MetaDAO, ICOs, SOL ETFs, AND MORE

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All right, good morning. Good morning. Welcome back. Welcome back. Another Zerx Research live stream joined today. No, Bacio. Bacio's out. He's off somewhere in the ocean enjoying himself, maybe getting lost at sea. Instead, we've got Carlos. um a leg something of a legend this week I will say from the research team uh joining us and Kunal as well although interestingly Kunal I think your Twitter Twitter is actually Kunal legend so maybe I shouldn't have used the word legend how we doing today guys >> all good >> doing good I guess um I mean kicking things off the the the market's hot um

Bitcoin is kind of testing all-time highs again um feel like we're like re we're repeating um you know if you look back a month or a month and a half ago it was like we were we were playing this game and and things were pumping um although maybe separate from from Bitcoin and crypto like the broader market has kind of just been continuing its grind up um some of that seems to be like Trump Trump admin related you know taking stakes in different companies um the AI investment cycle has sort of continued we've seen big raises and like co-investment and like different equity stakes and partnership deals and a little bit of debt debt financing like kind of continuing that trend. But um that's been kind of non-stop. Uh in

crypto, Bitcoin I feel like the past few months has been a bit more sideways but broadly up like it's still, you know, significantly up on the year. Um and up over the past several months um but we've just kind of we've been hitting like this mid120s mark and then sitting in this range. So, um I don't know. What do you guys think? Are we are we primed for, you know, stepping up to to new highs or, you know, this is just another another test and we'll maybe hang out again for a month or two?

>> Yeah, I think um it's been it's been a great start to Q4 obviously. Um like last week we saw equities closed uh at all-time highs like just investors are shrugging off. the US government shutdown. Uh mainly tech stocks have been pushing up the market. Um I think you're right like Bitcoin has been lagging gold specifically over the past month. Uh but it's now above 125k um touching all-time highs and we have some notable outperformers in the past week. Uh, I think everyone saw Ccash like just ripping and I don't know like for those who have been like more than

one cycle like maybe some PTSD because usually when Ccash bombs it's usually a sign that things are a little bit frothy. Um we also saw other notable upperformers that I think we'll discuss like uh Metadow uh and definitely some notable strength in um BMBB uh and BMBB related coins. So yeah, I think the market is a bit hot. Uh but I think I'm constructive uh going into Q4.

>> Yeah. So same for me. I think like one of our colleague Mark shared the analysis, right? So when gold tops usually there's a lag effect after which we see BDC as well hit all like new all-time highs. So again he perfectly nailed that and that's exactly what we're seeing. So like the past few weeks it was a lot of sideways action but now we're finally seeing that surge in Bitcoin again. So that's definitely a good sign for the markets. I do think we could see some momentum going forward. But I think at the same time as well there's a bunch of assets that continue to underperform. Like it's always good to like what I like to do is have a pair trade on. There's really a lot of these assets that you know you could say like Bitcoin L2s or these new like you know

restaking Bitcoin restaking protocols that I feel like are great shots to the Bitcoin trade and that has worked pretty good for me. So I think that kind of helps. You never know when's the next sideways action but it's always good to you know hedge some of that exposure. I like that. Good bit of a good bit of optimism it sounds like broadly. Um I do think at least within within crypto and this is something we've continued to see and maybe this is just more naturally kind of how most of the industry tends to be but um definitely like narrative cyclicality um continues to dominate outside of the few you know you have like the few outperformers that have consistently you know growing revenues and um I guess if if you're thinking

about like maybe hype or some other examples like that where revenues are growing they're shipping it all into the token for the most part and it continues to grind up and to the Um, outside of that, it seems like we we're continuing to kind of trade through our different different narratives and cyclical attention on things. But, um, that's okay. Bitcoin Bitcoin's doing its thing. You know, you got a few key outperformers that kind of month over month look really good. Um, and I think probably a lot of the market and maybe a lot of us even here at Blockworks, um, you know, we actually have fun trading some of the the silly narratives, too. So, that's okay.

There's a little bit for everybody um, right now, which is good. And we're seeing more protocols. You know, I think more and more we're seeing protocols, and this is something Meipo said actually in a tweet last week, uh, are starting to look a little bit more like companies as time goes on. Um, and so probably more and more over time that I think the expectation will be that we'll kind of gradually at least get a little bit more away from pure narrative activity and more towards this is this thing has a sustainable business model. It makes money. It should be worth XYZ for various reasons. trends up and to the right as revenues trend up to the right. Things along those lines. Um before we get into the main topics for today, I just got to do a few quick shout outs. Um one, Dash London is

literally next week, the 13th through the 15th. Yeah, next Monday through Wednesday. Uh I know next Tuesday we Bacio himself will be there live at DS doing a live Xerox research live stream um with a few panelists from the event. um probably some big names that you know from key protocols, but it's our biggest it's Blockwork's biggest institutional event. A lot of speakers um from representing like you know a ton of protocols, a ton of tread businesses from around the world. So if you want to get your tickets um and you can make it out there next week, 0x100, you'll get 100 pounds off and a couple of the guys from the team will see you there next week. We would love to have you there.

Um so get your tickets kind of kind of your last chance. This is your last week. Um, I mean, you need to get a flight if you're not already out in, you know, the UK or over in Europe. Um, so get your tickets 100 pounds off and we will see you there. Pacio will see you there in person. Um, outside of that, we are still hiring. Um, it's crazy. I know we've actually expanded this team. Kunal is one of our more recent additions to the research team. Um, the data team, all the teams have been adding, but we are still hiring, looking for research data analysts. So, um, if you live in SQL, you love onchain data, um, you love, you know, digging into trends, figuring out what's going on in crypto, um, definitely apply, check links in the

show notes, um, let us know. We'd love to hear from you. We've been, uh, on the hunt for great candidates and great additions to the Blockworks team. So, reach out and I'm sure if you have the that dog in you, you know, maybe one of the teams will find a fit for you. Um, but let's finally get into it. That was enough chilling and ranting from me. Um, I guess one of the big topics and I think let's let's kick it off. Carlos, you dropped a report to last month, a couple weeks ago, uh, on Metadal. I think you came on the pod also as well, um, and talked about it maybe while I was out that week, um, and laid out your thesis there. I know Ryan Connor was raving on the timeline saying uh Carlos bear case was a 150% move to the upside

from when it was trading at like 150 or so I want to say um that has actually played out. We're looking maybe more at that base case. I know that was like a one-year forward looking time frame. So I don't know that you were expecting it to happen in one week um but it did. So I don't know. Let's let's recap metad like thoughts um on like what's playing out now um kind of the fresh the fresh attention on it why such a strong like kind of upward repricing um you know even in your bare case I can pull up I can pull up a chart that you have but yeah walk us back through that like what do you think now any changes to your thought process and uh how you think going forward on it? Yeah. So, basically when I released the report, I knew it

was in anticipation of the Umbra ICO. So, I knew it was kind of like a good timing, but I got very lucky in the sense that I I did not think like everyone was going to start to pay attention to it and it was going to rally like 300% uh in the past week. Like, that's just been uh pretty insane price action. Um I do think that Metadow is misunderstood by many in the market still. Um I think it has a very sorry a very unique value proposition and differentiates from current ICO solutions in the market. So if you think about the current ICO landscape, you think you have like two different kinds

of things, right? You have like believe and bonding curves like believe which are like early stage startups but you have very high adverse selection because tokens there are structured as meme coins. So essentially token holders don't have any financial upside um or like yeah or or token holder rights uh as it comes to like the project success. So it's likely that founders launching there know this and you're just being like rock basically.

Um on the other hand you have things like sonar uh metaple genesis kaidos capital launchpad where adverse selection is lower but usually you have races that are post race meaning like projects launching there have already raised uh seed from investors they are probably launching at five or six figure uh valuations and so it's probably easier to invest at this stage but again it's it's a lot more It's a lot more expensive, let's just say. Whereas Metad allows you to fund like preede startups and like reduce this adverse selection issue by um allowing the founders to

send a credible signal to the market around enforcable token holder rights. And they do this with two mechanisms which is uh first funds are sent to a treasury which technically is just a smart account on squads and that is controlled by future key. So if a founder wanted to rogue and take all the money well they can't because they just have a monthly burn rate that they can spend. And if they want to increase their burn rate or increase like their uh limit by one month, let's just say they have to raise a future key proposal and that has to be traded on conditional markets which is what's happening today

with omnip for instance. Um and yeah so and and the other thing is that uh the IP of the project so social media the branding etc are given to a legal entity that is also controlled by future key so holders have legal recourse in case the team misappropriates revenues and whatnot um so that's basically like the whole thesis like unrogable ICOs and um internet capital markets asset it was envisioned and I think like it hasn't played out still but people are paying attention to the model more and I think like with the

Umbra ICO it's evident that the narrative is quite hot like it's been live for like two hours and they have already pulled like $4 million in capital which is four times what Omnipar ICO pulled in a 7-day window. So yeah uh that those are like kind of my thoughts uh for now. >> Gotcha. I want to talk I think we should talk about these ICO platforms more broadly. There's definitely been like a kind of continued uptrend there especially like we had sort of the launchpad narrative. Um, and that's resulted in now I think a shift more towards, you know, believe was maybe a start there where we got into this ICM

narrative a little bit. Um, have a have a launchpad specifically for actual like maybe protocol or tech based um, tokens to support a company or a business. Um, now you've got I guess Metadau is one and you just kind of went over that model a little bit. There's Metiplex, there's Kaido. Um, there's probably even a few more outside of those. Um, and Messi in the chat is actually mentioning these as well. Um, saying Kaido needs KYC Metaplex is hard to contact and get listed. Be that as it may, um, seeing all these platforms um, now with like a good good number, good volume of like consistent ICOs rolling through. Um, and

I guess I would wonder to both of you both of you, I know Canal, we had you on, you talked about Kaido a little bit, um, and the model there, at least as it relates to maybe the Kaido token and and that valuation. Um, I don't know, what do we think about these different platforms? Like how meaningful are the design of the sales? Do we have like a particular lean one way or the other? like, you know, am I more interested in Kaido because, you know, if I'm participating in the sales or maybe I just think that like ICOs are back, I can hold the Kaido token and if people are contributing to these things, it, you know, it's earning incremental revenue. Um, what do you think?

Broadstrokes on these competing platforms. >> Yeah, my take would actually be a little different. I feel like the mechanism doesn't matter as much but what more matters is the quality of projects launching and the number of success stories you get from the launch back right because I feel the narrative will follow that like the moment you have a few big raises on the launch pad these raises do well then everyone's going to be like hey yeah Kaido is the best place to launch because you know look at the historical data so I I feel like actually the mechanism doesn't matter as much yes the fut futaki way is is good to have But at the end of the day, it's just quality, right? So, I mean, I can speak for Kaiito. Like, if you look at its last launch, Limitless was I think

200 times overs subscribed just cuz it gave like, you know, users exposed to the prediction market meta. It was a pretty solid project as well. And the more important thing for me is like how does the value from the launchpads tie to like the native token of that platform or protocol. And in this case like the interesting mechanis mechanism for kao is two angles. So firstly like I mentioned the last time as well 2.5% of the raise amount you know goes to stakers and you it's almost like a call option right. So if the project does very well after launching then you get more than 2.5% right because in dollar amounts that is increased. So just by staking Kaiito, you can benefit from

every single raise that happens on the launchpad. And if they succeed, you do you eat better as a staker. And the other more interesting angle is now I'm seeing it play out where basically for these capital launchpads on Kaio, if you hold the Yappy Barara NFT or you stake an X amount of I of Kai, you pretty much get like 30% of the raise amount at least is reserved for the Kaito community. So it's more like a token gated access, right? If you you're part of the community, you get better allocation and you just need one good allocation and pretty much you'll make all like the amount you stake and the NFTs you hold, right? So access control like access to these deals will be very

lucrative moving forward. So I think more important for me is I'm always looking at how does value flow back to the native token and in this case I feel like Kaido is slightly better. Yeah, I like I like that angle. I think Metad has a completely different approach uh in regards to monetization. I can speak about that. So after the Ombra ICO uh ends, uh Metad will release a futur AMM uh where 2 million tokens uh raised in the Ombra ICO will be sent and paired with 20% of the funds raised in the ICO to provide initial liquidity uh for

Ombra. So every ICO that takes place in metad from now on will go to that new future key AMM to be prov to provide the initial liquidity and be traded there instead of radium which is the uh AMM that's used uh for previous ICOs. Uh this AMM will charge 25 bips. So it basically means that Metadow will now uh earn revenue based on the traded volume of new ICO coins and based on some projections that I have I think this can be a very constructive uh business model and very attractive for for Metad like just assuming they have two ICOs each

month uh one year forward looking they could have upwards of $130 million in annualized volume which would translate to around like $5 million in in annualized revenue. I mean, if they have more ICOs, like if Metadow becomes the place where quality founders go and raise money by sending a credible signal to Marcus that they are here to build, then I think you could see more than two ICOs per month. If you see let's say five ICOs each month like that figure rises significantly and you can see upwards of $10 million in analyze revenue for Metadow which I think um is like quite an attractive figure for like

an upand cominging project and could justify the valuation it has today. >> Yeah. Actually, a quick add-on to that and why I think this is so relevant now is, you know, with Bitcoin hitting like new all-time highs and we're pretty much bullish for Q4, this is almost the ideal time for a lot of these projects to launch their token or start raising. So, I think we're going to see like a ramp up of like TGES and new like raises happening. So, that's when you ask, okay, like how do I position for this? Like obviously, you can't ape into every single like launch out there, right? So you know instead of playing the new launches it's also beneficial to play the different launch pads. So I think here Kao uh Metad Metapplex will stand

to benefit of this trend of like increasing number of launches. >> Yeah, I would agree with that. I do think um the sort of like token gated access launchpad style this this was something that was very popular and reflexive um back in 2021 if you guys recall. I mean there were like every chain had one or two one or two launchpads and back then they were far more simple right it was like probably you know they weren't quite permissionless um in some cases but they were nearly permissionless now obviously there weren't you know there weren't 10 or 20,000 token launches a day but um you had a lot of these you know stake 10,000 tokens to get access to the the

pre-sale for this ICO that's then going to launch the next week and um when markets were going straight up. Um, a lot of those launchpad coins and then a lot of the sales that that funneled through them um did pretty well. I will say like, you know, if you're bullish Q4, if you think markets are going to rip, if you think participants are excited to get access to these sales, then um that would put pressure on, you know, potentially those platforms and then therefore those assets. But I do it also presents like reflexivity to the downside when like you know if if we're talking about ICO mania now if if that kind of dissipates a little bit going into if it's next year or you know the next couple of months um you could see that weigh down on it a little bit. Um that's maybe where I would see some some

kind of uh upside here for if it's Metadau or Metapplex even if they don't have that token gated model. Um you know maybe maybe don't pump as hard off of just access to the ICOs today. um but maybe you're not at risk of uh maybe a stronger pullback if enthusiasm for these sales um trends off a little bit but if the revenues are tied to you know the trading on these markets as well then you know it's kind of all interlin in a way so it might be a bit of a moot point but this is something we have seen before >> yeah I I think I I really don't like the token gated thing I think it's a better product to just be permissionless doesn't allow anyone to contribute to

the ICO. Like I imagine there are going to be higher quality investors that maybe they want to invest in a specific ICO but they don't want to hold Kaido. Uh so they like in that case they can't contribute to the ICO because they need to buy Kaido to to contribute to it which doesn't make a lot of sense to me. I think that's not an ideal product. Like I know that like as Kyle Samani would say reasoning by analogy leads to the wrong conclusion but imagine like you had like to buy an iPhone you had to buy an Apple shirt like first like it it doesn't make a lot of sense to me. I think it's better to have like permissionless access and allow anyone to contribute to the ICO and just

optimize the ICO for higher quality investors because like you you do want to like optimize for good founders and good projects but you also want to optimize for higher quality investors. Uh I think both sides of the equation are important. Uh and I think like yeah I I don't think a token gated access uh is the optimal design. >> Yeah. And I I maybe there's a distinction to be had here in the conversation in that um across these platforms you probably have varying degrees of maturity in the protocols.

And so, you know, perhaps some of these metad protocols that are raising are a bit earlier in their life cycle. You know, I mean, the raise amounts are a bit smaller, right? I think the min amount for Umbra was, you know, 750K that they wanted to raise. I think they've well exceeded that, but regardless, it's it's a bit different than like raising at say 300 or 400 or$500 million valuation um for some amount of the token supply. Um, and so in that scenario, you know, I think you said this to me in a in a DM the other day, Carlos, but it's it's like a bit more like venture investing.

And so you don't I don't know that you necessarily want like all of retail to be filming at the mouth, like let's token gate the access and like get people really excited for like a pump at launch when the goal is just to raise capital to then like maybe go and build or incrementally build a product from there. Um, versus maybe other platforms are optimizing for this is a product that's live, it's got PMF. Um, you know, we know it's going to be overs subscribed. Um, so maybe actually tokenating it makes sense because the demand is going to be so overwhelming anyway that, you know, if you just prored it, you know, it'll be like Robin Hood IPOs where everyone just gets one share or something along those lines.

>> Yeah. No, that's >> along Yeah. along the same point as well, Danny. And yeah, Carlos, like I agree with what you mentioned as well. So, I think how Kito tries to do it is they balance it somewhat. So at least 30% is for the community, but 70% is still reserved for like the overall market, right? Like whoever you know enters the round, yeah, there's still almost 70% allocation for you to get access to. And yeah, I think Danny mentioned a good point, right? So if it's a really hot race, what happens is it's going to be like multiples over subbed. And the main issue there is then how do you allocate to to people, right?

And you know, CT, no matter what you do, people are going to be upset. So that's the that's the truth of it. But then why not drive value back to your community, right? At least a portion of it. Like given that the sale is happening on your platform, shouldn't your community members who have been supporting you for an X amount of time also stand to benefit from this? But you're right that what does that does create like periods where they could be people like buying Kaiito just to stake in it, get access and after that dump it. So you know there needs to be some balance there. Well maybe like they give like higher priority to those who stake for a longer period of time or those who don't sell Kai after these sales happen. So definitely the design mechanics still need to be worked out and melted.

>> Yeah. And I and I guess that's another consideration when we compare to like IPO markets where typically you have flipping policies on these platforms. So, like if you use Fidelity or if you use Robin Hood or pick pick your other favorite brokerage that offers IPO access, like you know, they'll have a 15-day or a 30-day rule where if you participate in the IPO and then you sell within that time period, they maybe they ban you for the next 90 days from participating in new IPOs. We don't really have that in crypto, right? Most of this is permissionless. So, it's like, you know, you a lot of these platforms, you could be participating in all of these sales, buying, you know, buying the sale and then dumping it immediately after it lists. Um, so that that might be it might be harder to implement, but that might be something

to experiment with as well because I don't I don't know that that's really been implemented at scale in any in any system like this. >> Actually, Carlos as well curious to hear your views on like Metadau's unregulable ICOs. Like the way I see it then isn't the incentive for anyone just to like ape into these ICOs like how like Umbra is seen crazy demand but yeah wouldn't the gold would then just you know commit as much as you can cuz even if you get alo worst case you know the downside is kind of kept given it's like a gold based system right so if the goals are not met you get your money back so there's if there's no downside then just commit as much as it can and try to get as much ALO like what's the game there for playing these ICOs

>> yeah I think You rais a good point. I think well first of all I think like one of the value propositions of metadata is that it can be very attractive for investors because valuations are very low out of the gate or at least historically that has been the case. Uh, I mean, we just have two sample sizes, but like I'm curious that now that people are paying more attention. Like for instance, with the Ombra ICO, like I don't think it's as attractive as the Omni Pair ICO sale was. It's just a matter of valuation. Like Omni Pair raised $1 million like over a 7-day period and is now sitting like I don't know what is it like 20 million or

something. Um, so ICO contributors are like up 20x from from the ICO price because like no one was paying attention back then. But with Umbra, I wouldn't expect these types of multiples to be honest, just as a matter of people like contributing so much to the ICO. Uh, one thing that teams can do is that they can cap the sale. So let's say Umbra wants to raise 750K minimum, but right right now it's like at 4 million, right? Like let's say the Umbra ICO decides they just want to keep $2 million like they will return 50% of the funds per rata to every user like in USDC which is the

currency they contribute in. Um, regarding your point that it's just incentivizing people to uh like commit funds without like much um yeah, without much thought. I I don't know. I agree with that. like there's an opportunity cost to just like contributing like 100k to every launch and then I mean you eventually run out of money and it's not like you just get your funds back immediately if you don't like it right like it's um like the way it works is if a founder wants to ro if they're not like putting consistent

updates or for whatever reason like token holders collectively agree on unwinding the project, they can get back the tokens from the treasury, which is what happened with the mountain ICO. But that that was a multimonth process. So I don't think like you'll see an ICO where like the founder raises there and then just next month everybody get gets back their money because they don't like the token performance, right? Um I think it's going to be a bit different like again like this is a very novel mechanism so we still have to see it play out in practice to understand like all the intricacies but um I do like that uh token holder

protection mechanism uh because it allows investors to take higher risks on the nodes. So for instance, let's say I'm an Anon founder who's well well-intentioned and I'm smart and I want to like build X company like I can do that because like it's very hard for me to rock if I raise a metadow. So like basically if you want to ro if you are ill intention like you you won't build a metadata like it doesn't make sense right it's like if you want to commit like a financial crime or launder money you probably won't do that in Bitcoin right because it's transparent like it's it's kind of stupid for you to do it so

metadata kind of filters like for this lemon market and allows founders to send a credible signal that they're here to build I don't know like I kind of went all over the place there, but yeah, let me know if that answers the question. >> No. Yeah, that that that completely makes sense. And yeah, you're right that I think a lot of the market like why it's so overs sub now is I think people like I mean everyone's talking about Metadow and Omnipad did really well, right? So people are expecting like hey you know I enter this I'll probably get another 10 20x but usually the case is that the second launch usually does not follow the success that the first one sees and there I feel like the better place just to play metad itself like

keep it simple and then as and when you see a project that you're actually interested in then you invest but yeah I feel I I do agree as well I don't think umbra will like be as successful as omni pair I think it's it's just hype given in the current uh meta now. >> Yeah. And I think one thing you can do like one thing Metad can definitely benefit from is just having a lot of ICOs. Uh because if you have a lot of ICOs, you actually have to do due diligence and see what project is good because you cannot like just like invest 100K into each launch, right? And like just see what happens. Like I think as you get

more ICOs and they are like launched concurrently, you kind of force investors to do some due diligence and and and see which one is better because I I would like I could bet that people aping the Umbra ICO like probably 50% don't even know like what Umbra does. They just like aping the ICO in the hopes that the token goes up. Yeah, I think we're seeing, you know, obviously Metadau has repriced up significantly and I, you know, probably people playing the momentum here or have also gone and looked at Omnipair and now we're looking at Umbra and probably any other sale that pops up. So, I'd agree with you there that like a volume of a

higher volume of launches would would dilute that effect a little bit. Um but certainly like in the immediate term the kind of the current run the momentum the narrative there um it it's fueling additional participants in which makes sense. >> Yeah I just want to add like like thankfully we have Kos on the team who does the DD for us. I think literally half of us just texted him over the weekend asking him like dude is Amra like a decent bet? So >> yeah, I don't know. I'm not willing to put my hands in the fire for this one, but like um I mean it could do well based on the privacy narrative like we've had over the past week. I don't

know if you guys want to like briefly touch on that. Like we saw again I I think I mentioned this, but we saw Ccash bump like 130% week over week. um like every cycle we get the same thing like privacy becomes hot for a while. Do you think we're due for a privacy narrative or like it's just like temporary thing? I think we're definitely in it um right now with that move. Like that's that's ZK's highest price since 2022 maybe. Um so it's been a long time. Um, I do agree with you though that like

historically privacy is a category that's like very difficult to look at from like even Zcash itself like you're not looking at this thing from a fundamentals perspective. It very much is um like something of a narrative and like you know how much do you value a you know some onchain permissionless but also private network um relative to other maybe non-private networks that exist. Um it's a bit more dubious in that respect and so I don't know the like broader social and like cultural narratives that are prevailing can play into that a little bit. I do think I do think we see consistently like as the

years go on you see more people who are like more scared or like concerned about like oh the government the state is you know they're going to make us all use CBDC's and they're going to track all of our money and like you know have control over that. So um you know you could you could see these some of these privacy coins or networks as like a hedge to that idea. Um, which I think is why probably a lot of people um have maybe looked at these or allocated to them in the past is like uh kind of a hedge on on that on that perspective. But I don't know. I feel like I have no insider alpha as to like how long it could last.

It's historically it's like a very spiky and you know irregular sector even compared to the rest of the market. >> Any thoughts can all were you ever a privacy maxi? >> No. Yeah. this this sector is it's a bit foreign to me. >> Yeah, I do think um I agree with your point though like for the Umbra it's a kind of a double whammy. Um we're seeing a little bit of a privacy push Zcash pumping metad pumping like ICM ICOs um kind of all colliding and Umbra's sale being right now it's pretty good timing for them. Um, I will say the consistent thought in my head is like we've seen a

lot of sales of this nature where they're, you know, the team could cap it if they want to. They could cut it off, but for the most part, it's like contribute as much as you want, see what happens. Um, not to say that light is the same product, but um, or some of the other like ICO pre-sales we've seen in the past month or two. Um, but typically over the past couple of months, a lot of these sales have looked like, you know, the sale runs, completes, opens, and then trades lower below whatever the raise valuation was. Um, and then if it's actually a good protocol, maybe a week or two goes by, and then it and then it trends up. Um, even cards I think is a good example where that that ICO happened, it traded below the the

valuation of the sale price for a few days maybe and then and then went on a crazy run because of the TCG meta. So, I could see that happening again. >> Yeah, I think Yeah, just one last point. I think this is where it differs, right? where the mechanics are a bit different because whatever they end up raising uh whether they cap it or not uh those funds will go to a treasury that is a smart account on fuse that is governed by future key and they can just spend like a given amount per month. So let's just say 50k per month. So what that means is that if the token starts to trade like let's say 50% below the raised amount it means it

will be trading 50% 50% below book value because you can like actually say like this is trading below book value because this is the money in the treasury and that belongs to token holders. So I think like it does create like a different kind of mechanism um where you can arguably like have a fundamental floor price because like that's actually the book value that belongs to token holders. Um and and that goes back to what you were saying earlier Danny where this is more like earlier stage investing where you are actually contributing for the team to give them runway to build the product to go achieve PMF and achieve revenue and get their users etc. Right? So it's not

like you're uh contributing to an ICO sale for plasma where they already had their product they had already gone through three rounds before. um you're contributing to a project that's you're you're betting on the team and the idea more than the than the product that already has PMF, right? I like that. I'll add one last point is that um I love whenever we say it sets some kind of fundamental floor um because we're assuming that the market is entirely rational which it is not. So it does present potentially an opportunity where if it does trade below that value to a meaningful degree, you know, may and maybe the actual sort of fundamental floor based on how the platform works is like, you know, 95 or 90% of book value,

something along, you know, what's their burn rate relative to the cash amount that you'd actually get back if you if the funds return. You could do the math, right? You could figure out what that number is. So then to get a discount beyond that, um, you know, then that might look like money, you know, money on the floor that's worth picking up. Um I I just I do recall like people were saying a bunch of DATs have you know fundamental flaws at like the value of of their MNAV and then like when they then they end up trading at 30% discounts and you're like okay well like this is either the point where you start saying that you're going to step in and and and pick it up or um you know maybe the market isn't like as fully rational as we would always want it to be.

>> No, I mean for sure it can trade below like it can trade below. There's nothing stopping that. I'm just saying that with other token designs, you maybe don't have guaranteed token holder rights. Like I'm going to give the example of the pump ICO. Like pump was trading below book value for a long time after the ICO when it drew down. But the problem with that specific example is that there was actually no clear value split at the beginning between token and equity. Right? So token holders didn't know what percentage of revenues belong to them or what percentage of the treasury belong to them. So the market

said like yeah like let's just assume nothing belongs to the token and it all belongs to equity. And what that forces it forces certain kinds of mechanics in the market. So what the pump team decided to do at the end was well let's just use 100% of the revenues to buy back the token. uh is that the most efficient use of capital? It's not. But it has turned into the only way for teams to tell the market that they care about the token. Um otherwise people just assume that your token is a scam and all value is accuring to equity.

with metadata and future key that is different because you have a credible way of sending a signal to the markets that the token will acrue uh the project's revenue and you will benefit from the project success without having to let's just say redirect all the revenue to buy back the token. Uh so that's just kind of more or less my point where you actually have like a clear value split. It's not even a value split because there's no equity, right? It's just all value accused to the token which is kind of nice.

>> Yep. No. Yeah, I totally agree with you. I'm I'm just making more so the point around, you know, post sale price action. If you then get that, you know, kind of typical post sale or like postairdrop fractal um as we commonly refer to it. because of this mechanism, you you have like more of um a concrete kind of idea there that like you know this actually is something of like kind of like pennies on the floor that you're picking up for free. Um you know if it's if it's trading below it's you know book value and then you you could buy at a 30% discount and then you know the holders or the sale participants could uh you know choose to get the money back. Um you end up a winner in that

scenario um type of thing. So yeah, I totally agree with you. Um, but we'll have to see. Does the intersection of these narratives um is that meaningful enough for Umbra? Uh, we'll have to see post launch. So far, they've they've raised well over their cap. I think it's sitting around or above 3 million raised from their original original min number at like 750K that they were um originally asking for. So, we'll see where it goes from here. Um, but before we jump on to our next topic, I'm going to do a quick shout out to our sponsors for today's stream. Um, Katana. This episode is sponsored by Katana. Katana is an L2 built for DeFi and is pioneering the ecosystem category of productive TVL,

believing that change should be graded on how efficiently assets are put to work in DeFi rather than just total value locked. From now until the end of November, users that bridge to Katana can earn boosted yield from CAT incentive campaigns, added vault bridge yield, and other chain revenue. Follow the link in today's show notes to get started. Uh outside of that, we spent a lot of time actually the there was a bit more heated heated conversation thoughts on ICOs than I expected. Um one of the other topics I wanted to bring up. Um we can also talk about prediction markets. But I think this is pretty interesting and maybe worth discussing as well is this. We talked maybe a month or several weeks ago about the sold trade. Um, you know, there was

a lot of kind of marketing or like it was well known in advance that several large DATs were going to be formed by Soul. Um, you know, either buy it up off the over market, in some cases buy Lock Soul, whatever it may be. Um, we did see Salana and like a bunch of Soul Beta coins kind of catch a bit of a bid off of that. Um, over kind of over last month for the most part, I want to say, or at least over several weeks. um some things got priced up. I think now we're at the point where um there's a question to be asked of like when we think about back to like the ETHAT trade um I would say that was a relatively unexpected time in the market like kind of went

from zero to 100 where no one was really expecting them to be much of anything like kind of thought that thing was like I don't know maybe already a little bit dead like Sailor is already the king you know of accumulating Bitcoin like is this really going to be meaningful for ETH and then they went and bought up like millions of ETH in couple of months, um, ETH went from like 2K to 4 and a halfK. Um, but since August, ETH has basically been flat. Um, the DATs are still gradually accumulating, but um, you know, they ran up and grabbed they they accumulated up to like three three and a half million um, units of ETH in the first like two or three months of that. Um, and since then um, in the past two months have maybe only added an additional like million ETH or

so. Um, so that the pace of accumulations is like slowing down. They're they're in like that kind of log or the you know log part of the curve where where it starts to maybe slow down a little bit. Maybe similar to kind of how sailor's buys look right now where you know before he was slamming in billions the you know everything was going up. He got more money then he could keep slamming it in. Um question now is is are solds at that point in their cycle where you know they've got their big bids have already been slammed into the market. you know, we saw forward the um DAT basically raised a billion plus um and essentially already shoved that into the market. A few more DATs kind of have popped up and purchased up soul. I'm wondering like

how we're thinking about soul. How are we thinking about the DAT trade? Um and maybe the caveat here is that I think pre-dats we were thinking, okay, this is going to be a crazy combo of DATs come online and ETFs come online and that's going to be a ton of buying. So, it's like even though the rumors out of already out of the bag, like you can still buy because there's more flows coming. Um, that's are online, but we're still waiting for major ETFs. So, how how are we guys thinking about soul soul beta like in this sort of like largely flows dominated market? >> Yeah, like just to put some figures for context, um, I was looking at the September figures and Sena focused acquired around 9.8 8 million soul. So that's around $2.2 billion uh worth of

soul. Uh the majority of that came from Forward Industries, Danny, as you were alluding to, like in less than a week. Basically, they shot like $1.6 billion into the market and that drove uh soul priced at around $240 per soul and yeah, it retraced after that. Uh there's also Sena company uh by Panta. Uh they have bought a few hundred million worth of soul as well. Um I think one interesting thing that you mentioned is this relationship between that coast and ETF lows. So in July and August when ETH was outperforming you essentially saw $2 of flows go into ETFs

per every $3 of flows go into that co uh with soul that relationship has been much that ratio has been much smaller. So in September you saw just $1 of flows into SSK which is the only ETF live for Sena for every $15 uh into Soul Datos. I think that can change significantly once uh ETFs go live under the 33 act this month because uh these ETFs will have like better distribution. they will potentially enable staking uh and they will have like they will be more tax efficient. So I think you can like increase that ratio like from 115 to

maybe like 2/3 like maybe that's a bit of a stretch but like uh definitely reduce the ratio. Uh so you could see multiples more going to sol ETFs this month I think. Yeah, I mean definitely agree along those lines. The trend that we're seeing the same thing for like ETH ETH debts is that a lot of these debts will launch at like a high MNAV, right? And eventually this MF tends to erode downwards and we see the trend as it erodess downwards the ability to issue shares in size raise capital and buy more ET or soul declines right so we saw that with ETH and I think that's exactly what's going to happen with these sold codes and over

time initially for these uh when the ET codes were like picking up you could see the EDF flows for ETH were also like much more significant than Bitcoin inflows but in the recent within few days or weeks you can it's back to like Bitcoin ETF flows dominating and being the dominant ETF. So I think yeah that's the trend we're going to see that I think as soul once the soul ETFs get approved they will be a more significant source of inflows and bids for soul as compared to these that go. So I think moving forward I would be given more emphasis to the sole ETF and flows we expect from it and I do think we could get a pretty decent rotation right like I think Treadfi move a fair bit of from

Bitcoin to ETH and I would think they would want to go further down the risk curve if market starts to pick up so I I would expect some rotation into to sold but yeah I mean given the government shutdown I'm not too sure if that affects the timeline of when these ETFs get approved so that might affect you know, how much of a pump we see and so >> yeah, I think these are great points. I'd echo a lot of that and I'm just just showing the data here on some of the ETF flows um to accompany that. But yeah, you definitely like if you look at the first one you mentioned was BTC and ETH. Um you can see where kind of before BTC is dominating ETF flows and then into June, July, August, we see ETH like really

pick up and it's more obvious when I just leave it. um as the only one on this chart, but you can see where it really picks up. Um and I think that's on some of those large sort of like raise announcement days or like peak kind of excitement days for like Bit Miner, ESBET, some of those um some of those larger ETHATs. Um but since then, you know, there's been outflow days, inflow days. It seems like basically the ETF flows for ETH have been a little bit more flat or, you know, sort of like net neutral, if not, you know, maybe slightly positive. But we're not seeing these like big big impulse inflow days anymore. Um, but also worth pointing out that if you look back just to the beginning of this year, the total amount of like daily inflows were in the tens

of millions maybe or even outflows. Um, and that's kind of how the sole flows look today with just the Osprey one. You know, we're sitting in the, you know, low seven to low eight figure amounts on a daily basis, but, you know, trending towards inflows. Um so I do think there's a good point there where if you get the meaningful um issuers in um you could see this dramatically expand especially if it coincides with you know if either new DATs continue to come online or if they continue to bid um for a decent amount of time. Um you could see those compound on each other as we saw with ETH. um which which could lead to some outperformance over you know maybe a month or two um like we saw at that time may maybe a little bit shorter

since again this is like we're seeing it play out again and so maybe the market anticipates some of that and kind of puts in some of the the price action um ahead of time but I do think you know the government shoved down is maybe a question there um if if may maybe if the DATs the solds get sort of to their you know tapering off portion of their life cycle here like we've seen with you know I would say for in large part like the BTC DATs, the ETH DATs now, they they've t they've t tapered off quite a bit. Sailor is not able to ship in a billion every week anymore. You know, he he announces his buys on BTC and it's, you know, 10 mil. I've just purchased 10 mil, I've just purchased 100 mil for strategy. It's like very meaningless relative to their stack of whatever it

is now, like 80 billion or 100 billion in Bitcoin. Um he's not really like moving the market anymore as he was, you know, end of last year, beginning of this year. Um, and so that's maybe a question mark here is if if you delay sole ETFs by a month, like I don't know how long this government shutdown will go on. Um, maybe you miss that window where they can compound each other. Um, and that and that could have an impact. But the the opposite, maybe the the counter argument I'd make is if DATs taper off and then ETFs come online, maybe you can, you know, sustain some consistent flows for soul for a few months. Whereas for ETH, you had that sort of brief burst of, you know, everyone is buying a ton all at once and then um it kind of it fell off

quite significantly. Um and ETH's been flat since basically. >> Yeah, if I had to bet, I would say so ETFs go live this month. Uh like almost 90% plus probability. But admittedly, I'm not an expert in US politics and I don't know the implications of the US government shutdown. But yeah, I think uh the most likely outcome is that solo ETFs uh go live uh this month. Uh but yeah, it will be interesting to monitor the flows. I think one interesting topic around this is like do you want to bet on assets where the thesis is essentially yeah trafi will bid you will have a lot of flows or do you want to

bet on assets that have underlying fundamentals? I'm not saying that soul ETH doesn't don't have fundamentals, but what I'm saying is like what's more sustainable, right? Like the D that co and ETF flows or like maybe assets like pump or hype where those flows are actually generated by buybacks which go back to like real users and revenue. Like that's one of the things I've been thinking about in recent months. Like I think over the long term you kind of want to bet on the ladder where these types of flows where you have users and revenue and that's what's like driving back the buyback uh and and flows like

are more sustainable than saying hey I expect like two months of uh outperformance due to uh yeah institutions just aping uh my my coin which is a like a thesis, but like I'm just wondering for a longer term investment horizon like what's your your take? >> Yeah, I can go for that. My preference would be like getting these institutional beds and I feel like the assets that have done really well this year like the majors are just those that have institutional capital flowing into it. And the main reason is like if you look at like uh protocols like Bump or

other tokens on chain, it's it's basically the same capital that's flowing from one token to the other, right? You're not almost getting new liquidity in the system and that's like if you want like a prolonged pump in some of these tokens, you need new capital flowing in and you're not getting that in my opinion. It's mostly institutional capital and the way they are accessing these markets is through these DAT codes or ETFs. So if something like stable and something I would do in size is just going for these uh assets that have these institutional flows and then again a portion of my portfolio I'll play some of these other hot tokens but even then I trade them more actively than hold them just cuz yeah it's very nar narrative driven and even the most like fundamentally solid coins will go

through these rotations. So it's about catching the rotations in my aspect. Yeah, I'll use pumpin as an example because I think in the case of hype, it's sort of been an outlier to the rest of the market broadly. They've been growing really without stopping for the most part. Um, but if we look at pump, I I kind of agree with Kunal to an extent like I think there are cases where you can zoom out um in crypto and it probably helps as well like you know pre-token pump if you're just a VC like you know you're not you're not selling um you're you're waiting for them to actually, you know, do the next raise, actually launch the token, etc., etc.

But, um, now that the token is live, I think just like going back and looking historically at their trailing revenues, like you can see the cyclicality in the attention on memes and like the revenues that they've generated on the tra trading volumes there. And like, you know, you see these kind of cyclical time periods where, you know, activity trends up quite a bit. everyone is running the, you know, what's the current valuation based on trailing 90-day revenues at like the literal peak and then, you know, activity falls off 50% and it's like, well, now it doesn't look so attractive anymore. Um, but I don't know, it's always in those times when, you know, that's then when you want to make that new trade and, um, probably consider m, you know, maybe the next kind of cyclical sell out of it

event when people start running the, you know, let's annualize the one day numbers again. Uh, and look at the valuation. and it looks so cheap again. Um, yeah. I don't know. I I think that while I said it earlier like we've been trending more and more in this direction of like you can start to zoom out a little bit on crypto things in large part I do agree with canol that like narratives cyclicality like kind of like you know liquidity and demand for tokens um is just so continually volatile that oftentimes I do think many things are just a trade and not a long-term hold like there's very few like maybe Bitcoin and you could maybe zoom way way way out

on you know like ETH or BNB or Soul like there's a few cases where yeah like that those are just holds but you know we know that in a year or two years from now probably a lot of protocols that exist today even if they are generating revenue probably may not exist um in that time period. Uh there'll be new competitors. It's such a the permissionless nature anyone can launch a protocol anyone can start making money on chain you know right this minute um means that there's always new competition like we saw I think Axium is maybe a good good example of this where you know the trading bot market was dominated by photon and and uh bullax and some of those and then axiom came in and took 60 70% of market share within two three months um took no time at all

um and that's something that that category has seen over and over again where you know a new incumbent comes in with like now the the the newest best set of tools for onchain DJ meme traders um they refine it a little bit more and then they can onboard a bunch of people really quickly um and then inevitably in like another six to 12 months somebody does it again with like a new better iterated product um and I think just kind of the nature of of where onchain things are today like there's there really aren't very strong modes you know users can still switch from from platform to platform like nobody's really locked into anything um and so we just we've tend to see this over and and you have to like constantly be executing and having the best product and like always um iterating on that and to the

to date Hyperlid has done pretty well but you know their token launched end of last year right so how does Hype look in two years are they still around or does a new competitor come in I'm not I don't want to scare all the hype bulls I'm not saying that hype is a zero or anything like that but it's just kind of the the nature of the industry so um >> I just think if you're when you really want to zoom out and hold something, you have to be very selective and even if you are um you might miss. >> Yeah, I I don't disagree with you guys and I yeah, I would echo uh your points also point out that competition is not just uh unique to crypto like every industry is fiercely competitive like in a free market.

uh like more so my point is I think like equities are getting all the attention today and like all the focus is on like institutional flows and stuff like that and for sure we're in a market driven like in a flows driven market but I think like right now is the time where it may pay to be contrarian and just be like as you say selectively investing or allocating to onchain coins that just have like strong fundamentals and that believe that can be around like a year from now, two years from now, maybe h five years from now. So I think like yeah capital may be a a little bit like zero on today where you just have like

the same amount of participants like rotating or like it might be a good time as well to buy cheap uh before like eventually capital comes on chain. >> Yeah, I I think I agree with you. if maybe if framed slightly different in that I think because of the access to data and I think this is something that Ryan has said before but like having you know daily revenue numbers is probably like more of a curse than it is anything else because people index to the data like on to the recent data so much when it really like probably doesn't matter that much. the, you know, having some fundamentals now is great. Um, but it's more important that like you have, you

know, if you're looking out two years, then they need to have fundamentals in two years, too. Um, and so you can be, you know, doing a ton of revenue today, but if what you're building or your your path forward u means you're going to see a 90% decline in revenues over the next two years, then then it's a miss, right? like how are they how are they attacking or going to fit into that that future piece of the market is is probably the hardest question because we see so much like displacement. Um, but I do agree with you that like it often does pay to be contrarian like and metadata is a good example here recently where you know if you were looking at that and you thought that was a great idea and you were looking at omni pair and like it was underlooked and the you know the sale at

that time was you know would say broadly overlooked and then it traded you know below the initial sale price for a little bit and now has had a pretty strong runup now that attention is back on it. I think maybe maybe that's the bigger point is like some sometimes it pays to be like where all the attention is. Other times it pays to be like outside of the attention and like waiting for the puck to kind of skate to you a little bit. But I do like fundamentally I do agree with you >> just to like quickly end it off like the way I look at it it's it's you always got to look at who's buying and who's selling right and how much are the amounts and for a lot of the bigger tokens having that institutional bet helps cuz there's just a lot of

consistent buy pressure and for some of like like Bitcoin eat so like the sell pressure it it's more minimum right you don't have like on ongoing unlocks or I mean soul had it for a period but it it's much lesser so it's you can hold these tokens with a lot more conviction. The thing with like a lot of like the alts out there is firstly the the buy pressure is very rotational, right? You got to wait for the narrative to shine on you and then you get a lot of buy pressure. Like of course pump and hyper exceptions cuz that buybacks that they do every day at least helps to add to the buy pressure. So that's a good bonus. But I can name a lot more ALS which don't have that sort of buy pressure. But yet on a daily or monthly basis they have like strong token

unlocks by the team or investors. So in that case it almost like makes no sense to hold these tokens or if you hold it you have to be very selective. It's almost like a month trade and if you zoom out a lot of these tokens make a very good short leg to ETH BDC or sold. It's just like zoom out and these trades work really well. So at least that's the way I approach it. >> Yeah. Sounds like tokens are broken and metadial fixes it. He's still bullish. >> Carlos is saying higher. >> I will say I listen to and maybe to round it out. I was listening to a Peter Lynch. He did an interview just recently that's out on YouTube. Uh legendary investor in Trafy Markets. But one of the takeaways is like if you know what

you if you know what you own, uh they you can hold through draw downs and then inevitably or eventually hopefully hold through draw ups or you know repricings upward um and make a lot of money. I think in this industry it's like with so many people who are just trading like you say Carlos so many people are just trading momentum they're just trading the flows they're not trading any of the underlying and so that leads like that kind of compounds some of the volatility and the reflexivity and that if you have so many people who are piling into a coin because it's like this might go up higher then when it doesn't go up higher they're like oh man should I sell and then you see you know up followed by down followed by in like kind of over and over again with the next new

narrative whereas you know if you're bullish on something if it has solid fundamentals today. You see the path for its success in the future and you can just sit around, hang out, you know, zoom out. You're not worried about the price action on the day-to-day. Maybe you're buying more of it as it trends lower because you think it's still rock solid. Um, if it catches its, you know, part in the spotlight at some point in the future, then, um, you know, you're set up in advance. You're not you're not like chasing the crowd, so to speak. I feel like we've thrown out so many of the common common words of uh words of wisdom in market, so many catchphrases, but uh I I think they all stand.

So know what you own. Um you know, fundamentals are meaningful if if you're not trying to be a pure flows trader or narrative trader. Um but maybe just to say that uh narratives still are pretty meaningful in crypto. Um, and even in the stock market today, narratives narratives are pretty meaningful right now. Uh, you could probably buy any ticker that's related to AI, um, and you're doing okay this year. Uh, in crypto, uh, it's maybe more of a monthtomonth, quarter to quarter basis that the narratives or even week to week or dayto day sometimes. But, uh, we can leave it there. I think that was great, great pod, great chat, guys. Um, any last thoughts on Metadau or anything else? Carlos, where's Metadow headed?

Not financial advice. >> I don't know. Short term, I don't know. I don't know. Hopefully up, but who knows? >> His bags are speaking for him. All right, we'll call we'll call it there. Nothing else. No financial advice on the show. Thanks for tuning in, guys. We will see you later this week on Friday. We'll have a special guest for you, actually. Uh they just made a really big announcement, I want to say last week. Uh so we'll have some of those guys on to chat. I'm not going to spoil it now, but you'll find out then. Uh, until next time, we will see you then.

>> All right. Bye, guys. >> Yeah. [Music]