Morpho, Hyperliquid & The State of HyperEVM | Charlie, Felix Protocol

Transcript

A quick shout out to today's sponsor, Katana. We'll hear more from Katana later in today's episode. [Music] Nothing said on Xerox 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. >> Hey, good morning. Welcome back Monday morning to another Xerx Research live stream. It's myself and your fearless leader self, Picacio, joined by uh Charlie Felix Protocol on the in the Hyperlid EOS. Hyperlid ecosystem. Hyper liquid. Um how we doing

this morning guys? Glad to have you on Charlie. >> Thank you. So good to be here. >> Are you muted Boach? be the early morning for you, but I'm the one that's messing me up. Um, yes, welcome, Charlie. Charlie, I don't know if >> you want to give an intro. I imagine most people already know who you are because you've already done a pod. Um, but if you want to give a light intro, you're more than welcome to. If you don't want to do it, you can say I don't want to do it. >> No, sure. I'll give a I'll give a light intro. Um, yeah, good to be here, guys.

I'm Charlie. I'm one of the contributors, founders of Felix. Uh we're building money market infra and more on hyperlquid. >> Very good. Um and Felix is technically this is going to be a great segue for me. So Felix is technically a curator for Morpho, right? >> That's correct. So we I guess uh we took the curation level a bit higher and that we serve as a curator. Then we also offer a front end which was the only front end for morphone and hyper or um our vault on morphon hyperlquid until the morpho front end added them about two weeks ago maybe three weeks ago. Um and then we also deploy our markets. So we kind of do the full morpho stack. I guess >> that makes sense. What do you um so we

had I mean you know this um Daniel also knows this. We discussed this before the show just so the listeners are confused as if like I'm randomly bringing this up but um so there was like the slight issue with Morpho um with stream um like what is your I guess how do you see Morpho do stuff like this going forward like how does it like for example you guys are great curators right um and you offer your own front end and you're also hosted on the Morpho front end what is the ideal way that this is set up eventually is it like only the morph ful front end only does like whitelisted curators, you guys, gauntlet, etc., etc., or like very trusted parties or how do you see that?

How do you see that um model go change? >> Yeah. No, I think I mean we can get into the more I mean, I know it's been probably covered in aim at this point, the XUSD incident and the curators allocating to it, but um we can get into the specifics of it. Um, however, I think, yeah, to your question, B, it depends a bit on the level of permissionlessness you want in the the morpho system or I guess in DeFi lending at large. Um, if you want anyone to be able to spin up a market and spin up a pool, then arguably there should be no segmentation on the morphos side. Maybe there's eventually something like a strict list all list hyperlquidesque

where you have anyone can list and it's going on all list and then you have a strict list >> um and you have some sort of criteria for that. But then again that is another level of opacity that ideally we get to avoid um but you know there's a trade-offs there obviously you know we see that with curators on to these markets. However, the only other piece I'd say is a lot of the curators that lent to this market will probably be on the strict list. Um, and so is that really solving anything? I'm not sure. But yeah, I guess that's uh my thinking on it is always more open better, but open to uh counter arguments.

>> So the stream finance guys would be on the strict list. >> Uh, I'm saying more so the curators that chose to lend to that market would likely be on the strict list. So I for example like I I'm not certain but I believe MEB Capital was implicated in that. I believe RE7 was implicated that in that those are two of the largest curators. Um and so they would almost certainly be on the strict list. Markets being on the strict list um could be its own thing but then again I don't think that the Morpho team should necessarily be assessing risk of markets. I think that should be on the role of risk managers aka curators. Um and so to think like they can't do that themselves seems a bit handholdy uh to me.

>> Yeah, I think that makes sense. Also, it would be like more and more responsibility for Morpho if it started also um thinking about markets and providing risk to markets. I I don't think that would be sustainable for them at all. What do you um what do you think about like the a model where it's just one guy or like not one guy but like one team that does all of this, >> right? Um yeah, I think that is the uh the great debate. Um we can we can steal man a case here and I guess I'm curious to get your guys thoughts on it as well. Um like in my mind the steelman for a is uh number one risk should move more slowly so there isn't need for these multiple parties and hey we want to

avoid this large governance process because risk is something that should move slowly in the first place and that's more of a feature than a bug. Um, second point that I'd still for the a side is arguably pooling liquidity is all that matters in DeFi lending or the most important thing that matters and the pulled model is arguably the most efficient way to do that. You see more folk trying to get at this um with the shared market model and you know we can get into that but as opposed to having segmented vaults segmented markets we have segmented vaults shared markets.

So, we're trying to pull liquidity, but arguably not as efficiently as the A model. Um, and then the third thing that I would steal meant for the A side is in DeFi borrow lend today, there are really only a few collateral assets that make up the majority of demand. Obviously, we see that on the Felix side of hype and Khype like that is the majority of our collateral base. um on the A ETH mainet side, you know, that's ETH staked ETH. Um maybe a few other assets. I think like the Athena assets have emerged into that bucket. Um >> but yeah, I think like those are kind of the Steelman cases for the A side and we can get into the bear cases as well, but

I will uh be curious to get your guys thoughts too, CBI there. >> Yeah, I I think that last thing is what really resonates with me. Like it's really only like two to three collaterals. uh assets that you want and I think on a it would also be BTC right like or like wrapped BTC I guess and we can talk about like wrapped BTC has its own risks that is associated and they're keep trying to like change up which one's going to come in and the issue there is it doesn't move as quickly like I feel like I recogn like I don't use WBTC anymore I use CBBTC I'm sure it has its own risks >> um I think the WBTC thing is because of the Justin Sun stuff so I don't know if a adapted to that I I just have it checked. But like in my mind the a model

makes a lot of sense. Um but like I guess in between the a and morph thing where it's not like permissionless curators but it's like there's a few teams that I trust like like gauntlet you guys. Um and there's a few like risk managers I trust like Llama Risk is very serious. Our own block works research guys very good. So like I would trust these guys as opposed to like letting everybody do it. But if you let everybody do it, you get more exotic markets. >> Yeah. >> You get more fun. >> And then it like who am I to tell people what the >> the issue is that people don't have proper risk management and they don't know how to assess risk. Like the individual consumer doesn't know how to assess risk and that's also another

issue. But that also when you say that you want more regulation and it's a whole mess. So I don't know. There's no right answer. I don't think there's any right there's a lot of arguments on Twitter about what the right answer is. Don't think there's a right answer here. Charlie, what do you think about um sort of like information or like disclosure about assets or or like how a vault is being managed? Like I I guess for my POV, not that I was using any of these vaults, but I have a pretty strong inkling that like if you looked at some of these vaults via like the Morpho front end, for example, it wouldn't tell you enough information for you to have any view that like they were massively at risk due to off-chain activities occurring via the, you know, the stream

finance or other teams that were just like doing crazy looping rehypothecation strategies. >> For sure. Yeah. Yeah. No, I think it's a very fair question. Um, and I guess it sort of gets to at what level you think the risk management should be done, whether it's at the deposit. Like Bach, you're saying basically you're doing your own risk. If you're like, look, I trust these vault managers for this XYZ reason. I'm going to lend to only these guys. Like that's you doing risk versus you just sorting by APY on the morph front end and being like, oh great, this one is 20%, they've got five mil deposited. That's pretty good. I'll go put in 500k to that. Um, now to Dwarf's credit on the morpher front end, you can see all the markets that a vault is allocating to. So you can see, okay,

great. It's allocated 90% to this thing called XUSD. I'm not sure what this is. Um, and then it's up to you to go determine, do I trust these guys who are allocating to XUSD or do I trust XUSD myself? Um, I think the the issue in my mind is less on the opacity of who Morpho Vaults are lending to and more on those collateral assets themselves. I think people as far as I know still to this day do not know what the 93 million blowup was on XUSD, who that was. Um, like almost obviously that should be public information around who is being lent to here. Um, and where are these tables going? if that's not public, like it probably no curator should be lending

to that. Um, but certainly like there should be information somewhere that's public around that. Um, maybe the curators who lend to that have it privately and they haven't released it yet. I'm not sure. But yeah, I guess um I guess my my take would be it's less of a morpho issue and more of the collateral assets themselves um and the creators that are choosing to to lend to those more opaque assets. >> Yeah. I was told through the grapevine of Twitter that the 93 mill was a guy who lost a lot of money on 1010. Um I think he was running some like centralized exchange strategy. Um y >> and then he lost the money and then

tried to revenge trade it back. Um which seems plausible. I mean that's what happens to a lot of people. Um the other the thing here is like unironically a lot of this could be fixed by like if you're able to fully track people's positions fully like on chain right >> because that that is the whole thing right like swap per um running delta nur or like funding rate arbitragees that's a very viable strategy it's something a lot of funds do um to generate yield but um like there's sizing constraints if you go fully on chain but I I feel like that would have at least been if that was the reason why the blow up happened that would have been a way to fix the whole thing.

>> You're you're basically saying that there should be no more of this pooling capital onchain to bring offchain is kind of what you're getting at there. >> Yeah. Yeah. I don't I don't think that that makes a lot but I mean that's the entire point of how these private credit funds also or private credit protocols also ran over, right? Like what was the one? It wasn't Goldfinch that was like they took in a lot of capital and then they lent it out to these Kenyon motorcycle businesses at like bad rates essentially. I think they like at 12%.

It's like >> like who who invests in a stock like with no equity a ridiculous um you're taking on ridiculous risk and you're never going to be able to get your money back. It's the same thing. you're giving it out this money to somebody who says they run these strategies, but I mean if things go south I don't know how that $93 million hole is filled now, right? Like how's it remade? You have no I don't know how much like legality Morpho has stream finance has to go to this guy and say there's no like creditors. Like if you were a depositor and you lost money, how how do you get it back?

There's no >> Yeah, I mean there's a >> Yeah, there's no getting it back. like it unless stream gets the funds back from this guy somehow or has some sort of leen on his capital and he has you know 93 million sitting around they can take or they can garnish wages but yeah I don't I would consider it basically gone um so yeah >> and you can't underwrite that risk like because you don't know what the hell is happening offchain if you this isn't morpo's fault but it's also not my fault and it's also kind of stream finance fault, but also not hugely their fault.

>> Like, >> no, I mean, >> just doesn't work. >> I don't know if I how could it not be their fault that they're going to go lend to something. >> Anytime you're lending to someone, you you go assess your collateral risk and your your borrower risk and your I mean, people do balance sheet reviews and business reviews, like that's >> how lending. So, I I Yeah, I I think there's certain fault. >> Yeah. >> It's not Morph's fault, though. And I agree with you on that. I think people like my thing was I was very vocal that I think more folks should have fixed this somehow. But thinking about it, I don't think they could have fixed it. But I'm more so thinking from like their end because eventually if this happens twice it's fine. If it happens 10 times then it's

like it's a risk tomorrow. >> Yeah. >> Right. So and it could happen 10 times. There's no reason it could. So more should like implement some way of getting themselves out of trouble if they have to. >> Yeah. I would agree with you here, Boach. Like I I don't think this is fundamentally Morphos's fault. I think you have, you know, risktaking on, you know, people wanting to lend their money for 20% APY on their USDC and then risk-taking on these, you know, guys who make a bunch of money and then think that they can go be risk managers when they don't know anything about it. Um, that's probably objectively what happened here um on the stream side of things. But for Morpho, like to your point, Morpho's issue is that they're kind of in between a rock in a hard

place. Like classic situation here of do they want to just leave this thing completely open because that's how it scales the best or like the downside there is if five or six more times things blow up like are are people going to keep using your product? >> Yeah. No, I think it's a I think it's a fair question. Um, I guess the the way that I that I put it and I think the way that I see Morpho going is much more Morpho is infrastructure to build lending markets, lending products with um, as opposed to Morpho is an app where a bunch of

so-called curators list their vaults on this app and then people go and sort by APY and go deposit into those vaults. Um, and I guess I'm sort of speaking my book here, but that's what we've done on the Felix side is we've productized Morpho fully into like when people use Felix, most of them don't know they're using Morpho and and didn't know they were using Morpho until we got some texts this past week like, "Hey, I heard you guys use Morpho. Are you you guys solvent?" I was like, "Uh, yes, we are solvent." Like, this is this is not in a solveny situation here. Um, which obviously, you know, Embach, we can get into the point around the liquidity crunch as well and what happened there.

Um, and sort of the thoughts on that side like how arguably in the morphos system bad curators can hurt good curators. And so we can we can talk on that piece, but I don't agree with it. Um, but we can chat on it. Yeah, I think um I guess the the issue is like I mean one could say the same about Bitcoin 2010 2011 Silk Road like hey yeah it scales by being permissionless but it's just used for narcotics trafficking so if it keeps doing that should it be shut down? Well, I mean, I think we probably argue today, no, it shouldn't be shut

down because there's a lot of good that has come from it. I think same thing on the Morpho side, like uh if you're an open system, you inevitably have less than savory events in tandem with more savory events. Um, but you have to weigh them. And I think thus far it's weighed immeasurably into the savory side as opposed to just, hey, it's a constant source of terrible collateral being lent to. Uh so I guess that's my overall take on it. But >> no that's a good thing. >> Yeah. Another thing here would be like HIPPree if I don't know whatever like they start launching random markets using it and then it just doesn't work or something bad happens right

>> then it's like well like what's not like it's it's tough though because if you want to play both back end and front end the game like if you want to be both the back end of something as well as like off your own front end you have to it's got to be tough like I'm sure Hyperlid will also struggle with these HIPP3 things I I don't know how they're going to because they have a strict all thing which I think Morpho should also implement a version of that realistically. Um but like you can always have a risk there as well like something bad could happen. Um you you never I agree with you never want to back end guys but >> yeah yeah it's the uh it's the danger of the danger of operating the front end you know the blessing and the curse like

obviously the the blessing is the distribution I mean hyper liquid's front end morphos front they have great distribution the the down the choke the the back the bad is that it's a choke point you know it's a it's a fail case if something like this happens and um or you eventually you centralize control because there is there's no truly decentralized front-end offering right now. Like people operate front ends and that is what it is. So yeah, I think there are are trades. But Boach, you were you were coming at me in the DM saying you were going to come hard at Morpho. I don't I don't know if I'm hearing it.

>> No, I'm I'm This is what I usually do. I get like very very aggressive and then I'm like I'm actually playing. >> No, I think it's completely hedging. No. Um, well, the thing is that when something immediately happens, the first thing that I do is I message people. I say, "Yeah, dude. This [ __ ] sucks. This is like, >> yeah, he was mad last week. >> I was mad last week." >> Then if you sleep on it, you spend a couple days, you think about it, you're like, "Oh, yeah. This actually makes complete sense. This is fine." I still am not sure if the Morpho way will win over the A way. Um, just because I think like V4 A seems to be playing both sides. um but like at a very safe space and I think a lot of lending wants safe.

>> Um so I don't know about the winner the overall winner. might still um you know change my mind but >> maybe I'm looking out too like too far in the future but it seems like a gets there eventually you know all the way over to this like fully modular model but like given their market share that they can take the time to to go a little slower a more conservative approach. This episode is sponsored by Katana. Katana is an L2 built for DeFi and is pioneering the ecosystem category of productive TVL, believing that change should be graded on how efficiently assets are put to work in DeFi rather than just total value locked. From now until the end of November, users that bridge the katana can earn boosted yield from CAT incentive campaigns, added

vault bridge yield, and other chain revenue. Follow the link in today's show notes to get started. >> Charlie, what is um you're the you're the guy we have the most from the Hyper EVM side. Um what is the what are we waiting for on that side? How's everything going? Are you >> how's um because I saw a few stats that like activity is actually picking up and so our transactions per second but it's not where everybody wants it to be but from what I've seen it's developing quite well actually. >> Yes. Yeah. I think uh Hyper EVM has had a very interesting life cycle um in the life cycle of chains to launch this year. uh obviously the random announcement February 18

where we no one had any idea some teams go live other teams like us we waited about over a month post to go live um and then just kind of slowly building it was the alpha phase and then it's like slowly we're upgrading the limits on transaction and speed is getting upgraded things are getting improved more teams are launching um but then I think now it's in more of a phase where most of the base primitives are built And people are wondering, all right, well, is this just another another chain with the same copy paste protocols or is there anything unique here? Um, and so in my mind, I think what Hyper EVM is mainly waiting on is more things to do with HIP 3. I think that's really where

things go from here. Um as in obviously and we can we can get into the BLP stuff here briefly too but um obviously the core use case of hypervm was let's find ways to enhance the trader experience on hyper core. One of those key ways was essentially a multiasset margin flow where people would come to protocols like Felix deposit assets other than USDC which is the only margin asset on hyper core. So they would deposit hype khdc etc. borrow against those assets and then transfer to hyper core and trade. Um that's been a core use case. The most ideal would be that flow is directly integrated into hyperlquid and or hyper core and so

people can just on the hyperlquid UI take hype put down hype collateral trade against hype. Um that hasn't been doable. So the thinking is with hip 3 users can launch their own markets. they can eventually integrate this flow directly into markets and then with the expansion of builder code interfaces also integrating these markets also integrating more on the hypervm side we see more integration directly of hypervm offering into hyper core trading experience so that's kind of where I I see things going I think we're like hyperm hip 3 is taking its time to really get off the ground we still only have one market live um hopefully more soon but yeah I think that's kind of where I see it right now. Curious if you guys see otherwise or anything I'm

missing on it. >> I um the hyperlquid to hyper the hypervium to hyper core like margin very insta liquidity thing where it's like one button. I don't know how that's going to work. I feel like I'm a bit too stupid for this. Um in terms of the HIP3 being the main focus which I think is what you're implying. I agree with that. Um, one, um, I'd like to talk about BLP, but I know everything is a lot of speculation at this point. Um, from what I imagine, they're just going to offer very basic primitives, lending primitives on Hyper Core. Um, probably like the assets that we talked about

where you were like a lot of the assets that make up collateral are these ones. Um, whereas it's like BTC, ETH, and stable coins on Ethereum. Um, I think on Hyperlid I don't I'm not even sure if they would do Khype. I feel like it would mainly be Hype. >> Maybe USC. >> I don't know about BTC or E. I don't know if there's enough unit assets on chain to do that. And I don't know how they would even pick the provider because from what I understand, there's more and more um spot providers coming in as well, right? Like I saw a bunch of AVAC zero and USDT0 and I imagine that's layer zero bridging over somebody.

>> Um >> yes. Um I guess a couple things on on that note. So yeah, we can chat more on the BP CL on the spot issuance side. Yeah, there have been a couple more teams listing spot assets. I believe the zero assets you've seen aside from USDT0 which has bridged over from the USDT0 team. Um I think there's like a zero, link zero, a zero. Those are bridged over I believe from a team called hybrid which is run by a guy named at MTD. So big hyper lipidic community member. Um but then yeah there have been more of those I guess yeah selecting the assets is interesting. Um yeah in my mind likely look and I again for disclaimer I'm purely speculating on BLP as well.

um have no have no have not read any sort of docs on it or no sort of information on what the design looks like if it actually will be implemented if it's just a something in testing but I mean knowing the team they don't just usually test random stuff like it's probably coming to production and probably in the next 24 hours no but we'll see um but I think probably like the the main asset would be hype I would be surprised if they added third party assets given I think a big point of why they would build out a solution. And and for context for anyone who hasn't seen what BLP is, the speculation is that it's hyperlquid building an internal essentially multiasset margin system um

on the hyper core side to allow people to trade against non USDC assets. Um BLP potentially stands for borrow lend protocol, but um really the TBD. So yeah, >> very imaginative name if that's what they came up with. >> I mean I yeah I believe that's what it stands for. I mean maybe I'm off but I I thought that's what it was. Um, but yeah, I think the I would be surprised if they came out and initially had support for non for basically any asset other than hype because I think a major point of them doing this is to avoid thirdparty smart contract risk and inevitably if you're adding assets that

aren't just hype, you're adding in smart contract risk that doesn't isn't managed by hyperlquid labs or hyperl foundation, however they have their entities set up. Um, so I think like that's that's what I would say most likely. Maybe eventually they add other assets, but that's kind of how I see it to start if it does launch, but we'll see. >> Yeah, I think that makes sense. Go ahead. Do you think I guess my question here is like thinking about the hype hyperlquid's ex like kind of growth into different product lines and you know just rumors about BLP like I guess Charlie are you concerned at all about Felix continuing to operate or like

almost even compete against hype if they're going to continue to build out new products you know into the the borrow lend world as well and maybe that includes like additional products in the future that like compete directly with you in terms of what you offer today. >> For sure side. >> For sure. Um yeah, I think a few things on it. The first is like just um almost inevitably and again I have not I don't know what the design implementation details of their solution look like. So I can't say like oh compare the solution that we offer verse the solution if it comes to be. Uh but

almost inevitably it will be a it would be a smoother experience if you could instead of having to go to a thirdparty provider to go borrow against your hype you can just use it directly on hyper core like that would be probably smoother um so I guess you know we'll have to see what happens there obviously there are questions around pooling liquidity and rates are they going to cover if it's if it's really a borrow solution are they going to cover the cost to borrow is the cost to there going to be more expensive than elsewhere um questions on that side. So, it's certainly things that we yeah, we're we're weighing and we'll have to see um and also see kind of what their solution looks like if their solution ends up does end up doing something on the EVM side um or if it's purely built

on the core side. I guess we'll have to see. But um yeah, I mean I think on our side we like our our first thing is we are bullish on the growth of Hyperlquid and so we want we want you know what's best for Hyperlid because I think that's the the clearest benefit you know selfishly on our side as a as a business that's building on Hyperlid. Um and so I think like yeah we we'll uh have to find where our positions lie um around that but we have some other you know I guess cards in the deck as well. So yeah.

>> Yeah. I don't know how much you can talk about those cards in the deck. Are you open to chat about these or are we going to wait and see what Mr. Charlie comes up with over the next few months? >> Um probably see some things very soon. Um I don't want to speak too soon because yeah we're still ironing out final things but um yeah hopefully in the next week few days or something like that. So yeah >> also there's a chance that I mean Felix can tap into whatever liquidity there is on Hyperore right like I imagine they're thinking about that to an extent >> or like the lending or that you can harve those away or whatever borrowed lend from there as well to make your users more

Exactly. No, I mean exact and I think a benefit here is that ideally this increases borrowing overall and just that demand for borrow across hyperlquid if it does get implemented which like inevitably as um a large borrow provider on hyperlquid is helpful to see. So yeah, >> that makes sense. Um I I want to go back to this um to this thing that Danny said. Um how how so this idea of the hyper core hosting all financial primitives is I think quite sexy if you're a hyper if you're a hype holder like it's

it's ideal right like it makes everything very simple for us um for the user um and it just like expands the the the product suite of Hyperlid to the point that it's just like if you're if it's directly built into the Hyperore just much easier. Um, and you said that you guys still have a use case. Um, which I agree with. Um, plus I think this gives you the chance to like experiment a bit more. Um, and do sillier stuff, which I think could also be cool. Although probably not what you want to do. I imagine you want to do like more and more assets and I think you'll have like the spot assets thing I think makes a lot of sense for you. Um, like the BTC I don't I I agree with you.

I don't imagine they'll take on that risk at least for the foreseeable future. Um what do you think about other like we never saw AMMs do well on HyperVm. Um makes sense like there's a hyper core you want to trade over there if you want to trade. Um >> do do you think like this is kind of a I guess like overall thoughts. Do you think this is a dangerous precedent to set as a team or do you think this is like overall very good for the ecosystem because you allow the EVM to only be because in my mind this only pushes like really good themes to the EVM um where you actually have to offer something unique and cool um to like add on to the entire ecosystem as

opposed to like what we get on other chains which is a very basic AMM primitive a very basic a v1 v2 primitive etc etc that's just forked over what do you Um, yeah, it's interesting. I think so. The first thing I'd say is I don't know if you've looked at spot volumes recently, but it's actually interesting, and I'm not sure if it's still the case, but for a good while, uh, Project X spot volumes were either almost the same or topping, uh, the unit spot volumes on Hyper Core. Um, and so maybe that goes to show in some part that the issue is

not necessarily an AMM issue, but more so just that Hyperlid is still known as a per first venue and not a spot first venue. Even though there's discussions around, hey, hyperlquid can take on Binance private any sex experience. Well, sex is list loads and loads of spot assets. hyperl liquid. I mean, you can count the number of, you know, non-native spot assets on maybe two hands. Um, maybe there's a bit more now, but like that's obviously not an at par experience yet. Um, and so I guess that's that is something I would say somewhat against the argument that AMM's fully failed. Um, it's just I think spot trading across Hyperlid has not

succeeded yet. Um but again the argument could be made back to your point that look AM did fail and will continue to fail because trading on an onchain order book is just that much more efficient. And so unless you're a very longtail asset that you know cannot build liquidity on the orderbook side the the most efficient face place to buy this asset will be on the order book. Um so that is one question there. Um, so I guess I would separate that from the Hyperlquid team building primitives that are not native to the exchange because they started with an exchange. So if you're going to come build an AMM next to, you know, arguably one of the best exchanges, well then, you know, that's kind of on you for building the AMM. Um,

and but even with that being said, obviously Project S has some success relative to Hyperlquid Spot. So there's that piece. um on the part of them building other primitives in the ecosystem like I don't know if they were to build out their own liquid staking solution you know or something like this like um yeah I think that is it it cuts both ways um I mean because I think the the con is look obviously they're what like an 11 12 person team and doesn't seem like looking to expand rapidly ly on that. And so you can only do so many things very well. And I think we've seen this in some of the pre-market listings.

Granted, pre-market listings across exchanges are notoriously volatile and have these wild wicks that cause terrible UX issues, but it it could and it could just be sort of a a mass PR campaign against Hyperlid. why we see more emphasis on hyperlquids, you know, flaws on the pre pre-TGE hyper markets. But I do think there is some validity to the argument that look, the team is focused on so many things that to think that they're also they also should be continuously launching every new market that comes and trying to prioritize all these markets and um determining everything that goes into launching a market is sort of unsustainable. And so to think that they're also building out every other primitive with this 11 person team is um

impressive if it works but likely unrealistic um at least in any sort of short-term time frame over which time period other teams most likely build traction to a place where it doesn't make sense. for example, uh I mean Kinetic is obviously something like 1.75 or 2 billion in TV on the liquid staking side like um would it really make sense for Hyperloop to go launch their own liquid staking solution to go compete with that? It's like well these guys are a multi-billion dollar protocol already like why would we bother doing that? Um so I guess those are kind of the questions I weigh on it. Um, I think there are certain advancements to the hype liquid trading experience that it

just makes sense for them to build. Um, and BLP could be one of those things. Um, but I don't know if it's necessarily a a theme that continues to to go. Um, I guess I'm curious to get your thoughts, your guys thoughts on stuff like the prime broker space around Hyperl if it's something you guys have looked into. um players like Cleer and I know there's other ones that are coming up like Hyperlink, quote.xyz, these things. Uh Superstack, I've seen a decent bit of them, but like I think that's another primitive where there's going to be a lot of competition and arguably it could be something that the Hyperlid team builds themselves like,

okay, great. Like we have Hyperlid Prime and it's just this kind of prime broker experience built on Hyperlid. Um we work with, you know, blah blah blah. So, I don't know. I guess I'm I'm curious to see if basically if that is one that you guys could see or if there are other primitives you guys see that the Hyperlid team could in theory step in and create a better UX around. >> Yeah, I um I don't think there's a lot that they could create a better UX around. I I think maybe like a liquid staking one would make sense to me, but it's also like I feel like that first of all I invested in kinetic and also I love Omnia and also I love Kinetic. Um, to me that would be the one that probably

makes the most sense, but I also see why they would never want to do it because I think hyper liquority gets some flak because um the foundation wallets have a lot of stake or I guess like the foundation validators have a lot of stake. Um, so I don't know how much more you want to play into that. Um >> uh also I don't know what the marginal benefit would be if you can just go from one to another like khype to depending on however they end up doing it. I think I don't know if they have to touch that prime brokerage makes sense.

I've I chatted with a few people about this and the smarter people that I know have said that a prime brokerage for Hyperlquid is cool, but like those things really only make a lot of sense if you're integrating multiple venues into one, >> right? So, it's like I don't know. I need to read more into it. I need to look more into it. I've I've seen a few popups. Um, I I don't have very strong opinions on any of them. I I'm really excited for the for the spot stuff to work out a bit more. I think one of the main drivers that haven't come in is like unit is very good at listing assets, but they're

only like they're the smart they're doing the smart thing which is listing the new asset which will have the most volume >> which is the correct approach. But there also needs to be somebody who's listing like old assets that might just want like if you want to make it really that venue for all trading like a should be on it, ENA should be on it, right? >> Um pend spot should be on it. Like there's a few of these like key pieces and you could probably make a list of it and it's like maybe like 40 assets realistically. You can even do it by like checking Binance OKX private spot um looking at like which ones are matched um and like excluding like which ones have the including which ones have the most

volume excluding ones that are like obvious kind of scammy stuff. >> Make a list of like 35 assets and then list those. Um I think if there is like a spot competitor for unit I don't know if there like I know there are hybrid etc. Um, if there's one that wants to go like really serious, um, I would recommend doing something like that. Um, I don't know if that makes sense as a business for somebody to list like old assets that probably don't get traded as much as like like whoever lists mega or monad um, day one spot is going to make multiples more money than whoever lists like those 35 assets over three months.

So, it doesn't make a lot of business. So it's something probably Hyperlquid needs to handle or it's something that like unit needs to slowly handle throughout time. Do you know what I mean? Like that's the next thing. If we're talking trading, >> I feel like that's the thing. Some spot assets that I would like to buy, >> but right >> there's two things holding me back from only using Hyperlid Chain is spot assets on certain things and the second thing is offramp. Onramp off ramp is not easy. >> Yep. >> No, I fully agree. Um, and yeah, just one thing I would say on the spot side as well is I think it's a like I agree with the point on the need for more spotits. I think potentially one way to solve it is one of these um sort of

mobile ccentric but then also offering a desktop UI builder code app like a liquid um or maybe dexari if they end up getting there or one of these apps that's basically trying to offer like the Coinbasees experience ends up serving building out a listing function as well or working with a team that's listing these assets and there's a collaboration there where because then you're basically you can offer a sex like UX um and own all the volume coming all the trading volume coming from the listing. And so I think that would make a greater business case. So it would be like Liquid partnering with another lister or Liquid building out a listing to themselves and listing this. Like I feel like that's probably the way I I don't see unit going and scrolling, you know, Coin Gecko and just listing the

top 100 assets because they probably to your point Bach won't do um a fraction of the volume that Mega would do in the like the first month of trading. So it's just like is it worth their time especially since they're doing other stuff now on this on the equity purpose side and all this stuff. So um yeah but I I I do agree that there has to be some some sort of way to get parody there. >> How effectively does unit I just have a question. How effectively does unit monetize spot volumes for assets they list? >> I think they get 50% which is quite of >> very effectively very effectively of the trading. They make a ton of money. Yeah, but like you said, the volume here is is negligible on a lot of these assets,

right? Like I'm just going down the list and Farcoin did like two million in volume. >> Yeah, but like >> Sorry, you speak. >> Oh, no, you go ahead. Go ahead. >> But like I'm trying to figure out which one I mean there was a few of these that did a very very good volume. Um especially on like day of launch, right? Like pump. Imagine pump day of launch. It was the most >> Hyper liquid had the most volume across decentralized exchanges or like the most like single venue volume across the centralized exchanges. Same with like what's another big one? Um XPL.

>> XPL. Yeah. >> Yeah. >> It's like and that's the thing. It's like like you said it's negligible. Like Fartcoin does two million volume a day and that was like a big listing at the time but now it's almost I I don't know. The thing is I don't know about the economics from unit side at all. Like I don't know how much they have to pay for these listings. I don't know how much it costs for them to run the infrastruure for those listings. Um I don't know what they have to do on their end legal side, business side. So I can't figure out what it would make sense for them. It could be interesting for USDH to try and do some of this stuff. I was just thinking about it like cuz it's going to be tough for them to to compete with USDC in the markets. So,

it might make sense for them to compete in the swap markets or um I think this is what they're working towards. It seems to me like it um like on-ramp off-ramp maybe offering like a very good UI for that. That could be a great way to boost USDH volumes. Um, and and you can clip a percent or whatever on like off-ramps. Um, like I would pay a percent to be able to offramp very easily. Maybe not 1% fully. That seems like a bit much, but >> sure. >> You know, >> yeah, I guess the the thinking I had like the line of thought here is like knowing that the fees on these are a few bips and if you're going to list something and it's only going to do a million dollars in volume a day, like and you know, I guess then you get you

get 50% of the fees of those bips. It's it doesn't seem super meaningful. But to Charlie's point, which I think you mentioned, is like if you have one of these like other kind of like front-end providers who's maybe taking a larger, you know, take rate because they're providing some, you know, kind of like wholly integrated service to their customer who's willing to pay more in fees, like doesn't care, you know, you look at like an Axiom or something like that or a Ravi or a Phantom that's going to charge an additional take rate on top. like maybe they can flywheel that into, you know, hey, we're charging like half a percent actually on all these spot trades. So, you know, if the users want to see a or uni or bitcoin cash on spot, like we could list it because we know we're going to even if it's only

going to trade a million a day, like we're going to make way more money than than anyone would have made just natively listing it on the >> Exactly. Yeah. Exactly. Um, and I guess the only other piece that I would add on the unit economic side is I don't know Dan if you remember like the days like back in the summer when there was that large BTC whale who was selling like hundreds of millions on Hyperlid like I think they were doing something like a million dollars a day in fees there. So like obviously then like you have these days when you're ideally you keep having these days when like as them as the BTC lister like they're just printing off those and so it makes up for you know the the days when another asset is doing a million dollars in volume and they're not making

much. So yeah I mean having the biggest assets is always the the path to large scale. >> Yeah. But I also think this is the economics of every exchange, right? Like Binance has whatever like 600 SPA assets or something. I can't imagine like the bottom 80% does any volume whatsoever, but they monetize it by >> monetized natively from those teams by having them >> pay and and that's like that's something that unit obviously doesn't want to do because that's like what hyperl supposed to avoid. Um but maybe there's a way to to align the incentives a bit where

um teams can put up something to I don't know it's like it's also not the benefit hyperlquid needs to get big enough such that teams want to seek listing and then it it changes um like the spot side needs to get big enough um for the time being. I'm not sure how how it's going to work out, but those are my two things like spot markets, more spot markets. Um and on boarding, offboarding. >> Yep. Yep. >> My >> I guess I want to go back to uh something I was thinking about that that we didn't touch on was this idea of like what other products they could build or offer. Um, and I think to me there's almost a question of like you could compare some some different models here.

Like if you're thinking maybe from like a Robin Hood perspective, they're they're not necessarily building every product they offer, right? Like they've partnered with callsh for prediction markets. So I think when you look at Hyperlid, there's a question here. And then I guess you could look at Coinbase as well. They recently acquired Echo uh from Kobe. So there's sort of like some different models to go about this. You could build it, you could acquire it, you could partner with someone and charge an additional fee on top to monetize it. Um, I don't know if you think the Hyperlquid team like just in their actions so far size their team like their their views on how they've built the product today like if that makes you think that any new product they're just going to build it just because or is there an angle here like

if they want to get into prediction markets do they just call up Poly Market and get a you know slap it in and and charge a fee on top >> right right yeah it's interesting I think um liquid is in a unique spot relative to Coinbase or Robin Hood, Couch, any businesses because obviously it's trying to be more than just an exchange provider. It's trying to be this sort of this infer layer. I mean, it's trying to be it's Hyperlinker is trying to be more akin to Bitcoin than it is to Coinbase in my mind. Uh which is an open layer. So, and because of that, you lose the flexibility with some of these more businesses partnerships where it's like if you make a big part

of this working reliant on another party, well, then you inherently lose some of the I guess nativity, the natural the naturalness of this one thing, which is hyperlquid when it's relying on uh Coinbase for this thing or Koshi for this thing or Poly Market like it's it's losing something there. Um, I think that's a big question with Unit because essentially Hyperlid did partner with Unit to do spotless. Like I that's that does seem like you could make the argument like it you could make the argument that it was permissionless and um clearly unit walked in. You could also make the argument that look why would they just list Bitcoin themselves.

It's sort of like there was a and I'm sure partnership is not the term that they'd want me to use and it's probably not the the proper term, but you can see how it would be like oh they partner with this team to do the spot listings. like that's it's pretty straightforward. Um so I guess like and that's a that's a question on that side. So um or or saying like oh they they partnered with this team to do the um native stable coin native markets uh right so like >> but then again it's not necessarily like hyperlquid labs when it like signed an agreement it was like a full like a governance process that went into it the selection all this stuff so I guess those are kind of different um dynamics at play so I guess

circling to your question Daniel like in my mind they likely do not do any sort of partnership unless it's like, hey, we're hosting uh sort of a, you know, come win this opportunity to list these hyperlquid per markets and or hyperlquid uh prediction markets and if you want to come list, you can put a bid in and there'll be some sort of governance vote and this thing. Maybe that could happen, but I uh I'm just hesitant to see that they wouldn't want to engage in any sort of business deal transaction stuff, especially a bit after a bit of I would say USH like it went it was fine getting the ticket proposal, but it was definitely a bit of like oh there's all this backdoor stuff and

all these rumors around like hey it's a Cobalt all this all these things and I'm I'm sure they they obviously just not something that they want to deal with. So yeah, >> I think there's an interesting dynamic here. Just to add one more point is like you had a lot of teams who would have been willing who were willing to quite literally throw money at Hyperlid that did obviously did not win. And so like maybe I don't know this isn't really like push back but more so just like if a prediction market kind of proposal were to were to be on the table and it was you know put in your bids, put in your proposals, put in your offers for what that kind of arrangement or integration looks like for for Hyperlid.

Um, I do wonder if it makes sense to put this in front of the public versus to have like the team, for example, just, you know, take bids from three parties and say, "Okay, >> okay, clearly we're we're going to go with Poly Market because of their one, their brand, and two, they're offering us $100 million or something, right?" Like, versus let it go to public, and then somebody picks, >> you know, make up a name XYZ Markets and it's like an unknown thing, but, >> you know, the favorite of the crowd, so to speak. It's this stuff is >> because you want Hyperlid to win, right?

Fundamentally, like you want them you want them to to win. If you're long if you're bullish hype in Hyperlid, then you want them to take the best proposal. But >> there's maybe an argument that they don't that they may not best proposal. >> I was listening to this Kobe up only episode, like the one where it's just Ledger and Co. It's like three hours long and the last 40 minutes they just talk about Dows and decentralization and it was crazy to me because this is in 20121 when like Dows are very very big and we still have the same thing and I would say like that USDH thing was it was and I think we have this with the HIP5 thing as well and I I'd love to get your thoughts on this Charlie but like

>> like they specifically outlined the HIP5 thing in 2021 where they're like well there's a lot of shortterm thinking participants who are like down on something and they want to make money on it versus like the long-term aligned and the same argument you could have made for USDH um and the same argument you could have made for like this prediction markets thing is like the team clearly would know what is the best um for the long-term thing and if you don't agree with their long-term thoughts you can sell the token and buy it back when you believe that it's going to get better again or you can just not buy it at all. But like in crypto there's no like the moment that you let everybody get

have an opinion about something the opinion is useless because everybody has a [ __ ] opinion most of the time like the general public and they're just letting them speak about things that they have no [ __ ] idea about. Um and this isn't like any disrespect to the HIV guys. I read over the proposal. I disagree with it fundamentally. I don't think it's a good idea. Um, but it's it was really ironic and we have a guy who was very big into Cosmos back in the day, effort Capital, and he was talking about it as well and he was like, "This is why like governance is the worst thing that can happen to a crypto protocol because it literally is like you want as little governance as possible at all times where the team just leads spots and like leads the space and then investors can

make their own decisions based on where everything is going." Um that was a lot of rambling but surely maybe um >> just any takes in general on the whole thing but like would love to also hear what you think about HIPP5. >> For sure. Um well I'd say a few things. Um number one going back to uh Danny a point you made before around them not selecting the best proposal. I think that's fair. Um however I do think there's multiple arguments to what is the best proposal and I think a lot of people were arguing that yeah look even though Paxos is offering this way to you know basically onboard hype under Venmo and I hype under PayPal and it's going to uh buy a million buy you know 100 months hype or whatever it was going to

do. um that that was short-term and that in the long term you wanted a team that was only focused on hyperlquid and so that was um basically people were pricing the value of that versus the value of the immediate Venmo hype listing. Um so I think that's and I think that's a fair argument like I think you could obviously argue either way on it but I would just say like I uh I don't I don't fully agree with the framing uh that the best proposal was just the one that was going to buy the most hype in the moment. Um, so maybe there's that piece, but um, and then I guess Doc to to your point on the the governance side. Um, yeah, I mean governance is uh, decentralized governance is still a disaster. Like it's all over the place. But the one piece push back on the the Kobe point is

like to say that there should be no governance. Um, it's difficult because you walk into you walk into like you're you're either basically at the Bitcoin side where there's certainly governance, but it's basically autonomous or you walk into just it's a centralized org and like that's obviously what we're trying to avoid here. And obviously that not only are we trying to avoid that, but then that also likely rides into large regulatory issues and it eventually is shut down a couple years into the game if it gets any sort of scale. Um, and so I think there's there's two issues on that side and why even though governance is fundamentally not where it needs to be, it's still the direction that I feel

we have to continue to go and like things like delegates have made that a better experience. um onboarded risk curators. Um things like this have made governance more suitable than just everyone's firing in a vote. Um, but sure it's still like undeal like I would say on the on the hype governance side I'm really in any sort of like total governance like anyone can say have a vote have a voice like I think that's a one of the great things about you know Twitter and these platforms is like anyone can say something but really the the voters were the validators and um yes you could move your stake and so you could effectively cast your vote

differently that way but the real person saying native markets or Paxos or Athena or Sky was the validator. Um, and so I think there's like a a piece there where it's it's less of just like pure chaos of everyone's like firing boats. Um, but so I I I do think that's kind of where we go a bit, but I don't know. I I I rambled a bit there as well. So, um, I guess I know you guys do a fair bit in the governance space, but you think governance is like a pure waste or um, where where do we take governance? Maybe we knew that an hour session, but yeah.

>> Um I think like the I I honestly believe like the A method of listing and D-listing markets is probably the best way. It's like three to four risk providers who have like clear idea of how things should work. Maybe not the A example because um I think the the internal guys have a lot more power. But like let's say it's like I don't want everybody to have an opinion because a lot of people just don't know what they want to talk about and they're very focused on a short-term thing. Um I think the validator way of doing it is probably correct. Um I think hyper liquid validators are also like a relatively good bunch in that it's not

like a lot of like traditional consultancy style of businesses. It's more like money managers or you know like people who are like relatively smart and who want to like want to see how good succeed. Um so I think that is a good way of doing it. I think it shouldn't be more than like 40 50 people if you're going to do a government like a council style of governance or like a board a board is the best way to put it probably right >> um of governance a lot of sense. Um, I still wouldn't give too much weight to people's spots because I really like if I held um like let's say the HIPP 5 proposal was about what's that like Jeff 800

>> um >> per etc. And it was just those four assets and the proposal was like we should we need to boost meme activity therefore we need to ship it into these memes. Um, if I held those tokens, I would be like, "Fuck yeah, this is the best proposal ever." Like, they're gonna ship whatever $50 million a day. No, $50 million a year into these tokens um that have like 10k volume a day. I'm going to make so much [ __ ] money. Um, and it can immediately get front ran as well. Like, to me, that would have been the perfect proposal. But obviously, it's not the right choice. So I think it needs to be I think Hyperlid also has a benefit in that now it's set the stage that

validators pick votes um and you have to like move from one to another. So they have a good system. I just don't think like very mass broad decentralization with governance votes going that way has worked out yet. I just don't think people are like people consider the long-term effects enough. It's the same reason why if I hold Tesla stock, I can't really vote on anything, can I? Like, I'm just like, >> you could have voted to approve Elon Musk's trillion dollar pay package. >> That's correct. >> But, but here my my viewpoint would be that I think like governance in in crypto has just been historically too in the weeds. Like I agree with your point, Boach. We should like

shareholders or token holders, they don't need to vote on every action. Like yeah, typically you have people who run the company and then there's maybe a few key issues like you vote to approve a new board or you vote for, you know, maybe there's a large merger acquisition or something and and maybe you'll get the shareholders involved for that as it's maybe meaningful to the business direction and their you know predict future estimation of the stock price's value. Um but we shouldn't be voting on like you know every single action or proposal every other week. Um there is there is kind of a caveat here though that like if the validators are sort of quote unquote the board. Um I mean you kind of have like this weird conflict of

interest if um there's like a business model in essence to you know offer like staking services and then that kind of influences token holders to push all their >> their voting decisions over to a particular validator or therefore board member. So there's kind of like some >> we have some weird crossurrens just due to what you know proof of stake is. Um, >> ifina did this. I think in their initial proposal they had um Charlie maybe I don't know if you remember so just correct me if I'm wrong but in their initial proposal they had like if a validator votes for us we'll give them boosted yield. If they don't vote for us we won't um give them the boosted yield and then they had to remove it because I think they felt really good about it.

bribing. >> Yeah, like openly bribing. Um, which is also like technically the right way to approach that thing to win the vote, but and it's good that they removed it. Um, last thing I'm going to say, Danny, completely agree with you. If a validator vote went forth to like increase emission rate and like because your commissions immediately increase the amount of money that you make, it's completely wrong. We saw this with um chorus one and near I don't know if you guys know but >> near near like halfed um their emission rate because it was like 13% or something. And of course one was like oh

this [ __ ] sucks. This is the worst. Yeah. Obviously you [ __ ] ate it. You made a million dollars off it a year. >> I I >> Yeah. >> Go ahead. No, no, I I um unfortunately I have to hop soon, but I have one more thing I'd like to get your guys' thoughts on regarding ties in with the hip three stuff too, Boach. But um do you guys think or is there not an argument to be made that not, you know, not holding other assets, but should the assistance fund not be accumulating USDC as well? Um and not just buying hype. I guess the reason I say this and not to be anti my own bags or probably my own bags, but I I do

think if if the point of the assistance fund is to help in a worst case scenario, um well, in that worst case scenario, if you're only sitting on hype, inevitably you're going to be liquidating hype into an already down hype. >> And I arguably that is could be very bad um just across the board. So, I don't know. I'm I'm curious to hear like sort of tying in with the HIPP 5 stuff like it's not an argument where it's just like no we're not going to be accumulating other random assets but we are just going to be accumulating a balance of either USC or USDH um which is also buying back hype. So it's like look now instead of just sitting on hype we have a large stack of hype and then also 200 million USDH like I feel like that would be a pretty nice buffer. Uh

but I don't know I'm curious to get your guys thoughts on that. >> Yeah I think that makes sense. I think the main reason people don't, this is speculation, but in my mind, the Hyperlquid team set the assistance fund with that um mandate um because they wanted to have an explicit link to the token value acroal while also having a way to cover their ass if somebody knocked on their door and said, "Hey buddy, you're shipping $600 million a year into this token. This implies revenue and therefore it's a security."

Um I think that was the reason that why they did that. But like I agree with you. I think ideally let's say HLP is now at 1% like fees go revenue fees going to the HLP is 1%. Um I think there's no problem if hype reduces it to 95% and spends 4% on USDC but it would have to say explicitly like we are only buying stable coins and nothing else because you also don't want to prop up other protocols. Um because then you like one of the reasons I didn't like HIPP5 was because it's a bad feedback loop. Um if you're buying the token of I I want to say one that I don't like but there's

a whatever like let's say some random AMM which has failed. Um it just does no volumes. It makes no money. It's it's a ship product but you're buying the token of it to prop up this like like we need to support the Hyper EVM whatever. It's it's horrible because like the founder is still winning, the investors are still winning, but the product is deteriorating. It's a [ __ ] product. So, you know, I don't think you want to prop up others. Um because then you never get like the good tokens being bought back. Um but I I agree with you. I don't I think they should have a bit of a buffer in terms of USDC. USD probably makes more sense here because it's the like native stable coin. Um

But people will vote against that if that happens. Like that's ideally the that's the ideal way to do it. But then when it goes to vote, people will say, "Well, why did we not buy HIPP5? But we're buying stable coins. Stable coins aren't good for my bags. HIPP5 would have been great for my bags." Um, >> yeah, I think this is the case for a good unilateral decision by the Hyperlquid team to say that, you know, 5%'s going to go into into stable coins as a back stop >> or or me, Jeff. I will make all of the decision for you.

>> Yeah, send it to Bach >> immediately. Sounds like Sounds like we have to draft HIPP6ers. So, he'll he'll lose 90 million rage trading offchain >> and the users won't know about it. I will not do that. Charlie, I know you have to go. I appreciate you taking the time on a tight schedule to chat with us. Anything you want to say to the listeners um and to our live stream and our podcast listeners after this goes live. Um >> anything you want to share with them to do?

>> Um nothing. Just go watch UX Research, the best podcast in the world. So, thank you guys again. >> Thank you. Bye. You want to pull us out? Yeah. Uh, I realized >> I just realized as well >> realized I needed to say some things about a very special party, a very special sponsor of ours, Katana. This episode is sponsored and was sponsored by Katana. Katana is an L2 built for DeFi and is pioneering the ecosystem category of productive CVL. Believing that change should be graded on how efficiently assets are put to work in DeFi rather than just total value locked. From now until the end of November, users that bridge Dix to Sonic can earn boosted yield from CAT incentive campaigns, added vault bridge yield, and other chain revenue. Follow the link in today's show notes to get

started. Why can't Oh, you you took yourself off the screen. >> So funny that we both left. Um Charlie's off stage now. You can thank you for coming on. >> Yeah, Charlie, thanks for coming on. you are >> you're free to leave. We have a contractual obligation to fulfill here that we need to spend at least a few more minutes on stream for. >> Um actually there's there's something I want to get your take on that uh is being talked since we have maybe a few minutes here. The uh there's some chatter around the mega ETH sale around you know if users go on Twitter and say they're going to OTC their ICO

allocation then they'll be withdrawn from the sale. I guess Nomic tweeted about ICO beast basically. I didn't even read ICO beast tweets, but I, you know, I guess he was tweeting about >> something about uh OTCing his allocation for the free money or whatever. And then um the team pretty much quickly came out and said, "Anyone that does this just gets removed because we have your socials linked." >> Um I think it >> makes sense from the team, but uh it's interesting. We've not really seen this type of action before. They're they're kind of setting a new a new precedent, I guess. I would say like we've seen it for cybles, right? Like I forget what team it was, like layer zero, maybe that went absolutely crazy on their like sibil hunt to, you know, seek out and

like remove as many Sibil addresses as possible from their airdrop. Uh I think this is the first case of like we know that you guys are doing deals like on these sales before they even launch the token and we're going to like weed you out if we can. I mean, this makes perfect sense, especially for um someone like ICO Beast who got full allocation and is tweeting about how like there's a million people who wanted this full allocation. Um there's a million people who wanted more allocation than they got and you're out there tweeting about how you want to sell it. Um there's just a way to do these things. Also, it's a horrible look on the team. Like they already faced issues with giving cook,

I don't know how to pronounce hope. >> Um like they they gave him a lot of allocation. People are really upset about it. >> Yeah. >> You don't want to give people who are immediately like you might want to sell. For some people it is their like duty to themselves, not a fidiciary duty. It's like if you got the full allocation, um, some people have to sell a bit, right? Like maybe you don't have any money and you just made some money. Maybe there's like something with your family that's going, whatever. Like you have to sell.

Okay? You shouldn't be saying it out loud. Like there's a >> if a team is giving you a 4x, you shouldn't go about it on Twitter and boast and say, "Oh yeah, I made a million dollars. I'm selling right now. [ __ ] you." Like, it's not a good look. It's it's a horrible look for the team and the team is saving their ass and I think it's completely fair that they're saving their ass. I I um yes, it doesn't look great if it's like but also this isn't a decentralized sale. This is a sale through Soner which is Echo which you have to submit KYC.

You can't whine about it if you're like if your allocation is taken. Yeah, I I think it's fine. I I would be upset if it happened to me for sure. I have a loud mouth as well. I know like if I know I I would have made this mistake. Um even if I wasn't selling, which I'm not selling. I'm gonna go out and say I'm not selling not selling my allocation. >> Fred, this guy >> I'm just I'm giving an example is like if I wasn't sell I have a loud mouth. I would have made a joke about it. Haha. Thanks for free Forex. I always see that. Um you shouldn't do It's a horrible look for the team because people will screenshot it and say look at what you did or like look like Mega E is being it's the same as having a civil um it's

a horrible look at somebody who's immediately dumping especially something called a conviction round. Um we can argue if the name is the right name or not. I would have liked a mega sale or something like that. Um >> yeah. Yeah. you know, they they'll they'll never be able to uh get rid of OTCing this, but you can at least weed out the kind of like loud bad actors, I guess, in in this case. Um, and that's kind of free for them to do considering how oversubscribed it was. I agree with you on that point 100%. Um, it's funny. kind of reminds me of that I forget what soul token it was that had

the little K checklist like you agree to sell >> I own it >> is that what it was yeah you agree to sell in like a >> respectfully I think it was I'm not sure I'm not sure >> I don't remember which token this was exa exactly but they had they had the funny checklist before you know I don't know if Ekko needs to add the checklist say you know I will not OTC my bags uh there's No way to check. So, but uh I guess just a bit funny that that that's coming up on the timeline today. I I agree that there was some I saw some back and forth around cook capital as well just like I don't know these accounts that I think people know are like shillers for tokens and

get paid get paid by you know memes and other token projects to basically just like >> drop them on their timeline. >> I will say I really like the Mega Eve team. I like what they're building. I think is super interesting. Um I like the people that work there individually as well. Like I'm in a unique position in that I've met um through podcasts or through like video calls some of them because I wanted to have them on the podcast where I had like lay on a panel. Always have been super kind, always very smart, very sharp. Brett's a great guy.

I will say the cook decision does make me a little bit like you know what is is this it? Like is this the right thing? I think you should give him aloe. Um I don't know if I would have fought to death about but also like it's not really their fault. >> Like I don't think I don't think they needed to respond to it. >> Yeah. I think I think they should have >> I think bread took an L by even responding is is my viewpoint. Like I think like they define the terms of who got allocated. And so it's like it doesn't surprise me that an account like Cook would get an allocation especially after choosing the lockup. It's like we know this guy is farming [ __ ] on chain

with a ton of money. There's a bunch of accounts like that and even if they are like token shillers on Twitter or whatever, it's like it doesn't surprise me that they're going to that they're going to qualify for like the max tier. Um I think that's kind of expected based on the criteria they laid out. I think they took the L by going to Twitter and like getting in the You just You just don't need to. I I don't know. I think I think I think more teams probably needed to to learn social media. Like >> I don't know. Everything you do is marketing and so like you don't always need to respond to criticism. You can just let it exist.

>> Yeah. Especially since crypto is uniquely because it's so internet native. Um like on the internet things don't last very long anymore. in the last like >> three days acts controversies. Um so you could have ignored it. >> I've just forgotten about it. It's tough. Like >> I will say on the flip side like no one's going to care in three days as well the fact that he responded. So >> it it it really doesn't matter. But >> I don't know. Maybe people are mad in Bred's replies for a while. I'm not really sure.

>> All right. All right. Well, >> are we >> before we call it for the day, >> I have to one last time give a shout out to today's sponsor, Katana. Thank you, Katana, so much for sponsoring the stream today. Katana is an L2 built for DeFi and is pioneering the ecosystem category of productive TVL. In just two months, Katana has surpassed 500 million TVL with over 90% of that TVL being productive in ecosystem apps like Sushi and Morpho. From now until the end of November, users at Bridge Katana can earn boosted yield from cat incentive campaigns, add a vault, bridge yield, and other chain revenues. Follow the link in today's show notes to get started.

>> Thank you so much, Janna. >> Last up, I got to say a few things. We have um we don't have a lot of listeners right now because it's very early, but I will say tomorrow we have a very exciting stream um happening um with the Harmonic guys um who just raised from Parad or just announced their race from Paradigm Blockbusters. Um and on Friday or next Monday we have project zero um Mc Brennan coming to chat. So if you are a Zerx research listener, this is your time, man. You are having the time of your life and so are me and Danny. So we're gonna if you have any questions

for either of those teams, just let us know. Um you should be in the Zer I I I can't imagine any of the people listening right now aren't in the Zerx Research Telegram channel, but if you aren't, make sure to join it and let us know if you have any specific questions. if it's approved by um large stakeholders, we will ask the questions. Um and apart from that, um we'll do our regular stream on Friday as well. So, make sure to be on 11:00 a.m. Eastern. Um as always, today was a bit early because um we wanted to accommodate for Charlie. I wanted to hear what he thinks about everything. Um but it was a good stream. So, Danny, how do we end this? Are we good?

>> Um yeah, shout out to Charlie for coming on. um making things work was a great up great conversation actually. I was so enthralled that I forgot to do my ad reads uh during the show. Uh yeah, we'll call it there. >> Look forward to >> what were you saying? >> Very rare for Danny to forget to do the ad reads because he loves doing them so much. >> Yeah, I just I mean I love our sponsors so much. So what can I say? >> Uh yeah, look look forward to harmonic tomorrow chat and a uh a regular live stream on Friday. Do we have >> That's it. We might start doing Huh.

>> Do we have any exciting guests for Friday? I'm I'm not sure if I >> I don't know if I I probably will not be on the episodes tomorrow and Friday, unfortunately, chat. I will be >> Oh, we do have a very exciting guest for Friday, actually. We have Mc Brennan on Friday, and we also have uh something that I can't share yet. I just realized, so I sharing it, but um it will be cool and exciting. So, we should all look forward to that. >> All right. >> Sounds nice. >> Tomorrow on Friday, chat, >> tune in. Xerox Research Live will be here. All right. Thanks so much. See you guys. Peace.

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