🚨LIVE: PUMP & HYPE Leading! Saylor STILL Selling BTC? Katie Stockton Joins, Plume x Strata Markets

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It's the golden age of crypto, guys. Get right. Let's go. >> [music] >> Welcome to the nest. See you on the show. >> Enjoy my year of El Madre. Happy, happy Thursday. Welcome to Tokenization Tower, The Nest, broadcasting live from the financial capital of the world. You're watching The Rollup. Today is August 13th, Thursday. It is a weird day in the markets. NASDAQ ripping, crypto not. Um as always guys, shout out to Plume powering the show, The Nest as always.

Shout out to Plume. Thanks for being here Plume uh powering the show from the Empire State Building. Rob, good morning, good afternoon, good evening. How are you? >> Good morning, good afternoon, and good evening to uh you as well as all of our partners, our viewers, our team, and all of our friends, ladies and gentlemen listening behind the scenes. Uh it's a terrific day to have a terrific day and uh I'm excited cuz there's plenty of going on. Market is as apathetic as ever, but I feel like every day we draw one day closer to ultimately transitioning and completing the transition into a new cycle.

Uh and so I'm excited. I think that uh now is when winners and losers are defined. These are the time and market conditions that separate the men from the boys. And so it is an absolute pleasure to co-host this show with you, educate the market, and talk to some of the smartest and most sophisticated minds in digital assets. Um I'm excited and >> we've got Katie Stockton. We met her in Connecticut at that at that conference. Um uh she is a very technical, she's a CMT licensed investor and trader, and is launching a new Bitcoin product. So we're going to get we're going to chat with her first. Uh and then we're going

to get into the news, into the topics, into everything else that we're doing uh shortly thereafter. So why don't we chat with her. Then we've got Ryan of Plume. Then we've got uh Ramiro uh from Frontera as well. And yeah. So I'm going to mute on the meet there and we'll be good to go. >> Beautiful. Um well, we've got plenty get into. So, uh without further ado, uh we are going to bring up uh our first guest, Katie, in a minute.

>> Katie, yeah. She's extremely well experienced in the markets broadly. Um, and has a lot of takes on generally where we're at and what's coming next. Otherwise, guys, uh New Type says Cypher. Uh wow. Um, must be ripping or dumping, I guess. Um yeah, Hyperliquid looks great still, Pump looks great still. Um, Zcash looks pretty good. Lighter had their announcement of points being live. So >> Pretty interesting decorrelation uh in the market as we uh are seeing it play out because yeah, Bitcoin under 63K while Hyperliquid, Lighter, Pump all uh

doing quite well and extending rallies. I don't know. Do you Is this what we expected? It feels like this is kind of the uh the unraveling of the correlation. >> Yeah. >> I think this is going to continue. I think Bitcoin's going to go on its own way. I think there's a class of assets that have monetary premium and those are going to get seen as inflation hedges and gold is doing pretty well. Uh although >> Gold's doing great. Gold's doing great. >> And so it's interesting to see how gold is performing one way, it's uncorrelated from Bitcoin and Zcash and then those are uncorrelated from Pump and Hype.

>> Yeah. Yeah. I mean, you said that the um you said that the Bitwise guys said that the institutions were not interested in investing in majors, but then today Matt Hougan commented on my post from yesterday saying that they are indeed. Like he was like, "Oh, I see nothing wrong with owning Uniswap and all these others." So um yeah. >> So, there's a different investor type that is going into the Uniswaps and the pump funds and the revenue generating fundamentally driven DeFi coins. And there's another investor type that is looking at the majors, looking at coins with monetary premium. And you know, that's kind of what we're seeing play

out is this bifurcation happening in the market between market segments and investor types. And so, I think Katie Stockton of Fairlead Strategies is going to have an opinion on this. >> Definitely. >> to bring her up in just a moment. And as you mentioned, uh she is part of Fairlead Strategies. And uh I'm excited. I'm excited to bring her up. So, I think she's ready in the back. She's a uh chartered market technician, uh familiar with ETFs, portfolio management, CNBC contributor, uh best known for her disciplined rules-based technical analysis across markets and >> your favorite technical analysis, Rob.

>> Yeah, my favorite technical analysis. I am a TA >> Look at Maybe we you guys can have a little debate here. >> Yes, I mean I am >> know, but Robbie doesn't believe in technical analysis. >> I I I have called it astrology for men. >> All right, let's get Katie up and let's get this show on the road here. >> I'm excited to bring up Katie. There she is. Katie, welcome to the show. Good to have you. >> Thanks. Yeah, good to be with you guys. >> Yeah, thank you. >> Absolutely. Well, I mean that was a tremendous way to start off. Technical analysis. And he's typically the the TA guy on the show. I uh I kind of famously, I guess, oppose that view, but I'm curious, where do you stand on this uh on this debate?

>> You know, I feel like it's not even really a debate anymore. Although it it does give me déjà vu back to like, you know, 20 years ago, where with technical analysis, I think it's so much more mainstream these days and and for good reason because it's simply the analysis of price trends. And we can all agree that things move in trends, right? And of course those trends reflect the balance between supply and demand for the security. I think the misperception is that, you know, we're trying to predict where something's going to be at year end or something of that nature.

And that's not really what it's all about. It's more about identifying trends, measuring momentum, understanding where you are in a cycle, whether there's a support level. Things of that nature can really be additive when you're considering a position. >> And in times like we are right now, in these times, market conditions are rather apathetic. Uh seems to be kind of the way that uh you know, we describe these market conditions at least in digital assets right now. And so, does it Is it true in your perspective that uh technical analysis is a little bit more uh relevant in certain market conditions? For instance, when there is momentum, a trend is more defined. But

maybe apathetic market conditions because there isn't really a trend, there's not much momentum, and the flows are a little bit more mild, technical analysis may fall behind fundamental analysis. Or is technical analysis as relevant as ever, kind of no matter the the market conditions? >> Yeah, I mean, I I'm obviously biased, but I would say it's always relevant. And it can help you identify whether it is a trading range or whether it is a trending market. Those trading ranges often give way to big breakouts, right? So, we kind of get excited when we see these prolonged consolidation phases.

And to have that chart to show you where there was resistance that's no longer there, that can be really helpful and and helps you to see where there's a catalyst or maybe a shift in market sentiment driving something. So, not to replace fundamentals at all or macro inputs, but rather to complement them and help you understand if there is you know something's ready to get going and we found that cryptocurrencies do have a specific like character to them and Bitcoin in particular has this sort of um I guess propensity to these prolonged ranges or consolidation phases, but then either shoots up or shoots down and the indicators that we use can help you

identify when that's more likely to happen. >> Yeah. >> Where Just curious, what just around that out, what are some of your favorites? Like what what kind of indicators do you find yourself using? You like RSI or you know, or you just horizontal lines? What what do you typically find is most helpful to your strategies? >> Yeah, I mean we're we are kind of like classic sets in that we use moving averages and support and resistance levels uh to a very strong degree, but we also use a lot of indicators, things that are measuring momentum, overbought oversold inputs and relative performance.

MACD, which is moving average convergence divergence, it's a very common technical indicator, we use that. Uh we'll use it over different time frames and and it can be really informational. We use the stochastic oscillator as one and really kind of a uh replacement for an RSI, they're they're kind of one in the same in what their takeaway should be. So, but an RSI would be great, too. What I will say is that there's um no really holy grail, if you will, in terms of technical indicators. It's more about how you're using them in the current context, like the current environment, and also how you're combining them. So, if you're giving the appropriate amount of weight uh just based on that environment.

>> And um I saw a tweet that said the Bollinger bands are like as compressed as they've ever been, maybe only six other times they've been this compressed. And so, you know, to me I could I could on Bitcoin, exactly. Yeah, I and I can see that two you know, two different ways. Are we supposed to interpret that as you know, we're in this really low liquidity low volatility environment or does it make more sense to expect volatility? This paradigm can only continue for so long. How do you implement a time variable into some of these technical indicators to tell you when the trend might shift? The when question is what I I struggle the most with with TA.

>> Yeah, and so it is a matter of using multiple time frames in your analysis and looking at the indicators and and their sort of like norms over the course of history. We don't have the lengthiest history for Bitcoin and the like, but we do have just kind of general sense of a volatile asset. And for example, how long duration the average MACD buy signal might last on a monthly chart. That can help you understand time frame. We also have ways to understand that let's say we had an overbought downturn on a daily stochastic oscillator. Well, on average it takes maybe two to three weeks for it to become oversold, right? So we can get those senses of

timing. But usually when it comes to range, you just want to wait for the breakout or breakdown rather than try to anticipate when it will happen and position for it. We found that you know, there is high risk of sitting with dead money if if you're just in that range unless you're very long-term investor and you can have that level of patience. So we we like to see the breakouts or breakdowns. We need just something clearing of resistance or a falling below support before taking action. You can sometimes look at price patterns, things like triangles or you know, pennants, things that show like a narrowing series of lower highs and higher lows. And then there is a

point at which they converge into a point, right? So that's it's pretty unusual for the triangle to get that far, so sometimes with a triangle it's about 2/3 of the way to that point that you often see a breakout. So, there's there's, you know, metrics like that that give you a general rule of thumb. Uh but I like to wait for the breakout. >> Yeah. I mean, it's as much of a psychology and a risk management game as it is understanding patterns and indicators and all these things. Uh you know, we we've just learned to keep it super simple. Like horizontal lines, trend lines, and three moving averages. And we tend to just not look at anything else and try to just be very very very simple. And that's kind of

been the easiest way that I think we've we've done it. And we're much more like kind of zoom out uh multi-month to a year-long positions. And then obviously there's like some shorter-term stuff for on the side, but I think with our audience and what and like kind of what we're doing it's it's actually probably perfect for what you've launched, which is this BNAV, this um fairly tactical Bitcoin ETF, which actively manages Bitcoin exposure. And we were talking about this in Connecticut at Digital Forum. And you know, you had talked [snorts] about launching it at the right time. And that was maybe 2 months ago, 3 months ago-ish. Um now we're, you know, 3 months past and it's been it's been live for a little bit. Uh you know, still early stage, couple

million dollars in AUM. Maybe just tell us what your position is. You know, what is the exposure of BNAV right now? I understand it can kind of go from all the way to like a little bit less than 100% exposed all the way to a little bit more than 100% exposed to Bitcoin. So, how is the current positioning of BNAV and what is kind of your signals that you're looking at to make changes to that position or why are you kind of at the current position that you're at? >> It's funny to be market timing the launch of a a fund, but it is when you have that at liberty, it's definitely wise to do that because we obviously wouldn't have wanted to launch it into a peak. But now we have a long-term oversold condition for

Bitcoin. So I think it's a better time now certainly than it was a few months ago. And we launched on July 29th. Right now the BNAF fund sits with a 70% position in Bitcoin, so just notional exposure overall. And that's obviously under exposed relative to Bitcoin buy and hold strategy. Our design here, it's a rules-based system that we developed using technical tools and we're using multiple time frames. So we're honoring the longer-term trend, but then refining it with the weekly indicators and the daily indicators to help us know when we want to use leverage. The leverage that we're employing will be around 150%

and that will be triggered by just a very strong momentum push. And what we found is that over the history of Bitcoin's trading, is that these pushes actually are pretty fast and furious. They don't tend to last very long. That's why we get these prolonged consolidation phases. It's just the nature of how it's traded historically. So you need to be able to refine uh the signals I think shorter term in order to uh successfully sort of have have this type of system work for you. So our goal is primarily to build on the returns of a buy and hold strategy and to a degree actually manage risk and lower volatility of holding Bitcoin itself

because with trend following, any kind of trend following element generally helps you do that, right? Because you're not going to ride a downtrend all the way down because the indicators just frankly won't let you do that. Uh so it is it's a great strategy for someone that wants to own Bitcoin. They want to be there longer term, but they also would love to take advantage of momentum on the upside when it's strongest. >> Yeah, and not to get too specific about like pricing targets and [snorts] you know, things change, new cycles change, but I mean there's just rhetoric right now and some of the best investors who do, you know, map the four-year cycle or looking to October, right? If you think about 10/10 or even like the weeks prior

to 10/10 as the top, um you know, we're we're a 10 11 months in, right? And so we're we're coming up to that typical one-year long you know, when you go back historically you get I mean just the confluence is too good for October bottoming. And it's almost too good to be true, which is why you have some folks being like, well, maybe we go a little bit earlier, a little bit later. Uh this bull cycle previously that we just had also ended a little bit earlier than expected. I think people may have thought it would go to December, January maybe.

Uh ended in there in October. And so, you know, is that just kind of what you want to see one more move maybe to 45, 55 in that in that range to be able to get up to 100% exposed? What is the What is the system telling you about uh how you will change your position based on kind of what happens in the next 2 months? >> At the moment because it is under exposed, it's telling us that the all of our time frames are not lined up, right, appropriately. And we do have an uptick in long-term downside momentum. So it it's gotten less bad in a way as we've seen Bitcoin come down. We don't take

into consideration the point at which it's in the cycle, uh but that's just not really part of our methodology. We do find it interesting, of course, and maybe supportive or otherwise, so it can have information. Uh but the cycles are are tricky because they will change, you know, that that to get a refined takeaway from, you know, say a 4-year cycle or something like that. It It is hard to rely on that. We all know that all too well. So, rather we're really honoring the momentum gauges and trend following inputs that we use in our methodology. It is a proprietary model.

Uh but we're using the very short-term data to make sure that we have that trigger, right, for the momentum to kick in in more meaningful way than it is right now. So, it does does it need Bitcoin need to, you know, have a shakeout? It's possible. Uh we can't predict that. There are indications I would say that that no, we have already maybe a major low being established. There's very good support for Bitcoin just south of 60,000. So, so there's that. And that would further increase the odds that we have a good bottoming formation underway, but rather than tell Bitcoin what it should do based on the cycle or based on these levels, we just kind of listen to it and let the market

tell us what it is doing and what's more probable going forward. >> And so, the way the system works is to identify some confluence or contradictions between time frames. It And And I take it if uh say, for example, the weekly time frame lines up with the daily and the hourly and they're all moving in the same direction with similar momentum, that gives you enough confidence to say this is a sustainable trend and you can flip long or short depending on which way that trend is moving. But it it all sort of depends on how much and how many of those time frames agree or disagree?

>> Yeah, exactly. So, we're just gauging the trend and momentum across these multiple time frames and then letting that guide our positioning. And And we actually toggle rather it's not a a short fund, so it's long only is the best way to think about it. So, it will always have exposure to Bitcoin at a minimum of 70% of the fund and with the rest in T-bills effectively. And that's by design because we are believing that the people interested in in BNAV are probably bullish on Bitcoin long-term, but they're interested in a sort of leveraging the volatility. So, it toggles between that 70% exposure to 150% and doesn't carry anything in

between. So, it's employing that leverage. I would expect that to happen maybe 20% of the time based on market history. So, it's actually not often likely to be leveraged. But those should be the strongest periods, you know, per our models. >> Right. And with the models, are you know what's funny is that Michael Saylor came out and said he designed um MicroStrategy or stretched with like ChatGPT and it was really funny and people gave him a lot of crap for it.

How much did you use um kind of quantitative modeling with the help of the latest AI tooling to create the algorithm for BNAV? >> Yeah, so I would say it was more about our technical methodology and I've been doing this since the late '90s, so that's pretty well established. >> [laughter] >> Um we have you know quantitative sort of consultants and clients who have helped us over the years try to understand how to go from subjective technical analysis to something that is rules-based. So, that's been something that's just been kind of morphing for us over the years and it's actually been a great way to self-reflect on our research because we

also publish research. In fact, we have a cryptocurrency compass report that we publish weekly about Bitcoin, Ether, and some of the altcoins. So, we're we've been pretty deep in this market, if you will, from a technical perspective. So, it was the development of the the rules, uh which is where we started, where we leaned on AI, more specifically Claude, uh because we found it's great with spreadsheets, frankly, um is more in the backtesting to create, um you know, sort of the data presentation um that we desired. So, it wasn't more in the development of the model itself, but rather the analysis of the model.

>> Yeah. This is fascinating. I mean, I can I can, you know, forecast out, you know, first, second, third derivatives, right? Like as price moves up and velocity and acceleration, you have more momentum as the trend goes on. And then same, you know, as this uh phenomenon, you know, agrees on multiple time frames, the the thing that I think I struggle with here is the transition from a trend out. As you, you know, ride up a trend, you know, it feels so good in the moment. It's like, "Wow, this, you know, is never going to stop. It's never going to come down." And, you know, you reach that euphoria. How do you stay ahead of the trend in the sense that, you know, you don't get wrapped up in all of the momentum? Obviously, you

want to be on that wave as it's going with all that momentum, but, you know, it can turn very quickly. How do you anticipate those transitions from a trend, you know, starting or ending? >> Yeah, I mean, with with the all trend following, um you know, indicators and tools, the goal is typically to ride the bulk of the trend, right? That's sort of a known thing in technical analysis. That's one of the primary goals. You want to be there for the bulk of the trend. It's really difficult to find a measure that is giving you a coincident indication of an inflection.

Uh there's one set of indicators, we use the DeMark indicators, um to that end, and they they are great. They're not perfect, uh the ones that we use, but we know how to use them in an effective way, we feel. So, we have ways to I think get close to the inflection points in terms of our analysis, but it is something that you'll probably get caught up in, uh you know, pivots at times. But, the way to avoid really riding something all the way back down uh would simply be by having those shorter-term time frames in mind and making sure that the short-term momentum uh gauges haven't shifted in a meaningful way. So, so it'll keep you out of trouble theoretically by by

honing in on that very short-term metric. >> Yeah, got it. Interesting. >> I I'd I'd imagine that these strategies are relatively portable across asset classes because it's all price and time. Those are the two axes that we're measuring. And so, you know, this could also be applied to equities, and a lot of people have claimed that digital assets will rally when there's a rotation out of equities and into digital assets. Not really asking you to comment on that in particular, but I'm curious if you've applied your your models to the equities markets, and, you know, given that there's a lot of volatility there, what are your models telling you about the equities market?

>> Yeah, you know, we actually haven't used this model for an equity strategy, but we've tested it on ether, and we've tested it in multiple ways uh or sort of multiple versions of it using rotational uh sort of ways to to appreciate altcoins as they emerge from trends. And uh we found that just to focus on the single asset of Bitcoin was was really the best way to go at this stage uh at the stage of the asset class, frankly, because of the liquidity, because of um you know, sort of the market cap and the point of interest in Bitcoin over over many others. So, it's in a way from like a marketing perspective. Uh but, then also we just found we would take on a

bit more risk than we wanted without the sort of reward to make up for that risk, right? So, we felt like Bitcoin was the best way to go for this strategy. Theoretically, it can translate you know, we found that what what makes it work so well for you know, cryptocurrencies it is the volatility and it's a very volatile asset class. We all know that. We can certainly find you know, equities or areas within equities that are are similarly volatile.

But I I find that it's it's volatile also in both directions whereas equities are mostly volatile on the upside. So, I think that's what's exciting about it is the potential to leverage the volatility. Already, you know, we've seen the sort of cryptocurrency market mature in some ways, but I think it's still got a long way to go before that volatility really dissipates and becomes you know, something that's harder to take advantage of. >> And this is why a lot of people love this asset class, especially Bitcoin is because it's considered a very pure asset in the sense that it is entirely reacting to liquidity conditions in the market. There really is no underlying fundamentals. Again, with Bitcoin

specifically, it's kind of similar to gold and you know, the inflation schedule is actually even more um easy it's even easier to predict and map out and project than gold. So, a lot of you know, it makes sense that it would be the asset of choice to run these models. On the on the decision to run this model with a fund specifically, I'm curious you know, if if you kind of considered running a different monetization strategy for instance like licensing the software, you know, rather than managing and using the system itself. But if it and I take it you know, there's probably some people interpreting the system, but for by and large the system probably is

algorithmic and, you know, supplying you with signals and then you're acting on its behalf. Did you consider licensing this system so that it was more accessible to a broader part of the market? >> You know, the the funny word in that is accessible and we felt like the ETF wrapper is like the most accessible investment vehicle. Um so, and it's not easy, honestly, to get crypto into that ETF wrapper. So, that was our primary goal in developing BNAF. You know, we felt that we wanted to have something that a retail investor could easily just pick up and, you know, buy in their accounts, right? Their online brokerage accounts.

And uh we were able to do that by using synthetic exposure. So, we're using derivatives to achieve that Bitcoin exposure. And um you know, I think that the fact that it gets into that very easily traded instrument was key in our thinking. Um and we are, you know, at our heart at Fairlead, we're a a technical analysis research and consulting firm. And we have two ETFs. This is our second. Um so, the ETF business for us is uh you know, relatively new um and it's where our comfort level is. In terms of, you know, offering signals or you know, some other way to deliver the you know, that output from our models, we haven't really considered that. Uh but, you

know, we're we're open-minded in general. >> Yeah. Yeah, interesting. Um kind of last thing on on my side is it is there any kind of focus on the macro events or the Fed expectations or the interest rates or like it is there information into these models that's coming from outside sources data points that isn't just in the chart? Like, is it all just strictly what's in the chart, or is it, you know, is there other inputs that are kind of more external?

>> Yeah, I mean, all all internal in terms of the price trend. So, technical analysis, and that goes for the equity market as well, which we also focus on, that the what we're trusting is that all of the known information has already kind of boiled into the stock market or into the cryptocurrency market. [clears throat] >> It's priced in. >> Yeah, yeah, it's it's it's resulted already into that buy and sell decision. So, not to oversimplify, uh but it is really all about price as a manifestation of the behavioral elements of the market, and it can be just incredibly helpful. I can't imagine investing in

anything or trading anything without knowing what the chart looks like, because you generally want to have an uptrend on your side. There's always, um you know, value in finding countertrend setups. In fact, they can be incredibly, um profitable if you catch it at the right time. But, from a trend-following perspective, you know, that in its very simplest form, you want to see all those moving averages pointing higher and what have you. >> Yep. >> Yeah. Makes sense. I am man, it's I I struggle with the fact that everything's internal. It feels like a self-fulfilling prophecy, and I I, you know, to reconcile with this, it feels like, um you know, if the market if the if the uh premise is that a lot of this is priced in, and the market is

efficient, how do you gain edge and alpha on the market, uh if it's already priced in? >> Yeah, so think of it as you're putting probabilities in your favor, right? So, rather than saying, "Okay, well, Bitcoin's going to be at 100,000 on this date." Uh because no one knows that, right? Um, but rather you're trying to put more weight of the evidence in your court. And you can do that by understanding that the trend, by understanding whether there's a key level nearby. And And for support and resistance, those are just manifestations of buying pressure and selling pressure, right? So, you can either look at previous troughs on the chart. So, buyers stepped in there

before, so they're maybe likely to step in there again. So, those types of key levels can hold a lot of information. You've really seen that with Bitcoin, by the way, in terms of mining those levels, because when they break, they tend to break in pretty dramatic fashion. So, uh, you know, trends, key levels, momentum inputs. I I like to also look at relative performance for Bitcoin versus ETH and others. You can get a sense of the sentiment, in a way, a little bit of a risk-on, risk-off takeaway.

We will look at correlations in terms of price action between cryptocurrencies and equities. So, if anything's external, it's more on that front. But even for macro inputs, like interest rates or the price of gold or crude oil prices, we're initially, at least, looking at them in a vacuum. And we do that with intention, because we want to be unbiased in our takeaway. Now, when you look at yields and you think one thing, you want to reconcile it, um, you know, with what you're seeing elsewhere.

And that becomes more of the art of of technical analysis, saying, "Okay, well, if yields look poised to stall, well, what how could that, you know, impact these other asset classes?" So, that's where it where becomes more of a subjective takeaway. But otherwise, it's just putting the weight of the evidence in your favor. And I don't know why anybody wouldn't do that, just to have, you know, the trends on your side. >> Yeah, that's what they say, right? Trend is is friend. Um, and ultimately, the market is the final arbitrator uh here. So, um best of luck, Katie. Thank you so much for joining us. Uh, I mean, I find this I find this stuff fascinating. Uh, I'm a math guy, so I I love getting into some of the nuts and bolts here. Appreciate

you coming on. And uh yeah, we'd love to have you on again soon to kind of decipher how uh you know, maybe 3 6 months in now, how the technical analysis is shaping up then and what's happening. >> [clears throat] >> Yes, of course. We'd love that, guys. Nice to meet you. >> Yeah. >> Hope to see you at the uh at the forum next year as well or sooner. >> sure. Take care, guys. Thank you. >> Thanks so much, Katie. See you next time. Bye-bye. >> All right. We're going to keep things moving along here. Uh Andy.

>> Yoh. So, are you a technical analysis believer after that? Or no? >> I uh >> Or no? >> I You remember OCM? >> [snorts] >> What, from way back in the day? >> So, I uh I uh so, the original the guy who got me into Bitcoin originally, I haven't told I don't know if I've really talked about this too much, but um we there was a friend of ours, a common friend of ours, who uh introduced me to Bitcoin and actually before we met, I started playing poker online with Bitcoin. That was kind of the original origin story, but then him and I and another friend of ours ended up creating

this trading bot. We had one guy, you know, this friend was kind of the computer science programmer guy. I was kind of the math guy, and then uh we had one more friend who was kind of the economics or business guy, if you will. >> Yeah. >> And um it was basically this. The whole premise was to try to get you more Bitcoin, try to get a little bit more if you could get a little bit of edge, you know, as Bitcoin goes up. If you can just get 1 2% you know, return in Bitcoin, you're going to end up with a higher Bitcoin denominated value. And so did it kind of realize and it was a very similar thing. It was like uh you know, first, second, third derivative position, velocity, acceleration. Try to determine how much momentum there was and if you had this

confluence amongst these uh these derivatives of price, then you would signal to you that you know, the price was going to move in that direction. And it ended up doing pretty well, but uh ultimately like just kind of the the the thing that gets you is just when that trend switches. It's almost impossible to predict and anticipate when that is going to slow down. Uh if you do get um you know, some contradictories but contradictions between you know, these time frames and these derivatives, then that kind of signals to you that the trend is no longer going in that direction. OG Killa says, "TA only works when you have insider info."

It's pretty funny. Um so, yeah, I mean that transitioned uh pretty quickly, but it was a nice little experimentation and then since then I uh I use some horizontal lines once in a while for supply and resist support and resistance, but uh other than that not not too big of a believer in the whole uh Fibonacci spiral golden ratio uh cabal of technical analysis. So, I think uh we're going to hit some news.

I think we're going to hit some news. Before we do, let's do a quick standby. Make sure that we got our ducks in a row here and uh we're going to be right back. We're going to hit you guys with the markets, the weather, the news. Keep you guys up to date with everything that's going on. >> [music] [music] [music] >> You know we get deep.

You know we [music] get deeper. We get deep. You know we get deep. We get We get deep. We get deep. We get We get >> [music] >> We get deeper. You know we get deep. >> [music] [music] >> You know we get deep.

>> [music] >> We get deeper. We get deep. You know we get deep. >> [music] >> We get deeper. We get deep. You know we get deep. >> [music] [music] [music]

[music] [music] [music] [music] [music] >> Yo, yo, yo. What's going on, guys? This is Eitan with The Roll Up.

We're going to be patrolling the streets of New York City, getting answers to the questions that you guys have most. What are people trading? What are people investing in? How much do people actually budget? We're going to have people All right, we're back. Yeah, hit up the air horns. We're going to round out today's show for you guys. Uh the whole TA conversation is kind of fascinating. I mean, people like we got new type in here. We love you, new type. Literally been a thing since the 1600s. Started in Japan when people would display prices on board using rice.

I mean, I definitely understand the belief in it, right? The thing is that it's just not it's not a science and you even heard Katie say it's a art, right? And so, I think you know, maybe there's a blend in a design of charts and lines and indicators and whatnot and you know, if you can put this together and it reinforces it feels like it's just always going to reinforce your bias, right? Unless people and there is a cohort of people like the more people that believe in it, the more that it's true, right? And so, if collectively we all come to an agreement, right? And say "Hey 64,000

is a massive resistance level on Bitcoin." Well, what's going to happen? People are going to sell their Bitcoin as it gets close to 64,000. But, that requires us to have this collective belief, right? And this collective agreement in a particular price level or indicator and that's just not the case. And so, I think if I were to give the benefit of the of the doubt here and give it credit, give it its due, TA has some truth to it, sure. It's based entirely upon the people that believe it. It's entirely a meme. It's a fabrication. If human psychology wasn't a thing, it wouldn't be a thing. But, because people believe in it, it is

true. And the more people that believe in it, the more truthful and more relevant it is. And similarly, you know, this is true of all Ponzi schemes and you know, mass hallucinations and the collective consciousness tends to put, you know, value behind the dollar as a currency. They tend to put value behind gold, which is literally just a rock, but people think it looks pretty and they give it value, right? There's like an aesthetic of technical analysis that people enjoy. I think it's a very emotional response, but people tend to enjoy the emotional response that they get from practicing this art form, right? And people are allowed to practice these art forms. If they want

to practice it, sure, right? It's like a weatherman, right? You know, like these things get the weather These guys The weather The weather guys They get the weather wrong a lot. You know, maybe there's some truth in pattern recognitions and this and that, but there's a lot of inputs, right? And we can kind of scientifically draw some sort of conclusions by pattern recognition and all these things. Feels like TA is potentially an even more elusive art form. But that's That's my rant on technical analysis.

Look I That the TA stuff always gets you guys fired up in the chat, so that's kind of my two cents there on on technical analysis. I don't know if I would be investing in a um if I would be investing in a purely TA-driven fund. Let's just say that. Um okay, we're going to get into into today's topics. Everything for the news Not today's topics. You guys already know what's going on, but we are going to get into the market and we're going to get into some news. Before we do, let me tell you guys about Denari. Denari is our tokenized equities partner. Uh I mean, I am just excited. You hear so many of these large financial institutions talking about tokenization. They're also

talking about how the entire country is just invested into the gills in the equities asset class. $100 trillion plus invested in equities, and all of that is becoming an on-chain asset, right? And that ends up flowing into DeFi. You end up, you know, with tokenized equities and lending protocols and AMMs and decentralized exchanges. And so, all of this is just fuel for the DeFi fire, and more assets for us to make productive.

Very, very excited about the tokenized equity Dshare offering from Dinari. Let's flash to the markets. I mean, we have Bitcoin above 63 here. I guess it got bought up pretty quickly from its little dip under 63. I don't know. It feels like dip buying season, not financial advice, but uh that's what I am doing personally. I am slurping these dips. I'm buying the dip uh anytime it comes. Chainlink, green 2 days in a row with the rest of the market red. Uh I mean, nothing over this is aside from Near uh is moving more than a percent and a half. Near at a percent and a half. Um and so there's really not much uh to do in the markets. Purely

apathetic, no trend at all, no momentum. Technical analysis, you don't need technical analysis to tell you that. Uh we are headed sideways. Uh or at least that's what is happening right now. Again, you know, you could say this is the least volatility that we've had in a long time. And so, what does that indicate? It indicates that, you know, this time probably isn't different. There's probably going to be volatility that comes into the market very soon, right? And so, if anything, I'm preparing for volatility but you don't know when. Like there's nothing that tells you volatility is going to come tomorrow or it's going to come a week from now or a month from now, right? But uh the thing is uh digital assets can't get less volatile.

The You also don't know which direction it's going to move. Uh so, you know volatility is coming at some point. It can't get any less volatile. Uh we are going to see the trend emerge soon. Let's give a big shout out to Frax. These guys are doing incredible work. You guys know them. You love them. Uh Frax's product stack is appealing to institutions at a fantastic level. These guys are doing great uh with uh some of the institutions that have large swaps of deposits that are entering the stable coin space.

I believe there's plenty more to come from Frax in this regard and I'm watching them very closely. Very proud partner of Frax on this show. Let's go ahead and kick it over to Eleanor Terrett. She is a friend of the show. We sat down in Vegas. We got a good catch up on the Clarity Act which has been postponed until September. Now here she is commenting on the reg crypto that we heard out of the SEC very very recently. This is expected to come online as soon as tomorrow Friday of this week and this is potentially a response. I'm sure they've been thinking and game planning this for a long long time from the SEC. But this may come as

a response to what we've seen from the legislators in the Senate holding up the Clarity Act. Eleanor reports that the SEC's division of investment management issued a no action letter to Franklin Templeton. Franklin Templeton has the FOBXX and Benji use case. The relief allows Franklin's registered funds, those funds that I mentioned, to use its on chain US government money market fund for cash management and securities lending collateral. What does this mean? It means that Franklin Templeton can now collateralize and use those money market funds as margin which means that there is credit that can be created pretty much out of thin air because now it is

legal and in the regulatory clear zone to issue new credit against these funds. And so that's what what we're going to anticipate. We're going to see margin uh, provided as a result of having these money market funds, uh, and Franklin Templeton is doing this. And they got the no action letter, they got the regulatory clearance to do this. Uh, so this relief allows Franklin Templeton to custody and record ownership of those fund shares through its blockchain integrated system because these money market funds are tokenized rather than comply with certain legacy rules designed for physical securities.

So sounds like the custody and record of ownership was the hold up in margining these funds. Typically money market funds can be margined. That's why your brokerage cash balance can earn interest. But because these funds were tokenized and their tokenized funds lived on the blockchain, uh, there were certain regulatory guardrails that were put up that prevented margin. It's no longer the case. And so now Franklin says the structure can support intraday trading, hourly net asset value calculations, and faster transaction processing. This is effectively taking the training wheels off of the tokenized money market funds.

Big congratulations to Franklin Templeton and I mean big shout out to the SEC, uh, actually allowing these companies to innovate but do so safely. Uh, let's move on. Uh, big shout out there. >> W's in the sh- hot. >> W's in the chat for, uh, Franklin Templeton and, uh, the SEC. Uh, guys next up we've got friend Mike, uh, of Blockworks. The opportunity in crypto today isn't just crypto, it's all of capital markets. Uh, this is true of exchanges, data providers, custodians, etc. Expand your horizons. TAM is enormous. Uh, when people ask me what I do if I'm meeting someone for the first time, um, I just say fintech. Like that's where we are today, guys.

It's just fintech. You know? Like this is a fintech show. Yeah, we have a focus on digital assets, right? We've got a specialization and deep deep knowledge in blockchains and and our blockchain architecture, sure. That's the technology part of digital finance. But, in general, this is fintech. You guys, if you're working in crypto, if you're invested, you're invested in fintech, you're working in fintech. This is what this is. This is financial technology. Yeah, maybe one day NFTs run the world and, you know, we get social decentralized social media and, you know, digital art resurgence and, you know, that's great and that's not really finance. And so, you know, maybe it's digital art and it's digital social

media and these kinds of things. But, for now, right here, right now, this is fintech. Get used to it. Embrace it because this is a massive total addressable market and there is a lot of money to be made and everyone here is on the cutting edge, the bleeding edge of fintech. If you're here and, you know, we are glad that you are here. So, that is I think Mike has it right. That is the way to think about this space right now. Next up, we're going to give a big shout out to 1inch.

1inch recently launched the Aqua protocol and they are doing tremendous things when it comes to the shared liquidity protocol. They They call it Aqua. It allows you to keep your assets in your wallet, but still provide them as liquidity to multiple liquidity pools, essentially unlocking a lot of idle liquidity that had previously been in place. Actually saw someone put a report. They published some results in a dashboard in based on 1inch Aqua.

One number to catch your eye more in the thread in 16 days, the taker side pulled around 90,000 out of LPs who are quoting better in the market. If you're on searcher, it is worth a look at how to use Aqua liquidity. This is fresh off the press. Got this that report came out just about an hour ago. So, um glad that we can bring you guys uh fresh data, fresh reports uh right off the bat. Go check that out. Uh reports on uh Aqua liquidity doing incredibly well. Uh Jeff Dorman here believes the L1 thesis is dead and the data supports it. So, what do we have here from Jeff is that uh if you remember in really [snorts] started,

I want to say DeFi summer, you know, Ethereum popped off, uh massive gas congestion uh happened on Ethereum mainnet. This ultimately caused uh the need for the roll-up centric roadmap, but it also uh spun up the launch of new alternative L1s, quote-unquote the Ethereum killers. These guys were supposed to have better throughput, allow more transactions per second, and because we needed so much block space to support all of this demand for block space, these new L1s got created. This was the quote-unquote L1 trade, and there was uh quite a few benefactors of this trade.

Uh and so, Jeff is claiming that the paradigm in which these L1s succeeded is now over. The L1 thesis is weakening as crypto revenue shifts away from base chains. Um this also [snorts] ties into what we talk a lot about here on the show, which is the fat protocol thesis versus the fat application thesis. Fat protocol thesis is obviously uh the protocols underneath uh the base layer L1s uh accrue the value uh because it ultimately flows down to the blockchains in the form of gas costs. Uh the alternative view is the fat application thesis that said says uh value flows up to those with distribution, who own the

customer relationships. Hyperliquid pump fun and the like is proving the fat applications to be true. Also, this chart is proving it to be true. I've heard some contentious debate around this chart in particular, the one with the fun colors there on the left, claiming that most of the revenue that's deployed and depicted in this chart. Obviously, apps in general are taking more market share from chains, but the predominant uh venue which is capturing this revenue, uh it comes from like two apps. It comes from Hyperliquid and Pump Fun. Um and so, yes, this Blockworks chart shows blockchains captured 90% of the monthly crypto revenue from 2021 to 2023, but

fell 75% all the way down to 25% to now by mid-2026, right? So, that's a big, big decrease uh for the blockchain market share with respect to the overall value uh created on chain. Uh apps are certainly taking more market share. Blockchains have gotten commoditized. They've also scaled. Uh and so, you know, it's funny because we're actually seeing something very similar play out in the AI market right now. Jensen Huang was on CNBC talking with some of the large banks about financing another trillion dollars uh and investing it into compute, into the token economy, uh the end-to-end supply chain of uh tokens

which goes all the way from uh molecule to intelligence, includes memory and fiber optic cabling and data centers and all these things. And the premise is that uh the demand is going to continue to outpace supply. Well, we thought that was going to be the case with the L1 trade. We thought that, yes, it's important that these blockchains scale. We need abundant block space because there's going to be more and more and more demand uh despite how much uh these blockchains scale transactions per second, it's never going to be enough because demand is outpacing that scaling journey. Uh what happened? Demand fell, uh supply increased, and now this chart for value accrual and revenue generated

looks like the one on the left, where blockchains uh scaled too much, uh which is ultimately a technological innovation if they can do this securely, but uh they didn't need to. And now Ethereum and other L1s have a value accrual issue that they're working on sorting out. Um and so, this is what we're seeing take place. Um that is what is happening. Okay, let's continue. Uh next we've got um we've got one that is coming up. Go ahead, play the clip. Let's get into it.

We are proud partners of this team, NEAR. >> [cheering] >> NEAR is our AI partner. These guys are fantastic. We're excited to partner with them on all kinds of stuff. Uh they've got a perps offering, they've got an intense offering, they've got Iron Claw. This is becoming a full product stack out of the box, and uh they've got some really, really exciting developments that I can't quite share with you guys today, but very scientifically rigorous, as well as doing some incredible things at some of the conferences coming up. We are excited. Uh these guys are sensational.

Uh SEC, this is sort of the zeitgeist right now. It is uh that there are things that could happen as soon as tomorrow, Friday. People are are already mixing them up. So, let's get into them. Uh there's one that's scheduled. This is an open meeting. It's 10:00 a.m. It's a webcast on sec.gov, and the commission is going to vote on whether to propose regulation crypto assets. We anticipate this will go through. Let's go ahead and scroll down here. Uh so, that meeting's at 10:00 a.m. Eastern tomorrow. We're going to be covering that. Anticipate there's going to be a lot of news coming out of that.

Uh then, we also have a proposal that targets pathways for token issuance and sales uh without requiring full securities regulation. So, this is probably going to pertain to meme coins and different classifications of tokens, potentially governance tokens. We're going to see exactly how this shapes up, but this is sort of the market classifications that we're going to see. And so, they are going to vote on whether or not to roll this out. This is about how tokens get issued and sold in the first place, a legal path to sell a token to Americans without doing a full securities registration. It's run by the division that handles offerings and disclosure, which tells you the scope.

It's issuance, not trading. And I would be taking a look at this if I'm any sort of pre-token crypto company that might be considering a token. There's plenty of them out there. I would be watching this like a hawk. What I'll be reading for, can a token ever stop being a security? This is the progressive decentralization question. Is one federal filing enough or do you still deal with all 50 states? How much can you raise from whom and what do you have to disclose once someone buys, can they sell? So, these are all questions that we anticipate reg crypto will answer.

Um And we're going to get into it. Yeah. So, this is everything that's happening. We are very, very excited to see how this plays out because everyone has been very excited about the regulation, the Clarity Act in particular. And so, I I feel like all of that excitement is going to shift over to the SEC once they roll this out. And then, you guys also are aware that August 20th, there's going to be a CFTC Innovation Council meeting.

So, it feels like these two agencies, these regulatory bodies, are completely aligned and they're moving quickly to give our industry some rules of the road, which is something we've been missing for a long, long time. Uh guys, we're going to get into uh the daily equity segment. Uh first, let me tell you about Zama. Zama is uh doing incredibly great things on the privacy front. [cheering] Uh these guys are uh at the precipice, in my opinion. I think privacy is one of the uh very, very key industry segments that it's important to watch and keep an eye on because of AI. Uh I mean, just frankly, like AI is just keeping, you know, our our our foot on the gas pedal as it pertains

to everything uh across industries. It's so wide-reaching, far-reaching, that uh privacy is imperative. Zama is helping keep your assets shielded and confidential. You guys can go to zama.org to get access to their confidentiality product today. Uh let's get into our daily equity segment powered by Denali. All righty, guys, we've got two tweets for you on the daily equity for today.

Record S&P uh surges past 7,800, now worth a record $70 trillion. Uh yes, you heard that right, $70 trillion in the S&P alone. Obviously, you guys know, I mean, there's thousands of public equities out there. I believe the equities market in totality is upwards of a hundred trillion or more uh if you sum up all the public companies out there. The S&P alone makes up $70 trillion. So, we are at uh historic levels uh in equities.

Um again, how long will this trend continue? Obviously, these things are built to go up, uh and you can see that represented in the chart here. Uh if this was a token chart, you would think to yourself, "Well, this is going to come down at some point." You guys would all be doomers and bearish and you'd be calling for for a top, trying to trying to do that. But, obviously every dip gets bought up. These are large candle size durations. But, this is what this is what's happening here in the equities market.

So, we're going to kick it over to our second tweet actually because this is just to bring you guys an update on the S&P 7,800 up almost a percent on the day yesterday. And, you know, the mega cap rotation has added more than 300 points to the index in recent weeks. When the hyper scalers appreciate, it adds lots of market cap to the index. So, 70 trillion dollars in market capitalization for the index of the whole, the bull market remains heavily tied to mega cap tech leadership.

At the same time as these record-breaking equities levels, the US government posts its largest July budget deficit in history. At 432 billion dollars, this is historically negative month for the US government. It's an acceleration in federal spending. You could, you know, point to the war in Iran. You could point to inflation. You could point to a number of different things as to why the deficit is so large in July in particular. The reality is that we are now paying more interest on our national debt than we are funding our military and health care programs in the United States of

America. Ray Dalio has called this the end of an empire. We have doomers that are saying this cannot go on. This is unsustainable and this must come to an end. Ultimately, it is politically untenable for anyone to do something austere to decrease the national deficit, the national debt, and ultimately right the ship. That would be the prudent thing to do, but it's very unlikely because that would mean lowering all of the entitlement programs, all of the military spending, and ceasing to spend money in the constituencies of the states.

The people wouldn't like that. The senators and the congressmen and women wouldn't like that, and it is unlikely to happen despite it being consensus the right thing to do, and instead I'll tell you what's going to happen. You guys can fight me on this, but this is what's going to happen. We're going to print our way out of it. We're going to print our way out of it. It is the only feasible reaction that politicians have, and this is why you are paying attention to digital assets. This is why you are paying attention to Bitcoin.

This is what got you here in the first place. No matter where you are, if you're based in America or if you're based around the world, you have felt the effects of inflation in some way. You are here before the world reserve currency descends into hyperinflation. This is the thesis. This has always been the thesis, and this was the Daily Equity segment powered by Tenari. Thank you to Tenari for being such a fantastic partner. We're going to continue the show. We've got our next and final guest getting set up in the back. I don't think he's quite ready yet.

So, we are going to bring him very soon because we've covered the news. We've covered the news. My lovely co-host had to attend to something here. And so, we are going to read a little bit of the chat. Let's go ahead. Uh my producer is telling me behind the scenes. What's up, producer? Okay. Uh let's go ahead and uh do solo for 30 seconds. We're going to get into it.

Uh the chat. What are you guys chatting about? What are you guys chatting about in the chat when we don't know what the max supply will be? How do you Let's see. Let's see. Will be a bullish way to start the weekend problem. I usually invest in coins with a max supply. Unfortunately, deep state coins. I'm not sure which state coins are deep state coins we know are going to be big want to fiat control price with always being able to create more supply. How do we know how to much to allocate when we don't know what the max supply will be?

Thoughts? I would look at the inflation schedule. I would uh look at uh the uh balance between the revenue generated by a protocol. And further, I would look at how much of that revenue is flowing into token holders. And then I would compare that with the emission schedule. Obviously, if it has an uncapped max supply, uh you don't know uh how that inflation schedule could change in the future. But what you want to tell is what is happening right now. You want to try to think, you know, if this supply if this coin has a max supply, that's great, right? Because that would you would sort of forecast you would see that coming if they were to change that. Uh but even if the

supply uh is capped, right? What is the inflation schedule? What is the circulating supply? What is the unlock schedule? How do you ultimately go from the supply now to where we will be in the future? Um that is what we're looking at. And I think I'm actually going to screen share for a little bit, guys, as uh as uh we Yeah, as we uh get into the uh the guests, I'm going to do a little bit of screen share. So, let's see what we got going here.

I'm going to bring this up a little bit. Thank you for the little elevator music. I'm glad that we have that going. And uh yeah, keep hitting me with uh some things in the chat here, guys. Uh we're going to get the screen up in just a moment. All right. I'm going to show you guys a tool that I use to determine uh how much value is flowing into the token, the tokens that I'm considering buying. Because uh there might be some misconceptions here. And so, let's go ahead bring it up as we wait for Ramiro and Ryan.

Uh we're going to talk a little bit about net token value flows. And so, we are going to show you guys what we have here, which is uh I believe this is a chart that is showing uh some of the top coins. And obviously, the way that this breaks down, there's kind of like level one, two, three thinking here. The rationale is obviously starts with revenue. The revenue meta was coined last year by those on this show, and we uh have seen this play out in a tremendous way. We are now valuing uh these tokens, right? These crypto companies, these digital assets based entirely on their business, right? How much revenue they're bringing in? How much are they spending? Uh are they building a sustainable business model?

Uh that is first and foremost, they need to have a sustainable, hopefully profitable business. The next level uh of thinking here is um The next level of thinking here is how much of that revenue, let's say they have some revenue, you can't have zero. You got to have some revenue now. If you have revenue, the next question becomes how much of it is flowing into the token. And that's what you see here on this screen. And so, you can see that there are, you know, several coins here with revenue, but if we're looking at the ones which ones are flowing into the token.

And so we've got some these are actually negative, right? So the coins here that are negative these are coins that are emitting more tokens than they're bringing in. Right? In terms of value. And so token value here, the token revenue is green, it's a token's direct claim on protocol value fees, buybacks, and burns flowing to token holders. That is the positive element of this equation. And then you have the negative element of this equation, which is the full cost token holders subsidize inflation unlocks and rewards entering circulation. All of this is a tax or an inflation on token holders, right? So you've got a positive part of this equation, you've got a negative part of

this equation. This diagram, this dashboard shows the net flows, right? And so positive and negative combined, obviously you want more positive than negative, and if you have that, you get a positive number. You get something that's green here, right? And so you got LINK obviously doing actually incredibly well to see LINK as one of the few green numbers, coins on this dashboard. It's very cool to see. We talked a little bit about SVR the other day, and that is where a lot of the value comes from. So LINK firmly in the top few coins here, one of the four that actually has a positive net token value flow. The other

ones here are cake, hype, and pump. Cake up there. You know, sometimes the market isn't entirely rational, not actually sure what PancakeSwap is doing in terms of tokens. It is still a top basically a top 100 coin. It's been It's down a lot from its all-time high, but in the last month, uh it has actually been flat to up. In the last 3 months, it's been pretty much flat. So, it's holding steady. And at the very least, the tokens with this model, this positive token value flow, are able to sustain their valuations, at least be flat, and not go down. So, Cake is doing that. HyperLiquid, we know, has

done that as well. Uh we've got a little tooltip here. Says unlock warning. And we've got the same warning on Pump. Uh there is a schedule of unlocks that kind of equate to this cliff, and those are factored in in terms of this dashed, you know, striped box here. But, uh there's not any continuous um a continuous unlock schedule that is showing up in this net token value flow. Uh whoops, quick little back there. Um and so, what we're looking at here now, as we go down the list, there are some other ones uh that aren't as positive, but they are still positive. Uh Aerodrome, Velodrome, Radium, Uniswap, Fluid, BNB, uh Curve.

Uh oh, these Are these negative? They're pretty flat, but this blue category here is the next, right? Which actually have a decent model, right? They are making some revenue, doing okay, and uh we are tracking those as well. But, uh at the very least, what we've been talking about here is that there is a revenue-generating, fundamentally driven asset class, and that is the asset class that is catching the attention of crypto-native investors. Uh then you've got the other cohort of uh coins that have a bit of a monetary premium, only a couple in that category, only a few in this category as well. But, if you're curious which coins fit into this list,

this is a great start and a great breakdown of where they are in this list. Next up. um the last thing I'll say before we bring our guests up is the third level of thinking here as you're evaluating these revenue-generating, fundamentally driven tokens, and that is how sustainable these models are, right? So, uh that is what this dash line is indicating is as you forecast into the future, how durable are these positive and negative portions of this equation, you know, maybe you've got a really positive, you know, green to red ratio on this chart right now, but how likely is that to persist, right? How likely is

it that, you know, the revenue is going to stay so high or the the emissions is going to stay so low, and that is what these dash lines indicate, right? So, if the buybacks are programmatic, we know every block we get, you know, a lot of this on-chain revenue shows up, it's very easy to predict, well, it's much more likely that it's going to sustain this net token value flow. However, if there's unlocks, if there's things, and if uh you know, they only do buybacks on somewhat of a fugazi, only when I say so, trust me, bro, kind of way, well, it's less likely that those buybacks continue to sustain. So, that is what we're looking at. There's multiple levels of thinking here, multiple orders of abstraction. It starts with revenue,

your company, your protocol, your token has to have revenue, then the question becomes how much uh of that revenue is flowing to the token itself, that's what this green uh this green part of uh and I think you can see that here, guys, that the green portion of this uh dashboard is indicating, and then uh the next question is how durable uh is that uh is that revenue uh and that token value accrual. So, without further ado, guys, we're going to send these guys in, we're going to bring them up on stage. Uh we're going to bring up Romero of Frontera and Ryan of Plume.

And so we're going to get them on in just a moment here. And we're going to bring them up. I'm excited. Plume obviously big friend of the show and they helped to power our tokenization tower in New York City. And so we're going to bring them on in just a moment. We're going to bring them on have a fantastic segment here with our final guests of the day. We've got Romero and Ryan on structured on chain credit. Romero is an Argentine builder at Strata Markets crafting on chain structured yield products. Ryan head of strategy and ops at Plume Network. Obviously you guys know Plume and their Nest product

extremely well from all of the tokenization tower conversations that we've had. So let's go ahead. Let's bring them up. Ryan and Romero Frontera and Plume. Guys you're on stage now. Welcome to the show. >> Thanks Rob. Happy to be here. >> Absolutely. It's a pleasure. Thanks for sticking with us behind the scenes there. It's always fun getting set up here at the roll up. But guys I mean I want to talk about what you guys are doing together on chain structured yield products on chain structured credit. I think it's particularly relevant today.

I mean like everyone's looking for yield and it feels like now we're finally bringing the programmability and productivity of these assets to investors at large. And so I'd love to talk about it. Let's start with Ryan. We know you're we know your prop protocol. The audience is very familiar with Plume and the Nest. So maybe you could talk about how this product complements the existing product stock at Plume. >> Yeah. So this is the first RWA vault that we've launched Tranchess for. I think you know Tranchess really started to make some waves in in RWAs and in crypto more broadly earlier this year. And so, you know, we've We're We always take the stance that let's make sure the core asset and product is

there, the demand is there, and and then layer in additional features like trunching. So, we're we're really excited to be working with uh the Strata team and Ramiro here uh to launch this on what is what is actually one of our flagship vaults uh today, the the Black Opal and Opal Vault. >> Beautiful. And uh Ramiro, I mean, uh you know, we're big friends of fans of Plume here. Just tell us a little bit about, you know, what the experience has been ultimately working together on this product. Uh you know, what what How did it go? How long has it been? How have you guys been working together? >> Yeah, for sure. So, actually, um we're just catching up with Ryan in the green room, and he's uh he's he's he's the first person we got in contact on the Plume side.

Um yeah, we think the the infrastructure that that they built and the way that they've been able to distribute and scale this this this um on-chain finance products and on-chain private credit ability is fantastic. Uh we've um initially started exploring what product we can build on uh because our infrastructure, you know, fits perfectly for sort of um you know, bigger picture that that I think Plume and you know, and Nesten the team have. Um and out of the products that we saw, we thought that, you know, based on how um this the the the Black Opal product and Opal was built and how it was structured, you know, that we could fit perfectly and essentially trunching it on chain, distributing it, and you know, trying to bring this um to allocators, to retail, to earn

products. I think the the way that we are working with them has been super symbiotic. Um and you know, I think this the first of many, so happy to dive deeper in. >> Absolutely. Let's talk about how this works because, Ryan, you mentioned that this is sort of a layer on top of an existing flagship product, Black Opal. Uh can you just talk about, you know, Black Opal now, and then give us a before-and-after picture about what's enabled with this launch? >> Yeah, so Black Black Opal is one of our flagship vaults or or an Opal is Black Opal is is the the team in the fund behind it.

Uh that vault is sitting at about $65 million in TVL today. Uh it's a Brazilian credit card receivables vault. So, they work with fintech originators in Brazil uh to buy credit you know consumer credit card receivables from from merchants in in batches. Uh they buy it at a discount which is to which which how it basically works is you're you're advancing the cash to a merchant or whoever needs their money you know prior to the receivables can actually get paid. And so, instead of waiting however long it takes to get that money uh the Black the Black Opal team is basically advancing them that money for for a cost. Uh and so, that cost is what what leads to the the yield that you earn on the vaults. And so, it's a really attractive product, really great team,

we love working with them. Uh but you know of course it's it's not not going to be for everyone. And so, what trunching really unlocks is it it creates two two additional flavors of the core asset you know a senior and a junior is is typically how it's traditionally trunched. Uh and so, the senior is for people who are willing to take a little bit less yield uh in exchange for a little bit more protection because now you have the junior sitting below them uh in a potential loss scenario. The junior on the other hand is is for people who were probably already comfortable with uh the risk factors of Opal but maybe needed a little bit more yield uh to get them over the line. And so, now now you have both constructs for people who may have been you know just just there on Opal

but not not quite comfortable with it. And so, we're we're excited to see uh what else we can bring in with with these new features. >> Can you guys just help us with some like generic credit education? You know, how does trunching typically work? Is this always the case you've got you know junior and senior in the case of a liquidation or you know a failure to pay on those obligations, right? These are how these things are trunched out. Maybe you can just give us some examples of how these things typically work out um because now we're finally bringing some more sophisticated mechanisms into digital asset products.

Just curious if there's, you know, maybe some generic education that you can give, you know, to our viewers about how credit products should be structured and why it's taken so long to bring these sorts of parameters and mechanisms on chain to these on chain digital asset products. >> Yeah, I'm happy to share kind of my perspective from from the TradFi world and and then I'd love to, you know, get Ramiro's thoughts as well, but I spent the first half of my career in investment banking private equity. And so we we do a lot of leverage buyouts where you you basically raise debt to go buy companies. And in that world tranching is very common, but it's typically a means to an end. And so let's say you're looking at raise $100 million of debt to go buy a company.

First you go to the banks, the banks can only give you so much. Let's say they give you 30 million bucks. And then you go to private credit and the private credit firms can only give you so much, maybe another 20 million bucks. So now you're at 50 and you still need another 50 million dollars of debt. And so tranching is not a product in in TradFi, but it's a means to an end saying, "Hey, I need a little bit more debt than the senior secured lenders can give me. Why don't I go talk to lenders who are willing to take on a little bit more risk? That debt is going to cost a little bit more, but it's it's a way for you to fill that gap and get get more more debt capital that you you wouldn't normally be able to get from the first

line senior secured lenders or the bank lenders. In crypto and and with what Strata is doing, it's almost become the inverse where it's not a means to go raise more money per se, but it it's it's to create a whole new product for people who either need just a little bit more yield or a little bit more protection. And so it's really interesting to see, you know, what what Strata and them have done to bring tranching on to on chain capital markets. >> Beautiful. Ramiro, any anything to add there? >> Yeah, I can I can definitely take it from there. So I mean, we're approaching the opportunity from a different angle, right? So, what Ryan messages now is the way that you would see in the traditional market, but the way that we are approaching is from the from the technology side. So, how can we

make this structuring more efficient with the programmability that you can enable on chain, right? So, all the covenants and all these different metrics that when this waterfall structure start kicking in, when you when you have defaults, when you have certain events that trigger any impairments, [clears throat] how can we translate that to for smart contracts to essentially enact that you know, autonomously without relying on, essentially, third parties or just relying on the code. So, what you will see on on on this on this larger issues in in trade finance is, you know, multiple tranches and you would have your equity tranche and then you would go up to the senior

through an equity through a junior through a mezzanine. In our case, we have two tokenized tranches and what we're looking at is essentially a way for um transferring the risk of the underlying that could be credit risk, could be counterparty risk, that could be the credit risk to someone who's willing to take it, right? The beauty of of blockchain is that it's it's in many ways permissionless. It's it's it enables, you know, democratization of these products and we believe that through a senior tranche, you have that um that that way of accessing to enabling the access of these products to a much wider audience and then those that are more sophisticated or willing to take on the risk for that sort of leverage, like Ryan mentioned, have a product that is perfectly fit for them. Um and then

we're looking at composability, we're looking at multiple features of DeFi and on-chain finance that we can enable with this sort of technology. Um and we're looking at how can we make this product even more sophisticated by, you know, in the future adding more tranches, bringing in universal um Yeah, universal risk capital by not only enabling, you know, junior capital to take on on on the risk through stablecoins, but potentially, you know, accessing this through uh XRP, Bitcoin, you know, ETH. Um You know, what we're doing is very exciting, but again, approaching it from the tech side. So, with with that Pluma with Ryan, we essentially we we see where two worlds collide and we're excited about this product because of that.

>> Very very cool. And so, right now, the predominant yield source, where does the yield come from? It comes from Brazilian credit receivables. Is that Is that correct? Uh maybe you can just tell us a little bit more about how this market is evolving because uh it seems as if uh you know, this is sort of the flagship, as you mentioned. Why is this credit market so robust and do you anticipate that it will continue to expand and unlock more opportunities for investors to deposit into this vault and beyond? >> Yeah, I I think what's unique about the Anubi asset is is the source of the receivables. The concept of advancing cash, you know, for cost is not new.

There's a lot of merchant cash advance products. Uh it's adjacent to invoice factoring, payment financing. Uh ultimately, it just comes down to advancing cash to someone so they can get paid today at a small cost in exchange for taking on that duration. Uh what's unique about Brazil and actually a lot of LatAm is uh is BNPL is very popular. So, that that's buy now, pay later. And so, consumer credit card receivables by nature in in LatAm and and especially in Brazil have a longer duration. Uh in in the US markets, BNPL isn't super common. And so, when you look at uh US credit card receivables or funds that are doing something similar, those are typically yielding only single single digit APYs. Uh in Brazil, because there's there's, you know, longer time

period, whether it's 30, 45, 60 days that you'd have to advance the cash for while those BNPL receivables come in, it comes at a at a higher cost. And so, that's that's really interesting for people who are willing to take on uh that kind of risk, you know, credit risk that, you know, the Brazilian economy, you know, carries with its own own uniqueness and and different types of risk that, you know, say American receivables were. And so, it it's higher yield for a different profile. And so, what trunching really brings is for people who like that general profile, but maybe aren't quite comfortable with that risk, but the existence of, say, a junior trunch absorbing some of that potential first loss in a drawdown scenario could get some people over the line on it.

>> What what is the the benefit here of raising this capital in order to, you know, provide the credit to, you know, these buy now pay later credit receivables? What is the purpose of doing this on chain? Because my understanding is the flow of capital here is that the deposits are deposited on chain, but then the money is taken off chain and given to these, you know, those in need of the credit. Is it predominantly opening up this investment class to a new set of potential investors, essentially opening up access to democratizing access all over the world, or is there another value proposition of doing this on chain?

>> Yeah, I I I think it's it's everything you said, right? At Plume, you know, we we often say we're in the business of open finance. And so, what does that really mean? It's opening up these types of asset classes or investment opportunities to to the broader public. You know, if if I wanted to personally invest in credit card receivables, much less Brazilian credit card receivables, I wouldn't even know where to start, right? And so, now now we have a vault that anyone holding USDC can deposit into. But on the flip side, it's also being able to provide this product or service to the merchants who who need the cash faster, right? So, if if you're let let's say you're a restaurant, you have bills to pay, you have to pay rent, you have utilities, you have food supplies, inventory, you can't always wait 30, 45, 60 days for

those, you know, credit card receivables to come in. And so, by doing this, we're we're connecting two worlds, opening up on-chain capital markets to be able to go and purchase those receivables and ultimately advance it to the merchants. The originators that do this and source these receivables, they often have minimum minimum sizes of 5 million, 10 million, etc. And so, the the higher you go, the higher quality receivables there are. And so, it really it's we're able to kind of pull the scale of the on-chain capital markets together and connect it to those those in need of these merchant cash advances.

>> Fantastic. And where does this go from here? Is kind of the next thing cuz I can I mean, I I can see how the on-chain credit world is just exploding for all the reasons that you mentioned. We're democratizing access all over the world for some of these, you know, more esoteric you know, credit opportunities. There's a lot of capital out there. A lot of people are going to deposit into these things and we're going to ultimately bring capital to a lot more people that are in need of it. Um, where does this go from here? Like, you know, do you start to expand? You know, does it have to be USDC? You know, can you extend credit in different denominations, different assets? You know, the Brazilian credit market and then, you know, we expand

into you know, different types of financing. For example, I saw actually we had a fellow on the show yesterday who is doing this with compute, doing this with GPUs, bought up a bunch of Nvidia H200s. These things are yielding something like 60% right now because utilization is so high. So, you know, you can basically take ownership of your AI stack rather than renting all this compute and using it for your tokens. Are we going to see a GPU on-chain credit fault? Like, what what what are some of the things coming up that you guys are excited about?

>> Yeah, I I can I can Yeah, you want to take that, Ramiro? I I can follow up with you later. Yeah. >> Um, what you see right now is um, I think what what Ryan was mentioning before was the the the essentially the supply side, but but also the demand side. What what can you do with this on-chain credit? I mean, how can you use it further in on-chain finance? It opens up so many opportunities for using it as leverage, using it as collateral, integrated into other um, on-chain products that you that you have and that continue that uh, snowball of distribution. Um, but what happens with many of these products is you you might have some that are off-chain SPVs that are then tokenized and essentially most of the origination

and most of the management happens off-chain and then certain parts of the product come on-chain where we then come in and and structure this, but what you can start having is that that um, essentially that that uh, vertical integration of blockchain integration of this product. So, what you're talking about in in in in terms of GPUs, you can you you can use blockchain technology to tokenize the full uh, product cycle and the full credit cycle of these products and have structuring and have distribution um, fully on-chain, but also have the um, the tracking, the the the covenants and essentially the entire life cycle of these credit products fully enforceable through smart contracts.

Um, I think that's that's I mean, where where everyone wants to go in terms of creating much more efficiencies in in in in the sort of in the tracking and in the issuance of these products. Um, I mean, we we have we some ways to go, but I mean, you were talking about that the GPUs you as the AI is doing that um, with that full um, on-chain um, tokenization of these of of these products. So, um, but yeah, that's that's what we're we're excited about and I think structuring and and and this sort of uh, trunching that happening on-chain is just one part of that. Um, yeah, Ryan, happy to to to give your thoughts as well.

>> Yeah, I I mean, look, we're we're constantly looking at a new assets. I think coincidentally we we are talking to a few GPU, you know, related type of asset issuers as well. There's a lot of really interesting things, different teams are doing in the space in and around structuring these types of products. I think trunching is very interesting, especially with these higher yielding assets. You know, in the lower yield range for things like like treasuries or triple A CLOs, those are typically 3 and 1/2 to 4 and 1/2%. There's not much spread to give up, and there's also not a lot of risk to for the junior to take on. But, once you get into the high yield segment, kind of, you know, 6 7 8 9% or, you know,

especially double digit plus, there's always going to be a profile of investor that's more risk-on and a profile of investor that's more risk-off. And so, there there's a finite amount of stablecoins out there looking for yield, and you know, that that number is is quite large. But, at some point you you run into limits around how much risk, you know, different demographics of investors are able to take on. So, your average DeFi user might be might be, you know, more risk-on than, say, an institutional LP or curator. And and they they may be even more risk-on than, say, a centralized exchange who wants to offer some kind of products to their users. And so, we're we're with trunching we're able to offer pair it with different assets that that we we offer through Plume, and offer it to all these different

types of investors. >> Incredible. Yeah this this just seems like, you know, the direction that this is headed, especially as we get more regulatory, you know, guidelines, we get some more rules of the road, we can open up access all over the world. Do you guys think like ultimately, I mean, the the credit market is just it's almost encompassing of all the capital in the world. It's absolutely massive. We were talking a little bit earlier on the show about how, you know, this is essentially just fintech. Everyone here in crypto and digital assets, you know, this is financial technology and this is the bleeding edge. And so, do you think there's really anything that belongs off-chain at this point? Like, is there

any portion of the credit market that is better off, you know, Ryan, you mentioned treasuries and you know, some of these things that don't have a lot of spread, you know, the rates are somewhat low, there's not a lot of risk for junior to take on. Is it better for that to be off-chain or we kind of get there eventually? Like, what do you think is the future of on-chain credit? The scale The scale of on-chain credit, really. >> Yeah, I mean, look, the the scale of on-chain credit has certainly exploded this year. Um RWAs really started to take off last year, kind of starting with uh treasuries, uh you know, Biddle Biddle Biddle made a lot of uh you know, big news and and attracted a lot of invest- investments into that. But, as

it's exploded this year, I think how we think about it is, you know, early DeFi in the early 2020s was really about reinventing finance on-chain. Uh we see it now today as as bringing traditional finance on-chain. So, the two don't need to be mutually exclusive, they don't need to be different. I think, you know, traditional finance off-chain does a lot of great things and bringing it on-chain is simply increasing the access to to the number of people. And so, it it's it's hard for me to say if anything belongs solely on-chain or solely off-chain. I certainly think all of it has a place on-chain, but I I don't see it as a replacement for uh what's already working off-chain. It's It's we're just democratizing the access to people.

>> Okay. Romero, anything to add there? >> Yeah, I would love to add to that. So, I mean, what I would consider that everything can be on-chain and much more efficient. We're talking about traceability programmability um and fully transparent information. Smart contract I mean, all these products in a way they're a set of contracts and then [clears throat] the enforcement of those contracts are what makes these products out of there um lower higher risk and then what ends up, you know, moving the capital from from those that need it those that provide it. But if we can um essentially make that more efficient um and structure that and bring those um uh off-chain enforcements and bring

those covenants on-chain through programmability that can only happen if the rest of the of the product and the supply chain is also tokenized, right? Because you need information, you need uh metrics, you need data and then you need that data and that information to be input into these smart contracts, right? The more you have on-chain, the more efficient this all becomes and the more and the more enforcement and more covenants and and and more contracts can essentially be coded and and and and and built and distributed. Um >> Yeah. >> So it's it's a series of of how much more information, how much more data gets gets essentially tokenized and brought on-chain and what can we do with that data and what can we do and can we what can we build on that?

>> Yeah. Ab- absolutely. I'm I'm with you there. Ultimately, this works the best when it's end-to-end because everything is connected. These smart contracts can interpret and learn from one another uh and these actions can be programmatically enforced uh across different facets of the credit supply chain. Uh Ryan Romero, I think that's it, guys. Thanks so much for joining. Appreciate you kind of doing some market education here on the way that trunching tends to work in some of these credit products. Also, congratulations on the partnership and the launch uh of this, you know, trunching mechanism on uh the flagship Plume Vault Black Opal and Opal. Guys, you guys can go check that out on Plume and uh yeah, we'll we'll

we'll have you guys back again for the next one. I feel like uh this is going to be a mechanism that is going to be the industry standard across on-chain credit. >> Much appreciated, Rob. Thanks for having us. >> Yeah, one of many. >> Thanks so much. See you. >> Bye-bye. >> Fantastic. Well, no surprise there. These guys are rockstars. Plume big, you know, big fan of theirs. And you got Romero from Frontera helping out on the credit stack. Guys, tranching is coming. This is This is going to hit the on-chain world. And this is what the on-chain credit economy looks like.

This is the future of digital assets. It looks like credit. It looks like tokenization. Looks like tokenized equities. I mean, we're talking massive markets, which I think is incredibly important as you think through the scale of some of these DeFi applications. You might not have seen a lot of DeFi apps on that net token value flows dashboard. They might not be accruing all of the value to their token. They're certainly bringing in some revenue. The idea is that that revenue is going to explode with the explosion of tokenized assets.

We saw the S&P has crossed 7,800. This is now a $70 trillion index. Equities as a whole is a $100 trillion asset class. We are tokenizing it. We are tokenizing it one at a time. These things take time to play out. You're in the right place. Stay patient. Don't go anywhere. We're going to keep bringing you guys all of the things that you need to know to make educated decisions in the market today and tomorrow and beyond. This has been the roll up. We thank you so much, guys. We're going to see you back tomorrow to wrap up and the week strong, finish strong, run through the finish line.

And have a great weekend from there. Guys, fantastic. Thanks so much for watching. Shout out to everyone behind the scenes. Shout out to all the partners, the sponsors, all the guests, everyone in the chat. Give me some dubs in the chat. Freedom guy, we love you Give me some dubs, Freedom guy. Give me some dubs. It's going to be all right, man. Give me another one. Give me another one. One-arm bandit, we love you as well. John Smith, we even love you even though you're you're talking some smack there in the comments. Freedom guy, one-arm bandit, New Tight, we couldn't do it without you guys.

Sensational indeed. We'll see you tomorrow. Peace. >> [music] [music] [music]