The Pump Fun War Zone | Analyst Round Table

Transcript

now you look at a lot of app chains and they never got that viable business model that people wanted to use so they're left inflating to all hell and then you pull up the token chart you're like app chains are a failure like no the business was a failure it doesn't it's not about the model it's about business nothing said on zerox Research is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and any views expressed by anyone on the show are solely our opinions not Financial advice Pacho Ryan and our guests May hold positions in the company's funds or projects discussed what's up guys welcome back to another episode of zerx research where I'm joined by Danny Darren and Dan Smith from the blockworks research team to talk about all that is happening in crypto the markets defi NFI

gamei and everything included before we get started I just wanted to mention that permissionless free is coming up and if you want to get tickets for that you should use code 0x10 um at out because it will make people happy with me and the podcast and we can keep going all right um Danny do you want to get us started and share yeah um potentially exciting news for you know eth enjoyers out there um we we did see the first day of no outflows from the grayscale eth product yesterday uh on the the 12th um I think there's a there's a couple questions

here if you look at the vot like the inflows outflows across the board um you know across all the all the major um ETF products for eth today they all saw pretty muted flows um in comparison to the last few weeks so it might just be a question of whether or not you know that was just a slow day and so therefore there just wasn't much um to move for eth itself but um we we did see you know if you look back to to bitcoin when it was had its ETF moment um the launch and um subsequent like month or so we saw you know significant outflows from the grayscale BTC product and then at some point there was kind of a flip there um and that I think somewhat Co coincided you know you'd have to go back and and

chart that out but um there was a little bit of coincidence there with um then a sort of reversal in um change in what BTC price had been doing at that time so you know for the eth lovers today maybe this is that moment maybe it isn't maybe it was a slow day and we'll see more outflows tomorrow I'm curious on anyone else's thoughts here do we have some kind of you know is this a Tipping Point for eth now that you know gray scale e e flows are out of the out of the way for the most part or do we have more you know pain to come I can't specifically talk about the flows but I will add that I don't think that the pain is over for e um at least in the guess the short term I feel like it doesn't really have

the identity that it once had I've always been an epher Bowl if you go on my tweets you will see that I think ep's God's currency on unfortunately I have become a bit disillusioned with it um potentially a bottom um but I don't know like Solana does it very well and I'm sure Daniel Smith will talk about how well Solana does it at some point but it does it it's like high frut it's fast it does everything you want it to do Bitcoin is exactly what it needs to be it's digital gold no matter how much you believe in that um and eum's kind of in a weird place and it's not like it's kind of in the middle of the two it kind of wants to be a store of value but it also kind of wants to be like the App Store of the

internet um it's not doing either of those particularly well I mean if you like think about it I guess eventually it might be a better digital gold slash store of value than Bitcoin just because of the way emissions work like I don't know if everybody knows what's going to happen with Bitcoin after the cap is reached um but yeah not related to outflows inflows just something that I feel like everybody's been thinking about over the past three weeks and I just wanted to bring up God's Cur huh Bako yeah I mean we'll see I uh yeah I I don't know it's been interesting to kind of think about the valuation angle of these L1 assets that's obviously something that's off

discussed but I think there's definitely like a a commodity value piece of that of that value equation um I think it's like a super hard thing to achieve that probably has some like exponential qualities to it for meaning you know for a long period of time you get no value from trying to be money but if you successfully pull it off you get extreme value uh and maybe Bitcoin is an example of that I don't necessarily think it's like more on the money side and I think people prefer it for more of that store value side but but directionally I think that both falls under the umbrella of like that commodity value side of the equation that money thing is everybody wants to become money every rollup like provider that I've talked to every like

modular whatever Network Tia was the first one that did the like modular money meme but since then every single podcast that I've been on that I've listened to every protocols like documentations that I've read there's some form of mention of oh we want it to be money like um the cosmos people will say oh we want it to be Capital like I think they think that makes them a bit more special but that's like the ultimate goal and I don't I don't see how the majority of them go for it um I don't know I I don't I'm curious to hear what you think what you guys think as well but yeah yeah I mean it makes sense for some for some blockchains that are maybe more generalized and have a large amount

of economic activity occurring on them to kind of play into that direction right I think ethereum is a good example of that even with the L2 road map I still think you can you can make that work right and that's what it's trying to do is is create demand for eth the asset from the activity happening on these l2s that's both in um as like a gas asset on those chains so the transaction fees kind kind of reflect the level of demand um but also as an asset Within These economies for being a how you buy and sell nfts or other goods and services or how you you know you you use as a base parent in Dex pools are always the the common examples there um maybe like zor is an example of doing something a little bit more interesting

um they launch their new sparks uh like on their their consumer app they have Sparks I think Sparks are literally just like uh subdivisions of eth just like we or guay but with a a more exciting name and obfuscating Away some nerdy terms from the user which is probably pretty powerful and so even though the user doesn't necessarily know they're using ethereum as this as this asset and it just feels like an in-game currency if you will you know that is still creating demand for for ethy acid on the back end and I think that's important too um when you look at something like Celestia that looks and feels it's going to look and feel just the same uh in the future like maybe in so not today again going back to the point I made earlier about there

being this like exponential payoff curve of building into this like moneyness like uh quality for a long time you're not going to get any value from that um so I think for Celestia it'll look and feel a little bit different once there's a richer ecosystem built on top of it today it's really just like a couple gimmicky rollups and eclipse is coming live which will be it's like a first unique uh chain I'll say and unique meaning you know it's the first svm rollup which will be interesting but at the end of the day you know they're trying to be a general purpose chain which we have a lot of um so we'll see how that carries weight over in that ecosystem um but yeah it makes sense for

Celestia to try to play this game as well the interesting thing with Eclipse as relates to benefiting uh Celestia is Eclipse will actually be good for eth Demand right it's like settlement layer if you will is on ethereum so it's is it's Bridge contract is pulling ethereum based assets onto the chain uh so it'll be interesting to see how they go about pulling Tia onto the chain um ZK accounts aren't quite live on Celestia yet and so I assume it'll be like a the bridge version maybe using like something like a hyperlane uh or like a a I don't know it'll be interesting to see what what kind of wins out there but nonetheless I do think it makes sense to play into that money uh aspect let's talk about well I want to ask Dan about

his go ahead Celestia feis um this is something I brought up a week ago to him but I want to hear it on the Pod yeah I uh I'll pull up the block Works research dashboard here I think it's paints a good picture of where celesia has been and potentially where it's going um so let me share screen here but I'm excited about celesia today because it has seen a bit of a Resurgence in activity um with the launch of eclipse right and so it's actually useful to compare side by side demand for ethereum and Celestia so this is ethereum what

we're looking at right now um you can see this chart on the right here uh is the amount of data in megabytes posted per per day by various chains and so you know you see on an average day where somewhere in the neighborhood of like I don't know 1500 megabytes of data and we look at Celestia you know we historically have been much lower than that uh somewhere in the neighborhood of about 500 or so so maybe about 25% of the market and then recently we've with the launch of eclipse effectively uh that number has doubled to about a th to 1,200 and so it's going to be very interesting to see

how that number changes going forward and and why I think there's an interesting uh likelihood that the narrative shifts a little bit for Celestia is Eclipse is in uh developer mainnet today so it's you know there's not most blocks are empty or with just one vote transaction for that's how the svm works um and so this is basically just the barebones minimum amount of data that Eclipse needs to post in order to function and once you see midet go live and there's probably some incentivization program I would suspect um I think you're going to see a large increase in activity and it doesn't take much activity for Eclipse to like essentially fill Celestia's existing

block size so today the block size is 1.88 megabytes um and we've seen it hit Celestia hit 10% capacity and again this is with very very minimal amounts of activity and so my short-term thesis on Celestia is you're going to see an upswinging activity that forces an increase that drives the utiliz of exist current block space higher uh which will drive an increase in the block size so validators can vote to increase block size basically anywhere from uh where it is today at 1.88 megabytes up to eight megabytes megabytes without any uh like Forks or anything it's just like a a votable parameter governance controlled

parameter and so I think you're going to see people kind of reconsider their their prior Celestial thesis you know they'll to be fair this is the first time we've seen meaningful usage on celesia I think it got a ton of overhype uh when there was a time in the market where everybody was like dying for something and we basically had like one person tweet out hey like selesia is really in the narrative right now there's an ecosystem that needs to be built on top of it you know staked Tia is like an exciting play because of air drops you know that never really formulated but CT took to that and was like took it as their truth um and so I I think it got extremely overhyped and then that turned into disappointment because this protocol

like that needs to build a very very large ecosystem on top of it was like two months old right and now you fast forward to today we're like six seven eight months old uh and actually starting to see some of the major players go live so that's the Eclipse is really the Catalyst for selesia in my mind and another one I'm watching closely will be the launch of Argus Argus is being built by Scott zardo it's like a dedicated infrastructure for blockchain gaming I'm not the biggest onchain gaming fan but one thing about gaming it is very da hungry very very da hungry lots of transaction data to build onchain games uh so now you have an ALT VM rollup that is going to start violently consuming data once uh full midet goes live alongside the upcoming release of a very da hungry gaming

application uh it starts to get pretty exciting on like what this will look like now that said the economics here still leave a lot to be desired so there uh if you like salana basically sees the most transaction activity today um and if you assume a Max transaction size of 1,232 bytes that's that's a limit set by salana 800 TPS and an eclipse's compression factor is roughly two and a half H times so that all boils down to about if you wanted to post all of salana data today onto Celestia it would cost about a million dollars a year and so the question is all right well if we assume that there will be a vibrant ecosystem we see that level of

activity being posted on to celesia in the future like how many Salon siiz ecosystems is it going to take to kind of justify uh an investment in in at this valuation and so if you assume like fdv is like what six billion you know t plus one year t plus twoe valuations probably at this price is with considering emissions and unlocks some are in the neighborhood of like three billion um then you can kind of back into like a desired sale price to sales multiple based on that that Revenue so um I don't know like are we going to see salonz ecosystems launch on cestria in the near term no we're not but we are going to see existing block size or

existing block size get hit uh and have to be expanded and I think that's like a an an interesting Catalyst to pay attention to from a a markets and speculation perspective in the near term I like U actually the past two kind of tangents that you've or not tangents but topics that you've gone through here um sort of like this combination of I mean you're calling this thing moneyness I think it's more like narratives and like mess of things like I think you know people often when they talk about Bitcoin as well it's like you can talk about the description of like how many tokens there are and other things like about the factors of what Bitcoin is but ultimately it's like getting people to agree on what this thing is as sort of like a cultural money meme um and if you

think that that's like interesting enough you'll hold it in the same way that like people tend to hold dollars because there's like this General usage and acceptance of it within the world but if there was not you know acceptance or usage then um maybe the dollar meme would not be as strong like with other currencies in different countries um I think you see the same kind of Dynamics play out with like with eth with like ultrasound money l2s are going to save the world um and then maybe those those things don't play out so well the narrative doesn't work as well and then you people go back and look at the fundamentals and they have to have the the question of like how much value can I place on the like the value of the fundamentals in relation to the meme um and I think Tia is a similar example you

just described of like people were riding high on like the meme of modular money the memes of like staking and the value that that has but um you know that's very like attention and like momentum based um and when that kind of simmered off a bit it's you know like you just said when you look at the data requirements to have like a profitable business it's it's a far different picture than like maybe what the memes would suggest yeah that's a great point and to be clear like da is probably not the only value driver that will exist in the long term either um but it is it will be in the near term you know eventually you can do uh SL has this idea of like what is it fast block slow squares where it kind of enables the the blocks to be

quicker but the da process to be slightly slower uh just because that's a little bit more intensive for light nodes and that's kind of the whole point of data availability sampling but the faster blocks would enable something like a shared sequencer um there's kind of like a a dynamic there of like okay well shared sequencer networks will be built on top of Celestia so if you're not a first mover there then you kind of end up cannibalizing some of the things that get built on top of you if you were to go that route in the future um so that's something a consideration but point being da doesn't need to be the only value driver for like fee driver I should say for for the chain either but it is today but I was going to ask a question I want I want to hear some

thoughts on do we think that so like today we still have some you know there's lots of l2s roll apps app chains whatever you want to call them that are popping up and like obviously da and um different solutions are coming to Market on kind of building these modular Chains would there ever be a case for someone like a salana or you know pick your other chain that ex likeu Aptos Avalanche to replace what they have existing today and make use of like AA for data Avail availability does that ever make sense or like are they appreci enough to like they believe in the strength of their Tech enough to that they can kind of continue to out compete as like their own full stack solution before I think like Dan gives the right

answer I want to say I feel like one major cope that a lot of Da lovers say is that oh you can use like multiple da layers it's actually better because it's so cheap and I feel like that's what people try to do like oh like why if you're a chain and you're already using like yourself for data availability you can just post it to another da layer as well and it's cheap so it's it's just like extra available it's extra safe I don't think that makes any sense it's like because if if like your chain isn't doing your own da then it's like you have bigger problems your your Chain's just not working so that doesn't make a lot of sense to me that I feel like that's the C but to me it doesn't make any sense like I guess you could but why

yeah I mean If so on the on the your point BAU you first like you do get some interesting um interoperability enhancements if you're using the shared same shared da layer as another chain that said like if you make an announcement that you're using seven different da layers all of a sudden and you know six of them don't use you're the only chain on like okay that's probably not for the inter profitability Factor um so I don't know yeah I I mean I think directionally I tend to agree with you that that's just mostly noise um and Danny to your question uh it's interesting I I think you will see l1's

move to rollups and and kind of use the The Da structure again because it is so cheap it is very very very very very cheap and it's only getting cheaper you know I da isn't even live yet that'll be cheaper and potentially more scalable than Celestia in the near term near da is already cheaper than Celestia um and all that's is to say celesia is 10x cheaper than ethereum it's literally a dollar on ethereum 10 cents per megabyte on celesia so it's only getting cheaper so in your view would it be better for an L1 to become an L2 use some da layer right and then the L1 now L2 just like makes money primarily off of its execution and does some like some

like uh some like me Shenanigans like uh arbitrum like time boost proposal right like having an ordering policy where where they make um like some extra money off of that as well does that make sense or yeah I mean the question is like what is the you said I think you said better there and like it's it's an open question of which constructions better it's definitely not clear at all all right if you wanted to go be a roll up today okay well you're gonna have a multisig in a security Council because there I think fuel might be the only one that doesn't today um and you can see how much activity is going on on fuel Network today right and so what's what's the uh that was an unintended shot I I didn't mean to make

that so aggressive but the point being is I like sway man it's a cool language it's a cool name too um but yeah I don't know like what's the proper construction it's tough to say like neither of them are solved right ethereum has very much not figured out its end State as far as what the L1 construction looks like um vergal trees were like the plan and now it seems like there's a move away from that and uh Resnik and toly are pushing in the direction of mCP or multiple concurrent proposers for both ethereum and salana respectively and like decentralization is obviously the question uh for these l1s and likeu and Aptos have Li constrained uh validator sets because of bft consensus and all to

all communication has a you know a practical overhead and so they can only have you know roughly a 100 or so validators in their current state so they have to figure out they have to answer that decentralization question in a different way um salana has like a thousand or so operators today is that sufficiently to centralized chain maybe maybe not and but it doesn't it's not like it's right without its own issues either right and um stake weighted qos is like arguably a c centralizing policy and that's kind of the direction they're moving in the near term so it's really really tough to answer that question of like which one is better um I think if you were just like launching an app chain or something today you could probably make the argument that the rooll app direction is

a little bit more lightweight uh and the other piece here is like decentralization in terms of validator count has a cost you have more machines you have to pay right like if you run a single sequencer you have one thing to pay off and that's generally run by the foundation behind the the project and you know they're not trying to make money off that they're just trying to break even versus you know a a network of individual operators running validators on a like an L1 then you need to pay them to run that at a small profit there's 's a margin that needs to be made there so there's like an inherent cost there as well um one thing that not to keep rambling here but one other piece that got brought up on on Twitter the other day was someone was tweeted out

that the advantage of an L2 is that you don't have to pay inflation um I thought that was a bit of a silly take because there's no structural piece there's no architecturally differentiated thing between an L1 and L2 that makes you have to or have to not pay inflation right like if again it goes back to what I just said there's the node count has a cost and what what what you use to pay that cost doesn't isn't structurally different ethereum is moving towards a direction of minimum minimum viable issuance which would decrease inflation U to near zero because you can use fees to pay these validators right it costs like more to keep your fridge plugged in than to run an ethereum validator today who knows maybe that'll change but point

being um and so and l2s aren't like immune to inflation you can inflate for any reason whether it be decentralizing the sequencer set or arbitrum has a live proposal right now for turning on inflation to like incentivize governance activity so there's not like a structural difference between an L1 and an L2 that makes you immune to inflation or like requiring inflation either I think that's a a worthy worthy thing to point out I will also add that I feel like if you're an L1 you have to be very careful with your token um because you're constantly worried about the inflation side and that inflation you want to exclusively almost give to like validators um unless you're like a very new chain but I feel like

l2s are very Loosey Goosey with their money and they're just like oh here's you you minted an NFD here's 50,000 of our token you right and I think the important note there is that the token for l1s has historically been used to bootstrap the validator set right like you're basically saying hey we're not going to make any fees in the near-term we have to pay you as something so we're going to use the token the idea being that once you start making fees and you have like a viable business model and people want to like pay to use the service you're offering then you don't need the inflation piece right like that's kind of the end State you need to get to now you look at a lot of app chains and they never got that viable business model that people wanted to use so they're left inflating to all hell

and then you pull up the token chart you're like app chains are a failure like no the business was a failure it doesn't it's not about the model it's about the business I will jump in here and say that like for layer 2 tokens they are pretty loose with their money but I don't I don't think that that's going to like Remain the case in the foreseeable future maybe even this year but why not because the only differentiator between these l2s is their ecosystem and the only way that they've been able to like incentivize this ecosystem is just by giving out money like unless they can do something else which they haven't been able to yet then they're just going to keep spending money and if they don't spend money then I mean

like there's some that have certain ecosystems that are like differentiated like arbitrum and Basse they have different apps on them but at the end of the day if you're a new app launching and the there's no like they're both to evm um like base has some optimizations but at the end of the day you might as well just launch an arbitrum why would you go to one over the other it's not cuz Brian ball is because he's going to give you 150 to 200 million XY that same with arbitrum like they're giving out free money if you're a Dev you'll go to the free money it makes sense so I don't see it like changing unless there's some

drastic difference and I think that's one of the things is like with the l2s that has been an issue is there's no differentiator like Solana very clearly has a differentiator apos and sui even have a differentiator even though like they're not doing particularly well but these l2s are all the same um not like there's some small differences but it's not like tangible enough for a developer I think it's more tangible for the user like how else are they going to I guess bring value to the Token or how else are they going to differentiate their like like e yeah their ecos yeah that that right there is a difficult question that I honestly no clue I mean I was also thinking about with all these

interoperability standards coming out um I wonder if like if compe or if competition will get like worse between rollups because at that point you're I mean unless you're actively trying to maintain a wall Garden um it just seems like it would just overtime like become worse I don't know that's the goal no is like to make it undifferentiated as possible but it doesn't make any sense for the L2 because they make money off of whatever app is used on their thing like it's stupid that arbitrum spent 85 mil on users but it's like the only way that they can try and then they make 12

million revenue and they're like oh we lost 82% but in the long term it might all be okay it's like there's no other way to do it um and interoperability it only gets better and better so it doesn't matter if a product is on optimism or arbitrum but from the product side like from arbitrum and optimism side it very much does matter because these are businesses and they need to make money somehow and to make money they need to spend money because they don't have any other way to do it and the other side that it matters from is the protocol Builder right the the the person building the business is you have to you have to pick um and so Mike ialo actually had a great quote one time and it was like you know the Escape patch is great until for the user but

for the business I can't Port my entire protocol down through this Escape patch and move it to the next chain like you you have to kind of pick that original Community go out and build on that platform and you know you can expand to be a multi-chain protocol there's no doubt about that I'm not trying to say you can't do that but your initial build kind of has to pick one of these popular ecosystems I think that's why there's probably a power law that plays out here Bas and arbitrum are definitely the Front Runners today but there's going to be continued shots at this and taking it back to what we talked about earlier like these are all evm l2s that are still improving their Tech like Bas has made some minor

optimizations today like they're by far doing the most gas per second and transactions per second um consistently and they are probably going to be the first chain to integrate uh ref paradigm's new client built in Rust and that can dramatically increase the transaction throughput there and so they seem like the front runner to have the best tech uh in the L2 space in the near term and so you pair like the best tech with probably the best distribution engine in coinbase um it starts making like a really really compelling case and so if you're arbitrum you know you're you're kind of left wondering like what's your advantage here and to be fair arbitrum probably has the best tech today they're

they were long the cheapest chain uh in in the L2 space they're still very very cheap uh it's just a question of like scalability for them and I think they're doing the most on the meev side with time boost and on the developer side with stylus those are both really really really interesting um Darren do you know when time boost goes live um it's not up for voting yet so we still have at minimum a month so there's also the orbit chain stuff I mean orbit chains there's about like 50 of them right um only like half of those of them only like half of them are like live right now um a lot of the other ones are still like ongoing in development stuff like that um so I I

think that there might be more then like meets the eye for arbitrum but of course the governance guy is going to say that I don't know I kind of write the activity from uh what do they call it uh any trust arbitrum any trust yeah so when you're using arbitrum any trust I kind of just discount that activity like to zero like I don't know that's just like not a permissionless I guess it is permissionless but it's just not that's not what we're trying to build here I don't I don't love the whole idea of offchain Da being like this magical solution so you pull up you know roll ups. WTF built by the conduit guys excellent team 10 out of 10 recommend and like nine times out of 10 the chains with the most throughput um are either

like zy or proof of play which it both have this offchain da and it's like it's challenging for me to take that activity at face value and be like Yep this is this is the ethereum scaling we sought out to go get go get after you know what I want to talk about that off offchain scaling offchain da layer thing because Redstone also did something like that and it's basically them like putting it on a centr like C not centralized but Google Sheets da baby yes sir yes sir but it makes so much sense like if you're a gaming if like who cares if if you're just doing G right but I don't know maybe I'm taking a Twitter debate to heart too

much here but someone was like trying to we were arguing about the scalability of ethereum's role road map um and like you just can't count those that's not scaling ethereum scaling ethereum that's not scaling ethereum has no benefit to ethereum in any capacity what's up guys for this week's neillian snippet I'm joined by Lucas who's the head of ecosystem and a spreaded you over there thanks for joining us Lucas thanks for having me just to start us off um what's million and what is so exciting about it yeah I mean nilon is really a paradigm shift in how we think about Computing today uh so when we talk about privacy today usually refer to storing data privately addressed we refer to uh transferring data privately in transit but during the compute time

data is always actually fully exposed there is no privacy and security protection and Nan as the blind computation network is really fundamentally changing that so it enables you to basically encrypt data locally on your device send it to a decentralized network of notes they can blindly store and process the information so that's where the name plan computation comes from they don't see anything about the underlying data but nonetheless they're able to extremely securely store it and at the same time process the information um to generate an output which can then be reconstructed decrypted by a specified party so fundamentally it's giving rise to a private Cloud environment uh and new design space for decentralized infrastructure with the big Vision being to decentralize trust for high value

data sensitive data personal data private data right so we decentralized trust for ably financial value with bit coin programmability and public data more broadly with ethereum and Nan's aim is to make the next step there and also decentralizing trust for particularly sensitive information which I'm really excited about and I think will open up a lot of new use cases in verticals and horizontals that we haven't seen yet in crypto that's super exciting and what do you specifically focus on at Nan what does head of ecosystem and AI strategy entail yeah so I'm part of the founding team of Nan so I've been part of the project since the beginning so I've worked on lots of different things from um crypto economics governance uh you know ideation but also product and right

now my main focus next to other things but my main focus is heading up the ecosystem so what that specifically means is um I Source projects uh I curate them uh and then support them on their journey in building on a new network um so that includes bigger infrastructure Partners um you know setting up those collaboration partnership integration Partnerships with them uh including existing blockchains but also other offchain infrastructure projects and Enterprises uh and the likes but next to that also um smaller um preed seed stage startups series a startups uh in the crypto space but also in the web2 space uh and working with them closely to identify the synergies that exist with their application uh and the Nan network uh and then support them in their build as

well as to start deploying on our Network um so that's essentially what my main focus is obviously um many other things as well but that's C my main focus at today perfect um and what is your exact approach as neillian in building a strong ecosystem what are some concrete steps that you guys have taken and are taking it currently yeah I mean we had a really strong product mind product mindset since the beginning of their Journey right I think this is a pretty unique thing actually in crypto like we started the journey two and a half years ago but actually since the beginning two and a half years ago we spent a lot of time talking to Founders we spent a lot of time talking to decentralized Applications as well as uh web two companies to identify how they would

integrate blind computation into your tax deack right where do you need security where do you need privacy how does public IM mutable verifiable transparent storage and Compu and blockchains harmonize with the blind compute and blind storage aspect of the n network and by spending a lot of that time talking to FS already that early we shaped our product road map we shaped our ecosystem road map and strategy in line with that to introduce features and functionality that some of those applications really needed right so we were extremely Mar Market driven uh and as a consequence enabled projects early on pre-public network pre-public test net and the likes uh to access our internal network uh and supporting them in their build on that Journey right and specifically what we have set up for

that is what we call the Nan nucleus program uh the Nan nucleus program essentially is the support program for Builders uh we support them with um obviously the technical support with regular calls and support on a day-to-day basis um there is a business and marketing aspect to this as well and there's also a financial component to this uh that helps projects early on in our early Network to essentially utilize some of the functionality that's now unlocked with the new network um that is a key aspect of it but next to that obviously there is a strong collaboration as well uh with uh the development relationships aspect of the of team and the network uh in essentially enabling the right heaphones and bounties to be developed such that um you know the ecosystem develops the

right applications that we believe are good applications We Believe have good synergies with respect to the network uh and then there's also a strong focus on infrastructure Integrations uh which we will release shortly and we really excited about some of the biggest names that we will partner with in the next couple of weeks uh and essentially enabling those infrastructure projects uh to access blank computation in network and obviously that's a key ecosystem strategy as well because if you have an infrastructure infrastructure integration uh you open up completely design space for a lot of decentralized applications or uh traditional Enterprises to access the new Network so it's really multifaceted so I would say it's nucleus it's develop a relationship alignment in terms of making sure that hecon and poundies are set correctly and then finally it's also

infra Integrations that will open up a lot new use cases and design space to see a flourishing ecosystem which is really exciting perfect yeah it sounds like you guys are putting in a lot of effort into fostering a strong ecosystem how do you view that ecosystem develop over the next year few years what are some apps um use cases that you are particularly excited about yeah I mean fundamentally uh it's exciting to see the new design space that I briefly touched on before that we open up as the near nwk right there is now for the first time really the opportunity for decentralized applications to tap into plan comput computation and blind storage um so enabling decentralized applications on existing layer one ecosystems and other

uh decentralized infrastructure systems to connect to the Le Network seamlessly is super exciting because that will open up a lot new use cases and open up a black box uh that we haven't seen before so Nan becoming the co-processor the middleware uh for existing blockchain infrastructure I think will be really exciting uh but the next to that we also see completely new verticals and horizontals that we haven't seen in crypto before real world use cases and specifically nii a lot of use cases because if you look at a specifically um there is a lot of interaction happening today with those systems where we share a lot of very sensitive information right so every time you send the prompt to an llm to a large language model an AI uh company you leak a lot of your information right you have to trust them that they don't train the models you

have to trust them that they don't leak anything share exploited uh and also you leak a lot of information every time you process your your data so seeing applications building today already onlion um to essentially facilitate a private Cloud environment where AI implementations are happening in a fully Prof buing manner where nobody can see anything about the underlying data is really fascinating it's really exciting for me and I think we'll have a lot of exciting use cases coming out of in the next bumps and years to come uh because it is what we need it is what we need to protect ourselves from we can't have just a single company or a single individual um that you know has access to all of our data and creating a trustless credibly neutral uh decentral infrastructure system uh to train models to run models uh in a properly privac

manner I think is critical and we'll see a lot of use cases coming out of it and we already see today exciting companies building in a self Sur the ipace we see companies building in a federal learning AI use case spectrum and many others that's started to deploy which is which is exciting uh but thanks to that you know privacy and security are critical not just in AI they're critical in healthare they're critical in dating they're critical in um defi um today for instance if you look at defi specifically every time you submit a trade um you know you leak a lot of your information right or you have to trust the single uh individual or single entity uh not to front run you and that's a tax that users paid that they're not even aware of so grading a blind trade execution engine right

probably dock Bulls or the likes uh that can enable you to submit trades in a fully encrypted manner uh and protect you from being front run uh is exciting to see we see some developers that that U you know are in the Journey of developing those Solutions I think there's a lot more design space that will be unlocked in the next months and years to come across lots of different defi implementations that will essentially access some of the blind Computing functionality so I would say it's AI it's it's defi but then also as I said a lot of real world use cases are on Healthcare uh we see a company today that is essentially storing and processing genomic data in the network which is completely new design space that we haven't seen in crypto before uh because it's very sensitive information right it's private information it's AR

going be the most high value data that uh one can have uh and making sure this is protected when it's stored and protected also when it's processed and analyzed um is fascinating and will open up complete new discoveries and insights that Frankly Speaking can change not just the crypto space and you know the use cases that are possible with decentral infrastructure but also much more broadly what's possible with privacy protection traditional Enterprise and and and Healthcare specifically so anytime security privacy are critical the network could become uh exciting new infrastructure and I'm really excited to see lots and lots of applications across lots of verticals and horizontals building on it perfect that all sounds really exciting uh protecting genomics and Healthcare is something that I hadn't

thought about but it makes a lot of sense thanks for coming on an evangelizing million thanks a lot appreciate the invite and looking forward to following you guys with all the other interviews coming up soon as well I did want to ask something about um like in reference to time boost on arbitrum I've been thinking about um like what poly like uh what po what's been going on with polygon lately so um you guys like you guys know fast lane labs and how they're like essentially uh just like goo on polygon they like run me strategies right um so they're building a cross chain uh execution engine or that's what

they're calling it and I've been Atlas or is just something different this is atlas I believe that's what that's what they they're calling it um and I I was thinking with polygon's recent like AG layer uh like product for like uh there there would be like a relayer network right and with this relayer network you could say that there's like rev or relayer distractable value and I was wondering if like the cross chain execution engine from um fast Lan like if there's like some overlap there like could in other words could something like arbitrum have its own like a cross chain execution

engine and like take like value from that as well and couple that with like a re with reer extractable value I don't know this is like a lot of like me throwing like technical terms out there seeing if it sticks uh but yeah any thoughts I haven't looked into that at all that's interesting I mean you're definitely going to see I so I can only answer broadly here but I I I think you're definitely going to see me capture move up the sack towards apps like everyone has long talked about that but now you're actually seeing it oracles were kind of first with this oev or Oracle extractable value um you're seeing that those hit production I think uh I it Uma has a product for that and then I think pith was recently talking about theirs

um and so you do see things moving in that direction to the app player um and maybe even not value capture but value M or sorry me capture but me mitigation Paradigm and uh Eugene from Ellipsis co-authored a piece on how to like create an amm that basically prevented sandwiches from occurring or severely limited the amount of sandwiches that can occur so I do think in general you're going to see apps think about me a little bit more I guess what I'm trying to say what would be better for me to say is like with this like hypothetically and super hypothetically

if um arbitrum had like a realer Network right the realer Network would have like the rights quote unquote um on the value uh but happening between arbitrum and another chain or it would be able to like gatekeep that or gate keep that value and that's just like what I was thinking like is it possible for a chain to like um to have its own interoperability solution here like or for an L2 to have its own interoperability solution and then like extract value from that and use that to gatekeep so like instead of having a Walled Garden you're like almost paying people to to use this solution or something uh I doubt it but yeah but it

just keeps just getting bigger no like the interoperability issues are still there it's just that instead of like between everything it's Define still there what what's still there Define like what you mean by like the in operability Solutions get the issue is still there you still can't use it properly it's like even if you like let's say like on all El like okay let's take AG because AG is the only one that's live if if you are a chain that is opt into the a layer you're technically like all assets are kind of the same they have the same risk profiles no like if you have hold

it on mode or if you hold it on like the polygon POS is that's what I understand the agly as I mean that's that's like the end State for the egare currently it's um it's on V1 so like like cross change transactions are um like 45 minutes um so I I can't really I I wouldn't be I wouldn't say it's a perfect example right now uh maybe in 2025 I mean I think what Darren is asking is like a good point um I mean I think optimism with a super chain is really attempting to do this um you know I saw and it's I don't think these features are out yet

but I've I've seen like some preview demos of like being able to kind of Select and slide and choose you know to send um usdc for example from like your different you know super chain addresses all in like one transaction so there's a possibility that like you could build out a feature set that like leverages if you have this L you know L2 L3 you know they have their super chain ecosystem you have your orbit chain ecosystem and you have some way to like tile those together and you can like offer services to kind of integrate those really well and then like take some PES off the top um there could be a mechanism there but I agree with with you as well Bach like we're running into this problem

where the business model has been to like okay we take all the activity and we put it here and it's like again just like this generalized ecosystem that doesn't it's like hey come do your things here just generally um and not going after something unique or specific and the main goal was like you know let's improve TPS let's improve throughput and then what they say is like okay but the second layer wasn't enough so now we have to go to the Third one and again it's like okay you can put your apps or even maybe even your generalized layers down here and each time we take a like a whole chunk of the like value that drives um out of the picture because because we're scaling you know another 10 100,000x whatever the number is so

the business model just gets harder and harder each time um so I think there's trade-offs both ways and it's like to the point around really developing like a a differentiated business model it's it's hard to have a differentiated business model when the business model is like this is our generalized ecosystem come build here it's General and then it's open source and like anyone can go just drop and build their own generalized ecosystem you know in the exact same way and then you have to compete over users and you don't really have anything there's nothing really driving metrics at all um unless you have some other thing that that differentiates you like maybe just your raw Tech is better yeah I mean it comes down to like real products being built and then you get that Moe of like hey you know I want to be with this

product or I want my product to interact with this product at and so that makes more sense for defi than like a lot of other things like consumer um or even payments but yeah it's like how do you get real valid Builders onto onto your platform you know what they've done that like polygon has poly market and there's still nothing but poly Market on that chain I don't even know why poly Market's on it I don't know why they named it after polygon as well like it's not that good of a either way it's it's like and nobody's still building on it even though they have that like killer consumer app I mean whatever it's like election driven okay but also I like P Market I think prediction markets are

cool um and it is interesting to think about like where and why they're building um it's interesting like poly Market doesn't drive a ton of value down to the base layer either which is kind of typical for uh like a more consumer facing app that's not I think Defi and Bot activity is what's going to drive value in the near term for the base layers but um specifically with poly Market everyone's called it like the breakout app of the cycle because the volume has been like increasing there's only like 6,000 Traders per day which isn't bad I'm not saying it's bad but that's not like this main everyone was like talking about it as if everyone in the world has used this thing uh I just find that really really interesting that again there's like a couple thousand people trading on this platform yeah but

they're putting big money on it and they're yeah they're just very loud and it's you know it's appearing on like spectator index and all these like different like like big news websites and their intern is really good I think that's probably 95% of the reason why they're doing well it's the intern Nate Silver's there now I that's pretty impressive actually that's a good way like we said earlier you know narratives they there's often the disconnect between the narratives and the fundamentals and I think that I agree with you that like the narratives and fundamentals on poly Market are in very different states than what people would have you suggest um but I also like the point that you made Dan like uh I think kind of circling back and like closing off the discussion on like these

business drivers for like networks it's what we see today is like individual apps tend to drive like most of the value in a lot of cases like if you look at pump. fund on salana they're they're running like Millions for themselves in fees and they're they're taking up large percentages of like overall Dex volumes on Soul um or as a relative percentage to overall Dex volumes so it's like apps have a lot of the power in this case it's like the the infra and the tech doesn't really have that much power because if I have a good app and people want to use it they're going to come get me wherever I'm built as long as you know and so me as a builder like it's really just up to me to like find that text deack that enables this app to be you know fun seamless exciting whatever

it is um and I think that's kind of how the Dynamics will remain so for for these like chains ecosystems it's really going to come down to like does the tech that we have and like whatever distribution mechanisms the way that people can access us is it meaningful for like those good apps to potentially be built and if we're all just like building the same thing then it's like well then they can build anywhere and they're just going to like go to the cheapest cost if it's all the same Tech pump. fund now has 0.1% of Solana by the way like total Supply just based off of their fees which is ridiculous that's that's good business that's what that is that's good business that's it's like 560k soul in total fees earned yeah what's that in dollars it's like it

depends on the price but yeah I think around 80 90 million that's good business good for a couple of months yeah that's good business and theu one salana 10xs guaranteed NFA D not bad not bad at all yeah it's interesting I'm just looking at sana's um total fees total economic activity me plus fees um over the past couple weeks I was expecting more of like a pullback um in activity given the recent price action um but there's also this like weird dynamic of you know when price pulls back activity skyrockets at least for the interim uh but this is a weekly

view here and you know we are seeing like a decrease from this mid July Peak but I don't know thought it was interesting that activities kind of hung on it's a war zone right now like pump. fun is I don't know how how often you guys get in those types of Trades are look there but just let's talk about uh that actually that pump. fun point because I saw that tweet that was circulating around the idea that pump. fund is dead because it was like the graduation percentage of the number of token launched versus the number of tokens that made it into the radium pools so they hit that like minimum market cap

requirement and got launched on radium um it's like a super low percentage I don't have the Tweet up in front of me but people are throwing this around and the comments on like all of Pumped off funds tweets now are all like visceral anger uh and it seems like there's definitely been a sentiment flip but I just looked at like Dex volumes and mem coin activity and like nothing seems out of the ordinary to be totally honest and even looking at uh soul USD volume uh this it's it actually hit a local high since March 2024 uh last week at about five billion and that's like sole USD on chain volume and so I don't know it

seems like activity is not totally dying I specifically excluded mecoin activity there because I was curious like outside of that what's happening um yeah I don't know I'm curious if you guys have any thoughts on the graduation rate being so low and and sort of like what's what's next for pump fun yeah I I don't think it's surprising I mean I think if you just look at the Dynamics of cost to deploy and like throughput if you go back to I think if you just look at the history of like chains where mem coins have existed like ethereum back in the day you know it was far more expensive to launch any singular token so obviously you can't launch a million tokens in a month it's just not possible it's too expensive then you know people activity shifted

over to like bance smart chain it shifted over to these other like alt L ones that that came out that were cheaper um and more tokens were created as a result on the whole and then if you go to Sal and the cost is like effectively near zero um there's nothing really stopping you at this point from making as many tokens as you want so that might as a the the result of that might be that you know that percentage of tokens that graduate and go to large market caps is going to Trend closer to zero if you make more and more tokens there you know there's not enough money um in existence to like sustain a million or a billion or a trillion or quadrillion tokens to like X market cap it's just not possible um so I think that's really just a natural phenomenon

of being able to create more tokens pump they just had recent announ announcement that it's now free to create a token and then the first buyer of the token pays the creation cost so um I think it makes sense it's really what they're all they're trying to do is get people to use the product and create like create funny tickers create funny memes create funny you know things for other people to look at I think they had a million tokens created during the Elon Trump um talk one for every concurrent listener hello like yeah they a ton I um I think those reactions are mainly because they're just like yeah there's

not enough money to push everything up and it's just not as easy as it used to be like there was a time on Solana when you could just Chuck money at stuff and then probably eventually be up 10x or at least break even like two weeks later because it was so froy and now it's become very diluted um and it's just become more and more sophisticated like you have more Bots you have more people who are just sniping launches even though like they've been doing that since the very beginning it's now like even more competitive even like the regular people uh just because telegram Bots have become more and more sophisticated they can basically like do everything that prior to this was like had a tech um learning curve yeah I I think this is

a case where we've talked about narrative versus fundamentals and I think in this case it's actually the opposite where there's a lot of negative narratives being played out on like meme coin trading is dying because of pump like pump is dead because of XYZ um but if if you look at their fees and the revenues like it's growing it's been consistently growing even though we've been chopping sideways down like as a market for the past several months um they've been up and to the right so um and as a percentage of overall like activity on salana they've also been like either steady or increasing in in depending on kind of where where you look so yeah I kind of like thinking about it as though like we've all seen the spreadsheet someone did like a year

maybe two years ago where they had like a meme coin portfolio where it was like $1,800 split everywhere and all of it almost all of it's up like except like uh three entries right but that was because like that was so long ago that was like two years ago three years ago it was as Danny put it much harder to create like a meme coin um and it it was just like a much more time intensive process now you have people like pump fun is basically like it's basically like creating a casino and then everyone was making money on it so early because like there there wasn't there weren't that many people going to the casino and like they didn't I guess there weren't like a there wasn't an adjusted like rate for which people like win or lose

but now with so many like uh meme coins out like being like created every day it's basically matching what like a regular Casino looks like how often people like really win big but yeah I mean it's worse apparently according to the graduation stats than a regular casino but another thing is it's if if it keeps going like this it will actually die out like this is probably like the eighth time I've tried to call the meme coin top and it never works out but this time it will um no but more seriously if the feedback loop is just that you get on it and your coin doesn't graduate um because that bar is just going to get smaller and smaller you

know before it was like every token went to 200 mil and now like tokens can't get up to 26k or something then it's like people are just going to and then it'll self-regulate eventually it'll come back like everything come back there is something interesting here though because you like these aren't binary actions that people are taking it's not like you have to buy some token pre like pre you know successful pool and like and then never sell it like you can buy and sell them while they're still on the platform so it's like you know I would imagine that a lot you know maybe there are people who are just like diamond handed like I think this meme is the one of a million and I buy and I and like dang I lost and now I'm never going to

use pump fun again but you know I would imagine a lot of this activity is probably similar to what you what people do when they like Leverage trade on pers as well it's like they're in they're out they're up they're down like they think this is going to the Moon they think this is like dead forever so they're dumping out of it it's like you know margin f is launching their you know just launched their long and short product on Meme coins as well so I think it really just Taps into that like very high frequency like High event driven attention-driven like economy that people love to just like go crazy on we'll see how yeah I we'll see how all of this stuff develops I'm very hopeful for real yield defi building blocks of the internet of the new Financial

Revolution coming back Darren don't do that to me man you're you're a guest on this podcast you will not do that to me this is I'm cutting him out Mark cut him out of the whole entire podcast man I do have one question just like how does this not loot back to like what to like the higher requirements for that like ethereum has right like if the problem is too many people are launching meme coins Not Enough meme coins are graduating to me that says that you have to raise the requirements right can I tell you what will what I think will happen and I think this happens a lot um but people just don't notice it when something becomes extremely popular it just gets diluted out and then there's

no more return on it people start giving up on it and then eventually it comes back we've seen it also like with anytime a narrative comes back I feel like it's somehow fits this pattern of like it became too popular died out and then it becomes popular again so that's likely I mean pump. fun might die uh I really like the product I've used it before and I think that team is like really good like they've actually figured out exactly what to launch so this is not a this to them but it might die there'll be some something else that comes back it's just how the how cryptos generally worked yeah and and I think maybe to add to it I think we've seen a similar reaction in general to l2s to new token launches this like the past

two years it's like there's way more tokens there's way more options they don't all just go 10x instantly because there's just so much more you know people have to decide what they want to buy and they have a thousand options instead of 10 like it's just it's very different so um I think that's sort of like a natural outcome come you're going to get this like power law par distribution of like a few things will do very well and then like 90% of them in the case of pump fun if there's a million tokens deployed you know you're going to have like five maybe or 10 that do really well and then you'll have hundreds of thousands that like maybe get 10 or two do or $1 in volume so thank you so much for coming on I think we can wrap it up over there any Dan

Smith do you want to say something since you're back oh a pleasure Bako always a pleasure ZX research is my favorite podcast fantastic um huge shout out to Danny and Darren also for coming on um guys make sure to buy if you want to go you don't have to but if you want to go to permission list it's in Salt Lake City make sure to buy the tickets using ZX10 for 10% off your tickets all right come hang see y'all [Music]