LIVE: MegaETH, Pump, NYSE | 0xResearch

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Cheap. [music] >> [music] >> Dick [music]

back. [music] >> [music] >> Danny, it was just me, man. I I still don't have my timings right with the new intro. >> What's up, guys? Welcome back to another episode of Xerx Research. Today is an American holiday, but unlike the Americans, Europeans like to work very hard, so we will be still doing the live stream. How you doing, Danny? Yeah, Europeans are known for working super hard compared to the rest of the world. Uh, doing great here.

This is, uh, I'd say a holiday that some fortunate folks in the US get and many other unfortunate folks do not get and have to work anyway. So, >> yeah, I I to be honest, yeah, that's fair. I feel like we don't really have a lot of those holidays. All holidays are just statemandated here, but I guess for you guys, it's not always state. >> Yeah, there's just a difference between fed versus private holiday calendars typically. >> Interesting.

>> Okay. Um, >> anyway, >> just to start us off, I will say one thing to our listeners, crypto's kind of boring these days, guys. I'm I'm gonna be completely honest with everybody. No, >> there isn't a lot going on. Um uh so we're doing our best, but if anybody wants anything specific, if if they have any questions specific, we also appreciate that going forward. You can just join the Zerx Research channel and say, "Hey Boach, can you discuss XY Z?" Or, "Hey Danny, can you guys discuss XY Z next time?" And we'd be more than happy to do it because right now it's mostly just me panicking an hour before given that there isn't anything. Like

historically, it's been like I've had stuff in my mind that I've been reading about or looking into and I'd be like, "Yeah, we have to talk about this." But now it's like kind of a pain. Um I don't know if you feel the same way. I guess like because you do both light speeded and zero. So Zerx I guess not because we kind of split half half but I assume light speeded or is it because you're doing protocol based it's typically just >> um no I feel I feel the same right now in the market just in the sense that I mean it's probably also because we're it's the beginning of a new year um there were a bunch of like announcements in December and you know November December bunch of like announcements like end of year conferences and things like that and it's new year holiday

people getting out of holidays and stuff. So, I think it has been a little bit more quiet, but it'll probably pick up here like getting into mid Q1 as >> teams sort of like get back into the groove. I think that's just a typical kind of business cycle thing, though. >> Yeah, I guess so. I mean, it's also the same thing in August, right? I feel like July August >> end of summer. >> Yeah, >> end of summer as well. All right. Um, I guess like just to start us off, let's talk about this because I I didn't read this. you shared it with me earlier today. So, um, do you want to talk about this a bit? I know you've been a longtime Axiom B, so I'm not surprised that you're talking about Axium, but I'm also like I haven't looked into it.

>> Um, yeah, it was less of an Axium bull post in this case and more of a talking about Pump's acquisition of Padre. So, I guess something I thought was interesting, uh, and we talked about this a lot in terms of Pump, like how they need to find success, because I think one of the one of the the notable problems that they had was that just being sort of like the source, you know, launch launchpad for tokens. Um, and not really like the venue where people trade the coins. uh they ran into that issue when you know like Bonk for you know a month or so took over like all of the kind of token activity um and basically everyone's using you know Axiom they're

using whatever Bonbot they're using you know Trojan Photon all these other trading venues so uh you could see very quickly like all of the liquidity in the trading volume just like rotate to the new coins um and there's not there wasn't really like any dependency on pump itself necessarily so I do think like what this data I'm trying to showcase is that their um pump's acquisition of Padre is pretty meaningful to them as a platform like sort of cementing some of that uh stickiness to like their users like connecting the actual creation of the tokens to the trading of the tokens. So like owning the this like more comprehensive trading platform and competing with those other frontends um is pretty meaningful. That data

doesn't really show the percentage, but I can uh I can pull something up and just show this here. But basically what you can see if I pull yours off the screen is that um Axim has been pretty dominant um for a while. They've been kind of hovering in this like 50 60% market share of trading platform volume. We're maybe missing a few smaller um trading bots and I I got pinged by the FOMO guys actually that they would we need to get FOMO data on here. I think they're probably top five or so uh in terms of trading trading volume. But uh if we look at sorry that was revenue. Let's look at volume.

>> Uh if we look at trading volume here, you can see >> Padre was less than 5% a few months ago back when pre pump acquisition. um and they've grown to now anywhere from 10 to 15% um here in the recent month. So there's been a a kind of steady uh increase for them in terms of trading volume market share which I think is you know probably explained a little bit by just this combination of like pumps branding them being the main token launchpad and just getting their weight behind a competitive trading front end.

Um, I don't know that this is necess like, you know, Axium is a great team. They've been shipping like crazy. Uh, I'm sure they'll continue to do so, but I do think just like for Pump's business, this this is pretty meaningful uh to see that market share and that that volume growth up and to the right for now their their native trading platform. >> Yeah, definitely. I'm I guess I have like two thoughts on this. First of all, [snorts] again, you talked about Padre as a separate pitch back in the day, which I guess is like kind of crazy to think about now that it got acquired by Pump. Um, crazy in the sense that a token holders saw nothing in return from Pump or maybe they got a

pump airdrop. >> They got a they got a pump airdrop after the fact. >> Yeah. Um, and the second thing here is these guys just won't launch tokens. Like Padre had a token. Yeah. But Axiom just still hasn't launched a token. I can't think of one trading bot that has had a token. Banana Gun. >> Just the early ones. Uni bot and Banana Gun. It's been a long time. >> I mean, Trojan, >> Padre. Yeah. Outside of Padre. Padre had a token, but yeah. Of course, they got acquired and then the whole >> But like functionally, it didn't have a token because everybody just ignored the token. it didn't work out and yeah >> so I [snorts] don't know it's like it's one of the most revenue generating things in in crypto and then it just

never had a token kind of like I guess one thought here is if maybe the token is used as a tool by companies that can't generate revenue and then if you are re generating like why should a company go public um if it just makes a [ __ ] ton of money in private unless it like at some point you need it to scale or something. Um, but crypto companies don't need to scale. They just need to make the developers really good money for six months. >> Yeah. I mean, you can you can get into the like pessimistic argument that like the only the only teams that launch tokens are ones that uh don't see a path to revenue and therefore the token is the

opportunity for them to make some money. Uh I do think in in the case of trading bots, it's like been very much the case that like if you're the leading if you're a dominant trading platform, uh yeah, you there's like no need to even bother with the token because you're printing cash handover fist. Um we saw all the past like who is it? Photon, Bullex, uh, GMGN, like you know, pick your favorite ones that dominated like all of 2024 and then in the beginning of 2025, like made hundreds of millions of dollars in revenue, like no, you know, no ideas of launching a token and like sharing revenue or anything like that. I think uh, you know, if you make a really successful private startup and you make

hundreds of millions of dollars, it's like and maybe your prospects of like continuing that year-over-year are not very high. That might be the sort of the the disincentive there, right? It's like this is a very like competitive and pretty cyclical and like prone for disruption market such that like I don't know if you want to make nine figures then launch tokens say you're going to share all the revenue and then like lose market share for the next you know >> in for for infinity after that like it's just sort of like >> they agreeing to give all give up all the money you made. So, um, >> yeah, >> I don't know. Maybe that's sort of the we'll have to see whether we kind of get past that. That said, I would say like

as well compared to like a traditional, you know, web two equity startup. Um, you know, these all these teams are like super early stage relatively speaking. like Axiom is less than a year old or you know tech I guess technically they've been building for maybe a few years but the product in its current form is is only been out for less than a year um maybe just maybe just around a year now >> so even though they've got a ton of revenue it's like still very early stage in terms of like the company life cycle >> yeah I guess that makes sense the main thing there is for example pump launched and then like they launched the token they did

the ICO before they launched and then when they went live they there was like a few days there was there were a few days there where they they bought back using pre-revenue as like I think they shipped 11 weeks of revenue over a day or so >> that's just yeah it is difficult because you launch the token obviously people stop using your platform as much although with pump that hasn't really been the case based on their fees and revenues dashboard um But you lose that and then you're almost some people get really upset and they're like, "Oh, you're like using all of the past revenue." Like you're keeping all of the past revenue. So they expect you to put that into the into the chart, which

doesn't always make a lot of sense because it's just cash that you could use for like more um I guess reasonable use cases. Like you could I don't know. I mean I mean PubM's been doing a pretty good job to be fair. I didn't love the K scan accusation. I still don't know why the hell they did that and I don't really get it. Um maybe I just like I'm so out of the loop that I just don't know and I just don't get it. Padre is I think it makes sense and clearly it's been like at least semi working out because then now they're at 15%. I don't know how the routing system works there to be honest with you. I don't know how Padre is generating the revenue. Um but I mean I think I had doubts at how much money Pump was making throughout this

like memecoin bear cycle. Um, but I think post like the moment that anything picks up a bit of steam, the fact that the pump revenues immediately go up. Um, and like all the tokens that I'm being shared in the group chats again is pump to me makes it seem like they still have this I don't know if I could call it pricing power and I don't know if I could call it like anything but like semi-sticky nature like it is still the most dominant way to launch token. Um, >> yeah, Lighters had the same thing. They launched their token and then they bought back like they're buying back, >> at least from what I understand on the

DeFi Llama dashboard, it shows like the revenue was 70K for the day, but they bought back 170K. I assume the other 100K comes from a different time. Although they're doing it discretionary, so that might be different. But um >> yeah, it's cool to see that Padre is working out. Do you still use trading terminals when you're going to buy something? >> No, I don't. >> I feel like I just use Jupiter now to buy something. >> Yeah, I've just been a a Jupiter guy for a long time. Think they have a good product. I don't [snorts] I don't know.

>> There's not really much else to say there. >> And there isn't that much to buy. I feel like the Telegram bot was when you really had to buy a lot. >> Yeah, I think that really like it that that niche like targets a very particular type of user who is like spending all day staring at deck screener or whatever page, you know, tracking new launches and and constantly buying and selling out of them. But if you're not doing that, then I I find the the product is like not really necessary to use if you're just like trying to buy and hold some coins.

>> Yeah, it's a I think it's a completely different part of crypto for me to the point that I don't really know. >> Talking about maybe something a bit more relevant to us, unless you had anything else you wanted to mention. >> I don't know why I said more relevant to us like it is. I don't know if it is, but [clears throat] we're going to find out. Um, NY New York Stock Exchange launches I'm going to read this out. 247 doesn't launch plans 24/7 blockchain platform for tokenized US stocks.

They don't mention any specific blockchains. They said they're going to use multiple blockchains. This is in my mind bad for certain things. I feel like the main growth avenue for purpose exchanges and sexualized exchanges was now equities. Like clearly HIPP3 is the next No, disagree. >> No, Ian says they'll use Hideera. >> Yeah. Um AK free lighter obviously has its own like stock lo stock list stock token listing process.

um central like we saw Binance start offering equity purpose. I thought this was going to be like the clear way for them to scale their businesses. I think it's great for blockchains depending on what blockchain they pick and we're laughing at the Hideera thing, but I don't know what they'll pick. Like nobody really knows. I assume it won't be Ethereum given that it's relatively slow, but it might be like if they're just they might just want the Eve heads might be right and they might want something trustless and incredibly neutral and that is Ethereum.

>> I don't know how I don't know how you would post any meaningful number of trades to mainet though. They would have I would have to imagine they'd have to use a a rollup or something just for the pure like if any meaningful amount of volume of trading of trades were settled on this onchain environment um like as a subset of sort of the total trading activity that happens today in the markets then like I think you would you'd end up overwhelming Ethereum mainet. >> Yeah. And I mean they this like still needs to become based on what I'm reading it still needs SEC approval.

>> Yeah. >> Um but it is like this has been I remember I think D in New York 2025 this was the big talk of town and I think it makes a lot of sense like this >> there's a lot of discussion here. I know NASDAQ has also announced plans to move to 247 trading at some point. I think the bigger question is like >> yeah obviously the regulatory approvals but then also >> the timeline like I just don't I don't know how quickly that's going to happen even in the best case scenario is this is this three years out is it two years out is it five years out like that's pretty unclear. Um, I will say a lot of

platforms now, like there's 245 trading of a lot of assets. Not not every asset, but quite a few, like at least a lot of the larger assets now. Um, so we've kind of been slowly getting there. >> Yeah. I um >> I guess that's a good question. And you said um you think this is like kind of there's sort of like a bearish lean here on platforms that are angled towards like equity purps and things like that. Do you think that's because they would just like there's a positive angle where maybe they mint these assets like to those platforms?

>> Yeah. Yeah, I think so. I mean like I guess specifically for equity purpose, let's do this like this way. If you could buy Bitcoin on Robin Hood versus Bitcoin on chain, which one would you do? >> On probably on Robin Hood. >> Yeah. [snorts] So, and then like what settlement layer is that using? I assume like the Bitcoin stuff will just be on BTC and E will just be on ETH. >> But on the in terms of like stock tokens, I assume majority of it would be on the big boys. Like let's say if if they're doing batch batches and they're just posting data, which could be the case. No, I'm being serious. Why are you

laughing? I'm being serious. Like that might that literally might be it. Like their whole >> Bitcoin stock. >> Sorry. Keep going. He's disrupting us. >> [ __ ] Ian. No, but I'm just exploring this question. And then like let's say S&P, would you rather buy it on the blockchain or or like would you rather long >> whatever Tesla on the blockchain or on Robin Hood if you know you're going to get the same settlement time. >> Oh, you're going to get the You're assuming you're going to get the same everything >> that's what they're going for. They're going for 247 completely on chain.

>> Yeah. Here's the thing is I think it's like the wrong question in my view like in that I think the way that people operate is like they become a user of a platform and then they just use that platform. So in one sense like cuz you you're saying like would you rather buy it onchain or would you rather buy it on you know say Robin Hood or even like Coinbase or Kraken but that might technically be the same question in a few years right like you can buy stock tokens on Robin Hood if you're in the UK and that's technically onchain.

Yeah, I guess I don't know. My thought here is like these platforms are like we've said applications make a lot of money because they own the consumer in crypto and one of the ways that they're trying to grow that like consumer side is by charging for equity exposure on chain through per mainly because pers make a lot of money and then we're like all of the guys underneath are I guess I'm specifically talking about exchanges lighter hyperlid binance >> coinbase kraken Yeah, that feels like more of a it just feels like more of like a it will D5 platforms get bigger or will C5 platforms get bigger, right? It's like

>> because they're going to adopt all the same products at some point. I do think I mean this is something we talked about last year quite a bit. Like I do think we are in this window where you know take advantage of the reg and grow as much as possible. Like I feel like the goal for any of these platforms should be, you know, you look at the monthly active users on like Robin Hood and Coinbase and they're like millions, like tens of millions. And so I feel like the goal for a DeFi pers exchange with like 50k users should be, okay, how do we get to a million or two million before these other platforms are like legally allowed to just offer the product that we have to their 30 million

customers? >> Yeah. Um, and if they're not completely focused on growth, then like I think they're just going to get trampled. >> Yeah. Well, I I guess what I was trying to say is right now it's very much like applications own the user and therefore they make a lot of money. But >> there's a >> in three four years down the line there's a chance that these trades are being settled on loans that are served through Robin Hood or Interactive Brokers or whatever your poison is. And then like the Dan Smith thesis of 31 billion transactions at 0.008 008 might work out as opposed to what like like cuz my

thesis was always that if you can charge I don't know 14 pips on a trade that's a lot better than an L1 charging not based on volume and based on transaction amounts. >> We'll see. That's I guess that's what I was trying to get at over there. >> It's a fouryear thing. It's not it's definitely it's minimum a two-year thing. It's definitely not like a this year thing. I would say the regulation maybe approves it this year. Maybe. were agreeing though, right? Like you're saying you're worried about an app getting taken over like beaten out by a platform then like the app just needs to evolve into a platform. It needs to go into a platform that's the way to win.

>> Yeah. Yeah. That is the optimistic happy case >> and we've I think we've had that view right like at least even in DeFi you know 2025 was kind of like the a key thesis that blocks research was multi-product defi is going to win and like >> you see that especially so on Salana where like basically every app is in competition with every other app because they're like >> the only way to make more money is basically like to just offer a broader platform >> and add more features and they're like >> the lending products are in competition with, you know, some of the swap products and the swap products are in competition with, you know, some of the frontends and some of those are in competition with some of the platforms and the wallets. Like they're all they're all fighting for uh to like lock

in users. >> Yeah. And they are doing this a lot of these platforms and these blockchains are also I don't know if this is the right word for this but they're like application applicationizing like a has the A labs app now not the A labs app the A app um base has based app I think it's still called the based app um I imagine we'll get more and more of these like it's been so dead in crypto this idea of like an all-encompassing app. Um, and it's just getting more and more and I think that's like I think teams are probably slowly lighter launched their own app. I don't I don't

know if they've made enough um transactions on it yet to like be mentioned next to the other ones. But um I don't know if Jupiter has an app, but like I imagine a lot of these teams are going to become more and more product focused. >> Jupiter wallet. Yeah. Um, Phantom, great app. Great app. Like I I imagine that's like the next step in the evol in the evolving. I don't know how like >> that's a great example, too, right? Like the wallets like Phantom and Rabby like they they've been turning into like basically mobile exchanges, right? Like they went from wallet to like it's basically Coinbase.

>> And Phantom is great as well. I just wish they didn't like kiss your forehead every time you wanted to make a transaction [laughter] 40. >> Yeah, but it's like I think it's functionally the same as if you were a Coinbase, you know? It's like are you going to use would you use Coinbase or would you use Phantom? And like the take rates on Phantom are probably a little bit lower. Like they have to cater a little bit more to the onchain crowd, but still like they want to take a cut. >> Yeah, maybe a bit too much of a cut. >> They have some lock in. So >> yeah, I um I don't know. I would I would love to I would love to switch further. I've been using this app called Pay P A Y. I've talked about this before. Doesn't work.

Used to work, stopped working. I can't buy anything off it. So if there's like a good I talked to the to the plasma guys about it. I think they're supposed to come out at some point this year, but I'm looking for like a good all-encompassing. It's just like there's these segments, right? like I think there is chance for a regulatory AR orb um trading thing. Um I don't know if it'll be lighter. I don't know if it'll be hyper. I don't know if it'll be Axiom Phantom maybe. Um and then there's like this one other app that's like lending savings and earn etc. That's a cash app also. Like these two to me are very clear that it can work for especially in like a crypto sense. Still hasn't launched.

I don't know. There just isn't any like if we're talking about productizing, Phantom's done a decent job. But even that I would say is like a lot more cryptonative than it is for mass market. But maybe that's the good thing. Like maybe that's you just want to build around your core consumer base and try to grow with within them as opposed to try and reach like random pockets of the market that is probably not that interested in you. >> I think they're trying to break into it. They just haven't seen the adoption. like Phantom has their cash stable coin, but it's got very low uh usage. Like I think the I'd have to check the market cap, but it was less than 100 million when I checked maybe a few weeks ago. Um

which from zero to whatever it's at, like if it's 60 or 70 million um in market cap, like you know, maybe that's meaningful if they can kind of slowly grow that and then like take a cut on the some of those yields as It's like it's another revenue stream for them. But um I do think one app that's like quite clean on sort of like the the stratified crypto or like the sort of bank to onchain connection is like squads. >> Oh, that's a good one. I need to check that out. Ryan Connor was actually posting about it today.

There's a few apps like that where it's like they very specifically do like one thing really well and it's like you know cash bank account cash to like onchain stable coins like going between the two and then like very easily giving you like you know earn x% yield on your stable coins via we're just going to you know put it in a safe pool for you this you know >> yeah I'd really like just one that lets me access um a cash product as well as not onchain yields. I want treasury or money market funds. I don't know if either of those can be done. I don't want smart contract risk. I want very limited smart contract risk.

But also like in that case, I think you can just use I don't know Revolute or Robin Hood and probably get the same access and then eventually the same stable coin rails. So I don't know. I don't know how. Also, I'm >> the the payment thing is or like the the like bank to onchain like app is a tough one too because I think you get forced into a position where you have to take uh a fee. Um cuz I know even like Sphere Pay, if you're familiar with that one, that was like an I used that product for a while, like an incredible just like, you know, onchain stables to offchain bank account um conversions and like pretty quick, like very quick

settlement. Um and they had, you know, they had sort of introductory zero fees for a long time and then they had to add a fee because obviously they're just going to burn money forever if they don't take a fee because it's it's like that's the only product. they don't they're not making revenue any other way. Um whereas like if you're an exchange or like a platform or something, it's like you're making revenue in a bunch of different ways. You could you could incentivize like you know cash to stable coin like swaps for free like with no spread. >> Yeah. >> Um and withdrawals and deposits for free because you you're making money on you know the pers and the trading and the options and all that other stuff.

>> I think that's what Robin Hood does. They they pay you for sitting US dollars right? >> Yeah. a bunch of the I mean a lot of the like neo bank fintech platforms now give you you you get like just under the the you know the treasury risk-f free rate sort of on like idle cash via like a sweep program but they also have at least I know for Robin Hood specifically you can swap between dollars and USDC with no spread >> or fee >> that's pretty good >> and on and off board so >> it's pretty good maybe I gota >> it's hard to compete with that I feel like >> yeah it definitely is very hard to compete with that they have a good platform form. Um, okay. Less um less bullishness, fintech.

Let's try and find some bullishness into crypto. >> Yeah, Mega E. Um, a little bit of a hiatus. They are back now trying to regain some >> steam, some momentum. Uh, let me pull this up. They just dropped this Mega ETH global stress test. Uh, they want to do 11 billion transactions in seven days. So on the 22nd they're opening up mainet to users for some latency sensitive apps. So high throughput um while the chain is under some intense load basically like they want to do kind of like a mainet test.

>> Yeah. Like fog fishing. I don't know if you >> Yeah. May probably see some click farming or whatever different apps basically. But stress test the chain get get people on it for the first time. Um, and probably also try to generate some momentum on socials again because I feel like they, you know, they were very much in the spotlight and then post sale like they were going to do their whatever it was like liquidity campaign or or what have you and uh didn't didn't work out how they wanted it to and then they kind of like killed that and they've been quiet since.

>> Yeah, they did they did raise at a good time. They raised when the market was doing well and I think >> Yeah. >> No, but it's true. Like I mean from their perspective it's a great time for them to raise and they're still above the raise amount like the raise FTV so I think it's fine. >> Um >> let me show this. They're targeting they say they're targeting uh true TPS of 15 to 35,000. Um >> I don't know what the true TPS of Solana is to be honest with you. >> Yeah. So I guess they're comping it to 1.5K for Salana. So they're taking out vote transactions >> which is I think that we're correct to do. Although I'm sure there's somebody who will get upset with us for that.

>> Yeah. So, yeah. I mean, I think it's interesting assuming, you know, if we could see these numbers, that'd be really cool. >> Yeah. I um >> the hard part is the demand question, right? It's like you can do the fogo fish and then after the fog fish, like you you need demand on the chain to to do 10ktps. >> Yeah, it's tough. And I mean, you and I both know this. I feel like founders are already founders also al know this like it's not what it used to be where it feels like now you don't even see that many like day one v2 v3 amms launching on these deck on these new chains it it's it's the the developer interest

has and this isn't like a world with claw code where you can very easily launch like a copy paste and I know this isn't what to in my mind the flow was like new chain launches, you get some form of an air drop and then you there was a time when you could buy the first bridge or the first decks and you would make like five to 10x, sometimes even more if the developer wasn't an idiot and would tweet good stuff. Um, versus and then it changed very quickly to like there were still those dexes and bridges launching, but you didn't really make a lot of money on them. um and you didn't you stopped getting aird drops and now it's very

much like you have to deposit or buy into the ICO. You get very little airdrop if you do. Um and also there's no dexes or amm like on on Fogo. I think there aren't that many Dexes and lending like V2 forks, V3 forks, which isn't a bad thing. I think like you don't actively want those products anyway. It's just like more of a commentary on how crypto has evolved over the past few years. like there's a lot of L1's and marginal L1 doesn't bring in a lot of new attention from either developers or users. Um, so I think people I think founders realize that they need to focus on a lot of different stuff and like we've already we've already glazed Mega

Heath quite a bit on this pod. They've done everything they can to ensure that there are new applications on their chain. So, I think it should do okay. But I also think they should probably shouldn't be too disheartened if like day one they launch and the market's in a [ __ ] place. Um, and there just isn't that much interest. >> Yeah. I think part of it as well is that um the market is smartening up and the market includes these teams um because it used to be the case that it's like you launch a chain and then you're giving out millions of dollars in grants and incentives to like anybody who launches a Uni V2 fork. Um but obviously that was a waste of money in like almost every cases or probably like in 100% of

cases it was a waste of money to do that. Um, so I don't know. I just think, not to say that all uses of capital in crypto right now are smart, but at least some of the very pointless like burns of cash, um, we've realized that like we don't need to do some of them every single time or like make the same mistake over and over again. And certainly like just, you know, you can think of like the 2021 like, you know, Avac Rush or whatever, like we're just going to like throw $100 million into like DeFi teams and like it'll it'll pump the [ __ ] out of all the coins and then six months later like, you know, everyone a couple of people walk away with with boatloads of money and and like nothing else really changed. So, I think teams are realizing like you you

can't just like waste your your raise funds just like giving away money because it it won't it won't give you any sort of competitive advantage. Yeah. I What would you say is like a good Okay, so this is what I'm thinking of, right? Like Uber did a decent job. Uh I don't know if you remember 20 God, I'm [ __ ] ancient now. 2018 2019 Uber I don't know if you took a lot of Ubers in 2018 2019 Americans drive um as a young man I was taking a lot of Ubers and what probably now costs 10 bucks back then was four um because VCs subsidized it like that's

the common take I don't know actually how it works >> I mean if you take Uber in NYC it's like $100. >> Yeah. Yeah. And I imagine back then it was a lot cheaper because they subsidize. So that's like so it's not like unheard of that in crypto use incentives. Now obviously a lot of the ones in crypto are kind of wasted and they're not particularly like well um placed but I don't know like trying to make an attempt at becoming sticky by incentivizing users is not necessarily a wrong idea. I just like >> I think we see better we see better applica like attempts at it now. Like I think you could look at the we were talking about the trading apps earlier and like you see the loyalty programs and the referral rewards and the

kickbacks and like these are things that are done you know components of those are done by try to apply platforms and fintech platforms in different ways like you know get some cash back your credit card get some loyalty rewards get some referral bonuses for for onboarding people to an app like they're targeted in a way where it's like you know we're we're trying to grow and so like We want to incentivize you to like, you know, pro, you know, provide growth to the platform either by onboarding your friends or like doing more activity on it. Um, but I think the, you know, just giving people a million dollars in an airdrop like doesn't >> Yeah.

>> They'll sell it and then they will leave, you know, or maybe they'll hang around for a month >> while they call you. >> Yeah. And then they'll leave. It's like >> And then they'll call you an idiot after they leave as well. >> Yeah. like they'll be like oh >> yeah they were so so much money [laughter] >> um yeah and then apart from that the only one I know is like actually points programs in typical fintech is extremely popular obviously and like in all businesses like credit card points airline points etc and they do well um but the issue that I don't know if cryp like I'm I'm kind of I wonder why this is going to be a stupid example but like let's say unis swap every time you do a swap you earn a certain amount of

points and then points you can redeem across other D5 protocols. I don't know like gives you a fee rebate on some other protocol. It sounds stupid the way that you say this but this is effectively how it works in the real world where you get like free subscriptions and random crap off of >> Yeah. It's just different because this is a pure financial like okay if you swap more we'll just give you more money. But like there's a very easy way to game that in the sense that like you can wash trade, you can you know run strategies like try to be as delta neutral as possible but rack up a ton of volume. So it's like they're gameable in the way that like I guess you could game

flights somehow, but like you do have to purchase the tickets and like >> you know it's not it's not like you can go Delta neutral flights and not actually spend any money but end up with a million airline points. >> There are ways to game some of the programs. It's like, sure, sign up for the credit card and get the free points and then just like cancel it a year later. But it's a bit different, right? Like it's it's much easier to like uh game the reward systems when it's purely uh like a trading, you know, they have to get a lot more creative, I think, in how >> Yeah, I know a guy who put money into a bank um I don't know, like 10 15k at a time or something just because every time you deposited 10K, you didn't get AirPods. So like

>> And the banks do those too, right? open a open a open a new checking account, deposit a certain amount of money, we'll give you 500 bucks and it's like >> transfer >> maybe do that a few times a year, >> but on technically on UNIS swap you'd have to pay fees for example. It doesn't work. I'm not saying this is the ideal system. I'm just like because it's never been explored properly, right? Like I don't think I've ever seen any like in crypto we write so much about goofy mechanics or like the really smart people write about credit risk and the really stupid people write about how credit risk doesn't exist in crypto you know stuff like this and then there's no like body of work that is exploring okay like we have a spending problem in crypto

incentive spending problem and all of this knowledge is actually kind of held in small like incentive program managers and parties and not like broad like there's no exploration of it. It's not do do you know what I'm trying to say? Like if crypto is moving to this like more product focused world, then the best hire that you can make is probably an incentives and strategy guy or like at least like spent some time doing some research on it as well as like UXUI. But I feel like crypto UXUI is not as bad as it used to be. Like at least like I think it's fine. Like I if you sign up for a new bank account or a new like Robin Hood

style app, you have to go through a lot of steps. And in crypto, you don't have to go through that. >> You have to do KYC on chain. If we're just thinking about like the steps to opening up an account, the steps to opening up a light hyperlquid account is depositing some money into it, which you can do. Like the bridge transactions are still annoying. Yeah. >> And it's much better to not have bridge transactions. No one's arguing against that, but there's also like annoying stuff in Trafi is what I'm trying to say. Versus So like UXVI is kind of fine.

It's different because in the sense that like you have to do the annoying part for crypto earlier like you have to do the wallet and the seed phrase and and that stuff like separately from using an app but then when you use an app you log in with your wallet and it's not like I don't have to make an account >> and sign in with the account and like set up 2FA it's like you just you just have the wallet so it's like the process is different which I think is good in some ways and maybe bad in some other ways. Um, but I do think like I agree with you on the incent on the incentive point. Like I think you know Robin Hood is a great example of just talk about in like you can think that they're overvalued or maybe it's you know scalping retail or whatever

similar to you know people have bad opinions on Coinbase as well but I think if you compare the two like Robin Hood is blowing them out of the water and like the the just product offering and like incentives side of things like I think there are things that we can explore like within crypto that they're employing to like grow assets on platform, get people trading more, get new users onboarded. Um, you know, offering people like, you know, percentage matches on transfers from other brokerages, offering people matches on like their IRA accounts when typically like that's maybe an incentive you'd only get if you have a full-time job and they offer that to you. um they're doing interesting things like that which I think is helping them grow assets on their platform like kind of relatively sustainably because people

get in and they like the match and um and then they just stick around for the rest of it. Um, and I think, you know, we're probably getting to that point of maturity where maybe somebody like a Phantom or other could could start exploring like more explicit, you know, hey, bridge in or like deposit 10K into Phantom Cash and we'll give you a 1% or 2% balance match, but then they they'll have to like get smarter about it in the sense that I think you it can't be like a oneanddone type of thing because I think a lot of these like Robin Hood rewards, they're stipulated on like we we feed it to you over 12 months or 24 months. We're not just going to give you the money right now.

>> Yeah. >> Um they they really want to like lock you in and like make you become like a a kind of a sticky user. So yeah, I think there's a lot to learn from from a lot of the fintech and um probably yeah in in the fintech and like neo bankank kind of space where they just get really effective at at playing around with how to uh encourage users to on board and and bring their money over. >> Yeah. Yeah. And something I think is like very underexplored in crypto completely. Like the balance matching is a bit difficult because I think like Robin Hood has the benefit of you can only create one Robin Hood account, right? Like I don't think you can create 15 Robin or >> the KY the non KYC thing is always the

part that that messes with crypto things is because it's like okay if there's some way for me to make a thousand wallets and do this. But I guess in the sense of a balance like in a balance match that's like time locked it's like okay I mean if whether you have a million or $100,000 like it doesn't matter if you make 100 accounts for one account because it's just a raw you know you're going to get a 1% match on your deposit and you only earn it if you put it there and it stays there for 12 months. So >> yeah and if something you can give like trading fee rebates based on that or something like >> yeah that's a pretty good point.

>> Yeah something to Like even this just hasn't been done in crypto ever anywhere. Um sometimes people like to try and get smart and then they're like, "Oh, we'll incentivize users of platform X if you deposit that into us." Ends up happening. this kind of stuff kind of exists, but like I don't know how familiar I imagine not a lot of people are, but there are these like large syndicates of like TVL in crypto that'll like go from platform A to platform B and they'll be offered better rates than others. um like let's say you're doing just based off of like T yields back in the day would be like 4% and then you would also get whatever like 3% in um

tokens like a 3% APR in the token of the native protocol that hasn't launched yet. So whatever value that they're ascribing to it or something um that kind of stuff exists for like large TVL but not for small TVL and not for like small users which I think if if you're like part of these TVL syndicates and you get offered 7% while like the predominant rate is 4% you're taking this you're probably farming it for six months and then saying yeah these people are idiots I'm gone >> afterwards.

I mean, there's certainly a problem here of like if you're a non-revenue generating business and then you're trying to figure out how you can incentivize people and that can be like meaningfully accreative to your topline growth. Like I think you kind of need to figure out how you make any money in the first place. But like certainly if you look at you know a Phantom or an Axiom or like you know these platforms that are printing a ton on trading volume or um I mean that's probably that's probably the majority of it right on swaps. That's like the key swaps or maybe like a cut of yield. Um those are maybe the big ones right now. Um, if you're already generating, you know, revenue and maybe

even profitable, it's like then you can look at some of these ways to funnel some of that into growth marketing opportunities or incent, you know, incentivization strategies to really like fuel growth. Um, but if you're just the 10th, you know, you're just the 10th platform that's like just raised 200 mil and you're like, how do we burn more money than the other guys? >> Give it to me. [laughter] Yeah, give it to give it to us. Actually, reach out. Give us a call. >> Um, last question because we talked about Phantom and then I think we can end it. Um, would you buy a Phantom token or a Phantom stock? I know we don't know their financials at all, but like offgut feeling, I guess, which is a

great way to make any financial decision. >> Um, I recall the Phantom Privates trading I'm gonna say a number and I'll be wrong now. I don't know, maybe eight billion >> by >> last year. Um, I think a phantom equity would be really interesting. I'm being honest. I don't know that I'm going to go out. I I don't know that I'm going to seek out, you know, you know, to buy private, but uh I think it'd be interesting. A token, I don't I don't think so. Unless it unless the token is is the equity unless it's an equity token. Give me an equity token. Um or an equity. Yeah, I have well I would have bought like equity. I don't know about I

would have to look into it, but I think it's one of the few like purely private crypto companies that I would have bought. >> It's one of the few businesses that like I feel like they've really been year-over-year compounding their growth uh not stopping been like kind of relentlessly shipping all the right product integrations. Um there's not been a lot of great examples of that like multiple years in a row. I think they've really knocked it out of the park. We'll see what 2026 has in store, but I mean past like three years have been very positive for Phantom is what I would say.

>> I wonder if they get paid for blockchain integrations. Something to ask them if they if I ever get to >> like new new chains. >> Yeah, because they're very selective and I don't know if >> integrations. Yeah. >> Yeah. I think they've done all of the right ones for what it's worth. Like I think their selections have been great. I think you can only have Phantom on your phone or on your laptop and survive which I think is like >> you can Yeah. >> You haven't been able to say that for any other wallet. They have Hyperlid. >> They have based native based >> Yeah. Okay. >> They have Polygon.

>> Yeah. They've knock they've knocked it out of the park. They have native Bitcoin as well. >> Yeah. >> Bitcoin, ETH, Salana, Base, Hyperlquid. >> That's you need one wallet at a spent. >> That you have that's everything. That's that's that's everything meaningful right now in crypto. So >> yeah, I think they've definitely they've knocked that out of the park. I don't know whether they do get paid. Maybe some of them maybe they get a like a token incentive or something for a few of them, but they've had a lot of them for so long that like you know they certainly didn't get paid to integrate like Bitcoin or >> ETH. They raised money to be a Salana wallet. So like >> I guess in a way but >> but I don't think they would have >> if anybody has any information on their financials

let me know. I want to look >> um they have monad and they have sui those are maybe the only ones where >> maybe paid >> maybe there would be like a token incentive for integrating but even then I think like you can see the argument of you know the these were chains that raised you know a ton of money um so an integration you know maybe it makes sense >> yeah that makes sense all right Danny always a Pleasure. Thank you for taking the time to chat with me on your holiday.

[laughter] >> Hey, anytime. It's snowing outside, so it's a blizzard. >> That's nice. >> So, I'm not going anywhere today. >> That's good. >> Okay. And to our listeners, thank you all very much for joining us. Um, we have an interview with Sid and Merlin from Morpho and >> Oh, both. Wow. >> Yeah. With Anastasia, who's part of our Blockworks advisory team. Um, we're gonna talk about DeFi credit risk, which is a bit above my pay grade, but I'm going to be there and I'm going to try and understand stuff. Um, and then

that's it. And then we have another part coming out as well, but I don't know if I can share too much about that one. Yeah. >> Yeah. So, basically, there was a reason that Bach said there's some smart people who research DeFi credit risk, and there's other stupid people who say it doesn't mean anything. So, >> and I'm the stupid >> Anastasia is one of the smart people. So >> yeah, she'll come. >> So it'll be fun. Um I think that should air not I think that should air next Monday. So we're all looking forward to that. But like I said at the beginning, if there's anything specific that you guys want, crypto is just kind of like cryp everybody who's listening to the spot knows this. Crypto goes through these periods where there's four or five things you want to talk about max over

like three weeks. And to be honest with you, it's tough to run a podcast with that. So if you're not part of the Zerx Research chat, join it and then give me ideas. I might not use them just to let you know, but I also might use them. [snorts] >> Yeah, get in the Zer Xerox Research Telegram. Uh actually titled Xerox Research, not a CC Corp right now. Um another great great work of art from Ian and River. Um yeah, get in there. It's like a family. We're always chatting everything happening in the crypto markets and other markets at times.

Sometimes we like to LAR >> increasingly more other markets, but Well, when the other markets go up and the crypto ones go down, um people have a preference to talk about the things going up. But hop in there, chat with us, shout out if you've got uh topics that you want to hear discussed or for us to dig into, and we will. >> Peace. >> All right, see you guys.