The Modular Thesis Is Dead | Analyst Round Table

Transcript

to bet on Celestia you need a lot of salana sized rollups posting data to it over a very long period of time so like it could be a legitimate thing like if the achain thesis is a thing and things want to post data to Celestia it ends up being the big winner like it could be the fundamental winner like today through the next 15 years but it's going to take a long time for that valuation I think to to make a lot of sense nothing said on zerox Research is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and any views expressed by anyone on the show are solely our opinions not Financial advice Pacho Ryan and our guests May hold positions in the company's funds or

projects discussed what's up guys welcome back to another episode of ZX research today I'm joined by Danny Ryan and nille to talk about what is happening in the markets and across crypto um typically I like to start this off by passing it on to somebody else by saying what is happening in the markets what are you guys looking at unfortunately I don't know if that's going to be possible today since it's kind of boring out there um for what it's worth we spent the past half an hour before this pot talking about stable coin growth um so I don't know how to begin but maybe let's start off by saying how long do we see this boredom last what are ma macro views if we can't

figure out topics for the podcast let's do macro I guess like nobody else does it oh I think that the boredom will last until August is over yeah this this is just yeah this is just uh seasonality baby uh July's boring August is boring then everyone comes back from vacation and things will get interesting again I thought Americans weren't supposed to take vacation isn't it like a European thing where it's like until end of September I'm off I was going to ask what vacations the American um stereotypes around American vacationing I think are growing um just like from a past life

like every like head honcho in a bank goes away for August and like now you're seeing this like VCS don't work in the summer Meme and the US has more VCS than anywhere else right so like it's starting we're we're it's um Vaca uh bullish vacations in the United States do VC's not work in the summer because they sell in May and go away or is it the other way did it you know is it chicken and egg I don't know uh more pertinent question might be do VC's work um or is it just in crypto especially or is it just let's just throw some money at it one of them will work out um I guess less controversially what

is the big news for today anything happened the one interesting thing we've got today is that um drift on salana has just announced bet um their name for a their own prediction markets um on salana and it sounds like I haven't read this entire announcement but um some interesting things that maybe they'll be offering is that um for trades on the platform um you'll earn yield on those on those bet trades um likely by utilizing the underlying you know drift bar L engine so that's um I think sort of an interesting distinction um otherwise I mean what are you guys thoughts prediction markets have been a

Hot Topic um lots of talk around polym Market any thoughts here on drift kind of going at it themselves yeah I um I think it's pretty cool I I'm G to try and be more positive about drift going forward I think this is actually a pretty cool attempt like earning on your collateral is interesting um and I think it's just like a natural fit I would say I mean they already have the matching engine so why not just utilize it for whatever you can my only I guess gripe with this as well as with all prediction markets in crypto is that the it's just I mean I guess you can say it's about all things in crypto but it's such a like the your competitors are draft gang bet 365 like

massive massive companies so I don't know how well like betting markets SL prediction markets can do do I do think it's it's worth exploring though and I think this is a pretty decent fit yeah I think personally I think the yield component here is interesting by kind of leveraging their existing platform um I've had you know anecdotally have had friends talk about various trades on like poly market for example and I've kind of been like well why would I do that like I'm I'll miss out on yield on this XYZ other thing for you know a lot of these trades tend to be you know multi-month time span things and you're maybe trying to ARB some small percentage so it's like you know if I'm gonna miss out on some percent

that I can just get you know as like a relatively risk-free rate why would I do you know take this trade here um but I think if you can get that via you know if you can capture the yield and take the trade at the same time that's pretty interesting it's like a um nice double dip I guess you could say yeah I wonder what the yield is though I feel like it'd be like 3% or something which I don't take smart contract risk for 3% I'd rather just bet it on a token and lose it all if that's what we're doing to your point Bach while he's doing that uh lending usdc on drift right now deposit APR is 88.5% that's not bad 88.5% yeah it's not the worst you know

they also it looks like have um some py USD rewards and that is earning 20% so if hey if they let you make trades in py USD you could earn um a significant yield on that while while betting on your election trades hey guys permissionless the event for crypto natives is heading west to Salt Lake City and we're bringing the biggest names in crypto together for an incredible C Miss event join me in the rest of block works on October 9th to hear for more than 200 Industry Titans including Nick white from Celestia shiram from igir and Keon from Mona the conversations at permission list will be covering the hottest themes in crypto including modularity reaking the Bitcoin

and Solon ecosystems Ai and crypto rollups l2s institutional adoption and of course the November election that will be right around the we couldn't be more excited about this event and it's happening in one of the most beautiful places in the US ticket prices will be increasing towards the end of June so get your ticket today make sure to use the code so I get some credit and bragging rights from the rest of the team uh use ZX10 for 10% off on your ticket one more thing we're also hosting the permissionless recka font in collaboration with ble box the theme this year is a multi-chain future to build a better cross chain experience so I don't have to have a heart attack every time I bridge to a new chain all Hacker found participants will receive a free ticket to attend permissions so if you're a developer come join us in Salt

Lake City team up with fellow devs and build the multichain future speaking of I guess forecaster then like I mean Bach do you use it I'm curious like if you have thoughts there yeah I'll I I used to use it um I think it got really bad I had quite a bit of fun actually there was this um Channel called reply guys I don't know if you guys were in it or if you saw it um not to flex but I was one of the first 500 members in there um just in case that would add to my cloud or something but I used it for some time and then D gen tipping I think was like a double-edged sword for that because it

onboarded a lot of people I mean free money is free money more money is more good people come on the platform but it also brings on like the worst crowd I think is it's like pure engagement farming or it's like just Spam it's either of stuff like oh this kid lost his elbow in X let's tip for donations or it's like please sir can you give me 1,000 D it's like I don't want to see that on like the channel system makes sense because you can make it like locked but back then you couldn't so I never got the benefit I think now you can make it locked um either way it's just it devolved into chaos and after

that you never want to go back I mean not that Twitter is any different it's just like if I'm going to go onto a new platform it needs to be an improvement I'm not going to a platform that's us less where I don't get the same dopamine like there's less likes there's less recasts or whatever why I that was my general feeling as well I think I you know I was using them both for a while and it like had a good experience but like it wasn't like you're saying like not differentiated enough like not not better is not really the right word because they're sort of like maybe appealing to slightly different things but like just not new and exciting enough over using something like X to make me want to like switch entirely or or use it more than um kind of where a

lot of CT exists today um there was also a lot of people that said that they would exclusively post on foraster like all their different like takes and details about like protocol upgrades and stuff like that that lasted maybe a week or two and then they were back on CT so I I stopped using at that point because I was like okay cool like there's going to be some unique information here that you know I'd like to be a part of and then very quickly it just completely stagnated at least from my experience yeah it's a tough sell to build the same thing but like less it's yeah the tipping stuff was cool and I did like frames I just like I'm sure it'll come back like it's one of those things that I'm actually pretty sure

that it will like maybe not farcaster V1 but there'll be like farcaster V2 or some completely different social platform I think it's like people obviously like it there's been a lot of money thrown at it and like in it you know like the platforms were used to transfer money around people seem to enjoy it and they like CT is such a great place for that experimentation because we're all very risk on and we're like you can just ch Chuck money at something um if you just use it so I think people enjoyed it I think it'll come back but they they need to implement those fixes or else it won't work yeah I think the The Tipping portion like it it does feel like it had a bit of like its own

kind of friend Tech moment where there's like that quick like up and down of like people see the potential like Revenue opportunity for themselves or what have you um and they flood in and then they flood back out as soon as that gets diluted or is not you know maybe realize it wasn't as great as they thought um but I think to your point as well like into the future you know stuff like frames things like blinks now on salana as well like someone will find more interesting ways to like kind of integrate socials I think there's this hard there's this hard like kind of C like challenge of if you're going to do something like a forecaster and try to just like get people to move over um you're going to be competing with these massive Giants um in social media and so you know maybe there will be more

interesting ideas in terms of like having like a kind of like a layer that connects existing like you know if it's X or if it's Twitter if it's Facebook Messenger whatever um if you can overlay that activity using something like a like frames or or blinks to kind of like have this kind of like disconnected layer where people can interact um you know I don't know if that would actually resolve that problem because you still have to go and interact there but um it's that that Tech is is a step in the direction I I think yeah like all forecaster had to do was be Twitter before it was Twitter like before what it became now um and that no like feed that's feeding me constant rage bait or random stuff like if it was just a

simple feed of crypto because I only go on Twitter for crypto anyway I don't care about anything else on Twitter um so it just had to be that I mean I guess it's not like the Gillian Tam that they want but it would be a viable product that I would genuinely use every day but they put that channel thing in and then channels were open to everybody it was tough to token gate it and nftd gate it or like in general lock it that made it really difficult but it's it's it's a step in the right direction we've done more experimentation stuff um the time thing like buying somebody's time on they they had like three iterations of it they have another one now um those things are also cool objectively the coolest thing

that has come out is frch because it uses actual like crypto Dynamics I mean you can say what you want about like racer and what happened to frch but that was the only I would say forecaster is it's cool but it's more like e people circle jerk rather than an actually useful app at this point no but it's true like frch you you went on and you had fun the fun that I had on frch for a month and and then the airdrop fund was quadruple the amount that I had in total on forecaster I don't know what it was like for you guys but yeah no I feel definitely I definitely feel the same about that that

was my only concern with farcaster is that I don't know if he'll be able to capture the same level of attention as FR Tech just because of the maybe with the like tipping and some of the financial comp component there it makes sense that was my only main concern but adjacent to that topic what are you guys's thoughts on like lens I feel like I I keep hearing about it but you know forecaster is the main thing that people are using and integrating with and things I hear about lens are more like third-party projects like I don't know like web 3 music protocols that are like Hey we're going to integrate lens forecasters like social stuff and then like lens is like we'll just put adjacent stuff and just plug it into lens has anyone been hearing about what's going on there so both lens and foraster at the protocol

level are very similar they're both desenti by social graphs so it's like what we're talking about right now is technically warcast which is like the platform that gives you the Twitter like beat and whatnot um but yeah like I wrote I wrote a report on this for blockworks but the I think the only difference between them is that lens uses nft Dynamics versus warcast doesn't uh that's what I can remember and it's they both like have attachments to your identity or your ID or whatever they call it like they call it individual stuff um and then you can view that on whatever platform so on lens you could have a YouTube like platform like a video player and use also um like a Twitter type of Micro blogging platform

and it would have the same identity so it would just be nil and you would just carry it over kind of like Google uh site Gmail lens I think never took off because it had that like moment of air drop Farmers siers random people coming on and posting here's how you can make 10,000 x on your altcoin um months before farcaster did I think everybody farmed because farcaster actually did one thing really well and it was invite only and you you had to personally invite Dan message Dan Romero for some time and then after that there was like invites yep frch as well they did the same thing with the invite codes I I agree I think that's really smart because I totally remember the lens like I mean I followed lens for a while when

they were quite early and it was like it suffered from that problem significantly of like you log in there and all the activity is just like you know farming potential points that maybe do or don't exist for the future of just like GM hey guys GM this coin THX Etc like there's not there wasn't like real activity on there it was just this this spam of you know hoping for something to come yeah and maybe the timing played a part as well because I think lens was quite a bit earlier um before like we had this kind sort of wave um in the market late last year yeah and I think social media is obviously like a very tough nut to crack

anyway but it's also very reliant on demographics and know who you have posting on the platform like at the end of the day you there are people who use Twitter not to post but only to follow people who post and if you can't curate that group which I think farcaster did really well I think Dan Romero had a strong uh Network and he brought on quite a few like both influential and interesting people as well as like people who just post and people like reading their post for some reason like more VC fult leader types which some people enjoy reading about so they they all went on that platform and people joined it versus lens was you can't have a points farming

program in crypto social because you need to like very it's like a baby you need to nurture it very very carefully or else it's going to go to the wrong direction and then you can't take it away you can't bring it back you can't have something like lens and then be like oh actually guys we're going to make it cool again it's not going to work it's I will say I think like focusing on differentiation like frch is clearly a different product than like X or like existing like feed based social platforms it was like specifically catered around sort of a differentiated Niche um which I think kind of helped with their like the level of explosive growth that they saw um so like like I think if you even if you look in the kind of existing like

giants of like live streaming or or social media platforms like it it doesn't go over well you know we had platforms like mixer that tried to like just pay a bunch of streamers big you know big contracts to bring them over to their platform to you know like grow their their user base and then that that platform shut down within like a year or two YouTube has has done the same thing trying to like poach streamers over from twitch over to their like gaming live streaming platform and I think ultimately like that hasn't really worked um there's things that come down to like just is the platform better is like the community experience like better the chatting features Etc I think ultimately it's going to come down to like just having a better product or like better kind of community oriented thing there when we're talking about a social

platform um so just like coming up with like a def you know X platform and then trying to bring people over is is just not going to be enough unless you really have something that's like uniquely interesting there yeah I think that's the key part that you said that the unque part because even seeing like the pipeline for like social media platforms and then taking off like you've got something like like Facebook for example then you have like Instagram that's kind of differentiated Snapchat that's very different as well and then like they provide a very unique experience to a very specific demographic and they scale up and milk that as much as possible and then ironically converge and design across each other so like you know like Instagram for example now has a lot of overlapping design with like let's say

Snapchat and a variety of other different like social media platforms so I think that was that was my main apprehension with like farcaster and lens is that they they have this cool substrate but they're going after basically just creating a clone or like a slightly altered version of like X Twitter that's why I still think like FR Tech was very cool because like you said it wasn't trying to be you know something that was already on the market it was trying to go after this Niche and there was an opportunity there um so it'll be cool to see if like somebody can pull that off I think there's still still a lot of room for somebody to do something cool yeah you make a great point about convergence because I think like the the success of Tik Tok we've seen like you know YouTube shorts like

all all the platforms you just mentioned they all have like their own like short video piece because they see that potential um and so obviously you have the same problem here where it's like you know if it's if it's farcast or warcast if it's friendch Etc like they see the they might see the potential value in those things and be like well we should just do you know the same thing but like it has to probably start with that kind of unique differentiation first you know grow that sticky user base and then maybe you can like tap into that later on yeah 100% 100% you need that like user liquidity basically that seeds content like early on and then things can kind of pick up same thing is true with like gaming as well with content creation platforms like you need that sort of base and that base

comes from some sort of unique offering and then from there you could start to generalize to attract other audiences that kind of uh can sit on top of that base that you've kind of created Ryan you're working on a decentralized social media report no what were you looking into it I'm kicking the tires yeah I'm kicking the tires I think that um look I think at the end of the day all these networks are like content businesses and it's really hard for um an incumbent to compete on content especially at this stage of the game where you have these massive well capitalized social networks with a lot of ml Talent

and access to compute and uh established networks um established Network effects whether that's um the Creator and Their audience uh or just where a conversation takes place and you can think of crypto Twitter as you know exactly that crypto Twitter it's not crypto foraster yet um and I don't even think it's close um so like so so the question is like how do you compete like what is what is the wedge for of the social networks um I think I think there's like kind of two ways to compete one is that like the existing social networks have such a they need they need to mess something up um in terms of like data

privacy or like something that Twitter's going through right now where they're just making a lot of people unhappy with the I think the lack of content curation I'm not saying I agree or disagree with that but I think users and especially advertisers are objectively not happy with that so like maybe you know you capture some of that like user flow as a result of that I think that the kind of the more obvious one is and and it's what frch kind of it's exactly what frch did which is um just like on the financial side just allowing people to be Financial on your platform because the existing rails will not do that it's actually something where they're

unwilling to compete like okay Twitter might want to set up payments but they're really slow at it it's still not out they've been talking about it for years Facebook is not going to let you like click a blink and you know ape into a prediction market right but like maybe forecaster can so I think you have to you have to compete on what like the very obvious thing that crypto does where it just like let people take risks and send value um and um like as foraster doing that today um it's I don't know it's not it's not obvious to me it's it's certainly not part of their curation strategy um it's very like decentralized

and I it's not obvious to me that that's helping I um with that curation strategy think I completely agree with like in terms of how foraster does it I don't think it's even like a good way to do it because they very much push you into these subreddit style uh platforms and I don't think that's a that's a good way like at the end of the day I think most people just want to follow XY Z user and just have their feed that and I think Twitter messed it up in that sense it's like even if you do post a blink on Twitter let's say there's no guarantee that your followers will even see it if I posted something for like you Danny and nikil you probably wouldn't even see it

because you'll be on your for you page and it's the same with forecaster it's like it's on these specific channels and I I'm not sure how conducive that is to reach to people but so I'm not and there's also like not many people on farcaster so I guess that's not really a curation thing though that's just a they need to up their game up a bit yeah as as I'm thinking about this I'm confusing myself on the difference between farcaster and warcast like I I obviously know what they are I I know the strategy but and like the strategy is clear right it's like okay if you build up enough of a user base like it makes sense to give developers the freedom to

create a unique experience for that like decentralized social graph that's super cool um but it's confusing the existing users like it's kind of confusing me um and is anyone doing that but warp cast today um it's yet to be yeah there's a few but they they haven't caught up as much because I think the only times that I used it is when warp cast was struggling because a lot of people were using it but obviously that's not really the case anymore like there was a few Alternatives yum or yep it might be yep I don't think it's yum yep was like an yep was like an aggregator they aggregate between like lens farcaster

and a couple other like decentralized social stuff and I think they even agre across Twitter too yeah so it might be I think the like ideal solution for that would have been just naming it foraster warcast forecaster as well and just because if you're a Dev you're going to like I'd rather confuse the dev than the regular user just make the devs be like oh there's also another foraster instead of being like oh this is warp cast this yeah I think um maybe you're seeing it on Twitter today like for just further establishing its lead like I think that a frames or a blinks like product um that everyone has enabled in that feed can be super

powerful especially like for the sending the value flow thing like maybe this does even happen on a web 3 native thing and maybe Elon is just like adventurous enough if that thing starts taking off and there's value flow on his platform which is like what you want especially if you want to do the super app thing like elon's hinted a lot historically like maybe crypto becomes that thing um and maybe you want to embrace it as these advertisers are like not coming to the platform like he had hoped he implemented subscribing which I feel like is a very basic level of that um you have to pay to see some people's posts I still I don't know I it's taking quite a long time

and it it would have just been as simple as like doing like a venmo or a cash app I think those are the like big American ones right or like revolute is what they have in Europe doing like a simple integration with that I know there's definitely like licensing stuff and I'm sure there's triple the licensing stuff in the EU but I mean surely you could have worked it out over the past two years or at least like a slight attempt at it yeah I mean you'd think the value would be there at the very least like to Ryan's point and to your point as well B on subscribing like you know taking a percentage of all kind of value transferred um that's a good business model when you have like millions of users who might you know even if they're

sending 10 bucks like you're going to capture that across Millions a month or whatever um that's that's nothing to scoff at and if it's just simple Integrations and you're not really like these are tools and things that have been built out you just get to integrate them into your platform and and just capture some some revenue on that um but like we're saying like you know I think as well there's like probably some regulatory question marks um when it comes to people like sending money back and forth or two directly two influencers um in some cases for certain things so um but yeah I do wonder why um it maybe hasn't been kind of pushed on or you know other like more direct efforts to go after it have not been um

tackled quite yet I wonder if it's just because it's it's just like he has two very contradictory views one is like Anon culture form of the internet the other one is um let's make it the super app which requires kyc it requires like a lot more stringent checks like you can't have a billion Bots per user if you're letting people transfer money to users because then that's like people already get scammed on Twitter all the time that's like another recipe for disaster um so I wonder if that's just like another issue that he has is like how the hell do I actually implement this we'll see I'm sure it'll work out it's interesting though as like as like

a counter that they he also implemented the you know Revenue sharing to creators um like I think close to right after the buyout I want to say so so that was like a pretty recent feature after the kind of the Takeover the switch to becoming X I guess you want to say so um I I don't know if he had a further Road road map there in mind of like going down that financialization path and it just got lost but um we'll see that's another thing that puzzles me is you're inviting the worst because especially with the way that he counts engagements this is just turning into what's wrong with Twitter now but

especially with the way that the engagements are like counted you're inviting the worst form of Engagement like the lowest form of content essentially you're encouraging people to post rage bait um like hypers sexualized content and like General midwit in attempts to get x amount of views so that they can get a Payday and it's it makes and then you force everybody it's kind of a power move and then you force everybody else on the plan platform who maybe doesn't want to engage with this content to watch it at all times on the 4 You page so it's like it's it's it's kind of a long drawn out form of torture for a regular human being yeah I think this is a problem

that that all social platforms struggle with though right like like on YouTube you know you get obviously they have different ad rates and whatnot depending on the on the category what have you but you know if you can pump out rage bait or just anything that gets views cringey clickbait content um recapping stuff that other people have created like you've done no work other than just like aggregate other maybe sources of news or memes Etc like you can earn a dime on that um I won't speak to whether like that's the right or wrong way to go about it but it certainly like drives a ton of content like people see that opportunity and they go after it yeah all social media has become that now

it's kind of and that's why Mr who who said this I think Sam Alman said said this he was like just real life experiences will have a huge premium in the future and I think like most people were like oh that's because everything's going to be digitized I think it's because everybody will try and run away from digitization well I guess the same thing but at some point this is going back to we we actually did a podcast Ryan was it with you no it was with Dan Dan Smith where we had on two people um from liquid culture FM and they were like oh everything's going to be digital I was like no we're all going way we're moving away from social media like the internet is going to die out I'm pretty sure I'm going to be wrong on this one

but we'll see hot take very hot take it's a wrong take as well I know it's wrong I think it's just hope it's just pure hopei I will get off the internet you guys can stay on and watch people get beheaded on Twitter Jesus I won't it anymore no but that's literally it I don't know who you follow I I stay on Twitter lists I don't go on my for you page ever uh or almost never I just stand all these EU guys man big doomers there is a problem with Twitter for you today uh you can see that they've changed the algorithm a few times um I'm getting pretty good at um at avoiding the rage bait stuff um I

see a lot of politics when I don't want to and you really just have to scroll past it very quickly like it knows what you spend time on knows what you don't don't and if you stay on the post too long like you're giving the thing feedback that you are engaging with this content so it's going to give you more of that um you got to swipe quick really really quick even if like it's really good at showing you thing like Tik Tok right like you can accidentally be on Tik Tok for an hour and feel terrible after but you spent an hour of your time on it right and that's feedback to the system um so yeah it's it's a beast you have to you have to really toy with it um but you know I mean Elon is a fantastic um hirer of engineering talent

and he's really good at Engineering Systems to be like to have like phenomenal ux like if you've ever been in Tesla you know that um I I'm not I'm not bearish on um what he's going to do with that platform and um I guess more broadly B I'm not bearish on the internet I'm not bearish on the internet I'm bearish on this form of the internet and you can't be bearish on the internet because it's all consuming and knows everything you've ever desired or will desire but you have to at some point say let's relax a bit like stop killing me random stuff yeah it it just comes down to human restraint I think a lot of the the negativity

there is around like people not moderating themselves maybe as much as they should be to Ryan's Point like I've certainly seen the example where like you see one video on Tik Tok about like X topic like anything like like pregnancy and then for the next week it's like okay every video that comes up it's all about pregnancy like every video You're G to get and you're like like how do I get out of the cycle everything they show me like I can't I can't swipe through all of them fast enough no it's definitely about moderation it's also why I've never downloaded Tik Tok and I'm pretty sure if I downloaded it I would literally die in a week because I can't like I'm like oh interesting let me look at this for an hour um so that's where crypto is at right

now where we talk about social media algorithms for 20 minutes let's um let's actually do some now that we have kind of like a plateau in the markets maybe we should do narratives that have died out um this is something that we wanted to talk about last week I remember we didn't have time there's a lot to talk about last week not this week so I'm going to start off by saying modularity um has relatively died out now we are I mean initia is supposed to launch soon but like Tia Dimension ran out of steam nobody really talks about them anymore um forever top was in maybe not forever but forever top was in

when people were running DCF models on airdrops from staking um and I'm not sure how they could ever come back for what it's worth like they will probably but let me show off the Daniel Smith will be very proud of me for showing this off we have a incredible probably the best not probably definitely the best dashboard for um Celestia in the world and as we have done it Celestia has $30,000 in total blob fees that's cumulative by the way that's not um so that's pretty ridiculous and I wonder how it can ever justify

whatever valuation it's at right now um like even if you factor in growth and I'm sure we will factor in growth maybe at like a 300X multiple but I don't know how it ever comes to that what do we think so something I've been thinking about like related to Celestia is that I I I believe they're going to have like some some token unlocks going into Q4 and I've been seeing an increasingly number of folks um especially on the liquid token fund side talking a little bit about Celestia as like an interesting an interesting area I'm not sure if they mean interesting instead from a fundamental perspective more from like a like a left

curve and like right curve perspective that okay token price came so down smart people building on it even though maybe it's never going to justify the valuation could potentially be something that you know if that narrative does come back it is going to be the main the main token that basically represents that overall narrative and at the current prices that it's at right now and we'll probably go a little bit lower after some of the unlocks that could be something that's interesting that's my only take there otherwise I agree with everything you said but that's just my only caveat that still could be interesting I still just don't know how they'll ever justify their valuation but I have a feeling that there could be

some cool things that come out maybe going to start of next year uh with depressed prices yeah but then you come to that point where it's like oh dog is 80% off should I buy some right now and it's like should you um you know what I mean though it's like yeah I think that I I think that that's fantastic framing um that is and it is it points out what's so wrong about that method of analysis um uh I think it was it was in May of 20 22 and I saw this meme it was the um it's like Homer Simpson like talking to like a little

Bart Simpson or something he's like yeah my coins are down 90% and he's like yeah my your your coins are n no your coin your coins are are down 90% so far so far yeah yeah um and it it doesn't matter how much down they are from the high right like what matters is a sound valuation and even in trafi you see this like oh it's down 20% from the high it's like yeah but the valuation is still XYZ above whatever's normal so um that that method of analysis is yeah super bearish on it uh people do it all the time professional investors all the time but it's not the right way to think about these things um especially in a low liquidity environment right because the

price could go insane um from relative on relatively small volume um when you start seeing these things trade down that much like I think like you can argue about the um usefulness of DCFS and things like that um I think that they start to matter in those like capitulation moments um so like probably for something like Tia like the DCF is like very relevant um and probably doesn't like look too good right now I mean it's still at five Bill FTV that's the thing and at 30,000 cumulative Revenue with unlocks coming up I agree with you don't n like I think eventually there will and I

think that's what funds are looking at like the people that you talk to are probably also like oh like it's been beaten down but there should be a narrative and I wonder if that's going to be a thing going forward or if it was just something in the past because in the past like things did go up because of a narrative but it doesn't mean that necessarily will continue happening that's true in the future like the space was a lot smaller less assets um more hope more optimism by people like oh modularity and then now it's very much like more people are more sophisticated I think to the point that a lot of people are know that it's only making x amount of money and the other thing I'm thinking about

is categorical winners because like salana is like the go-to play for like high through put chains you can make the argument maybe apto sui as like potential like next you know par ofci spense for a runup but generally when people think of like oh like Fast chain good how do I get exposure to that like salana or when people think of like you know okay like like app chain thesis or something like that people will think Cosmos I'd like to think people would think Avalanche but likely they're thinking Cosmos um and then you know if someone's thinking about like modularity like that's what I'm just thinking about for like categorical winners it's going to be more or less celesia and ethereum post ETF you know like Bitcoin is probably going to be trading a lot on

like flows so it's kind of falling into a category of its own in some ways or like a similar C category as Bitcoin still with influence on a variety of other things but that's just my general thoughts on it so Celestia is interesting just because uh there is a lot of fragmentation in some of these other categories like you know if you want to get exposure to like app chains there's a lot of different platforms that might you know support that to some degree or for highr p chains there's a lot of different categories but salana is already like the clear front runner there on that side Celestia is kind of like the only one in that category maybe some might say it's a failed category some people might say say it's a category that's yet to see success so that's the only thing I'm thinking about

is that I think like markets are also very like simple uh very mid to left curve and so if they're like they want to look for a really easy winner in a category and that's I wouldn't say Celestia is a winner it's just like just one of the only participants in that category that actually has made a name for itself so that's my only thoughts there like uh left curve take I would say yeah to to bet on Celestia you need a lot of sized rollups posting data to it over a very long period of time um I mean look we saw this in trafi markets where things in the NASDAQ or just think the NASDAQ itself got bit up to extraordinary highs and didn't reach that high again for 15 years I might be

a little off on the time frame there I think it was 2015 that it got back to its 2020 or 2021 highs sorry 20 2000 or 2001 highs right so like it could be a legitimate thing like if the achain thesis is a thing thing and things want to post data to Celestia it ends up being the big winner like it could be the fundamental winner like today through the next 15 years but it's going to take a long time for that valuation I think to to make a lot of sense and we've seen it we have an we have an analog for in triy markets it's it's a very it's it's a nonzero chance right it makes the story it makes the story interesting yeah like with many many apps Min chains products in this space like it's possible that Celestia is a winner at some point in the future but

this the valuation today might have just been like very early like like Ryan is saying you know if if that you know I don't know that we see the need for whatever the numbers um that Dan Smith has run like 60 some salonas um rolling up all their da on to uh Celestia but if we get to a point in the future where that is like we've got that much stuff going on on blockchains and you know we need to have that much data availability space um you know that might be the kind of break even win point for them but um as of today it's it's questionable if that's if that's a possibility that's fair I'm going to offer the opposite thing as well here like what would need to happen and this is also from Daniel

Smith probably should have had on Daniel Smith on the spot instead of me to actually give the views but what he um said would be good for Celestia and I think something that you also mentioned Dan is gaming um because gaming requires a lot of data to be posted so gaming l2s gaming l1's whatever game fi there is would be good um like Ryan said Solana rollups posting on Celestia would be huge just because they also have a lot of data going through it but it's going to take quite some time those two are the main things to watch out for though apparently um the opposite of that would be that there's unlocks coming up and also data availability is

very cheap and presumably only going to get cheaper as more Alternatives launch um there's a few live right now but there's more building and more coming like so we'll see how how it all works out narrative number two that have died real yield no one cares about real yield anymore you know GMX we had returning fees no one's like oh we need real yield um 2022 bare Market everybody was looking for some GMX Fork that would return e to es insert token here holders not anymore people are

uninterested yeah I have a very mild take on this um I think this is this behavior is very similar to what we see in trfi in equities when markets are down people look for like safe Investments you know you're you're sort of mom and pop like you know you're not you're not looking for a ton of risk um and so to look for something that earns you eth on your eth directly and you're not like playing this you know maybe it'll grow 100x in the future and justify a crazy valuation like that's not what people are looking for when all of their when all the value of all the things that they hold has just cratered 90% um they're they're looking to hold on to what they have left and so to look

for like safe opportunities to basically just like earn on what they have left um I think it's like sort of a very natural reaction and I think that's kind of why we saw that that real yield movement of people being like well I I really only want to hold like Ethan stables and so if I can earn like actual like cash flow directly on that then I'll do it so obviously when the market goes up then people you know people switch very quickly and they say well I don't care about real yield anymore I want to capture the 100x like on the way up next be Market next be Market if it's not a super cycle it could still be a super cycle it could be a it could be a bare Market up only still next up we have ai no one cares about AI anymore man

what happened it's because they keep lobotomizing Claude and Chad GPT we can't pump the markets anymore what's happening with AI agents I think was the last like thing that became popular and then those kind of also died out but when do we our resident AI expert Ryan when do we see that come back uh I think it's going to be with us for a long time I think that the intersection of crypto and AI they're very narrow use cases that Mak sense um but look things go through hype Cycles uh it just it happens um it's not surprising if you're a value oriented guy you can see that the hype has been

built into the price of a lot of these AI things if you are a like very sensible VC who understands the AI space you see a lot of like froth and like nonsensical things in the agent space so like yeah it's um the hype has certainly died down um I think that you're going to see these decent I mean these decentralized compute projects are generating real Revenue they are being used um you know IO is generating gmv uh render just posted its highest ever burn uh so Revenue onchain in a single Epoch uh latest Epoch on salana uh aash numbers look look you know

they're they're pump they're doing Revenue they have some interesting Partnerships uh so yeah like things are going uh but things don't happen overnight like I think a lot of the crypto markets expect so yeah it's just going to take some time and like is it like is it warranted that the hype died down across AI like yeah right there are other things going on in the world right now like most like obviously the El cycle um crypto broadly is just like back in the news like all eyes are kind of like on E BTC and now so for these ETF up or for these ETF approvals and uh the GPU shortage um it's still very much there but it's not as intense as it once was and you can see that in

prices of h& 100s so yeah look these things are narratives are going to cycle um but there's still like fundamental value that can that that can be created um but yeah like steer clear of the things that don't make sense like is it like do we need like a ZK proof of the of the AI inference to be posted on chain like I don't know I don't think so personally I'm not placing my chips there um is it time for agents right now on chain um I don't know like the big AI shops can't really build agents right now so like why are some cryptos guys crypto guys going to be able to do it um so like it's like it's like be NFA be

be careful out there but like there are some things that make sense yeah I think the um with the hype cycle I think this always happens whenever you start seeing stuff with like with AI it was very clear because they would just add AI to the end and I think it got like the peak the like reached the Pico top for both monad hype cycle and AI hype cycle when they launched a project called monad Ai and that's when you were like hey guys like maybe we gotta let's take some risk off over here let's relax a bit um yeah I think I think this is one definitely where um people have gotten a little OV excited in the short term that said I think if you look at like behaviors like

people are using chat gbt they're using Claude they're using these llms on a daily basis to like answer questions where previously you might have gone to Google search um like they are changing like base behaviors of people that are like interacting online and and doing things and and same goes with like actual workflows um developers I mean if you've seen any of the reports that are out there about people like reporting productivity increases from just like being able to simplify their you know their coding experiences get get their boiler played up really quickly like get a first draft of something you know help help review writing like it's it's changing a lot of workflows and work processes um kind of just across the board really anything

you can think of these days um and and I think that that's something that's like while I think it's understood it's like that part of what's happening is kind of going under the radar while everyone's getting excited about like doing infer being a AI agents it's like the actual like root behaviors of people that are changing and businesses as well like you know basically providing these tools to their employees for the productivity gains it's like that that's like a fundamental change that I think we'll just kind of continue to see accelerating as these models get better yeah and I think the key thing is this kind of goes back to our social media discussion which is that what can some of the products that are being created here at the intersection of crypto and AI offer that is like completely different and basically impossible uh to

offer in like traditional web too because like you know for social media for example not saying that a forecaster is offering the same thing as like a Twitter Reddit hybrid but you know essentially there's just a lot of overlap there too much maybe of an overlap same thing we're seeing here where there are a variety of different like uh like onchain models that are basically being created like these compound open- Source models especially the bit tensor ecosystem and they're very interesting on paper but they're just not different enough from the alternative that is easier to access and that more more people would access so I think till we see that that like you know we're kind of just going to be waiting here for something to go up which is why I I was pretty interested in my shell because basically it offers some of the experience that character AI

if you guys are familiar with that it's like a Marketplace of different llms it's usually used by people that want to like talk to specific custom llms like I don't know like there might be a Sam bankman free like llm that basically like talks from his perspective and just says like hey Buy Ft or something like that obviously don't do that um but like uh so like just crazy stuff like that but people love that stuff because it's like you know part of Internet culture and my shell basically is offering similar friend Tech type you know like I guess incentives on top of that so that you can you can actually like provide some tokens to the actual creators of

these models whether it's to gain access to it gain upside into it and it's really in early days but I think that those types of experiments where it's offering a product that is completely different than you know what can be offered in web 2 uh but you know iterates on that functionality is something that can be really valuable here and I haven't seen enough of that in the decentralized AI space um my Shell's one but I was curious if anybody here has seen something that kind of offers some of that same energy I guess of uh providing something very different I think people are going after this I think the problem is it's just it's very early days for this Tech and like to have like even an example of being like

an AI agent like if you want to have something that's G to like do your like go do your shopping for you and like have you know packages come to your house automatically and like it just understands like your spending habits and the things that you need like there there's a of like handholding and like actual traditional development that is required like it we're not at the point where these are just like okay I can just like have this plugin play AI agent it's going to like do these things I tell it to there's there's a lot of like intermediate steps that like need to be tackled first um and so I I think that you know people are seeing those things in their head and they're like wow that's like that is going to be amazing but like I think the tech just isn't

there yet to be able to just spin those up in a day like there needs to be a lot more development to be done because I I see the same like value in Gam in the future like NPCs and like you know characters in games like there's a lot of traditional development work that goes into like crafting stories and like you know thoughts and voice lines and all these things where you know if you can get to the point where there's these like really well-featured characters and you just can kind of like drop them into a world and it understands what it needs to do like that's obviously incredibly valuable the amount of man hours you wouldn't have to spend designing um there's so much there's so much money on the table but it's it just isn't there it just there's there's way too much

handholding required to like get something something to that kind of end state today yeah I would have just brought up gaming as something that's like very clearly uh intersection for AI agents but I'm not even sure if it's necessary in crypto um we'll see I think like crypto has some cool I mean in general anywhere any like thing that you can make take risk on for you or send money for you crypto has use case for it so I think it's like with anything we'll come up with some form of narrative it might be a bit of a like a to c instead of a A to B but it'll be fine as an example you mentioned it like I think we can picture the applications right like

if you're someone who has loans like active in defi or something like you could imagine like a well designed like AI agent that like autom manages like your LTV and things like that right like puts risk on or takes risk off as needed but um like I mentioned like we're just I think people are imagining these things and like the tech like needs a few more steps to be kind of fully there yeah I was surprised that there's no AI agent for emails for example if we don't have an AI agent for emails or like scheduling and stuff how can we have is there one is that why people are smiling there's one there's some ear there's some early stuff there um in beta yeah but but not it's not it's obviously not it's obviously not crypto stuff yeah

but no what I mean is like if we don't have it for email stuff then we're not going to get it for managing your Lending and borrowing because that's a lot more trusting like you can send the wrong email but I don't want like to lose money I I maintain the view that the most interesting things in Ai and crypto are not the intersection of the technology but the mark the the market structures that arise from AI so the compute markets where there's a shortage of compute um blockchains present a interesting like distributed system solution and and bootstrapping mechanism to you know to mobilize idle compute resources um on synthetic data generation like we're going to run out

of high quality data by like 2026 or 2029 depending on who you talk to um we're going to need to improve these models over time like we could use decentralized gpus to generate synthetic data at a much lower cost than you can in a Data Center and like there's going to be or there's a there's a non-zero chance in probably a high probability that um uh energy resources are going to be strained in certain localities because we're going to be using them to power football fields full of high performance gpus uh so we're going to need to use token incentives to bootstrap decentralized energy resources like those are the things to me that crypto has like some shots on gold for I

mean you're obviously you're seeing them in both liquid and VC markets um on the product side like yeah maybe there's going to be something there but it's like we're all just guessing at this point I think that that's where you have like a lot you have big markets with like tangible meaningful shots on goal um that have i in my view like decent probabilities of success yeah I think in general though most people are interested in not that side like the actually um logical business side but more on the I guess like a bit of a sillier side because I don't know I view that as a bigger opportunity there's no way to say like how much a pro a protocol that allows AI

agents to be in games could generate like how what that should have as a value versus with a caution and stuff you're very much like okay like line by line we can work it out like how much it's at its fair value um so I guess that's the big crypto unlock here is that we can speculate on these and that's the only thing that we really neat on that sense yes anyone want to do the last dying narrative last dying narrative it doesn't have to completely die it can come back the L2 narrative the scaling via the l2s and building for the maybe not building for the at home

Staker but though that is a maybe early Innings of a Dying narrative giving the moves from uh Paradigm and um max Resnik I think his name is yeah um and and Max Resnik being um being a guest on podcasts like bankless means he's being taken very seriously by some people um I think that that scaling D the and he's explicitly said um that something along the lines of like ethereum should eat l2's lunch like should compete against them again um that's very interesting um that's a very

interesting turn of events and if you want to long eth in my view you kind of want to see that compound so yeah maybe the L scaling via l2s is a dying narrative I mean yeah I think I agree with that that's not he made my point for me I don't have to say anything that's literally it I mean I just I'm going to take the counter here I'm just going to say maybe we're just having some bumps on the road and as I can't really make a very good argument for this because I also hope they die but as the ux improves which is something that I feel like has been said

every day for over the past however long um it'll just get better you know the the problem the biggest problem I have is that we're seeing you know this would would have been incredible to predict several years ago but we're seeing the economics just not play out in eth's favor right it's playing out to the favor of l2s like they're getting the users they're getting the sequencer fees um and eth is losing out um and if your if your like thesis is that like eth as money solves that somehow like because we're using eth on those chains like that fixes the problem it's like what at at some point in the future when

literally all activities performed on l2s and we've like there's this continued gradual decline of eth versus some potentially other asset or chain out there what is the reason that l2s wouldn't just move elsewhere like there's if there's nothing keeping them there fundamentally other than being the biggest one today um what happens when there's another you know biggest one in the future like I just don't see compelling reasons for like just Mone to like keep you in the Pi yeah also if ethereum doesn't go up nobody will use rollups like that's literally it it's the the price of that to the price of the token is very important to

activity and I think everybody knows this and it's like I don't want to say put the pump mentals on it metallic but you know you got to focus up a little bit I mean that's like you said if there's no value going to the base chain yeah why why would rollups yeah also I think that the the max Resnik and like Paradigm team talk about increasing the performance of the base layer I don't see that as mutually exclusive from l2s necessarily because like one could make the argument that one of the issues with like base rollups for example that debatably have more alignment with the actual um ethereum based layer ethereum

based layer gains access to some of those fees because you're using like you're using you're using nodes as sequencers basically and so there's there's a little bit more connection to the value flow the argument that could be made is that by increasing the performance of the base layer you make base rollups more attractive of a proposition and then you align the activity of l2s with the L1 because right now that's just not there it's not attractive enough of a proposition to use based rollups right now block times are too high it would just be an expensive and slower solution rather than doing what optim base are doing right now why do it and for what benefits basically so that's that's the only thing I would think that it it actually could potentially be something

that's valuable uh for aligning the L2 narrative with the L1 that makes sense um I think we're good for the day do you guys have anything else you want to bring up very urgently very importantly any tokens that you want to mention that might go up 10,000 decks over the next few weeks or no um let's see maybe usdt to $2 that's all I got my bank account 10,000x send it boys Ryan any specific coin picks price [Laughter] targets I think we're good to go yeah we're good to go thank thank you so

much for coming on the podcast guys um and thank you to our listener for making this all possible I think that's it thanks guys thanks everyone [Music]