🟢 LIVE From The Nest: Winter is Over??? KAIO, Canary & Injective, GSR’s ETF Launch

Transcript

[music] [music] [music] [music] >> We'll see you around the timeline.

>> [music] >> Feels good to be back. I think the Rollup is one of the most premier [music] media brands in crypto and Andy and Robbie are great experts at everything they talk about and it's my favorite podcast. Adding it to my library as we speak. Potentially multi-chain [music] deployments. We are at Devconnect day one here at the Nest from Base. >> [music] [music] [music] [music]

[music] [music] [music] [music] [music] [music] >> JP Morgan, BlackRock, DTCC, Fidelity,

the entire thing was just institutions. It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. I'm bullish. HE SAID IT. HE FINALLY SAID IT. I'm so bullish. He is bullish. I'm bullish. We're bullish. >> [music] [music] [music]

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>> The Rollup [music] is headed to the top. If we're not already at the top, we're going to the top. We're going. Rollup is my favorite. From all walks of life, all over the world, all over this industry come together for the Rollup. >> [music] [music] [music] [music] [music]

[music] >> Five zoom out. Institutions aren't coming. They're simply here. This is the golden age of crypto, guys. Get right. Let's go. >> [music] >> Welcome to the Nest. See you on the show. Bang. Bang. Rob's back. Robbie is back. Back in action. >> [snorts] >> Yes, sir. I'm off the disabled list. Yes, sir. Guys off the disabled list. It is April 22nd Wednesday. Bitcoin's at 79,000 printed non-Russian US damn dollars, ladies and gentlemen. These are printed dollars not

Iranian street money. This is USD we're talking here. We're in the tokenization tower presented by Plume. You're watching the Rollup. Rob is back. Let's give Rob some love, man. The guy is back in action on the show, baby. What I miss? Uh you missed two days of the DeFi's biggest exploit of 2026. Extremely sombering sobering conversations here in the Nest uh with some VCs, some DeFi protocols, and some leaders in security. So, all in all, it's been a hell of dramatic um last four days in DeFi.

So. Well uh yeah, I've been keeping track of it on the TL. And uh it's a tough situation out there. I got some new San Pellegrino Mhm. Get my vitamin C on, baby. That's good. >> let's get into today's show. Uh before we do that, let me tell you about Plume. Obviously, our lovely lovely friends [screaming] at Plume hosting our show, hosting this amazing space and their on-chain asset management. The team is back from Bali. Lovely lovely offsite. We're live from the tower. We got Kaito founder. We've got the Canary Capital team and Injective and GSR uh joining the show. A lot of ETF talk today, institutional talk. Um we've got the CEO of Kaito, Steven and Cooper from the Injective and from the Canary side

and Andrew or Andy from GSR. Uh Our topics today are powered by Trezor. Use code Rollup10 at trezor.io to get your Trezor, some of the best self-custody in the market. That's today's topics, Rob. We're back. I know I just got you for a little bit. You're just off the disabled list. I'd love to get your read on the markets since you haven't been on the show the last couple days. Let's get into the weather, the markets. Let me tell you about our lovely friends at Frax, our premier stablecoin partner. Open, stable, borderless.

For more info, start using the future digital money today. Visit frax.finance. Guys, it is uh it is not the sunniest of days here in New York. It is 49. It is overcast, wind gusting at about 18 mph. Um Rob, just so you know, the trench coat came out yesterday. It was even colder yesterday. So, we preemptively kind of uh retired the trench coat. So, I just just wanted you to make sure you're aware of that. >> Even the trench coat's got to come out of retirement sometime. Yeah. It is I I think that's my favorite piece of outerwear. Mhm.

So, we're getting ready to go to Miami. It's going to be very warm down there. We've got a dinner. We've got a rooftop event with the Momentum X guys as part of their Modern Money series. I'm looking forward to that. We've got some travel ahead. Uh and I think I'm going to come back to to New York spring. So. Yeah. It's exciting times. I'm excited for Miami. It should be a good time, especially if uh Bitcoin is pushing 80K like it is now. Yeah. Is it really? 77 78 >> 78 eight. Let's get into the markets, guys. Our weather is powered by Relay.

Visit relay.link to learn more about their cross-chain product. All I see is green, baby. All I see is green. Near is finally above that 1.4 mark. Chainlink hovering around that 9.5 mark after they got ISO SOC 2 uh approval for their CCIP product following all of this fallout from the Interop space. Solana up. Pangu ripping. A lot of green on the bottom chart. You guys can see there, guys. Bitcoin eyeing 80K.

Um again, I think there's a strong chance to to be made here that Bitcoin gets into the 80s. We've been saying this for the last week or two that winter is over. Whether we, you know, >> [clears throat] >> are right on that, on my side or not is yet to be seen, but undoubtedly, this is the first kind of, you know, real move that we've seen this entire, I mean, six, seven months. I mean, we haven't even had a bear market rally, really. And this is the first one that we've seen. Yeah, I I agree with that. I mean, it still remains to be seen whether the lows are in, but the the point is clear here that, you know, we're we're shooting higher.

Um I could see a a rally all the way 80, 90. Um obviously, 100K is going to be the psychological level. If we get above that, we can flip, you know, resistance to support. Might take a little bit to get over that, but I think that would mark the lows. Until we get above 100, I still remain cautiously optimistic here. Yeah, I think uh some of the TA guys are saying that that 87 level is the important level to to you know, take down and tackle. On the bottom of the screen, Pump up 4%.

Aave, even amidst all of this chaos, Stani put out a tweet about it. Um it is up 2 and 1/2% today. Jupiter up 3%. There's Pengu up 11. Say Network, a name I have not heard in a while, is up 12. Etherfi, one of the portfolio companies, up four. >> Aerodrome up 12% as well today. Aerodrome looks good. >> Yeah. >> Um Sky looks great. >> Yep. I think Aerodrome may have to make an appearance in the Neo Finance Index. I was I was actually reviewing that today and did a podcast about it. Uh by the numbers, guys, if you've been following our N7 Index, so Neo Finance N7 Index, obviously it's been taking a bit of a bit of a hit here with Aave, but Sky,

Syrup Aave Morpho Etherfi Pendle Hyperliquid make up this index. It's up 7% year-to-date uh with, you know, Morpho really backpacking at 80%. Uh Hype at 60%, Sky at just over 40% return. And compared to the rest of the market, this N7 Index is dominating. It is outperforming Bitcoin by about 20%, outperforming an L1 Index by about 30%, outperforming DeFi Core, uh which is comprised of Uni, Curve, um Compound, a couple others, about 40%, and then outperforming the L2s, the Arbs, the OPs, etc., by o- over 50% this year. So, yeah, this N7 Index

is working. We're well through Q1, Rob. Um and we can maybe make some changes to it, but it's looking pretty strong. We have I have I haven't checked this in about 20 days, came back to see that it is the only like index that is positive this year. Of course, Sky, Hyperliquid, Morpho backpacking here. Yeah, and I do think Aerodrome belongs in that index because of their revenue generation. I think there's plenty more as they launch on mainnet in July. I'm excited for what's to come there. Um I mean, just my my broad take here on the markets, I'm just I'm extremely surprised as how resilient the market has been in the face of this this ex- exploit.

You know, I I've been advocating for Ethereum, you know, last week when I was on the show. Yeah. And I got to say, I was I was concerned about my Ethereum position after this exploit. You know, just in general, it was how can you not be somewhat concerned about the future of DeFi and to so to see Ethereum hold up, really not go down at all as a result of these hacks when arguably one of the most lindy DeFi protocols, you know, has this bad debt. It it it It shows that, you know, the market is somewhat disconnected from like what's happening on chain. Um and then, you know, you see this massive rally across the board because the

ceasefire is extended. The these things are so connected to macro. Um I don't know what to make of the exact It's almost a little bit disappointing because it means that, you know, us as people that are following the industry day-to-day, we're not able to dissect and differentiate and kind of separate winners from losers. Everything moves in tandem according to macro, which feels like it's that's what should be disconnected. The things that are happening on a day-to-day basis inside the industry is what really should be leading to what separates winners and losers. It's just not what not what's happening right now.

Yeah, I mean, there is like dispersion, right? In terms of like there's actual um there is a change in the way that the market is you know, valuing and reacting to different assets. Like Hype is obviously doing well and Sky's been doing well, but yeah, outside of like, you know, I was also shocked that this didn't have any negative effect. I mean, Aave took a hit, of course. I think LayerZero did as well.

Um but I think it also shows that the market is just driven by the institutional flows, too, more than anything now. And you would probably expect more of that. The the other thing I I think you're right. Um and I think once we get into the large rising tide that lifts all boats, then we can get into a conversation about outperformance. Yeah. When, you know, making some of these decisions, uh doing some research is going to is going to help pick those outperformer. Yeah.

>> Right now, everything's driven by Iran. Everything's driven by the war. I think the other thing that is going to become increasingly important, it's already started to get there, is going to be Kevin Warsh, the new Fed chair. Yep. >> You know, his confirmation hearings are underway. Um I saw Tom Lee kind of giving an analyst call on Fundstrat. It wasn't Bitmain, but on Fundstrat, talking about how 10 out of 13 times there's been new Fed chairs, it's led to a 10% decline followed by a sharp increase. Mm. forward. That's kind of the rule, uh not the exception. And so, I'd be curious to see He was kind of making the case that, you know, uh because of the war, a lot of these things have already experienced a down a decline. Uh but I think we could see some market volatility as as a new,

you know, the the war might tone down, but the new Fed chair activity might ramp up, and then, you know, we might see some increased volatility as a result of that. Yeah. A ton says Bitmain, the ETH, MicroStrategy definitely is. Those two are the only kind of dapps holding up here. Um and we'll see what the Fed chair says. He He came out yesterday, I think, or the day before and had some comments, the market didn't like it, and then the ceasefire happened, and the market loves that. So, we shall see. Our digital assets market today is powered by Zama. Let's give them some love. They are leading confidential compute and encryption transactions and tokens on chain on Ethereum today. Check out zama.org.

Plume up 10% today in the bottom ticker. Let's give Plume some love. These guys are bouncing, good to see. Winter is over, hopefully. Let's get into the news, and we've got a bunch to talk about, some crazy price targets, some interesting more news on kind of some of the hacks and exploits, as well as what's coming. Before we do, let me tell you about our premier AI partner. This is Near. This is the blockchain designed for AI-native applications. Check out near.org to learn more. So, Ethereal Eyes, good friend of the show, Vivek, comes on the show, talks about his Ethereum thesis, but then also goes on, I think it was Bankless, and

then they had their own kind of like written paper about this, talking about ETH to 250,000. So, if we scroll down here, you can you can hear more of the thesis of this productive money idea. And yeah, it's pretty uh the thesis is ETH to 250,000. And I think I like this that's not a joke. They're really calling for 250,000. Let's hear what he has to say.

financial people love, but it also is a store value and it uses collateral. It basically uses the money across the economy. It is an asymmetric bet to say that Ethereum will reprice from being just value on as a technology company, like Mike said, and transition to becoming a money. And when that happens, just it there is a potential 100X in it as that starts to happen. And so, people it's one of the best risk-reward things to look at. I think as we think blockchains become universal. And the timing again, it might not be immediate to get to 100X, but that would be a little bit wishful, but the the timing of repricing could start pretty soon because people already people now know what Bitcoin is.

People obviously know what gold is. The there is a need for a digital asset store value or multiple of them, and ETH is emerging more and more as that second pristine store value asset, and we think it'll become the primary one. BlackRock just launched their staked ETH ETF, and so, they're calling ETH a productive asset that's earning yield in the staked ETH ETF. Harvard just rotated some of their Bitcoin holdings into ETH. So, it's you're you're seeing the institutional allocations diversify. So, it's it's starting now, and this is the thesis for it to really catch hold.

Yeah. Yeah. So. >> So. So, the 100X for ETH would put it at about a 25 to 30 trillion dollar market cap. Yeah. Um 25 to 30 trillion dollars. That is a almost the equivalent of the XRP folks coming on and saying 500 or 1,000 or 589. Almost almost as big of a uh price target.

>> There's quite a quite a leap here, you know. I'm I'm trying to rationalize here what Vivek is saying cuz obviously he has very strong conviction in his own beliefs, and he's he's talking about those here. And one of the things that I think is working in his favor is, you know, take take Bitmain and take Tom Lee, who, you know, everyone's betting against Saylor and Tom Lee. These guys have a track record of Saylor has a track record of going bankrupt, but Tom Lee has a track record of doing extremely well in the markets.

Yeah. And there there was a projection I saw the other day, it was if Bitcoin or or excuse me if Ethereum just kind of reclaimed some of the some of its highs not even went to some insane all-time high like 250,000 but if it just got up to you know the 45,000 mark and Tom Lee gets to his accumulation target of 5% of the network. He ends up generating a billion dollars a year in annualized revenue from staking. Not to count D 5 which he probably will you know hold off on now.

But just staking and the other stat attached to this was that there's only there's less than a hundred companies that generate a billion dollars of revenue a year. Wow. And so if Tom Lee's able to create a top 100 company worldwide by accumulating this ETH staking it before you know people have said that you know what what's the the monetary value accrual thesis around ETH. Yeah. Vivek is advocating for this monetary one. I think it is a leap to say like you know we have Bitcoin we have gold and we need more store of value monies. I I maybe that's the case as we kind of grow into this you know we mean this crypto economy into into reality.

But I I I just don't think we've really gotten to the point where we're going to be using ETH as money. No one's using Bitcoin to buy their coffee they're using it as a store of value. ETH could maybe be a store of value but to be money I think is a different kind of thing. Maybe it's productive money and that's that's what he's getting at. But all to say that you know I if Tom Lee's able to get 5% of the network they're able to generate a billion dollars a year and ETH is able to supply companies like that with that kind of revenue there's going to be more companies that do that and they're going to be securing this extremely valuable piece of infrastructure and they're going to be incentivized to contribute to that

network. All of that is extremely valuable and I could see more companies stockpiling ETH as a result of trying to accrue a large percent of the network and get a piece of that revenue. And I think if Bitcoin goes to the projections that people think it will you know the 250k is the 500k is the million. I mean you know even if ETH is what 2500 or 2400 and Bitcoin 75 80k so 140th right?

You know even if it if it chopped the way that in half right? And it became 120th and Bitcoin was at a million you're you're looking at $50,000 ETH right? And so like in in infinite time scale I could see ETH breaking six figures and that would be insane even five figures would be nuts. I think it has a way better chance this cycle than it did last I mean undoubtedly but I mean you got to love just the the the the massive price targets to get people excited like you just got to love it. I mean like to come out and say $250,000 ETH I mean

man that requires a certain level of of of belief and so you got to you can't knock him for it. So >> Yeah. Yeah no I I I think that's the case and I think Ethereum's got the best chance more so you know you've got everyone trying to attack it the Solana guys and everyone rightfully so cuz it's not perfect but I do think it's got meme coin momentum which Bitcoin has and no other no other currency has and I think that's what they're going for with this money productive money thesis. Um I do think as we transition into more of a bull market it makes more sense to be talking about outperformance.

Obviously part of the thesis is the debasement trade fiat money printer goes burr Bitcoin you know that's part of how Bitcoin gets to a million which look I I believe in I think 2030 is a realistic target for that. Um and I think money printer go burr has a a very important piece to play and it I think it's more important to start thinking about ETH Bitcoin ratio right? Because that is how we're going to measure ETH to Bitcoin outperformance. All right guys let's move on from a theorized great friends of the show love the institutional bullishness.

Something's got to get these Wall Street guys excited. Chainlink comes out and says big four firm Deloitte and Touche LLP completed SOC 2 type 2 examination for Chainlink CCIP and data feeds. Chainlink is the only data and interop Oracle platform meeting key institutional security standards SOC 2 type 2 SOC 2 type 1 and ISO and IEC 2700 2022 certification. Massive milestone for Chainlink let's give it up for them in the in spite of all of what's happened this covers massive CCIP proof of

of reserve smart data data feeds to get this from a big four firm in the light [snorts] of everything that has happened in the space the last five days is massive. It's a huge win. This infrastructure is what TradFi and institutions will be using. They will be using SOC 2 type 2 compliant data infrastructure audits compliance Tether's going out to get an audit from KPMG all of this is becoming more and more important and so if you're a fan of Chainlink if you're bullish you got to believe that this is something that matters to people who are actually evaluating this industry at scale that they want to see this be something that

is a stamp of approval validation and confirmation that the largest asset managers on Earth can come on chain using a protocol like Chainlink and that is what matters that is what's going to put this space forward. Security and resiliency will allow for scale that's something that we have to continue to harp on here. Security and safety and resiliency sorry resiliency will allow for scale Chainlink is bringing in scale. I don't have much else to say but it's pretty massive.

Yeah shout out to Chainlink doing things the right way they were obviously able to stay secure amidst all the the chaos earlier in the week. And they've been uh uh a very good example of how to connect these on chain worlds with these off chain worlds and then connect disparate players. Like they are helping to bring central banks on chain. One of the things that these like these guys these some of these institutions are so stuck in the past. Yeah. Getting these certifications shows that they meet a lot of the standards that you know their their old coding language is able to communicate with this new this new thing because it meets the standard.

So yeah I think they've been they've been able to get past some of the the tribalism and go out learn the language of the antiquated legacy financial world. Um and and put together infrastructure that's able to communicate with both. Yep. That's great. Guys I think we have our first guest here the CEO of Kayo Shrey Rastogi a Kayo's a regulated platform that brings real world assets on chain. Um they're actually quite big in Abu Dhabi and Dubai. Um they are based in London they got an investment from Tether as of late which was quite interesting and have been kind of unknowingly leading this new

era of on chain products right? And so I mean this should be interesting. Tether came out more recently and basically said look we're going to invest in this company and we're going to do it and you know this is the company that we think is going to do well. So I'm excited to talk to Shrey we're going to let Rob go. Um Pleasure guys going to be back. Have a good rest of the show I'll see you guys soon. Yeah man. Don Ladbrook says clowns ETH am I right? That's pretty funny.

Oh my goodness the ETH haters are always out and about. Oof Chainlink go go wow they they are securing the future of finance. XRP to a thousand that would put it at a hundred trillion dollar market cap if I'm not mistaken maybe even higher. So let's see if that happens. Let's get Shrey up he is his first time on the show and look looking forward to talking all things Kayo and what they're building. It should be a good one. Hey Andy.

Good to see you. >> Hey Shrey what's going on man? All good. All good. How are you guys doing? Good man. Yeah doing well. Rob just got his wisdom teeth out so it'll just be you and I today. Market looks good. Crazy D 5 hacks over the last couple days but we're you know we're pushing through. Congrats on the recent news from Tether I saw the investment side that is a strong signal for the market so congrats to that man. No thank you for that I think the fundraise is just the I guess hygiene we just day zero of building but we are very very thankful to Tether and all the other investors including for the ventures Brevan Howard

digital who've backed us believing in the mission to tokenize financial assets for the future. So we have we're very excited but we also want to acknowledge we're at the ground floor of where we need to go. Yeah man. For sure. So you guys are bringing a lot of this kind of RWAs on chain funds structured products credit also have some pretty notable kind of um ties there in the Middle East with Abu Dhabi as well. Maybe you can just give us a bit of a layer of the land here, how you see this convergence between institutional finance and digital assets, and then really where Caio fits.

You know, I feel like this tokenization RWA construct has been something that pretty much every large chain company is trying to operate within as this flood of institutional capital comes in. How are you seeing this play out, and where does Caio fit in? Give us a bit of your your your perspective here. Yeah absolutely. I think we've been talking about tokenization for the last 5 years or so at this point. And 5 years ago it this was purely a concept where we were just talking about can we represent securities on a distributed ledger?

Um there's a few attempts that have been made at it, but starting with representing what exists off-chain as tokens, still retaining legal rights off-chain, but creating a token representation, which has been a good start. But what's really been the tipping point of the last 2 years um around the time we started Caio is there are institutions who are willing to go all the way and issue legally binding instruments where the ownership lives on-chain. That to me is a key difference between just having a representation and really unlocking true on-chain finance on regulated financial assets and securities.

That's not been That's not been something that's happened overnight. Um people have been at work at this for the last few years. Regulators have been scratching their heads about how to think about this when they think about issuing securities. And we are starting to see quite a few green shoots here where there are there are jurisdictions like like Singapore, like Cayman Islands, and now even the US with the Clarity Act and the market structure bill that are looking to bring legal certainty on issuing on-chain native instruments.

And that to me is where the convergence for TradFi and on-chain finance is going to happen. Um and maybe it's worth connecting where Caio sits in this entire value chain. Um think of Caio as the orchestration layer for the issuance and distribution of regulated financial instruments. We connect some of the highest-quality blue-chip asset managers to issue digitally native securities and funds on a chain of their choice, to clients of their choice, and distributed to venues of their choice.

So this is truly bringing in open infrastructure like the the ethos of DeFi, but with the controls that a TradFi organization needs when issuing these funds. Then what does that mean in practice? You can issue a fund that is le- as a token. Your token on Caio represents your legal and beneficial ownership in the fund. And that gives the asset manager certainty on who their shareholders are. And that gives the shareholder certainty on who what they're investing in and what rights do they own.

Caio just provides the orchestration layer for these high-quality asset managers to do this all on-chain, but in a way that their clients and their service providers can all can all understand it. Yeah. Um there's a very very heated debate about the correct way to tokenize assets. Right? You've got the native tokenization model from some of the notable players, and then you've got this wrapped token model. They both have pros and cons. Is Could you maybe just explain a bit about the mechanics behind how Caio issues these tokenized assets? Is it more akin to the wrapper model or more akin to more of this native model? Absolutely. Um we are

firmly native model where the managers we work with, the the funds they issue are natively on-chain. Um this is purely a choice based on purely a choice for issuers and their clients on what model works for them. Um as you said, like both models have their pros and cons. The native model is obviously significantly harder um and um and you need a lot of sophistication on-chain, managing share registers, managing KYC, managing the life cycle of an asset, um minimum ticket requirements, jurisdiction requirements. So it's so it's a much harder problem to solve, um which means the barriers to entry are quite high.

And that's why it's some of the largest issuers who care about issue who care about um all of these things uh focus on the native issuances. But there is an audience there is a part of audience which today doesn't have any access to these products and probably never will if they if they wait to access native native products. So there is a there is a market and an audience for wrapped assets, but Caio today is focused on native issuances. Yeah. We are um but we are we we we think that there's going to be both of these models that exist.

Yeah. And And I- Is Caio its own Is it its own blockchain? Caio is a protocol that sits on Ethereum, but then connects to a few leading layer one and layer two networks including Solana, Sui, uh which allows our users to hold their securities and their fund tokens on a chain of their choice. Okay. So we >> Got it. And the types of assets are you guys focused on? So we we're kind of growing this view here that like we're shifting from a chain-centric kind of view of the world, right? Where it's like which chain am I on and

bridging from different chains and thinking about kind of that question versus more like, "Hey, I'm a user, I'm a protocol, I'm an investor, I want to access this asset, not what chain I want to access or be on necessarily, but which asset I want to trade or invest in." And so I'm curious how you think about the spectrum of non-speculative assets into speculative assets as as it pertains to tokenizing these things. Like is there any cuz you know, everyone's tokenizing anything from like like stablecoins obviously being like the most like basic form of tokenized dollars all the way to like money markets all the way to equities. You

know, we've heard from people from the Solana side talking about pre-market Chinese IPOs, right? The whole kind of swath of things, right? From completely non-speculative to like extremely speculative. Uh I'm curious what you think about this spectrum of assets that Caio wants to integrate and be a part of. I think there's not really much of an edge in the asset tokenization at at all. Like I think everybody can get access to a issuer for the most part, tokenize the asset, and have you know, semi-similar commoditized product offerings. What I'm trying to get at here is like what is what makes Caio different from the tokenization perspective as it pertains

to the types of assets? Are you enabling different types of assets? Are you enabling a new distribution pathway for these assets? Like Like what makes you guys different from other tokenization platforms and kind of how do you think about this asset spectrum? Yeah, that's um you made a very very valid point, Andy, um that chains like clients don't care which chain they're on. They care about what asset they're buying. So really there are chains like Solana which have already thought about this and really care about what kind of assets they're bringing on.

We've taken a very similar view where at Caio we want to focus on the highest-quality assets that you cannot access anywhere, and cover the full spectrum of assets from simple money market funds that you can come in and out to get get yield on your stablecoin balances to highly complex long-dated private markets funds. We and and we do all of that natively on-chain. Uh so we've got a money market fund which you can buy um T which settles T+1, or you can get some instant redemptions to it as well. So that's simple yield-bearing instruments.

But then we have products from very high-quality quality private markets managers like Hamilton Lane, like Mubadala Capital which is coming online. And these are products that you can't even access at some of the top private banks. We've got a hedge fund from Brevan Howard. So these are the kind of products which we distinguish ourselves with where hard-to-access products available at low minimums that have never been accessible before and at a chain of your choice. So you wherever liquidity lives and wherever clients live, we want to make these make these assets available. Yeah. Yeah, interesting. Um talk to us a bit more about how some of these relationships came about. Like what is the process to onboarding somebody like a

a Brevan Howard or a Mubadala Capital? Um it A lot of these relationships from what I've understood from the likes of Franklin Templeton and Invesco and some of these other names that have recently partnered with larger, you know, on-chain asset managers and tokenization platforms is suggesting this desire to reach the on-chain market and the distribution that has been uh developed and grown there on-chain, and giving them their products. So their ETF products, their money market funds, etc.

Is it simply distribution with some of these names that you mentioned um that they're looking for distribution to this new on-chain user base, investor base, many of which maybe don't have an account, don't have a a brokerage with these, don't have the minimums to even invest in some of these. Like, what is the core reasoning for why some of these large uh funds and institutions are working with Caio? Like, what what what what do they get out of this? Yeah um you you just named some of the largest and longest-standing institutions in finance. Franklin Templeton has been around for literally like longer than we've been alive. Uh and and if you think about it from the

perspective of the client of of these these large asset managers like Franklin Templeton, Brevan Howard, Mubadala, which is a sovereign wealth fund. The distribution for them is they don't care about short-term distribution. They really see on-chain issuances as the way of how capital markets and financial markets will operate in the future. Yes, immediate opportunity today is distribution to on-chain clients who don't have brokerage accounts. But why why why do we why do they use this channel to distribute to to these audiences?

Because it is fundamentally better, faster, cheaper to distribute to non-non-banked clients today using the on-chain infrastructure. But they recognize they are they're some of the first movers in this space. They're not doing this for short-term wins, just distributing to some offshore jurisdictions. They This is their experiments to make this their default of distributing to their core clients that exist today. The the largest institutions, the largest private banking clients. It just makes sense for them. And and the and the institutions which have already made this move are some of the early movers.

You don't you don't um unlock a Franklin Templeton or a Mubadala by cold calling them. They need people they can talk to that they trust, and they understand and who understand both their pain points in the traditional infrastructure and how on-chain infrastructure works. So, it's really through these institutional relationships um we are um on our side, we are very very uh thankful to all of our backers, including Brevan Howard, uh further ventures in the Middle East who have who are deeply connected with some of the sovereign uh sovereign institutions in the space. And that is how you unlock these relationships and I'll help them bring their products to market and run these experiments. So, yeah, it's a really a combination of

bringing the most forward-thinking asset managers and issuers and connecting them to teams that are building on-chain that understand their pain points in the TradFi world. Yeah. Yeah, and you guys obviously have that experience. Um you know, I'm curious what's not happening correctly in the RWA space, in the tokenized asset space? Like, what are what are protocols missing, or what are we just not doing right like currently? What are what is being overlooked, under invested? Where is there a a inefficiency or a a spot for somebody to take some market share? Like, what is

what is not currently happening in this part of the market that you believe should be happening, and perhaps you guys are even positioning for this? Yeah, that's a great question. Um I I think Caio and a lot of other players in the space are chipping away at improving the quality of issuances and bringing these high-quality assets to market. What is still missing? A A And And then there you have the likes of Aave and Morpho who are trying to build utility on top of these assets. Um so so that infrastructure is building out.

What is still missing today is really a shared identity layer, which would be a significant improvement to whatever exists in the TradFi world. Um now, if we had a shared identity layer where you could have every user on Morpho or every user on Aave who wanted to share credentials and be eligible for RWA collateral, that would be the big unlock. And that would really that would really differentiate the on-chain world versus the off-chain world. There's a There are teams which are building some um some initiatives around this, but I do believe we are quite early, and it'll need joint efforts with TradFi, with the service providers, with the asset issuers in the space to do

this. So, so so this will have to be a collaborative effort, but we're still early. Yeah, one of the questions that I got today on a separate podcast that I was the guest of is that which is really quite quite relatable to what you're saying here is that, you know, all of this kind of capital flow is happening, a lot of these adoption metrics are higher than they've been ever, and we're seeing the interest from the large asset managers of the world skyrocketing. And they're all coming to build and bring assets on-chain. And the sentiment that is appearing is one of, "Well, how do we we being this kind of crypto-native batch of investors holding Bitcoin, ETH, Solana hype, other assets,

L1s, other application tokens, how do we capture this value? How does the industry capture this value for what we've built?" And so I I put it to you, how how do you think about the what's been built already in this industry as as it pertains to, "Okay, all of this institutional adoption is happening, but how do what how does what we've built even you know, figure out how to actually get the value from what we've built for these firms? What is what is your kind of vision or thought process into thinking about value capture for your protocol and for the broader kind of crypto landscape as a whole? Perhaps

it's not so black and white, but how do you kind of envision this intermediate phase that we're in of like everyone's questioning what value there is here, meanwhile the largest allocators in the world are coming on-chain. In a couple years, the picture will be more clear. What do you think that picture may look like? Yeah, that that's a that's a great great question, and yeah, and and like kudos to the guy who asked you as well. Um If If you think about it, right? Like, the reason DeFi moves so fast is because it is open, it is permissionless, and you can fork something and improve it anytime you want. But what that also means is if when institutions are interested and they want to just use this infrastructure, they could just do

that as well rather than using something that a team on-chain has built. The way we The way we think about this at Caio is let's not focus on technology, let's not focus on infrastructure that we are building. Yes, we love we love that. Like, the on-chain audience loves that. We are all crypto nerds. That's why we are in the space. But the institutions only care about what they need. Like, how can we turn it into a service that they can use where we abstract the infrastructure problems away from them, where we turn it into something that they understand, and they can use within their existing systems or integrating within their exist existing systems. So, the view we've taken at Caio is we want to be a we want a manager to be able to take

their existing funds, plug them into the Caio protocol. We allow them to tokenize an existing fund natively, and you should that as on-chain infrastructure. So, for them, they don't need to write new legal docs, they don't need to write uh they don't need to work with the other third parties. They can continue working with their own fund administrator, they can continue working with their own legal docs, and yet use cutting-edge on-chain infrastructure to issue tokenized shares. So, that's our bet at Caio. We make it accessible for these asset managers while abstracting the infrastructure problem, and how do we integrate it in their existing workflows. But um I'm sure there's going to be other bets as well.

So, then how So, then to to to the value question then, I understand kind of the framework of thinking and like the value proposition of working with something like a Caio, but how does Caio make money? Like, how do you guys make money? Caio charges protocol fees where um so, all on-chain as I mentioned, like all actions when when a fund is issued, all actions happen on-chain, still supervised by a transfer agent or a fund administrator of the manager's choice for supervision and regulatory purposes. But all of those on-chain actions lead to protocol fees for Caio. And those protocol fees bring uh scale with complexity of the of the life cycle, with transaction activity. So, we really capture value at the AUM and the

transaction level of these natively tokenized funds. Okay, and then Okay. Okay. And who's paying that? Is it the users who are buying the products? Um uh Today, it's the asset managers, but in the end, the client pays for everything. Okay. And oh oh okay. And then And the and the asset manager is paying that fee because they want to get their product listed on-chain? Um the asset manager is paying their fee because they would have paid expenses in the traditional world anyway. We offer them an experience that's better, expenses that are lower than their traditional ones, and distribution on-chain. So, that's why for them it's a win-win.

Got it. And do you guys have a token yet? Um not yet. Not yet, but we have >> I I That wasn't on the on the list here from your team, but uh cuz people are always, you know, the state of the market today is like if there's if there's a business model that is happening before the token launches, or you know, before even thinking about it, it's strong. If not, people are going to ask you what I just asked you, "How do you make money? Why should I hold this token?" etc. But you know, moving from that, how big are you thinking here?

How large is the market that you're trying to penetrate? And what is that penetration path, you know, look like? Let's look at where we are today. We are at 25 billion dollars worth of RWA assets as an entire industry. Peanuts, man. Peanuts. I think the off the five asset managers who we work with, the smallest one, the single smallest asset manager has more assets than that. And they are they are a very very specialized asset manager managing 33 billion dollars of assets.

We're barely scratching the surface of the scale of these markets. We've had estimates everywhere from 1 trillion to 16 trillion in tokenized assets. That's not going to happen overnight, but I do think the the pace of acceleration towards that target is happening soon. We've started the work with funds. These represent the endpoint where users access this. But now, the way we scale this is by going closer and closer to the source of issuance of these yields. By issuing structured products, by issuing debt directly from issuers. And that's what the next version of Kaito looks like, where we open up the same infrastructure to issuers of

other regulated assets like debt, structured products, ETFs, credit instruments, and by really expanding the coverage to any kind of capital formation vehicle. Do you guys have any tokenized uranium products? No, unfortunately not at this stage. Um What about other commodities like copper? We we don't get offered single commodities, but we are working with a large manager to to launch an actively managed commodities fund. And then we do want to offer exposure to commodities single name commodities as well.

Yeah. What about um What What about these exotic markets that I was mentioning like these Korean stock market or Chinese IPOs or anthropic equity or this type of stuff? Is that Is that at all possible or not really interested? Absolutely. A funny story is like the the Korean stock market. So I'm a I'm a stock market geek. I've been working in this industry for the last 10 years. The KOSPI 100 was the largest traded derivatives contract in the world by far.

And and like if anyone tells me that that was because of fundamentals, like I'm sure they're kidding themselves. It's really because people just wanted exposure and that and and speculative trading. But that that market is extending to not just Korean stock futures, right? Like people do want to speculate and get exposure to price of SpaceX. So so there is there is a going to be We we think that that that all assets come on chain and that's how you can build a full portfolio. That's why we focus on, you know, liquid money market funds, bond funds, private assets, but then really single name assets as well. So Yeah, I'm bullish. I'm bullish single

name exotic assets. Yeah. Yeah, because everyone's focused on getting US assets into the global investors' hands, but not as many people are focused on getting emerging markets assets or markets available to US investors. Yeah, that is I I think there's a lot of high quality teams and a lot of high quality companies that come out of non-US markets, which people often don't even get to hear of just because they can't get exposure, but tokenized models provide that option. Yeah, like Deep Seek is apparently in talks with Tencent right now for a 20 billion dollar valuation funding round.

Are you a believer in this emerging markets thesis? I mean this is completely separate from what you're doing here, but there's just kind of, you know, conversation in the macroeconomic conversation about how emerging markets have been far under invested comparatively to the US equities market and that they are poised to have a strong outperformance compared to the US equities markets just due to a kind of shifting of the nature or shifting of the tides, if you will, of the globalization economy as a result of many things stemming from all the way from the US freezing Russian treasuries during the that war to this war to oil to energy to

AI etc. There's a lot of factors at at play here, but like what is your emerging markets take? Is it Is it overhyped? Is it something to to invest in and to think about? If it is, how would you get exposure to this? Obviously not financial advice, but curious what you're thinking about from the macro sense. I am not a macro trader, but I am what I am very very bullish emerging markets. I grew up in an emerging market, so I have seen the pace of change in those markets and I can tell you that the demographic change, the technology change in those markets far outpaces whatever is happening in the developed world.

India is my home country. Look at what UPI did. UPI is probably one of the best retail payment infrastructure that exists. My a vegetable vendor accepts Tencent payments on his mobile phone today. So I am super super bullish. It's a Emerging Markets have young demographics, smart people who want to get educated, learn English, super entrepreneurial. It's really they are looking all looking out for themselves. They have no social safety nets. So I would be I am personally long EM.

Whether that translates into short-term stock market public stock market performance or not, I don't know yet, but I am bullish EM. So EM, is that the E like the like the classic index fund is EEM? Uh uh wow. That thing looks crazy. Just broke out of a just broke out of a 20-year range to the upside. Yeah. >> Putting in a massive green monthly. My god. Yeah. >> Emerging markets. See, this is what I mean. Like there's no way to trade this ETF on chain, I don't think.

I'm going to look it up on Cloud. That is a good shout. >> [snorts] >> Maybe this is what Kaito needs to do next. I don't know, but I'm telling you people are over fixating on bringing US assets onto markets to give democratized access to global investors and not focused on bringing global investment opportunities to develop market investors who have all the capital. Not all the capital, but some of it. Yeah, there is no there is no EEM on chain, I don't think. Interesting. I mean, yeah. I mean, Trey, this has been great.

I I wish you the best. Thanks thanks for coming on. Emerging Markets bull here. This thing looks great. So Yeah. EM bull, crypto bull. Thanks for having me, Andy. It's been a pleasure. >> We'll see you next time, all right, buddy. Cheers. Cheers, man. The Emerging Markets bull, man, that EEM index is crazy. Actually, someone in my family told me the other day that they were allocating into the EEM um index. Like like they were allocating more of their funds into this rather than into the US equities market.

Which I was kind of I was kind of surprised by. But it makes sense, man. This thing is a This thing is on a 20-year breakout look putting in a a really really nice monthly candle in 8 days. So that is more of the macros. I again, like this asset should be on chain. Like you should not have to bridge and go into a brokerage account to trade EEM. Like you should just be able to do that on chain. So Hopefully that Hopefully that happens. Up next, we've got the CEO of Canary, Stephen McClurg. A Canary is an investment management firm focused on digital assets.

And we've got Injective, Cooper. Cooper is the institutional lead driving partnerships and adoption. We're going to talk ETFs. We're going to talk Injective. We're going to talk the state of the institutional market and what's happening with Stephen and Cooper. This should be a good one. I think we had Stephen on like, I don't know, must've been like last October, right before there was this onslaught of of crypto ETFs. I think that was the last time we had Stephen on and never had Cooper on. So the ETF pipeline is hot. People are bullish. People are allocating. I think Avalanche had a pretty big flow to their ETFs when

Bitwise launched theirs. Today, GSR also just launched their um ETF, their first actively managed one from them. Bitcoin, Ethereum, and Solana. So yeah, we're going to hear from Stephen and Cooper and talk about ETFs and what's going on in the global markets, RWAs, regulated futures, and more. Should be good. Should be good. Guys, checking in on the markets here. Again, EEM is what we just talked about.

Broader market looks good. We've got Cooper and Steven ready to join us here. We're live from the Empire State Building talking ETFs. Lot lot lot of action in the last couple of months. As I said, I think we had Steven on in October before the onslaught of crypto ETF. Steven, Cooper, guys, welcome to the show. Hey, thanks for having us. Thanks for having us. Looking forward to Busy times. Busy times. Is Is that a Thunder hat? Yeah, do you know Thunder? No. Thunder is Do you know Dez Dickerson? She's an OG Bitcoin developer. She She launched a gaming company that uh um

rewards in Bitcoins. It's It's a really cool company. There you go. Nice. Well, Cooper, welcome to the show. It's your first time. As I was saying, we had Steven on, I think with Eric actually, last time. And Steven, we'd just love to get a quick tip on your background and what you do at Injective on the institutional side. As I said, I think it's been quite busy with the recent launch of futures. So, lot lot a lot to talk about here. Yeah, totally. Thanks for having me on. I'm Cooper. I lead the institutional business here at the Injective Foundation. I came to crypto about 7 years ago after a couple brief stints in the traditional finance world across brokerage and venture.

Um and I've been here for the last four four and a half years. So, mainly focusing on business and trying to bring profitable businesses on chain. Um happy to be on here with Steven. Uh he's kind of taught me a lot in the past couple years and we're very excited about the the recent futures launch for INJ and um you know, what that means for the the future of Injective's, you know, more broad institutional acceptance um as well as the path to an ETF. So, happy to be on here with you and and get into those things. Sweet. Yeah, Steven, it's been maybe 6 months since we had you on last. I think as I was saying, it was pretty much right before, you know, last time we spoke there was not a single crypto asset ETF other than Bitcoin and Ethereum, which sounds crazy

now. Sounds insane. Um we'd just love to get a an update from you kind of holistically, lay of the land, ETF side, uh adoption side. I'm sure it's been a busy 6 months. Although, obviously, it's been a bit of a slow market. How's it been? What's been the state of things on on Canary side? Yeah, so I I don't know how many times I've been through a bear market in in crypto at this point, but uh this is one of them. Uh this one doesn't feel as bad though. And and I'll tell you why. Uh you know, we we launched, again, an onslaught of ETFs in October, November, December. They they keep rolling out.

And what's happening is the market is really taking to any kind of uh platform that has uh you know, financial or or enterprise use cases including things like tokenization, which is which is the big buzzword right now. So, despite the fact that most of these um you know, uh altcoins after Bitcoin and ETH have launched since October, which was the top of the market, uh we've gotten a very very steady amount of flows coming into the ones particularly that have enterprise and financial services value.

And uh it's one of the reasons why we're we're very excited about Injective as a protocol because uh they do provide that solid uh foundation for um you know, for financial transactions. But But that is what we've noticed. The the market is really really keen on investing in projects that have uh in in enterprise and financial solutions attached. Yeah, definitely. And the flows on the ETF side as of the last, I think, couple of weeks have been strong. Obviously, we saw a lot of outflows, but now it just feels like there's a lot more options uh in the market just, you know, for for the average investor on their brokerage.

There There's a lot of crypto asset ETFs now. Cooper, I'm curious from your side, how you think about kind of standing out in the lens of an institutional investor, right? A a lot of these come in, they know about Bitcoin, they know about Ethereum, and they have a lot of questions about everything else. Yeah. Uh you know, what it is, why it exists, what the value is. Curious, you know, kind of what your experience has been like fielding these questions, like what these questions are, and just generally how you kind of think about uh standing out from the rest of kind of the available options as it comes to uh trading crypto for larger institutions.

Yeah, so with that being said, I'll give you the quick intro. Uh for those who don't know, Injective is a layer one blockchain built specifically for finance-based applications. So, unlike general purpose blockchains, there's a specific use case. And we'll effectively like to think of it from a simple perspective as like a WordPress for finance. So, developers can come in, they can spill up spin up their own exchanges, their own prediction market apps seamlessly um with the you know, the click of a a couple buttons in in a few days. Um and then they can access institutional grade liquidity through those, you know, apps themselves. So, I think that, you know, people are really catching on to the revenue meta um and understanding that, you know, crypto is maturing and and businesses need to have real fundamentals and they

need to have abilities to generate revenue. And you see, you know, an interesting asset class that's reached 300 million people globally um that largely don't have access to financial services. Um and we view, you know, ourselves as a great rail infrastructure to get to those people via building kind of this modular architecture or or enterprise grade solutions um or modules, you know, that developers and and 40 plus applications that I have across the Injective ecosystem today can bring those different forms of use cases to those people more more broadly and globally.

Awesome. And then kind of what are some of the questions that you're fielding from that side, right? Like Like what are the main points of interest or conflict when it comes to Injective from the from the institutional crowd? >> Yeah, I think right now it's all compliance, right? I think it's all, you know, are tokens permissioned? Are they permissionless? Who has access to them? Um you know, what does the regulatory environment look like in in 12 to 48 to, you know, you know, months out. Um I think that those are the majority of the questions is obviously a permissionless token is, you know, much better because you can seamlessly transfer it across the world in the click of a button. However, there are some compliance uh constraints around that in terms of who's going to

regulate that token and who's going to govern, you know, you know, could bad actors have access to it. So, I think right now we've been doing a lot of thinking and working with a lot of the leading institutions to to to figure those types of questions out. Um there's no perfect answer um you know, currently. And I think that that's kind of a a big part of the way we've positioned our modular architecture is to have a different framework for different issuers globally, right? If you have somebody in Europe, um they're going to have to, you know, comply to different, you know, MiCA standards as opposed to somebody, you know, in the US um who's trying to get a transfer agent license.

Um and that's going to have a different set of requirements. And the same thing for, you know, Asia or the Gulf, etc. So, I think from that perspective, um that's largely, you know, the question is is are you accessing new users or are you accessing new capital on chain? And based off of kind of that answer, um you can find different forms of solutions that that that fit your use case pretty well. Yeah. Awesome. Steven, this kind of futures to ETF pipeline, this this like 6-month period.

You launch these regulated futures, then that sets you up for an ETF. Um this may be silly, but is it just that easy? Is there roadblocks? Is there complications here? Is there ways to expedite this process given the kind of more status quo nature of digital assets now? Curious through your process here, how, you know, this may play out for Injective or just kind of thinking more broadly as well about this crypto asset to futures to ETF pipeline, what that looks like. Obviously, we're seeing more and more of these uh come out of the woodwork over the past few months, you know, since you were last on. What does this pipeline really look like based on the SEC's new guidance? And is there any roadblocks or is there any ways to kind

of expedite this process? No, there there's really not a way to ex- expedite it. And And And by the way, I don't think that's necessarily a bad thing. Um when when the guidance first came out, I was hoping that language around quantitative metrics were going to be included in it. And it ended up not being in there. Uh it really is reliant on a futures market. But there's two different paths that we're having to take simultaneously. One of them is the S-1 process. You So, you file a prospectus, you get comments back and forth uh from the SEC. You answer those comments. You You beef up the S-1. You file them an amendment. And And And you keep going. And if you look back to um you know, the handful of ETFs

that got launched uh this last October, most of those were filed the prior year uh all the way back from September to about November. So, the S-1 process itself is taking about a year. And And it's just because there's so much the SEC has to process. Um I I definitely uh would hate to be in their shoes right now trying to process all these S-1s. But But it is about a year process just to get through the S-1. And fortunately, um you know, a a lot of them that we filed, we've we've we've filed over a year ago. So, we're still working through that process.

The second piece of it is the qualification to actually trade on an exchange, which is having a futures market for 6 months. That in itself is a roadblock because you know, look, there's there's about four main uh futures platforms in the US that uh list crypto spot and they don't list just anything. You know, there's a lot of different factors that they look at. They look at things like market cap. They look at trading volume. They even look at overseas or offshore trading volume of derivatives. So, one of the interesting things about injective and it was a question that I answered from

an institutional investor was okay, well, why why injective? The market cap's not that big. Well, there's another category, too, and Cooper brought it up and it is actual use cases and profitability of the chain itself and even though injective's not even in the top 20 as far as market cap goes, it is in the top 10 when it comes to uh the the value of the chain and the money that it makes from transactions. Meaning that there's real world use cases that are transacting on this blockchain that actually pays for the for the privilege of doing so, right? So, that's a really important factor. And when I see a a coin that

might be smaller in market cap, smaller in US trading volume, but has a very high uh ranking as far as profitability and real world use cases, to me that's a hidden gem. That's something that I'm looking at is okay, we're not there today, but a year from now, 2 years from now, this thing's going to kill it. Cooper, anything to add there? No, I think Stephen had some some kind words there. In addition, I definitely would note that, you know, relative to a lot of those market cap, you know, FDV metrics, right? It's super interesting to take a look at. For those that don't know, inject has been, you know, in circulation for I believe, I don't remember the words, over 5 years now, right? The project's been around for 7 or 8 years now. Why I bring that up as important is people take a look at at

circulating market cap, but they don't take a look at fully diluted valuation and effectively they don't understand that, you know, 30 to 40% you know, it's 20 to 40% in many cases of those tokens are locked up and going to get dumped on their heads from, you know, different forms of venture or team, etc., right? Um so, I think that the aspect of fully diluted, you know, valuation out there in the market and and the understanding that all token unlocks have already occurred, um something super important to understand about, you know, more mature tokens versus less mature tokens. And I think that that puts us in a an interesting category where we're just focused on building products at the end of the day. Um we don't have to deal with those types of headaches and, you know, and and they're all in the rearview mirror.

Um so, you know, from that perspective, I think it's uh it's an exciting time over here on the injective side of things. Yeah. Stephen, when it comes to some of the uh questions that you're fielding from these investors, is it is it accurate to say that they place Bitcoin in kind of this individual category and then you've got Ethereum kind of making its way into kind of this okay, it's the second thing, but still a probably a lot of questions and then everything else? Like I'm just curious what their general worldview is when they look at this market. Yeah. So, you know, I put things in my own categories and and I think a lot of investors are are are probably looking at it the same way.

I I I almost wish they would look at it the way that that that I look at it. Yeah. Uh I I put I put Bitcoin and then things like Litecoin, Monero, um Zcash, you know, uh I put all of those in the category of money. And I view them that way. I think most of the market views it that way. And it is its own separate category. The category that, you know, we're talking about today has more to do with I would say just broad corporate and enterprise use cases. Yeah. And that's where you get, you know, the injectives of the world, the XRP, the HBAR. And again, the ones that are transacting on chain and that real world use cases are being built on top of, those are the

ones where we're seeing a lot of the flow in. And uh some of them have, you know, like there's a broad range of of projects. Some have a lot of hype and sometimes market cap and and and and retail trading is hype based. And uh the ones that are actually really, really building and focused are the ones that you see that are that are that are really transacting real world assets and um and and they're really being looked at closely by institutions, by financial advisors, by corporations. Uh ETH still, in my opinion, falls in the latter category. Um I I really compare ETH more to like an open source type software like a like a Citrix.

I I don't really see you know, this is going to be really unpopular. I don't see a very long-term use case for a lot of enterprises using say ETH. Um what I'm seeing happening are corporations they you know, they they love the the technology. They love uh the code and they're just taking the code and privatizing it and building it themselves. That's what JP Morgan did. They're just they're just, you know, creating their own fork and and and owning that part of the chain. The ones that I'm really interested in are the ones that are a little bit more broad-based that are, you know, that that people are building directly on top of. And those are the ones that I find very interesting.

Yeah, Cooper, just kind of like on a similar note there, there's this just absolute growth of like the NYSE's launching block space. Uh Stripe obviously working with somebody like Tempo launch their own block space. There's just kind of like corporate chain happening. You got like things like Canton, etc. You get these like new kind of categories of block spaces that are being created specifically for these institutional use cases. And then something like injective kind of is in the middle here where it's like, okay, we facilitate retail, we facilitate institutions. We're not kind of like set for one.

You could argue that that's a benefit or you could argue that you're kind of not succeeding in one of the other more than the one who is, the hyperliquid for perps or the Solana for retail or the I don't know, you could say Canton for the institution or the Right. you know, NYSE chain for the institutional. Kind of like I'm broadly curious like from the strategy perspective, like what matters to you guys now? Like what is the definitive market for injective to win and how do you explain that to investors? It's a great question and I think through having all those same meetings with all those folks that all of these other, you know, large foundations or smaller foundations are also having, something is incredibly clear. And that's, you know, what is our

competitive advantage? Our competitive advantage is building blockchain technology. Right? When you go out and have some of these conversations, these guys barely understand consensus. They barely understand block space. It's like then you understand, right? I don't necessarily understand their business, you know, perfectly or you know, at a master level, right? But what we understand is building blockchain technology and what we understand is how that can benefit their types of use cases. So, I think the goal for us is to meet people in the middle. Um and effectively say, okay, how are you trying to optimize your business and we can be flexible and modular to to to find ways to do that. A great example of that is we have a couple modules on our chain called the you know, the permissions module as an example. We're working with a a couple of great, you

know, tokenized issuers um who were able to come over and seamlessly launch whatever types of compliance controls they need for their tokenized funds. Um so, I think really like it's it's that simple. It's the answer is these guys don't know how to build blockchain technology and I think a great example Stephen even brought it up, right? You're seeing a lot of these projects from big banks or or wherever they're coming from building their quote-unquote private blockchains. But once you dig into it and have some of those meetings and get a little bit of an understanding, um they're using like tech that's outdated by like, you know, 4 years already. Um and then you realize where your competitive advantage is and that's, you know, building this technology and making it modular such that it if it can fit in service, you

know, different aspects for different users. Um And I think that that has been, you know, a successful strategy thus far. Yeah. Then Stephen, building off that kind of, you know, thesis around building better technology, again, perhaps it's somewhat silly, but do do do the institutions really care? Like do they just want you know, something with good backers? Uh you know, that their buddies are in, so, you know, they want to be in. They they see a a potential for upside like what are you seeing as like the key things that that that these firms care about?

You You've said this kind of focus point on tokenized assets or real world assets. Obviously, you know, that's what um that's what Cooper's been, you know, talking about with injective, but you know, do they care about the tech? Do what do they care about? Yeah, look, you know, over the I don't know, [clears throat] the last 10 years that I've been full-time in blockchain, what most of that time has been is exactly what you described. Who are the backers? Who's buying it? You know, who are the who are the influencers involved? You know, things like that. And again, that's a little bit more on the hype side. Uh it's changed significantly in the last 2 years. And and I want to say the change really started occurring when

the ETH ETF came out and people started asking, okay, well, well, what is this? And and this is where, you know, financial advisors and institutional investors uh started looking at it and saying, okay, what's what's what's the value proposition? What does this do for me? How's this how's this relevant? What's the future? And that really that really started a lot of due diligence and exploring what each one of these other blockchains does. And uh you know, it it all keeps coming back to real world real world use cases. Can Can somebody in my industry actually use this blockchain to do something interesting, something, you know, and and and and again right now it's more on the tokenization side. Uh I think it's

really going to expand a lot beyond that. That's sort of the uh that's sort of the sort of the first stage of, okay, I can see this. You know, uh the reason I got into blockchain was uh I was a I was a a fixed income manager and I was a bond trader and I I looked at the uh at the bond market and it was it was very disjointed. You know, anytime I wanted to trade a bond, I had to look at a Bloomberg screen, pick up a phone, make a trade. And I knew that there was a future where blockchain could possibly used to, say, put bonds on the blockchain and then be able to transact, be able to um uh

utilize tools like repo, reverse repo, which a lot of people call, you know, DeFi lending. But, that's essentially what it is. And uh are you able to utilize these tools? Are you able to transact? Is it Is it secure? Is it fast? And is it fairly inexpensive? And those are really the three factors that uh a lot of people are looking at. Yeah. Uh last thing for you, Cooper. Um what is on the road map for Injective from both the institutional side and the tech side? Where are you kind of most focused and what is What should the community be excited about from what Injective is working on in 2026? Yeah, great questions. Uh I think the the first thing that has come out recently uh is

that, you know, Circle and USDC is live on testnet. So, I think we're very excited about where that's going to go, you know, more broadly and a lot of similar partnerships or I'd say, you know, tokenized-based partnerships from an institutional perspective of different types of assets being utilized across apps on the chain and and, you know, getting to their end user seamlessly. I think from a tech perspective, there's a lot of work being done um right now to make, you know, the chain as a {quote} payments or transactions or an exchange product to be as efficient as possible. So, there's a lot of work being done behind the scenes to really decrease block times already from, you know, one of the fastest in the industry at about 600 milliseconds um to, you know, bring that down to, you

know, even as close to, as, you know, Solana's numbers in in in the realm of 200 to 300 milliseconds. Um in addition to that, I think that there's a lot of work being done in terms of providing new modules for these developers. We're seeing, as an example, cross margining being something that that's super interesting. Um we're seeing, you know, a lot of these different wallet creation platforms continue to evolve. I think that's a great example, back to the previous point, of, you know, what does blockchain enable, right? In the world of traditional finance, there's five different layers of fund administration. But, if you can have smart contracts or or different forms of on-chain primitives kind of cut out and and take out the cost of, you know, three of those five fund admin um you know, layers, you save, let's

say, you know, 50 to 150 bips um on this facility that's, you know, only making, you know, 8 to 10% annualized year as an example. So, I think that that's where we're spending a lot of time. Um and and and lastly, I will note that there are some some big plans that that aren't out yet um of a large exchange launching, you know, on the on on the network that's real goal is to service and offer, you know, 500 to thousands of different markets across equities, commodities, um you know, cryptos in the forms of perps, um you know, more globally. So, there's a lot of time being spent um on supporting that team and that effort. Um so, I think a lot to come, but I think long story short, new tech is really

speeding up the chain and adding more modules um at a high level and then supporting a lot of the different institutional business that that that and tokenized funds and tokenized assets that are coming to market. Awesome. Yeah, I mean, I think the the kind of mental framework that we've been living in around this technology being solely for crypto assets is being broken. I mean, you guys have both came on and said the emphasis is on trading different types of assets, financial services, etc. It's like the the previous couple years of the of what we've known in blockchain is not going to look anything like the next couple years just based on the types of assets, the types of users, the types of protocols, policies, given all these exploits as of late to circuit breakers, rate limits. Like the whole industry is

just is just rapidly changing. So, appreciate you guys spending some time with us, Steven Cooper. Wish you guys the best and uh hope you guys get this ETF through sooner than later. Thanks for having us on. Thanks, Steven. Thanks, Andy. Cheers, guys. [cheering and screaming] All righty, guys. Someone in the chat said, "I'm holding 7K ING. What's up, Bala?" Good to see you, man. Uh we've got Andy Bear, asset management manager at GSR. They just launched their first ETF product today and we're going to talk about that and more. We'll be right back. We're going to get Andy set up and we'll be back shortly.

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[bell] >> Going up. 70. 7 >> All righty, guys. We are live here with Andy Bear of GSR asset manager. A lot of experience in traditional finance and more. Live in the in the tokenization tower. Good to see you, Andy. Welcome to the show.

Two Andys here today, guys. Big news for GSR with the first ever ETF today. Don't want to bury the lead. Andy, how are you feeling? I know it's been busy. It's exciting. Launch days are great and you know, it's great for GSR with expert in market making in the sell side of the crypto business to be first to market in the US with a multi-asset actively managed staked ETF. So, we think this will be a great product for long-term investors and basically it answers the question that we all get asked every day is like what crypto should I own? Right. And so, actively managed across Bitcoin, Ethereum, and Solana. What does that really mean? Does that mean, "Hey, I don't know which assets to allocate to and how to kind of diversify my crypto

exposure. I want to give this to an expert, allow them to kind of use their market analysis to provide me a strategy across these three assets." How do you guys think about what this actively managed ETF means because this is a rising trend now in crypto ETFs, this idea of active over passive management? >> Yeah, exactly right. It's look, it's a very simple and honest concept. People want to know what they should own long-term and people are starting to think of less as a trading thing where they're going to go in and out and try to you know, make a few bucks or position for a month or two or try to time the market. But I'm really just going to allocate there and I'm going to kind of leave it there like I would with other asset classes.

We're seeing some of the other giants in the industry start to design products, both multi-asset products and and you know, other people who are more allocation oriented launch Bitcoin ETFs like Morgan Stanley position these things as long-term holding. So, for our long-term holding product we thought, "Well, what would we want, right?" We we know that we need Bitcoin for its macro asset influence, right? That store value, oldest crypto, more than a trillion. You got to have some Bitcoin. Ether and Solana represent the core of this kind of layer one contribution to the integration of things like stablecoins and tokenization, which more and more people are hearing about now that that's kind of top of fold news.

So, we kind of think of that as the core, right? You can certainly add other names outside of that, but that's a core holding that is for most people is pretty defendable. The next point is, "Well, how do I weight these things, right?" Because if you market cap weight them like some of the products that are out there, it's it's a passive way to go, but you end up with a lot of Bitcoin and that's worked especially in softer markets because Bitcoin has a little bit more of a shock absorber type of property when it comes to drawdowns. But as blockchain technology takes off and all this stablecoin and tokenization talk starts to materialize into activity, we think that these layer ones are going to have

legs. So, you know, if you're market cap weighting, you're kind of betting against growth and you're betting more defensively. We start with a third to third to third allocation to those three assets. But the active management, back to your question is each week we use signals to say, "Where's the market going from here? Is it a growthier market? Where's the momentum? Where are we in the seasons and how should we allocate?" So, each of the three can allocate anywhere from 0 to 60%. It'll always be 100% allocated. We're not trying to time the market, cash or crypto, but we will steer, we'll change those sliders around in recognition of where we think it's going. We my team and asset management at GSR runs hedge fund products. Of

course the the firm has had proprietary trading going on for years. So, our models are pretty good at at kind of having a view of where the markets are going to go and we're starting borrowing some of that technology for this ETF. Amazing. I guess, you know, the other question in all this is why not sooner? What I know these these products take a while to build and develop. Also, the ETF market is relatively fresh in the space. What was the process like to get this done and get this through and why not sooner? Yeah, great question.

Think about there was a lot of excitement maybe not this time last year, but by the summer it was a pretty excitable market, right? You had a lot going on with digital asset treasuries. You had all-time highs being hit almost kind of weekly. You had that August pump and then that other kind of follow-on pump in October before that deleveraging event. And you'd think that's a pretty good time to get an ETF out there because the excitement was good, the news was good. There were IPOs on New York Stock Exchange and Nasdaq. But now is a time sort of 8-9 months later where the mood is definitely more constrained, right? We've been in this trading range for a long time. Leverage is pulled out of the system. Funding

rates on perps are kind of flat or negative. Volatility levels both implied and option prices and realized volatility is down. We even created in GSR a new gauge called the conviction or ambivalence gauge. Like and the market was trading at almost max ambivalence up to a couple of weeks ago. The way we measure that is, you know, I guess the shorthand way of saying it is if a trend starts to form, does it get legs or does it does it gain energy as it moves or does it kind of mean revert? And if it mean reverts, very difficult trading environment, right?

Cuz you want to latch onto a trend only to see it fail. So, we were at kind of max ambivalence. We're starting to crawl out of that. So, now is the time when people can step back. Certainly long-term buyers can buy in at cheaper levels. Right. But we're also seeing all of the slow news, which has continued to happen, start to change behavior. So, we're seeing enough tokenization and state and stablecoin integration news that people are starting to think, "You know what? Allocating to this space to play a five or a 10-year growth pattern makes more sense than ever.

Crypto's volatility is down." And so, now you see some of the big players starting to be more active about having their herd of advisors and wealth managers start to make allocations. So, this is the conversion of crypto as a trading class to an investment asset class. We know that we're not the biggest out there. We think that that trend is really starting to form with some legs here. So, I wouldn't say I would have loved if we could launch this earlier just because things take time, but I think actually our timing might actually be kind of good.

>> Yeah. Yeah. No, for sure. Similar to the digital asset treasury companies that purchased a lot of their initial shares last year. There's there's I think there's only one now that's above water and it was the only one that got delayed and then was able to hold off buying Better lucky than smart right? >> Correct. Yeah, so. And so, you mentioned in this BESO product that both Ethereum and Solana will be staked. >> That's right. So, of course, like the three things people want. I want to have a core portfolio that I can really stick by. I certainly don't want to you know, not be not have staking rewards accrue to my product. And then this active management piece is a third

piece that will help people feel a little bit more comfortable. They won't feel under-risked when the market starts to rip and Ether and Solana are taking off like you know, sort of June and July of last summer. They also won't feel kind of overexposed when markets start to pull back. And you know, sort of safer to be of the three in Bitcoin. We've experienced that entire cycle of emotions and positions over the last 12 months. There will be another 12 months where that happens. So, when you have a static allocation like that, even one as sensible as we think equal weighting is, it still kind of helps keep people in the product if they know the product is working for them by

giving them yield and by just kind of navigating through the moods of the crypto market just a little bit on the margin will keep people feeling like the product's working for them. Advisors will be able to tell their clients that the product is working for them and that just helps people stay in the game. Yeah, I agree. I mean, because the So, from the you know, and perhaps I'm not the ideal client here, but from the from the investor perspective, you know, you pay fees on what you own in these ETFs when when you hold them. And a lot of the passive ones to me, it's always like, "Well, okay, it's great. I don't have to be on an exchange or be on chain, but I'm still just paying money to hold these assets that that I could hold elsewhere and not pay anything." And

sure, there's benefits to being on like a Schwab or be on a broker and having the liquidity, etc., but the active management perspective allows you to kind of turn your brain off and kind of give that access and ability to somebody who's very very in the loop, right? Very very tuned in. Correct. And and again, yeah, you may not be perfect cuz you you may have your you may have a hardware wallet at home. I'm sure you do, right? You may be uh Couple of them. Yeah, a couple of them, right? But you are probably very likely have people asking you who are not in crypto, "What should I own?" And you're not going to necessarily for all those people tell them to go out and buy a hardware wallet right?

Right. So, and some of them you say, "Well, you should get some Bitcoin, but you're going to miss out on you know, the stablecoin and tokenization thing and layer ones and you know, and we face that, too, right? For years and years we face that and what we all came up with is, well, if you put somebody in Bitcoin, Ether, Solana equal weight, their bases are covered, right? If they want to go out and buy XRP or if they want to go out and buy Stellar or if they want to go out and buy Chainlink or they want to go deep, they say like let's bet bet on a DeFi bounce and you know buy some Aave or buy some Uniswap, go for it. But that's not your core portfolio. That's not that's not the thing that's going to kind of lift you up as the

macro asset adoption of Bitcoin continues to accelerate and the implementation of all these tokenization and secure and stablecoin initiatives of Ether and Solana really start to take hold. Those are the things we're kind of betting on in the most base case and everything outside of that is kind of you know a satellite holding. Yeah. And so if I'm not the if I'm not the ideal clientele, who is who who do you think would benefit most from this product as an investor? You know, I I probably have some ideas in mind, but generally like when you guys were designing this and thinking about this as as a business line for just for GSR, who who was that primary target and how do you guys, you know,

maybe plan to make them aware that this product exists? Yeah. And and so without necessarily, you know, diving into the area of giving investment advice and talking about kind of personas more generally look as a long-term portfolio holding, the objective of the product is pretty simple. Kind of maintain a core holding of these three assets which we think will be durable cycle survivors. Make sure you're getting your staking yield and try to eke out a little bit of extra performance with the asset manage with the active management and that should that should be you should be golden there, right? Who are we trying to attract? Well, advisors should think about this as a way to solve problems for them, right? They have a problem of clients coming in pointing to

newspaper articles about the New York Stock Exchange and ICE Futures and CME and you know, there's all these integrations and securitize. Everybody's coming to you know, how do I get exposure to that? Seems like it's moving right. They see the the you know, the chairs of the CFTC and SEC up at podiums together talking about harmonization and and the growth of crypto which is just I mean it's brings a tear to my eye, right? Um but the advisors need to respond to their clients' questions of how do I get there? Do I just buy Bitcoin? And the advisor says, well, I don't know, but I don't think so, right? This solves this for them with those again those three key properties, core portfolio, staking returns, and active management. They're

adding value. Frankly, what I see advisors doing which is a smart plan, I think what they do with other asset classes is I'll go half passive and half active. So maybe I'll buy, you know, the Morgan Stanley Bitcoin or or try to put together a passive portfolio or buy one of the multi-products from Grayscale or Bitwise and say that's my market-weighted portfolio, but with the other half I'm going to see if I can add a little bit more value and look for something that tries to do a little bit more. And [snorts] so maybe passive's right, maybe active's right, but I'm going to cover my bases in that sense.

We think that this can slide right in as the active component of that portfolio. Now, I know you, I know me, like we like to trade. I was in finance a long time and one of the things I learned is I'm not always a great trader, right? [laughter] I let emotions get into things. Have you ever done a bad trade in your life? >> Endlessly bad trades. Endlessly bad trades. And do you learn from your mistakes? >> Sometimes. Sometimes not. I don't, right? I fall prey to the same cognitive biases. I chase markets. I get emotional about losses. And on my best day, I like to say the best investor in my household is my son because he was born in 2008,

right? And his college account was just long equities for the last you know, last 18 years and he smoked all of us, right? So this idea that at the same time you don't want to necessarily be passive cuz you see all these big market swings. So frankly, if I hold Core Three, right? If I go on to my brokerage account and type in BESO, right? And buy it, I know that I'm going to get that extra little model-driven kind of pivot from time to time, that weekly rebalancing which is going to make me feel as if I'm at least reacting to market conditions. So it's not that crazy that you would think in a retirement account that you would hold BESO and you would just kind of let it

work for you because when we're honest with each other, we can't always be right and we're not always going to be as mechanically oriented and and and model-driven and pure as as our research models will let it be. So I'm happy to pay a little bit of fees to let BESO do the work for me. Yeah. Yeah. You know, this kind of concept of this passive flow has been talked about quite a bit as MicroStrategy was in the conversation of getting into the S&P.

It's blanking on me if they have yet. I don't believe that they have. >> stayed in MSCI which was critical for them. Yeah. >> Exactly. So They got into the Nasdaq 100. That was that was important. >> too. Yeah. So potentially soon, you know, we'll see what happens. But there's this now this passive flow coming into digital assets that didn't previously exist, right? Whether it be from, you know, in the best case it's added to the S&P and and all the pension funds and these large-scale endowments are allocating to the S&P just passively year over year. That means they're buying Bitcoin effectively.

Now you've got these ETFs and you've got this kind of slow-moving advisor landscape of education when it comes to clients recommendations processes decision-making that and these take months to years, right? From the time the client is interested or excited to the time that the advisor feels confident enough to finding the right product to developing the relationships. I mean, I I've seen photos of different you know, kind of institutional allocators from the crypto side, you know, being on stages educating advisors and and talking very basic high level, right? And so what I'm trying to get to here is basically there's this new passive flow into the industry.

My thesis is that it generally will help shape out some of the really volatile lows that we get on the majors going forward. Potentially also kind of shave off some of the highs, but will is kind of getting us into this more mature market dynamic. >> [snorts] >> From your perspective, the thing that I think our audience is going to be curious about and that I'm curious about is like how do you think about the size of these passive flows as well as the timetable? ETFs have just basically been live for about a year or two on Bitcoin, Ethereum maybe about a yearish year and a half close to two now. Altcoins six months, eight months. These flows take time. How long are we thinking here? And then like what is the kind of scale of

passive flows that you could anticipate whether a kind of percentage of portfolios, dollar amounts, just kind of thinking about how we can think about this. You I think the way you framed it was perfect and it really helps frame kind of my answer which I I think in last year we got way ahead of ourselves. >> Okay. Assume we saw these inflows into the Bitcoin ETFs and we said institutional adoption is here. We saw these 13Fs being filed and we said, oh, all these great institutions, these endowments and and state plans.

And I think what we didn't appreciate was a lot of those long ETF holdings were part of a basis trade. Meaning they were long ETFs and short futures on the other side. And even if people kind of knew that in the back of their heads, they didn't really appreciate it cuz it just the inflows make you feel good, right? And you don't want to feel like this is a this is a hedged position and there's no real net adoption. I think a lot of it was basis trades. Now, on the one hand, having a Bitcoin liquidity market in ETFs both in spot and options and in futures, and having this kind of parallel native market of spot, perps, and sort of derivative options, right? Um it's good because more people have access. It's

bad because it kind of bifurcates the liquidity. Sure. Uh and it creates some of these these two parallel universe markets. Uh certainly if you look at the deleveraging from October 10th which was very focused on Binance, the deleveraging on February 5th which was very focused in the I bid and I bid options world, you can see that they're kind of almost starting to branch. Um one of the impacts of that has been to reduce volatility because you have these different trading markets which are kind of operating independently. Um second one, the ETF one certainly more oriented around option selling than option buying and just volatility is getting dampened.

People I think mistake that reduction in volatility for stabilization. And the reason I don't think it's quite there yet is because to the extent that that basis trade was setting up, you had the inflows, you had money parked in the ETFs, and things were fine. But when the basis trade went away, you saw outflows, right? And the volatility returned. So like everything else in crypto and and what is the basis trade about? Whether you're doing it in perpetuals and for you know, the audience basis trade is if if if dated futures on on CME or another CFTC regulated exchange are trading rich, you can buy the spot, buy the ETF,

sell the futures, and collect a yield. You can do the same in perps. You can buy spot, sell perps when it lines up and you can collect a yield and that's great if you can work out your marginal of those two positions. It's It's the best trade ever, right? It's It's It's nearly a pure arbitrage, right? That kind of uh basis trade setting up is really has to be based on demand on the future side, right? So, it's back to a leverage conversation. To the extent that there is a demand for leverage, right? That Ave rates are high, that funding rates in perps are high, that all all of the other DeFi yields are high, um it means people are like lunging for

leverage. That's bullish. Um it's not anti-volatility, but it's bullish. To the extent that the reduction in Bitcoin volatility, and in fact the price support was based on the basis trade being alive, um it's kind of a false signal, right? When the basis trade went away, prices came down, a little bit of volatility returned. Um so, I think we got a little ahead of ourselves in late 2024 and in 2025 thinking that we were there, uh but really it was just a bunch of trading going on. Now, I actually think it's different because, you know, we'll we will soon be a year since the genius act was passed. That was on July 18th last year.

And the top of fold news is starting to seep in to the point where you really have um more big traditional institutions talking more concretely about allocations to the asset class. Sure. That's the news, and that's the flow uh that I think is really going to make a difference. Now, will that create more of price stability? Absolutely, right? Absolutely will, right? Because there's less leverage based longs or position based longs and more long-term holding. >> Yeah. Um it won't eliminate volatility, but I think it will reduce volatility of volatility. It will reduce the seasonality of crypto a little bit.

>> And um that's all on the positive side. On the negative side, I think it will suck more energy out of the crypto-native trading market into the ETF market. We're going to have to deal with that market structure problem. But um I think there's a really good reason why it wasn't happening last year, and it was kind of a false sense of security, and where I think it's a more durable trend now. Yeah. Yeah. I mean, I think that investors who've been around for a while welcome a declining volatility in Bitcoin as a stable holding of other portfolio. Many Many of us are, you know, nearly all in on crypto at all times, right? And so, you're just absolutely getting hammered by

people by your portfolio high, low, you know, 1 year, next year. Weekends, nights. Yeah, exactly. [laughter] You want something more more stable. That's right. And that is kind of where we're getting to. I think you do you would love to be able to kind of shave off the tops and the You would give it You would absolutely shave off the top if you could shave off the bottom and just let that trend line um start to uh continue to tell the story about adoption, whether it's Bitcoin as a, you know, scarce uh a store of value and a macro asset, or whether it's um Ethereum and Solana sort of taking on this chores the the the settlement layer for all of DeFi and all of uh blockchain assets. You would love to see that

happen, uh certainly in the environment we're in now, where we really like the rocket is just trying to get off the pad, but every time it sputters, very very frustrating. You'd love to see environments of ambivalence kind of wash away and see crypto do at least as well as large-cap equity. >> Yeah, man, that's what's been driving such negative sentiment. It's just the watching the QQQ just rip, and, you know, Bitcoin can't get its feet under itself. >> I I And you know, the underlying reason for that is there are people smarter than me trying to, you know, probably have better ideas than I do, but we're we're still in this area where there is um you have a lack of price action and trend, which, you know, kind of points back to a lack of

conviction, which I think points back to a lack of use of leverage, which may point back to a lack of availability of leverage. Um you know, in the fourth quarter of last year, gold and oil were so volatile. If I was a trader, I'd rather If I can especially since I can trade tokenized versions or perps, I'd rather trade gold or silver or oil cuz it was more fun, right? Um now, gold is priced to perfection. Oil's still pretty volatile, but it's so politically Yeah. day-to-day that trading it's not easy. Uh and there are, guess what, professional oil traders who know more than you do.

>> that the that that the degens want some volatility, and they might be returning here. >> You're I think wise to want less vol. The degens want more vol. The other The other um I think cohort that is going to be sad when volatility goes away are option writers. Mhm. Because uh whether you're uh a digital asset treasury or a foundation, or it's just always been your thing to write 10% out of the money calls on your Bitcoin uh as a way of just scraping giant yield, um that's going to go away, right? And um I It's not going to come back. In fact, it may be it may look more equity-like, where the volatility isn't on the

melt-up, but it's on the drawdown. Mhm. And then, higher vol on drawdowns is never fun. Like, people don't like that. That's no fun. It's It's fun when something's up 10% and suddenly options become more expensive. Like, that's not bad. Cuz then you can write calls, right? But when things are down 10% and vol comes up 20 handles, you think, "Oh dear, like I can't hedge, and I certainly don't want to write puts here, and what do I do?" So, um vol is like it's Some people think of it more as feature than bug. Uh I think for people who are Oh, the other thing important thing about vol is that a lot of the guidance about allocating to the asset class is 1 to 2%. 1 to 2%.

>> Right. Crypto's so volatile, 1 to 2% you're going to feel it every day. Um well, that was when Bitcoin was like 60, 70 vol, right? On a calm day, like a day like this, not too much breeze, cloudy, like Bitcoin might be 30 might be a little bit more volatile than Nvidia, right? >> Yeah. So, 1 to 2% is not going to do anything anymore. Um you really need to double it because the vol's gone in half if you want the same impact on your portfolio. The other thing we like about Core 3, it has diversification across three assets, but it still tends to be about 10 to 15 vol points more volatile than Bitcoin.

>> So, if you want to write options against it, maybe we'll get options listed someday, or write OTC options, or just feel as if you have that potential defined by the distribution of return distribution of the product, it's there, right? It has more of a chance of going up a lot than something that's less volatile. So, yeah, the volatility thing is um uh both sides are going to have to adjust to it. Sure is. >> Yeah. Andy, thanks for spending some time with us. Congrats on the B E S O launch. Um first ETF for GSR. It's a big accomplishment. Um a new business line, a new line to access institutional capital for uh and I know you guys have a ton of connections, partners, and a great great

overall network here, and will be contributing to the passive flows into active products pipeline that we'll see more of. So, thanks for spending some time here. Fantastic. Thanks for having me. Cheers, man. Guys, that is our show today. We finish off with a double Andy here in the nest. Thank you guys for watching. We'll see you tomorrow. We've got a packed schedule tomorrow, as well. Um should be a good day. The markets look good. I'm saying winter is over. Yet to be seen. Yet to be seen in final, but we're looking good here, guys. See you guys tomorrow.

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