Navigating DeFi in 2024 | Matt & Aryan

Transcript

you know look at Pendle for instance like Pendle you could have been buying Pendle at around 5 to 10 mil fdv at one point in time and now it's above a bill so I think that's what's really cool about this Market is that it gives retail the ability to deploy Capital into existing protocols that trade at or below private rounds you get to you know deploy Capital into a market that trades like Venture in my opinion you know some of these things are pre-product and pre-revenue and you can buy them liquid which is effective liquid investing but with a venture framework behind it which I think is really cool and that's one of the things that like really enticed me to start deploying Capital to this Market when I first started wh teed up with the Wormhole Foundation stewards of

the Wormhole protocol the leading interoperability platform powering Crossing transfers for 200 plus multi-chain teams came unique worm NFD just for zerox resarch listeners today pair is an Innovative pair trading exchange built on top of Simo users can trade trending narratives with one click from Blue Chip narratives such as long BTC short e right through the whiff versus Bonk the Hat stays on Sim's intense Centric architecture enables deep liquidity source offchain and Broad onchain and combined with pair has democratized access to complex trading strategies typically reserved for institutional Traders Avalanche is a smart contract platform that has a novel consensus protocol subnet infrastructure and the hyper SDK toolkit which allows

web free developers to easily launch custom powerful block blockchain Solutions you can start building today by checking out the link before we get into today's episode just a quick disclaimer the views expressed on this podcast by either myself or any guests are their personal views and do not represent the views of any Associated organization nothing in this episode should be construed or relied upon as Financial technical tax legal or other advice all right let's jump into the episode what's up guys welcome back to another episode of zerox research today I'm joined by Matt and Arian from CMT digital as well as our very on Daniel Smith from the research team thanks for joining guys thank you for having us thanks for having us on wor um before we get started do you

guys want to give a short introduction of yourselves as well as CMG digital yeah for sure um I'll give you an intro on CMT first and I'll dive into an intro myself so U Matt and I both work for CMT digital uh CMT digital we exist as the blockchain Investments and policy and Regulatory advocacy subsidiary of the CMT group and the CMT group is a larger proprietary trading firm by background um the CMT group itself is established in 97 around the Genesis of electronic trading in Frankfurt Germany so uh really had a adoption uh approach to technology when it comes to trading markets and uh that's been a kind of core focus of the firm since Inception

took the form of electronic trading through the '90s high frequency trading throughout the 2000s is ultimately kind of the lens through which we got interested in blockchain and digital assets starting in 2013 so CMT digital was established we joined the blockchain association to start Gathering some legal and Regulatory footing before making initial investments in 2015 um spinning up the crypto desk in 2017 uh we're also an RA in the space and uh we launched our first Venture Fund in 2018 um I joined at the beginning of venture fund 2 uh back in 2021 so I've been here for about 3 years now we're on our third investment vehicle we've supported over 150 portfolio companies to date and uh we think of ourselves as generalists

within the space really looking to invest in companies that are either using blockchain technology to bring efficiencies to markets external to blockchain historically or actually investing in companies that are iterating on the blockchain infrastructure itself whether cryptographically uh bringing in new uh Primitives or kind of iterating on the blockchain stack so pleasure to meet I got my start at the blockchain research institute in 2017 in Canada with the tab Scots and uh yeah pleasure to join you guys today thank you and on my end I've been here at CMT

digital for six and a half years now started out as a junior Trader as well as researching and executing event driven trades and was an early defi user or myself using uh idex shout out to idex back in 2018 for trading my PA and then out of that experience was a really early defi user including you know everything that um you guys are probably doing back then lping in the curve as BC run PC pool pre uh curve launch and bought a bunch of baskets of of a bunch of uh longtail defi stuff including you know synthetics yarn even like stuff like zot HED based and pretty much every food farm under the sun which

effectively translates to what I do now for CMT perfect um Matt just to kind of go off that I since you've been in let's say def5 for the past six years or so how do you think like the app landscape is now especially like at this period because I feel like there's more infrastructure than apps currently do you think there's like a lot to do on chain or were you having more like fun and it was more interesting for you back then that stuff was like very new it was more fun back then in the context of everyone was making ridiculous apy obviously like when Sushi swap launch for instance their Uma pool was doing like I think it was like 30 to 40x APR out of the gate which was

absolutely insane those sort of opportunities are obviously no longer present The Meta has changed a bit whereas back in 2020 users were more engaged in posting assets as collateral on these food farms and then using that to farm the underlying token for an insanely High APR that has effectively been farmed into um Oblivion but we have this new interesting meta that's formed over the past few months in particular with Athena launching which is points farming on on that front um it's obviously very highly dilutive in its current form and the

trade has become overcrowded um post season one of of atheno um being concluded but I still think there's a few other opportunities particularly within the Pendle yts that could be potentially interesting yeah I um I looked into those points programs um like the Pendle and using it to trade but I never thought that it was like particularly beneficial because like you said I I feel like they got diluted up really quickly and then Igan layer had a whole issue with how to reward them um I think they later fixed it up but I I actually want to talk to you guys a bit about points programs like how do you see that working out over the next six months let's say do you think we're going to go

back to regular old Air drops or do you think we're going to keep having this points better because it like worked really well for Pendle gearbox did quite well off it as well just like farming points what do you guys think I'm under the opinion that um it it's kind of on a Case by case basis right like you saw like Renzo kind of um screw it up in terms of just user feedback from that that pie chart that they rolled out um I I think it really comes down to how teams are effectively allocating these particular allocations

on the airdrop side of things the uh on on the Pendle side you know I'm sure you guys saw but s usde is now allocating more of their yield to Holders of of S of state usde and so I think there's some interesting opportunities there particularly like if you look at the you know the the July 25 expiry YT product for Sude um if you run a few calculations you can see that um the um average uh APR right now is quite high and on a profit percentage basis you're looking at probably around 90 to 100% APR assuming that um that assuming that the yield you know effectively stays around that 37% price point and

assuming a 5% allocation at the current FTV level which I think is personally pretty reasonable just given the season one was 5% and that seems to be like the general framework too you're seeing a lot of teams allocating in that 5% trunch um going forward but um you know as I mentioned before too like we're seeing like TV alls explode you know swells above two Bill uh ethery you know is is above four they're like four or five last time I checked and so um it is becoming a pretty crowded environment but I still think that they're selective opportunities um particularly within the pendal ecosystem to add to what Matt's saying I think it's down to the LRT providers and also the uh platforms like Pendle to ensure kind of high

transparency surrounding some of these assets um I think with brenzo it it was a case of you weren't exactly sure what the underlying claim was too and so that's where you saw that deviation start to form and so it's about having that deep liquidity uh at the token level to support kind of free movement in and out of something like you know wrapped e e in the case of eifi as well as being able to be comfortable knowing that the asset is properly representative of of the underlying claims and I think that's something that is uh more of a trial and error process especially at this beginning stages as we're seeing these Primitives come out

um a lot of this stuff is being tried for the first time on the reaking level so um I'm not expect I'm not it would be naive to expect everything to go perfectly I kind of want to get you guys' opinion on cash flow projects like staking to earn some form of protocol earn Revenue how do you I feel like those projects have largely died out um I think the only one that's like relatively popular still is maker Dow how do you guys see that that space evolving do you think we go back to the roots and like not Roots but I guess what we had over the bare Market where everyone was searching for some form of cash flow or some form of like Revenue yeah I mean at a high level

we've seen massive dispersion within the market YTD I personally am under the opinion that we continue to see this particularly within the defi environment which has undergone a ton of innovation since it became a household name four years ago but in in Maker's case too I think you're very well positioned to capture a cash flow narrative as well as you know what they're doing with endgame doing their 24,000 to1 red domination of uh Supply so that cuts price significantly which should in the Boost Retail demand which is consensus at this

point in time you know they recently injected 300 mil into you know State usde die and then usde uh die pools on Moro and then you know as you know I'm of the opinion that as users Loop their exposure to stake usde we should see borrow you know hover close to the underlying yield which just you know increased a 37% Target and as those converge you know know in theory we should see this integration granting maker um higher state DDE yields going forward and they have obviously the option to you know inject an additional 700 mil die obviously fantastic you know if you look back at the previous quarter

of this year it was a strong one for them again uh they doubled run rate Revenue to 422 million know driven by naturally higher interest rates post eth launching obviously so they're sitting on that narrative well obviously you know gearbox is to and then um you know it with igen layer launching too um we should see that be another Catalyst for improving their already robust run rate too which is you know on their subow structure too and you know they recently launched Moro vaults which are you know it looks like they're earning you know 7 mil annualized from that alone um and then you know as I mentioned before with

with launching too you I think you'll see some pretty heavy incentives for resters post launch and that kind of turns maker into this you know massive ethereum yield Farm in itself in my opinion yeah maker is really interesting I you mentioned their Integrations with Morro and uh using their d3m credit line it's it's been really fascinating to me to watch their revenue composition shift away from rwas and into Crypt back loans um that's kind of been if you remember like Q4 2023 that was like the risk right they were this rwa focused asset that was acing a ton of yield specifically uh from these rwas and it was like 60 to

70% of their their income was or sorry the revenue was coming from RW and we were in this High rate environment where consensus was rates were more likely to go down than up uh which would have a negative impact on maker Dow's revenue and so we fast forward to today and that shift has greatly uh pivoted away from rwa now rwa comp uh have a competition of about 33% of their Q2 forecasted income Revenue again sorry and uh it's been interesting because that's not really for a fault of rw's Revenue decreasing uh in q1 2024 was 26 million uh throughout the q1 and in Q2 it's trending towards 32 uh it's really just the idea that Crypt back loans are

actually coming back and becoming a useful source of re of income for Maker Now yeah we've seen some interesting pivots within the RW space in the context of relying effectively on t- Bill yields in a high rate environment to drive Revenue which we we've seen you know that was Pro proliferating at the back half of last year right but like for example you know Maple which is a um a liquid holding for us um you know they they had a very uh interesting mechanism launch last year that was tokenizing t- Bill through a lending mechanism and you know I think at its peak they had about 80

roughly 80 mil in uh net deposits um at its peak I believe but then you know we're seeing some really interesting stuff Devi uh devolve with their private credit facility you know like even like last night we saw like three mil get deposited into their direct pools you're seeing like 200 accounts created uh consistently on a weekly basis you know tvl has you know 2x for their secured lending arm and their aggregate tvil across products uh recently you know surpassed 175 mil which um we haven't seen since uh 2022 um so you know that's really cool to see too A lot of these teams have been pivoting to offer these new intuitive products to combat um potential for uh rate height decreases

over the next year or two one thing I wanted to ask related to these like real world asset shifts is how you guys View tokenized equities like we had I think we've talked about this like internally over the past few weeks and on my end I don't see like I think there's no real demand for it right now and I don't see there being really any demand for it in the future but what do you guys think do you have like a I I think it's down to what the post tokenization uh use case is going to be and I just don't know if we have the depth in product offerings at defi level to be able to really make it attractive

for people to because it's it's it's not trivial right you have to figure out where the custody is how you would actually go about tokenizing this Equity piece um what legal and Regulatory considerations then come with that and then H where are you going to deploy it and actually put those assets to work um I think that is changing uh you know we're seeing uh increasing numbers of particular markets being formed for this uh both on the private and public side you know provenance blockchain has existed for quite some time and has multi-billion uh worth worth of you know real world assets tokenized on their chain um I think it's about kind of how do these environments that are then

going to be holding these tokenized equi going to be expanding to the rest of defi to actually increase the alert to uh make those assets productive for me I'm not entirely sure how concrete The Tam is for tokenized equities in particular obviously for um tokenized t- Bill yield that's attractive particularly for you know Dows that want access to safer yields in a higher um with a higher rate that you receive versus let's say you know depositing usdc as collateral on a and it's fixed so you know what the payouts

going to be it's it's predictive over time which makes it additionally more attractive and it's a passive vehicle for collecting yield without much activity needed to manage your position whereas you know if you want tokenized access to a US traded equity in you're living you know 12 hours ahead of time somewhere halfway across the world managing those positions becomes a little more difficult in theory in my opinion given the time stamp duration where you're not based in the US and there's also the thought of like who exactly if they crypto native are going to be buying these things um me along with all of you are um are probably are

trading crypto because that that's where our core Edge is I just don't have any Ed you know day trading Apple call options yeah I completely agree with you m that's that's also been my thought process it's like I don't think I would have ever used it and I don't really see the demand for it that much um kind of Shifting away from Real World assets what narratives do you guys what narratives are you guys excited for over the next 6 to 12 months is there anything that you're specifically focused on so I'm I'm taking a kind of broad look at uh infrastructure and execution I think the execution Frameworks pretty pretty generally across the board are shifting and becoming more generally interoperable um we're seeing the rise

of uh alt VMS existence across different environments we're seeing the rise of uh attention to intense based approaches at least and uh ongoing debate about kind of where the margins should exist within execution um and so spending a good amount of time thinking about those different topics and and exploring the different Landscapes um generally I'm of the opinion that execution is going to become increasingly uh multi-chain and uh leaning towards more of those intense based execution approaches it's just a lot of the intense approaches are very ambiguous right now and it's unclear largely how we're going to get from a

declarative kind of uh transaction building uh format as exists today at the evm level to kind of a more generalizable execution framework that allows you to kind of have multihop execution SL multi BM execution and so that's pretty interesting to think about and pretty multifaceted in terms of different infrastructure pieces having to coordinate together to uh support it who are the key players in that world because to me it seems like it'd be sort of the market makers that sit behind those intents right like the applications surface the user intents from the user and kind of shovel them towards these market makers that play a key role and then there's probably some

intent like infrastructure right like some RFQ model across is building this dbridge is building this um there's many other players in that space But I'm just curious how do you think about the landscape there and who the important pieces are I think market makers to begin for sure but I think market makers involvement actually provides a longer tale uh term approach for actual infrastructure coordination and the reason I say that is because market makers are going to be essentially fulfilling all of these uh lower hanging fruit intents at the beginning at least um and in doing so they're build up a backlog of data of you know what are the most common Roots what are the most

common asset swaps what are the most uh common sort after things for users and in doing so then have a database that can be used to actually build some of these more commonly traversed paths across the multi-chain graph um and that would then allow the more decentralized solver markets to collaborate and start fulfilling some of these routes potentially more efficiently than market makers would themselves um and I think it raises the question of where should the margin lie within intent execution should it lie with the market makers themselves or should it lie at the uh Meb infrastructure level um and yeah that that can get quite fiery in terms

of a debate yeah that's let's let's take it let's take it there then if we it's a fiery debate that's the fun part right and so it's interesting because the if we get end up in that world like all right where would I want me as an investor like where do I want to put my attention to then because market makers will are sort of just like private entities maybe you can get like an equity play there um but I'm to me it doesn't seem like the guys in the middle the middleware so like the RFQ infrastructure kind of gets any cut of this right it'll be like the market makers demanding their side of the cut and the app ler demanding their side of the cut which largely they might use to return to users and some fure end State um but is that a good way of thinking

about this like to me it seems like the RFQ infrastructure that sits in the middle is it's kind of just hard for them to get any meaningful margin agreed no I think the margin will lie with the market makers to begin with like I mean you're going to have the cost of a defina native execution and market makers are naturally incentivized to match and just underpin that and so as the market making uh intent performance space becomes more competitive that bar will naturally get pushed further down from where the defi execution is uh but in doing so they're kind of a trojan horse because they bring the data that will allow the more decentralized solver networks to then undercut them uh and so then the decentralized solver

networks then start setting the bar in my opinion um and will market makers then be able to compete with that I mean depends on how much Access Data they have I would argue yes probably they will um but I think it is not unconceivable that the decentralized solver uh networks will be able to kind of hold the margin at the end woro is the leading interoperability platform for multi-chain Bridges and applications with over 1 billion messages sent and 40 billion in value transferred wormo leads the industry in Cross chain message volume and total value transferred if you're a builder wormo has an extensive sued of tools and infrastructure to securely build

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it out by clicking the link below Matt what about you what have you been looking into over the past couple months so the the two things that I found to be intellectually interesting over the past couple of months is looking at restake rollups and particularly with swell because they've amassed a pretty large amount of tvl over the past um past month really they've surpassed two bill of tvl understandably so um this is kind of the the general playbook for reaking services uh you know they launch and

within 30 days they have amassed more than a billion of tvl um resulting in in massive appetite for the underlying I think what's interesting in the swell example is not just the you know kpis that they managed to hit quickly it really comes down to the fact that when their token is staked it acrs sequencer fees and um I think that in theory this should uh solve a pretty big problem within the L2 environment in my opinion whereas you know existing l2s such as optimism and arbitrum have in my opinion this disconnect between the sequencer and the token holders where essentially by

staking it to ACR the fee as a user um it effectively negates th that pain point between um holders and the sequencers in my opinion and um they've already accured on the fee side more than a million dollar generated on a 10% take rate too so if a bull market comp analysis is produced I think personally you could see that hitting five over time and it just like kind of with these kind of variables too it just seems to me that they're positioned really well out of the l2s to kind of capture this D5 activity as it relates to uh reaking over time and then I I also think too like another Avenue too that I'll I'll

mention here is that um um The Avenue for enhanced staking rewards coming via igen lay for users who opt into uh restake and receive that extra yield by delegating to an operator who supports you know ABS is on the network which um should pose the same opportunity cost as staking eth but with the caveat being like this one is the larger value prop as it allows users to kind of you know capitalize on restake rewards as well and then the other thing that I've been um looking at recently that I find to be really interesting is um just like toxic order flow in general and different mechanisms that are being

integrated and created today to combat that particularly from um both like the uh historical I perspective right that uh LPS are having to deal with as well as um lvr as well and kind of you know interesting new mechanisms that Protocols are coming with you know you you have ambient that's been doing some cool stuff in this regard um you know the the big thing to me too is like that needs to be solved for this to become a g viable trading solution is uh latency obviously and like you're seeing that too with bonding requirements being cut for the cow's amm and um I I think you know over time

you going to see some really cool stuff kind of emerge from this that negates uh to varying degrees toxic flow accured to LPS within the Dex environment and I think we're going to see some pretty cool stuff too being launched at the back of um univ V4 launching as well particularly with Dynamic fees and how those kind of relate to um cutting lvr I think the toxic flow point is also important for thinking about the intense uh development um obviously intense networks solver networks as well as market makers are going to be more incentivized to go to venues without toxic flow and so when looking at methods of capturing uh the actual

conversion from the transaction execution as it exists today to intense it's really a function of where does that good tox non-toxic flow exist and uh how can those solver networks then plug in yeah um I actually kind of want to ask you guys about Matt you mentioned that these projects these reaking projects they get one bill in TBL in like under a month and there's this huge appetite for these I asked this to Sham as well but I want to under like I lay has 15 billon TBL that's a whole lot of security and I just don't know if that's like even NE at this point how do you guys think about that do you like do you

think there'll be a mass outflow eventually or do you think they'll manage to incentivize these resters so I I wrote a relatively long paper on reaking it's on our website and it kind of dives into this point if anyone's interested in diving in fully it's a banger it's going in the show notes thanks then um but I in that paper explored kind of the risks of raking and I don't think that reaking poses a risk to the economic security layer kind of as uh has been discussed before uh to the point of kind of cascading security risks I I think the longer taale risk of something like Igan layer or abss that

operate on top of Ian eras what's going to be the long-term draw for a delegator to stay uh delegated within a certain number of abss um and with that I mean the post igen layer points drop or whatever the current incentives are um what's going to be the longer term draw and if it's just 4% or if it's just the base yield but denominated in that ABS token I think that one thing is really important is is how closely correlated is that as's economics to ethereum itself if there's kind of really high correlation between uh the as's value and ethereum's value I.E if the AVS is

kind of deriving its value from ethereum itself what is it bringing to the ethereum ecosystem by existing as an AVS and I would argue that AVS is are best positioned when they are uh valuable in their own regard as opposed to being a derivative of of ethereum now I'm not saying that all derivatives of ethereum but you want to be bringing in value that's external to ethereum to ethereum through igen layer um and I think that is also then incentivizing the delegators to continue receiving the rewards as it is kind of valuable in in of it in and of its own right and they they are therefore more likely to you know not just sell and uh compound into eth um I think it's also a matter of for

avss as they're looking to launch on top of igen layer um it is really a non deterministic future layer level of security that they're going to have access to and so they need to get comfortable with what's that minimum sort of bar uh of security that they need to be safe and uh what do they within some confidence interval expect to have at some future point in time um and I know that it's very early for Iger and this is all kind of stuff that's being actively worked on and I don't think there could be a better team behind a proposal like igen ler to uh be kind of thinking about these things uh but it's just some of the points that we considered during our research that's

interesting you mentioned the yield Factor here as well because me boost has about I don't know about let's call it a 90 95% opt-in rate neighborhood that's probably a little high um and it adds about 25 basis points to staking yield so it's it's like not that much um when you when you look at it on percentage basis but everybody is still collectively opting into it um how do you think about the dynamic there and and the idea that you know maybe it doesn't take a massive yield number for E stakers to say Hey you know this is like marginally extra work for me I'm going to do this anyways well I think also I think this touches on the argument that happened between kind of Renzo and ethery um because with me boost what are you opening yourself up

to in terms of risk um it's it's kind of a set amount of risk that doesn't really increase but with every additional ABS that you delegate to the risk is compounding and it's it's also not related risk I mean they're both slashing but the ABS could set very different slashing conditions and so you're getting compounding levels of risk the more AVS is you secure but not necessarily compounding yield because the yield is going to be differently denominated different assets not necessarily compounding in E and so I think the marginal gain that you get with each additional ABS is very much unknown the marginal risk is more known

is there any world where slashing never goes live I mean if you think about salana right like salana wants to like eventually we'll have slashing but it's just not there today and it's not on the immediate step next steps right is there any is there any chance that Ian layer does the same thing I would say it's there is a chance yeah um I think it also speaks to the whole what do you want to be covered within the scope of consensus um and if there are mechanisms by which you can cryptographically verify uh certain actions or and and prevent them as a result uh that could be an

attractive way of preventing uh having to implement slashing but I'm struggling to understand kind of what other mechanisms you could put in place to incentive align to align incentives and please let me know if if anything you've come across but I I found it hard to uh find alternatives to slashing reputation my friend the social layer classic I want to change I want to change tuna here a little bit Arian you and I have uh once once in a lifetime ago feels like chatted about near at quite some length and when I was looking at the charts coming into this pod and near has just been Rock Solid man they cannot the Market's kind of had some ups

and downs over the last two months but not near uh I'm I'm curious what's the boss tell us tell us about the near thesis is that is this thing still alive or what so the near uh Foundation has gone through some changes in the past year I mean IIA has taken the helm again um I think near What drew me to near back in 2021 was the strength of the infrastructure in my opinion I really liked the Doom slug finality Gadget uh I liked night shade like charting I think they're one of the only monolithic approaches to uh horizontal scaling that I've come across and I'm quite a big fan of horizontal scaling um I think n has

gone through a process of trying to figure out its place within the ecosystem and it's reached what I would argue is a little bit of an inflection point in that they've got this critical mass of tooling uh whether it's developer tooling for things like Java whether it's uh Library support or whether it's kind of the SDK itself um indexing as well as a public good they they've kind of reached this point where it can be expandable um it's just a matter of where do they want to sit do they want to sit the private in private key infrastructure level for chain abstraction and kind of coordinate everything that way do they do they want to uh be more of a kind of defi native

environment for kind of fast finality do they want to lean into the EA layer uh for fast finality or is it kind of a mixture of of all um I think we're moving in that chain abstraction thesis for execution anyway I would argue that's what intents is leading into too so um I see an increasing area of potential engagement for Nia and it's a matter of what sort of Partnerships can they uh put in place and what sort of problems can they solve for project teams that exist today uh that would really help them uh capitalize on this opportunity that's interesting is it more of the chain abstraction side or my like really dumb left curve view of this has just been fast chain good right salana has

had a great uh last six months Su and Aptos are starting to put some of the pieces in the right spot of course the last two months of those two specifically have been quite brutal but um yeah is how do you think about my idea of just fast chain good look I think fast train good but I'm not going to kid I mean n hasn't had the the user experience that salana has historically and I think that has been a huge barrier to adoption um the wallet infrastructure specifically hasn't been great and I think that's stuff that the team absolutely knows about and has has been working on so perhaps through these updates that we're seeing coming through this year um that will change significantly and is one that I'm definitely keeping my eye on um as a very early Paras and ref user it

would certainly help me if that did come back but uh I'm not particularly counting on it yeah the block Explorer falls into that category too but but Matt I'm curious how you view this whole this whole near situation any thoughts on on its development and where it's headed I think there's something to be said about the fact that near did not launch at a in my opinion ridiculously high fdv I think it was somewhere in like the 500 mil Mark initially and I think that there is importance here with giving retail the ability to put on position in the liquid environment into these up upper tier l1s as perceived by

the market at a valuation that isn't obscene to the point where you're paying you know 50x above what private markets were pricing it at 12 months prior and on that kind of Point too we saw salana do that really well there's a bit of survivorship bias with it but you know salana didn't raise a ridiculous amount of money at an insane Val and then they launched during the trough of 2020 and you know back then you were able to put on positions for you know sub a dollar for a decent amount of time too and so I think from an FTV launch it a really awesome opportunity retail to buy it at

a reasonable liquid valuation out of the gate and then it is Al potentially really attractive too from just the the general AI point of view too right like reail loves Nvidia um Nvidia trades at large multiples above of above revenues but um it cann't gives people like an onchain exposure to this AI narrative in a quickly growing protocol as well I would I would also argue that Nar yeah by the way we love n uh one of the one of the approaches of near is they are a sleeping giant in the sense that they have a ton of users now those users have no idea they're on

blockchain especially in the case of something like sweatcoin or uh kaai Ching I mean these are I remember in my apartment building when I was in the elevator uh there was a guy and he pulled up sweatcoin on his phone and I mean maybe he was a crypto native guy but he just uh seemed like it was someone who had come across sweat as the walking app and and as a result of the blockchain experience being so abstracted away from them in that app historically uh they've been able to onboard now those users have no interactions with blockchain today but if the tooling and if the environment for that adoption does improve then it allows them to onboard kind of these large bases of users that haven't

historically been involved yeah I I feel like the AI near narrative is Ari in what you mentioned where it was they were really trying to find themselves a little bit but I agree with you I mean I had no idea Kai Kai was on near and also sweatcoin as well I have no idea and I'm sure like if I don't know I'm sure there's like a million who also don't know um I want to ask one last question I wanted to ask this after we brought up near but the I keep getting sucked into these like VC High FV questions because they like fascinated they've fascinated me over the past few weeks um I know that you guys have been looking into AO AR I kind of want to understand the feis behind

that because I've been hearing it quite often um about it and like like near it's been doing quite well that's one of the charts that I checked before we hopped on so so in terms of arweave and AO so arweave is a is a investment that we we've had for quite a few years a thesis on R weave is really around the permanent storage aspect um now arwe historically has somewhat struggled to find its product Market fit within that permanent storage aspect whether it's a lack of historic product uh differentiation or uh diversity in terms of the different types of storage

that they can offer um it kind of didn't Encompass a full solution that would allow anyone to switch completely over from their current provider um but are we is at a position now where it's kind of just the infrastructure is built and it's ticking along and it works um and so what I think is really important and beautiful with AO is that it brings a whole new paradigm uh to arweave itself you now have this storage layer that is not only IM mutable um and permanent um you can have kind of non-permanent storage on there as well now but also allows you to plug into the State Management aspects associated with blockchains and compute on top of of

blockchains and that hasn't been historically available so what that opens up I think is a whole new depth to rwe's capabilities you can now not only store things on it but form arbitrary proofs over it or have triggerable events in the form of you know KRON jobs in the case of AO um and that I think brings a level of liveness to the storage layer that hasn't historically existed and gets pretty excited when you think about corresponding State changes in other environments due to some State change on our weao um and I think generally that's one of the narratives you know liveness within smart contracts reactive smart contracts whether it's event log based coordination on a multi-chain

environment or whether it's you know through something like our weave AO um yeah it's pretty exciting yeah the token sync angle is is quite interesting as well and AR I want to dive One Step deeper onto one of the other uh the piece that you mentioned around like smart contract livess what's like a example that you could provide of like why this may be useful I think it's useful for just an I mean I think it's multifaceted useful um you can have obviously you can have the the the well sort after things like limit orders stop loss um but I would argue that that's not kind of the full realization of the uh potential offering for for this technology you

you really then allow multi-chain execution as a result of uh these this liveness so if you have like uh so if you have a smart contract that changes state on one chain that can emit an event log that is captured by some protocol that then coordinates a signing event on some other chain that allows some initial function to continue through this multihop process um right now we don't really have something that can coordinate that endtoend process and so I think Beyond just implementing more richness within execution and how you want to structure your execution I think

it allows you uh more depth across different environments in terms of your execution as well thank you guys um thank you so much for hopping on and joining us this was incredible thank you for having us we really appreciate it the opportunity to come on and really enjoyed our conversation fantastic Daniel thank you as well yes of course we'll put the the link in the show notes to uh some some ways to contact both Matt and Arian it's been a fantastic uh conversation guys thank you both for coming on and cheers have a great rest of your day thank you guys take care likewise talk later we have teed up with the wormo foundation

stewards of the worall protocol the leading interoperability platform powering Crossing transfers for over 200 100 plus multi-chain dabs Wormhole isn't just a bridge it's the leading interoperability platform for multi-chain applications so go and claim your unique wormo nfts just for zerox research listeners today hit the link in the description to fill out a form and to prove that you've listened to today's episode and receive a PO app you get an email over the coming weeks to claim your limited edition nft [Music]