Monad Mainnet, L1 Valuations, and Berachain News | Livestream

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Nothing said on Zerox Research is a recommendation to buy or sell securities or tokens. This podcast is forformational purposes only and any views expressed by anyone on the show are solely our opinions, not financial advice. Pokio Ryan and our guests may hold positions in the company's funds or projects discussed. >> Good morning. Welcome back to another episode live stream of Zerox Research. Music keeps going. feeding the ducks. It's a classic. It's a classic. And uh maybe not maybe not the ducks per se this week. Maybe the turkeys. We've got our turkey friend bottom right for Thanksgiving. Bakett's dangerously close to just eating him with the placement there.

>> Oh, actually surprise hot take. I love turkey. >> Really? >> Yeah. I think it's a great meat. It's very >> like are you particular about it or you know like white meat, dark meat or just any turkey? Yeah, of course. Of course. >> There was a correct answer to that, so it's fair. >> Definitely. Um, >> no, but I like Yeah. Are you Are you excited for Thanksgiving? It's not a big thing where I am, obviously. So, >> yeah, I am. I think it's uh I don't know, I would say probably a fairly standard thing us to go to family's house and have a nice dinner. It's a good time.

>> Are you Are you going to be with family? Yeah, I go to my parents we go to my parents house every year and they uh my dad makes a pretty killer stuffing. So that's >> turkey is not the highlight. It's usually the stuffing. >> Okay. To me that seems kind of natural. I would love like I imagine there's very good ham as well. Is this accurate? >> No, not ham. I will say maybe more of like a Christmas thing. Like a Christmas ham. >> Oh, interesting. I guess I'm getting my my things. I can't. It's blocking my face. So, I have to remove the turkey. I hope you're not too upset with me.

>> No, I think the classics are probably like turkey stuffing, mashed potatoes, maybe cranberry sauce. Those are like all classical. >> Maybe yams. Someone could do yams. Yeah. >> Very good. I have a lot of knowledge of Thanksgiving purely from >> movies. >> Yeah. done it. Um, always seems to be something going wrong on Thanksgiving if that's I don't know if that's relevant IRL. But um, something more relevant is great segue. Monad mainet launch today. What are our what's your initial reaction? Have you done anything on it? Let's start with that.

>> I swapped. Um yeah, I think launch is always tough I think for any because I think the expectations are very high >> and the ability to meet or exceed those expectations is very low. So um they're probably set up for a little bit of disappointment in the immediate term. just I think that's just kind of a natural uh thing that we see with with chains um price-wise. I mean, who knows? Like we we it's really market dependent. Like we see new launches go up for the first week and then down only for months.

Sometimes they just are flat. Sometimes they just go down only for months. Um but yeah, I I don't know. I think I think a lot of the early setups here are very like the expectations are very high and even the the price expectations are very high and that's hard to meet from like uh what the chain has to offer from day one. >> Yeah. Yeah, I agree with you. Um I'm going to run over some things because I took a look at it this morning. First of all, this to me seemed kind of ridiculous. Like an actively managed vault for Monad curated by Steakhouse. Not ridiculous in the sense of like why is this being done? But ridiculous in the sense that it's it has a TVL of $20,000 which this is on the main monad page, right? Like this is app.mmonad.xyz.

This is like their mainet tweet announcement had this link on it and then when you click on it and you scroll down it's it has 20.8k. Now given Melo is not the most popular platform in the world but still to me 20.8K it seems ridiculously low, right? Um, >> yeah, >> earn >> the reward token is MVT. I mean, that feels maybe >> Oh, that's the receipt token, >> which is the Monad Vault token. I don't know what the reward token the reward token. I >> What are the details there, I guess?

>> Uh, >> or is there none? >> There we go. Actually, TVL is quite a bit high. I know it's 886k mon, which is 21.2K. Um, no, it's uh rewards are in mellow. Not great. >> Okay. >> You know, also >> an API is zero right now, but >> realistically it's still something that I would have imagined more people would have deposited into. Now, this is shout out cozy kuru cozy maximalist. I don't know if you guys know him. Um, and Zox research channel sometimes. He's also a funny guy in general. Um, he's on the Kuro team. They're live. I used them to swap some assets on Monad mainet. Um,

and it was it was relatively it was a relatively clean process. I was a bit surprised at how little they showed the order of process. Um, I guess like the main interaction that I had was with the aggregator. Um, and I'm also excited for FOMO. Um, which I don't know if it's live yet with for yet. But apart from that, everything seems semi bog standard. Um I don't think anything is fully live yet, which kind of brings us to the point that you made, which is day one is always super difficult. Um you don't know which one of your like you're a chain and you've spent let's say Monad has been working on this for

four years. I don't know if it's true, but let's say four years. Um someone just found out I'm not American by the way. Yeah, that was >> they've been working on it for four years. They've had let's say 10 iterations of test net mainet devet. um you work with a hundred applications throughout those 10 iterations and day one only 10 of them managed to go live which is like first of all an insane thing that only 10 managed to go live but also on the other hand it's like you have to coordinate with 100 different parties to make sure that some of them go live and on the first day you have to organize it such that you have a per product type a deck slide a lending

product line a vault product line like minimum as well as bridges obviously So overall, I think it's not that bad. They've launched with the necessary requirements. Um, but day one, like day two is always better than day one, first of all. And second of all, like I can't I can't imagine anybody being particularly happy day one of their launch. Like what what chain had a good day a great day one launch?

>> Probably nothing. doesn't I don't think it exists. >> No, >> Bass had some really infamous rugs. So, >> yeah, >> B had bald, right? Didn't even run. First first two days, it just only went up and everybody was like, "Wow, Bass is the best chain ever." >> Yeah, >> it has full r. Um, another interesting thing is, uh, did you do the Mona? I don't know if you did this, but I assume you didn't do it, but did you do the Coinbased ICO for Monad?

>> No, I did not. >> It's another thing we have to talk about. Price on Mon USDTP on Binance right now. This is the perpetual contract, not the spot contract, but it is 2.4 billion. Anybody want to guess what the Coinbase ICO was? >> 2.5. It's crazy. >> Yeah. I mean, I think they um they got hit by a little bit of timing as I think probably everyone is aware. Like I think the Mega ETH guys kind of they did their sale like at the top so to speak. Uh and so there was, you know, maybe a nice uh kind of opportunity there. I guess if you're in the market at that time

thinking, oh yeah, if I get in at the one bill valuation, you know, I think this will launch at whatever higher multiple from there. Uh I think kind of the same idea existed in the eyes of people wanting to do the monad sale and they just we went into market down throughout the back half of their sale. And so, uh, that the pre-market prices which were previously up at like maybe five or six billion have trended all the way back down to the open ICO price of 2.5 and it's it seems to be basically actively trading like around that price um on chain right now. At least that was my experience this morning.

>> Yeah, mega is at 3.5 >> but still pre-market, right? >> Premarket. So like >> I think in the case of Monet, it's kind of like the token actually went live today and so we saw those prices converge because there was a reason for them to like I think even if the market is maybe maybe 3.5 is fake so to speak on Mega. But you're not going to >> volume on >> Yeah. You're not going to start like shorting it now when you don't know when the token's going to go live. But I would expect, you know, like let's say the market is still bad and they release the token in 3 weeks, then you'd expect to see those to converge, but there's no point for it for it to happen now. It's

just I think it'll just remain dislocated like that. >> Yeah, I would expect that as well. Mega E is also going to be an interesting launch. I don't know what their day one partners are. I had a very clear idea of the Mega Mafia when it first launched. Like it was going to be GTE. Um I think Euphoria was on day one day day Mega Mafia one as well. Avon the order book guys. Um and now I like I kind of don't know can't remember any of them. Um now I just know that Euphoria because Jim talked about it >> on Friday. Um, >> yeah, I think I mean probably the more meaningful thing in the immediate term is going to be I don't I believe Monad

and I'm sure Bega as well are going to do like some liquidity incentives on top of things like they have the kind of their app list on that site but I don't think anything is actively incentivized yet or right at this moment but I believe they've uh commented on the fact that they will do. So, um, so I mean, you'd expect to see some movement, some flows around that, right? If there's vaults or LP or LPing or, you know, borrow that's incentivized, then I'm sure we'll see upticks in that activity. Again, I think it's just like I don't know. These are all classical launch the chain short-term things that we'll see happen

and then uh it's going to be a question of how that translates into medium longer term. Um, but you know, as in many cases, the expectations are very high and so it's going to be very hard for them to meet that. But I guess we'll see. Yeah, it's it's increasingly difficult to launch chains. Um I think for the longest time, everybody was always saying like we like why do we need new chains? Why do we need new chains? And I think there are some clear examples where you do need some new chains.

Just not sure if you need generalized chains. And I think the most vocal person who believes that we need more new chains is Hib who anytime someone's like we don't need any new chains. Hashem writes this massive long paragraph and he talks about like how we're just going to make things faster and faster and faster. I don't blame the Monad guys, but I don't Is Monad that much faster than existing chains? I don't think it is. Like I know Mega E is taking some tradeoffs, taking some like cutting some corners in the sense of like decentralization. We can talk like you can care about that a lot, not care about that a lot. I don't care

about like anybody's opinions on that really. Um, but I've always had this view that mega like Mona did things the hard way. Um, I think 10,000 DPS is pretty good, but is it that good, right? Like is it It's just kind of crazy to me because we're talking to Harmonic Ben from Harmon. I don't think you were on that pod. So, Salana block builder Paradigm invested in them. Um, also they work closely with Temporal, they're part of the temporal team.

Anyway, the general idea was like their entire view is that we want to get to 1 million TPS. Um, Hyperliquid's at 200,000 TPS, the Hyper Core, not the Hyper EVM. Um, I don't know what Mega E is boasting, but I'm pretty sure it's above 10K TPS. like sometimes they share those images of their explorer and I know it's still test net so it's not real but um and you can't see anything really it's just kind of like going really fast um >> I think >> the goal is one gigas throughput which for context I believe base is like

35 meg 30 so 35 million gas a second versus you know uh a thousand million guests per second you or does a multiple higher throughput than what's on base today. I guess you could look to Salana and say it's a you know single digit multiple over their current throughput as well based on you know what one to two to maybe even like 3k TPS at at like peak load um scenarios. So yeah, I mean I think assuming the purported numbers are realizable like in real world usage then you know it's a step it's

like a step function of more throughput I suppose on like a traditional blockchain. I think we can argue that like Mega ETH's construction is a bit it's a bit different. Like it's not really like an apples to apples comparison with like a you know 100 distributed node kind of oriented blockchain versus like one big beefy sequencer. Um but I I I think probably the big point and I don't know if this is kind of where you're getting but I think that's not really what matters so much anymore. like it it it doesn't necessarily matter to just launch a fancy like a fancier faster chain and then it's worth more money. Um we care about the economic activity, the flows, the the value acrruel back to the native

token which is al always associated with the chain. And I guess maybe my take which I want your thoughts on is I actually think I'm maybe a little disappointed in both Monad and Mega ETH in their maybe unwillingness to be more I don't even know if I don't even think opinionated is a strong enough word to be more centralizing of like the app experience. um basically owning owning the applications and then therefore the revenue streams from those applications underneath the umbrella of the native chain token because I I think what we see now is

that like Hyper Hyperlid did this successfully with the Pers exchange and may do this with other things like with borrow lend and I think Salana while it scaled effectively and caught a bunch of you know priority fee revenues from lots of activity from memecoins um didn't capture any other part of that flow exchange um and so is losing out now and maybe into the over the next few years potentially. >> Yeah. So this is something that I wanted to talk about with relation to something tangentially related to this as well. So first of all, Mega Eve has some attempts at doing this. I think for USDM we'll have to see how far they go. Um, now one thing that I was fight not

fighting but like in the chat like Jim and um Daniel Smith were talking about um how Solana has done more spot volume on Zcash compared to Hyperlquid. Completely correct. Hyperlid has done I think like $150,000 in um Zcash spot volumes versus Solana was doing 40 50 mil a day. But the amount of money that Hyperlid makes off of spot trading volume is multiples more than the amount of volume that the amount of money that Solana makes off of spot. Because on Hyperlquid when somebody lists a spot asset, 50% of the

fees go to the lister. Therefore, listers are or I guess like spot issuers are incentivized to list these assets on the chain, bridge them over, figure out a way to make sure that the spot trading is liquid. Um, and Hyperliquid provides the order book um as well as the distribution for this trading. Therefore, it captures 50% of the on Solana. Solana makes a lot of money when there's a lot of FOMO to buy an asset. What what that means is that when people have to raise priority fees, when people have to raise tips, um like geot tips, etc. When there's a lot of out of protocol and in protocol tipping that goes directly to Solana's

topline, like that is direct revenue to Solana. But that's not that was not the case with Zcash. And I don't I'm going to check the numbers now as well, but last I checked um so Monad launched on Solana as well through wormhole sunrise. Um I think last I checked they had sub one mil volume ac no sub 1.5 mil volume across all AMMs. Um on Hyperlquid it's like four mil 5 mil. Now, it's not a huge number for daily volume in 24 hours. And no one's going to argue that on either side. But even if Salana was at 10 mil, 15 mil volume. I would imagine that most of that like it would make less money probably factors less

money than multiples less money than hyperlquid would make on spot volumes of the same asset. Does that make sense? because it doesn't directly go to I need to do the numbers on this but because Salana is so so cheap it's just like it doesn't matter the the like you need to scale trading a lot a lot a lot um or you need to make people pay more and more in gas. So this ties into what you're saying in this way is like unless you have applications make more money and this is like trading applications also make a

lot of money because they take on fees from volume. So you want as an as a chain to have some form of like value capture mechanism in that matter. um or else you're going to be constantly stuck in this thing where you're trying to increase the amount of transactions that are happening. And I just don't know if there's like a very easy path to do that um compared to like how much more money you can make. Also, Salana has such valuable block space. Like a lot of the times people are like, "Oh, block space is infinite." Like, yeah, it's infinite, but there's also like valuable block space. And Salana clearly has valuable block space. So, it should either charge rent on it or it should build protocols, products that can capture that. um capture value on that.

Long story short, completely agree with you. I am a bit surprised. Um but also it's very difficult to build a chain as well as build an app. I think it makes more sense to build an app and then develop it into a chain. We saw actually um there's this team called GTE, the global token exchange on Mega Mafia round one. Do you remember them? >> Yeah. >> Orange brand. Yeah. Okay. Um, they left I'm pretty sure they left Mega Mafia. Um, and they are launching their own L1. So, like that's another question like would I have left Mega Eve if I'm GTE?

Probably not. There's not that much benefit that you can get off of launching an L1. Apps make more money and it seems that we're finally kind of I don't know what the pump valuations. It should be like 2 2.5. Um, like you can launch a very good app and get the same valuation as an F1. So, no, my Nemesis is on. >> Yeah. Pumps at 2.7 FTP, >> you know, and and like Monad's at 2.5. I'm pretty sure they raise the same amount of money. Um I'm sure that mo pump has way less um

I should like I don't know I I don't know when this like valuation is going to compress for chains. It hasn't yet but it slowly is. So I I don't know why. Do you get what I'm trying to say? I'm like jumping from one place to another. But >> yeah I mean it's just I think there's kind of a time based phenomenon here. Welcome on James. We're talking about valuations of different things and how they make money maybe as always. Uh I mean I think there's a time based phenomenon here like prior round for things like monad etc. Like I don't know we're still having these things that raised at very high valuations kind of coming out of 2021 that have not hit the public markets until this year. Um, and so

obviously their valuations are still relatively like anchored to the upside. So we won't see them potentially get priced downward until they trade publicly like Monet is doing now. Um, I mean I feel like there's plenty of examples that support what you're saying Boach. Like you could look at bear chain for example or like movement or like XYZ other chain and token that it's launched in the past like year two years that have just gone down only since their launch that basically exemplifies the point that like okay they aren't worth that much just for the sake of being a new chain. Um people care about where where potential revenue streams might come from.

>> Yeah, I'm coming a little bit late but I I agree with that. And I think like if you think back to like the 2021 cycle, everything was punctuated by lower raises in the private market for L1's. And then you actually had an opportunity to bid them in public markets, right? Like stuff that TGE, like Avalanche, like you actually did have some nice appreciation because price discovery was predominantly in the public markets. So you could like actually bake some of that in as a retail investor. here. It's like every single person knows as soon as this stuff hits the market, it's going to be a down only chart. So, they're like, "Why am I going to bother ever bidding it?"

Yeah, >> I think and I wonder if part of that too, you know, I think a lot of the layer one like the chains that launched in that period as well may have launched like their tokens initially in in 2019 or 2020 and the real like upurge in in liquidity and and craziness didn't happen until late 2020 and into 2021. So to your point, there was still like kind of upside in the market. Um but yeah, I think it it's been it's been different in the past several years to your point. >> Yeah, like a lot of it is unfortunate just like when the team does a TGE, right? Like if Monad TGED in January 25 or February 2025, like could easily see

this thing being like a seven billion dollar FTV right now, right? >> Yeah, >> I agree 100%. And I think we would have seen like to both of your points like let's say they launched uh Q1 2024 when Tio was at trading at 20 billion um and Starket was >> this could be a $50 billion project. >> Exactly. It could be $50 billion coin at that particular time in the market um just because of how things were acting and and then but then I think like if that happens then the chart looks exactly like Box says where it's like this isn't worth that much and it just go down only until until today.

>> Um um we price that in. >> I I will say one thing it is a bit tough because right now it's at like a very weird middle ground where it's not like Starknet at 30 bill you have to sell that realistically like if you're getting a Stark airdrop it's not worth 30 mil. Stark's a great protocol but a great chain but in no way is it worth 30 mil at that time. you have to sell it, but it's also not low enough the way that James is mentioning where it's like, you know, you had meaningful time to bid Avalanche and Solana at these lows. Um, it's like at this weird awkward ground where it doesn't have a proven product, but it's also like not high enough to sell, not short enough, not low enough to buy. It's just kind of

like you're like, "Okay, well, I guess I'll wait like two, three weeks to see what the hell they're up to." >> No. >> Yeah, totally 100%. Um, one thing I don't know if you guys want to talk about it just because it's brand new, but like I'm literally leafing through it now. This thing from Jack. It's crazy. >> Yeah, I just saw it as well. Let me pull it up. >> Let's discuss. >> Um, I don't think you saw it yet, Danny, cuz I was >> I saw it in the chat. Our uh our old >> This is legit cryptocurrency journalism. This is like this is the stuff you like desperately need in this industry. So, hats off, Jack. This is very cool stuff to find out.

>> All right. Can everybody see my little screen? Yes. Okay. >> Yeah. >> Light mode. >> Do you want to Yeah, dude. It's I'm not logged in on this side. Okay. Who wants to give the background on this one? Should I start? >> You're doing I I just read it. I don't want to say anything wrong. So, yeah. Still trying to understand. Um so Barerich basically Barerchain gave their lead investor which is Nova Digital um under Brevanhauard Digital which is under Brevin Howard a very large fund the option to um get a refund under investment if the token did not do particularly well.

Um this is the best way to do venture investing because you either get a >> I would like to steal Um, >> I would love to guaranteed not lose money and or make a lot of money. That sounds great to me. >> Yeah, there's also some other information here about like frameworks, investments going forth, etc., etc. Uh, which I don't know how relevant that is for this conversation, but this is um a very good scoop. Thank you, Jack. Thank you Jack.

>> Yeah, I love what Jack wrote here saying. Four lawy lawyers we spoke to said it was unusual for an investor to be granted a post TGE refund right unlike a typical VC investment the Revan fund wasn't taking any risk either Barrow would pump or they could get their money back very very nice setup for them >> this is very >> I guess my the initial thing I would think about is most relevant and like someone other investors can can produce this information right away um if they have like MFNs within their subscription docs and like they're offering ing. So MFN, most favored nations, basically means like you're not going to get worse terms than anyone else has offered. And if someone that's investing alongside of you is getting a preferential term, you can get it, too. I'd be really surprised

if like the protocol did this not legally. Like that would be surprising to me. But I don't know. I'm sure I'm sure other people that invested in this are scrambling right now to figure out what's going on. I don't Do you really need a lead investor that bad that you have to tell them, "Here, you can have your money back if you need it." Do you know what I mean? >> Yeah. I mean, you're basically paying it's a marketing spend at that point, right? You're basically just giving away tokens for free, right? Like, >> yeah, but like like Brevan Howard is a very large fund, very good fund.

Obviously, they're very talented given that I don't think any other fund has ever done this. And it's um I'm sure there are other funds that could have led you around that would that would have just put the money in and this would have never come up. Do you know what I'm trying to say? Like I'm a large L1 and I'm thinking, okay, I need to raise. There are four to five leads that I'm thinking about. I I can either go with one of them which will ask me for its money back if its investment doesn't go well or I can go with another one who just wants to invest finds me because he finds my protocol my layer one interesting. Which one do you go with?

>> Right. Like what am I missing here? How can >> No, it's it's it's totally Yeah. It's crazy. >> Yeah. I don't it's um it's weird to me that you would do this rather than I don't know K realms are a thing. Like I'm sure you could have found plenty of you could have raised money from CT. Like I don't know there were plenty of ways I think to raise money without um giving them a free takebacks. >> Yeah. And I don't think anyone like no like Brevin's obviously a very good name but I don't think anyone looks at it and goes like oh my god Brevin Howard is invested now I can need to ship everything into this thing. Like the the value of the name is not surely it's not that much.

>> I don't think so. I it seems immaterial to me. Like I don't I don't think it would have mattered if it was Brevin Howard or pick your other favorite venture fund. >> Dude, it's also $25 million. Like you can definitely raise that off of CT. >> Yeah. Yeah, I think equally it's interesting like obviously we weren't quite doing we weren't quite back to doing ICOs yet when Barra launched, but let's say they waited a little bit longer. They could have very easily done an ICO and probably raised like 100 million or more. Um, >> no, that's very interesting. Yeah, it's great though. Like I would like Echo to implement this feature and I would like

a free roll on all of my venture investments if that makes sense. I think that would be very good for me. >> Yeah, I don't know. It seems to just kind of highlight incompetency if anything. >> Yeah. James, what's your take on this? You kind of came in here huffing and puffing. >> You give I want to clip you in context. I don't I I would want to review everything else before making a hot take, but yeah. No, I mean, if I were if you were an investor alongside these guys, you probably would be not too happy right now, which I imagine that conversation's going on in a lot of places. Yeah, it sucks. Feel bad for people.

>> Well, oh yeah. I mean, surely they didn't give this to everybody, so I don't know. >> No, I think they said I think in Jack's document, they said that they didn't have it to everybody. It was only for bre. >> That's that's something you wouldn't know, right? like they wouldn't be required to disclose this. >> Well, that's the thing. So, like that's why I mentioned MFNs. Like you typically you'd have a clause that says like if investors are if anyone else is offered better terms than what you're investing at, you're given like notification rights to to get those rights. So, that's why this would be odd. I think we're at a pretty logical slow point here for me to interject briefly and do a quick shout out to our sponsor for today's stream, UniS Swap. Thanks so much, UniS Swap.

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Oh, we like this one better. >> So, James, what do you think about We were just talking about Monad Mega. Did you already ask him this, Danny? I got very sidetracked by the whole >> We were talking about valuation when he jumped in, so I'm not sure what you're going to ask. >> Oh, James, what do you think about how L1 should be valued going forward? >> What do you think about value? I don't think I've ever heard James. James is for context, guys. I'm in I'm with I'm in a few groups with James where we discuss investment methodologies, our ideas, what we should buy and sell at what price points, etc. And I don't think I've ever seen James make any reasonable fundamental or technical

analysis. I've never seen him say, "Oh, this token is trading at X valuation, therefore it should should be bid." And I've also never seen him say, "Oh, this like is at like he never draws those crayon lines and is like, oh, like it's at support. We got to buy." but he also does trade very actively and he says let's bid this, let's sell this, etc. So, James, if you're not doing fundamental analysis or technical analysis, what are you buying and selling off of? >> Um, I'm trying to think of a way to say without sounding stupid, but I mean I think like a lot of crypto coins trade on vibes, right? And like there's there's there is a lot of capital and and I bifrocate, right? Like I I I don't trade um

like majors based on that. that I don't think that's really reasonable. I don't really trade majors to begin with. I kind of just hold Bitcoin forever. Um, but I mean like look, I don't think you like a lot of times in crypto like we'll just talk about Ethereum for an example. Like valuing Ethereum from a fundamental or technical perspective like I don't think would have given you like the correct trading strategy at all in the last like six months, right? Like if you were valuing Ethereum on a fundamental basis, you wouldn't have bought it when they announced all the DATs. Um, and then you probably still wouldn't have sold it when the DATs bought everything, right? So

like that that was I would honestly say that's probably my best trade that I've made this entire cycle was just buying Ethereum and then selling it like towards the top of the Dat Mania. And I don't know how you would classify that. Like maybe you call that fundamental. I don't know. I don't think that's like a fundamental discounted cash flow type of analysis, but it's just a fundamental analysis in so far as I see someone who says he's going to buy a lot of the token so I can fundamentally buy it before him. Um, that's kind of where I spend honestly in all seriousness all my time at crypto is just finding those weird little idiosyncratic like opportunities to trade. Like I I'm not a fundamental investor. I'm not good at it. I'm certainly not a good technical trader. Like I couldn't tell you if

something's going to go up or down 10% over the next couple weeks. I think that's kind of a bull's errand. Um, back to your previous question of like valuing things on fundamentals. I think you have like an interesting question of the the two L1s I think that are stable now, right? Like being Ethereum and Soul. I think they've gotten past the point that they're being valued on like a fundamental basis. I just don't think that they are. And I think they have like the lindiness that they're being valued as something else. Um, I have no interest to debate whether or not that's like store of value or something else. I just kind of it is and that's all I really care about. Um, and I look at every other 01 and I think it's probably very difficult for any new L1 to get that same level of lindiness. So I think

on a long time frame they're probably all just going to zero would be like my overarching guess, but I would never take a position on it. Like I'm not going to go long mega ETH short monad. Like I just I just don't play those games. I just don't think it's a positive expected value to take any position in them. Do you think that going forward as these things resemble more and more businesses? I do agree on the sense of like um it's very tough to val like Ethereum I think is that I I can't remember. I think it's at like a 400x price earnings. Um, but it's like that's also like what it always trades at and then Solana trades

at like a 30x price earnings. So, it's like it doesn't make a lot of sense to value it based on that because you have this like you don't have like a consistent multiple that it trades on, right? So, you're just kind of looking at two things that have are valued completely differently. Nobody knows why one is valued one way, the other is valued the other way. And a lot of people have died trying to play that like convergence gap where you're like and I agree with you like if you were like okay well Ethereum's overpriced and Tom Lee puts the gigabit on it like you're just gonna get bulldozed over so it makes no sense.

>> Yeah. And and I think like and I also think to that vein like narrative based investing I think is fundamental in a in a sense. Maybe it's not fundamental in terms of like I'm putting together like a DCF spreadsheet or something, but like you could have constructed a lot of like pretty cogent fundamental analysis trades based on like Trump sentiment going into his inauguration, right? And like Palunteer names like these like that I don't know I don't know where that falls in terms of like your classification of how you invest. Palanteer is certainly not a cheap name by any type of like traditional investment analysis, but like a lot of people put together very cogent trade pitches for that when when Trump came into office as like an example.

>> Yeah, it is. Yeah, it is. I guess it's very context dependent and it's very much like it is not vibes. I I think like I mean I guess it is vibes, it's like vibes plus mind share plus narrative. >> Dan, you can you can also just look at like that. You can look at like the value factor in like traditional equity markets and like momentum, which momentum is probably the best descriptor of like narrative based investing, if we're going to like assign definitions to these, um has been way more powerful than the value factor over like the last 10 years, right? And every single traditional value guy uh that made money before like hasn't hasn't made money recently.

>> Yeah, that is increas Okay. Well, my question was that if you think eventually these things look more and more like business that businesses then do you think I guess like that valuation aspect starts playing more and more a role and in the sense I guess like I'm referring more to let's say like metadow ownership token style equity token splits take off where all the entire regulatory and financial landscape changes and all tokens start acrewing value some way or another um and these things look more and more like cash generating businesses I guess still valuation es and flows plus narrative plus mind share etc and not just

>> yeah I think that's probably right >> yeah it is the reason I was asking this is like for example today monad launched two and a half bill gives me nothing gives me no information >> right like abs I think this is the only place in finance where it actually I think apart from VC maybe because in VC you're also kind of like blind and you don't know if there's going to be BMF. You don't know if it's going to make any money. You don't know anything about the timeline. You don't know like there's a product out but it's very much like it like I would say Monad L1 today isn't it is like an MVP to an extent like there's nothing on top of it yet. There's eight product protocols on top of it. There's no we don't know how fast it can go, how

much money it's going to make, etc., etc. Um, I think crypto is the only place where the general public can buy a token like this or like buy into an investment like this where there's actually no information whatsoever about it. >> Like there's no >> and even the information that's out there like I can I can read at the read about like redesigning the EVM from the ground up and paralyzed execution, but like I don't actually know what that means, right? Like I'm not I'm not smart enough to understand what that means besides having someone on a podcast tell me that it's very good. Right. So like that's that's not enough information for me to buy something.

>> Yeah, it is. >> Yeah. And maybe one core difference from like maybe a traditional tech IPO would be that you know I'm not a valuation analysis expert or anything along these lines but you can develop the idea or the thesis around like a path towards revenues recurring revenues or you know a valuation that's based on their you know earnings at some point in the future um from becoming like a cash burning machine to like a cash generating machine and but I think the problem is that in the case of these just like generalized blockchains that's kind of hand wavy because it's sort of

we are like we've discussed it we know the picture there it's like the fees aren't going to justify like the valuations that we're talking about. Um, and so then the other port part that we hang on is the network effect and like like James said is it's going to be this reimagination of the EVM and have such powerful network effects that it's worth so much money. But I think that's kind of where like chain these just like blockchains differ from you know you could you could take something like Uber or pick your other favorite tech startup and it's like okay they just burn a [ __ ] ton of money. How are they going to make money? It's like okay, you know, they're growing and at some point then they'll charge a fee for this, that, and the

other service. Um, and actually, it's quite the opposite for blockchains where it's like, no, actually, we're going to compress fees even further and like we're going to try to keep growing, but it's like, okay, but where like where do you actually make the money? >> And didn't didn't Keone have a podcast a few days ago or something? Maybe I read this tangentially um where he said like it doesn't matter if L1's make money or something like that. I hope I hope I'm not quoting him out of context, but I could have sworn I saw someone post that a few days ago. Um, which like stuff like that or even he totally talks about that all the time, right? Like this is not extremely encouraging for the token price.

>> Yeah. And and I think, you know, there's probably a disconnect for them in the sense that it I think it's probably true that like an L1 could make no money but yet still serve as a backbone to a lot of things. It just might then also mean that like >> the token >> regular regular people probably don't even don't want to invest in the token. Um which can be true like those things can be true and that's fine. Uh you might just have to look elsewhere for things to put your money into outside of like the narrative cycles. >> Yeah.

But like I would say that a lot of Solana's narrative cycle was purely because it was making a [ __ ] ton of money, right? Like cuz it I mean the entire rev thing. Don't make me pull Daniel Smith up here and make him give us the spiel, but like that was it, right? It was that was its narrative. So um >> yeah, and I I mean and I think to some extent he'll still argue that point. I mean I forget the number he always throws around, but it's like 1 million TPS at X% of a cent is still worth a lot of money.

Um, >> it's tough because it means you have to monetize these like tiny little units of transactions. And it it's like a much better way to monetize in my mind is just to go to Jupiter and say, "Hey buddy, like you know, you made $600 million this year. You made it because you're trading apps on infrastructure that I built. Like here's a subscription model." I don't know. However AWS charges people, um, it should charge people the same way. Like AWS doesn't charge individual customers. That would be [ __ ] ridiculous. Um, it charges the business.

>> Well, that's also Well, that's also a question of like do you want to be a commercialf facing business or a retail facing business? And the answer in like any type of commercial market is is always commercial. Obviously, you never want to face retail, right? Like facing retail sucks. >> Yeah. >> Like Yeah. you want to be as like commercial like you want to be B2B um and I can't imagine that the world goes anywhere but towards these chains charging the applications building on top of them or internally building out applications also a very valid way of approaching this thing like you can have the chain that >> just runs in the background dirt [ __ ]

cheap you don't have to monetize it you monetize it through like one killer app five killer apps 10 killer apps. But a few valiant efforts as it I will say we talked about bar chain today. Couple one positive thing about bar chain. I like that they built up their own stack. Like it had a canonical dex, a canonical lending platform and a canonical LSD thing. Um actually I don't know if it had LSD. Anyway, it had a cononical dex and a canonical lending which I think is a directionally correct thing to do.

like you want these basic loweffort apps that generate an unnecessary amount of money. Um, AMM specifically in this case and like non modular like monolithic lending which is like not a lot of innovation that can come from it. Just do it yourself. Capture the fees. Why give it to somebody who's just forking something off of Ethereum mainet? Kanto did it as well. the two examples that I'm giving haven't done particularly well but but I think directionally it was the correct thing to do. Um yeah so I I I'm surprised not everybody else is also doing it I guess.

>> Yeah I think there's there's other reasons that explain their struggles to perform like I think Barrow was just bar chain is stuck in 2021 um is part of the problem there. like I think they're too eager to like redo M type economics and like hope that that we can just run entirely on that. Um I agree with you that like owning some of the applica here's maybe my thought is we see plenty of cases in finance where you can just do both. You can serve as backend and also as like a front end to retail.

So like back end for businesses and front end to retail and I think even like some of the most like hyped examples like in prediction markets for example like we see Khi and Poly Market basically both attempting to do this where they have their own kind of existing front end and they make some money on on the kind of the fees there from you know retail users that trade on it but then they're also doing partnerships you know call sheet partnered with uh Robin Hood and I think like we as well and they charge them you know a fee uh to basically route orders through their markets. And it's in my mind it's like I don't know the the the like lift and the amount of people involved and like the effort to actually do it's not like you need to go out and build a

physical factory to like sell you know an API key to your exchange to some business. You just have to sell that to them. Sell the idea to them and and get them to agree on the pricing. Um, and so I don't see why there's any reason why like that can't be a meaningful mode of operation for probably basically anything that's building in the crypto space. You can probably sell B2B and you can probably sell B TOC. >> Yeah, we're kind of taking James out of the conversation because we're speaking positively about crypto and I assume he's like kind of >> Well, here's I feel like it segus to something. I'd love your take here, James and Boach.

>> Be pretty measured. I think it I think it segus like that point I just made segus into this idea of like there are and I think we're seeing this now with I would say probably Salana as well and honestly with Kone and Monet they they seem to have the same view of like being offering this like credibly neutral platform and thus therefore taking no stance on like selecting and making your own apps on top. um those seem those seem to be like just not compatible ideas. And I don't know, I guess what are your takes there? Like to me it just seems kind of strange that we see this play out over and over again like with ETH pushing everything to L2s and then losing out all the value flow to the L2s. Um why can't like a relatively

neutral platform also just like have some own app some of its own apps that make money too? >> No, it should be able to. I think that's right. But one thing, one thing I did want to say, Baku, if we're talking like constructive criticism, like I wish we would stop kind of playing the same game of like I think a lot of pro the problem that all these protocols are facing is not technical in nature, right? It's purely like how they've structured these things. Every single one of these projects is going to continually just raise at a massive valuation and there is not going to be any natural buyer and every single it's not an accident that every single chart looks the same, right? And until like until we start launching projects at way lower valuations and publicly float all the tokens way earlier, it's just going to

keep keep happening. >> So it's it's a shameless metad plug, but like it actually is right. Like you need to get the tokens in people's hands at a low valuation quickly or else you're just going to keep doing this fractal forever and nothing is ever going to change. Like it doesn't matter how good the tech is. If you have stuff that's, you know, tokens at such a blisteringly high valuation and people are just unloading them on a programmatic basis, it's just going to happen over and over and over again. >> Yeah. Ryan asked me this morning about my thoughts on Metadou and my answer to him was it's the only token on my like watch list that has put in a higher low.

Also, everything the bad h that happens in crypto is a marketing stunt for them potentially. And it's just the truth. Like I agree with you. You can show Metadau in this case. It's >> No. And there's like And like I sold it because I'm an idiot, but I bought Avichi when it launched at like a couple million bucks. And I was like, well, no, I got bored and probably wasted it on something else. But like that's an great example of like a good hot narrative of Neoanking. team seems fairly competent and like anyone in the world. Yeah. You didn't get filled at your your metadata ICO price, but like it launched at a super reasonable valuation and you could have bought it and now it's, you know, probably close to like 100 million bucks valuation.

>> Yeah, I um I actually thought that this year would kind of not this year, but there are some positive attempts at this. Um, I do think that this like pre-market listings happening on chain um is a good thing for this because I think for example if hyperlquid hadn't done hypers for monad or whatever like pre-launch markets everywhere I guess like binance OKX etc as well then monad would probably have launched at five to six bill like I do think that that price is going lower and lower now >> I'll take the So, well, so the reason it's actually

it's actually interesting to think about that I would have done the Coinbase ICO sale in like for me what is relatively decent size if it were not for the pre-market purpose. Like I set myself like an invalidation level of like if it's trading below 32 at this per at this point I'm not going to do it. Um and if that like pre-market price didn't exist I probably would have bought it. So I I think it it did a great service to people to be totally honest. I guess that's fair. It's um >> Yeah, I agree with you now. Now I agree with you. You've converted me, James.

>> The more information the better, right? It's it's real volume relatively, right? I mean, they're not volume, but like there's there's still volume there and people are still willing to transact at it. So like that that does tell you something, >> I think. Yeah, I think to your point, it's like you're if you're imagining the average retail guy who just wants to bid the sale and doesn't have a good feel for what the market thinks despite the decline, but can look at just a chart, >> then yeah, they have a lot more information than they used to have. And so, >> yeah.

>> Okay. Also, yeah, I think if you're ICOing at 2.5 bill, you're clearly going to launch at least 56 bill, right? >> No. >> Well, that was that was the calculus, right? So, my calculus was like, okay, what discount what discount are you willing to to trade for a 30-day block up window, right? And my mind was like two 2.5 and my expectations to sell it at like 34 or 35, something like that. Um but just the pre-market per just told you that that was wrong.

>> Yeah, you would have gotten it today for like 30 seconds. >> Yeah, >> at free though, not at 3.5. Um, no, I think pre-markets are very good for that. I think the ownership tokens, Metad's good for that. And I think a lot of this is just going to come from the fact that like just time um market doesn't reward a lot of generalized L2s anymore. Therefore, probably not a lot of them will be able to raise and if they do raise, they're not going to be able to raise the high prices. Therefore, they won't be able to launch at higher prices.

Um I I think um this entire ICO thing is probably semi good until it kind of run the the bad thing in crypto is like the first few teams who approach things the right way end up doing it doing well by their participants. Um, for example, Plasma did very good with their pre-eposit program. Um, because it was at 500 mil valuation and they launched at whatever 10. Mega E as well, they did it at like a billion. They're still at free bill right now. So, we're gonna like these solar sales are going quite quite well. Um, James has to go. Goodbye, James.

>> Yeah, I gotta I gotta jump off. It was fun chatting. Thank you guys for having me on. Thanks for joining, James, as >> he's gone, man. Um, no, but the last thing I'll say, and then we can wrap it up. Anyway, we've been here for an hour now. Um, we've been doing our job for an hour now. Um these first few guys that are good who attempt this like new form of capital raising or capital formation or like who who launch this pre-eposit program they do it at a low price such that participants will make money on it and then eventually that runs out and after that like after the there's three to four who good guys who let people

make money on it and then 15 people after that raise money and everybody loses money on And then it gets normalized. Do you know what? Do you get what I'm trying to say? Like we always have to push it to the point where like nobody makes any money on it and it's a painful experience now and then it starts getting normalized. Like in crypto nothing is like good or bad. It's just like it's really good and it goes to [ __ ] [ __ ] for like three months. And >> I think I push back on the framing though. Like I don't know if I would call any of them good guys or bad guys. I think this is just how the market works, right? Like if you're earlier and you haven't seen one project instantly get priced at 10 billion, then you're not going to assume that you're going to

get priced at 10 billion. So therefore, you're going to offer your thing at a lower valuation. But then when you're later and you've seen six teams in a row go 500 million, 1 billion, 2 billion, 3 billion, then you're going to be like, well, maybe we should do 3.5 billion. Um, so I think that's just kind of how the market works. And like >> then when the narrative cools off and like the 3.5 doesn't work out, then it's like, okay, we're going back to 500 million, I guess. Let's start over. >> Yeah. And then that's when people start buying again, which is nice. Also, bare markets will help. Like inevitably, just like in all markets, the bust brings everybody's valuations down. Um, Danny, do we have to do one more read?

>> No, sir. >> Thanks again to Uniswap. >> Thanks. Shout out to Uniswap. Um, I guess before we No, my producer is not here. I was going to say something to him. All right. Um, then just to end things off, uh, make sure to subscribe to the Xerox Research newsletter. It goes out daily. Um, and have a to our American listeners. Happy Thanksgiving week. Happy Thanksgiving coming up. >> Have a happy Thanksgiving on Thursday >> to all the listeners out there.

>> All the listeners out there. Um, Danny, anything you want to say? Um, what could he say? >> Is he stuck? >> Did I lag out when you asked me that? >> I was like, why is he thinking for so long? >> It's even funnier because I said, um, no. So, I think we're good. Yeah. Uh yeah, clearly liquid, you know, excitement isn't the same. You know, Monet trading at the ISO price. So perhaps we uh need to price things down down again like we

were just discussing for the next round of uh financial games. But uh everyone can enjoy in the US anyway can enjoy a nice Thanksgiving and and we'll get back to it next week. >> Peace. >> See you all on Friday. Oh no, Friday. See you all next Monday. >> See you next week.