of BTC or announced

another billion that they purchased of BTC. I also saw that um I don't think it was Tether themselves, but maybe some investment firm affiliated to Tether bought like 4 billion or so of BTC um that was being tracked on Arkham and uh Bitmine bought some ETH. But um yeah, I kind of agree with you. I mean, we've been in this like downtrend and I guess sort of like flattening out maybe down here now just um at these lower levels than earlier in the year. So, of course, the like the excitement, the gambling excitement

has uh cooled off a little bit. Um, some of the things that I'm seeing people talk about, I mean there there still seems to be like a big focus on like ICOs and token launches. >> Bunch of the platforms like on Soul are kind of competing on this. Um, you know, Metadau is doing the whole futarchy thing. There's still a bunch of like these other >> somehow involved in it as well. >> Yeah. >> Yeah, I agree with you. Like that's been the big thing I feel like over the past. But it's also such a like boring thing to play, right? Like >> Yeah, it's it's tough in the traditional sense that like you're the short-term outcomes are

probably going to be relatively disappointing for a lot of these things. Like, you know, Coinbase did the Monad sale and Monad is at roughly [snorts] its its list price or so, maybe a little higher. Yeah, I think it's it's a little higher, but it's nothing like super sexy. Um I think they did, correct me if I'm wrong, I think they did it at 2.5 and it's at free right now. I should probably check. Um but yeah, I mean nothing like exciting, right? It's Oh, it's it's at 2.7 right now, so it's like literally up 10%.

Less than 10%. Um, this is one of those things you can play and probably make a bit of money on. I think it's mostly been captured at this point. Like I think there was a time when you could do a lot of ICOs and probably do relatively well. Um, I think it coincided with Metad's original ones like AVC, Avici. Um, there's a few more of those. um income umbra famously raised a lot of money returning could have made money on those but also even those are like I don't know it's it's not where like I would have imagined we would be but also

like now I'm looking back at my I don't want to say journal or diary but I'm looking back at this thing that I keep like loosely once or twice a week and then one of my things that I wrote was like you know probably time to sell mid December uh mid um 25 late 25 and it's I wrote that >> huh >> I I sold a decent chunk I don't have that much exposure left but it's also kind of interesting think because I it was really hard for me to sell and I was like I don't want to sell and then >> but back then it like logically made

sense based on I picked the four-ear cycle I was like it made sense So um and then yeah like volatility is still there at least but there's nothing super exciting happening even though we have like a lot of token launches right like we have monad recently we have mega coming up presumably um >> it's just a change it's a we're kind of like the market is adjusting to the sort of change in the game like when things are going up only then a lot of the like short-term games can be very profitable like the you know buying and selling a

launch you know within a few days and being up a couple X and then I feel during these periods it's the the game kind of changes it's less about just like buying every sale and hoping to instantly flip it and more about having to seek out opportunities and uh potentially like think longer term like six 12 months like what do you think is going to happen where those things are headed. Uh >> I find that it's very difficult to say anything about 6 to 12 months though. I feel like it's easier to say about two months and easier to say about 10 years, >> but it's very difficult to say about 6 to 12 months. I don't know what the [ __ ] going to happen in 6 to 12 months. Do you? [snorts]

>> No, of course not. >> No, it's >> maybe maybe even two months is the appropriate comparison. But you mentioned like Avichi for example and I mean that that token has been up only for two months. So >> um but it wasn't like a buy it day one and sell it the next day type of thing which I think is what so much of the participants are are focused on. >> Yeah. What do you what have you I know you're very into Rivian now. >> Uh no not now. I feel like I've I've been I've been interested in Rivian. We don't have to talk about Rivian though.

It's not crypto, but there does seem to be a little bit of an overlap there of uh I don't know, maybe it's to the point about crypto people getting into looking at equities and wanting to find things to trade there instead. Uh I've been interested in this conversation around like lighter and hyperlquid and per uh let me pull up there's a couple markets. I mean, I think for one, people are looking for a TG here by the end of the year. I'm just pulling up the poly market, but the market right now is pricing pretty good odds that they launch this token before the end of the year. So, in the next 3 weeks. Um, and then I guess I've seen some

discussion that like this is I don't know people are looking at hype price down and they're saying well team selling you know token unlocks team selling but also more competition yada yada yada. I mean, I think they're trying to ascribe some things to just like market going down, momentum breaking down, you know, trading activity and revenues are lower than they were earlier in the year. There's probably a lot of things you could ascribe to it. Um, but it has sparked some conversation of like where does the per space go. I'm curious if you have strong strong thoughts there or how much you've thought about like this. Um, you know, you kind of have hype with the

they've got fees in their product and the builder builder code >> Yeah. >> front end model and then liquid lighter is doing the more like >> everything in house. >> Yeah. Almost like a a Robin Hood model zero free probably like some kind of payment for order flow type of >> Yeah. >> type of strategy here. >> I mean I think lighter is the most real competition that Hyperlid has right now. I don't think that's a very uh contentious thing to say as well. Like I think almost everybody realizes that and I think a lot of hyperlquid people also realize that um it's going to depend on a few things. I think Hyperlquid got a little bit lucky in

that well not lucky because it's like a lot of tradeoffs that you have to do like you don't raise outside capital which means that you all of the risk is like by the team and their own capital. Um, so that's the thing like how much to of the token is going to VCs because VCs have to sell. It's a fiduciary duty. Um, at least good VCs have to sell. Um, so like it depends on stuff like that. Depends on launch price. Like I don't know, hype launch at two bill. I think lighter launches at a price that low. I don't know. And at the time it was very much like like hype wasn't a guaranteed thing to the point that there were it wasn't

particularly consensus. So you not every like there was a reason that it went up and then up and then up because people slowly realized okay like this thing is a very different machine like a very different business versus like it didn't have the it didn't launch at a very high price. I don't know what the market dynamics are like now that lighter like I wouldn't be surprised if lighter launched at 5 mil. It wouldn't it wouldn't be an insane thing to me. >> Um >> yeah just >> yeah based on >> bull market looking at a few mil potential or free billion potentially.

>> Yeah I would say like free bill based on this. I I mean I don't know how much volume there is on this. Oh that's actually a pretty decent chunk. >> 16 million. >> I don't know. To me it would make sense if Yeah. like free bill, two and a half free bill. Um I don't know the market dynamic is so different for some like think about it this way. Um it's like people who did the ETH ICO or like when they first or like people who did Solana the original like when you could buy at $3. What L1 can you buy? I guess not you can buy free will. But do you know what I'm trying to say here? like the market dynamic is so different that I don't know if you can get the gains from

lighter that you can that you would be able to get from Hyperlid if you had bought it at launch. Um nevertheless I do think that it is the biggest competitor that Hyperlid has right now. Um and I think that's purely because they are launching everything in house. Um, I do think they've made some strategic mishaps. It doesn't make a lot of sense to me that they're only allowing equity trading, equity purse trading during market hours. Like that to me is after hours trading is liquid enough.

Like holidays and weekends, okay, you can do the Austium thing where it's like 245, but who why would you do just market hours? if people want to trade market hours, they'll just trade on on an exchange where there's a lot of liquidity. Um, does that make sense? Like to me that didn't because you can get the pricing from a relatively liquid venue after hours and I don't think that would have been a big deal for them. Um the second thing is uh they I feel like they've been slightly slow to uh to expand the product a bit further in that like spot is just

getting just happening now and it's only like two assets. I feel like they could have gone more and more. It's it's a good product. I I use lighter relatively often. Most of my most of the time I use hyperl liquid but sometimes I want to use lighter just to like get some points on. It's pretty good. Um I have heard from people who are a lot more involved in the trading side and that they they either do like they run strategies or they were at some point involved with high frequency trading or algorithmic trading that lighter is not as good. But I'm taking their word for that. Um, as opposed to saying something that I actually have experience in.

>> Yeah, I don't have a strong bias one way or another. I think I'm a proud holder of like 10 lighter points. So, uh, certainly not enough value there to mean anything. Um, I would I would maybe counter both. I think on that equity purpose thing, I I see it as sort of like a a whatever. Like I think it's sort of like a natural all all of these platforms are racing to implement. Um I don't really see it as necessarily a knock that they did market hours only. I'm assuming it's just like let's do market hours only. We can just turn it on right now zero risk and then we can spend I don't know couple months building out a system to do like a 247

style offering. But I imagine it's just like let's just let's just turn them on. You know, maybe they'll only be a few million volume, but that's that's fine. At least they'll be in the app. Um, and then like on their speed of of shipping, I guess I've been impressed, honestly. like >> oh >> spot I mean they just added spot ETH like last week but I don't know they're when I look at the markets that they have like they also have the forex markets which are quite large I would say uh given I guess maybe what I would expect like they're maybe I'll share this tab that I'm looking at right now um looking at their the equity per like you know you see a lot of these

big names that you see on on the other platforms forms only a few million in open interest for for mostly stocks only a few million in daily volume on the forex side like the Euro USD pair over 80 million open interest over 100 million in volume and a lot of these other pairs as well you know 50 million in volume obviously there's no fees on volume but still you know the ratio here of open interest to volume um >> is pretty good and I think >> is quite good >> lighter is the only place where you can actually do FX in per um like the big ones. I'm sure like a bunch of smaller ones have them. Do they have any commodities?

>> Yeah, it's just I think it's just gold and silver. >> So, they have the >> This is also not bad. I mean, >> so I guess what I was going to say is like I've been honestly impressed with I don't know. They've been very quick to like Okay, I think Forex actually came in November or maybe even late October. So, they added that, they added the commodities, they added equity per they just added spot. Like I think they've been moving pretty quickly. um these past four or five months honestly. So >> um and if they got the token launch coming as well then I mean obviously the token doesn't necessarily mean anything for the product but uh in some case in some ways the token is always part of the product >> uh for the speculators out there. Um >> yeah I I agree with you. I think it'll

do like I think it's objectively doing they've objectively done a really good job the team and I um like I said I think it's the only real competitor I have like the reason that I said maybe they're a bit slow is maybe just I'm I was expecting more but also on the other hand I'm thinking about it now I'm like if if I wasn't on the podcast and if somebody asked me my thoughts I wouldn't have even brought it up. I think it's kind of like the podcasters thing where you have to be like, you know, it's really good but also XY Z >> trying to have a take.

>> Yeah, you have to have a take. Um the other thing here is um now if you are the team um and you've sold equity, you have a company and you've sold equity in the company. Um they need to kind of be careful in how that those feet because let's not like Like there's a lot of protocols out there that generate very significant revenue. Um we all know this but the main difference has been recently that there are some protocols that will acrue that value to the token and there are some protocols that will not acrue that value to the token. So, lighter could do as lighter could be a fantastic protocol with amazing

low fees, great low latency, you know, buy whatever you want on chain, fantastic. Um, they need to figure out the token end and how it's going to prove value. And I think that's where the VC stuff gets tricky because I mean it's just like it's a completely different way of structuring things. Um, I don't have enough experience with it. I um I would be curious to see how they're going to do it. The market expects I would say a certain amount in buybacks or like direct value approval to tokens at this point. I mean, we've been talking about this for months now, but it's just the reality. I don't know if they have to do 100%.

Um I don't if you're using the other money to invest in the product, that's fine. Um, but I do think that there needs to be some form of like, okay, we're generating X amount of fees and then we're going to use like 50% of it, 70% of it, 80% of it to to buy back the token or return or some other way. You know what I mean? Um, the other thing is um I had one more thing I wanted to say. It slipped my mind. But yeah, do you know what? like they need to somehow show that the token is going to be worth something or else you just another like 21 protocol.

Yeah, I agree with that. I do I personally I'm hopeful that actually the ownership coin model becomes more of a standard than we just ship all the money we make into the coin because I just think that that is like maybe fun in the short term and especially when the market's going up because it's an additional slam bid into the coin but um like if you are thinking long term about the success of a platform it it just feels like kind of a waste.

Uh, so I'm hoping we can get away from that and we can get more into like, you know, maybe it's token holder rights or, you know, the equity and the token get combined into an entity and you take away the question marks. But, um, you know, we'll we'll see. Metadial has some traction there, but there's not like some of these large projects, it's still, I would say, quite limited in terms of that that approach being taken. So, >> yeah, the the issue of like Metadau is for example like Monad will never get on it. Right. Like does it like lighter won't ever be a metadal launch or bonad will never be a metadal? Do does that >> Yeah.

>> Like the larger ones that you're like okay like I want to see some form of like some form of um ownership and it it just doesn't work out. And and the other issue is I feel like it's more of a regulation thing as opposed to a as opposed to a onchain smart contract thing. It definitely like metad is great because it fixes it for this like 10 to 15% of protocols like mid not mid tier. I think these protocols can do very very well but like purely based on the amount of money that they raise. I guess they're like mid to lower tier.

And it works really well for these protocols because you simplify the entire process. Um, investors know what they're getting. Um, the team has clear goals and KPIs. Fantastic. Metadow benefits. Fantastic. But it doesn't work for everybody and it can't work for everybody. And at that point, I think some form of unfortunately regulation has to get involved and say tokens are actually um like if you hold a token that entitles you to ownership of the protocol if it dissolves because that's the entire basis of stocks, right? Like [snorts] if you're a equity holder at some point

after they pay back preferred equity debt whatever you get the remaining of the money and that's what like you're it doesn't represent anything and it won't represent anything for the vast majority of protocols apart from a very niche group that say we want our token to be ownership tokens and they're also self- selecting like good teams who would have probably already had some form of value acro mechanism who were going to work towards a good goal end up picking themselves and putting themselves into this basket of like Metad saying we're going to do ownership tokens. They're not the ones that I'm worried about though. Like the ones that I'm worried about are the very large protocols who have very convoluted equity token structures because they've

raised five times and they've some of them have raised $450 million. Um and then also like the shittier protocols where I'm like I don't know if I get like any legal rights if I buy these guys tokens. They're lying at they're lying and I'm cooked, you know. >> Yeah. Yeah. I think more and more though the market is forcing outcomes here, especially in a down in a down market. It's like when you get those clearly poor poorly designed structures there where all the value goes to maybe the equity and the token is a memecoin.

then you know maybe maybe you know maybe the gamblers like kind of speculate on it for a few days and it pumps here and there and people try to play the quick kind of rotation game but um I don't know we just we see again and again that all of those just they just trend to zero because people are not willing to uh to just like hold a meme coin that means nothing in relation to a a business or protocol. So I agree with you like you know we probably like ideally you need to have some like base level regulations that maybe force some of this to extent but otherwise we're kind of left with you know you have to kind of select for the good teams and deselect uh all the teams that aren't willing to

to make those choices. >> Um another thing about lighter that's kind of weird. Sorry, I just remembered what I was going to bring up before. Um, they don't share any of their revenue and they're saying, "We're going to share revenue when the time is right, but and they're like, "Oh, like we're just like trying to figure out how to show the revenue." I'm like, "It's quite simple, buddy. You just show how much money you make by day and then sometimes by week and then sometimes by month and then by quarter and then that's it." but they don't know how to show that. Which is another reason why I'm kind of like I don't know what they're doing in the back end. It's a weird thing to do, right? Like if you're a DEX and you're

making money, and I'm pretty sure they're making money like based on the amount of trades that people are taking on this platform, if they're doing like a payment for order flow model, which I think they are, even though ZK Mike just got upset at me and said they're not doing pee off, which I'm pretty sure they are anyway. um they are doing pee off. They're making a lot of money and they're like they've publicly said we need to make sure that we are representing the numbers the way we want to represent them which to me seems >> um >> I don't know how it would work. Yeah, I guess I don't have enough context there, but I guess what what I would say is like if for example, I'm going to assume that they have maybe like a profit

sharing agreement with market makers um that operate on the exchange or something along those lines, then maybe maybe getting the revenue statements is not quite as simple as just like looking at an address on chain and then like saying, "Hey, here's the revenue for the day." Because maybe it it potentially is maybe not routed that in that way. But in terms of like how they want to present it, I guess, and maybe this is leaning a little too stock based or equity based, but it is fairly common to like I don't know take some time thinking about like what are the metrics you present as a public company to say that like you know it's not quite as simple as just like here's

our revenue. Usually it's like you break out other metrics like if you're Tesla it's like how many cars did we deliver and what's our margin per car and like if we're doing robo taxis like how much are people paying per ride and how many rides we did. So in this case maybe it's more involved and it's like you know maybe they have some revenue share agreement with with different parties and they want to maybe break that out in certain ways but uh I don't know maybe some of that can't be shared. I don't know. I'm taking a maybe a generous a generous interpretation here, but >> the nicest I've seen you be to a protocol. So, I think you may have more than 10 points in your life.

>> What's that? >> This is the nicest I've seen you be to a protocol. So, I think maybe you have more than 10 points in your live. >> Uh I have 10 I might have 11 points as of this week, but uh no, I don't I don't have very many points. Um I'm I'm just interested in the I don't know. It's like the kind of the one hot area of competition right now that's like that's like pretty interesting. I feel like in other areas, you know, Metadau is kind of like the only game in town in in like this new form of like launches and things, but at least in the per space, like there's there's some back and forth going. You know, we had I was, you know, I was tuned into the memecoin launchpad wars earlier in the year, but that's, you know, that's down

in the dumps. So, I have to have something to >> get interested in it. But, we have no details on the token. Like, I don't I'm not going to speculate and say the token is bad before there's any details, but when they're when they're dropped, like we can shut all over it if it's bad, you know, >> or we'll be like very into it. Um, I will say there are other places where I think a lot of action is happening. I just think we probably aren't as interested as other people are. Like Daniel Smith got oneshotted by prof. [clears throat] >> That's true. And it's like I guess now there is a way for you to invest in it which is through wet and I don't know how much context you have but from what I saw it seems like they already kind of they messed it up once and I think now

they did something weird the second time around where they announced that they were going to do it at some point and then changed it to earlier. Um but I think that's it. like it's those it's still trading based and propm are like I think I would say objectively quite interesting. It's just it's like kind of being super interested in me back in 21 and it's like well you can't really make any money on it unless you're like spending a lot of time actually building out stuff. So >> yeah, I I think that's a valid point. Sometimes in even the places where the competition is happening, you know, there may not always be publicly investable things in those activities.

And like I would that's probably how I would place Prop Amms today. Like even even in a wet token scenario, like I don't as it stands today, I don't think that that token means anything in regards to the success of humidify. We'll see. Maybe they change it, but as it stands right now, it doesn't it doesn't seem too likely. Um, but yeah, I don't know. I I think there's plenty of there's probably plenty of areas that are interesting, but uh without tokens. So, at least, you know, letters going to TG. There's a bunch bunch of teams competing here. Obviously, hyperlid has kind of been the story for the past year and they've had a token out. So, this is at least like a sector that's very interesting from that perspective. Lend lending may be the other area. Um, and we've seen kind of

some some drama there. But I guess uh from my POV like lending at its core like is not like a super exciting hot thing that from day to day um changes very rapidly. It's it's a bit more of a slowmoving giant. I would say >> maybe we're just kind of lost because the people into lending are also super into lending. They're like, "Oh yeah, >> modular pools, man. They're crazy." And they're also super into Pendle all the time. I'm thinking of Carlos who's probably having the time of his life because there's like all the stuff happening in lending but also all the stuff happening propms and he's like yeah this is fantastic versus like I don't know there's not that much

particularly interesting things happening for me. I am happy that we are consolidating a bit into these per sexes. Like I think two months ago you saw Taiiki himself shill five different ones to farm and then now it's like they these other ones still exist and I imagine that they do okay but for the time being I can comfortably in my mind say over the next three months in terms of per taxes you probably don't need to worry about the ones that haven't included some form of equity per trading or like not named hyperlquer lighter like you can just be purely focused on these two and see how they go. Um, which is a good place to be in, right? Like as

an industry, if if each category somewhat consolidate themselves with lending you a morph for a I would say those are the big two and then there's the other ones trying to get in. Is your dog bothering you? >> No, she just came for some pets. >> Um, yeah. I I mean I think you make some good points. We we tend to see this though. There's like a lot of excitement around something and then 10 10 competitors get launched on very maybe small difference or nuanced views about what the product should be or what it should include and then maybe one of those survives and becomes a meaningful competitor. But I think that's that's kind of generally the way that the

markets sort of go. I mean you're seeing that in AI broadly, right? like there's like 9 trillion AI startups and obviously 8.9999 trillion of those are going to go to zero and then there's going to be a few that that do really well. So um kind of a it's kind of like the natural like cyclical process that happens with with startups and businesses uh and investing. Uh before we chat about anything else though, I do want to do a quick shout out to our sponsors for today's stream. Uh starting with Katana. Katana is an L2 built for DeFi and is pioneering the ecosystem category of productive TVL.

Believing that change should be graded on how efficiently assets are put to work in DeFi rather than just total value locked. From now until the end of November, users that bridge the Katana can earn boosted yield from CAT incentive campaigns, added vault bridge yield, and other chain revenue. Follow the link in today's show notes to get started. As well as Uniswap. Thanks to Uniswap for sponsoring today's stream. The unis swap trading API solves the problem of adding crypto to your products without the hassle of needing deep crypto expertise, ongoing maintenance, or liquidity aggregation. The trading API provides access to the unis swap protocol, which has processed 3.3 trillion in all-time volume, handled over 465 million swaps for more than 25 million addresses, all with zero security breaches. Developed by Uniswap Labs, the US-based team behind one of the most used DeFi apps, access some of

the deepest liquidity in crypto, combining both onchain and off-chain sources for optimal pricing. The same liquidity that powers billions and swaps now available via a singular API. Thanks so much to our sponsors. >> Thank you, Uniswap. Thank you, Katana. >> I um should we talk about the unis swap thing now that we've mentioned? >> Yeah. You want to talk about uni? I guess that's maybe another place >> um where kind of like when I was mentioning like sales and ICOs and these things being kind of a a core I don't know, focus of the market right now. UniS swap has their uh their CCA continuous clearing auctions system and they just did I think their first one.

Yeah, their first one with Aztec I believe. Yes. Let me pull up. Hayden had a tweet about it just sharing some details saying 59 million in bids, no sniping, bundling, timing games, just slow fair price discovery ending 59% above the floor. [snorts] Uh even if you bid 10 billion FTB on the first day, you would not have overpaid and instead executed at a DCA price between the floor and the clearing price. U large portion of the auction proceeds will see the pool and be the largest secondary market liquidity source. Um, I guess this system it makes sense to me

in a few different ways. Like I guess I guess this is kind of like the reckoning of of different games that we have in crypto. Like I think while we we understand I think generally that like some of these other sale mechanisms like the first come first serve or like pricing a sale like maybe way be below what the expected like valuation of the thing is will be in public are I think typically done on purpose because then it it pumps the price or it lets certain individuals kind of play a game there and >> um capture some some return from that

activity. Uh in this case like this this auction mechanism makes a lot of sense to like basically let anyone get kind of like what is expected to be the fair price and then seed seed in a starting pool. Um, I don't have a strong take here other than the fact that like I just don't think that this Aztec token is um particularly exciting. Uh, and maybe opens up the problem of like you have to get immediately into the conversation about like are the tokens worth anything? Um, and do they like is the token a memecoin in relation to the protocol or does it have value? Um, so so like the sale mechanism can be quite good. Um, but if the token is not good, then uh you still have a a problem to

solve. Though that's not necessarily unis swap's problem. >> It's not. But if you're unis swap, you want to make sure that the first token that launches through you goes up. [snorts] >> So that >> or at least isn't, you know, you don't want them to be a scam, which not that I'm not saying Aztec is a scam. I don't I don't think that the team is, but No, I also >> I don't think that it is a scam. I'm just like Espresso is not a scam, for example.

But Espresso has pivoted four or five times. Astria isn't a scam, but they've pivoted four or five times. These are like teams working on interesting problems that the market doesn't necessarily value sometimes. Um, >> yeah. >> And what ends up happening is they don't go up. And if Aztec doesn't go up, it's not a great advertisement for the unis swap. PGA. PGA. CGA. >> CCA.

>> CCA. Jesus. PGA is a golf sword. >> PGA. Um [snorts] um so that's one big but on the other hand I really like that a lot of these teams are now launching um forms of issuing assets on chain. It makes a lot of sense if you're a DEX because you end up controlling the entire funnel from launch to trading. Although I'm not sure if unis swap would have had a problem with that anyway. Like for metad it makes a lot of sense. Um because AMMs make a lot of money and I think that's why I'm met valid Drum makes a lot of sense because I think most of the time um Aerodrome sorry tokens end up launching putting the

liquidity onto unis swap and if they launch through a drrome and the liquidity lives on Aerodrome it's a fantastic way to do it um because the protocol takes all of the fees I don't know if unis swap needed to do that and I'm a bit surprised that Aztec is the first choice but it does like conceptually makes sense like unis swap is kind of an old guard token asex kind of an old guard token um makes sense that they would work together. Uh, I do think that it would have been probably better from unis swaps then to go with something that was valued at a lower price probably and something that might be more interesting to regular users in everyone. Although I don't know enough about and we did just have a privacy like a big privacy thing

like a month ago. So I don't know maybe I'm completely wrong and AIC ends up doing really really well. I eat my words. >> Yeah. And maybe maybe something that we still need to work through is this I mean you mentioned a bunch of names not not not just Aztec but like I don't know projects that raised post2021 at high valuations and now they're launching in a very I would say relatively different market. It's like you're not you're not going to launch some L2 at 10 billion FTV. Um, and so prior raise rounds are like quite high relative to maybe what you'd expect this thing to trade at on the public market.

And obviously also like launching maybe like a fresh network today with nothing on it. Um, I don't know. I I think they just have they have a lot of headwinds that they're working against, but um, you know, the sale mechanism is good. So, if Aztec is going to be successful, like at least at least it it's not being like overinflated by a poor sale mechanism to start things off um and it can trade kind of like where the market expects it to for now. >> Yeah, this is >> so that does help.

>> Yeah, it does help. This is I the market is also at a better stage than in like post 2021. Um, it's just that these [snorts] types of projects just aren't valued the same way. I I saw somebody wrote something about how like retail is getting smarter, but not in the sense of like they're not falling for um >> I feel like it depends. It depends on what you mean by smarter because I I think there'll always be two games in the sense that like there's always the one game around a launch and it's like that's the hot asset and if you can predict up or down you make a lot you can make a lot of money in the first one or two days and maybe you can't really

predict that and it's just kind of like you're just gambling every single new launch but either way there's always a lot of volatility around those events in in many cases. Um maybe the CCA mechanism kind of eliminates that to some part and you can kind of save retail from themselves in some senses. Um but then we need to fix the then then you need to work on the the longer term game which is around kind of the token value acral stuff that we were talking about. But yeah, I think those are those are definitely like differentiated and I think a lot of a lot of people trip over themselves because they think they're playing one game when they're actually playing the other. Um and uh and then things don't work out.

Yeah it's I don't know. It is. I read a few people talk about I mean every every like time there's a bare market people say this, right? It's like you should start increasingly focusing on like this is a good thing and a bad thing because crypto is as it becomes more and more normalized um volatility goes down and when volatility goes down the the ability to make increased returns goes down as well. Um, so you want to f and like as it becomes part of this broader asset class which includes macro assets and stocks and whatever um you want to start getting more and more focused on

all assets. So I guess like to your point there's two games you play but now we're also bringing in a third much larger game which is just general investment. Um also just like I I've been corrected and you've also been corrected. Um uh Rob um Robin Lighter does not have pee off um high frequency traders and algo traders pay for um lower latency right now. I imagine they'll either go into a BOP model in the future or >> that's where all their revenue comes from is a fee for >> which which makes you think how much money these guys these like high

frequency trading firms must be making off retail flow such that they'll pay so much money for it for I mean like latency really really matters right but like figures I saw on DeFi Lama is was 185 mil annualized which is quite a bit of money being paid Eight lighter. >> It's not bad. >> It's good. >> It's though he corrected me. >> So actually in a roundabout way, it's the same thing though, right?

>> Yeah. >> You let the sophisticated entities pay you a fee to trade faster. Some of them inevitably are market making. Retail trades for free, but they're, you know, getting quoted spreads from the market makers. And then you're getting, you're not getting maybe a direct profit share, but you're getting a fee by charging them to use that service. So it's >> in a roundabout way it's the exact same thing. It's just >> the same model but >> different design. Yeah, >> different design. It is a cool thing I guess. >> Okay, that makes sense to me though. I mean I I figured it was something along those lines. So I guess it makes sense to still like it still sort of falls into that that same thought process.

>> Yeah. Yeah. Lighter is cool. I will say one thing. I watched a few of the interviews and I think uh I think they should be doing more and more interviews. more interviews. >> Yeah, more and more interviews. One thing that was my thought, my simple thought. I like it when founders go on and talk about their thoughts. Um >> yeah, I agree with that. I think it's becoming more of a trend as well. Like I don't know. I feel like I don't know this idea of founder marketing and you just see some of the more I mean maybe they tend to be like more retail names but uh maybe and maybe that plays into it but you know you see people like Alex Karp of Palunteer.

>> Yeah. >> It's one of the classic stock and same with Elon and Tesla. They're like some of the classic stocks where people say what they're way overvalued and it's like maybe that's part of it is they kind of they build up a stronger following by just being more open to the public about >> their plans however crazy they are. Even in crypto, we have a few very like founder marketing. I would say um Aerodrome does this quite well. Alex Cutler is really good at this. Um very vocal, sometimes a little angry, but overall like a very sharp guy who can >> feel like Ethan Salana are pretty good examples of this. Maybe for different

reasons, but like I don't know, historically Vitalik has been kind of like a cornerstone. Although he's he's been a bit odd in his things. >> Yeah, he's he's it's maybe changed, but I like for the longest time it was very much like he very much drove all of the discussion around Ethereum. I I think you see that changing a little bit with with Salana, but I don't know, you know, totally talks about all these things and he retweets projects >> less as well now. I I don't I mean I guess like I'm going to be wrong over the next few days because they're just having break point now but feels like he's quieted down over the past six months versus like I'm seeing more and more non totally people speak. Same with Raj. He was also like very very vocal. I think it's just the signs of like

developing [snorts] product though like the larger your product gets the more people you bring on and the voices become more and more dispersed. Like I feel like Justin Drake's a lot more of a talking head now. Dan Cred was historically very quiet. Um yeah, I has Vivu now. He's very very vocal. Matt obviously they've always had >> very vocal. So they have all of the the investors as well like Kyle Somati is one man machine who was like just bet you $100 million anytime you talk badly about he's like James but a lot richer. [laughter]

>> Yeah. It's like massive size check James that's tough. Um I feel like the Salana strategy is very interesting too. like they they very intentionally like sometimes rage bait, sometimes it but it's like very like engagement focused like sometimes they know they're making something that's rage bait and they do it on they're doing it on purpose because they want to elicit the response. >> Yeah, they're quite good at it. I >> Makes sense. It's a marketing. I would say that they like they have some like cringe marketing but even their cringe marketing they play into it such that >> doesn't become I think it's a lot better of uh of a strategy than like other what others have taken what other chains have

historically taken. I will say one thing, I've been thinking about this quite a bit and if Hyperliquid starts doing not well, I think the comm's thing will start biting them in the ass because they they do very little coms. Like Jeff does a pod every two months, you know, and he does it really well. He's very like polished. He speaks very clearly, but that's it. That's all of the like >> pretty famous example of like lack of founder marketing, I guess, is what I would say. They're the complete opposite where there's very little coming. It's >> I do think I think the market wants more of it. Like they they certainly probably need a more vocal public spokesperson about the project.

>> Yeah. And what they're doing. >> There's a few people that have taken that slot if you think about it. Like Max Fiji is very vocal and he is probably like I don't think he's handpicked. I don't think he's approved by the team. I don't think he's approved by the majority of the community, but he is like objectively pretty smart. So, he does a good job. Um, and also like other bag holders as well, right? Like me, I'm on the pod once a week. Just [ __ ] speak by [laughter] >> in crypto. There's certainly the community the community market can become it can become pretty like I don't know. I feel like XRP and Ripple are the

classic >> strong example of that where you just >> for whatever reason every every other boomer has like you know 50K and in Ripple and they're like it's my retirement account and I'll >> I'm going to live on XRP for the rest of my life. it's going to 10,000. Um, and otherwise you don't really hear from like I don't know Garlinghouse talking on CNN every day or anything like that. >> I do see him quite a bit, but unlike scam YouTube videos, it's not it's not him. It's like some AI thing. It's like Ripple's doing its fourth airdrop. Make sure to click this link. Um, >> you could maybe argue there's a

transition point where you get enough enough of a strong community that they can kind of take on the messaging, but in some in some cases that bites you in the in the butt, right? >> Yeah. You don't want the bad people to become your spokespeople. >> Well, and and then like when things if things are going poorly or against you, like I don't I think you've seen the ups and downs within like the ETH community and culture and it's like oh everything's great like ETH's going to take over the world and then like 2022 23 it's like oh man I don't know I don't know maybe we chose the wrong model or something um they don't have like very you know community doesn't have clear like vision and direction so I don't know I think there's always a point for kind of like a a clear central voice to

uh say like yeah we have a clear there's a clear vision and product road map and where things are going. >> Yeah. >> For ETH, like you know, maybe Vitalik was not always so talkative, but he did, you know, at least provide some of that consistent like this is where we're going. This is how the road map's evolving XYZ. >> Yeah. And the dog's also not media trained or anything at all. He just goes up. >> He's a funny guy. >> Yeah. He's just a funny guy. It's very um I will say he is like very clear in the way he speaks for somebody who is clearly like three standard deviations out of my IQ. Um so [snorts]

>> all right >> I need to one more time give a shout out to our sponsor of today's stream Katana. Uh Katana is an L2 built for DeFi and is pioneering the ecosystem category of productive TVL. In just two months, Katana has surpassed 500 million in TVL with over 90% of that being productive in ecosystem apps like Sushi and Moro. From now until the end of it is already past the end of November, but users that bridge to Katana can earn boosted yield from cat incentive campaigns at vault bridge yield and other chain revenue. Follow the link in today's show notes to get started. I need to find out [snorts] if um that boosted ongoing.

>> Sorry, what? need to find out if Katana has has continued that boosted yield or if it's uh if that's changed in the month of December now. [snorts] >> Very good. I think we should fire our producer. That's rule number like that's >> we should fire our producer. He uh >> doing He needs to be doing a lot more actually. You know, >> he should be doing a lot more. >> Uh I do wanted to I wanted to pull up this tweet maybe to for something funny to kind of talk about close things out. We we were talking uh I don't know if we if we talked about it on this pod, but like I don't know. There's been a lot of excitement about prediction markets and there's been some good memes going around. I don't know. I think we've talked a little bit. I talked about it

on on Lightseed with Ryan Connor and some of the other guys and maybe we talked about it with uh with James and Noah last week here. >> You have [ __ ] Ryan Conor on Lightseed. [laughter] >> That's [ __ ] up. >> Yeah, man. What do you think? [snorts] He loves Salana. Um, >> go, >> but some of the conversation right now is that like the speak about prediction markets is maybe a little overheated. And I thought this tweet was hilarious. Um, or this copy pasta that's been going around is so funny that like prediction markets will replace buying stuff. I want someone to bring kiwis to my house.

I make a prediction about whether someone will deliver four kiwis and load 15 into no. A guy with an ebike sees it and picks up some kiwis before dropping them off. He bets yes. He drops them off and he gets the market resolves to yes, and he gets 15 bucks. Rest in peace, Amazon, Door Dash, Uber Eats, etc. Um, so of course this I've seen a bunch of versions of this copy pasta like for just everything like replace every type of company with a prediction market and then you have a guy that that bets yes and a guy that bets no and it replaces everything about the service.

[sighs] >> I will say my favorite one is still the one that what's that guy's name from the Tulip King. The Tulip King one. >> [laughter] >> I think Ryan Connor messaged me after he thought I was like >> about being elected to uh to political office. >> Um yeah I I don't know how relevant prediction markets will be apart from gambling. I um don't really the one is like oh you can see what like I think the funniest one was when you saw people were doing like rates based on prediction markets and it's like well there's like it's the most [ __ ] liquid market in the world but you can just just look at the actual market. Um I don't know. We'll see. Like

it is objectively pretty good though that I can check out that the market generally thinks Kevin has it is going to win by 78% chance. That's a good thing. Um I don't know if it will solve. >> I think it's largely going to be the same promise that crypto had which was the universal equalizer. We found out unfortunately in at a certain point turns into pure gambling and then probably gets fixed up after that with tokenization and everything going forward. But for the I would say probably prediction markets will be disappointing for the next three to four years. Yeah, it's actually funny that like I don't know that I feel like the

basis of the of building out prediction markets has always been this like idea of more information like like you mentioned like you could know with more certainty than like doing a poll about who will be the next Fed chair for example. Um, but then what ends up happening is all the trading is on sports gambling and then and then you and [snorts] what's that that one thesis that's like the newest thing always ends starts out looking like a toy but but in crypto we say the newest thing always starts out looking like a casino. Um, it's a question mark as to whether that's true or if it just is inevitably always going to be a casino.

>> I do think that there's a way that it can become a super digestible way of showing um percentages like probabilities that certain things happen or not. Um but I don't know how necessary it is to have uh massive valuations on these things. Like I do think it's the only right like I mean they're very cool but I don't know how much money they make and I don't know about like how much money they'll continue to make going forward.

um it makes a lot more sense if they're just like trading infrastructure which is very valuable but not probably not as valuable as everybody else thinks it is where it's like oh it's going to like the joke the the guy you showed right now I don't know his name but like Aaron J Mars I think that's like clearly a joke right but there are people who are like like that's that like very clearly a joke at level like nine but there are people who believe at like a level seven or a level six of that intensity and they're like Oh, this is definitely going to happen probably like it'll be a very I would think that it would become very boring tech where it's like purely trading infrastructure on the back end and you and I if we're interested in a

market we can bet on it. Um, but the vast majority of its use case is probably purely showing like data for like elections data, product level data, um, I don't know, macro data, etc., etc. But like, and that's just off of betting and currently there's not enough volume to decide whether something is going to be like true or not based on the amount of traders there is, but it's mostly just insider trading showing it. So, it still works like the the product still works purely because of incentive trading. And I think eventually it'll start working because you have um they I I imagine they're going to start consolidating

markets and offering like better ways of because right now the markets are really messy, right? >> Will Danny leave Xerx Research by October? Will Danny leave Xerox Research by November? Will Danny leave Xerox Research by December? >> Yeah. >> And you can only vote yes or no. Um I I think they're going to have to consolidate those and then put it in a prettier format. No. To me, this makes the most sense. Like they consolidate markets and it's a purely backend thing and the front end that regular people see I don't believe in this financialization of everything. I think the front end that regular people see

will just purely be like a news platform that is that feed um that feeds into various search engines, news channels, newspapers, whatnot. And it's like purely a data API that people show. I don't think anything else makes sense. It's like the market is like >> nobody like the vast majority of people aren't involved within the market at a reasonable level but they always pull those data points. It's like SP 500 rose 0.8% this morning and like that goes do you know what I'm trying to say? It's very convoluted way of describing this like very simple thing but this to me makes the most sense.

>> Yeah. It's almost like um I don't know like if you think about the weather for example, the thought I'm having here is like does predicting the weather or like being a weatherman like does that make money today? Like how do you make revenue? I think in most cases it's like you're on a a local news channel and then the news network is like paying to hire a weatherman and they're doing that because certain people watch their broadcasts. But like I guess hypothetically in this future where like a news network can't make enough money just by like sponsor deals.

Maybe they then need to financialize the weather and then the the weather guy actually has to be like a cracked statistician and market you know market maker on the uh weather prediction [snorts] and [laughter] he has to run a profitable venture. I'd say that's I don't know that that's like necessarily a good outcome but um you know >> Yeah. a weird scenario here where it's just like I don't know it just it just kind of points to like it's like a monetization avenue from from kind of where I'm sitting and and maybe some you know we're I think we're seeing news kind of lean into it because I mean they'll take whatever they can get if they can get their the news people you know people that tune in to also gamble on some markets maybe that's good for them but uh it it probably doesn't

really like make sense as an end state for for everything like you're saying. >> Yeah. Also, so far we've only seen that these things end up in good like these things are better than existing forms. So like the big one was Nate Silver was predicted Camala was going to win and then Poly Market predicted Trump was going to win and then Trump won and everyone was like well the establishment forecasters or that prediction markets rule the world. um what happens when these things actually can and like there's this idea that if there's enough money involved and if there's enough people involved the market will show the right outcome but I don't know if that's

true I don't know if wisdom of the crowds is something that exists and I don't know if wisdom of capital is also something that exists like thus far it's been proven but thus far it was proven when prediction markets were relatively niche like prediction markets I think gain more I I don't think the data shows this but I would say that more mind share post election like pre-election or like during the election it there was a lot of money involved there was a lot of trading volume involved but I would imagine that it's like very smart it's called super forecasters and like lingo but like just very smart people who realize that there's this new venue for making a lot of money by being right they get involved in this and they're

right but I don't know if that translates to when the global market gets involved because the global market is wrong all the [ __ ] time. Like people with vast amounts of money are wrong constantly. So if like in a year more and more people get involved, more and more capital gets involved. But the capital that's getting involved aren't people who like are super interested in new forms of predicting and new forms of markets, but just like regular people who are like, "Oh, I think Kamal is going to win." Um James is getting upset at me and your experience. I don't even know. It's It's been 40 minutes since I said that.

>> Yeah. Maybe one thing I'll add because I think what you're saying makes a lot of sense is like just So here's the thing is like just because the prediction market is cor like correct in the sense that like maybe it favored Trump to win the 24 election and then he went on to win. It doesn't mean that the opposite couldn't have happened. Like if the market priced Camala at winning at 30% and then she won, it's not that it doesn't also necessarily mean that the market was wrong. It just means that like a lower probability outcome occurred and that that's possible. Like the market could still, you know, it could price something at 5% and it can happen. That's just that's what was the expected outcome and it just happened to

be that time it worked. It's, you know, flipping a coin is like 5050 heads tails, but you know, you might get heads 60 times in a row. It's just something that can happen. So, I agree with your point that like I don't know, it definitely was a very strong marketing campaign for the product and they really and it like really got pushed within media of like all the forecasters and the news the news channels were just were wrong and the prediction markets were like so right and this is the future of everything. But like it it could have been the inverse result and I I don't think that would have fundamentally changed anything about like how these platforms work or how even forecasters work. Like maybe the forecasters were wrong by some degree because they weren't taking new

information in this election versus the priors but >> it you know you don't you don't immediately invalidate all of their work just because they you're you're predicting probabilities. So like by nature you're not going to be right every time. That's how it works. >> It only makes sense. One last thing I'll say and then we can end this is they also came up in a very contentious election where um mass like publications and news channels etc were very much I would say on one side of the election versus on the other side of the election. And then I think that also fueled prediction markets quite a bit. Um, and I mean I

don't know if it's like a prediction markets issue at that point or if it's like a how is our news and television and broadcasted and like what standards do we need to hold these people on to? >> Yeah. there. I mean, I think there's and this is outside of crypto, but there's kind of like a centralization thing that happens there where, you know, there's a few businesses or like core groups that own a lot of media outlets and so, you know, maybe some of them are biased in one way or the other. I think we people generally know this like, you know, you know that Fox News has a lean, you know, that CNN and XYZ other platform has a lean in one direction or the other. And there's like, you know, you can go to

there's like newer news platforms online that you can find that it's like see the bias in this article, see who wrote it, see who funded it, that that type of thing and you can get all that information. But um >> even that is like I don't know. I found that >> I don't think that the like you [snorts] know the average guy that's watching Fox or reading the New York Times like I don't they don't really care is kind of the the result. >> Yeah. The issue is that the only form of mass media that is unbiased is probably like purely financial news, right? Like Financial Times, etc. Well, it still has a bias, but it's a lot less biased than other stuff because it's like purely related to the markets and like you can be on one side or the other

side and you're mostly leaning towards making some form of bet in the market. This is irrelevant to this conversation, but this is like something I've been thinking about and like how you want to adjust the way that you consume news. Um, and I don't know if the solution is like to have an API hooked up to your computer that just prints out prediction markets and stock things, but something to think about for everybody. [snorts] >> Yeah, it gets back right back into the financialize everything idea. >> Financialize all your feeds and make them help you trade. >> Yeah. Wait, Zaki asked Baktia thoughts on the HL front and HIPP3 markets are divided by issue which is not intuitive in my opinion but makes sense from side rest side thing. Um other thing is it

doesn't make a lot of sense from right now I think because of the way that it is displayed but historically there are different markets in centralized exchanges per different ticker and I think that's what hyperlink is kind of doing like they fixed that somehow because you can have Tesla USD Tesla USDC um which works a lot better than if there were like two Tesla USDC markets right so it's like because like in Binance if you think about it is like whatever BTC FDUSD BTC USDT BTCUSD markets. Um, so it's not as bad as it should be, but I I mean this is like yeah, this is one of my bull cases for

lighter. They're able to issue everything under USD because they control all markets. We'll see which one ends up being right and which one works. Um, >> for the time being, I I do think that it's a little messy, but not messy enough such that you can trade. I think if as as they start moving things into like the strict place, it'll also be a bit better. >> Are they the big stink about USDH a couple months ago is so interesting to me now. Is Hyperliquid not going to prioritize transitioning markets over to USDH? Like they don't care. Just let them be USDC based.

>> I don't know if it's their priority. No. I I mean USDH is like I don't know. I don't know. I don't I don't think they're going to plan on shifting. It would be such a pain in the ass. The thing is that I think that would be bad for Hyperlid. like you want to keep people people I like Max Fiji and I like US but he knows that USDC has a certain brand and certain Lindy that USCH just doesn't have yet and it it wouldn't make a lot of sense for them to say hey guys like I know we have $5 billion of capital in USC we're going to swap it over to USD in one day I don't even think US would be able to handle it

at this point Maybe um I don't think they'll swap for a while. I don't think they'll swap ever. I don't know if it makes a lot of sense. >> Um but USD has a lot of good stuff going for it. You get like reduced fees to a meaningful extent which I think is >> to the dogs. >> Yeah, they're fighting. >> I'll let you go. And do you beat the dogs or [laughter] >> No. No. They they probably want to go outside and run around. [snorts] [laughter] >> We can end things there after I said be dog.

>> Okay, we can uh we can call it there. I think covered everything we wanted to chat about. Uh all right, thank you guys for tuning in. I'm going to go set up all my pricing feeds from the news so I can uh tap directly into all markets uh without having to think about it um and really financialize my life even further. Yeah, >> I think I think really just like locking in and leaning into the new trends is is the way to go. >> So, >> you should only be thinking about >> how to trade about >> everything that is happening in the world.

>> Your entire life should be financialized to the point that you can't you can't think of anything else. >> Yeah, that's a good idea. You will eat the bugs. Your children will eat the bugs and we're all going to eat the bugs together on Friday when you hear from us next time. Peace out. See you guys.