🚨LIVE: Robinhood Dominating On Ethereum?! LIT ATHs coming? Bitwise's Matt Hougan & Ryan Rasmussen in

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[music] [music] [music] 17. floor. [music] We'll see you around the timeline.

Feels good to be back. >> I think The [music] Rollup is one of the most premier media [singing] brands in crypto and Andy and Robbie are great [music] experts at everything they talk about and it's my favorite podcast. adding it to my library as we see >> potentially multi-chain deployments. We [music] are at Dev Connect day one here. I'm guessing from base. [music] [music] >> [music]

[music] >> Heat. [music] [music] Heat. [music] >> [music] >> JP Morgan, Black Rockck, DTCC, Fidelity, the entire thing was just institutions.

It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. >> I'm bullish. >> HE SAID IT. HE FINALLY SAID IT. >> I'M SO BULLISH. And he's bullish. I'm bullish. We're bullish. [music] [music] >> [music] [music]

>> Heat. Heat. [music] >> [music] [music] >> Heat. Heat. >> [music] >> Corola is headed to [music] the top. If

we're not already at the top, we're going to the top. >> Roll up is my favorite. >> People from all walks of life, all over the world, all over this industry come together for the roll up. [music] [music] >> [music] [music]

>> Zoom out. The institutions aren't coming. They're simply here. It's the golden age of crypto, guys. Get right. Let's go. [music] >> Welcome to the next. See you on the show. >> Market's down. Leg last leg down, guys. I mean, they're calling 15 20%. We don't know how deep it's going to go, but I think one thing is consensus, and that is that this is the last draw down before we resume up only. And this is the roll up. We're going to be here down up sideways crap market bull bare, doesn't matter. We're going to be here bringing you guys everything that you need to know so that you're ahead of the curve. You guys did not get

oneshotted by AI. We are continuing to come at you hard with fresh news. Everything that's taking place in the industry, we're going to bring it to you guys right here on the rollup. It is August 11th. We appreciate you guys rocking with us. Go ahead, hit us up in the chat. Give us a little subscribe. Give us a follow, a like, a comment. We want to hear from you guys. Okay. And so we have a tremendous show as always. We have Ryan and Matt from Bitwise. These guys are going to be joining us. Uh these are the spokesman in the suits that are speaking on behalf of our industry with the largest financial capital allocators in the world. Uh we are going to be speaking with them on

everything that they're seeing play out in the marketplace right now. Uh today of all days is a great day to get them on the show and hear what they think about the state of the market. So, we're going to be joined by Matt and Ryan in just a little bit. Uh, we've also got uh Daryl who's going to be joining us of NPC Labs who are contributor to uh B3 and chatting about AI with Daryl. Uh, guys, tremendous show. Got a little bit of a late start today. We've got uh Matt and Ryan getting ready in the back. So, we're going to speedrun here through our opening segments. Uh, and of course, before we get into it, big shout out to Plume. These guys sponsor the

tokenization tower. I believe my lovely co-host Andy is going to be back tomorrow live in New York from the tokenization tower. A big shout [cheering] out to Plume. Couldn't do it without those guys. Uh also, uh let's kick it over to today's topics. Uh as I mentioned, uh this is the rollup. You guys already knew that without a doubt. And uh we're going to be getting into it. Mr. Lighter OG, let's go. Lighter, big volatility today. Haven't seen your name in the chat before. Thank you for joining us. Mark Weather live from Florida. Bitwise team, Ryan and Matt are going to join the show and then we're going to be joined by the co-founder of NPC Labs. Uh as always, this show is sponsored by some of the major

innovators in the space uh doing incredible things on both the uh tokenization front as well as the traditional markets front. Tokenized equities partner dinari is uh is a big big uh player in the space. They've tokenized the entire S&P 500. Uh these guys are doing it the right way. No SPVS, same shareholder rights. The Dshares that you get from purchasing a tokenized equity on uh app.dinari.com are literally shares of these companies. No SPV funny business. One-armed Bandit, thank you for uh for showing us love.

Appreciate you as well. Great stuff as always. Stick tuned. We've got a great segment coming up with Ryan and Matt from Bitwise. 91 degrees here in Florida. Feels like a hyundo. Hundo. Keeping it a hundo. It is warm out here in Florida. Uh no surprise there. Let's keep things moving along before we do talk about markets. We're going to go ahead give a big shout out to Zama. Zama is a uh friend of the show. These guys are building the privacy space and uh we are very glad that they are uh here with us on this journey. Some of the best builders uh come forth in bare market conditions and I think as you look at a project as

sophisticated, thoughtful and forwardlooking as Zama. Uh it kind of reminds you why you're here. It inspires you that there is real research, real innovation that's happening despite all the memecoin casino shenanigans that we see on a daily basis. Zama is building for the best of us. Uh, also Zama presenting our market segment for today. Privacy technology is rerating. Uh, markets flat. You know, as I was looking at it, things looked a little bit more down than we're showing here. Uh, you know, I do think that we're getting a little bit more of a wash out. Posted a tweet, kind of a meme, uh, over over the last night or so that said, uh, you

know, the Buzz Lightyear meme of everyone saying the same thing. Uh, we're all going to buy the bottom in October after the summer wash out over August and September. Uh, that's kind of what you're seeing here. You're seeing the August September wash out. uh summer seasonality is hitting low volatility uh low liquidity environments just chop chop chop chop chop markets are a little bit down today tomorrow might be chopping up we're going to get CPI tomorrow uh so I think there might be some d-risking that is taking place as uh ahead of CPI for tomorrow um but that's kind of what you're seeing here in the crypto markets uh the digital asset markets equities are pretty much the same story uh S&P futures are flat

NASDAQ's flat and uh QQQ's down flat. Oil is back up to 88 but consistently staying under 100 bucks. And uh rates are high, but I think that's by design. They're trying to steepen the curve. Uh and I've been reading a lot of macro analysis. This Bessant Wars combo feels like it's shaping up for a liquidity injection. Bitcoin tends to do well on the back of liquidity injections. Guys, before we get into our guests for today, and I know you're excited for Ryan and Matt, these guys are pros and uh the Bitwise guys are always up to incredible work. We're going to give one last shout out to our friends at Near. Near is our

AI partner and uh these guys are doing incredible things. Not only do they have a great AI product stack, they also have near intense which uh is powering a lot of uh crosschain volume all over the map and uh predominantly helped to unlock the Zcash ecosystem. You know that we are big Zcash bulls here on this show. We believe that there is a new cohort of privacy enabled quantum resistant technology and financial assets along with it. uh big believers in the near Zcash trifecta along with perpetuals hype and lighter. Take your pick, guys.

We've got Ryan and Matt coming up next. We have them just about ready in the back. Why don't we go ahead and send them into the studio whenever we're ready for Ryan and Matt because I'm excited to bring them up on the show. We're going to get into a little bit more of our news section after our guests for today. As I mentioned, we've got Ryan and Matt. Uh these guys are at Bitwise. Bitwise obviously uh they've got their ETF products and uh they do incredible work. Uh so we're going to talk with them. These guys also I mean I love chatting with people that have a unique vantage point in the market. Uh the benefit here is that you know these guys have broad

perspectives. Um, I say all the time, you know, people come on, they like to talk their book, and obviously there's a product stack from Bitwise, but the benefit of having these people that, you know, have a more general point of view, have a little bit more of a nuanced opinion on things. Uh, they don't just talk their book, right? They're able to hold conversations at various points in the market because when you ultimately have, uh, more generic product stack, uh, it's important to keep track of really everything that's happening in the space. So, I'm excited to talk with Matt and Ryan. See that they are ready behind the scenes. So, we're going to go ahead bring them up on stage. These guys are pros. They're friends of the show.

They've been on before. Matt, Ryan, welcome back, guys. >> Uh, it's awesome to be here. Thanks for having us. >> Yeah, thank you. >> Absolutely. Absolutely. Uh, it's fun. I was just saying, you know, you guys are able to, uh, you know, come on the show, kind of talk shop, whereas a lot of these other guys that come on, they want to talk their book. So, I mean, just generically, you know, as you guys are moderating things, keeping an eye on things, I mean, where are we? I I actually, just to kind of set the tone here, I uh posted a meme the other day. It was pretty much the Buzz Lightyear meme. Everyone's saying the same thing of, hey, we've got one more wash out over the summer and then one last leg down and then it's up only. Everyone's gonna buy the bottom in October, one

year after 1010, right? Is that the playbook? Is that what we're on pace or do you guys kind of see some uh maybe variation in the path that we're following here for digital assets? >> Yeah, I see I'll take a first stab and Ryan can follow up. I see something a little bit different. The thing that I've noticed more than anything else in the market over the last, let's call it two months is that we've completely stopped reacting to bad news. Right? Michael Sailor is selling Bitcoin. Uh Bitcoin doesn't care. Stretch trades to 75. Bitcoin doesn't care. We have a massive cold storage hack. Bitcoin doesn't care. The Clarity Act goes down.

Bitcoin doesn't care. When you have a market that entirely stops reacting to bad news, that's often the sign that you're actually at that bottom. So, the part of that analysis that I would question the sort of consensus wisdom is whether we in fact get this massive draw down. Now, maybe we do. Maybe you get a chance to buy Bitcoin in the 50s, but I'm not sure that you will. There's a lot of signs to me that maybe we're in this rounding process. Maybe we slowly grind higher over time. We're seeing interest from institutional investors. We're seeing interest from long-term investors. I don't know. The sort of signals I'm seeing in the market look actually pretty strong.

>> And uh Ryan, what do you think is uh is bottom end or do we have one of these 10 to 15% draw downs ahead of us? Yeah, it look it's hard to know, but what I do know is that in these in past cycles when we've recovered from a bare market and finally left crypto winner, some of the best days in that cycle are those early days. And so sitting on the sidelines trying to time the bottom perfectly has hurt people in the past, right? And they've missed some of Bitcoin or some of other crypto assets best days. So I think it's really difficult to time. I do agree with what Matt said where we continue to get bad news particularly in July. We got a lot of bad news followed up with the cold storage hack and with the clarity act here in August and Bitcoin's up over

that time period, right? And so I think that is important uh to to look at and to level set with and maybe you're you know better off just staying in the market at this point rather than trying to time it. >> Yeah. Or maybe building positions a dollar cost average as time goes on could be the right strategy here. I mean, that's kind of what we're seeing. It's as time goes on, the question then becomes how much time is going to go on with us in these apathetic market conditions. Have you guys done any any research or or any sort of analysis as far as, you know, people like to say we're in the four-year cycle now. It feels confirmed and we're going to get this, you know, one year from top to bottom. Do you feel like these cycles are expanding or contracting relative to

time at all? Do you feel like as the market cap grows, as Bitcoin becomes more ubiquitous, do you think we're going to get these longer market cycles, maybe the four-year cycle turns into six, or do you think we're going to get maybe this contractionary, you know, response where we do get some more fluctuations on a quicker time frame? Any any any thoughts as far as how we might see the time variable here play out uh on on Bitcoin in particular? >> Brian, why don't you take the first step? Yeah. Well, I do think you know, first of all, we are seeing these cycles compress in terms of returns, right?

Both to the upside and draw downs to the downside in the bull and bear markets. And you can't really ignore that when you start to think about what does the four-year cycle look like, right? In the last run up to alltime highs in October of last year and you know, year four or year three of this four-year cycle, we didn't get a,000x from the prior low, right? It was less high of a multiple. The draw down that we've seen now is about 55% from all-time highs. It's not the 70 or 80% we're used to in past cycles. So, it's compressing there. I do think that look, these cycles aren't perfect in terms of their timing. If you look at 2025, actually, that was a down year over the calendar year for Bitcoin.

And so, the four-year cycle historically, it was three up years, one down year. Now, we had two up years, a slightly down year, and then a down year this year. I think it's not easy to to map exactly over the long run. I do think that the market's fundamentally changing. You have different buyers coming into the crypto market today than you had four years ago or four years before that, right? And you have institutional investors that we face off with at Bitwise. You have corporations, you have sovereign wealth funds and family offices. Those are just different types of investors. They take different types of exposure over different durations than the early retail investors in crypto. And it's a much more liquid asset. So, it looks different. Uh, clearly we have some pattern holding here and we and we've had it hold, but it's always going to

look a little bit different in my opinion. >> Yeah. Uh, Matt, any any thoughts on how long we think this these apathetic conditions are going to last? >> Yeah, it they always last a little bit longer than you think. You wake up and there's a massive bull market. I think we could easily in the right series of circumstance end up, you know, back at 100K within a handful of months. But I think it's going to take a reasonable amount of time to sort of get the ebulent bull market that we remember from crypto cycles past. I think what Ryan said is very true. We have a new actor in the market, which are these large wealth management platforms, institutional investors, and they move slower than traditional retail crypto investors. In some ways, that's

positive. Right? Over the past few months, we've seen a number of major wealth management platforms uh approve Bitwise's Salana staking ETF, BOL, despite the market being down 50%. They're not doing that for FOMO. They're doing that because they're making a decade long decision that this is an important asset for the world. So, they move at these different time frames. So, yeah, could we could we still be sort of in a sad like note ebulent market in a few months? I think that's entirely possible, but I do think there is there's sort of strength in that slowness. That's what I would expect for this next cycle, a slower, more fundamental, more institutional bull market that grinds higher. That would be my base case. Uh but it depends on how

conditions break out. And and so the just de diminishing uh volatility as we continue because the the new net buyers and new units of liquidity are a little bit more sticky, a little bit more solid than maybe the fleeting retail and mercenary capital that we've seen in previous cycles. >> I'd say a lot more uh long-term oriented, maybe a lot more solid. These are people who set investment policies and invest for three, five, 10 years, right? They uh they don't react on a 3 5 10day basis. They react on a much slower basis. They're institutions that take a long time to turn. We've said this before, but for a long time, our average client at Bitwise allocated to crypto

after eight meetings with us. You know, sometimes you're lucky if you get a meeting every quarter with a professional investor. That means it's a two-year educational process. So, it it does just move slower. And I'd add that anytime you inject a new type of investor into a market, that alone lowers the volatility because they just move and zig and zag at different times. So I think the thing we're seeing in this bare market with the market down 50% not 80%. I think that's indicative of the direction we're going. I suspect we continue to have sort of shallower drawd downs, lower volatility, and more grindy upside. There's still a lot of upside. I think Bitcoin is still going north of a million dollars over the

next, you know, decade or so, but I think it's going to be a different kind of move than we've had in the past. >> And are these investors primarily taking exposure through ETFs? And what are some of the ETF flows that you've seen as of recently? >> Yeah, I think ETFs are the primary vehicle. That's how they get exposure to stocks. It's how they get exposure to bonds and it's how they getting exposure to crypto. So you are seeing flows into that since July 1st. You know, we actually saw strong outflows into these ETFs through the end of June. Since July 1st, we've had relatively strong inflows primarily into the crypto majors, primarily into Bitcoin and Ethereum, a little bit into assets like Salana and

Hyperliquid. Uh that's to be expected, right? Remember, these people were learning about Bitcoin and Ethereum for a two-year period. they're now making their allocation and I think from their perspective majors are likely to lead. I in fact think there's going to be sort of a bifurcated uh bull market where institutional capital is driving assets like Bitcoin and Ethereum higher and cryptonative capital is more focused on revenue generating apps from hyperlquid to unis swap to a to morpho. That's the that's what I expect to see over the next sort of six to 12 months. Oh, okay.

I think we we will get a little bit deeper into that because I like the bifurcation into cryptonative capital. Those uh capital investors are looking at a fundamentally different asset class and maybe some of the majors that are getting primarily institutional capital interest. Um before we move off of, you know, some of the the ETF investors that both of you have spoken to on a regular basis, I'm curious, are there any catalysts? I know clarity was sort of, you know, taking front front and center for quite a while. Is there any catalysts that you or some of the institutional investors that you're talking to, do they have any catalysts on the horizon that they're watching and they're sort of, you know, staying on the sidelines until these things happen

or is it just the the regular process of market education that is a slow grind that is ultimately bringing them into the markets? >> Yeah, I'm happy to. to to answer this one from what at least what I'm seeing when we talk to these wealth management platforms or individual advisors. Uh you know I I do think that we're fighting for attention as an industry right now with AI and with these equities rallies. They've obviously performed really strong this year while crypto's been down and most of these financial advisors or institutional investors are looking at crypto as a small portion of their overall portfolio allocation. 1% 3% 5% and so they spend that much time

on it and they're just not focused on crypto so far this year. I think that's starting to turn as you see the market bottom out and as you start to see some positive news developments. I actually think that the Clarity Act stalling out and now that we're in this kind of quiet period for clarity with a vote scheduled. I think that's a positive catalyst. Going into July and August, it was, oh, there's this looming deadline and if it doesn't pass before the the recess, then we're doomed. And now we know there's a vote on the horizon. I think that tells the market that these things can change over time and they're not a uh, you know, they're not such a binary event. I also think the macro environment is getting a little bit more settled. We're getting used to elevated oil prices. It's still unclear what's

happening with interest rates, but we're getting used to a Worshled Fed. Of course, we'll have the the Jackson Hole uh speech coming from him later this month. That'll give us a little bit of an indicator perhaps of where we're coming, but he's not really telegraphing, you know, what they plan to do. But but overall, I think getting out of the summer period and this uncertainty period, leaving some of this bad news of July and August behind us is a catalyst in and of itself as investors start to look ahead towards the end of the year and towards 2027. I think crypto fits really nicely into those end of year discussions.

>> Yeah. And I I would just add I think some of the biggest catalysts are in places that crypto Twitter is not looking. Right. If you talk about Morgan Stanley, Wells Fargo, UBS, and Maril Lance, the four sort of largest wealth management platforms, uh they control about $20 trillion in assets, the kind of catalysts that I think will be a big part of the next cycle for the majors at least are Bitcoin, Ethereum, and other assets being added to the model portfolios on those platforms. You've already seen it on a small scale at places like Wells. I think you're going to see it at many other of those providers over the next six months.

Again, $20 trillion of assets there. If you're starting to get model allocations of 1 or 2%, that's a huge amount of inflows. So, I think a lot of crypto thinks about the Fed, they think about the Clarity Act, they think about REGG crypto. All of those are really important, but many of the biggest catalysts are actually internal to these wealth management platforms that are going to be the marginal buyer of the large cap assets, I think, over the next few years. And I would watch for those sort of small news stories that actually trigger tens of billions of dollars of flows uh on a persistent basis for years in the future >> and and I think you guys have you know tremendous tabs on those sorts of investors and so let's talk about this

bifurcation in call it investor asset class fit right you you mentioned how the crypton native investors looking at a more maybe defy fundamental revenue driven approach whereas as we've got, you know, some of the more monetary premium assets that are appealing to some of those investors uh that that come from an institutional background. I I guess before we get into some of the nuts and bolts, maybe you could just explain a little bit more why you think this is the case. Why have we seen this bifurcation and then we'll talk a little bit about each of those investor types and asset classes.

>> I think there are a number of reasons. You know, first you start with liquidity, right? I just mentioned 20 trillion of wealth. They can't look at an asset like unis swap which is what $2 and a half billion dollars and make a significant allocation to that. There is just a size mismatch. It's not fit for purpose for institutional capital. Really only a handful of the largest assets can absorb the kind of liquidity that I think is going to come out of this market. So that is one element of it. A second one is just educational process. I mentioned it takes two years generally to bring this audience up to speed. The Bitcoin ETFs were approved in January of 2024. So they're just sort of reaching that educational apogee at this point. And I think that's another big piece of it. And then on the flip side,

uh the institutional investors don't have the sort of emotional damage that crypton natives do. Right? We've been in Bitcoin and seen the market pull back 50%. We're looking at the values in our wallets that are down substantially from that October high and it's painful for us. And so there's a healing process there. If you have a 0% allocation, you look at that pullback completely differently. To you, that's a gift. To you, that's an opportunity. To you, it's a better entry point. So, because they're starting from a different point, they're viewing this asset in very different ways. The flip side is also true on the cryptonative capital. We're just very closely aware with what's going on with Hyperlquid doing nearly a

billion dollars of revenue. were very closely aware to what's going on at a and unis swap and morpho and others about returning revenue directly to token holders. That area of education hasn't trickled up fully into the institutional market. It'll get there, but I think re sort of OG crypto has a chance to be ahead of that narrative just because they're more focused on these smaller cap assets that aren't big enough for this institutional crowd. >> Yeah. Yeah. makes a ton of sense and I appreciate the the insight into the investor psychology of how they're thinking about each of these asset classes respectively. Um Ryan, I I think a question for you here is, you know, I I'm curious about the correlations,

right? Because and I'll just sort of take a step back. We've been thinking through this thesis on this show where, you know, with the midterm elections and the Clarity Act, we've been hearing a lot about the national debt and how, you know, it comes from both sides. one's spending on the military-industrial complex, the other one's spending on, you know, uh, pro programs, entitlement programs. And so ultimately, you know, both sides are blaming each other for spending the money. Regardless, the money is getting spent. And, you know, Bitcoin tends to react to that. Whereas, you know, because the the crypto native, the digital asset native asset class has been a little bit more fundamentally focused and driven on these revenues. It feels like that bifurcation has now correlated the altcoin complex with the equities market and how we typically

value those sorts of things. Whereas Bitcoin feels like it's a bit more uncorrelated, getting a little bit more into the inflation hedge conversation sort of pendulum has swung back over into into valuing Bitcoin that way. curious what you think about, you know, this analysis and if you're seeing any other uh pertinent correlations in how these asset classes are represented. >> Yeah, it's a really good question. I think you're smart to talk about correlations because these investors that we're speaking with think about these things as they're trying to build a comprehensive diversified portfolio. I also think that you're absolutely right.

Go Bitcoin is trading differently than other crypto assets. Now they they do have some correlation together because a lot of investors do treat crypto as one thing but they should trade differently and the reason they should trade differently is that they have different fundamental drivers. In the same way gold has different fundamental drivers demand versus supply the need for a hedge against currencies being debased etc versus software companies which are driven by earnings growth revenue technical developments uh innovation etc. Right. And I think that you're going to see this increasing divergence between the return of Bitcoin over the next decade versus the returns of crypto

assets like Ethereum, Salana, Hyperliquid, DeFi assets like Uniswap. That doesn't mean one goes up and the other goes down. I just think that they're going to trade differently as investors start to think about them differently. I think that Bitcoin will trade more like gold. And in fact, we've seen Bitcoin's correlation to gold increase relatively recently, uh, which which a lot of investors a year ago were saying, "These things aren't correlated at all. I thought they were supposed to be digital gold." Well, recently they've had, and we're seeing the crypto assets that are innovative technologies and softwares trade more like technology and software. I actually think that's good.

It shows that crypto as an industry and as a technology is infiltrating traditional markets and traditional industries in the way it's in intended to. And I and I think it makes sense. The other thing I would say about correlations, which is particularly interesting, is that if you were to tell investors there's this asset class or these assets that have low correlations to other assets in your portfolio, volatility is declining and it has potential for high returns because it's very early on in this assets life cycle.

They would they would be screaming the smramer be banging the smash button on his show. uh but then you say it's Bitcoin or you say it's unis swap and they freak out and they say I can't touch that thing right and there's alpha there because eventually they will come around to the fact that this is a powerful tool to build a diversified portfolio built for the future and digital assets are just one of many asset classes they'll consider investing in >> I think uh producers listening behind the scenes he just ordered a smash button it's going to be here in the studio in a little while um and I think you're absolutely right I mean crypto has this connotation in the in the world and society. It's just people just it led a bad taste in people's mouths as a result of FTX or you know through one

thing or the other. Um which is why we call it digital assets here on this show. Uh because people and I you know I I think it was Matt maybe you were on the show and we we I think the last time we were talking about this how the exports of the industry are completely fine in terms of optics and perception. You know people don't have a problem with stable coins. people don't have a problem with uh blockchains or digital assets or you know any of these things perpetuals you know but they have a problem when you get the umbrella term of crypto and I think that is some of the market education that you know you guys are fighting the good fight and going out there and helping to educate the market to arrive at a more sophisticated and mature knowledge base in the in these investors so that

they're able to parse out you know this isn't just all crypto there are some nuances here perpetuals and meme coins are different from stable coins and blockchains. Let's kind of treat these things, give them their due. >> Yeah, I think that's absolutely right. And we have come a long way, right? You now see plenty of headlines that put together the largest institutions in the world and worlds like tokenization and digital assets and blockchain. And you couldn't have written those four years ago. We sort of almost take that for granted now. But every once in a while, I'll see a headline that's like, "Wow, in 2018 this was complete fantasy." And yet here it is and it's just a daily occurrence and we barely even comment on it. So I I think that is definitely true. We have some baggage but when you

reterm it people are able to evaluate it on the merits and uh I think that's part of the growth. >> Yeah. And and you know ultimately we're we're aligned. We're both out here you know educating uh everyone else so that they can kind of level up their own understanding. We've got some questions uh from the audience in the live chat that I want to get to in just a moment. But first, I I I want to just chat about kind of the the the 8020 portfolio feels like it's it's done. And I'm just curious how maybe the investors that you're talking to are reacting to this. Do they see this similarly? You know, people are calling for the death of the 8020 portfolio. You know, typically stocks and bonds weighted and and you know, now we've evolved to a point where we've got these radical portfolio

constructions. maybe just a a quick word on, you know, what the the status, the state of the 8020 portfolio is now in the eyes of institutional investors and where do you think we are now? What if you're just conjuring up the the you know, best portfolio construction for you know an institution out there? I I realize it's a rather general question, but you know what what are you suggesting to some of these investors? Yeah, look, I I look at this from like a big picture historical perspective, which is if you back up 20 years ago, the largest institutions in the world were not investing in an 8020 or 60/40 portfolio. They held stocks and bonds and private equity and private credit and alternatives and commodities and they put them together to gain the kind

of returns that brought them headlines in the Wall Street Journal. That's what we saw out of Yale. That's what we saw out of Harvard. That's what we saw out of hedge funds, etc. That was true, but retail was sort of left with the S&P 500 and the aggregate bond index and we were told that's good enough. The beautiful thing that's happened over the last decade is we've sort of broken down those walls. Right now retail can get in access to private credit and private equity. It can get access to commodities. It was early to crypto which has been the best performing asset class arguably in the world over the last 15 years. And now you can build a more diversified, sophisticated portfolio that includes all of the

world's different assets. Right? The starting point for any investor should be to capture the global opportunity set. Crypto is part of that, as is real estate, as is stocks, as is bonds. And we're seeing that at these major wealth platforms. They're no longer content with 6040. Part of that is because the nature of bonds has changed, but a lot of it is that the nature of opportunity has changed through things like ETFs that make things like crypto accessible in an easy rapper. >> Yeah, Ryan, anything to to add here on portfolio construction? How people and in institutional investors might be thinking about this? Yeah. Well, I mean, I think it's changed a lot over the long term as Zach mentioned, but also over the past six years in this kind of

postcoid era where you've had a lot more retail participation in the stock market while you've had crypto grow as an emerging asset class. You've had access to these other asset classes at the same time where we've had a world that pays a lot more attention to the amount of money printing that's happening to the rate of money printing is accelerating. And I just think all of these things start to play a bigger factor in portfolio construction. What I'm seeing more and more when I talk to financial adviserss is that they are moving further away from these traditional structures partly to differentiate themselves from other financial adviserss because ultimately at the end of the day they're in the game of winning business and winning clients from other financial adviserss, but in part because they need to beat the

market, right? And crypto for instance is now part of the S&P 500 via Coinbase, right? via strategy and now crypto's in that benchmark. And so if they're not investing in crypto, they're essentially short crypto as part of the returns of their portfolio. And so it's just changing the way investors are thinking about portfolio construction as a whole. Bonds have not been performing well. That's an area they're thinking about. Private credit. They now they had access. Now they're concerned about it. It's just changing the way investors are thinking about portfolio construction.

You see legendary investors like Ray Dallio suggesting 15% allocation to Bitcoin or gold or Rick Edelman who's one of the most successful financial adviserss in America suggesting 20 to 40% crypto in a in a client's portfolio. You even have some of these these large traditional firms uh like Charles Schwab saying you should have up to 6% crypto in a portfolio. That's so different than it was 5 years ago. It's remarkable. And so I think that's where we're headed is just a very different portfolio construction regime than we had a decade or two decades ago. And crypto is a core part of that.

>> It it certainly is. And uh now it's suggested by some of these you know large financial advisors uh and big trading firms which you're right is absolutely different from where we were before. Um you also mentioned money printing which I think is the gateway for a lot of people to come into this asset class and start to understand it and give it its due. Um, and so Ryan, you know, just curious if if you have a word on macro because you're right, Wars hasn't really given us any sort of insight into what he's thinking. What do you think? And, you know, we saw a lot of money printing go into the AI capex buildout. Do you think it has to shift and maybe money in order for it to flow into this asset class into the digital assets has to shift away from AI and we

need to see kind of an unwind or a rotation out of that? Maybe you can just give us what you're seeing on the macro landscape and what you think this Bessant Wars, you know, combo is going to do for digital assets moving forward. >> Yeah. Well, well, I think rotation is the right word, right? We saw a rotation out of crypto, out of gold, into equities, particularly into AI driven equities. I think eventually you see capital rotate out of that trade as investors take gains and look at other opportunistic areas to deploy capital.

What I do know from our conversations with these investors is that they're not asking should I invest in crypto. They're saying when should I invest in crypto? And that's very different than four years ago. And so I do think we see capital rotate back into crypto. My macro outlook is that we're going to continue to see these massive deficits. We're going to continue to see money printing. We already had the US government come out and say that they're going to need to spend 600 billion of borrowed capital in Q4, which is bigger than the global financial crisis package that bailed out the banks. That's the long-term trend. That's not slowing down. It's actually and kind of scarily

accelerating. I also think that Worsh wants to keep rates low. You already saw the expectations for rate hikes come back down. I think, as I mentioned before, we're getting more used to elevated oil prices. I just think that the macro is getting less uncertain and that's making investors more confident in their ability to allocate across different asset classes. I think crypto is one of the ones that benefits from a capital rotation heading into Q4 and into 2027. Yeah, it it makes a ton of sense and we've already seen, you know, this regime intervene in the Japanese currency which kind of creates some money printing as well. So, I think you're right. It feels like the macro

and, you know, as you mentioned, had the opportunity to raise rates, chose not to. And so, it feels as if this this macro regime is starting uh to evolve into uh you know, potentially more dovish position. Um, all right guys, few minutes left. I've got kind of a rapid fire segment here. All right, I guess we've got some questions in the chat for you guys. Um, first one is from Matt. Matt, which are your investors that you're talking to buying more of, Bitcoin or ETH? [laughter] >> Uh, right now it's still Bitcoin. There is rising interest in ETH. It's been performing well. People are excited about stable coins and tokenization, but the starting point remains Bitcoin and, uh, we're seeing more flows there.

>> Got it. Ryan, you uh, you seeing the same thing out there? Yeah, I think the thing to remember is that if you were on one of these investment committees and you were thinking about how should the 10,000 financial advisors who use your model portfolios start getting exposure to crypto, you would start with Bitcoin and then maybe you would add some ETH, but it would probably be like a market cap weighted exposure or maybe you would add some salon instead of right. But you're starting with Bitcoin. I think that's exactly true. >> Yeah. Um, which one are you guys more bullish on? Hood or hype?

>> No, you got to go first, Ryan. >> I'm more bullish on hype. It's a smaller market cap asset, and I think it's earlier, you know, in its in its uh life cycle, and I think it's going to be one of the major benefactors of the next crypto bull cycle. I'm bullish on Hood, but more bullish on Hype. [laughter] >> Yeah, I'll take both as well. I think I think hype has more upside potential, but I think Hood is a generational buy and hold asset. If you had to tell me I had to buy something and come back in 10 years and be confident that it's substantially higher, I think I would put my money on on Hood. I think it's just a phenomenal company executing phenomenally well.

>> Okay. All right. So, we got a divergence here amongst our Bit Bitwise uh peers. Okay. I'm keep the chat is loving this, by the way. I'm keeping up with what what they're saying here. The next one is overunder. All right. So, I'm going to throw out some just go over under and then maybe we'll we'll talk about some of the the the rationale as to why after the fact, but we we've got four or five assets here. Uh and price targets. Bitcoin 180k by 2030. >> Oh, over over. We'll be way over. Yeah. >> Okay. All right. These are all by 2030.

ETH 8K. Ryan >> over. Oh, >> man. I over as well, but definitely some nuance worth unpacking there. >> Oh, okay. We'll we'll we'll note that. Um Zcash, actually we got two different ones, both by 2030. Uh one prediction Zcash 30,000. Other one is Zcash 25,000 by 2030. >> Under and under. >> Oo, I think over and under. >> Over 3,000. under 25,000. Ryan, why so bearish on Zcash?

>> Yeah, I I'm not bearish on Zcash. I just think that you can't have these you a pretty optimistic price targets for every crypto asset. I just think that things move slower than we we think, right? Like Bitcoin is only trading at 65,000 today. And I I think it's going to take a long time for Bitcoin to to get to a million, right? 2030 at a million. I think that, you know, could happen, but it's probably going to be a few hundred thousand. The reason I say that is I think it takes longer than people expect. And so, do I think that Zcash is going to be a a good buy over the long term? Yes, I do think there'll be demand for privacy coins. I do think that Zcash is uh is a special asset. I just don't

know by 2030. >> Got it. Okay. Yeah, 2030 is uh three and a half years away. So, uh we got we got some time. All right. You guys are going to have some fun with the next one. hype. $500 over under >> by 2030. Uh >> 10x 2030 on hype. >> 10x 10x. I'm thinking through on that one. That's a $600 billion valuation on hype. Um Oh man, I I'm think I'm probably under, but I'm uncomfortable saying that. I'm not sure.

>> Okay. Well, it sounds like it's a close one. Ryan, what do you think? >> It's a close one. >> I think under, but it could run above it in between that period. >> Interesting nuance. >> Some big volatility coming. [laughter] >> Just curious and we'll get to the ETH nuances as well, but just curious hype. Why do you think that, you know, we might get some sounds like, you know, serious blowoff top there? uh with some volatility.

>> I I mean my opinion on hype is that look what it's done in the face of a bare market, right? Hype is one of the only crypto assets. Now to be fair, Zcash is in the same boat that's done remarkably well given the environment that we've been in. I think once the environment turns in crypto's favor, you're going to see many of these larger market cap non- Bitcoin assets run. And I think Hyperlid is probably primed to benefit the most given the size of the asset and the growing awareness and popularity of hype. But uh but but as we've seen with many of these newer crypto assets in these cycles where you have these magnificent runups, you do

tend to get a decentsized pullback, a lot of volatility. And so I think it's going to be, you know, probably like the key asset that displays those properties that we've seen displayed in things like Salana previously or Ethereum in the cycle before that. >> Yeah. >> And just to add a nuance to my comment because I had I'm I'm realizing a mistake of course because of the buyback the total market capitalization could be substantially lower even at those prices. So I think that's the like that's the challenging mechanism to consider. Um but it is the case historically that we've seen rotations between leading platforms. So that's probably the risk to the long-term 2030 thesis.

>> And similar you know point to that uh is competition from you know within the sector. The next one here is lighter. Uh we've got one for 30 and the other one for 50 which would be insane. But uh what do you guys think about lighter? >> There's a lot of people at Bitwise that are bullish on lighter. I will say that it's something that we we've talked a lot about across the research and DeFi teams. I think perpetuals is going to grow, you know, remarkably over over the coming years. So, I think lighter could it could go above.

>> Look, it it'd be it'd be tough, right? All these assets can't have these massive run-ups is my is my general opinion. So, okay. >> Um could lighter be a winner in this bull market? Yes. Uh 30 is is probably the more of a ceiling than a than a floor in my mind by by a large margin. Matt, any thoughts on Lighter? >> I think it's just hard with a platform that new, uh, to be honest. Um, there's so much churn in this space, it's it's hard to predict. So, I'll let Ryan take the take the vote on that one. >> Got it. All right. Well, that was our overunder segment here for today. Uh, Matt, um, you mentioned, you know, ETH at 8K by 2030, and I realize all these predictions are far out. We're not going to hold you too too uh close to the fire

on this, but what are some of the nuances that you described that could affect, you know, the upward mobility of ETH over the next couple years? >> Yeah. Well, I think there's a a pretty fascinating thing going on in the market between ETH and Salana with one positioning on a monetary side, one positioning more on a revenue driven side. And I think it's indetermined at this point which valuation approach um will will win out over the market over the next handful of years or whe whether you'll get both, whether you can have both. Uh and those are really fundamental decisions that lead to downstream decisions on how the protocol is run and go to market. Uh so I think it's it's just a a fascinating comparison from my mind uh how those two

projects are running and uh my favorite approach is just to own them both. >> Do you think uh this memecoin launchpad you know phenomenon that we're seeing play out on Salana is at all sustainable in terms of revenue and we do get some sort of sustained rally in the launch pads like pump fun. >> Ryan, you want to tackle that? Yeah, I mean, look, if you if you believe that investors are going to continue to to speculate, then I think you can believe that we're going to continue to see fees generated by memecoins being launched, right? So, I actually I don't think it's going away. My my hope and my general thesis on Soul is not centered around the the meme coins, right? I think that

is a shortterm uh uh tailwind that will be surpassed by things like tokenization of equities which is a significantly larger market than memecoins and has a much you know bigger TAM than memecoins. And so uh do I think that it's sustainable to be the only driver? Absolutely not. Do I think it will play a role in the short term and will still be some sort of a factor long term? Yeah, I do because I think you whether it's with options in traditional markets or other types of derivatives or perpetuals in crypto or meme coins, right? What we've seen is that retail investors love to speculate and I think we're going to continue to see that uh

you know for for years to come. >> Yeah, I completely agree. If I can just add two things, I think it's still pregame on something like Salana, right? We're at $300 billion of assets. There's $670 trillion of assets globally. That's like 2,000x. Um, we're a week away from red crypto being introduced, give or take, which will clarify how tokens can raise capital without triggering SEC compliance. When you take something like that in a mature regulatory state and you combine it with the kind of launch platform we see on something like Salana uh, and entrepreneurial ideas, I think there's an explosion of possibilities in that space. So, I I do think pregame is sort of the way to think about it and

it's doing exceptionally well. >> Matt, could you just tell us a a little bit more about REGG crypto? Maybe not everyone has been keeping their eyes on this, especially amidst the Clarity Act. What can we expect from red crypto? >> Yeah, it's sort of it's sort of the the the bypass road on the Clarity Act, right? So, the Clarity Act would be legislation, but of course the SEC can do regulation. uh they've said, you know, they've come out with rules already in terms of taxonomy between the CFTC and the SEC that's also in the Clarity Act, but they're acting on it on a regulatory perspective. What we expect in the next week is sort of the first draft of the red crypto rules. Those are intended to specifically allow new projects to raise capital without being

uh registered or triggering SEC registration and then evolve over time into a centralized platform. That's sort of a dream we've had in crypto in a real way since 2018 and the ICO boom. But now with some regulatory teeth and some regulatory certainty, I think people are dramatically underestimating how much entrepreneurial energy that that can create. We've seen all these amazing crypto projects emerge despite massive regulatory threat. In a week, we might get the rules that allow those to emerge with regulatory clarity. I think there's going to be like a million flowers that bloom. I should say it's just the proposal of the rules, then there's a

comment period, etc. So, Washington moves slower than crypto is used to. But next week is a really big deal, particularly if you're worried about the Clarity Act. The SEC does have a lot of levers it can pull for the next two and a half years, uh, at least, and it looks like they're going to pull them. >> Okay, big week next week. We're going to keep our eyes on that. Um, one of the last things I have, R is is Ryan, you mentioned, you know, uh, not one of the things you said just now was, uh, not everything can go on these crazy runs.

And I'm just curious to to dig into that a bit because in cycles past, we've seen everything move in unison. you know, we've got ZERP era, you know, interest, low interest rate environment, liquidity injections, everything, you know, is uh is generated higher off of those tailwinds. And now it sounds like because the market is a little bit more mature, we're going to see a little bit more nuance in how these things move. Why do you think that is? And what categories do you think are set to outperform in the coming bull market?

>> Yeah, it's it's a good question. like the the market's larger today than it was in past cycles, right? And just naturally, the the laws of numbers here would say that when you have capital coming into larger market cap, more liquid assets, it's going to have less of an impact. That's why you've seen Bitcoin for instance, start by going up, 1300% a year and then 700%, then 400, then 300, then 200 that right. So I think that same thing happens across other crypto assets. You also just have more crypto assets now than you had before. And we talked about memecoins.

You now have tens of thousands of crypto assets being launched like every day or every week. And so at some point that saturation plays a little bit of a role. When I step back and think about what's going to do well in my opinion over the next cycle from a thematic perspective, I think it's Bitcoin, which will continue to cement its place in the world as a digital alternative to gold that's better in many ways, but at minimum a kind of partner to gold and portfolios. I think layer 1 blockchains that are already seeing a lot of institutional adoption and a lot of traction like Salana and Ethereum and Hyperliquid and some of these others are going to do well in this next cycle

particularly because investors have now heard of them for many many years and are going to be able to start seeing how much traction that these these networks are are seeing. DeFi is another area. It struggled in a crypto environment that saw regulators suing DeFi companies, right? Unis swap was being sued and debanked in the last bull market. Now it's free of those chains and those things holding it back. I think that we see DeFi really become what we all thought it would become in 2021. I think that happens this next cycle. So, I'm bullish on on DeFi. I'm pretty bullish on layer ones where stable coin and tokenization activity happens. To be

honest, I'm very bullish on crypto equities because I think that Wall Street just does not pay enough attention to some of these crypto companies like Coinbase, like Figure, like some of these other crypto companies that are setting themselves up for success in this next bull market and doing a remarkable job at executing and positioning. And so those are the areas I think are going to do particularly well over this next run. >> Yeah, you mentioned crypto equities. So, um there's this cohort of, you know, mining companies that are pivoting their hash power over to AI uh data center compute. Uh but it is catching notice. I think it could uh also indicate that, you know, we're we're in this phase shift of the market. Guys, I think that's it. We covered a lot of ground

today. Really appreciate you guys coming on. This was fantastic. The chat loves you guys. We have people asking Ryan to check his DMs. That was Flip has that message. So guys, really appreciate you coming on and just as we continue to play out these market cycles, would love to have you back on in a few weeks and just, you know, continue to catch up and uh give us the good word. Really appreciate it, guys. >> Awesome. >> Yeah, appreciate it. >> See you guys again soon. Thanks so much. >> Bye. >> All right, guys. Fun times as always with Ryan and Matt. Uh we're going to keep this show moving along. I I I think you guys all enjoyed everything that we covered today. Uh fantastic having those guys on the show as always. Um those

guys are are great and and like I mentioned, I mean just it's a lot of fun having uh people that are able to take a general, you know, vantage point on the market because a lot of people come on, they talk their book. Um, and obviously these guys have ETF products that are made up of Hyperlid and Salana and ETH and Bitcoin, but you know, they do keep track of t uh have tabs on really everything that's happening in the market at any given time. Uh, so as we wait for our next guest, he's going to join in a few minutes, Daryl from MPC Labs. We're going to get into some news uh cuz you guys heard a lot of what is going on in the minds of institutional investors uh from Ryan and Matt, but we are going to get a little bit deeper

into the headlines. Uh and so let's go ahead flip back to what we have here on our news section. Uh we're going to start with anthropic signing. And this is actually just what we ended off with with Ryan and Matt. Uh as you heard Ryan express some bullishness on crypto equities talking about Coinbase and Figure um you know that is uh these are obviously public companies but have their businesses in the digital asset markets a lot of infrastructure a lot of exchanges strategy takes up a lot of the attention when it comes to you know what these companies are doing in the public markets but there are a little a lot of crypto equities out there as well and there's a cohort of these companies that

have typically built out this infra infrastructure for mining Bitcoin. Um, the rise of proof of stake has sort of taken a little bit of steam out of their sales, but you have Anthropic here signing a massive deal, $9.1 billion, 20-year deal with Bitcoin miner Riot Platforms to secure AI compute capacity. And so, obviously, Anthropic needs compute in order to process tokens and serve uh those tokens in the form of intelligence to their end customer. Um and so obviously uh they can get uh they they want this compute. They need to get it any which way that they can. Uh and they are resorting to uh Bitcoin mining companies uh which already have the big

electric electric power grid buildout in rural areas all over the world. Um, and they uh can now contribute a lot of this hash power, a lot of this compute power over to uh the AI complex as well as the Bitcoin complex. And so we're going to see these things go hand inand uh this thing is not slowing down. It got started with Bitcoin. Now they find themselves in a very favorable position uh to serve the insatiable demand for AI, compute, and tokens. Uh so very cool to see uh actually Bitcoin companies and and I think this is also a crypto equity if you want to call it that uh now getting into this business big big

partnership with Anthropic. Uh I would continue to pay attention to this category. Uh we also saw Nvidia's Jensen Huang go on CNBC do this big announcement with six of the largest capital allocators in the world and talk about allocating capital to the infrastructure buildout. Um, we talked about how the supply chain is downstream of the AI bottleneck trade. Data setters, real estate for these uh big compute stations are becoming the bottleneck. Uh, and Riot platforms is doing this. For more on that, I would recommend checking out our episode with Matt Seagull. This was our AI super cycle last week. Should be on YouTube now. And uh, we talked all about this.

the the VANC guys have a product that does track the um the uh miners uh that are public in the markets. So, let's keep moving. We've got a tweet up next from Tulip King uh and he is talking about uh half of the bifurcation that Bitwise, Ryan, and Matt were talking about. Uh on one side, you have institutional investors that are looking at the asset class, digital assets with a monetary premium. There's really just three that come to mind. It's Bitcoin, ETH, and uh Zcash. Uh and obviously, you know, with varying degrees of influence there. And then on the other side of this bifurcation, you've got uh the revenue generating applications. Uh

these are the assets that the native capital allocators are taking a little bit more of an interest in. Uh and you have Tulip King, uh just nice, firmly placed in that native category. uh looking at uh these revenue generating applications says, you know, this is where to allocate and you should be shorting the unprofitable L1s that aren't monetary assets. He's probably talking about ETH there. I wouldn't get too tied up in shorting ETH. You guys know I'm an ETH bull. I think it can catch a significant tailwind and rising tide from tokenization, RWAS, and uh generally just the onslaught of assets that will be tokenized. Uh ETH is the blockchain

where a lot of those assets end up. Uh so I wouldn't get too heavy-handed on that short, but there are other unprofitable L1s that are out there that aren't monetary assets. Bitcoin, ETH, Zcash are the L1s that might not be profitable but have a little bit of monetary premium. I mean, you've got Cardano, you've got Hideera, you've got Sooie, you've got a lot of others uh that feel like they fall in that latter category. Um there's just one more thing I want to mention on this, which is in regards to ETH. And it was just a I haven't really heard anyone talking about it like this, but I've been thinking about ETH uh as I've been learning and thinking and listening to a lot more of this AI

rhetoric. Uh it feels like what you have is um kind of this bifurcation in openweight models and uh and you know these frontier models in the US. Uh the analogy that a lot of people are making here is that the openweight models are going to get a lot of the users uh and gonna end up a lot like Android and then you know those who can afford it are going to pay you know the $20 subscription for the frontier models even if the intelligence difference that they're using it for is negligible. They're willing to pay the $20. It's easy. It's comfortable. It's what they know. It's the reason why we all have iPhones and not Androids. uh if you have an iPhone uh even though an Android would be, you know, perfectly sufficient

in getting the job done. Regardless, it kind of feels like ETH is Android. It kind of feels like Salana might be Apple and ETH might be Android. Um I don't know who is Apple actually, but it kind of feels like ETH is going in the large user base, large amounts of adoption, but very low monetization. Uh Android obviously is uh is exactly that. Um, so just a little bit more of an ETH thesis that I'm playing with. It's not particularly bullish for ETH the asset, but uh always got to challenge our assumptions here. Um, we're going to get Daryl up in just a moment. Uh, we're going to finish setting him up. Let's go ahead move to our next tweet, maybe even fit in a daily equity segment. Before we do, let me tell you about 1 in. Uh,

these guys are doing incredibly well with their shared liquidity protocol, Aqua. Big round of applause for 1 in. Uh these guys let you approve one wallet balance uh to back multiple positions at the same time across pairs, ranges, and chains. You're not going to split your tokens. You're not depositing them, but you're not leveraging either. These things stay in your wallet. It's a totally different way to provide liquidity, and you keep your liquidity active in more markets than before. So, 1 in is doing uh really cool things uh very innovative when it comes to the liquidity provisioning market.

uh big friend of the show, Narolf. The uh the Narolf lore with the rollup lives on. Narof is a incredible researcher and very thoughtful personality on the timeline. Uh and so he describes fake world assets. We've been hearing a lot about real world assets. You guys, you know, hear about that a lot on the show. But what is fake world assets? It's like an NFT gadget gotcha open to everyone. It's like the NFT. They're trying to bring NFTs back, right? So, basically, depositors add both an NFT and some ETH.

Then, if you pull that NFT, you either keep it or you take 85% of the ETH. It's like a liquidity pool with NFTs. So, let's scroll down a little bit. We'll get into the nuts and bolts a little bit more with fake world assets. Um, narrow off great thread here. uh talks about how 85% uh of the pools are in this ETH backing. You can claim 85% of its ETH backing or you can claim the NFT. Uh NFT depositors pair assets with ETH backing, earn acquisition fees, and influence draw probability, right? So, it's kind of like opening a pack of these NFTs as well. Uh, probability design means higher ETH backing lowers the chance an NFT is selected, creating a trade-off

between protection and acquisition likelihood. And so, Fake World Assets, great name, is turning NFTs into a liquid onchain game of pricing, backing, and randomized acquisition, creating new activity around NFT markets beyond simple floor price speculation, adding a dimension to the NFT market. I think this is good. I think this is the innovation that a lot of people tend to look at uh and uh think through when it comes to reviving an asset class um such as NFTTS. Let's continue. Got a little bit more that we're going to cover here in these tweets. Uh as always guys, check out Narolf. great

explainers, great education in the market and uh great way to keep up on uh everything that's happening in the industry and keep your thumb on the pulse. Nar doing a fantastic job. Big friend of the show uh and uh give him a follow. Uh Tyler here uh again keeping on our NFT uh train says that you all minted out a coal the coal Ethereum NFT project in the year 2026. That's 44,000 in supply. We don't have to spend too much time on this. Apparently, this guy's a scammer, but he got his recent NFT mint minted out, made a million and a half, and uh we don't know what's going on there. Um, and so

that's what's going on. Uh, we're going to move off of this because not much more to cover here. Don't want to give this really any more due. uh pretty surprising that you know this guy scammed apparently and now has a new project in which it got minted out. So you know maybe there's more to that story that we will find out over time. Uh this is something I wanted to cover because it is actually a real problem uh that we're seeing unfold in real time. uh tokenized equities are becoming uh just very fragmented and so this is something that we're keeping an eye on uh because we saw this when it came to stable coins. I think there is going to be a big play when it comes to the user

experience of this, the abstraction layer of this. You know, we're going to see decentralized exchanges and AMMs sort of aggregate all of these tokenized equity forms and then put them into a format that is more digestible to end users, the investors that are ultimately going to be buying these securities. Uh, but this is what is getting built out in real time. Thankfully, we have some experience as an industry with building out solutions for fragmented assets, right? We did this with stable coins. We did this with wrapped ETH, staked ETH. As we built out more of the multi-chain onchain economy, we ended up with abstraction technology that is able to make a very nice and friendly user

experience despite having different assets across chains, right? And as I'm sure you guys know, you know, having uh an ETH for per se on uh let's say, you know, optimism isn't the same as having an ETH on Robin Hood or Arbitum. Similarly, having because there's different security principles at play here. So, similarly, having Nvidia on, you know, uh optimism isn't go is going to be a fundamentally different Nvidia than having it on Robin Hood chain. Um, the one caveat here and we're going to get into our daily equity segment is that I believe dinari is able to basically use this ubiquitous format

across different chains which makes it really interesting before you buy these tokenized equities. Just know what you're getting into because you don't know uh really what is underlying this tokenized asset. You don't know if you actually buy a share in the SPV, buy the actual equity like a Dshare or a native issuance of a share or buy simply a token with no fundamental value at all. Um, so know what you're buying. uh and I do believe that you know this is a problem but it's an opportunity for one of these abstraction protocols to come in and uh really put together a nice user experience solution for all of these the the fragmentation of tokenized

equities I think is a real opportunity uh that we're going to see play out very soon. Guys, we've got one more tweet. It is our daily equity segment for today powered by Dinari. Let's go ahead get into it and then we're gonna bring up our next guest, uh, Daryl from NPC Labs. [music] All right, we are here with Daily Equity powered by Dinari doing incredible things with their Dshare protocol. Um, also in the equities markets, this is a developing story as the US government

continues to just take stakes in private companies. Um, you can call this a variety of different things. Um, soft bailout, uh, socialism, you can call it whatever you want. Uh, but this is just the reality of the regime that we're living in. The US government now owns equity stakes in 30 private companies after being involved in zero just over a year ago. uh this was something that you know the the administration the Trump administration in 2016 didn't do uh in some instances being the single largest shareholder according to the KO Institute. Now the reason that I bring this up for our daily equity segment today is that it feels like they aren't going to let the equity market go down.

It feels like uh them taking stakes in the US government means that they can uh if they ever get into a position where you know they've got this large unrealized uh loss on their balance sheet feels like they're able to just because you have you know the buyer of the equity also uh the entity that runs the money printer. It feels like they can just print and boost their back so that they never have to realize this loss. Um I was reading some macro analysis by uh Arthur Hayes who described how uh this is a principle that he believes is going to happen all over the world. Uh one in the US we're already seeing this take place. He also

thinks that as we get further into the AI buildout, as more misallocation of capital happens, the administration is going to become increasingly involved in supporting these companies and they're going to use the veil of national security to justify it. And so we might see even more involvement and investment by the government into some of these private companies. Uh also uh because we're seeing overseas some currency uh intervention uh there might be a scenario in which you know uh and and the example right now is Japan because the US just intervened in the Japanese yen market uh which is that they're going to try to

repatriate uh a lot of capital in Japan and use it to boost up uh the Japanese markets. And there's a lot of nuance in that as well. That's one of the strategies. Uh actually as of uh today uh I saw Arthur just released his Yen Quake article. Um you know Arthur is a complicated uh character in uh digital asset history but uh I tend to really enjoy his macro analysis. Um guys, thank you so much. This has been uh the daily equity segment powered by dinari. Uh we are going to get our next guest on the show. So, let's go ahead and uh go to a quick little coming up. Yeah, I don't

think we need a standby. No, we're rocking and rolling, guys. We're pros back here. Big shout out to the team behind the scenes. We got a ton on sound effects. We got uh Leo on uh on the ones and twos on OBS. We got uh we got Meg, we got Nero in the chat. They're clipping. They're posting. And uh we got Alex doing whatever he's doing. Who knows what that guy's doing. Uh much much love, Alex. love you. Uh and then obviously my uh my lovely co-host Andy is out there doing something wild in this world as well. Uh got to give a give a shout out to the team. Come on guys. It's a team effort out here at the rollup. Uh let's get our next guest uh uh in the in the back. He's been chilling for a while. And uh I uh I

think we're going to have a fun uh fun chat with Daryl. Uh give let's give Daryl a little Yeah. Let's give let's get let's get Daryl up. Let's get him moving. And obviously big shout out to everyone here in the chat. I think we got some new [cheering] faces here. [screaming] >> Yep. Big shout out. Big shout out. Shine double O. Friendly face. You're not new. You've been here rocking with us. Uh the light the lit hype ratio is absolutely cooking. Lit hype at highest level since March. Salana seeker phone is built on Android. Lol. Onearmed bandit.

appreciate you being here with us as always. Uh and also thank you for the donation. Big big moves. Much love. Figure helock holder here. I think that one's going to do quite well as an RWA as well as uh you know we had Ryan talking about figure the public equity on the public markets. Wow. I'm reading the chat. Some absolutely wild conversation took place. Believe in something. You guys are talking about psychedelics on the stream. >> Embarrassing.

[laughter] >> Um, we love you guys. Thank you so much for rocking with us. We got our next guest ready uh behind the scenes. Uh, Daryl is going to be joining us, the co-founder of NPC Labs. It feels like we're reviving NFTTS. Uh, so we're going to be hearing from Daryl, also big contributor to B3. Let's go ahead bring up Daryl on the show and get into our uh AI super cycle segment for today. I think we got a little animation and then we'll bring up Daryl. [music] >> Welcome back to AI Supercycle, our

premier [music] AI show airing every single week presented by Near. We cover the ins and outs of decentralized AI, privacy, and the future of this massive technology. Near is the blockchain for AI and the execution of AI native apps. You can check out Near's latest AI product at near.ai. Sit back, relax, and enjoy the show. On the show, uh we're going to be chatting about AI uh compute ownership. Uh, and this is our a AI super cycle segment powered by Near. Uh, they've got great AI products as well. And so we're going to get into it. Darl, thank you so

much for being here. Appreciate you coming on. >> Yeah, absolutely. Thank you so much for having me, Rob. >> Absolutely. Well, uh, I realize that, you know, you're co-founder of NPC Labs, big contributor and builder over at B3 as well. Maybe you could just talk us through NPC Labs B3. what's the relationship and what is your role there uh as you contribute uh to these entities? >> Yeah, absolutely. I'm going to speedrun this because I don't think anyone is too interested in my background and who I am. I think they want to have, you know, more insights on AI and a meaningful conversation and insights from you, Rob.

And so, you guys are the best at that at the rollup. So, I'm just going to speed past our background, but in short, I'm one of the co-founders, CEO of NPC Labs. We're a core contributor to the B3 ecosystem and today we are super excited to talk about B3 IQ which is our newest product that is our take on the compute space and essentially giving anyone the opportunity to own their own AI hardware Nvidia chips specifically because those are quite hard to get these days. >> Yeah. And you know, I I saw Jensen give this there was a panel discussion he did on CNBC and I think he followed it up with a Twitter article just today or yesterday talking about this partnership that he now has between Nvidia and some

of the largest capital allocators. I saw Goldman Sachs, Black Rockck, Blackstone, KKR, Apollo, you know, we're all up there talking about how they will be contributing finance uh financing to this AI data center buildout. Um, and it feels like what you're describing at B3 and this B3 IQ platform is going to fractionalize and democratize access to this asset class, treating AI compute as an asset class and giving access to this asset class to the broad swath of investors out there. Is that the right idea? Is that the right way to think about B3 IQ?

>> 100% spot on. You nailed it better than I could honestly. But just to give you it in our own words, I think this idea of owning your own intelligence, owning your hardware is just starting to take off and gain more mind share recently. And we are a new platform that enables teams, startups, researchers at leading institutions that are doing amazing research around cancer genome sequencing, embedding LLMs into your phone. But I think part of the problem and the challenge they have is like very very limited budget and so renting doesn't really make sense. And so our platform gives anyone from larger teams to

individuals this ability to purchase, manage and also monetize AI hardware should they need to or when they're not using the machine. And I think it ties back into what you said there Rob around fractionalized ownership and democratizing access. We talked to a lot of startups in the space and the demand for compute right now is extreme on the supply side. There's a huge bottleneck especially for the best and latest generation pieces of hardware like your black wells, B200s, P300s and whatnot.

And the demand is so extreme right now that if you go out and rent one of these things, whether it's individual units or a node or a cluster or so on and so forth, you're actually paying premium rates. And so, just to give you a very simple example, if you're renting, let's say, a node of H200s, which is something we offer, you are paying probably 200k a year just in rental costs. And so, at the end of two years, you're paying 400k. But if you actually go and buy the H200 node outright, like you're buying a car or a piece of property, right, and you own the whole thing, you actually pay 400k upfront. So really, the own versus rent math is super skewed at this point. And ownership makes a lot of

sense because you're just paying AWS 400K and at the end of two years, you're not you're left with nothing, right? You don't even have the piece of equipment. >> Yeah, I I think everyone wants exposure to this asset class. I mean typically when you look at the largest capital allocators it's not a bad idea to copy trade them and so everyone sees that there's an insatiable demand for tokens right and obviously compute is the most necessary raw material in producing tokens and so everyone wants exposure to the asset class of compute because it is just in such high demand and you're right typically the way to get compute has been to rent but now you're offering the opportunity for firms to buy compute hardware and infrastructure. And so give

us an idea of what happens if I were to, you know, if I was a user and I came to the platform B3 IQ and I wanted to go ahead and buy so that I could own, you know, some more of this stack. Do you guys own Blackwells, you know, in a in a vault or a data center somewhere? How how does this work if someone comes to your platform with, you know, some dollars ready to spend on compute? >> Yeah, absolutely. We try to make the process as easy as possible. Whether you're an AI researcher or you're a individual that's just looking to have a local inference setup, right? And you want to try some of the latest and greatest open models. You come to the site, you essentially have a self-s served browsing experience initially

where you can check out all the different types of setups that we offer from H100s, H200's to your Blackwells. we have access to the suppliers and distributors to procure this inventory. And so it really depends on your workload. I think for some of the AI startups that just raise a lot in capital and want to split between renting and owning, they'll go for the higherend pieces of hardware. Let's say your Blackwells as an example. So you come to the site, you select the equipment that you want, and then you book a call with our team. I think this is a pretty, you know, high budget offering and also it's pretty technical in the sense that we need to really deep

dive and understand what your workload is, what your setup is, lead times and build a custom configuration here that works for your training needs. A lot of folks are training using our platform now. And after we do the consultation, we purchase and put in the order should things work out and then we act as a one-stop shop there. So, uh, we go out, procure the hardware, we host it at our 27,000 foot Oregon facility that has all the power, all the cooling, all the requirements that you need, and you access the hardware once it's live through either a dashboard if you're less techsavvy or if you just need to connect to it directly through some orchestration or your in-house platform and piece of software, then you can do

that as well. We offer basically physical single tenant bare metal machines that you can connect via SSH or you can do some other you know access method whatever works best for you. So you can use these machines, connect to them via SSH, use them for compute, use them to produce tokens. And it what I'm getting at is this isn't just a tokenized model of gaining uh access to an investment opportunity, right? You know, we've seen crazy things. We've seen tokenized cows and, you know, all all sorts of, you know, weird tokenized RWAs, right? And I I I'd imagine that, you know, there isn't uh a class of investors that are out there that want exposure to the upside of the

price of this hardware, but don't really have a need for actually using it for tokens. But no, what you're saying is that you can both own it for an investment and you can also use the technology while you have financial exposure to it. >> Absolutely. Absolutely. So, it depends on what you're looking for. We think of our audience at least our initial audience for this launch as two primary segments. One is if you're an AI startup or you're a researcher at a leading institution and you are bought into the idea of owning compute but it's difficult right now because you don't have the technical expertise to set things up or you don't have that much capital upfront because these machines are expensive. We offer this one-stop

shop platform. We'll help you buy it. We'll finance it. will set it up and you can monetize it if you wish when you're not using it. The second person I think Rob is what you're getting at where there are a class of investors especially I think in the US that have portfolios that are just cash flow generating right I have Airbnbs on the side they generate income every so often there's a property manager that looks after everything I actually just put in the capital they manage the bookings they do the setup and the cleanup in a uh I guess in a similar way we offer something like that but for compute right and and if so you want to bet on hardware as an asset class and not just

Airbnbs of an example you can come to us right put some capital down we'll procure that hardware for you host it and help you monetize it essentially by selling that capacity out to you know everyone out there who wants it at the moment >> I I want to get into some more of the nuts and bolts about you know the rent verse own uh you know equation and balance there and then also some of these these different customer groups Before we get too much deeper though, I I just want to catch up a little bit on B3 because we did have Victoria on the show. I want to say I mean maybe it was a year ago at this point, but but you know quite a few months ago and it feels like uh a a shift. Um if I remember correctly, there was like this NFT

gaming component. And so maybe you could just describe the evolution of B3 and NPC Labs. How did you go from NFT gaming to B3 IQ AI compute ownership platform? >> Yeah, absolutely. Great question. Great question. Also, before the call, Victor and I had a team meeting and she was saying that she loved working with you all. She loved the time on the podcast. She was supposed to be the one to come on the podcast, but for some reason the team decided, you know, the next best option was me. So, you guys are stuck with me for the moment. But just to just to give you the background and context.

So I think it starts from back our I guess our time back at Coinbase, right? So we we started at Coinbase. That's where I met Victoria. had met Sean and some of the other team members that are now core to B3 and we were always working on NFTTS infrastructure problems at the company knew bats and when we left we decided to take essentially that expertise and apply it to gaming that just felt like the natural fit. We were all gaming nerds. We all love the idea of maybe playing a game that you enjoy and also monetizing at the same time.

But the gaming thesis, I think while the fundamentals make sense, I think it's going to take more time to bake on integrating NFTTS and onchain components into games. While we were in gaming, we actually saw uh firsthand how GPUs and you know this new asset class was rising. Even early 2025, we saw that you know GPU prices were skyrocketing. Actually, a lot of gamers were quite pissed. They were extremely angry at the fact that like this GPU that they bought for their, you know, gaming PC used to cost 3,000. Now it's like double the price. So they were actually up in arms about it. But we saw that as a data

point and a signal that AI is something we should be looking closer at. And so we took a step back and evaluated what can we build and deliver in the AI space that's value add. And we landed on two things. One is software. So that's B3 OS. We built a agent harness that enables um you know secure and reliable uh onchain transactions for uh agents and humans and then B3 IQ which is uh coming out of stealth today on on the hardware side enabling anyone to uh to own compute. So I think in a lot of ways you know there's companies that start somewhere and then they end up you know in in kind of a different place. Um, Nvidia did that. Uh, Slack did that,

right? >> I was gonna mention it sounds very similar to the Nvidia story of starting in, you know, hardware for gaming, uh, which was what GPUs, right, uh, were were predominantly used for and now obviously we've got this very very big use case for GPUs in AI. >> Yeah, absolutely. I think the thing that sucks I mean just talking off the cuff about gamers or being a gamer you're kind of always you're like at the forefront of something usually at the front of all these tech trends but you're kind of like the guinea pig where like you know once it works for you then all the other you know builders and all the other use cases pin and then gamers always seem to get the short end of the stick right like they tried experimented experimented on but like you know they

get a worse user their experience at the end of whatever tech trend is going on. >> It's like the uh it's like the bands who get famous and then they change their music style. It's like you want the guys that are underground. That's where all the culture is. >> Yes. Yes. Yes. Absolutely. >> Well, it makes sense. And I mean, you know, similar similar trajectory to Nvidia. I'm I'm hoping, you know, it reaches similar scale here for B3. Um and so let's talk a little bit more about, you know, what you anticipate from some of these customer segments. Um, and walk us through why, you know, we might choose to maybe maybe just some of the metrics and the math here about, you know, kind of the the you mentioned $200,000 in rental costs, $400,000 to ultimately, you know, rent to own or or

upfront costs here. Walk us through some of the math in terms of a user that might be coming in, you know, they're looking at, I mean, you know, 20 bucks a month or 200 bucks a month for some of the pro models. In those cases, does it make sense for them to go ahead on B3 IQ and, you know, own are you looking for more of a broad distribution play or is this primarily a corporate offering that you're looking at for, you know, some of the the companies that are uh, you know, token maxing through these uh these uh model APIs?

>> Yeah, I I think you bring up such a great point there, Rob. I think there are large enterprises and folks that are on, you know, Cloud Max or Codeex Max or whatever Chat GPT calls their plan today that are essentially getting great deals, right? They're getting fantastic deals to prompt Claude or Prompt Codeex, you know, a million times a week, right? Because these companies ahead of their IPO are subsidizing the crap out of these programs. So in in a way that makes a lot of sense. I think what people often underlook or underappreciate is there's still a cost to using these centralized API providers

if you're just a user and a consumer of inference. And that cost is your proprietary data, right? And so if you're, you know, a personal user like myself, I'm giving Claude, you know, my deepest, darkest thoughts. I'm also giving Claude, you know, my personal health data, right, to track my risk and my family's health data. And so, I think from a consumer perspective, like I'm fine making that trade-off, like paying 200 bucks a month for Claude to be my therapist plus my like physician, fantastic. I think when you're a company, small or large, the opportunity or I guess the potential cost of leaking your proprietary data information that I think is pretty significant and it's

something that people are becoming more and more aware of over time and so the viable alternative is using openway models that we all know are getting better if not you know exceeding on certain dimensions and workloads. And the way to use those, you can rent from, you know, an Opra router or you could just install those on machines that you own, right? And going back to the calculus of owning versus renting. If you can combine a machine that you own and it's cheaper than something you would rent on a long-term five, seven, eight, nineyear basis, then really it's kind of the best of both worlds. And and that's what we offer to someone who's looking to, you know, uh reduce, I guess, token maxing and also push forward what we're calling like, you know, private inference and owning your

own intelligence. >> And so there the the value proposition of this is twofold for the customer segment that is looking to actually use this hardware. There's the one side which is the investment proposition. Owning rather than renting actually leaves you with some principle at the end of the day. And there's also this uh private inference or local inference it although it's not local but private in the terms of your data not getting leaked. Um and so am I correct in saying that uh you know one of these frontier model companies if I were to use claude or chatbt I I have to use their stack I can't run those models locally on my own hardware.

So Frontier Labs, no they don't publish their weights and they don't allow you to install them on your MacBook or local machines. Open weight models you can although it doesn't go beyond that only the weights are published. So there is still some risk there inherently. I would say in the future I expect open AAI encloudic to have a mix of maybe closed source models for frontier tech right frontier workloads and then open source models for everything else because it's going to be really hard to compete with these Chinese models and even thinking machine right that came out with something

that's just as good if not better than fable on certain dimensions I think that's a really good point >> uh thinking machine being the US openweight uh alternative. Um and so yeah, and and just one more thing I'd throw in there is that uh you know, we may see these frontier model companies with openw weight, closed weight models that are available, but then also potentially even internal models that they are choosing not to release open or closed for public use. Um you know, whether reasons uh various for various reasons.

>> To your point there, Rod, they might release their own hardware, right? They could be releasing laptops, local inference boxes, phones. I know OpenAI has still been exploring that. So there's different ways I think for them to get their models in front of the right audience. >> Absolutely. Absolutely. And so there's this private inference uh that that you can run on your own stack uh that you can pair along with these open weight models uh potentially save on compute as well if you're token maxing on these frontier models. And then also uh you know the investment uh upside that could come from owning the stack. You know that's kind of on the on the segment that is going to be using the hardware as if if we were to jump over to maybe

you know the investors that are looking at this purely as an asset class and potentially even you know a passively uh generating yield passive income asset class. Can you just walk us through the math? Like what is the current you know yield that someone can expect from owning a a Blackwell uh or you know kind of one unit of compute? >> Yeah, absolutely. So I'll try to simplify this as much as possible and people have detailed questions, ping me, call me, text me. I'm available anytime.

But let's just take a very simple example. Is there actually a way for me to share my screen or >> Yes. Um, you can just gonna go ahead and share your screen here in the studio. Uh, we we uh sometimes we do this on the fly. So, all right. I see your screen there. Just give our producer a moment to pull it up. I don't know. Do we have some uh elevator music or something that we can play in the [laughter] background? >> We we might have we might have something for these little transition uh transition things that happen once in a while. I put you guys on the spot, so I should have prepared this earlier, but I think it's a great question. I want to make sure I answer it.

>> Okay, we're uh I'm gonna give you a heads up when uh when we do have uh Oh, I hear a little bit of music playing in the back. It doesn't sound like elevator music. [laughter] >> There we go. Okay, >> there we go. Now we're we're we're getting somewhere. All right, I see our producer. >> It's kind of It's probably what uh Ray Dalia was playing in Aiza last night. >> That was hilarious. He's like 7 77 years old. >> I know. How did the man not have a heart attack? Jesus Christ. >> That was wild. What do you think, Ray Dallio? You think uh he's got a the right idea here? The world's coming to an end and civil US civilization is uh at a turning point.

>> He's going to say that when you're Ray Dalio, you know, it just it's even if the world I guess goes into a turning point, he'll be fine, right? But what about the rest of us? I mean, >> it just it's such doomerism. I don't know. I don't know. What do you think? >> Oh man. I mean, you know, you can see the the infinite money printing writing on the wall, right? So, we've kind of chosen to opt out into, you know, the Bitcoin and gold economies. They do. I mean, they say they being just people say that, you know, that hyperinflation sort of thing tends to occur at, you know, the end of regimes or empires. So, I don't know. Correlation's not

causation. So, we'll we'll see if this time is different, but uh you know, people say that for I think maybe that does happen. Uh it's just does it happen now? Does it happen over the next few years or does it happen in another 250 years for America? >> Yeah, well said. Well said. >> We're ready. Okay, that was uh that was great. Little little uh sideway uh segue there. Um okay, I see it. Let's pull it up. get the the screen on the uh Daryl's screen here. Let's go ahead cut to it.

And uh Darl, maybe you could just tell us what we're looking at here. I see we've got $292,000 for a machine, a 8X H200. Uh give us a little bit more. This looks like the B3 IQ platform. >> Yeah, absolutely. So we built a earning calculator on the platform so anyone can just come in and just better understand the earning potential of some of these machines, right? And none of this is financial advice. This is just numbers here that are based on real data, but we're giving folks an opportunity to evaluate, you know, the investment for themselves. So to your point, let's take the ADX H200. The way to think about this machine, it's used quite frequently

for training runs. It's one generation older than your black well, but because black wells are in such short supply, the prices of H200's have actually risen pretty dramatically. Even H100s, they've been up 40% since the beginning of the year, I think H200's up even more. When you buy 8x of these things, it's essentially a node. And usually when you train a model, you load them on multiple nodes in a cluster. So then you're able to load and train the model more effectively. The cost of these things, they're not cheap. So it's almost like a Ferrari or a high-end vehicle or a property, right? And so it's >> difference between this and a Ferrari is this one's going to appreciate as soon as you drive that Ferrari off the lot.

It's gonna Oh, yeah. It's going to cost you. >> Yeah. Oh, it's going to cost you a pretty penny. Absolutely. So this one is actually, you're right, it's appreciating these days because there's so much demand for them. But let's say on the lot, you know, you're getting it for 292K and the cost there are like pretty high, a sticker cost even for a startup that raised a significant amount of money, right? 200 300K is something not, you know, uh, nominal. So, uh, what we do with our financing model is, uh, we actually give everyone the opportunity just to put 30% down on uh, the machine itself. So, let's say you're looking at this purely from an investment perspective. Instead of buying this Airbnb, you're buying this machine, right? That's 300K. Just like a

mortgage, you only have to put, you know, 30% down. So, you're putting about 87K down. The cash that's coming from the machine that you're getting in your pocket day one is about three grand. And that's, you know, this is how that breaks down. Essentially um the machine uh you know this node we're able to sell the capacity to AI startups in the space to other folks that have demand for compute and inference that you know topline gross earnings is around 14K um you minus 10K here you subtract 10K uh because you know there's a there's a share of um you know that revenue that goes back to pay the balance that you

owe. So the difference between that 87k and the 300k, right? And then the remaining 30% rest share is about 4K. There's a hosting fee that we charge for, you know, assembling, hosting, power, cooling, all of that. And so at the end of the day, you're getting about 3K in cash per month. And the nice thing is because there's so much demand for these machines, you get to own it in about two years, 25 months. And if you're looking at it strictly from investment metrics, the IR the four-year IR is really high. It's 63%. Right?

Because you're only putting 30% down. So it's essentially buying these machines on leverage. And I think from an investment perspective, we've had really good conversations, really good appetite from folks that don't want to put, let's say, you know, money in Airbnbs and properties because interest rates are quite high, but want a different way to express a viewpoint and an investment on compute, right? And this is one of the purest ways to do that because you're actually owning the hardware and making money on it. >> Fascinating. Appreciate the walkthrough and the live demo. Um, couple questions here. Um, oh, we lost your screen.

>> Okay, let's go share to uh >> um >> back. >> Okay, so uh what a couple questions here. One is who is the lender here? I'm putting 30% down. Someone else is covering the 70%. Is that you guys or do you guys have a capital financers that come in and provide the other 70% of this loan? Yeah. So there's very few capital financers out in the space and most of them support institutional organizations, institutional setups like your hyperscalers, right? And your data centers of the world. So core, weave, mbis, etc. Right? And not many folks do it on like eight machines. So actually

we step in. So we take money off of our balance sheet. We buy the machine in its entirety and essentially we provide the financing support that you need to get the machine. We assemble it. So in that way we act as that like one-stop shop where you don't have to worry about too much capital hosting assembly or monetizing it. >> And I take it you know this uh managed hosting you mentioned all the infrastructure build out connecting the machines setting them up putting them where they need to be. There's also the aspect of going out and sourcing demand for the compute itself, right? You got to go out, you got to talk to an AI startup, you got to get someone to come in and utilize the machine. I realize that everyone's token maxing these days.

There's tons of demand out there, but you guys are out there forming relationships and getting the customers to ultimately consume the compute that comes from these machines as well. >> Absolutely. And I think right now we are in the golden age of compute, if you will. There's a lot of demand for compute and there's literally not enough machines on the market. It's a complete sellout when it comes to black wells. You're lucky if you find, you know, more than 500 GPUs of Blackwells or, you know, a H200 node that's a thousand GPU count that's available right now. So there's a severe supply shortage and so what we do is we we try to focus on what

we do best which is procuring these pieces of hardware, assembling them, hosting them and in terms of the monetization and pairing it with demand. There's folks that text me almost like once a day now asking if we have extra GPUs per capacity. But we also uh in order to scale this uh partner with different folks um both the marketplaces and also some of the brokers out there uh who have you know demand that's kind of their job all day and they pair that demand with you know the supply that we have on behalf of our you know investors and also you know the AI startups that aren't using it full-time.

>> Fascinating. I'm I'm hopping around a little bit, but I'm just kind of throwing questions at uh your way as as I think of them. Uh next one is um as you know, Nvidia continues to build this the you know the new and invent new uh uh machines. What has been the typical trajectory for these machines in terms of their value? And and the reason I ask is because obviously you know 63% as we see here is a tremendous yield. Typically in the yield farming DeFi summer days on chain >> 63% didn't last very long. You know like [laughter] it was

>> it was driven down by token emissions and so even if you were getting 63% you know the the principle would depreciate. We just so happen to be in this AI super cycle. Uh shout out AI super cycle name name of the segment powered by near. Um and so we actually have this converging confluence of you know the hardware becoming you know it's appreciating uh at the same time that we have this incredible yield but I take it once new machines come out right the old machines might depreciate. Can do you have any data or or you know historical examples about uh what the prices of these old machines tend to do after a new machine is released?

>> Absolutely. I think that's a great question, one I get a lot around essentially the residual value of these machines, right? And I think what's crazy about the moment in time we're in for the first time in PC parts, computer industry, dynamics, like older generation pieces of hardware are actually appreciating or holding steady in terms of price. So the floor has risen on older generation pieces of hardware like the A100, the H100, even some of your 3090s, consumer grade level hardware have also either held the floor pretty steadily or appreciated in price. I don't actually think that's going to last, right? As

Nvidia comes out with Reubins, which is supposed to be sometime right in the next 12 to 18 months, as Nvidia comes out with more generation or I guess next generation pieces of hardware, it absolutely will have an impact on the prices of older generation pieces of hardware. I think the numbers that you see here, what we've baked in is a pretty steep decline in the hardware rates per year. So essentially you see a 20% decline in the prices of hardware year and I think that's a very conservative and aggressive I guess conservative but also aggressive in the sense that like most folks in the space don't think the hardware will depreciate as much because they see so much demand

for compute coming right now the demand is you know about like 55% for training the rest for inference but talking to folks in the space the inference demand is just growing month-on-month because of how good these openw weight models are getting, right? And so to me, how that translates into hardware prices, it's hard to say a specific number, but I think the floor will be higher than expected because these older generation pieces of hardware will still have a useful life beyond like three, four years, primarily if you're using it for inference or you're using it for your own needs. And I think the numbers here are interesting because you can own it right in in two years and after that it's kind of like a free call option to the upside.

>> Makes sense. Yeah. And is that the same case for the yield on these machines? Do do you anticipate you know even if there's a new machine uh I'd imagine that there's still demand maybe it's not for the hardware but actually still using the hardware. you know, do you do you anticipate uh even after a new machine the yield uh compressing or or staying relatively stable? >> Yeah, so one difference on our platform is the offtake the demand that we match these machines to. We aim for longer term contracts. So in the space right now, let's say Rob, you buy a machine, you host it, you assemble it yourself in your house, right? which I'm sure if you have a significant other, they'd be kind

of pissed about because these machines are really loud. And I have like a bunch in my bedroom right now. My wife is super pissed at me every single night. [laughter] But if you if you have one right, you're hosting it. Um you could go on vast or you can go on open router even if you installed the model in it and uh use it like serve inference, monetize it yourself. Um the difference between that and what we do is uh we try to go direct, right? So we get larger purchase orders of demand and these are multi-quarter or multi-year contracts.

So essentially when we sign the contract we're locking in that rate for multiple years and that's why we're able to underwrite you know some some of the kind of projections that you see on here because these are not let's say on demand rates that will like fluctuate or be volatile over time. >> Got it. Okay. Make makes sense. And um another another one here is uh we see on the left side of your screen this utilization assumption. Um you got that set at 80%. Could you just explain that metric a little bit more in detail and what causes that to fluctuate?

>> Yeah, absolutely. So high level utilization is how often the machine is being used, right? And so right now we set it at 80% because in these multi-quarter multi-year contracts we are essentially assuming 95 to 99% utilization from you know the purchaser right so if you're a startup that's training the model you just pay for a year's worth of compute right you're you're paying based on the number of hours in that year whether or not they use it the entire time that's another question but they've effectively paid for one year right and so translate that to utiliz ization, it's basically 100%.

But, you know, that's a, let's say, two-year contract, right? And to sign another two-year contract, there's likely some gap in between, maybe like a month or a couple months. And so, over the life of four years, let's say, you know, to be conservative, we want to say like, okay, this machine will be used 80% of the time. So, that's that's one way to think about it. The other way is when you go, let's say Rob, you're using your own personal machine and you go on the on demand marketplaces, the term lengths are usually much shorter. So they're like less than a year, sometimes they're a week, sometimes they're a couple months. And so, you know, the utilization rate varies dramatically.

So, you know, if you have the opportunity and you have these machines, ideally you would sign multi-year B2B contracts. like that's where like you can lock in the rates and that's the best risk adjusted let's say you know um contract that you can sign in um Inc. >> Okay, got it. Um do you guys am advertise these contracts that you have with uh the direct consumers of the compute for instance like uh you and I both you know own a own a you know node of H200's someone is you know renting mine uh someone's renting yours and then you know my contract ends but yours continues. Do you get the yield or do we

share it? >> That's a great question. So right now it's paired on a direct onetoone basis. >> Okay. >> I think the next product that we're considering and this is you know been a couple quarters in the making. The next item on the road map is this is a great starting point for someone who is really eager to express a different view on compute by investing directly in hardware. But I've always thought what crypto has done a great job of there's been many misses, right? But I think what crypto has done a great job of is abstracting, I think, complicated, you know, investment instruments into something that's simple for the average person to understand, especially on the retail side. I'm pretty dumb when it

comes to like how I like to invest and ape in certain things. And so, how can we turn this into that kind of product? And there's some ideation going around. One idea is essentially to turn each of these machines, each of these offerings, the squares that you see here into RWA vaults, right? So an ADX200 instead of need to understand irr payback period, all of this, right? >> Minimum investment size maybe like $1,000, you put a,000 in and you get a certain amount of APY per year, right?

And if you want to redeem it for some ownership in the machine, that's fine. There's probably a legal structure we could set up to do that, but you don't have to understand like whether this is, you know, a 2026 Ferrari or 2024. You just look at the APY and you get, you know, you make your choice, right, based on that decision. So, we're trying to simplify it. >> Yeah. Yeah. I think that would certainly simplify it in the eyes of, uh, mercenary capital allocators that are simply looking for a yield. Uh, and that is a customer segment that this industry has appealed to uh, in the past. So absolutely you guys >> since the days of gold Bitcoin mining back in 1314.

>> Yeah. Yep. Totally up to you guys if you guys want to attack that customer segment. But uh if you do uh wish you guys well. Darl I think I might be out of questions here. This has been fascinating. Um I I really appreciate it. Oh the other thing I was going to mention is if uh you know there is a direct to consumer onetoone pair with these machines. I want to know who's renting out my hardware. like I want to know, you know, what is their company name, how much longer they have on their contract, these sorts of things, so I can keep up uh with them, make sure that they uh you know, they're they're [laughter] making good on their contract.

>> Um >> Darl, I mean, I'll just pass it to you, I guess. And any closing thoughts here? I I really appreciate the walkthrough, the live demo. It's not something that we get every day, so kudos. It takes a a brave man to do a live demo on a live show, so kudos and uh congrats on bringing this out of stealth. Thank you to you and your production team for handling that last minute request. Beautiful uh setup and also beautiful music in the background. Um I think Rob to your point you you do want to know who is using your machine. I think the way we do that is through the dashboard. So you can log in and you can see exactly who's using it, how much they're consuming and the rates that you're receiving. And also most importantly there's export

controls. Right now I have to emphasize this again. I think my lawyers make sure I say this time and time again. You know, AI startups from China, mainland China, and other countries on that list cannot use, right, these workloads and machines per the US export controls requirements. So, it's just something to call out why we have that interface in the dashboard. So, you know, your customer, you know, who's touching the machines. But yeah, I think if uh just to end things really quickly, like this was awesome, Rob. Thank you so much for the time in the space. Um, if folks are curious about B3 IQ, uh, they can come to the website. They can also follow us at, you know, B3 labs on Twitter and X.

And, you know, if you have a need for compute or just want to check compute anytime, uh, it really feels like crypto back in, you know, like 201 uh, 145. I started really digging into crypto in 2015 and the space feels like that where everyone is just trying to uh understand the space more deeply from a technical level, from a financial level and also really help each other out versus it being so pee. Everyone's like, you know, working together to build new offerings like this and trying to make compute more accessible to the average person.

Yeah, these uh these market conditions create a lot of pressure, but uh there are some, you know, rockstar people and companies that are born out of that uh and those market conditions. Uh Darl, thank you so much, man. Absolute pleasure. Would love to have you on again soon. Uh I do think that this is certainly uh more I think it's just cooler uh and uh a very a very uh you know, interesting development beyond what we saw in the first rendition of crypto AI. I think this is a step in the right direction. So, thanks for fighting the good fight. Congrats on the launch out of Stealth and would love to have you on again soon.

>> Amazing. Amazing. Thank you so much, Rob. >> Absolutely, guys. That's been uh AI Supercycle powered by Near. Thanks so much to Daryl. Uh and hope to have him on again soon. Uh and guys, that wraps up today's show. Uh so, we had Daryl on AI Supercycle. Uh we had Matt and Ryan on Bitwise uh as part of our guest earlier. Uh we took you through our daily equity segment. Uh and we took you guys through the news for today. Um fantastic show, honestly. Great variety. Um great guests. Had a little live demo in there. Uh good segment.

And uh Matt and Ryan, great uh takes on the market as well. Uh also love, uh love everyone and all the comments that we had here in the chat. We got a late one here coming in. Beef hyper meat. We're going to see you again on Friday. when compute HIP3 markets on hyperlquid. Now we've got potentially an asset class and a marketplace where an oracle could generate a price feed. So beef, I think maybe you could uh you know talk to the chefs over at Hyperlid and uh see what they can do about spinning up a price feed. Let's do it. Let's do it. Guys, that's been the rollup. Today was uh August 11th and we appreciate you

rocking with us. We're going to be here tomorrow. I think I'm going to be joined by my co-host again tomorrow and so uh great show as always and um yeah, much love. Big shout out to everyone, the fans in the chat, the team in the back, all of our partners and all of our guests for today. Fantastic show as always. We'll see you guys again tomorrow. Don't >> [music]