🚨LIVE: Sentiment Down Bad?! Institutions Are Buying. Moonrock, Stablewatch, SharpLink & Bitwise Join

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Heat. Heat. 17

floor. We'll see you around the timeline. Feels good to be back. >> I think The Rollup is one of the most premier media brands in crypto and Andy and Robbie are great experts at everything they talk about and it's my favorite podcast. >> Adding to my library, >> potentially multi-chain deployments.

>> We are at Dev Connect day one here. That's amazing. Heat. Heat.

JP Morgan, Black Rock, 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. SO BULLISH. >> It is bullish. I'm bullish. We're bullish. Heat. Heat.

Heat. Heat. Parola is headed to the top. If we're

not already at the top, we're going to the tongue. The rollup is my favorite. >> People from all walks of life, all over the world, all over this industry come together for the rollup. Zoom out. The institutions aren't

coming. They're simply here. It's the golden age of crypto, guys. Get right. Let's go. Welcome to the next. See you on the show. Ladies and gentlemen, you are watching the rollup live from the tokenization tower, the nest where digital assets meets finance. It is May 28th, a beautiful day in the city. Beautiful day down in South Florida. >> We got the tokenization tower and we got the tropical tokenization paradise. What more could you ask for? We are running the gauntlet all the way up the Atlantic northeast, the the Atlantic coast.

Aton's looking for a sub $40 entry on hype. Purr just raised $50 million for the Dco. Thread guy closed his Zcash position. We got Zcash bears on the timeline. I don't know what's going on out there. Rob needs near to pump bad. Um, guy needs a guy needs a new light bad needs near pump to really come through. >> Oh my goodness, my near position is looking great. I mean, >> up 33% this week. >> I can't believe our our lovely in-house hardworking ATON has the audacity to tweet he's looking for entry sub40 on the best performing crypto asset of the

year. >> Yeah, it's pretty incredible. It's pretty incredible. Meanwhile, he's on the side of he's on the sound effects absolutely ripping. All right, ladies and gentlemen, welcome back to the tower. We had a sick episode today. Um, if you guys are on YouTube, I'm seeing you guys in the chat. Hit hit us with your questions, thoughts, we'll respond to you. Uh, if you guys are on Twitter, same thing there. And yeah, first of all, as always, shout out to Plume, uh, the Nest by Plume, bringing onchain asset management to fruition with their Nest vault product. We're in the Nest. We're in We're in Plume's headquarters.

So, we're here. Um, >> the headquarters vault tokenization. I I I don't think you can you can just, you know, strap that into Plume. I think the entire world is getting tokenized. The entire economy is being tokenized and it's happening out of that building that window. >> It's happening right outside that window. >> It is. >> And we are at the forefront. Feels very good to be at the forefront of this covering tokenization onchain finance day in and day out. Wouldn't rather >> good. Some days it's uh some days it's bearish. So, you know, >> I don't know. Have we really had a bearish day for tokenization?

>> No. Not really. No guys, welcome to the tower. We got Moonrock Capitals founder joining. Talk about his robotics investing, his AI investing, his crypto investing, what he's seeing on the venture side. You know, our fund has not really done a check in a long time, so we're not really active right now. Um, so kind of curious to see what he's doing, if he's active. I mean, we've seen some cool deals, but then we got Stablewatch founder. They just launched this Osero product, a stable coin yield product. Super cool. That is actually one of our portfolio companies. Uh, and then we have the Bitwise head of research as well as Joseph Shalom. Uh, hype backup 59 vibes are up.

>> Hold on. I want to cover just on our guests very quickly today. I I think you know, Joseph Shalom coming onto the show is >> is very very interesting timing. Like there is so much shenanigans happening at the EF happening with Ethereum in general. And this guy is the second largest DAT company. Uh, he holds a boatload of ETH. >> Yeah. 800,000. 840,000. >> And Ethereum feels like a ship without a captain. >> It feels >> That's a That's a bold bold take for an Ethereum bull.

>> I I mean, every It feels like the entire EF has left. Bit mine is the one that would pick up the pieces. Joseph Shalom can pick up the pieces. I've been on multiple panels with Joe Luben. He feels like he's stewarding the ship. But where are the leaders of the Ethereum ecosystem? For so long, we've heard how decentralization is just not really able to build a cohesive strategy amongst this ecosystem. Obviously, it's got strengths and weaknesses, but I think that's going to be a very very uh telling conversation with Joseph Shalom today.

>> No downtime. That's what matters, ladies and gentlemen. No downtime. Our topics today are powered by Treasure. Treasure.io. Use code rollup 10 to get your hardware wallet across, you know, every chain, every asset that you want. Let's get into the markets and weather. Before we do, let me tell you about FRA, our premier stable coin partner. Open, stable, borderless, building the infrastructure for the future of digital money. Visit frack.com to learn more. Robbie, it's a beautiful 73 and a little bit cloudy today in New York. Uh, how's it looking down there?

>> Uh, it's beautiful today. You know, down here in Florida, we've got this uh this kind of boiling over effect. Every afternoon for about 30 minutes, we get a little we get a little rain, you know, because it steams over. It's like a boiling pot of water. >> And uh so you can expect a nice shower here in few hours, but right now you can look out the window. It's pretty sunny. It's feeling good. >> Good, man. Good, man. Our our weather as per usual powered by Relay. Visit relay.link for your best crushing swaps available on the market today. Now on chain, let's get into the markets. It is a little bit red out there for your select assets. Before we do, let me tell you about our tokenized equities partner, Dinari, powering US equities onchain.

Uh, infrastructure for tokenized US equities and bringing real world stocks onchain. Visit dinari.com to learn more. Rob, it is red out there. It is red out there. Salana's holding on for dear life. Bitcoin down again. And Berniski put out a tweet saying that he does not think that there's going to be a so-called rotation hire from the new upandcomers. Rather, that the majors are telling us something and people don't want to listen. >> You know what I find interesting about uh Chris's Yeah, go ahead. Finish that thought.

>> I don't want to listen to the majors. Send higher. You know, obviously Chris is, you know, very well respected. I also love how Chris, you know, has been tweeting a little bit less frequently because it feels like in these kind of markets, you just need one idea to stay patient and ultimately uh ultimately proliferate that there the market is so full of so much noise that it's almost better and more effective to have less thoughts, less ideas, and just be have a very high hit rate on big ideas. Uh so I think >> 100%. Yep.

If we didn't have this business, I'd be surfing in Indonesia in in a money market fund and waiting for about another couple months to be rebined. But of course, here I am running this business. >> I don't think it's the business that's forcing you into the market. >> I think it is. I mean, >> I don't think it's the business. I'm looking at the market companies. I don't think it's that. I think we can stay patient here in >> I cannot wait to talk about per. All right, guys. Today's digital markets powered by Zama coming up. They're pumping right now a little bit uh private payments, private transactions, private assets, all on chain, doing things the right way.

>> Before we move off of Chris's tweet here, I think it is relevant here to the markets where he says, you know, I don't see a paradigm where majors are rotated out of and select upandcomers can sustain their swim against an ongoing tide for long. I think majors are telling us something people are finding reasons not to listen. Obviously, majors, you know, he's referring to Bitcoin, ETH, soul. Essentially, that's it. My my stipulation with this tweet is equities are a major asset class and they continue to push higher. And so I agree that, you know, Bitcoin and ETH are forecasting out and they're trying to tell us something and maybe we're finding reasons not to listen and and maybe Chris is right, but if that's the case, what are equities telling us?

Right? It feels like, you know, Bitcoin is kind of holding and kind of dwindling down a little bit and that's telling us that there's cracks in the foundation, but at the same time, we're looking at equities push higher and for some reason, it's just disbelief and we're again thinking that this is just cracks in the foundation. >> Well, I mean, dude, I mean, you cannot have a pumping market without us a healthy pumping Bitcoin. So that's what I think that's what it like and if anything equity is pumping and Bitcoin not is also telling you more that something's wrong here. Chris calls it the macro or the most honest macro asset uh Bitcoin >> meaning that a lot of these pumps are kind of like >> dishonest given the state of the world.

So you >> outside of >> I I look I'd be curious to hear more about why Bitcoin is a more honest macro asset despite its lower market cap to equities. I don't know. Maybe we'll get Chris on after his uh after his sbatical. Let's keep it rolling, ladies and gentlemen. Into the lovely news. Before we do, let me tell you about Near, the blockchain for AI powering autonomous agents and AI native applications. Visit near.ai AI to learn more. Wall Street clearing house DTCC says it plans a connection between tokenized securities platform that they are building. Uh shout out to Alpaca and Stellar. Uh people are caught way off

guard by this saying Stellar is a old 2017 chain. There's other threeletter crypto tokens that are kind of bucketed in with Stellar Rob. Uh people don't really realize that Stellar and Avalanche of that kind of like OG cohort are doing far more on tokenization and institutional adoption than uh a lot of chains are like again like there's this bifurcated path mega e Salana even to some extent but not as much uh base even to some extent trading onchain consumers to the max and institution RWA that's happening there's a kind of like this like split path happening I think um and stellar obviously was with the government of

Bermuda of Bermuda when we were there a couple weeks ago. Now with the DTCC, I mean, they're doing something right. >> I completely disagree. I think this is an absolute nothing burger. I think Stellar is one of many blockchains that DTCC will launch on. Even in this article, uh it says DTC's tokenization service to connect with Stellar as it advances its multi-chain strategy. I think this coin market cap post is lacking a disclosure. It was maybe paid by Stellar. I think Stellar is taking an RWA path. I think it's trying to focus on um taking a more institutional route.

It's essentially a poor man's canton. I think >> wow >> BTCC is going to launch on several blockchains. They decided to announce this thing with Stellar. Uh I can read the quote here says this collaboration uh represents another step forward in DTCC's efforts to build an open interoperable digital infrastructure that bridges traditional and digital markets. Uh that was the chief executive officer of DTCC, Frank Lala. >> Wow. >> There's a lot going on here in this article, but it really doesn't uh call Stellar out uh with too much. It does say that Stellar's proven track record with institutional assets onchain is an important factor in our evolution of blockchain networks, but Stellar is one

of many chains that we can expect the DTCC to enable with tokenized assets. Uh it does say that they're going to collaborate uh uh going forward, but you know, we all we saw the tokenization service. It's planning to get rolled out in this summer and it's going to roll out. I think we saw 50 plus partners that they're learning and figuring out best practices. Um, I expect lots of chains to be part of the DTCC uh roll out later this summer and that ultimately expanding to uh a multi-chain strategy. Stellar making up one of those chains.

>> Uh guys, I see you on YouTube. Uh almost 20 of you guys say what's up in the chat. Let us know what you think about Stellar. We're gonna pull into Ilia and Ethereum Foundation. Rob, this kind of gets to what you're saying here with um how the EF has evolved over time. So, let's get this up. Uh Ilia tells a story which I don't know if anybody actually is aware of this, but they, you know, near kind of like spilled out of Ethereum in 2018. Uh they wanted to build scalable infrastructure for AI focused applications. they really were trying to build sharding with like the original rollup roadmap and um a and and also build more like tech on top of Ethereum.

The EF was like no you just should just go build it on your own. So let's actually hear what Ilia has to say here. So, I mean, we we have a long history with Ethereum because we actually pitched in 2018 to build these two to Ethereum Foundation because I actually like if we could just build these two, make it work, we would go back to AI in like 2020. Uh, and uh because that was like the whole thing. We're like we needed a blockchain for our near AI stuff and we're like looked around. We didn't find anything that would actually match our needs, right? Scalable, easy to use, kind of abstracted. Um, and so

we were like, okay, well, Ethereum is, you know, was talking about sharding back then, was talking about web assembly, was talking about, you know, faster slot time, was talking about better user experience. >> We're like, >> Web Assembly, you don't hear that very much. >> No, Land these days. >> Uh, and so we're like, cool, we can just build all that. We have a team, you know, we are VC funded. We just need an upside. That was the things like, hey, we need a way. >> Whoa, whoa, whoa. Sorry, I'm gonna stop you right there. >> I don't know if you're >> Oh my gosh. Dogging >> communism, but we're not paying you [ __ ] You can you can build us, too, but we will not pay you a red scent, my friend.

>> And so that that was kind of where where that conversation went. Um >> Yeah. And and so and like these guys are nuts. >> I've pitched this idea multiple times. So like before launching mainet, I pitched it again because like hey look, we've built it now, right? We had Bayet, we had charting, we had web assembly, >> derisked all of the >> Yeah, we had account obstruction. Let's figure out like what what this could look like. We do have VCs. We need to pay them money. I have a team that, you know, wants upside. They work, you know, 247 effectively. >> Why would you have VCs? What were you think?

>> Yeah. So >> well that's the story man and that's how Near was created and that's why they end up creating their own chain and um it was a part of that kind of like L1 early L1 trade and that happened. >> I think it just goes I I think it's important to remind people that near effectively an AI company and this entire blockchain evidenced by this clip is effectively a side quest. Like they didn't start out to build a blockchain themselves. they were just going to build it on Ethereum, but they needed a blockchain that was able to do sharding in order to get, you know, enough block space so that it was able to uh be performant for AI. Uh they their initial focus and their main focus is AI and

which is why I think we're seeing a lot of uh a lot of the products come out now. Um but it just again like it's not the first time that Vitalic or the EF has been called communist. um they don't pay for these sorts of things. They expect people to just kind of come along. And it's funny because now, you know, just yesterday we were talking about Hyperlid not paying for market makers, not paying for listings, not paying for anything. It's just incentivizing people with the strength of its own product and the strength of its own token. Ethereum has done that and taken a very similar path. and their product in the blockchain has been so strong that it has incentivized people to build on top with no additional cost or financial incentive that they will

have to pay. Um that has been both a strength and a weakness and it's led to near kind of going out and building things on their own uh rather than kind of internalizing that. So it's funny um usually it's most difficult to get that early on. The fact that ETH and Hyperlid have been able to succeed at bootstrapping this without any additional financial incentives I think is huge uh for the ultimate strength of the ecosystem and it just goes to show that the toughest times of both of these ecosystems are behind us and I think a lot of this is now about reaching size and scale. I do think that it's important to stay open-minded and adapt some of these policies as these things

grow. Some, you know, there's obviously a ton of resources. The Hyperlid team and Foundation has a ton of hype. The Ethereum Foundation has a ton of ETH. Uh there, you know, these are resources that they can apply to the betterment of the ecosystem itself. Sometimes it's not great to just buy back and burn, you know, ETH. In the case of of the Ethereum ecosystem, it might be more effective to say, "Hey, we want AI products on top of Ethereum. Let's take this ETH, not burn it, but apply it or give it out as grants or do these things so that we are using the financial resources for the betterment of the chain."

>> Yep. >> I I realize that it's maybe antithetical to the ethos to to have some sort of uh elite group that is deciding how to allocate these resources. It is. >> But if we codify this, I mean, think about like the spirit of, you know, the DAO back in 2016, it was hacked, yada yada yada. But the idea of that was to programmatically allocate these resources. And so if these things are applied and allocated by code, all of a sudden, it's not communist. We codify this. We have a governance process.

We're able to allocate the resources for the betterment of the ecosystem. And it's not one person or some elite group of people that are allocating these resources. It's the code of the ecosystem itself and I think that helps to avoid um just burning these resources and it helps to avoid the centralization at the top of the totem pole. So I' I'd still like to see some of these ideas put into practice. >> I hear you. And I think uh maybe uh maybe Rob's going to go and be the next EF director. He's going to leave the role up and go be uh be the leader of of the EF. Ladies and gentlemen, your new EF director, Rob Cleasages.

>> This is my uh Yeah. Get Come on. Come on. Round of applause for the campaign. My campaign for the uh chief dictator of Ethereum is built on AI overlord governance. I want to implement an AI system that is able to make all the decisions with how we allocate our ETH. And we can bring uh we can make Ethereum great again. Ladies and gentlemen, give it up for Rob, the new EF Foundation creator. Let's let's get on to the next piece. Let me tell you about Infinifi DeFi infrastructure for simpler access to onchain yield liquidity and capital allocation to explore more efficient onchain finance, higher yields, no leverage. Visit infinifi.xyz.

Orbital raises $50 million in a series B led by Plural platform uh NASDAQ or Nvidia Ventures, Radical VC, Compound VC, Fly VC. Um it is AI designed materials and modular infrastructure for nextg data centers. So a lot of these data centers that are doing >> um >> yeah a lot of these data centers that are doing AI or AI data center GPU farming are you know were previous Bitcoin miners. Um and then they have cooling fluids, faster to deploy compute systems and basically their entire business is ran around um how do you lower the time of launching a data center and like building a data center, launching a data

center and playing it out. So don't really have much here but wanted to highlight it. Congrats to them. Uh this sector is going to have trillions of dollars of investment. Had a conversation with the Milk Road guy yesterday. They launched Milk Road AI. I don't know, man. Maybe there's a rollup AI coming to you guys soon. Uh not sure. But, you know, it's uh it's just happening. It's just happening and it's just going to keep happening and keep accelerating. So, you you kind of got to love it and you also kind of got to wonder when there's ever going to be a bid that returns to crypto. So, >> let's move on. We still got plenty of news to cover.

>> Yeah, let's get it. All right. Falcon Finance teams up with Anchorage to issue FUSD, a Genius Act compliant payment stable coin. I put that in quotes because I don't think that Genius compliant is the right way to advertise this from Coin Market Cap, I don't know the specifics, but without the Genius Bill actually implemented, at best you're at a Genius compatible level with these things. But um yeah, this is the regulated counterpart to Falcon Synthetic USDF stablecoin and their ecosystem there. And I mean, look guys, this is going to keep happening. This is just going to keep accelerating more and more of these stable coin products,

these types of new uh yield products on chain this time in in line with the Genius Act. >> Yeah, not much more to add here. I think it's semantics compliant, compatible. I understand Genius Act still needs to go into law, but I do see more and more of these uh Genius compatible payment coins, payment stable coins popping up. We talked about SoFi USD yesterday. I think we're going to get our friend of the show, StabledUp, uh sponsor Fracks and co-founder Sam Casmanian on the show. He's going to talk to us more about Genius Act, Clarity Act, everything going on with stable coins.

Uh I think he's coming on next week. So excited for that. Otherwise, stable coins just continue to proliferate. We're going to see more and more stable coins. Uh, this is not slowing down. >> Guys, don't let the sentiment get to your head. You're never going to see hype under 40. Don't ever let don't let that, you know, just stay true to yourself. All right? Stay true to yourself. If you're in hype, you're in near, you're wondering when what Zcash bounce is going to do, if Bitcoin's going to zero, just stay true to yourself. Manage your risk. The situation is fine. >> Uranium is going to 75. Uranium is going to be great.

>> We're still in >> hype's going to mid 80s. >> We're still in a nuclear uh uh deficit. Uh >> it's going to take 30 years. >> There's a shortage. >> Hype's going to 25x before we even have that shortage. Let's get into the next topic. Before we do, let me tell you about LeFi, building infrastructure for crosschain swaps, bridging, and routing across the onchain economy. Explore smoother cross execution. Visit leap.five. Michael Sailor was asked why Bitcoin hasn't been getting the same momentum as stocks and what catalyst could break the heavy resistance ahead. Stretch today, Rob, is pulling down under that dollar mark. So guys, Stretch is meant to stay at a dollar. Uh it had a crazy wick. Uh

somebody wicked it all the way down to 971. It's now trading at 988, meaning basically Sailor can't do much right now with Stretch until that thing gets back up to 100. Let's hear what Sailor has to say about the geopolitical pressure. What's happening with Bitcoin? I think it's kind of obvious to us, you know, it's fouryear cycle things. You know, it's position and hype and see you at $85 type of thing. But let's see what uh our guy here has to say. Maybe he's going to >> I think a lot of my guests that I've been speaking to have been wondering why Bitcoin hasn't been gaining the same momentum as say stocks for instance which have continued to hit these record highs and I'm just wondering what the fundamental catalyst would be to break

through that heavy resistance we're finding just north of 80k right now. >> Yeah. Well, stocks are beneficiaries of the AI trade. there's a lot of capital flowing in into the equity markets because of enthusiasm around around AI and tech. Um that capital's been drawn out of the crypto market to a certain extent because many Bitcoin miners have been rotating into AI high performance compute and they've been uh they've been selling Bitcoin or they've been refinancing their Bitcoin to do that. So that's the headwind. Uh really the drivers for Bitcoin right now will be macro as we start to see a loosening monetary policy. That'll be very good for Bitcoin. Uh

a sessation of or um a lessening of tensions with the trade trade wars and with the hot wars in the Gulf. Both of those are good. Uh Bitcoin is driven by geopolitics. for example, uh, crypto billionaires out of China, out of the Middle East, out of Asia, out of Africa. And so when they feel pressure, sometimes they're selling has nothing to do with the US equity capital market. >> This helps to answer the question that we were left with uh, as a result of Chris Berniski's tweet.

>> Yeah. >> Why Bitcoin is a better forecast of global monetary policy than potentially the equities market. >> It's because it's less noisy. even though the equities market might be higher market cap um maybe a better signal for the US economy um it's not as uh pure a signal for global monetary policy and the health of the global economy and so I think Chris is absolutely right and when we look at Bitcoin and try to think what is Bitcoin telling us um it's giving us an indicator of the ent the health of the global economy um whereas stocks don't quite do that so Yeah, I I think um and and you know the next tweet that we have

coming up with regards to the Bitcoin ETFs, I think is also playing into this, but I think Sailor's absolutely right. >> He's also talking about looser monetary policy. You know, we have Kevin Worsh's first Fed meeting coming up in two and a half weeks. >> Um a little bit longer, just about 3 weeks. That's when we're really going to get a sense of how dovish or hawkish Kevin Worsh is. And you know, Sailor's a little bit presumptuous in my opinion about the looser monetary policy. We don't know how doubish Kevin >> I mean, am I wrong? I I don't know. We've kind of gone back and forth.

Obviously, Trump picked Kevin Dorsch for a reason. Trump is looking for doubbishness, but Kevin Worsh is not the most doubbish pick that he could have picked. So, we really don't know how doubish or hawkish Kevin Worsh is going to come in at. Obviously, it's not all about interest rates. Uh the Fed funds rate for the next decision coming up in June 98% priced in at no change. >> Yeah. >> So we know effective >> I mean Trump's going to be on his ass though to change these things. So >> yeah, but I think he's there's more tools in the Fed's back pocket and in terms of the mechanisms and levers that they can pull to ease monetary policy.

It's not just about interest rates. And frankly, Arthur is the best person that talks about this because, you know, he he mentions things like, you know, adding bonds and, you know, corporate, you know, equities and and markets onto the Fed's balance sheet. That's a way to ease. There's uh sofur. There's uh all these kinds of bank uh regulations and reserve requirements that they can ease as a form of loosening monetary policy, allowing more credit to be created. Um, the thing is we're not seeing that reflected in Bitcoin. You'd think if Kevin Worsh really is >> because it hasn't happened yet.

>> Is it? But isn't part of, you know, Chris's theory that Bitcoin is forward looking? >> Sure. I until we get rate cuts and people like going ballistic about Bitcoin, people are just going to kind of like, dude, there's no reason to buy Bitcoin right now. Like, why would you buy Bitcoin right now? If you think that Kevin Warsha is going to cut rates, he's going to ease monetary policy and that's going to propel the price of Bitcoin. >> Yeah. >> Then people would honest macro asset because if the number of dollars in the systems goes up, Bitcoin will just go up over time. But like there's so many other asymmetric opportunities right now. Like >> like there's so many other >> I'm trying to I'm trying to make room

for Chris's thesis as well as ours. And what you're saying is that there's room for other assets. And I think you're right, but I think that contradicts Chris's Chris's thesis. >> I don't know. I think that like you can just go and buy a Micron because they or Snowflake because they announced they're doing a $6 billion deal with Google and you're up 30%. >> I mean, why would you buy Bitcoin? >> That works as well. Um, but >> well, I mean, does it ever? Apparently, apparently it's been working.

>> Yeah. So, why would you buy Bitcoin? I mean, if you're it it does feel like this AI trade is happening in a bubble irregardless of the macro policy >> for sure, >> right? And so, if you're confident about, you know, the the AI and we also heard how the only thing that is going to put an end to this AI vacuum trade is uh an anti-AI political regime. And so, this continues to happen. >> AOC 2028, >> right? And so, if this is happening irregardless of macro, then then I think you're right. I think you can go into AI, it's going to happen no matter what happens with the war, no matter what happens macro, no matter what happens with monetary conditions. But if we get this perfect storm, monetary conditions ease, and you get, you know, this a pro-

AI trade happening, that's where I think we could see some explosive numbers. If we don't get the macro conditions, then you have the risk of this pulling down the AI trade, and it's just a matter of which one is stronger. >> I got you. I mean, I think the the the AI trade continues. That's what that's what that's what we know. >> That's why we're seeing the stock market rip and we're not seeing crypto rip except for some of these choice AI products, right?

>> It's going to I mean, it continues to rip, but I mean, we shall see. >> All right, guys. We're gonna get till makes makes a change. >> Well, well, yeah. I mean it until until like any macro change should be bullish for um Bitcoin and equities. >> So >> any loser monetary conditions for sure.

For sure. >> Yeah. We're we're gonna get Simon Dedic, the founder of Moonrock Capital up. He's been doing some interesting things in AI, robotics, crypto investing as well. obviously founder of Moonrock Capital. Uh should be a good segment. They are established in Munich in Germany in 2019. Uh Simon's a German entrepreneur and investor. Um deep in robotics, tokenization, infrastructure. There's a lot going on. Let's get Simon up on the show uh and keep this things rolling. Simon, welcome to the show, man. >> Hey guys, pleasure to be here. >> How are you, man? What's going on?

>> Oh, good. How about you? Thanks for having me. >> Yeah. Oh, good, man. Are you going to be in New York anytime soon? You got any conference uh travel planned? >> I am considering right now actually. I mean permissionless is happening end of June, right? So I definitely enjoyed the conference last year. So I'm I'm currently considering lots of going lots of stuff going on actually. >> Nice. Yeah, there's ETH in a couple weeks. >> There's a I don't know the uh the the the conferences so far first half of the year have been quite different than than the previous conferences. there's uh there's just a there's a bit of a lack of the DGEN in the air if you know what I mean.

>> Yeah. Yeah, totally. I definitely agree. I mean, one that I will be at is like next week in in Paris. I'm not sure if like you guys will be there or like anyone listening is going to be there and but it's called Proof of Talk. Um it's actually it's it's not well known, but I I can definitely recommend it. I mean, it's happening happening in the Lou. Um it's being organized by some friends out of Germany here and um very very pleasant experience. I mean the quality of people there is incredible and it's like one of these very few European conferences that actually manages to kind like fly in people from the US and out of Asia, right? So it's it's kind of cool.

>> Well, Sim, we we wanted to pull up a couple last things that we wanted to go over for our for our audience and with you and get some of your take on that. We're going to pull it up. Uh the first one is that IBIT saw the largest the second largest daily outflow. I don't I don't know if you saw this on Twitter the other day, but uh if you look at the screen, you should be able to see it. And there was a $1 billion market sell that happened out of nowhere on IBIT, which is the largest Bitcoin ETF. Um there was an a daily outflow about $528 million. Bitcoin was down like maybe like one or two% on that day and yeah I mean it was just an very very interesting sell and uh the largest one

ever and obviously kind of like Bitcoin's been a bit down the these ETFs have been swallowing a lot of the supply uh they've been kind of changing the dynamic of investing in Bitcoin. I you know I I don't really look too deep into this guys but it's definitely something to note as far as like this is like the second biggest day of outflows ever. >> Yeah, I think I'm I'm pretty similar to to you guys there. I mean I I don't look at these things like too closely. I mean for for me this is usually just like the market being the market kind of right. I mean it's definitely not great signal.

Um I mean it was kind of obvious that at some point like after all this like great buying that like all the the ETFs and like also the debts brought and there's also going to be selling. And I mean I I I think this is also just kind of reflecting that right now like many institutions and like many backholders just don't really know like why they should be bullish here right now. Right. So, but I think it's I mean I don't care much about these things. It's just the market being the market and I I'd rather like focus on our kind of like long-term investments and and stuff actually building things.

>> Yeah. Yeah. I find it uh I find it peculiar, but it seems like these ETFs have been swallowing a lot of a lot of the flows both, you know, Bitcoin obviously, you know, with this sale, but also Hyperlid has uh seen a lot of flows through the recent Hyperlid ETFs. Um, Simon, how much are you paying attention to liquid markets? Like you said, the market just being the market versus focusing long term. The VC landscape has changed significantly, you know, over the over the recent months as well. Uh, when you when you kind of look at things, uh, and you're forecasting and you're thinking about building a thesis around VC, uh, how much do you pay attention to the liquid market to kind of tell you, okay, let's pay attention here, let's pay attention there.

>> Yeah. Yeah. Um, so I think it's like I mean given that we are like still a prop fund, right? Um, we we have kind of like a hybrid structure where we do kind of like venture deals but we also run a liquid book. Um but I think like it's important to mention like we we are not traders right I mean when when we are talking about liquid investments then we are basically finding kind of like underwalued gems on on the market and we find like projects that in our opinion are massively undervalued and then we just kind of like accumulate them. It's not like that we are paying too much attention what uh like Bitcoin and Eve is doing like in the short term and and we are trading it or something. I mean

obviously we we have our our guys that are like following macro right and we have our general view on like whether we are like long-term bullish or bearish the market in general right but overall we are trying to be like venture investors being like very long-term focused and usually then these things become just like way less relevant. >> Yeah. Yeah. I agree. I I mean I mean you do have to have a kind of like a bigger picture view and then you just got to kind of ignore all the noise. I want to pull up this next one. Uh Gayscale is finally getting their Hyperlid ETF ready to go. Um they just filed their amendment number four. So their fourth

S1. Uh the filing includes planned 2 million total hype token seed investment worth about $und00 million $13 million. The ETF is designed to combine hype exposure with staking yield. On yesterday's show, we talked about how the total supply of the ETFs has already swallowed up about 1.15% of the hyperlquid market cap uh just in the first week or so. Simon, give us your hype take, bullish, bearish, where does this thing trade? How are you reading this uh kind of institutional wave of adopting Hyperlid finally?

>> Yeah. So, um, look, it's like a very difficult topic for me because I'm hyper sidelined basically, right? And I I I made a very very stupid mistake in the beginning to kind of like see Hyperlid as just like another perex, right? And I was I was very much midcurving it and basically saying like I mean there's like GMX and all these other perexes already like why why is like Hyperlid so special, right? Then I I I kind of like got sidelined. Um, and then it was running and running and I thought like, okay, it's kind of cool, but now it's like way too expensive. And then I obviously also didn't buy when it dipped. So I I will like Hyperlquid will just be like this

this asset for me that where I will always be Hyperlid and I regret it quite a lot. Um, because I think what's what's happening right now is is super cool. Um I mean obviously um I mean of course they are printing like a [ __ ] ton of revenue right and like the metrics are like very impressive but I think what's very cool about Hyperlid is that they are like one of these like very very few use cases that managed to kind of like break outside of the uh crypto bubble basically right so basically just as like poly market and and kind of like their moment with the election and like people realized Okay, prediction markets are kind of like this new marketplace

where we can price events and information asymmetry, right? And I think it's very obvious right now that hyperlquid is just like opening the eyes of like a lot of thread like Wall Street suits and like how great it is that you can price preipos, right? Or like um how how cool it is that you can trade oil on the weekend when like the war is starting. So I'm super super happy for Hyperlid because I think like they are bringing more eyeballs uh to to the cryptocape landscape and I I think they are one of the very few who managed to kind of just like grow the pie again, right? Um, so yeah, I'm very bullish, hyperlid, even though I'm I'm sidelined. And um I think

it's it's pretty cool to see um like these stats going live and actually catching quite an institutional bit as well. Um because like like Wall Street Wall Street just have it has it on on on the radar and they want to buy it, right? And um so we have we have debated a lot internally already whether it's going to flip um Solana and and Ethereum, right? Um, I think fundamentally it makes sense, but um, yeah, it's, yeah, it's still very hard to kind like forecast. >> If hype flips Ethereum, oh my god, I'll be insufferable. Um, >> I mean, it doesn't doesn't necessarily mean that hype is pumping to like $1,000, right? It could also mean that EA is is dumping to $100, which is

probably rather the consensus take right now. >> Yeah. Yeah. Yeah. Don't tell that to Rob, guys. All over there. All right, let's move on. Last one here for you. Uh, so this is like kind of getting into like the DAT versus underlying versus ETF conversation. Hyper Strategies Hype Strat uh bought $ 1.5 million or $ 1.5 million hype last week while its cash increased from 113 million.8 or yeah 114 million to 157 million. So added about $43 million of cash. They probably issued and sold more than $130 million worth of pur shares through the ATM, which is this kind of beautiful thing about DATs that we all were

excited about back in the day when you know they were starting where you could issue shares, sell the stock, use the cash, buy more of the underlying kind of creating this reflexive pumping flywheel. Obviously, you know, these inventions would have been better at the bottom than at the top. And um so yeah, Purr is cooking. These guys are h have a nice MNAV 1.18 1.19X. They've got $160 million of cash. They've got 22 million hype. They are creating more value per share than owning an ETF. Uh I own a lot of PER but also at the same time they've kind of underperformed hype in the last couple let's say a week because uh

they've sold a lot of the shares to raise more cash to buy more hype and so it's kind of an interesting dynamic here Simon curious how do you think about these DAC companies this kind of like ATM flywheel how do you how do you reason about buying you know something like a purr or like a micro strategy versus a Bitcoin or a hype? Yeah. So like obviously we are we are crypton native investors like we would never never ever kind of like touch a debt, right? I I mean to us it just doesn't make sense when you can also just like own the the asset directly. Um I don't know like we are not big fans of that. Um so I I mean obviously I I mean they are kind of like Ponzi schemes,

right? So I mean they are they are great for the market like when when it's in up only mode, right? been like a great accelerator of this and uh like um yeah the price is going parabolic then due to them but the problem is like it's also going the other direction like once the the whole kind of like uh Ponzi scheme breaks right so I don't know like we also see like a lot of we had like a lot of chatter already around like micro strategy and micro sailor right and obviously like once the this model breaks like the market is getting like very very afraid that uh we can go down like much faster than we actually went up. Um so I don't know.

I'm I mean I I I definitely see how how great those debts are to kind of like make those assets accessible for like Wall Street and like non-cryptonatives. Um but I think it's always kind of like a bit dangerous and um I I would prefer if we rather go up slowly but surely but like more sustainably, right? um by actually people buying it spot rather than like with these leveraged um Ponzi mechanics. But I mean, let's see. Uh for for now, it's great. Um let's see. I I would just the I just would hate for to get a trade right but for like the ecosystem to do well but the company

itself to for some reason like >> you know we we've seen how sometimes this happens and I just it would feel so so awful to get the trade right but the company that is the vehicle for the trade is wrong. I don't know Andy how do you reconcile something like that happening? Dude, it's gonna feel better to get the trade right and to have Sheamus absolutely executing like a savage, which he's clearly proven he can do at scale, not buying the top like all the other hype dads or all the other dats. Selling one selling at alltime highs, raising cash, buying more hype on a dip. Dude, the guy's dialed. The guy lives over here in Sands Point. Honest.

We're good, man. Don't Rob, just worry about your ETH position. All right, man. That's all you got to worry about over there. All right, let's bring Simon back up. Simon, let's talk VC Robotics AI. I know you've been doing a lot there. Um, what what have you been doing, man? Have you been doing deals this year? We've done like maybe three deals this year. We've been on absolute pause. The entire founder archetype is shifting. The entire uh kind of what actually occurs value in the industry is shifting. The whole musical chairs is beyond up happens every cycle. feels more real this time. What is Moonrock doing? What are you guys seeing out there?

>> Yeah. Yeah, definitely. I mean, maybe for for full transparency, um like we are currently quite quite swamped because we are also preparing our own fundraising mode kind of, right, which is kind of like eating up a lot of our time and but we are still actively looking at deals and we are still actively investing and but we also haven't like invested like a [ __ ] ton um over over the last few months. I think the the the most recent deal has been like Block Works which we think is is is like quite a cool one that we are very proud of. Um so I think you guys are still there.

>> Mhm. >> Yeah. Okay. Um so um so I think the problem is like or like the problem actually is like a good thing but like the market is consolidating quite a bit right. Um, this also means in my opinion it's it's getting like a bit more boring um on the venture side, which doesn't necessarily mean this isn't like an opportunity. So I think like what I'm talking about is like you guys should know this as well, right? I mean a few years ago like in the last cycle like we were trying out kind of like everything, right? We were trying to to bring like everything on chain and everything was like super experimental and like there were like there was like new stuff going on every day and this was obviously

while like most of these deals are now quite underwater. Obviously it was like an interesting time to to deploy. Um I mean the kind like the [ __ ] phase is kind of over right now like we see the market consolidating and towards the winners. Um I think we have learned over the last few years like what the kind of use cases are that actually make sense and um what the kind of use cases are that that are worth doubling down on um like stable coins, prediction markets, perexes right?

>> Um and I think this is what we are seeing um in the private markets right now. Um so we are seeing a lot of the same stuff. Everyone is building like neo banks right now. and everyone is building on top of prediction markets, right? Which which makes sense. I think there's still like a lot of opportunity there. It's just not that we see like so much innovation right now that we are dying to like write one one check after the other. But what I also would say is like what is like a very positive signal like with this consolidation is that we are kind of like filtering out all the all the moonboys, all the tourists, right? And at the same time like who who

who is left are actually like the very very solid founders who are doubling down on on the on the industry and who actually are still here because like they believe in what they are building and they believe in the in the industry long term and we definitely see this being reflected already in our deal flow like we would say that the founders pitching us are way more solid um than they have been like a few years ago. >> Yeah. Yeah. And and is is the firm doing stuff outside of crypto as well now? Like I mean I I know you guys have been like doing robotic stuff and AI things and it's been of interest to you. What uh what's the Yeah. What's the you know what's the balance between crypto and

not crypto stuff? >> Yeah. Uh we are still pretty heavy on crypto and so we are definitely also interested in in stuff outside of crypto. I mean obviously we are we are buying stocks to some extent but this is like rather personal accounts. Um then like we we did some robotics investments just because like we are very very bullish on on the vertical itself. Um and then we have like some crypto companies who are pivoting to being AI companies now. So we are also AI investors now. Um um but yeah no no I mean like we definitely see ourselves as like crypto investors and this is like where we have our expertise

where we have our edge and we're still doing like 95% like crypto investments only I would say. >> Good. Yeah. >> Yeah. >> Yeah. I mean, I think uh the all of the infra and the chains and the interrop and the zk and the >> uh modular and the fast L1 and the man all of those are just so so liquid staking restaking. Um I mean you can just keep naming them. There was such a such a narrative a forced narrative loop last cycle and all of those deals and all of those tokens are just completely crushed.

>> Yeah, I think like uh what we are very happy with is that the market is getting smarter right now and maybe it's also like a bare market thing, right? But we have like this revenue matter at the moment like we're like getting completely crazy to focus on on actual businesses. Um, but I'm I'm actually so sick and tired of kind of like talking about weird tokconomics and uh yeah, talking about like the monetary pieces for like Ethereum or something like we we just want to focus on like great founders building like great things that actually like solve problems and that uh generate revenue like actual businesses, right? And I think >> a great example of this is uh one of our

portfolio companies uh collector crypt um that we have backed a few years ago and >> they're ripping right now. They they are like one of the best performers like over the last few months I I would say um like they are they are incredible and the the thing is like first of all like the founder is like very very committed like he has been like a collector for like 20 to 30 years like he's building this because he believes in it right and he actually wants to solve a problem and secondly he is like really solving a problem so there are people like willing to to to pay for it and um it's like one of these very few cases where like building on on on crypto rates actually makes sense and I think this is like

currently being reflected in in the revenue. I think they're doing like more than 100 million of annualized revenue and this is also being reflected in the token at the moment. >> Yeah. Yeah. I mean I I I saw that and that $40 million market cap uh that trader blunts guy is calling it one of like the most easy undervalued trades that he's seen. You agree with that? You think this thing has like a 5x in it? >> So, look, I'm I'm I'm very biased. So, like we are very proud because like we have been like literally like one of two investors who dare to kind of like pull the trigger on them in 2024. Like no one wanted to back them and like everyone passed. Uh they actually didn't even

close the round and and now they're like one of the one of the best performers. So the thing is like if you look at their revenue numbers, if you look at like the actual TAM, um I definitely think they have like a lot of upside. Um I I I I'm a bit careful like what I'm saying because I obviously know about their plans and what they already working on, right? And obviously this is not financial advice, but I truly believe they could become a decacorn, right? And right now they are they are sitting at like I don't know 3 to 400 million FTV. And I think it's like how I see it is like this is kind of like the NFT market right now in just like a way more sustainable and a way

better way, right? Because what we are selling to people is kind of like let's say collectibles and Pokémon cards. It's it's stuff that people already know and that they're used to and we just sell them like a much better version of it. Um, it's not like we are trying to sell them like an ugly JPEG of an of an random ape or something for six six figures, but we are selling them like stuff they love and they they can actually relate to and it's a huge market and I think it has like massive potential to pull in like a lot of pe people from from outside of crypto, right? And who who don't even care whether they are interacting with crypto and I mean we are seeing this already. I think Collector is like the second

highest revenue generating project on Solana right now. It is right right behind Pum Fun. Um and I'm very happy for them because like they they really earned it. >> So what do you know? What what do we need to know? >> So let's say um the alpha is that they will just aggressively expand both horizontally which we're already seeing, right? they have like this big partnership with uh this huge comic vendor and so they are tapping into like millions of like comic collectors. So they are also kind of like expanding their their asset classes uh on the platform but they will also aggressively expand vertically and they will own the

vertical stack. Um and this will bring them a lot of attention from outside of crypto. >> Interesting. That seems to be like the main through line in your current uh bullish thesis across anything is like is this project is this company bringing external attention external assets on >> I mean we need to start growing the pie again and the thing is like we have like way too many founders way too many projects just like focusing on the cryptonative bubble and like all these I mean also crypto Twitter is getting like It feels like more debt than ever before. Um kind of and we need to bring

new people into the space and we need like new capital like all crypto bros are are kind of broke, right? Like they don't have any money left to to bit our tokens and like they don't even believe in kind of like cryptonative assets anymore. So like we need this we got the institutional bit already but they won't buy our shitcoins. Um probably it's it's getting better with the with the clarity act. Um but we also need more like non-crypto people. Again I I think as we are seeing like with treadfi and defy like how these worlds conver like converge already and we we will get to some point where there is no crypto or like non-crypto worlds anymore. they they are just like the lines are getting blurry and um those projects who are

kind of like moving first um to get like these people um I think they will do very very well >> um and yeah and I think overall like a big problem is just like the whole token versus equity issue right and we need >> we need to solve like where you acrew for tokens and um I think Blockworks is doing like a great job there with that token transparency framework and their alliance they they just launched yesterday joined that right you're part of that alliance >> yeah exactly um so we are we are good friends with with Yano we are also uh investors in Blockworks I think you guys are too right yeah >> um

so I I think like I have massive respect for them because like they're hustling already for like almost a decade and they are like one of these very few people who actually really care about growing the pine and and making the industry heal and and and and who like genuinely care about the industry, right? And not trying to extract like a boatload of money out of it. And I think what they are doing with the token transparency framework, it's very cool and we see it's it's it's working already. I mean liquid investors like tea research or something. They are already publicly stating that they are willing to pay a premium for founders who do like proper investor relations and uh who who who do like proper um

token transparency and I think we will see this trend to uh like this trend continue and um I think like what they are working on is very very interesting. I mean, it's it's not very surprising that we see them quite a bit in Washington DC recently. >> Yep. Yep. Yep. Definitely. Simon, um hope you survive the next or the next couple months. It's not going to be that bad. I mean, come on. This place the bare market for ants. Just um >> I think it's fine right now. I think it's the market's doing kind of all right, right? I mean, your your near bags are pumping. My cards bags are pumping. are hyping.

>> Yeah, my hype are not pumping. >> I mean I mean I mean you're having a tough time if you're not on the hype near Zcash >> Tra like if you are buying some cards token I'm going to buy per. >> All right. All right guys well you heard it here first. Collector [ __ ] cards what like I mean over I think like $30 million of revenue I think some annualized >> over over 100 million. >> Over a hundred million. What is that annualized then? >> Annualized. Wow. Wow. 100 million annualized revenue, $40 million market cap. Simon's got vested bags. The FTV on this thing is not very close to the to the circulating. So, watch out for Moonrock, but uh ladies

and gentlemen, he seems bullish, so hopefully he uh hangs on tight for the ride. Simon, thanks for your time. >> Thanks a lot for having me, guys. >> Cheers, man. Thanks, Simon. >> All right, guys. Up next, we've got the stable watch team coming in hot. They will uh get fired up about what they're doing with this Osero product launch. >> Oh, yeah. Purr's ripping. Hype's ready to go back above 60. I cannot believe a member of the rollup team is trying to get in sub 40 when he knew that the other member of the rollup team who actually got in sub 40 on the previous run didn't size up enough. Now, now we got guys like S. I'm telling you, Rob, people are so sidelined on hype still.

Like, it's it's unreal. Simon is like in the trenches and he's sidelined on hype. >> Yeah. I think um I think it caught people by surprise. Look, if you're too zoomed in sometimes, you you have this this issue where you think these things are too similar. You see >> flying right now, Rob. >> You feel vindicated, don't you? Bro, what are you gonna do if like you get the trade idea right and then like it doesn't even play out in your favor? Buddy, have you ever heard of Bob Diamond? Do you know who Bob Diamond is?

>> Former plays president. >> He is the CNBC extraordinaire. That guy will go on and shill anyone. >> What's our time horizon on this chart? Five minutes? Three minutes? >> All right, guys. We've got Poter of Stable Watch and Osero following their launch that just came out. We got called the Fruit Rollup Kids by a Ripple Maxi on Twitter just now. Uh that was Rob's spicy take on Stellar. Uh Stellar wants to come on the show. Hope they don't see that one. Um and yeah, we got Poter, founder of Stable Watch. He's going to talk to us about Stable Watch Osero today's launch. He's probably sidelined on hype as well. I mean, who makes you say that? I mean, everyone's sidelined on hype, huh? the hell's going on out

here? >> Yeah, you're making it out that I'm an ETH maxi. Meanwhile, I'm one of the few. I got I got bags of hype. I'm not in per, but I I'm on the I'm on the hyperlquid train and it's a stable coin super cycle. I'm uh Why don't we get Podor up here? We've got some things that he wants to share as well. Osero is >> some love. First time on the show. Second time on the show back. Last time we did that um kind of stable coins in review 2026. We'll have to check out the predictions at the end of the year. Yeah, what's up? Great to be here, guys. Uh, yeah, happy happy to be here.

>> Congrats on the launch, man. How's everything looking? >> Uh, pretty good. Uh, a lot of work, but yeah, it's it's pretty exciting. So, we uh came out of self uh pretty recently, like two weeks, three weeks ago. Uh, we launched the first product today. In the meantime, yeah, we announced the fund raise as well. Some cool stuff is in the pipeline. So, uh you can hear about that if you're going to be at stable summit in New York next week. So yeah, uh I'll make sure you you follow the up the updates from our site. >> Love it. So you guys raised 13.5 million, $2.5 billion of USDS credit access. Today you guys had a larger announcement about this yield product.

Maybe just kind of walk us through what Osero is high level set the foundation for us here uh and the audience and then we'll get into some of the data, some of the numbers and kind of like the USDS sky both thesis here. >> Yeah, definitely. Um so Osero is a prime agent within the sky ecosystem. So you can translate it into subdial right like the the sky lingo is uh is pretty complicated and and uh yeah so so let's uh talk about it as a subdow pretty much there's only few whitelisted parties to take care of like let's say economic activity for the sky protocol. So, Sky protocol itself as a you know decentralized uh set of smart contracts

and is setting up the incentives constraints how the ecosystem should look like but then us so those prime agent subdials are doing the uh big part of the work meaning helping manage part of the uh balance sheet so in our scenario this is up to 2.5 bill capacity to allocate into different kind of stuff what we looking at osero is mostly potential allocations on the RWA side. So we look into quite few sectors which are uh uncorrelated to what is currently on the sky balance sheet. And then very big focus of what we doing at Osero is the expansion of the sky ecosystem. And because of that we've built Osero Earn.

This is the simplest way to integrate SUSDS. So the biggest yield bearing product to put your stable coins to work and get yield 10 lines of code. So when within let's say 1 hour you can get that whenever you're um exchange custodian neo bank or maybe a wallet and uh this way yeah you can offer that uh best risk adjusted yield in the the whole space to to your users. Um, beside that, our app also going to be live and sometime relatively soon and we're working on all of the technical as well as the like risk kind of legal setup to uh start going on with the with the allocations.

Love it. So, I actually talked to um Kyle from Milk Road yesterday. He came in the studio. He gave a bearish Zcast take that was blowing up. People call him a [ __ ] And then he also gave a take about the sky revenue versus hype revenue. why these things aren't valued in the same way was also interesting. But one of the things that he said in that response about Sky versus Hype and how the PTE ratios of these two assets are uh far different and there's like a big kind of gap in the way that the market is valuing Sky versus Hype is that Sky wants to be the safest place and their whole brand is predicated on being the safest possible place for yield for stable coins on chain. like

that's all they care about. How does Oserero kind of take that similar mindset and approach to how you guys allocate this capital and what you guys are doing? I know it's not sexy. I know it's not hype. I know I I know it's not like something that's going to, you know, 100x. How do you guys maintain security, safety? Is that one of your top priorities? >> Yeah, definitely. This is like the uh the most important thing on on our plate, right? So we want to help manage risk and and streamline this in a um in a great way because you can't eliminate risk ever right you're always going to be exposed to that if there's any yield there definitely there is some risk but uh the goal of sky ecosystem is to

manage that in a in a proper way right um so you can see that all right like uh at the moment sky savings rate is around suffer right so you get paid pretty much similar rate to to uh overnight rate in in the banks in in the US. Uh and that is not sexy as you said, but this is the biggest yieldbearing uh stable coin like yield bearing asset in the space. So even while it's not sexy, you could say it's uh still a lot of demand uh for it and the supply is only increasing all the time. When we speak with potential integrations, for example, uh around user SDK, yeah, we see a lot of demand for for that product. And why is that?

is that I I believe that if you're holding a bigger amount of capital, you of course don't want to be exposed to too much risk, right? Your uh main objective is to defend your capital, grow it, but yeah, most importantly, you don't want to lose it. And in recent months, we see so we've seen quite a lot of, you know, bad events for the whole space. So, starting with the stream uh blowoff and so on. So around that, yeah, you you got the vault creators. So they behave also kind of like a bunny manager for you. You could say like it's it's it's acting like a hedge fund. You allocate into this vault. They making money in a different ways like different

kind of strategies. A lot of that been based on uh working around uh stream uh finance. But uh in most of the examples uh unfortunately they bear no risk. So there's no liability on the curator side. We got like few really great firms which are doing great right we got steakhouse we got gutlet which are uh doing really great work some smaller ones as well but still unfortunately this space is is not really safe when you entering this kind of a vault you could have some juicy API it can be I don't know 5 10% you can find different vaults uh but in the end um if something going to happen with your money there's uh you're just left on ice and there's no any capital buffer

any legal uh liability, they take it on and and so on, right? So, it's pretty much uh a lot of risk. You're underwriting for maybe three, four, maybe five more uh percentage points on on your capital. So, if you're allocating 100 mil uh or or maybe more, I don't think so. This is kind of risk you would like to you would like to take. Then the other um kind of opportunity where a lot of people are putting their own money is to lending markets right and uh when uh we speaking about the about them the problem is that in most of the cases for the for the big

lending markets you pretty much like finding looping of two assets ETH and SUSD right uh and derivatives around that especially around ETH. So the um there's actually pretty big concentration risk uh around where this yield is coming from and then if something going to happen in one of those two positions those two strategies uh you're uh in in very bad spot and we've seen that very recently which happened you could say not uh because of the um uh not because of the like latters like there's structure but because of the kelp hack but still the depositors in

those markets being very much exposed and the rest of the people also couldn't withdrawal uh from the markets um and so on. So once again the risk is pretty pretty concentrated in one place and more and more people are getting like sophisticated around how they want to manage risk and Sky ecosystem is providing like really the uh the best way to to do that and get uh the safest possible exposure if you want to allocate your money on chain. So how >> the gold standard the gold standard >> yeah pretty much I would I would say so so how the whole um system works is the risk framework is based on the basil 3

uh so this is banking regulation introduced after 2008 uh the the banking crisis and um how it operates is that if there's any position on the balance sheet and you would like to uh borrow um uh as a like regional bank or whatever like in this scenario let's say to make it easier that sky um is kind of a uh defy central bank and as the primes are operating like around it and got those master accounts. So then Osero if we would like to allocate any kind of opportunity we need to post our own uh risk capital uh and only then we can borrow money from uh from Sky. Um and to

very much simplify how this work let's say that we're taking very long time frame let let's say even up to 20 years for some asset if that would be like some RWA asset and we look for the biggest stress periods what's been the draw down you know of the nav and uh during let's say uh covid crisis or maybe 2008 crash and so on let's say in some scenario that would be 8% draw down and once again this simplified but then the risk ratio would be 2x of that let's say maybe 16% and then if we put 16 mil of our own capital >> we would need to we would be able to borrow 100 um mil from uh from the sky

and then allocate into that we pay the borrow rate this is how the yield for susds is generated but then if something going to happen to that position we need to manage different kind of risk like time to liquidity all of those position positions need to be like really liquid. We need to be able to liquidate them very fast if there would be any withdrawals uh and to meet them or if uh yeah something would be happening to the asset like the price of it would be going down and in this scenario when the price of this asset would be going down uh Sky like us would liquidate that position uh and we as a prime agent as Osera would need to plug that hole with our own capital. So that means that uh the osora incentive is totally different

than incentive of like a rescuer in in some kind of a vault because we need to have skin in the game in any uh any kind of opportunity >> and p I just want to pull up on the screen that a diagram to kind of help the audience understand a bit how this works a bit better. Let's let's get that up on the screen. And you can kind of uh you know, you can see the Sky ecosystem, the Osera earned here up on the screen. And you kind of just explained how you guys have to put your own capital up in order to have an opportunity to get capital from the from basically the USDS in reserves in Sky as a prime agent. And then this kind of diagram walks through how this how this kind of plays out in a distributor method. So maybe you could

just walk us through this diagram as you just did uh short and sweet on what is happening here with Osero Earn. >> Sure. So this chart is yeah actually about Oser SDK. So this is how like from the text endpoint as a integrator. So it can be wallet neo bank or or whoever like integrates SUSDS and how we through our SDK just helps you handle everything. So you just don't need to to to care about that. Um so this is totally different uh topic actually than the risk framework which I've been uh talking about but yeah so like very simply if you want to stay on the on the like with the with the risk topic let's

say yeah uh we're looking at uh position A which seems is extremely vanilla. This is something like maybe money market funds or whatever is something which is bearing very low risk. We need to assess a few um vectors when it comes to the risk side. From our side that going to be all of the economic risk and so on. But some other teams are also working from the t tech assessment. There also need to be a legal assessment uh in place. But from our side, let's say that this is very vanilla opportunity. Um and the risk ratio which is described as CRR in this basel 3based model. So uh required risk capital uh the um the risk

is calculated in a percentage number and in this scenario that would be five uh% let's say right so if we post 5 million of our own capital then we'll be able to um borrow from this balance sheet the 95 um 95 mil uh altogether 100 mil is getting to the opportunity Unity and once again if something is happening with the position uh it's getting liquidated and the whole uh after any potential loss would be um plugged by our capital not sky capital and so on and very important is that we as OEO got our own junior capital in place but

within the sky ecosystem we also got our own underwriter which holds you could say mezadin capital. So if we would default then there's another extra layer of capital which would be defending users. So there's no haircut on the price of USDS. And even if that capital would um go to zero then there is still surplus buffer which you could say it's senior trench which is at the sky protocol level. So actually there's very clean uh very easy to understand waterfall of losses if you're looking at the sky protocol and what is said is that in most of the of the other places

where you can generate y it's not that easy to understand how this would look like or uh that you're actually directly exposed to risk if something going to happen you're just going to take this uh haircut as a as a user >> and pur could you describe kind of the the the flip side of this you mentioned you know we've been talking about risk risk quite a bit, but talk to us more about the demand side like you know at the top of this we have distributor platforms right wallets, neo banks, exchanges, custodians. Can you just unpack who you foresee? Maybe you guys already have several of these teams integrated. You know what what is the plan to go out and get some more get some more demand, get some more distribution uh to ultimately grow the USDS supply uh and uh deposits into Osero?

>> Sure. Um very uh very good question. So um like our thesis is like from the beginning. also from when we started working on stable watch that uh stable coins are already eating the world right you can see that on the payment side uh a lot of like threat uh venues fintech venues as well like this first generation of fintex they're moving um faster and faster to on rails when it comes to payments but what is not really being worked on yet uh and we're working on that with osero is how this transition also going look for the yield products. So if you're going to look at uh what um saving accounts in US are

yielding at the moment like the national average is like around 0.6 six uh% APY right very low and um users really want to get somewhere else with their capital because this uh like Fed and some other agencies uh and and governmental bodies are are predicting the inflation like meat's uh term going to be probably above 4% even close to 5%. So then if you're having your money in the like plain bank account, uh like pure loss, right? You're just uh you're just losing money all the time and and your portfolio is bleeding. Um and banks really won't be able to offer better

yields in upcoming year two or maybe three because most of those um like uh customer deposits are actually uh also with regional banks and they put a lot of money into like Siri uh bonds like commercial real estate in like around 2020 rates were super low like around 1.5 maybe two but most importantly the prices of those uh commercial real estate really went down. So there uh are sitting on big losses which are not yet you know uh visible on their balance sheet because those loans haven't matured but they're going to mature.

There's like very big wall uh I think uh 400 to sorry 400 uh yeah bill um going to be maturing just uh this year. So it's like really huge amount right and then banks to still be operating especially those smaller banks which are holding those uh those assets um they need to build like healthier legal balance sheets they're also regulated in like under basil 3 or like similar framework so they need to hold a lot of like plank cash right to meet the withdrawals and when they going to show those losses they're going to be under capitalized and that means they just need to make more money and that's high uh last year and this year the profits

of the bank like net margins are highest from I think 2019 at 3 point like 2 3.3 uh% and they just can't pass this yield to users and that means that like very big opening for anybody really working on this on this yield side and providing users with a safe reliable way uh transparent way to earn on their uh USD deposits or in our example uh stable coin deposits uh right uh if you look at the fintex they already go into that direction trying to capitalize like gold uh gold uh cash sweep account at Robin Hood is paying 3.3% um I think and still uh SUSDS and sky is

beating that so if you compare SUSDS like uh the biggest yield products on chain the safest one the most transparent the biggest the best liquidity profile as well five bill more than five bill sitting in USDC idle so you can swap it at a moment one to one uh with USDS this is actually very attractive if you compare that to what you could get in a normal uh semics account in the in the bank but also uh most of the fintex so this is the best moment really to try to capitalize on this opportunity that's one thing the other leg uh of that is that most of those yield opportunities beside lending platform firms are sitting around USDC

and we know that like swapping one USDC to one USDT it's not always that easy. This is something we also try to to try to work on um at Diosero to minimize this uh friction because um some other like really high potential opportunity lays in emerging markets. A lot of people they're already using different kind of neo bankanking platforms. A lot of them are be built from scratch on the onchain rails, right? um like yellow card for example in uh in Africa and uh and so on those people are using USDT mostly to transact and very often they don't have any opportunity to put that um USDT to work in a very easy

very transparent you know very safe way and not take you know a small loss because of the conversion because of the swap from USDT to USDC and in those emerging economies people maybe want to invest I don't know, maybe even $10 a month. And if they would need to pay like 20 cents or like 30 cents for for this swap, it's actually, you know, very meaningful to them. So minimizing this friction is also very important and and this is what we're working on uh at at the love it. And I mean, I think part of the appeal for Sky is going to be as the kind of supply of USDS continues to grow, like we we we can pull that chart

up on the screen. You can see that it's just been very very very steady uh in terms of the USDS growth. The appeal here is that as USDS grows, um there becomes more demand to deposit into the protocol for the Sky asset for protocols like Osero. I you know I'm gonna I'm gonna get that chart up here Leo on the screen and then we'll we'll kind of talk about it and how how pot you're seeing Osero contribute to the SUSDS growth and the USDS growth at large. What is the plan for Osera to really go out there and contribute to scaling uh the outstanding supply of SUSDS and USDS?

>> Sure. Um so I think that yeah like Oserero is playing like really crucial uh role in all of that as the like only prime agent only subd we're that focus on those integrations. So we already got a lot of ongoing conversations in upcoming weeks you'll be able to see uh SUSDS in your favorite uh apps uh I I hope so. So it's like very big focus from our side. Beside this as I as I said like very big problem is that USDC is the main asset. You at the moment can swap into um USDS or SUSDs. So eliminating this friction around USDT also going to open very big market uh

for us and yeah Osera is is already uh working on this also like the third um third angle to that is that we're very uh much focused not only on accommodating the existing market. So most of the teams also if you think of neo banks or so they actually targeting the um western world user who okay got the access to like maybe uh US bank accounts or or maybe European ones using revolute. Uh and as I said this is great opportunity because still we can just provide better better yields and really be competitive to what is offered in in threadfy and fintex. But in our uh scenario, we also try to expand more

especially in APAC uh and South America at the moment. So we have uh a lot of conversations going on there and I believe like long term this is uh very um very big unlock and pretty much aligned with what US would like to achieve with stable coins. Uh US needs to export the the depth somewhere. So the more of a stable coin usage in in emerging economies um the happier US is uh I would uh I would say and uh then the the genius is banning like direct uh y pass through from like big players issuers like circle or or tedar. So this option like SUSDS to turn your payment stable coin into yield bearing asset is

very um you know it's amazing opportunity for for people in those places. >> Got it. Yep. And this is something that we anticipate continuing to grow especially in emerging markets as you're saying uh and as well in uh in the US and more regulated markets as well as regulation continues to advance. We get the Genius Act put into place. we get the Clarity Act, uh, payment coins will transition into interestbearing stable coins and that could be an exponential catalyst for the growth of USDS. >> Yeah, totally agree on that. So, we're already on a great trajectory uh, right?

It's already the biggest um, asset this kind uh, onchain and I think that we're going like much much higher in the in the coming months. We see a lot of demand coming from different places and at the moment we also working uh at Sky on a lot of initiatives which going to help us scale even faster. So uh better data infrastructure um better um tech infrastructure when it comes to smart contracts and so on. So all of the work is uh just uh more smooth and that means that the time to any integration and so on going to be getting shorter and we're going to be capturing the market faster.

Oero air our SDK is like part of that and it's letting you integrate with an hour like you could do that even faster. It's literally 10 lines of code. So uh that's a big upgrade. >> Poter, thank you for spending some time with us. Congrats on Osero earned savings for wallets, neo banks, exchanges, pushing forward Sky USDs. Obviously, we're big fans here of Sky of Oser, what you guys are building. So, again, congrats for pushing the needle. I know this has been a long time coming for you guys. Looking forward to hanging out in Europe. Hope you have a Europe summer and uh we'll uh we'll see you soon. All right.

>> Yeah, definitely. See you in New York sometime soon as well. Thank you very much guys. >> Come over in June or July. We'll be around. >> Awesome. Thank you. Thanks. >> All right, buddy. All right, guys. Up next, we've got Joe Shalom answering the question that all the ETH haters want him to know. Is ETH dead? >> No, I'm just kidding. >> That's what we're going to find out. I I mean, look, Joe uh Joe's always a very thoughtful guest on the show. Yeah. >> Um have had the pleasure of chatting with him several times, as well as his uh his Joseph counterpart, uh Joe Lubman. And so, uh, I'm excited to chat with Mr. Shalom today about ETH.

Obviously, so many changes happening in the ETH ecosystem. I think >> we just need to cut through the noise a little bit. It's tough out there. So many opinions around Ethereum. >> There is a lot of opinions. There's a lot of opinions about the market in general right now. There's a lot of people who are, you know, kind of jaded right now. But Joe and Sharplink have just struck a new deal with Galaxy. Yeah. For a Sharplink onchain fund. Also, ESBET will be joining uh or or is Yeah. It will be joining the Russell 200 2000 and 30,000 sometime in end of June.

Yeah. Um Clarity Act 8750,000 ETH. There's a lot to cover with Joe. We're going to bring him up cover it. Uh we're going to see if he's going to add hype to the balance sheet. I don't know if he's ever gonna do that, but I'm quite tempted to ask him. Quite quite tempted to ask. >> Oh, that's a good question. Yeah, why don't we uh why don't we get him get him up here and uh we get going. >> Yeah, man. I mean, this should be fun. Um Joe's obviously close by in New York. Looks uh looks the part, looks ready to go. He's always always a fun time. So, >> one of the, you know, what just while while we're bringing uh Joseph Shalom up, uh, you know, one of the takes around ETH that I've heard that has just kind of I've just been thinking about a

little bit more is this, you know, we used to have Bitcoin not blockchain or blockchain not Bitcoin back in 2018. You know, there was this big institutional blockchain push. You know, we're going to put all of these assets on chain. We're going to this is a new financial rails. Everything's going to end up on blockchain. But Bitcoin is sort of uh you know it's used for drug dealers and crime and these sorts of things. So big blockchain not Bitcoin push. And now we're seeing similar rhetoric with ETH, right? Tokenize the world. Put all the assets on chain. Put them all on Ethereum.

>> 100% agree with that. 100% agree with that. >> But the asset is maybe struggling to find value acrruel. So I'm I'm interested in in asking uh Joseph Shalom this as well as getting broad takes on Ethereum. Uh why don't we go ahead? I think we've got him ready. Let's go ahead and bring him up >> and welcome him to the show. >> Yes, sir. Yeah. Well, I mean, if you look at crypto Twitter, people will tell you that Ethereum is dead, but then you look at Mr. Shalom here and look at him. He's got he's got a nice haircut and a nice suit. I I think Eth is anything but dead here. Joe, welcome back to the show man.

>> Uh, great to see you both. And by the way, two guys from Florida. There's nothing better. >> Love that, man. >> Got it. Right. That's absolutely right. >> Well, as I said, Joe, I mean, there's a lot to talk about. You guys have been doing some great work. We got to address the elephant in the room. If you look on crypto Twitter, if you look at people that have been ETH fanatics, you had the bankless guys breaking up and one guy selling all the ETH. You got people claiming that it's the easiest short ever, dunking on everyone. I mean, Rob was just kind of giving this analogy to 2018, the the first bare market that we went through where was blockchain, not Bitcoin. Bitcoin had fallen and gotten crushed. Everyone was bullish on the

promise of blockchain, but had, you know, had these really negative jaded takes about Bitcoin. Everyone right now is very, very bullish tokenization and stable coins, but still seems to have these negative jaded takes on ETH, the asset. Let's set the stage for the conversation. Joseph Shalom, is ETH dead? >> Uh, no, it's not dead. I think when people capitulate is the time that smart money is made. And can I take a step back? So, Sharlink is the second largest corporate holder of ETH. And I think we just need to tell that to your viewers.

I have a stake in the outcome here. Um, other than Tom Lee, we are the second largest holder of ETH. And let me just give you my perspective. And this is one human's perspective. I'm not looking for crypto Twitter to blow up and create hate here. The noise is missing the big picture. Let's step back from the short-term drama around the Ethereum Foundation and why don't we actually be objective and look at what Ethereum has delivered and how it's positioned. Let me start by saying you guys go came from a a sports school. Look at the scoreboard. So in the prop properties that matter most for institutional adoption which is the future of

Ethereum, Ethereum has the most trust, liquidity and security objectively speaking. It has the license to win. But sometimes in life you have the license to win but you're not winning. In all the categories where that license converts into real economic activity, Ethereum isn't just winning. It's winning by a mar a large margin. 50 plus% of stable coin value globally settled on Ethereum. Tokenized assets, you know, as soon as some of the next projects are tokenized that have been announced, it'll have 70% of all tokenized assets in the Ethereum ecosystem. And it frankly is the default for high value DeFi transactions. So

like there is no competing chain that's close on any of the dimensions. So, I want to start with a reality check. Look at the scoreboard. And these did not happen by accident. And I'd love to have a really heated conversation. And I'll give you my hot take on what's going well and what's not. But the scoreboard says Ethereum is winning and it has a license to win. >> Yep. And we want to get into some of these hot takes as well, but we also want to we want to talk about the facts. And the fact is that Ethereum is winning when it comes to stable coins. mentioned over half market share when it comes to all the stable coins. It's winning when it comes to tokenization and RWAS.

Significant amounts of RWAs are on Ethereum. But let's get into some of the spicy stuff, Mr. Shalom. I mean, the asset is just not reacting to the lead that Ethereum has in some of these very significant categories despite the stable coin super cycle, despite the importance of tokenization broadly for finance as a whole. With all of this happening, it seems that the asset would be acrewing a lot of value. People have been saying that something when it comes to the value acrruel mechanics is broken. I'm sure you can tell us and help us figure out and separate facts from fiction here. When it comes to ETH the asset, what are people not understanding?

>> I think people don't understand that we're at a step function moment. And I'm not talking about Ethereum continuing to own 70% of all tokenization. I'm suggesting that right now there's only about $ 32 billion of tokenized assets in the world. You're going to start seeing that go up by 5x, 10x, maybe even a 100x. Um, and when that happens, you want to be on a chain that's actually been building for that moment. And I have a great analogy for you. People really really gave Jeff Bezos a hard time as he was building his book selling business. It was losing money. It was losing money for years. And they basically said, "Look at the price.

Don't look at the activity." And he would say very clearly, "I'm not selling books. I'm changing and building a platform that's going to change the future of commerce. And you need to be patient with me because the TAM is going to be huge." And it turns out from those days Amazon's price a 1000xed. So I think we need to take a step back and say Ethereum actually has been doing the right things. The foundation is trying to become even more decentralized. And by the way that is not a bug. That is a feature. Look at what they've delivered uh over the years. And if I had a trade-off and we'll get to the price of ETH in a minute. If I had a trade-off of having a chain that is amazing amazing

at short-term marketing and selling and conferences versus a chain that's built 10 years of security throughput uh privacy is coming and quantum proofing and you're taking a long view. I would take the chain that's decentralized and is building the platform over the future over a shortterm uh marketing engine. And I'm not trying to FUD anyone. I have a lot of respect for the other chains out there, but I'd rather bet on the one that's building for the future because the value to Ether will acrue when you see these step function changes coming uh to the ecosystem. So like I'm not in a defensive position. The debate we

should have is what is the role of the Ethereum Foundation versus the role of the private sector in the goto market and the marketing around the Ethereum institutional adoption. It is clear to me that the EF is not interested in being the go-to market and marketing arm. They're interested in building security, trust, throughput, and quantum proof, which I would take if I had a choice in a minute, but it means that people are going to need to step up. And I'm being very, very direct here. >> Yeah. Yeah. And I think you mean you bring up the most important point I think just to start off, which absolutely great, which is, you know, we want to know your view then, right?

People have alluded to the likes of Tom Lee, the the likes of of you and others kind of stepping up and being that um BD arm, that institutional sales arm with what Etherealize is doing as well. How do you view the role separation now of the EF and the Ethereum Foundation? what their role is versus what all of the treasury companies, all of the private sector companies doing investments into Ethereum or into the ecosystem like Sharplink are. In your mind, what is that role distinction? Because I think right now the community wants to have a clear distinction and they want to stick with it and they want to know kind of

what's happening on both sides. What do you view as that clear role distinction as it stands today? Well, I think it's very clear that Vitalik, who's a visionary, is thinking in decadel long periods and he's trying to futureproof Ethereum as the decentralized uncensorable platform for the future, not just for finance, but for governance and AI and other things. So the role of the EF is to uh become the builder, the standardbearers, but also when necessary, they will take teams that are in the EF and decentralize them. And there's a there's a method to this, and I'm not even going to use the word madness. There's a method to this, which is they want this chain to be uh

survivable in any situation. And by decentralizing validators, decentralizing node operators, decentralizing the core protocol builders, it's not tied to any one person or the size of the treasury. So that's number one. Number two is I would say there are a lot of voices from Tom Lee to Etherealize to myself to Joe Luben who feel like we've been the ones telling the institutional story to the institutions and by that I mean sharing facts. the most secure platform has never gone down for an instant. When other chains have beautiful websites sharing their downtime, Ethereum doesn't need that. But the most important thing

that we do is when we talk to institutions and we do that regularly, we explain to them the benefits of having a platform that's truly decentralized where you don't have an individual player with governance rights who might have a lot of money in their treasury but can actually change the rules of the game. If you're building the future rails for the largest banks, asset managers, insurance companies, clearing houses, they want certainty that no one is going to change the rules of the game. So, I think the role of the private sector, ETH holders like ourselves, is to tell that story. I also think you'll see over the coming weeks and months, you know, groups uh coming together in more formal ways to tell the story. And I do think it's clear that

it's not the role of the Ethereum Foundation in its future incarnation to be the marketing arm of institutional adoption. That has to happen from the private sector and you'll see the largest stakeholders take up step up. It is our responsibility. Period. >> Yeah. And and we're all incentivized to do so. Joseph, I'd like to switch gears for educational purposes for just a moment. Given your background, um, you know, serving as managing director at BlackRock, head of strategic ecosystem partnerships, you you played a key role in shaping some of these digital asset products, uh, like some of these, you know, Eyesshares Bitcoin trust as well as the Eyesshares Ethereum Trust.

Recently we've seen quite a bit of activity in these ETFs uh both in Bitcoin in IBIT as well as the the ETH ETFs. These things have had record numbers of outflows. The market has absorbed those outflows relatively well. But could you help us understand what these what this activity could mean? What these flows could mean? Is this capitulation, you know, these massive block trades essentially shaking these teams out? selling is becoming less and less uh significant. What what do you make of uh these the recent activity given your deep understanding of these ETF products?

>> Sure. Whether you're talking about the ETFs or the DATs, they're largely beta exposure to the underlying asset and their job is not to make the price of Bitcoin and ETH go up. The job is to create a great product. The ETFs are great products. The DATs are great products to give people a better exposure vehicle than owning spot yourself. You don't want to own spot, Ethereum, Ether, and then try to stake it if you're an institution. So, these vehicles are meant to allow people to express their opinions. And let's just be clear, in crypto, which is different than traditional finance, people in crypto buy when the price is going up.

In every other market, people step in and buy when the price is going down. Um, but they're functioning exactly as they should. Neither BlackRock or Fidelity or Franklin Templeton, it's not their job to create demand for Bitcoin and ETH. It's their job to create give them a better wrapper. And these ETFs are functioning exactly as they should. And the markets will tell the story. Is there interest or is there not in each one of these underlying? But I will tell you it feels like at this moment when people capitulate in retail markets and the sentiment is low, that is exactly the time to buy. That's when Warren Buffett buys. That's when money is made.

I'm going to I'm old enough to know that when sentiment was bad in the 1970s, they bought Geico. When sentiment was bad around Bank of America and Goldman Sachs in 2008, Warren Buffett bought those. and you make money when others capitulate. Um, you just need to be mid to long-term oriented. So, um, the final thing I'll say is, and I don't I don't work at Black Rockck. I don't speak at Black Rockck. Um, I worked there for 20 years. When FTX came about, most institutions stopped talking about Bitcoin and ETH. They weren't launching funds. At BlackRock, we doubled down during that winter, and it turned out that was the right move. So, um, I think sentiment can be, uh, counteryclical.

I'd be very bullish right now on the riskreward at these prices. >> Yeah. But I think I mean just to add to that like the sentiment side is there because of the underperformance of ETH the asset for the last couple years. How do we turn this thing around? Um this this community is one of the best in all of the industry. What are you seeing for ETH the asset right now uh as far as kind of turning around the underperformance and turning around the ship here? Uh it seems like we're probably coming to like a accumulation phase across the markets at large.

Bitcoin's kind of just been chopping around the last I don't know five months, four months. Uh not looking for like price predictions or like up or down here, but like holistically macro- wise underperformance for a couple years. People want to turn this thing around. Sentiment is bad because of that. I understand the counter cyclical nature of sentiment and kind of trading against your own psychology or the crowd, but what is going to turn this thing around? >> I think it's going to be three things. And I'm not going to give a price prediction other than what I said, which is the riskreward right now looks really good, but there is a complete divergence between the price of Ether and what you're seeing in the market. I think it's attributable to three things. Um, but you're right, it's a it's not a short-term thing. Um, it's been

persisting for a bit. One is just you know the we are in a riskoff environment and for most of its history Bitcoin and ETH generally traded uncorrelated to stocks and bonds. What we've seen in the last year and a half is actually a very high correlation between Bitcoin and ETH to high-risk equities. And what's interesting is you would argue that the markets are up but in reality a very small corner of the financial markets is doing remarkably well it's the AI stocks and anyone uh providing um uh inputs to to that the memory the chip businesses until such time as there's a broader

market sentiment that's risk on I think crypto assets are going to lag and I'm being very direct And the second thing is the geopolitical risk and the lack of liquidity in the market go hand inand with inflated oil prices. Look at the price of WTI crude. It is probably the greatest indicator right now on the price of Bitcoin and ETH. You look at the price of of WTI when it goes up. Bitcoin and ETH are inversely correlated. You need the war to end and the price of energy to come down. And the final thing, I'll just be very direct is we expected at the beginning of the year three rate cuts, you know, 75 basis points. And Bitcoin and ETH are incredibly sensitive, incredibly

sensitive to rates and liquidity in the market. And until such time that you get this temporary oil driven surge of inflation out of the way, it's very hard to imagine the Federal Reserve cutting rates. So I think you need more stability in the geopolitics. you need a broader market recovery was with a broader risk on and you need rate sentiment uh to be more dovish than what it is today. Until then, I think it's going these are going to be trading sideways. But again, this is probably one of the best entry points uh as we've seen. It's very hard to explain when tokenization, stable coins, DeFi, and agentic are coming and every day there's another announcement from an institution that two years ago would have moved the

price of ETH. I think there is so much positivity before you even talk about the Clarity Act. We just need the decks to clear out a little bit for to let it run. But I'm I'm not in the business of making price predictions. Sorry about that. And so I I Joseph, I think we all agree and we see the potential in the Ethereum ecosystem and leading these categories, tokenization, RWA, stable coins. I think this inevitably leads to the rise of activity on the Ethereum blockchain. But there is this cohort of people out there where it's it's like Ethereum, not ETH, right? Just like it was blockchain, not Bitcoin in in 2018. Obviously, we know how that played out. In 2018, Bitcoin ran to 100, you know, thousand plus.

Again, not asking for price predictions. There are people that say that there's something wrong with the ETH value mechanism, right? I is the thesis here that, you know, we increase the uh the the uh transactions and the activity on the Ethereum blockchain to such an extent that the burn is triggered and the ETH monetary mechanism kicks in. this ultimately you know is going to reduce the supply demand is going to increase we know what happens um or is the ETH is money thesis is that still the driving thesis here what is the thesis for ETH the asset and why is you know Ethereum not ETH why is that the incorrect take here

>> yeah I think the it's the former which is let's just be clear when you see what the Ethereum Foundation is building and I'm talking about Ethereum mainet right now I'm not talking about the L2s who who are built on top of Ethereum when you they're basically reducing gas fees significantly they're doing 3x increases in capabilities and throughput because mainet needs to be built to support the volume that's coming from tokenization stable coins and agentic micro payments I think if it grows incrementally you won't trigger the burn in a way that's going to drive the price of ether up but We genuinely believe we're going to see

step function increases from stable coins, tokenization, and agentic that will create that demand that will trigger the burn. And when that happens and you start seeing 10x, 20x, 50x or more transactions on Ethereum and the L2s, you're going to end up needing Ether as that trustwware to secure the transactions. That is the thesis. But I gave the Jeff Bezos uh I gave the Jeff Bezos analogy which was he was criticized for selling books at a low cost uh driving throughput and volume uh I would make an argument taking losses for a long period because he was trying to build for the future of

e-commerce and then you saw what happened. I I believe the ether ethereum uh thesis is very it's very similar. So um I I don't think it's the Bitcoin store of value. I think the network is gonna end up having transaction volumes that are going to be so high that you'll trigger the burn and that will lead to higher ether prices. That would be the conviction I have. >> You know, I Joseph, I I agree with you because I think we are able to reach these levels of scale, but I have this internal Jevans paradox. I and and it's that you know the EF and the developers and all of this work uh with really really intelligent developers is going into scaling the chain which is driving gas fees lower on a per transaction

basis. On the other side you have greater activity and but it feels like these things are at you know at odds with one another. If we're really going to scale the chain, we're going to make transactions very very cheap, then you know we we wouldn't create as much uh congestion on the network and therefore we wouldn't require as much you know fees in order to charge on a per transaction basis. Again, this might just be, you know, compensated by the enormous amount of scale of this activity. I is that is that the case?

we're just going to outpay as intelligent these developers are as much as they can reduce the fee overhead and scale the chain. That is just nominal when it's relative to the amount of demand that we're we're looking to create here with this activity. That is the answer and that is the belief and they're trying to be precient which is they and when you see what's coming out uh in Glamsterdam it's going to be able to handle volumes like we haven't seen but also be able to handle periods of low volume and handle periods of peak volume um because the system can't uh fail over and uh I think you're going to end up seeing that and I think it's some combination of stable coin growth u but I think tokenization people are wildly

underestimating And when that happens and you start seeing 247 trading on NASDAQ and NIS and you see the DTCC leveraging a series of change to dematerialize collateral and allow wallet movements, you know, you would have seen the Brian Armstrong tweet a few weeks back saying there were 160 million agentto agent payments in Q1. Very small dollar amounts, but we're this is the tip of the iceberg. And when that demand comes, you're going to need uh Ether, the token, and there's going to be a lot more burn, and that should be really positive for Ether. But they're not taking short-term decisions.

And I think it's actually very smart. How this is all being communicated, I don't think, is great. And I think, as I said earlier, private sector stakeholders uh need to have a much bigger voice in terms of organizing uh that thesis and how we tell the story better. It it's a marketing problem. It's not a protocol problem. And I've got one one quick followup on this note because it does seem like tokenization. Ethereum is the leader stable coins as well. But on tokenization, you know, there's kind of the spectrum of ass of of assets that are ready to be tokenized. Uh Andy and I have talked about this before. It's part of our NEO finance thesis. We started with stable coins, the lowest on the risk curve, and now we're getting into, you know, bonds, private credit, tokenized equities.

We're kind of going down the risk curve. Uh when it comes to the tokenization thesis, all of these things become tokenized and become onchain and they a a large swath of those assets end up on Ethereum. The the the question I have is how how much velocity do we need really like the the strength of of Ethereum seems to be the security of it. It never goes down. It's very secure. It has very robust and resilient infrastructure. But when it comes to the the amount of throughput or high frequency activity that we need in order to really really ramp up the number of transactions per second, it feels like a lot of that activity has flowed to the likes of Hyperlid and Salana whereas you know

they might be prioritizing speed. You know Ethereum is prioritizing security. how much of the tokenized assets that are coming on chain are coming to Ethereum for a lot of transactions per second and then therefore you know playing into this you know very high activity thesis uh that ultimately you know we talked about is is flowing into ETH the asset >> yeah I'll I'll answer that in two ways um and again I want to be the most positive person in this ecosystem I believe there are going to be a lot of survivors Lana is doing a remarkable job focused on like a very narrow narrow use case of highfrequency trading. Um I think if you look at where the real money is, look at the largest asset

managers in the world, the Vanguards, the JP Morgans, the Black Rockcks, the Franklin Templetons, the amount of assets that they're going to be tokenizing and the transactions they're doing is not high frequency, but when when they're on tokenized rails, just take a step back. We've been talking about tokenization since 2017. Um there are $ 32 billion of assets tokenized roughly. Black Rockck announced that they're not going to tokenize a new fund. They're going to tokenize a existing fund with 7 to8 billion in AUMUum. Wait till you start seeing the next one which could be a a a large asset manager tokenizing an S&P

500 fund which could have $500 billion in that fund. So you're talking about step function increases coming. I don't think it's going to be the high velocity, high frequency, you know, blackbox algorithmic trading. I just think you're going to see most transactions over time in ETFs, in individual stocks, in the most liquid corporate bonds are going to be tra traded on chain. And I don't necessarily think it's because it's 247 versus, you know, nine hours a day. It's just going to be a lot more activity on chain that exists today. And I think what we miss is one of the biggest chicken and egg problems in tokenization is you have these products but they're KYCed and it

requires liquidity. And until you start seeing bigger and bigger funds and bigger and bigger participants coming in, you're not going to have the liquidity profile to allow that high velocity. But at some point you're going to get to a tipping point and liquidity begets liquidity. I think it's going to be coming from the buy and hold type investors who happen to manage hundreds of trillions of dollars. It's not going to be the high frequency traders who are really focused on that one Solana speed use case. These people need finality over speed and they need economic security over speed and they even need um economic security over price. So um I don't think it's going to be the high

frequency. It's just going to be there's the volume of tokenized assets and the time periods they're going to be able to trade in is going to be 10x, 100x, a,000x what you see today in terms of tokenized assets trading. We're at the tip of the tip of the iceberg. We're in the top of the first inning, not the middle innings here. >> Yeah. I mean, we've been just trying to shatter this reality in people's minds that we've built this onchain ecosystem for the $150 billion dollars that's on chain and the three trillion total assets in the cryptoverse and that we're really looking at the hundreds of trillions of other assets being tokenized being used on chain. Those will be on Ethereum. One of the things Joe that I think is exciting for people

is this idea that eventually the major crypto assets will have this kind of passive bid and it's starting with Micro Strategy eventually getting into the S&P 500 and on the ESP side it's getting into the Russell 2000 and 3000 later in June. How how should we think about ESP's entrance into the small cap indexes as a way for ETH the asset or ESP to have this kind of like passive bid from pensions from uh you know middle-aged people using a financial adviser. talk to us about kind of like the evolution of ETH getting a passive bid from institutional allocators who serve the average mom and pop and how

ETH will kind of be part of their portfolio whether they know it or not as a result of some of these uh major indexes accepting a equity like ESP. >> Yeah. So let me take a step back for your viewers. Um there were six or seven Ethereum DATs that launched last summer. There were two of us who were able to successfully raise billions of dollars. Um we raised $3 billion. Tom Lee has raised much more. And we both have something quite unique is we have volume in our case on the NASDAQ in their case on the New York Stock Exchange. Being included in an index is really important. So for example, the Russell 2000 and 3000 indices. There are two ways that this is going to benefit the

companies included including Sharplink. Uh the first is uh as you said people are um managing uh I think over $150 billion from an index perspective on these two indices where you essentially if you're an asset manager and you have this product you need to have every constituent in every weight to own that index. So I don't really call that passive investing. you're still exposing yourself to midcaps and extended cap stocks, but that is what you call passive flows because if you're into index like we will be at the end of June, uh it's necessary when you buy the index, you buy sharp link. The second thing that's not talked about and maybe

it's because I'm a boring Tradfi guy is many investors who are buying equities, many asset managers are only allowed to buy those that are included in the index. Meaning, if you're not included in the S&P 500 or you're not included in the Russell 2000 or 3000, even if you're an active manager trying to outperform a benchmark, you can't buy that equity. But once they're included in the benchmark, they become part of the universe that you can take an active bet on. So, I think there is those passive flows, but they're also being included widens the investor base who are allowed to invest in your stock. And we've done um things well. We started um uh when I joined in June July, we were 6%

institutionally owned. The rest was retail investors with a heavy Asian fast money retail investor base. Um as of March 31st, we are 47% owned by the largest institutions in the world. Fidelity is our largest investor as of March 31st, which means you have these anchor investors who are buy and hold. So the combination of index flows being included in the index and being investable and having institutions who are owning you is is a righteous uh is a righteous thing. It doesn't change the price of the underlying and we are largely a beta to the price of ether.

>> Understood. Understood. And then I think the other kind of like key point there is that people want to understand what they're getting more out of uh owning ESP right over the ETH asset. So that's one thing is you get these passive flows, these kind of institutional ownership. The other thing is that you guys have just announced a onchain yield fund with Galaxy $125 million looking to get more value per share, more ETH per share of ESB using onchain yield strategies. Give us the kind of high level here. What is Joseph Shalom's view on maximizing ETH per share for ESB owners? So the the good news is for your viewers, you know, Bitcoin is a great asset. I own a bunch of Bitcoin, but

it's not natively productive. It's a store of value. You hold it and you hope you're going to get the price appreciation. And in a digital asset treasury, you've seen micro strategy have to do financial engineering in order to get that yield and you gear up the the public stock and that's still available on Ethereum. The difference is Ether has a native staking rate. We are the only DAT that was like staking over 98% from day one. But we also believe that we have a comparative advantage over you owning spot and trying to stake it yourself or buy the ETF including the ones that I launched when I was at BlackRock. And the advantage is we are not a daily redemption fund. We have permanent capital or near permanent

capital which means we can deploy our ether not just in simple staking like we started but you can start participating in riskadjusted yield where you can deploy assets your ether for a multi-year period and in return get higher rates of return. We did that in January when we allocated about 200 million of our Ether into a liquid restaking uh solution with EtherFi and Consensus Lineia. And by the way, we did that within a qualified custodian. The first time anyone had taken DeFi in a public company and done it within a bank regulated custodian. This is just the next step in the efficient frontier which again if you have permanent

capital there are a lot of protocols who are starved for that initial capital to get off the ground and if you can stay in your ETH which is what we're doing and make it available to protocols you can have them overcolateralize that loan you can have it be with high quality collateral and you can earn an outsized yield on a riskadjusted basis and our partnership with Galaxy we announced announced our memorandum of intent to launch this fund. We'll identify those protocols and be able to deploy for multi-year periods to those who meet the institutional standards of Galaxy and Sharplink. And then you end up having a portfolio that's largely still majority

simplest staked, but we can beat the Ethereum staking rate because of that competitive advantage. And I'm not here to knock the ETFs. They are great products, but if you're a staked ETF, you're likely not going to be able to stake 100% because you have to provide daily liquidity for investors who want redemptions. And you can't do that if you have a 40 50day unstaking queue on your ETH. So, uh we can provide uh not only the Ethereum staking rate on 100% of our assets, but we can outperform that from a productivity perspective.

And for those who can't own the ETF, we're I think a smarter alternative. >> Yeah. And I think that is the competitive advantage that Sharlink has uh beyond some of these other uh opportunities for exposure. Uh Joseph, want to give you the last word here. We just got a minute or so left. I know you're you're busy championing ETH to all of the uh hungry institutions out there as well, but you mentioned you had some spicy takes. Last word to you. want to make sure that we we give you a chance to uh to share any more or any spicy takes that you didn't get to already.

>> I would just emphasize two things. I think the industry is wildly underestimating the size that tokenized assets is going to be later this year and next year. It took seven years to get to a $30 billion RWA uh tokenization number. you're going to end up seeing individual funds multiple the size of that who are going to be tokenized and it's just going to be step function and Ethereum is going to win 50 to 70% of that. So that's number one. And number two is for those who feel really crappy. They have a bad bag.

They've had a bad experience. They're in the dumpsters. They they want to pivot from crypto to AI. You know, they're just frustrated. At the moment, when retail is capitulating is often the greatest riskreward period in the period that follows. You've seen that in the stock market. You've seen that in in cyclical uh changes. And the smart money doubles down when the sentiment is bad. if you have the tolerance to think beyond a couple of months. So that would be my hot take. Uh focus on the long term.

Look at the signals of what the announcements are and then you know you have to believe that Ethereum is going to win an outsized uh version of this and Ether the token is going to be the in demand token to secure those transactions. But look, it's we're in a winter and you have to have the leadership to see beyond the next month, two months, and three months. That's very hard for retail investors. The smartest institutions are doubling down right now and they're not experimenting. They're allocating capital.

>> It's a bit of a cold front, I would say. Joseph, for you, it's a cold front. Maybe for us Florida boys, it's a bit more of a winter. Thanks for your time, Joe. As always, as always, keep stacking, man. Keep stacking. Uh Ethan is not dead. We'll we're going to be here. Half this podcast isn't selling ETH. The The rest of the haters aren't selling their ETH. Stay strong, Joe. We appreciate your time, man. >> Great to see you guys and I look forward to seeing you soon. >> Absolutely. Thanks again, Joe. >> See you at Eth, man. Peace. >> That's what's your uh what's your ETH take here?

>> Well, look, I mean, Joseph Shalom classy as ever. Uh part of the institutional champion strategy there at Ethereum. Um, look, >> what's your ethic? I thought you kind of pushing back on >> Well, I look, part of the value of this show is that we can pressure test our thesis. This is what I love about doing this show. It's why I show up day in and day out. And so, what what I do have is a thesis that is bullish ETH. And I have a time horizon that is on the scale of months to years. And so, I absolutely agree that ETH is in a position to capitalize on the large swath of tokenized assets. You have the biggest, the brightest, the most valuable, and the most prolific financial institutions that have ever existed talking about

tokenization. And you just had the former head of digital asset strategy at Black Rockck talking about tokenization and why Ethereum is the home for the tokenized revolution, the tokenization super cycle. So I think that is number one is you have this tokenization super cycle. Number two is the realization that Ethereum is the home and the ultimate landing place for I mean Joseph said it 50 to 70% of tokenized assets, stable coins included. And when you sum up stable coins plus tokenized assets, you do reach uh you do reach trillions of dollars and and more so uh an order of magnitude higher in the likes of 10

to hundreds of trillions of dollars of assets. And so you know first that is the base case is that Ethereum as an ecosystem and as a chain will be the home of 100 or more hundreds of trillions of dollars of assets. That is where I think I agree with Joseph and I think most people in crypto would agree. Now it intuitively says that yes if this thing has hundreds of trillions of dollars of assets you would expect that it would be a valuable thing. there would be, you know, a ticker uh an equity or a share of this network would, you know, essentially appreciate in

value and it would command, you know, significant value uh for a share of that network because it has and it houses uh hundreds of trillions of dollars of assets. That is the disconnect right now and I think that's where the market is a bit confused is how do we get from you know a place where ultimately hundreds of trillions of dollars of assets tokenized but uh ultimately a share of that network is a significant piece of value and right now there's kind of two camps you still have the eth money camp or you have hey the likes of you know this this scale of assets is ultimately going to lead to a lot of uh a lot of activity on the network. People need to own ETH for gas and and to pay for

transactions on the network and ultimately that is going to lead to um a lot of people demanding ETH the asset in order to pay for transactions. There's two problems with that thesis. One is that the the Ethereum ecosystem is is scaling. We're we're decreasing the amount of fees that are charged per transaction. And so we're not going to need as much ether in order to send those transactions on the network. Even if you have hundreds of trillions of dollars of tokenized assets, you're not going to need that much ETH in order to send those transactions. That's problem number one. Problem number two is that the tokenized assets themselves don't necessarily require a lot of

transactions. This is kind of what I was what I was getting at is that you know right now the high frequency of transactions when it comes to tokenized assets it's happening on hyperlquid and it's happening on Salana. I have some qualms about the Salana thesis pier because ultimately I do think Salana is kind of a memecoin place and you don't really have a lot of high frequency tokenized flows for high quality assets happening on Salana but it is certainly happening on hyperlquid and I do think the rise of kind of these alternative trading systems like the New York Stock Exchange the NASDAQ tokenized alternative trading systems will command a lot of value and a lot of volume when it comes to tokenized assets. The problem is that, you know, people look

to Ethereum for finality, right, for these tokenized assets. And even if you have hundreds of trillions of assets on Ethereum, it doesn't necessarily mean that you're going to overcome the scale of of how we're proceeding with this network. We're decreasing the transaction costs. you need an exponentially more amount of transactions in order to burn ETH and and lead to a rise in ETH the asset. The the amount of transactions or excuse me the amount of assets on the network that is one thing but you need transactions on the network not just assets sitting idally on the network in order for uh value to acrue to ETH the asset and I

think that is where I'm still not quite sold. I think there's been companies Etherealize Sharplink Bitmine you know, that have done some data and digging around this. But what I'm really looking for is the math, right? If we have hundreds of the the math is this, right? If we have hundreds of trillions of dollars of assets on Ethereum, how much do how much do we need to turn over those assets in order to lead to a significant amount of transactions on the network at a certain gas price in order to trigger the burn o and overcome the amount of scale that we have on the network. That I think is a very it's not

a very complicated mathematical equation. But if we're going to put aside the ETH is money thesis, which in my opinion, I mean, we've already seen how Bitcoin is money is playing out. We're we're we're using it to play out in a store of value thesis. But I just we're not going to see Bitcoin be used to pay for coffee. We're not going to be seeing ETH used to pay for coffee. I I think we have to put aside that thesis. And I think look, there's an institutional um you know, equity like play here, but I think that is primarily based off revenue. It's not based on you know pure store of value thesis. So I think we have to put that aside. I think we have to focus on Ethereum and the revenue the revenue capabilities here. And I think

it's a very very simple straightforward equation that we should be that we should be doing the math on. It's what how much is going to be tokenized 50 to 70% of that is going to land on Ethereum. How much does that need to turn over in order to lead to uh in in order to have some amount of transactions and what is the gas price as we turn over those assets that all of that leads to the demand side of the equation and then on the other side of the of the equation you have the amount of scale that we're decreasing transaction fees that is what we're seeing play out and I think ultimately we're going to need the amount of

transaction demand and the gas paid by uh the the likes of people trading, holding, securing, custodying the entire economy around tokenized assets. We're going to need to turn over those assets. We can't just have them sitting idally. Otherwise, we're going to have this very very low amount of transaction volume even despite the large amount of assets sitting on the chain. We need to turn over those assets to trigger uh to trigger the burn. and and this is ultimately the the the pickle that I think Ethereum finds itself in. Uh I'd be looking for some math here and shooting for some projections uh when it comes to the pace at which we're going

to scale the network and the pace at which we're going to ramp up the amount of transactions uh via uh the amount of volume and assets that we have uh tokenized onchain. End rant. Uh, we're going to kick it over back to the guys at the tower. I don't think we need a a little standby break, guys. So, just stick here right with us. I'm going to kick it over to Andy and Ryan in the tokenization tower. And I have a feeling they're going to be talking about one of the top performing assets in the world. The thing that is catching a bid, the only thing that's not AI that's catching a bid. We know Andy's loaded up on the treasury

company. We know Ryan and Bitwise have been sending these ETFs higher and higher and we know Jeff is continuing to buy back his own token. Guys, it's none other than Hyperlid live. Uh we've got Ryan Rasm live, head of research at Bitwise in the tokenization tower. Let's kick it over to these guys. Don't go anywhere. You're not going to want to miss this. Hi Going

70 7th floor. All righty, guys. We are here live at the tokenization tower with Ryan Rasmusen, head of research at Bitwise, following the meteoric rise of both the Bitwise and 21 Shares ETF launches of hype, notably other ETF uh products that they have doing a lot of work in the space. Ryan, welcome to the tower. Good to have you on the show again, man.

>> Great to be here again. >> Big week for you guys. >> That's right. Yeah, exciting week. >> Yeah, man. It is. Um, maybe just walk us through like the last week internally what what's been going on. >> Oh, man. Uh, well, so much goes into the leadup to launching one of these ETFs. You're working with regulators, you're working with market makers, you're working out all the operational nuances of of seeding the funds, etc. But really, once it goes live, you see what all that work leads up to. And there's been tremendous uh adoption and response to the launch of these hyperlquid ETFs, right? And of course, the price going up has has a function of to do with that and caused by that. But nonetheless, we're seeing tons of demand obviously for these things. The largest hype ETF in the in the world. So, really excited

about that. >> Yeah, man. I mean, it's it it seems like you guys caught a lot of other issuers asleep at the wheel on this one. Like, what happened there? Was it a regulatory thing? Was it a knowledge of the market thing? Is it just like being in the know? like like why was it just two issuers that that got this done seemingly at the same time and now Gayscale's you know kind of trying to catch up and a couple others usually like the bigger names let's call it Black Rockck or some of these larger ones maybe they wouldn't dip their toes into smaller assets like what what happened here >> yeah I it's a good question there's always trade-offs here in terms of what assets ETF issuers want to focus on right and when you have crypto specialists like Bitwise it's easier to survey the space know which assets have

strong narratives strong fundamentals and that we think are going to be long- term term valuable ETFs to have in the space. Other asset managers maybe don't focus solely on crypto are also using their resources to file ETFs or or build funds in other areas of financial markets. And so from that perspective, I think crypto specialists like Bitwise have an edge. That's why you don't see larger asset managers necessarily dipping their toes here. the regulatory elements of it do play a role but you know you file for these things months and months in advance and then it sets off these sequence of events and and meetings with regulators etc and so it's not like it's you know it's publicly known that there has been filings for these uh and then it all kind of plays out from from there but I think as crypto asset managers and crypto

specialists like we we pay so much attention to what's going on in the market we have 200 people at Bitwise who spend all day every day looking at crypto markets we have onchain solutions public funds etc and we talk to investors and we've seen the demand for Hyperlquid both onchain and from speaking with investors build up for months now and we're really happy to have you know the world's largest Hyperlid ETF now out there staking natively in house and and some other cool features as well that maybe we'll talk about. >> Yeah, I saw that. I saw there's like there's wallet trackers going crazy right now about the purchases of hype and the staking and so we're going to get into that. We're gonna get into the thesis, but I think there's still a bit of confusion on how these things work.

Even just, you know, from the top level with Bitcoin, people kind of assume that the ETF, $1 into the ETF is the equivalent of $1 of buying power on hype, but it's not always that straightforward and simple. Maybe you could just kind of unpack like the the flow here, like like educate us on how the flows work. People come in on their brokerage account, they buy the ETF, they buy is it HY, what's the ticker? >> Bhype. BHP. Yep. >> BHYP. They buy that, right? Let's say they buy 100 grand of that. What happens then in the in the kind of backend to to get that um that cash or that, you know, uh asset into Hype and then staking it?

Like is it just one to one? Walk us through like how these flows kind of work. >> Yeah, so for the most part it's one to one. Now, now when you go into your brokerage account and say you want to buy $100,000 worth of an ETF, you you can be you're buying it on the secondary market, right? Someone else who's looking to sell $100,000 that ETF is selling to you for the most part. And when there's more demand than there is supply or vice versa, that's when you start to get these these market makers involved and these authorized participants who actually go and take in the capital. They go and give it to the ETF issuer. The ETF issuer creates new shares of the ETF to give to the market makers. and they go and sell those on the secondary market. So there is this

kind of sequential process that happens but you can think of it more broadly as a dollar in to a B hype ETF is going to go to buying hyperlquid and then those assets are staked and we stake inhouse uh at Bitwise and you know of course that helps investors realize more of the overall rewards because they're not paying a third party staking provider some fee etc but a dollar in a dollar into hyperl is really the best way to think about it. Okay. And I haven't looked, you know, into the whole prospectus and everything, but is the is the kind of memorandum here that you guys are operating with on a daily basis in terms of like equalizing the ETF, so if you have, you know, however many inflows versus outflows you you guys are

settling at the end of each day to make it kind of even. >> Yeah, exactly. So, so ETFs have intraday liquidity, meaning that they they are trading all day, every day, as opposed to like mutual funds, which uh strike a NAV at the beginning and end of of each day. And so, the thing about this is that our team is working with the market makers and what's called authorized participants and trading desks to facilitate this capital flow all day so that the market price you pay for the the hyperlquid ETF reflects the underlying NAV of the fund. And the NAV is just the net asset value of the underlying hype assets themselves. And that's a flow that's going on all day throughout the trading day. And then of course the end of the day, uh, you strike an end of day nav, which is what

it opens up at the the following day. And you kind of just move throughout the trading week like that. You know, I asked that because hype's been especially strong during the US trading hours as of the last week or so, like especially strong and then kind of like dwindling a bit overnight and then each morning it seems like there's this, you know, persistent flow. >> Yeah. Yeah. So, to get into the thesis a bit, Matt, um, your CIO at Bitwise put out a tweet basically saying that everything clicks for allocators when they understand that the entire MMO of Hyperlid is to make a bunch of money on trading fees, take that 99% of those fees, and go back and buy the underlying, right? And I quote tweeted that yesterday and put out a a clip

about it and was basically saying like the incentives are so aligned here. It's very simple. If you are an ETF issuer, you're your MO is the get AUM. You want to be selling your products to clients and who are going to believe in these products and want to hold these products. Hyperlquid is a very easy sell because of all the features that it has. And so the incentives are aligned for Bitwise to go and kind of talk about Hype to their institutional network because it just makes sense compared to a lot of L1's other assets. Now, we don't need to get into the comparison game here, but talk to us about the appetite for allocators in who have a traditional lens on investing. When they hear about Hyperlid and the, you know,

over a billion dollars or so of of free cash flows each year going back to buy the asset, they hear the story like what is that light bulb moment kind of more in detail look like? >> Yeah. Well, I mean, it really is a light bulb moment. When you think about traditional allocators, you really have to separate Bitcoin from other crypto assets because they understand the narrative for Bitcoin is digital gold. It's this digital store value that serves the same purpose. And and two things are true. One, they've accepted that gold doesn't generate cash flow. And so they don't need to get over this fact that Bitcoin doesn't. They can accept that it's an analogy, a digital version of gold. And two, not allocators allocate to gold. And so naturally, they're not going to allocate to Bitcoin. You just have to accept that

not everyone is going to invest in Bitcoin just like everyone doesn't invest in gold. Now going to the other crypto assets once you get beyond Bitcoin with allocators then they want to know okay if these aren't like digital gold what's the selling proposition what why does it have value right and then you start talking about cash flow and it's been difficult you know particularly in bare markets but for a lot of crypto assets in general it's been difficult to justify the valuation with the level of revenue that they generate right the level of fees that they generate hyperlid it's such an obvious story and these investors tors allocate to stocks. They understand that okay, you want to generate cash flow.

That cash flow crews to shareholders. You explain what happens with hyperlquid, right? Generates fees on all this trading activity. Those fees are used to burn to buy and burn hype tokens. As a hype investor, that feels a lot like a stock buyback. It's just programmatic. And when you stack that up against traditional equities, it's a relatively high buyback, right? It's it's a larger buyback program than most of the companies in the S&P 500. I think the average buyback's something like 2% in the S&P 500 and it's something like 5% when you do the math on hyperlquid at least. So from that perspective, it becomes an easier sell. And our goal is to provide the best menu of investment options for our investors and then help

them through that journey into which products they want to allocate to. And they all have different mandates of what they can, can't invest in, should, shouldn't invest in. they have different uh goals in terms of risk uh risk you know adjusted returns and ratios and things like that and so our goal is to help them on that journey and we think hyperlquid is a uh a really important piece of that broader menu of options for them to choose from. >> Yeah. Yeah. And so then let's get into kind of that conversation. I assume the question is all right bull case bare case what are my tail risks here? What am I what do I need to understand to understand what I'm investing in? Could you maybe just provide us what the what the like the bull case is here? What you see as like the um like the opportunity

and the TAM and then similarly the bare case. What is the risks that you are educating investors on? What are the tail risks? What are the things that they should understand before looking into uh hype as a as an asset? I love that you asked that question because what I feel like a lot of the crypto industry doesn't necessarily accept or crypto natives don't accept is that investors have to look at both the upside and the downside, right? Yes, there's potential for high returns in crypto, but that comes with certain risks. And so, we do educate on both of those things. The way that conversation goes is I think we first zoom out when we talk about what's happening and the long-term trajectory for crypto. You have the largest you have the largest regulators in the world. You have the largest asset managers in the world.

Larry Frink, CEO of the largest asset manager, Paul Atkins, the most important financial regulator in the world. They're saying all assets are going to be on blockchains in the future. And they're not talking about 20 years from now. They're talking about 3 years from now. You see the regulation making its way through the SEC with Project Crypto and other initiatives where they're laying the groundwork. You see asset managers actively tokenizing funds and building out the infrastructure to do that. You see the NASDAQ uh working with Kraken for tokenized stocks. You see the New York Stock Exchange working on their own tokenized stock initiatives. Okay, so the big picture is assets are moving on chain.

>> How big is that market? It's it's literally in the hundreds of trillions, right? So the next question is where are they moving on chain? One of the natural places they're going to go right now that's that is to the most efficient and the best technology. And Hyperlid is is up there with the best of them. They're extremely fast, extremely low cost. They do this this trading extremely well of derivatives and spot. They're rolling out really interesting features, right? Like they just rolled out the ability to to launch permissionless prediction markets. Okay. Well, prediction markets is a huge market that traditional investors are hearing about all the time, every single day. They turn on CNBC. It's sponsored by Khi. They they see a Wall Street Journal piece on

prediction mark on poly market, etc. And so you start to talk about all these mega trends of stable coins, tokenization, prediction markets. You talk about the infrastructure it's going to be on and Hyperlid is just at the top of that conversation every single time and I think that's that's how the educational journey starts and when you paint that picture for them it makes it much easier to make an allocation because you actually have tangible points to reference not only on regulation institutional adoption but on the fees that Hyperlid is already generating before this transition takes place and I think the nail in the coffin there on the on the conversation point with these investors is it's not just crypto assets. Yeah, >> the Wall Street Journal, Bloomberg, other major financial publications are

quoting the price of oil that trades on Hyperlid on the weekends, right? The S&P 500 just licensed its index to trade perpetual futures on Hyperlid that trade 24/7, 365. So, you can actually see this playing out in real time if you're an investor. They're paying attention to so many other things in the world. Our job is to show them this is happening and help them understand how to get exposure to it. >> Okay, so that's super bullish and I, you know, trust me, I've been I was buying hype the first day. I am beyond elated at this conversation. But like what are we missing here? Is there a regulatory risk? Is there a competition risk? Is there a DeFi exploit risk? Is there a security risk? What are what are the

what what does that conversation look like when it comes to Ryan? This sounds amazing. I mean, look, this thing is printing money. It's still kind of under known, underallocated even within the cryptonative landscape. There's a lot of people that are sidelined because they just thought it was another per deck, too expensive, whatever. Let alone the rest of the macro environment, global macro. What am I missing here? Why is this why is this not so obvious? >> So, yes, there are risks and we talk about those and you brought up some really, really good ones that investors should know about and that we educate on. Regulatory risk continues to be one of the larger risks facing cris crypto.

It's been derisked significantly with the current administration, but there's reasons that the Clarity Act are so important. For instance, and why we need the SEC to finalize its Project Crypto agenda and push those things through is because you need this stuff set in stone in order for the next administration to not come and easily reverse it. or you need it set in stone so that traditional institutions actually feel comfortable allocating billions of dollars, investing tens or hundreds of millions of dollars in this infrastructure for the long term. You've already started to see this play out. For instance, with stable coins post Genius Act, we've seen so many traditional institutions start investing a lot of money in stable coins, right? You've seen SoFi just uh

launched a stable coin for its I think 15 million uh users of its app, right? And you've seen time and time again developments in the stable coin front. Mastercard spending over a billion dollars, Stripe spending over a billion dollars on stable coin infrastructure acquisitions. They only did that after the Genius Act passed because they were comfortable that there is now legislation in place that's not just easy for the next administration to reverse with an executive order for uh you know a new SEC to come in reverse. Okay. So when it comes to Hyperlid, the natural question is are assets going to move onchain? Are traditional institutions actually going to be interacting with these blockchains? and how are they going to do it? And what's the DeFi privacy issue looking like?

What about KYC, AML? There's all these questions. And so, you need legislation in place in order for these institutions to feel comfortable knowing the rules of the road and to actually invest and move take these steps forward. So, the regulatory risk is there, but we need to get legislation in place to derisk it even further. That's like the first risk out there. And I don't think that the Clarity Act, if it doesn't pass in the next seven weeks or eight weeks before the summer recess, that's not the end all beall, right? There will be chances to pass in the future, but we really would love to see it pass of course uh in the next two months before the midterms, before the summer recess.

Okay. Another risk, you mentioned this as well, there's smart contract risk, right? There is technical risk associated with moving your business onto this new technology, right? These blockchains, they ask about quantum risk when we talk about investors or we talk to institutions about moving on chain, right? Those are real risks too and so we help them understand those risks and and then there is competition risk. I mean you you said that as well and I think that's very very true right we've seen time and time again new L1s disrupt the existing L1 space >> especially in perexes >> especially in perex >> consistent iteration >> right people are talking about already that oh there's hyperlquid uh uh disruptors right lighter etc and so >> you saw Salana disrupt Ethereum you've seen hyperl kind of disrupt Salana right

and so there's some competition risk now this is why when we talk to investors we talk a lot about position sizing right don't put all their eggs in one basket. Most traditional investors wouldn't do that in the equities world. They wouldn't do that in the alternative assets world and so they shouldn't do that in the crypto world. We're big fans at Bitwise of indexing or buying a basket of crypto assets to play a specific theme. So, okay, you want to invest in the growth of stable coins. You want to invest in tokenization, every asset in the world being tokenized. You should buy a a basket that represents that theme. And we're happy to help them build those assets or run model portfolios for them. We have index funds as well that do that for them. But a lot of investors want to take those positions and add satellite

uh positions on top of that. Maybe they're maybe they want broad exposure, but they want to be oversized or uh overweight hyperlquids. Then they'll add a hyperlquid ETF on top of that. And we help mold the way they're thinking about and you know educate on the way they're thinking about how to build a comprehensive crypto portfolio. So, it's risks, it's rewards, it's about having broad exposure, but also making sure you're exposed to the right themes and that you're going about it in a smart way. >> Amazing. So, just this week, we saw the Hyperlquid Strategies Treasury Company, Ticker Purr, came out and announced that they had like a weekly update on their financials. They sold about $120 million of of their or they issued about $120

million of of their of their own stock. Sold it uh raised a bunch of cash off that I think $40 million of cash. Bought uh about a1 million hype, I believe, in the last week or so. And so they raised their cash uh by about 40 million. It's about 150 million of cash now. And uh they have I think 22 23 million hype under uh this this treasury company one of the only treasury companies in the entire market that is like timed things somewhat well and also picked the right asset. Um when it comes to the growth of the treasury companies in Hyperlid specifically with PER how does how does PER affect the investment thesis for

Hyperlid as an asset? Uh obviously they're just trying to continue to accumulate this thing. They're they're sitting at about 1.19x uh MNAV. So they are able to continue to hit that ATM to buy more hype. Um in in your mind, is this kind of like negligible? Is it is it important? How do you think about uh hype liquid strategies contributing to continued growth of hype? >> Yes. Well, love the ticker by the way. It's just it's just a fun sounding ticker. Uh it's not it's not negligible. It is important I think on for for one it's a simple supply and demand story right you have more demand coming into an asset than there is new supply or supply issuance then you're going to drive price up that's just simple

economics and so when you have the ETFs buying hype on the open market when you have the hyperlquid systematically buying hype on the open market and burning it via the fees generated from using the platform and when then you have companies like hyperlquid strategies raising cash and using that to buy hype on the open market. All of those things are the demand side of the equation. And when you stack those up against supply, that's when you can start to realize, okay, where's this thing going? And you can explain why the price has done so well over the past week, right? Beyond demand on hype itself, I think it's really important to have these companies in these spaces, whether it's, you know, Bitmine and Ethereum or whether it's Hyperlquid Strategies and Hyperlid that are

building around the space, right? or or or uh you just had um Joe Schlom on, right? And they're also doing the same thing for >> championing the >> you're championing adoption. You're investing in the infrastructure around the space. You're using the protocols, right? Like you're using DeFi, you're helping to uh boost liquidity and boost the brand name around these things and you're buying the asset and you're holding it or you're staking it, etc. Like those are all important things. It also provides investors who maybe have mandates to only invest in public equities. It provides them a way to gain exposure to these new technologies and these cryptonnative systems through public equities. Right? So we work with for instance endowments, foundations, etc. Some endowments or some foundations

have mandates that they cannot invest in commodities. They simply cannot invest in commodities or single asset commodities, right? They can't buy a gold ETF. They can't buy a Bitcoin ETF. They can't buy a hyperlquid ETF. They certainly can't invest in crypto assets directly because of operational nuances, etc. But what they can do because they're allow they their policies enable them to uh invest in public equities and because operationally they're set up to invest in public equities, they can go buy a hyperlquid strategies company, right? And they can have that exposure and then any alpha hyperlquid strategies can generate on top of the underlying price exposure to hyperlquid is a plus for those investors, right? And so I think it's really important to have these companies in the ecosystem bringing awareness, bringing demand and

and bringing liquidity into into the ecosystems. And so I love to see what Hyperlid Strategies uh is doing. And if I had to guess, we're going to see more Hyperlid DATs pop up. >> Amazing. And and I agree. I mean, they've executed quite well from a top down perspective. Have done well. I've, you know, a goodiz bag in perb and been very very bullish on shams. I always have to do a disclosure here. Um and and so when we're thinking about um some some of the circumstances of events that have happened and kind of like the order, one of the things that happened like about a month ago was this Circle Coinbase USDC deal with Hyperlquid, which is another demand driver that that we haven't quite touched on yet. One of the things that we heard from uh the leading liquid staking provider kinetic

on the on the uh hyper core and hyperbm team was hyperlquid does not pay for anything externally market makers they don't pay for integrations they don't pay for all any of the stuff that a typical kind of L1 would and in some sense has slowed them down they've you know it's been harder to to do certain things it's been harder to get certain things done but they have these different teams now the trade XYZ team has kind of came in as its own external team but part of the team Jake Travinsky in DC has now kind of stepped into his own kind of team and so you got all these little like teams within the team but of course you know the claim to flame or the claim to fame is like 11 12 people on the team. Now, with that being said, this Coinbase and Circle deal was

specifically unique because in most cases, Circle and Coinbase like to strike deals where the revenue split is heavily favored to them for the liquidity, for the native issuance, for all the Lindy effect that these companies bring. In Hyperl's case is actually quite the opposite. most of the revenue I think to the extent of like 90 something plus percent of the USDC that is about 5 and a half billion now I think on hyperlquid on hyper core will actually be given to the assistance fund and use for buybacks how how did this specific event >> change your view on the regulatory uh risk on the revenue risk on kind of hypo liquid's dominance what did you think

after this happened >> there are certain moments in a a journey of let's just call it even though it's not a company because it's an easy uh you know it's an easy mental model to use there's certain elements or certain events that happen where you're like oh okay this is like it's happening now like this is a step change in how their business operates they've shown that they are powerful in this ecosystem that their brand name holds a lot of value and I think this was a moment where you saw that happen I mean I think you're absolutely right typically you don't see these types of deals where the the issuers whether it's circle or coinbase whether it's distributor have less econ economic uh uh capture of the deal, right? But in Hyperlid's case, to your point, this just grew their revenue significantly, but I think it also

bolsters adoption of USDC, right? And that's why you would see Coinbase, who has incentive to do that, and Circle, who has incentive to do that, want to do this deal, right? They want to grow USDC into the world's largest regulated stable coin. And if you're looking at ecosystems like Hyperlid where tons of trading activity is happening whether it's per now spot prediction markets are headed that way it makes sense to want to make your stable coin the staple of that ecosystem right if they could have gone back in time and done that for Salana they would have done that right and so I think that's the reason why they would do something like this overall it's going to drive a lot of demand into the USDC stable coin that will grow over time more liquidity uh more dominance across different blockchains more supply more revenue etc

ETA and so it makes sense for them to do it. It's a great boost for Hyperlid, right? And and I think when you think about to your point of regulation, like where is this thing headed? The ability for Hyperlid to say, "Look, we have the world's largest regulated onshore US-based stable coin uh as like our, you know, preferred partner, if you will, uh, for lack of a better term, and it's dominating what the stable coin usage is on top of this platform." That's a great point to make to regulators when you're working with them, uh, or or or showing them what your business looks like. So, it's a win-win in my opinion. Of course, it's a win for Hyperloop, but I think it's a win for Coinbase and Circle as well.

>> Yeah. Yeah. Well, I think it contributes to this vision of being kind of like this house of all finance and being able to have that regulatory, you know, arm, right, with with these two players. It brings a lot of a lot of firepower in DC and also a lot of credibility and legitimacy and then perhaps up to the tune of 125 $150 million of annualized revenue from the treasury bills underlying the USDC on the blockchain. You know that is rate dependent but you know that is another another boost to the assistance fund. when when you're looking at like the TAM here, right?

People often compare Hyperlquid to Binance, Bybit, some of these other exchanges, but then you've got like the larger view of the NYC, the CME, uh NASDAQ, and these guys are not going to go down easy, and they're not friendly opponents right? >> Talk to us about how you see Hyperlid's progression from like a crypto exchange to comparing to Binance. I think they hit like 17 18% of OI on Hyperlid comparatively to Binance I believe. Don't quote me, but like we're we're taking a much bigger swing here. Those guys aren't going to back down easy.

What is your mental model for maybe how that could play out, what that comparable looks like and that evolution? >> Uh yeah. So, so I think that the the TAM of what crypto is going after is insanely massive. It's literally measured in the tens of trillions, if not larger. And I think the the surface area that crypto is scratched is tiny, right? So overall the market for for that these these markets are going off to is huge. The penetration of those markets is minimal. It's going to grow significantly over time. So it's important definitely to look at hyperlquid share within what we already have as as the per market, right? And you you referenced the stat against Binance in terms of OI and I think that's the right number uh as well, right? And that's impressive because it's a relatively new system. Binance

has been around for a very long time and it's starting to build and hit all-time highs once over and over and over again in terms of its share of that per market, but Hyperlid's also growing its spot volume business, right? It's it's getting into prediction markets. It's probably going to launch other products, right? We're only at HIP 4. Who knows what HIP 5, Hip 6, HI 7, HIP 20 brings, right? All of these things will help them address these other huge markets that crypto in general is going after. The reason why I think it's important to think about the overall size of the market that crypto is going after is because you will see crypto's share of the market grow and then hyperlquid share within the the breakdown against Binance or other other firms also grow and I think that's net positive for Hyperlid. Look, we're so early in in the

journey of these things. There's a reason that you can have an ecosystem like Hyperlquid, which is relatively new compared to other blockchains and other L1s, do so well and grow into the 10th largest crypto asset in a matter of years cuz this is just such an early space. It's really hard to look 20 years out and say who the winners and who the losers are going to be. It's easy to say, I think this company's going to be or I think this ecosystem is going to be a winner. But what we tell investors is that having broad exposure to the space is a safer bet than choosing individual winners or losers. And that is true if you would have gone back and invested in the internet in the late 90s, early 2000s, right? Do you want Google or do you want Pets.com? You probably could

have just bought a basket and had both and you would have done just fine. >> Yeah. Um, one of the questions that gets kind of thrown around with regards to uh this point here is what is the actual market cap of hype? And there's like conflating numbers. If you look at coin coin gecko or if you ask somebody else when your investors are looking at the PTE ratio of this thing I think it maybe is around 50 you could say right now depending on the numbers what what is the like like what market cap numbers do you guys go off of or like what is the because there's this kind of issue right for the audience where there's these unlocks but effectively the unlocks are uh only to the team because there's no

uh VCs and so we kind of have this trust in the team that they're not going to unload on the market. And so, and then you've got the assistance fund, which is also like there's no rules around what can be done with that, but it's it's almost like Satoshi's wallet where it's never been touched and it will just only been added to and never been withdrawn from. What is the right way to think about the the market cap structure from a circulating market cap and an FTV market cap for hyperlquid? How do you explain this like situation to your investors? >> Yeah. So, so the things you noted are are really good things when you talk about risks as opposed to your bullcase and things that you use to level out your bulk. So, I think it's important to think about these things. To be

completely honest, people who are buying the hyperlid ETF, if you're if you're a financial adviser or you're an investor that that spends most of their time in TRDF, you're not thinking about these these differences between like like FD and float adjusted market cap, etc. Like, they're just not there yet. They're not calculating PES on Hyperlid. They see this thing that is hitting escape velocity. Of course, price help leads helps lead the narrative and they want to have some exposure to these mega trends of stable coins, tokenization, prediction markets, etc. They're not really that focused on pees today, right? They think, okay, these are huge markets that are going to grow over the next decade. Let me invest in them now like early stage tech, right? Rather than uh, you know, trying to figure out where does it fit, you know, amongst

like the PE of the other companies in the S&P 500. So they're like somewhat somewhat price insensitive investors at this current point. >> Yeah. I mean institutional investors for the most part are long-term oriented and they're systematic, right? They're they're of course those that are trying to trade in and out of these markets and stuff. When they think about making crypto allocations, they really are betting on crypto as a theme, crypto as a trend. It's a small portion of their portfolio. They don't really have time to get into the nuances of like FTV versus like circulating supply and unlocks. It's just not something to think about. Their thought process is am I hearing that every asset in the world is going to be tokenized? Am I hearing that the Wall Street Journal and Bloomberg is quoting the price of oil and that the S&P 500 just licensed index

for Hyperl etc. Yes. Okay, great. Where is that all happening? Oh, it's happening on Hyperlid right now. Great. I should probably have some exposure to that in case these things are true. I should minimize the impact of my portfolio if they're not true. And that's why they balance their their position sizing and it's not 50% of their portfolio. It's not 20% of their portfolio. In most cases when we talk to investors crypto is anywhere from 2 to 5% of their portfolio and they split that across many different crypto assets. Now, of course, there are investors, uh, financial advisors, wealthers who have zero crypto, and there are some that have 10 or 15 or 20% crypto, but most of it balances in like the 2 to 5% range, and it's split across several different crypto assets, and they just want broad exposure to these mega trends, and Hyperlid is one of the

things that gives them broad exposure, but there are many other things as well. >> That is extremely extremely bullish. That is extremely bullish. So just to kind of close this out here, I is your is your take here that then hype as an asset continues to be undervalued currently and that there's a price appreciation that is, you know, yet to be had directionally like how do you how do you reconcile all of this into a directional thesis? >> Yeah. So, there's a lot of crypto assets out there, and for most of crypto's history, it's been difficult to align the the growth of this ecosystem with the value that's passed on to token holders. Hyperlid is one of those new newer crypto assets in this kind of

postgender, post Biden regulatory world that's figured out how to do that in a remarkable way. So yes, do I think if we're correct that every asset in the world is going to be tokenized that stable coins are going to go to three five plus trillion dollars in the next five years. Uh if you think that capital markets in general are going to be riskone, then yes, I think there's room for hyperlquid to grow its share of the market's going to grow and the market in total is going to grow. Those are both kind of bullish tailwinds, right? We believe the regulatory environment is going to be more supportive of crypto than less supportive of crypto going forward. That bodess well for Hyperlid and other crypto assets. Yes. incumbents are going to fight it. But I think that happens with all new technologies. And when you have an innovative technology

like crypto, like blockchains, like hyperlquid, those fight through those break through kind of the walls that incumbents and regulators put up. We've seen it happen time and time again. It's not new to crypto. It's not going to stop crypto. And so I think that escape velocity to us is going to happen. And just making sure that you have exposure to these mega trends is what we tell investors that they want to have because you don't want everyone to have been saying that these things are going to happen and then have to look your client in the eye 5 years from now when stable coins are 5 trillion or when you know tokenized assets are 10 trillion and say oh yeah I heard about that but I decided I didn't want to have exposure to that.

>> Yeah. Wow. I mean guys I mean we have some of the largest allocators in the world uh buying buying what we've been preaching for over a year here. Ryan, thank you for your time. Thanks for joining us. Uh, congratulations on the successful launch. >> Yep. Great to be here in the tokenization tower. We'd love to come back sometime. >> Thanks to Bitwise, thanks to 21 Shares for bringing this asset into the institutional allocator's hands. That wraps up our show for today, ladies and gentlemen. It is May 28th. You're watching the rollup live from the financial capital of the world. Tomorrow we will be back at 12:30 p.m. Eastern per usual with a lot for you. See you guys then and thanks for joining us.