Pudgy Penguins, Scaling Solana, and the Hot Ball of Money | Analyst Round Table

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so long as these teams are pedal to the medal on scaling and they don't get complacent I think there are a bunch of chains here that are eventually going to hit that like without question like millions of TPS this episode is sponsored by scale scale has differentiated itself from other layer ones by offering users a network of gas-free interoperable evml ones where the user experience comes first explore the gas-free ecosystem at scale. space ecosystem and follow their Journey on X at scale Network to learn more about the gas free architecture and growth of the scale ecosystem visit the scale research Hub at scale. space research chaos Labs the leading onchain risk management firm recently launched its new flagship Oracle product Edge Edge delivers integrated High Precision risk and price

data for any application with the market follow and reach out to chaos Labs on X to learn more hey everyone today's episode is sponsored by glyph glyph is file coin's foundational defi primitive enabling filecoin holders to earn rewards on their fill tokens by lending them to a diverse pool of filecoin miners SC Phil deposit it with file coins first in most popular defi protocol by visiting glyph doio today nothing said on zerox Research is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and any views expressed by anyone on the show are solely our opinions not Financial advice bacho Ryan and our guests May hold positions in the company's funds or projects discussed what's up guys

welcome back to another episode of ox research today uh it's myself joined by Ryan um our our great lovely friend bachio has and I quote said Ryan Connor's points are way too hard for me to compete with um so he's given up he's given up completely on even trying to debate Ryan at this point um maybe we'll see him on some future episodes but he he said he couldn't handle cash flows Conor anymore it was too much yeah I heard he's taking time off to work on his takes he's goingon to take a week he's going to go to the gym he's going to work out his takes and he's going to come back better than ever so wishing him the best I I think he can pull through we're rooting for him hoping

hoping the best hopefully we'll see him back here for some more episodes shortly at least um I guess getting into today um there's some maybe exciting news just from this week uh I think a big one really was pudgey penguins and then the pengu token launch um this was pretty interesting I think for a few reasons um one pudy Penguins themselves the nfts and like all related I think sort of nft collections had a bit of a kind of crazy few weeks of volatility in terms of price um in anticipation of this token drop um but then two this the penguin penu token itself actually um just this week dropped at like around

initially um a 6 billion fdv or so um and was allocated to you know nft holders um and things of that like but also you know a wider community of like ethereum OG users and Salon users um kind of a variety of different communities that that receive this token so um I think that kind of the reactions have been a bit mixed um in terms of you know some people got some free money and like that's great for them and they don't really care about pudgey penguins they probably dumped it um others maybe more more questioned about um I think there's there's kind of this open question about whether pangu is purely a meme coin which I think it's kind of been described as um but it's sort of an

open question at this point whether um Pudgies or like the brand will use that going forward for any reason for any utility or or to drive value there um so I think that's kind of Up For Debate um I don't know Ryan if you had any specific thoughts here um but I can pull up I think relative or just sort of related to this the uh the Pud floor price yeah it it uh it whipped around there quite a bit it looked a lot like a um like a stock that just paid a next dividend right like like Carl icon takes the thing over it has too much cash on the balance sheet it's going to pay out a special dividend to investors so you have to price that in and then the price is auto

is going to automatically adjust downward as the dividend is is paid on the on the exive date um or the issuance date um yeah so wild price action but um I think I mean look it was a moment to kind of like look back and reflect on what has happened with puggy I think it's one of the most interesting stories in like the history of crypto um you know I think Luca super impressive and what he's done is super impressive um Luke himself he's a self-made guy um kind of like fantastic marketing mind um pudgy got to the market cap it got to and got into Walmart with like no TV

like no TV deal no video game uh no music right like how IP typically gets into the stores like it just was like pure IP and I thought that that was pretty interesting like there's something to be said about Luca's execution there um I think one of the bigger takeaways here is like you don't always need a dow right like this is a pretty centralized project it's you know it's the the pudgy team and and Luca they have they have the sole IP rights um the IP rights are kind of distributed I think each pudgy holder can receive five% royalties on

items um that leverage the IP that they own via the nft but there's a hard sorry there's a soft cap on that at 500k per nft per year so it's a pretty centralized model like luk is very much directing it and like great for them like they they've generated a lot of value doing that um yeah interesting question on whether or not the pangu token is a meme coin I think like decisively it is not like again centralized entity like you can argue there's optionality for a value capture there or some value flow back to token holders so yeah I wouldn't put in the memec coin bucket and I guess like

finally I think the bigger takeaway from like a more macro lens perspective is like why did why did they issue on salana you know they could have issued anywhere and um I think that um you know when you're thinking about like which ecosystem is going to quote unquote win um there is a um the reality of it is that like you know the the projects and the the change the chains that they issue on are somewhat a function of the the ecosystem at large and um look the more interesting ecosystems have the most uh interesting asset issuers and asset issuers want to launch their token on places where they think

they're going to get the highest valuation same reason why Alibaba wanted to issue stock in the United States because they thought it was going to give them the highest valuation it's G it was the it was the best Capital Market for them um and I think that pangu is um kind of an insight into what what um asset issuers are really like uh highly intelligent asset issuers are thinking today yeah I think you bring up great points across the board um just in terms of like execution of the you know by Luca or like the brand the team however you want to refer to it it has been interesting to see um paji sort of be this kind of front Rudder in replacement of or sort of like as a

parallel to the you know kind of Bard a yach Club of a prior cycle that um tried to I think you know affect this a similar strategy of like building up this brand and then you know did eventually launch an ape coin as well and like you know tried to build some like games and IP and other thing leveraging um that identity a little bit and I think you know that that brand has kind of faded into OBS you know maybe not complete obscurity yet but um has definitely faded out of the Limelight whereas um there's definitely been some momentum building behind this this brand so to your point like they definitely have you know been executing well at least like you know getting their getting the namesake into Walmart Etc I think there's definitely been some some

good execution sort of successes um out of that team we'll see where it goes from here I think it's um like we're saying this it's not so clear as to whether like this token or any whether any of the individual nfts um kind of how that will continue to drive as it's sort of like a piece of Ip um and a different from like your typical you know maybe defi asset um regardless though um if we move on I think the the talking point there around ecosystems around salana is a good one to drive us right into the kind of our next topic today um one that I think is interesting is we've been having some discussion internally um as of as of recent just around sort of like the acceleration of

different blockchains the acceleration of the technology um I think some of some previous conversations have kind of harped on this idea around you know the advancement from you know using etherium to using like salana was you know like a sort of a 10x and us your experience from like a fees perspective from a speed perspective um you know you could maybe say more whe whether that multiples of 10 or 100x Etc but um we're we're seeing sort of similar attempts at jumping in magnitude to you know something like a a s or an aptose from salana today um and it opens up this question of you know the the Pudgies and the other meme coins of the world they're launching you know their assets and and brands are launching their

assets on salana today but um are there reasons that are driving the space f you know towards that next level of scaling to where you know it becomes continually meaningful um to drive the Leading Edge and we need to go to you know another 10x 100x THX in Improvement and another you know 10,000x reduction in you know fees for example um just thinking about it today as you know compared to maybe the last cycle when you know the average user was on ethereum um you know the the cost to transact for like a a consumer sort of regular user is is basically nothing at this point I don't think people are really thinking about pennies um when they're running transactions um now Bots and arbitragers and and um you know

sophisticated actors are probably you know they're factoring That Into You know their p&l and their strategies but for the regular User it's that's come down to a level where it's um you know not really a friction Point anymore um but you know it opens up this question of you know salana has shifted their focus to you know ibrl like increased bandwidth reduced latency um and we're seeing these NextGen kind of chains that a lot of them are focused on this same idea of you know we need to push 10,000 TPS 100,000 TPS Etc um and we're willing to pump the hardware maybe be a little bit more centralized um I I guess I'd be curious to get your

thoughts you know where do you see this driving to and and who who are the or who or what are the catalysts that kind of over the next five years that that push us in in that supposed Direction like can salana continue to compete you know if we get a fired dancer upgrade and other continued upgrades like will they be able to continue to compete against like this new oncoming generation of tech that you know started from the ground up with this idea of you know sort of another scale of of capability um or are they going to end up like the ethereum of of last cycle where they've kind of been started to get a little bit displaced yeah I think it's all up to uh I think it's all up to the uh folks in the

salano organization um I think that um you look if if you decide that you want to stop scaling like yeah I think of course someone else is going to take the lead I mean they have quite a liquidity Advantage right now um I mean as evidence by kind of the again the move of asset issuers to that chain and the and the very high uh amount of deck volume but like there's no indication that that's happening right like fire dancers on the road map like uh multiple leaders is is on the road map um there there's kind of like no end in sight to like where the scaling is going to go um and that's probably a cross chain right um I think like scaling so long as these teams have their you know

so long as these teams are pedal to the metal on scaling and they don't get complacent um you know I think there are a bunch of chains here that are eventually going to hit that um like like without question like millions of TPS right um and you know this is also open-source software so if anyone can you know crack the code that gets you there it's going to be copied as best as it can um by other chains coming to market the um so to me it's not it's not really a performance game and I don't really even think it's a cost game anymore it's a it's a business development game um you ALS you always have that that kind of um wrench in the

equation where like if Apple launches a chain like it's kind of over like they have better distribution than than everyone else but assuming that things like that don't happen like it's like Foundation performance like who's talking to Founders and helping them build on the Chain so that they can issue that new ass that gets Traders like wanting to ARB the value between that asset on different dexes and between its fundamentals so um yeah and I I don't know is it is it true that Su and Aptos are you know 10x improvements on salana cost and speed like using the chain I don't know if it's evident and like just looking at the like daily transaction numbers um on

sweet per day like they're topping out at 6 million 5 million I think salana is just reaching something like near all-time Highs at 63 million a day so I mean it could be a demand issue but we know thatu just kind of rolled over on um load of like five or six million transactions a day so I don't know it's not it's not clear to me that um even the these kind of like NextGen chains are um are in the same league as salana right now in terms of performance yeah and I guess some of that is you know test numbers that get touted um yeah the to your point the bigger question might

be you know have they seen the relative demand required to you know maybe push the existing chain to its limits like we've seen with salana right I think generally um the chain has been floating in like a 500 to a th000 TPS range in terms of non-vote transactions um for the past several months and ba we know Bas started to kind of Hit the or at least briefly maybe hit hit the ceiling on on their current level of scaling um in like the near 100 TPS range so um yeah to your point I think some of that is still up in the air um and we have some of these you know upcoming teams as well manad and and Mega eths um Etc who you

know I think this is just a common trend is you know kind of the nextg builders they they they come up with the NextGen number whether it's a 10x or 100x of the current capabilities but it's it's a little bit of a TBD from the test environment to the Real Environment where you get you know the kind of the uncertainties of you know fees interplaying with you know spam and and the other issues that I think these teams have to deal with from like a network and a latency and you know competition perspective of of onchain users yeah the um the test numbers I you know I'm I'm not super In The Weeds on the technical stuff matters a lot less to me than the like demeanor of the team and what they've been able to achieve thus far

um it's it's funny like watching these test numbers come out over the last four years I'd say like without fail they kind of missed by 70 to 90% so when you see those test numbers it's always helpful to to discount them heavily which is fine like the test numbers coming out of coming out of like fire dancer for example if you get a 90% discount to that number that's still great progress um hopefully that's not the case but you know it's it's great progress nonetheless um I it was kind of to shift gears though the um one one thing isn't working on chain I think and it's like the per stuff um I think after some conversations this week

it's quite clear that market makers do not like making markets on chain the costs for them to submit orders and then cancel those orders which they have to do quite frequently is is quite High um and you know the congestion that they face when doing those actions is most important um prevents them from from risk managing so kind of the the way to think about it going forward it's like you know market makers and and high frequency Traders are going to be the biggest value drivers of of rev in these in these systems so if you're thinking about tokens and who's going to benefit it's like where can a market maker just and

hfts participate the most um and that's frankly how it shakes out in centralized exchanges too it's not a perfect comparison but um it's they're they're both directionally true um I was talking with the team that they think that actually that pers onu um is kind of the might be the first place where you can build that chain experience where a market maker can submit and cancel orders just like they would um for a similar cost to like a centralized NASDAQ type of thing um TBD on that though because I don't think that there are any per Solutions live on sweet today but like I don't know may like it's like a few things could like throw a wrench in like what's going to

be the dominant chain going forward at current at current trends and it's like one if just a new like Apple player wants to participate but then also like if if if one chain is just like purpose built for trading um maybe it's hyper liquid I don't know if we want to go there uh yeah we can actually we can talk hyper liquid if you want to jump into that I will say one thing that I think is maybe interesting to your point here um is that I do know you know there's a few teams that like on salana for example um that are exploring like maybe L2 based Solutions um um from a from a pers perspective so I believe like The Zeta team has been looking at

an L2 solution there as well as the um the Phoenix guys the I think it's Ellipsis Labs um are also looking at L2 solutions for just like going after these higher frequency trading um like sort of building out a higher frequency trading venue that settles to onchain but you know might technically be offchain via you know something like an L2 based technology um I I think it's interesting as well in the context of stuff like like magic block who's looking at like building out these ephemeral rollups where you could maybe do I don't know how that might work in the context of trading live assets but um you know exploring that with like potentially gaming or other things where you know

you could have some um onchain state from the L1 that's kind of you know locked in this contract and then you could manipulate other variables kind of offchain in this ephemeral rollup um and then kind of post the result of those activities later back to the L1 at you know greatly reduced cost and while you're kind of interacting with that Contra do it at you know greatly increased speed and lower latency relative to you know trying to push all that through um you know regular transactions on the Chain so um but yeah to your point you know maybe maybe right now that does look like you know hyper liquid us solution of just making a super super fast super high throughput chains position focused for I mean

they've started out with the purpose of making this highly performant um and usable you know perex essentially um and they're you know looking to expand that into being maybe more of a general purpose train but it started from this this vision of of making in a great product um yeah do you I mean do you have deeper thoughts there on you know where they're headed or how we thinking about them today relative to the market yeah I'm I mean I'm not paed um I know that they're making an L1 but like are they going to juice the L1 like a mega eth or is it going to be an arbitrum like thing that's the big open question for me I think it's unclear um and I what I would imagine is that

similar to kind of the existing product is that you know the exper my guess I'm just I think we're operating on speculation at this point I don't think there's like heavily confirmed details here as to like the particular architecture I could be wrong maybe there are but um it it seems like you know given the approach that they took with hyperli with the app um I would imagine a similar approach for the chain so you'd start streamlined and the focus is on you know make this thing really fast and performant and if that requires you know if it's like a single sequencer or if it's like you know four servers or whatever they're all collocated um whatever they have to do to kind of get

the the througho performance that they're that they're going after um or the product experience um and then figure out kind of the you know maybe the decentralizing or other aspects to that to that Tech later um that's sort of the approach I imagine um but I don't know if that's really confirmed or not at this point yeah it's like it's like really critical right like um there's a lot of liquidity there um there's a lot of um kind of Goodwill with the product um it has a great rep reputation um I mean I feel that cuz universally just like people that I speak with over the last 12 months have just universally said it's a fantastic product um but

like the the question is then today like I'm just like constantly thinking about the hype token and how to to think about this valuation and um trading at like 55 times um call it like forward Revenue if you assume that they have like some per like take rate on volume and you assume that that volume 2x's over the next 12 months I have them at 55 times and that's just the per product right which is like kind of a reasonable valuation for crypto but like probably tells you that the you know without an L1 the story is over like there's kind of not a lot of margin margin of safety there there was at two bucks there's not at

25 um so then to me it's like okay you have a lot of liquidity there you can Pro you can probably parlay it into aat platform play and being a Bas layer L1 thing um so what are you going to look like are you going to look like you know you want to be evm compatible if you look like arbitrum you're not going to get the same amount of throughput amount of throughput that you would um if you were going the mega eth route and like the amount of throughput is going to scale that Revenue number that's going to like really impact your valuation so like I don't know like thinking like what is arbitr at now like 10 billion fdv for simple round numbers let's say there's a 50% probability that

um hyper liquid can pull off an arbitrum like uh ecosystem it's like okay just like add five billion to the value to your price Target today on FTV and it's like that's what um hype looks like as a platform play which I think is a fine way of going about the valuation um and I and I don't and I don't think that the salana C makes sense right now what salana has achieved is took a lot of years um a lot of devs and um a lot of unique products launched there to like make that happen um and has been sufficiently battle tested to the point where it could get to the throughput scale it is at today so like I think that's a longer time Horizon thing and

like so like that makes sense right like 24 billion fdv today um slap on half of an arbitrum valuation to it it gets you at 35 for a price Target um I don't think that's so bad but you know I think I've said on past podcast that it like hype is undervalued and of course it's repricing so quickly feel like it's a lot less true today given that kind of reason there just like that given that kind of like back of the napk and reasoning behind it yeah I do think um there's a lot of things playing into this um kind of positive price action for hype lately right just the you know the lack of of

an Insider allocation I think you know kind of building up a community around it and and giving them a healthy um allocation of you know a token at maybe what at the time was um you know a below kind of market value um for for the token based on you know the the the data that we have today um as well as this just you know strategy that they've executed of going product first um making a great product EXP experience and then looking to expand that afterwards whereas the kind of reverse approach um or this like this infra approach has been so common I think in the space for um so many years now of like you know build like the next big

Grand thing you know the next great chain or the next great infrastructure stack um that can command you know a high fdv at launch um and then you know let let the builders come and build there um I think this is this is sort of the opposite right they've built kind of like this great purpose exchange and um have had some success and now it's like well we can expand further and and capture um you know a broader sort of market share if we can build out like a chain um with other products alongside it it's the failure of the app chain thesis it's like these are liquidity Network effect things you want to own as much as the relationship as you possibly can if you are a successful app chain why would you stay that

way right um and like it's it's kind of like similar to the Unis swap story where like people were saying like oh this is the success of app trains like precisely the opposite it is this it is the reality that it makes sense to be a platform um and these apps when they when they can they're going to keep trying to be platforms um yeah man I I don't know like do you use hype or do you use hyper liquid like what do you think about the product experience because because that that's the interesting part for me too is this the the comfor the tool stay stay for the network aspect of this you haven't seen that much in crypto um is it as good as folks say it is yeah I

think for me this is a hard one because I'm not really a perp trator so I've used it in the sense that like you know I've made a few trades on it maybe to like kind of farm some volume or what have you and I've also used like within telegram I've used like PVP trade which leverages hyper liquid for you know doing spot in perpose trades um just within within the telegram app um or within your chat rooms basically um but yeah you know as like not a perp trator it's hard for me to comment on whether it's like you know this this great product um relative to others within the space but that is like the overwhelming I think opinion um especially from people who have been I

think using it um you know over the past year regardless of whether or not they thought they were going to get a massive airdrop from it um which obviously might be kind of I think inflecting the the public opinion you know over the past weeks right it's you know it might have been a great product before it's prob it's probably an incredible product now that um you know maybe you can buy a house with it but um I think it it probably speaks for itself I think that um that they were sort of you know growing in in you know market share of of volumes um it would be interesting to see that Trend kind of if it continues and they maintain like their sort of strangle hold over um onchain P's like volume dominance or market dominance going forward then that

would be an interesting like change of Fate from prior examples where for example like dydx you know did their air drop and um you know went to you know their own chain um went after the like sort of the same in in a bit of a different well it's actually kind of the same story build the product and then they went to you know a generalized chain but regardless um you know I don't know we haven't seen this typee of success um completed before where you know you're the number one Contender you drop the token and your and your volume doesn't you know drop off in this case it's been you know they they kind of rose to the number one spot dro the token and now people like it even more um which is

interesting yeah um we've seen I I remember a time when people were universally saying like after you drop the token like the activity is going to drop off too it seemed like that was the story that was the trend for like eight straight months and then I feel like maybe it was like drift was one that dropped a token and you saw like a slight decline immediately but then like it it kept scaling um yeah hype's another one that's kind of bucked that Trend um product Focus I think it's highlighting that product Focus for sure um and maybe anti-il things too like I don't know anytime I try to participate in one of these systems like I'm getting asked for my email now and I don't want to you know I think if you're a casual

farmer you don't want to make more email addresses like that's a really pain in the ass yeah um is um is is hype doing a second um points program I mean they they haven't given out all their tokens right yeah I it sounds like that I I don't know that this is 100% confirmed but it sounds like there are maybe ongoing seasons um for continued usage so that could be playing into it but um you know I think we'll have to see you know if a period comes where is where there's a sustained downward Trend in the price um that might that might

change um the Market's opinion a little bit I think it's it's easy to say that um yeah you know it's the best product in the world and you're trading it and you're holding it and it's going up um if that continues while the price declines then that's a and that's an even stronger story to to make yeah I think I the interesting the kind of like the tail risk with all these burs products I think is institutional adoption um like proper Traders wanting to trade on chain um hyper liquid to me um is still I mean it's probably the best of and closest institutional on the market besides maybe one or two um but it still has isolated

margin right like there's not there's not a sophisticated cross margining engine there um and and that's and that's kind gonna that's going to be standard if you're a sophisticated Trader right the other thing that I think that they're you know aware of and trying to build out as well is just this you know starting from you know like a sort of lack of spot token availability to kind of gradually adding in that presence and building up that that sort of asset base which you know if you're you know per deck on base or salana or ethereum right like those assets already exist there so for them it's they kind of have to build that up over time sorry yeah yeah they they they

need um they need cross margin um because you know well an institution is going to want to risk manage all their stuff in one place in an intelligent way and like I overheard a conversation of like oh I have to like move my assets around and like there was like disappointment about ux I was like oh yeah that that's just isolated margin like like that that's the that's that's the thing that they're missing um regarding spot assets like how does that even work like there's no smart contracts like how do you list an asset on this thing or launch an asset I've seen like I've seen that there are like hyper

liquid launch pads popping up like what's that process like yeah they have um a hyper liquid they have an auction um to list new tokens on the app or chain app if you want to call it that um where basically these you know projects or individuals bid up um kind of this auction price to secure you know the ticker in a spot to list um those have been trending quite High I'm looking for I know there's a dashboard for this um but I believe and I might be incorrect but I believe they only list

currently maybe one asset a day or one asset every few days or week um so there's there's been quite a bit of competition um bidding up those new spots and I think some of that has been you know um kind of going after this this sort of influx of capital to the to the app I think you know there's been some like people launching games people launching meme coins Etc um it's kind of been going after that same kind of trading exuberance that we've seen on other chains like soul and base it's like so to think just like oh yeah if these guys want to make like money out the gate like they need a mem coin Launchpad like it used to be like oh what defi Primitives do they need and now it's like oh one of the first things

they they need a beam coin launch pad yeah I think the the market definitely like jumped on that pretty quickly and I think we've seen um I mean a lot of the tokens have done well but it's not surprising and that hype has continued to do well so um I think that'd be you know similar to when you know xrp kind of had its move in in a bunch of the the new sort of meme coins there also performed um fairly well for period um people were you know excited to slash their Capital around um as far as listing like other spot assets I'm I'm not positive on that that process of you know getting additional other capital from you know if it's the sort of like eths and souls and similar assets of the world but

either way I think you know they they kind of have this process where they'll need to sort of build up that that asset base um to further support you know spot trading alongside the purpose product hey everyone we'd like to give a special shout out to the sponsors of today's episode scale scale is built different unlike other layer ones scale is offering users a network of gas-free interoperable evml ones where user experience comes first scale operates like the AWS infrastructure model where developers pay for space in the network in scale tokens to validators essentially scale has chain fees and not gas fees this allows for free transactions on scale and has saved 46 million users over 9 billion in gas fees explore the gas free ecosystem at scale.

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learn more thanks again to chaos labs for sponsoring today's episode quick shout out to the sponsors of today's episode glyph glyph is file coin's foundational defi primitive enabling filecoin holders to earn rewards on their fill tokens by lending them to a diverse pool of filecoin miners similar to lsts like Li Oro glyph solves a major capital inefficiency for filecoin glyph currently has over 19 million Phil deposited and over 150 million Phil in total volume and is backed by the filecoin foundation multicoin capital and more got Phil deposited with file coins first and most popular defi protocol by visiting glyph doio today thanks again to glyph for sporing today's episode maybe going on from there um I know you recently had um a piece on filecoin um do you want to dive

into I think I think filecoin is maybe one that um listeners and the audience have not looked at in recent times uh guess I'd be curious what's the what's going on in that ecosystem and you know what are the sort of interesting takeaways um that that people should know about filecoin yeah yeah totally so spent a few weeks having a ton of conversations with uh people building applications on filecoin um applications in like storage and compute and other services and then in defi um just kind of like to take a step

back yeah like everyone kind of knows filecoin but like doesn't know filecoin which I think is interesting um like just to keep it like brief because it can get overly Technical and I think that that's been kind of a problem with file like getting file coins message across is that like they need a comps person um that can speak better to like the crypto Natives and the DG that like really make Capital like flow in these systems um but like long story short um there's this thing called ipfs that um like in its like end State um could lead to a lot of efficiency gains for the internet at large uh instead of storing

files based on their location so like the URL is like this like layered structure that finds like a box in a data center in a specific place um ipfs uses uh cids or content hashes where you don't search you don't go to a specific location you go to the nearest place where that file is right so it could you know enable like like bandwidth efficiencies um for the for the greater internet and uh lead to a more durable and decentralized internet and the community is very very enthusiastic about building this um if you think about like if you think of like product building versus like ideologically

driven building like I'm building a product because like I don't know I want to make money versus like I'm building this thing because like I believe it's the way the world should work and I would think of like ethereum like being over here I would say like file coin is either there or further than the ethereum folks like um and and I think it's something worth building toward if they can like get the efficiency gains uh and like the decentralization um and um the um uh and and the other benefits that like ipfs and filecoin um think that they can get um and filecoin is incentivization layer on top of IP on top of ipfs so um order to make the system work you need to incent storage

providers to store that data right they're not going to do it for free in this the centralized fashion so like fcoin is that incentive layer um historically there have been a ton of impediments uh for file coin's growth they have lacked Enterprise functionality basically you can like store stuff on filecoin and like you can't get it back like they you can't retrieve the data like they're like the storage providers are incentivized to store the data not to retrieve it which is a huge problem uh unless you like want something like archival storage right um there have been no smart contracts on filecoin very limited programmability and certainly something

that's not on par with like an evm historically and then as a consequent of that as a consequence of that there's been no defi so like if you want to be a storage provider and like you needed like there's capex you need to bootstrap these storage resources is you need to be like basically a mini data center operator and you need to finance that and financing that is hard you'll probably have to do with Equity rather than doing it permissionless Le on chain and that's like a barrier to entry if you're dealing in like crypto stuff and your revenues denominated in crypto or like like there's just like questions and it's just like harder to get financing in in those um in that kind of envir environment versus crypto rail so um in short like there's been two upgrades to fcoin recently over the last

12 months it's the FM uh an evm compatible smart contract layer and then IPC uh which enables like um interoperable side chains and l2s on filecoin so looking much more like something that crypto folks are used to um and that has enabled startups to build like near feature parody uh AWS like subservices and D5 protocols so talked about retrieval earlier how like you could store data but you might not get it back uh there are protocols that are incentivizing retrieval and some of these storage providers are now like at par with AWS in terms of like an SLA for like do you

have my data when I ask for it like nine NES of precision it's a handful it's small but they're getting there and the network as a whole it's up and to the right in terms of their retrieval success rate so if you need um if you need your data you can get it um the the other problem with file coin historically has just been like it's more been geared more toward Cold Storage than hot storage Cold Storage is like you know I work at a bank I need to save a document for seven years because like that's what the law says and then I can dispose of it you don't need to grab it all the time hot storage is like you need it immediately right it's like some like you know you're working on a dock with someone like at at your job um hot storage is like now a thing it's

slowly becoming a thing on filecoin um and there's bunch of projects working on that and making that again near future parody with some cloud services um stach is a name aave is a name and then um like defi is happening and that to me is the most exciting thing because if these storage providers want to get financing basically they have to stake fill in order to provide services because you know you need to be slashed if you don't do your job um so then they need to stay a lot of fill I think it's like let me just make sure I have this correct um tibs I think they need to store like 5K

fill per terabyte which is a lot um sorry per petabyte yeah a storage provider needs to store 5K fill per uh petabyte so like you don't want to have to accumulate that yourself you want to you know deal net Phil via some financing arm and now we have the D5 Primitives to do that um Phil is being drisk because there are lsts for filecoin right so you could stake that fill and then move that liquidity if you need to or like hedge that liquidity right um and then there's like stable coins on chain which like one of the big narrative problems for filecoin is like you look up the revenue and it says

there's none because it's not on chain like the best SPS storage providers will be doing like back room deals or sorry like offchain deals where you know if they are storing data they'll have like a legal written contract um we want to get that stuff on chain so that F coin can tell a story like there's real Revenue here um and then there's like all these programmable things you can build around that so like glyph for example they like tokenize the storage provider experience so if you have some prog program programmable Revenue stream to a storage provider like you can leverage that SP on chain to like take on additional leverage like expand your business so yeah so I think like kind of like tldr just to wrap it up

um like filecoin is I think objectively at a Reflection Point like services are now possible there that people want to pay for feature parody with some um CSP Services is is possible and if you're a crypto Deen that just cares about like throwing risk around on chain and generating some yield you have those opportunities too and no one's looking at filecoin right so so so that could be interesting you want to go where where capital is scarce and historically it's been pretty scarce on fcoin that's an interesting point um on the defi side it does raise questions to me just in terms of like the you know

the typical crypto user today um you know like you mentioned like I don't you know they may have heard of filecoin I don't know if they hold or think or or or care about filecoin at this point but like you're saying if you know if there's these opportunities um for like a sort of overlooked ecosystem where you know you can hold lsds or play these different strategies that you know people are doing across all chains at this point right you know um it's become you know I think very common for some folks to you know whether it's salana or if it's s or aptose or bass or just whatever the hot new thing is or the thing that's not being looked at um but has a new lending protocol or you know leveraged you know LST protocol Etc um those are

opportunities for people it's it's maybe a question in terms of whether um anyone who's not looking at Phil I don't know if they would you know look to bridge their Capital over from like a base or a soul or a sui or like these hot ecosystems but um yeah definitely worth checking out if this is sort of like a new kind of set of of defi Primitives based around um you know the storage kind of product yeah there's a capital rotation game in crypto I think it's going to last forever just because of the permissionless stuff and you know we have it's just a d it's a it's a dgen culture right and

um filecoin has not even had a chance to participate in that historically like they did because they had a coin on binance but that was the most that anyone could participate in that and like it's not the perfect place for defi right I think block times are going to be like 20 seconds uh but that didn't stop people from building weird things and participating on bitcoin and there's obviously not as much wealth on fcoin but there is capital that needs to go somewhere and if you set up for bridge and you have Smart contracts and you let people do interesting things you know you can harness that D gen energy for something useful um it's also like a good story for institutions I think I think dpin is or sorry I think I think trafi institutions are going to love

dpen and I think they're going to love deepen because the revenue potential is uncorrelated to crypto fundamentals crypto is speculative everything looks like this massive leverage Circle and all the fundamentals are correlated to that massive like like roller coaster of Leverage um deepin like Hive mapper is going to have ARR and when you know token prices fall Hive mapper AR is just like gonna keep going the same way and it's going to be the same thing for storage providers on filecoin if they can get that pmf and you know the thing that excites try folks about putting something in their

portfolio is if it you know if it's uncorrelated to the things that exist in their portfolio and it minimizes that volatility and and you have that you have the potential for that um with with some of F coin starps if they can achieve pmf yeah that makes a lot of sense that's a that's a great Point um maybe hinging on for one last topic hinging on this idea of the kind of continuous speculative ball of money um that I think we've historically seen in crypto um I know we've had some discussion about maybe this potential um potential for a flipping of Base relative to salana in terms of Dex Dex volumes um I know as of late there's been a lot more excitement um past month or so um around

Bas um a lot of the community the eth kind of community has latched on to some of the newer the newer projects that have that have turned up you know the virtuals um clankers Etc that have you know within salana land it's it's sort of been like the pump fun and meme coin game and I think that's maybe similar aspects of that have started to catch on in Bas and um just a lot of metrics have been accelerating for bass so um I'm going to pull up some data here I I guess I'd want to ask though like what are your odds or where do you see this going like do you think it's likely or like a given that at some point we see Bas end up flipping salana in you know activity or Dex volumes um

today they kind of just in terms from a throughput perspective um you know salana has the edge in terms of you know relative amount of transactions that can be pushed through um but but based you know Jesse and the team they been rapidly accelerating the the throughput of the base chain um pumping that gas limit um I think on a weekly basis um and they've you know recently kind of broken up above that that sort of 100 TPS Mark and continuing to scale so what are your thoughts there yeah I think it's a very high probability that base flip salana in inex volume and similar kpis um look it's I think they're only like one point Sorry like 2.5x off um from salana today if you like

have a 30-day look back period or maybe it's like it's like a weekly annualized look back or something um and that's nothing that's absolutely nothing um all you need actually is activity to die down on salana like kind of normalize and activity to stay where it is on base or accelerate like a little bit and you have base Dex volume slipping salana which um I think I think that salana deck volumes today are like some of the highest all time and the only other chain to reach these levels is eth so it's basically been eth and salana like looking back to

2021 um so it'll put base in like this very like um like kind of like a like Elite Class if they can keep up the momentum which like I think they obviously will I think the a meme coin or AI agent coin met is like really real um it's super interesting because it it gives these like there's a lot of optionality in in in expanding these things into into real products with real Revenue um there's like this influencer angle that they can take where they you know create this like lore about themselves and can adjust to Market like very Dynamic Market demands um

and I think Bas is like I think salana is technically in the lead but Bas is like right there and there's really enthusiastic and like talented AI folks building things on Bas so like it's something to watch um you know I'm not making a call that like you know Bas becomes the dominant chain and no one ever competes again but like from like a you know short-term fundamentals perspective like I think it's pretty likely that um that BAS flips on some pretty meaningful metrics yeah I just I pulled up the metrics from um our own dashboards here so we've got so Dex activity so Dex volume on a weekly basis um they've been

clipping at close to 40 to 50 billion over the past several weeks there was a noticeable sort of Peak at around 60 billion about a month ago and it's it's dropped off to that sort of 45 billion range here in past few weeks um and if we pull off pull up B on the same sort of perspective then you know we're looking at around what 14 billion today but it it has not had that same I mean they had a bit of a high point that same week um November 11th but it it seemed like they've continued to be sort of more up and to the right um over these past several weeks whereas salana I think there has been a little bit of a noticeable maybe drop just you know a few weeks back and it's you know

even if the the trend is still you know relatively flat or maybe even up and to the right again um base certainly seems to be accelerating on a relative basis I think to the AI kind of agent and token perspective it does seem like you know there's a lot of momentum and attention behind virtuals um it's definitely the largest like platform and individual kind of token in this category um but to your point like certainly on salana there does seem to be like a like a at the current time like a greater depth broader maybe overall Community um of developers going after this kind of category or narrative whatever you want to call it um so we'll I think we'll

sort of see where that goes um you know virtuals has the opportunity to kind of you know continue expanding and if you get you know um a broader Community starting to build out around that product then you could see similar sort of you know success or just general like um bit of a snowball effect that we've seen with like a6z on salana for example where you've got just lots and lots and lots of developers working on this open source Eliza framework um I think there's a chance for Bas to do the same thing and I think the you know there's such a big factor here for base in that like coinbase is just such an effective like onboarding you know brand institution company um that they can you know direct their users to you know if

they are going on chain to go on chain to base um and they can build into their products they can build that into their exchange Etc there's there's lots of ways they can go about doing that where they can you know directly you know encourage users to you know if it's send usdc send it on base um versus anywhere else um and I think that's that's a really strong factor for them yeah that distribution is key I think that they have that Advantage until um the wallets can get like the money exchange licenses that they need in you know key like those states with the largest gdps to to make that happen right so like I as a New York resident cannot directly on board to Phantom I have to

go through coinbase and I actually can't even use Kraken because they don't have a bit license like they they they have this very important um Monopoly on just like it's like a toll it's like a toll road right like there's only one way to get in and you got to pay that toll um and they can funnel that traffic to base which is like which yeah which is like if this is a retail driven cycle um and that that really heats up like there it's just there's so many there's so many reasons why activities there there's so many reasons why like base can pretty likely flip Sal on it's retail activity it's like coin bases

distribution it's kind of like this shot on go with the A on goal with the AI meta um it's eth market cap sitting there just having a big asset with a lot of Market cap um now that kind of like arbitrum is like their Dex volume's rolling over like that's going to probably trade on base now and you saw in that data that you were showing yeah there's a lot of reasons um again not a short not a long-term prediction but like definitely a short-term prediction that like Bas is kind of it's not unlikely that they're going to flip yeah I I think that's totally fair and I think just the both base and salana I think these have been ecosystems that have been easy to root for um just the the team the team at

base like their mission from day one has been to just scale and scale like crazy um and there' have been periods where maybe they've had to pause that but in general like that's what they've been going after um and I think it's been great to see relative to you know the the 00 l2s that have launched with you know your average vanilla evm implementation with no major improvements and then like you know maybe there's a brief period of of farming tokens and then everyone moves on to the next thing um I think just the fact that that B's Mission has has been to like sort of you know reach for a a crazy high bar North Star um to go after similar to like the developments we've seen um from salana and like on this Trek towards like a

fire dancer World um it's it's been impressive and I think that's I mean I think that's what a lot of people have been um you know waiting for and and rooting for um from a product perspective in the space that you know for a long time was just hey we're building great infra but it's like actually just a copy paste of the last thing so um it's refreshing totally awesome uh any other big takes for the listeners do we call it there big takes um I think that um yeah the biggest take in retrospect on this episode is that um

mcoin launchpads are critical infra It's A def5 Primitive you need it and you can't have an ecosystem without it it's it's definitely been a strong point to get you know your average degenerate you know onchain trench Warrior over to your chain and and dumping $10 into you know their their next potential 1 million x opportunity um which everyone everyone believes and knows in their heart that they can and will eventually hit yeah every every chain is doing it right like every chain needs a meme coin Launchpad um what what new chains are coming to

Market like I guarantee they have a mcoin launch pad on day one like hyper there's going on right now or something like monad monad I know there are teams building like a pump fun equivalent yeah Mega eth I I know Mega eth has some you know attention trading based apps um or an attention um and Trend trading app that's that's being developed um which is kind of similar and um I'm sure bear chain will have them as well I'm sure there's other chains I'm forgetting but um yeah I I think you're totally right and it's it's become like a prerequisite at this point you get the trading activity and um certainly like if it's the validators or the market makers

whoever the more sophis sophisticated actors on chain I think they love it as well because it you know it drives um you know Arbitrage and other trading opportunities for them to take advantage of so you need a DEX you need borrow end you need stable coins you need a launch pack the the standard D5 Primitives have evolved all right well uh thanks everyone for listening and we will uh see you guys next time thanks again to scale for sponsoring today's episode if you weren't already planning to make sure to go check out scales ecosystem explore the gas-free ecosystem at scale. EOS system and follow their Journey on X at scale Network and visit the scale research Hub to learn more about the gas-free architecture and growth of the ecosystem that's scale

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