Recapping HUGE DC Week, Oil Ripping, Head of Asset Mgmt At G20, Bittensor & Pantera Capital Join

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[music] [music] [music] [music] [music] [music] >> We'll see you around the timeline.

Feels good to be back. I think The [music] Rollup is one of the most premier media [singing] brands in crypto, and Andy and Robbie are great [music] experts at everything they talk about, and it's my favorite podcast. I mean it's in our library as we potentially multi-chain deployments. We are at Devconnect day [music] one here at a suggestion from space. Here at a suggestion from [music] space. >> [music] [music] [music]

[music] [music] [music] [music] [music] >> JP Morgan, BlackRock, DTCC, Fidelity,

the entire thing was just institutions. It's just It's next level. This industry is going to the next level. And guys, I I don't know what else to say. I'm bullish. He said it. He finally said it. I'm so bullish. He is bullish. I'm bullish. We're bullish. >> [music] [music] [music]

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>> The Rollup is headed to the top. If we're not already at the top, we're [music] going to the top. >> We're going. The Rollup is my favorite. >> From all walks of life, all over the world, all over this industry, come together for the Rollup. >> [music] [music] [music] [music] [music]

>> They're not coming, they're simply here. It's the golden age >> [music] >> It's the golden age of crypto, guys. Get right. Let's go. >> [music] >> Welcome to the Nest. See you on the show. We're back, baby. We were back at the Nest. Tokenization Tower. Happy Thursday, March 19th. Let's get some love for the Rollup team pushing forward. DC, the last 2 days hard. Guys, we have been absolutely slamming it down in the capital of our lovely country, the United States of America. Guys, what a run in DC this week from the the CFTC, the SEC, and more. Guys, quick shoutout

to Plume. The Nest by Plume would not be possible without our amazing friends at Plume powering RWAs, tokenization, and more. They just announced that the Nest product is coming to Etherefi's Neobank, a portfolio company of our fund good idea ventures. So, let's give some love to eat your fries and plume guys. Really really great [cheering and screaming] to see them come together. As I said, I mean this was just an amazing two days last the last two days in DC firmly had the most policy discussions I think we've had entirely on the roll up. I mean I think two days of policy I'm good for two years. That's what I've been saying.

I mean two days of policy is plenty for me plenty for the roll up team and yeah, I mean guys, we're live back in in New York. I don't really know what's been happening in the markets. I mean as you can see we're back in the Empire State. You can see the beautiful view our lovely tin job that's almost done. Guys, it's a great day great day to be back in New York. But I don't know what's happening in the markets. Gold's down a ton. Bitcoin's pulling back. This war in Iran's raging on. So, I don't really want to go into that too much. We're going to monitor monitor the situation with Aton here in a few. He's got the update for us.

But just a quick recap on what happened in DC the last couple days. So, we sat down with policy makers across the board and really got insights into what's happening from the SEC CFTC the classification of digital assets as commodities namely ETH Solana Ripple Cardano Chainlink Stellar Lumens Hedera a lot of these kind of like in stow coins or in stow projects or kind of like those those OG types. And so we saw those come out as commodities. They also gave us classification for digital collectibles and then all the way down to what we obviously knew that tokenized securities whether you tokenize a security or not

is still a security. And so that was the classification. What also came out of that was the rise of the hyper liquid environment where the S&P 500 came out and said that the height the hyperliquid perpetual futures exchange has earned a exclusive license to use their index on hyperliquid through trade XYZ. That was also a big talk of of the town. We had Kraken delay its IPO. And finally, we're getting to the end of the rumor mill here with Patrick Witt announcing some stablecoin regulation possibilities for the Clarity Act. And so that is also coming out. Guys, was a great week in DC. Shout out to the DC

Blockchain Summit team, the Digital Chamber. Let's give them some love. They were absolutely crushing [cheering] it. And you just love to see it. And we had Perry Annan, the original founder, who actually brought Robbie and I together at the University of Florida Blockchain and Bitcoin Club all the way back in 2017. Yes, she did say it was the nerdiest club possible. Um I second that. And and she sponsored our tickets to go to DC Blockchain Summit in 2018. There in 2018, it was the very very very early days of kind of DAOs and governance and this kind of restructuring of how decentralization is going to make an impact at an

industry-wide scale. So we talked about that and more with her and she was great. So guys, that is all our opening remarks for the day. Was it again a fantastic segment in Washington DC. Absolutely loved it. And yeah, we'd go back again. And the policy was interesting enough to keep us engaged and entertained because so much happened. So let's get into today's topics, guys. We've got a busy day today here in the tokenization tower. All right. Welcome back to the nest first and foremost, guys. I know you guys are used to this new studio now. No more calling in from you know, mom's basement or study or Brazil, Hawaii, Turkey Albania Bali Singapore Tokyo

Korea, all the many places I had I don't know if you guys know I've been doing the digital nomad thing for last 4 years. This has been a bit of a lifestyle change. We got Markets and Weather live from New York City, the head of asset management at G20, institutional folks baby joining in the show. Um we got Pantera joining the show as well and then AI supercycle with Synthetix founder uh James Ross, a friend of the show, talking about the BitTensor bull thesis guys. I'm not sure if you guys have been paying attention to BitTensor. If you have, you'll see that there's been a subnet craze in this run. We're talking about it last week on the show. Wanted to bring him on in the studio in the tokenization tower powered by none other than Plume to talk about

what this means, why BitTensor is this Bitcoin of AI and more. And so we should have a really good episode today. The all a lot of them Pantera folks are also pushing on the payment side. Synthetix payment side. Tempo just launched. Shout out to Trezor powering today's topics. Let's give Trezor some love. They're absolutely crushing it. Best hardware wallet on the market. Use roll-up code roll-up 10 to get 10% off your order at trezor.io. Guys, let's get into the Markets and Weather but before we do, let me tell you about Frax. Frax is building infrastructure for the for the future of digital money. Open, stable and borderless. For more information to start using the future of digital money today, visit frax.finance.

Guys, what is happening in the market today in the weather? It is 38° overcast here in the tokenization tower. Shout out to Relay powering the weather segment of the show. [screaming] >> [cheering] >> Today's high is about 44° cool but seasonal if you ask Claude. Uh light winds, low chance of rain. It was cold in DC. It's still cold in New York. We're inside. We're warm. We're feeling good. Let's get into the markets guys. I think this is what you guys want to hear about. It's uh it's a bit bloody out there today. So, deep risk-off escalation in the markets today.

Oil shocked. Brent crude oil spiked up about 113, 117. Um highest levels in years. There's massive stress on key facilities in Qatar, Kuwait, and Saudi Arabia raising fears of prolonged global key supply shortages. Namely oil and others. Like I said, we're going to monitor the situation here shortly with Aton. And he's going to kind of walk us through what's actually happening out there. There's fears of a recession. Bitcoin's down quite a bit today at 69. Uh Ethereum's at 21. Solana back under 90.

Chainlink back under nine. And Near's kind of staying pretty steady. Uh it's been around that 1.3, 1.5, 1.2 mark for a while. I think that AI kind of narrative is holding up a lot of these chains and protocols that are adjacent to that. Powered by Zama, our friends at Zama build confidential applications on Ethereum. Anything you want private first. That's Zama. They power our digital assets market. We're going to get into Aton. He's going to monitor the situation for us. Before we do, let me tell you about Near actually. One of our best partners here on the Rollup. The [cheering] blockchain designed for AI-native applications and autonomous agents. Start developing today at near.org. The blockchain for

AI. Guys, it is time to monitor the situation. And we have no none other than Aton ready to bring us live from the back office. Aton, I know there's a lot going on here, man. I mean, I just kind of opened it up with the oil shock, the energy crisis, the gas surge, Qatar. Last night there was a major bombing on a Iranian oil site. What's happening, man? I know you've been monitoring the situation. Get us caught up here.

Yeah, so where do I begin? Just even looking at our dear friend Gainsy, where he's been being woken up in the middle of the night, being bombarded by these rockets, waking him up. So, it's very interesting to be like keeping up of war just through like live streams from people like Gainsy. But more interestingly enough, we had US Secretary of War Pete Hegseth say they want to raise 200 billion with a B to go in and and take care of Iran. Just go in. So, that's a large chunk of change that they want to raise and get in. And then secondly, you have 17%. This is a report from Polymarket I saw this morning that Qatar's natural gas export capacity was wiped out by Iran last

night, and it's going to take anywhere from 3 to 5 years just to recoup what they lost. So, across the board a lot of resources are just being wiped out in the Middle East. Yeah, and so I have here that there was a natural gas price jumping up about 25% in Europe. The European indices down about a percent and a half to 2%. From your lens here, what is happening to the price of oil? Kind of like Yeah. I mean like oil has been trading sort of like a meme coin these past few weeks since the war started. Just like moving based off whatever President Trump has has been saying, whether "Hey, we're going to go in there." or "Hey, you have to open up the Strait of Hormuz to

everybody." But you see a lot of European countries like you had mentioned, like they're in a position where like this is this is impacting them. And just like we had the Powell come out and say like inflation is still an impact. So, it's a whole like factors impacting like these these price movements. So, I can't I'm curious how it's going to be in the weekend with like the activation of hyperliquid and more and more people like wanting to get in on it and trade these markets on a Saturday, on a Sunday, on 40x leverage as crazy as it sounds. Yeah.

Yeah. So, there was also something that um I think you had talked about that there was a a a a bomb or missile that hit an Israeli uh new or um oil site or sorry, an Iranian oil site that the US didn't sign off on and that Trump kind of seemed like he was losing control of the Israeli army. I'm I'm not sure what exactly happened there. Well, I I didn't see too much about that article-wise, but what I did see is that Trump did wave like some like Jones Act that like prevented [clears throat] them from like going in, but like they're calling it like he's waving this law and if you like look at the comments, it's

actually hilarious. They're like, "No, you're not waving a law, you're just breaking the law." So, it's pretty interesting from like a power position, like a wartime president, um how the people react to like who's actually in control. Yeah. Interesting. Um Okay. Um yeah, I mean, I'm I'm seeing that there's some big uh disruptions in Qatar with the LNG disruptions. And I actually saw this uh post from Balaji talking about the um the the impacts of the missiles hitting the Gulf countries [snorts] that aren't involved and how this is going to cause a disruption and

a slowdown in everything from IPOs to tech investing to real estate in these markets. And so, it seems like there's kind of this recessionary fears across the market now. People worrying about how the the kind of second and third-order impacts are of these kind of missile shot at countries not involved in this particular war. Yeah, like I mentioned Europe, like I saw this morning that France France and Macron he they're like, "Yeah, we don't want to be involved in this war like whatsoever." And similarly, I saw Switzerland who's like notoriously known for like their neutrality, they said to like the US government like, "Hey, we don't want you to like

land your planes here. Like we don't want to be involved." But the USA is like, "Listen, this impacts you wholeheartedly. Like if you're not in this like straight up forward moves, and like the oil's not moving, then that's going to cause inflation in the price of all these natural commodities just to keep going up for the people. So, I think it's like at a standpoint where like these countries are going to be like, 'Okay, we have to get involved here. Like we actually have to get an end to this.'" Yeah. Ladies and gentlemen, monitoring the situation today with intern DJ. Let's give him some love. All right, guys, we'll be back into the news here to kind of cover some of the latest here. I think we have our first guest as well ready to join us on the show. We're going to crank a little bit of the news.

Um Yeah guys. We have quite a bit. I mean, we have different agentic payments being unlocked as well as different kind of launches, Watcher Guru supply shock. Why don't we get into it, get fired up, and we'll get our first guest situated, Nauman, the head of of asset management at G20. And so, why don't we roll into our first tweets today that we'd like to cover as I think that there's quite a bit to go over today. So, Visa Crypto Labs has launched a command line tool allowing AI agents to execute secure card payments autonomously. I think these guys are completely behind the boat. Visa

screwed. They have no way to compete with stable coins. They know it. They're They're literally not going to be able to compete with stable coins. If you want to use an agent, they're going to use stable coins. Visa screwed. They think that there's this TradFi AI convergence possibility. I don't see it. I think they're behind. I don't think they stand a chance. Um we're going to see stable coins proliferate with AI agents uh quickly and expect to really see that happen quickly and come to fruition fast. So, this was kind of a a rebrand. Visa had a new crypto lab uh that that they had announced in the past year, but now it really is is positioning infra and AI in the same

world, in the same alignment here. And yeah, I mean look, I don't think Visa stands a chance unless they're going to pull stable coins and actually use them at scale. And so, look guys, I mean, however they figure that out, however they do that, yet to be seen. So, guys, we got our first guest here. We're going to get him on live. We're going to be right back with a quick commercial break. Guys, stay with us. We've got the head of asset management at G20, a large market making firm and asset manager here in New York City. We have a lot to talk about as the digital asset space permeates into the traditional finance world. Guys, stick with us. We'll be right back.

>> Ladies and gentlemen, we are back live with Naman, the head of asset management at G20. We're live here from New York City in the tokenization tower where digital assets meets finance. I had the the privilege of meeting Naman at an event hosted by the Momentum X folks uh down in New York last week and wanted to bring him up, chat about what you're doing at G20, and this kind of convergence between finance as we know it and digital assets. So, welcome to the studio. Welcome to the nest. Uh thanks for having me, Annie. It's good to be here. Awesome, man. Awesome. Well, before we get started, you have a very extensive background in in finance, in traditional finance. How did you get

started in the in in in the finance world, and then how did you end up at G20? Yeah, I have a pretty long history. I used to be at Merrill Lynch which later became Bank of America after the crisis was right in the thick of it. I saw everything happen which was really the the background of why I ended up in the first place because of everything the smart money and everything that happened in the background balance sheets. But I I started off at Merrill Lynch in Hong Kong and New York and to Credit Suisse for a while as well all in the structuring and equity derivative space.

So that's a lot of what I did risk management for institutions. But eventually you know I caught the crypto bug while on the trading floor and I you know jumped headfirst into into the sector. Yeah. Yeah man I actually heard from Alex the ZK sync co-founder about their new chain carry network yesterday which has kind of a consortium of open banks building on top this this kind of blockchain layer to enable better bank-to-bank communication and they're basically doing tokenized deposits on chain. And so it seems like this era of banks being shying away from the blockchain environment is really

shifting. Like I imagine in your in your tenure the appetite towards digital assets was pretty much slim to none, yeah? It was slim to none at the time all because of regulatory issues. Yeah. And and the fear of it. But similar to what you spoke about we're also building privacy is a big thing especially on what you can say but we're also building from a bank perspective on kind of network as well and that's all about privacy and movement of collateral in the background as well as a bank communication. >> Yeah.

>> So I'm very well aware of the space. It's I feel now that's that's where the convergence is actually happening. Mhm. And so with G20 you guys have a market making desk, an asset management desk. What are some of the numbers as far as like you know, which which global markets, kind of like what are the you know, individual lines of business and then what is your role? Right. So, G20 started in 2010. It's a cross asset class quantitative trading and asset management firm. So, we trade commodities FX and crypto. Crypto we got into in 2018.

We're huge market makers, top three with for all the token projects. We've done some of the major deals last year and this year as well. So, market making is a big part of it. We're also you see the counterparties, you know, the Goldman and the Merrill of the world where people come to us for option pricing, especially on altcoins. Mhm. We're big players in the altcoin space and kind of overlaps with our market making business. And then we have the asset management or treasury management business. What that and that's the part of the business that I run. We manage money for all the foundations because they're sitting on balance sheet that they need to make productive.

We run money for high net worth, for young not retail but institutions in general on the asset side. Awesome. You know, the running the money is you know, that's all about yield generation, risk management. Yeah. And we're going to take a quick commercial break. Just take something real quick guys. We'll be right back back with the model. We'll get into the meat and potatoes of the conversation here. >> audio

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[music] >> All right, guys. We're back. We got Naman here, the head of asset management at G20. Just did a quick intro.

Yesterday in DC, we got news from the SEC that something that a lot of us probably already knew or assumed that these digital assets were not securities, but it was just kind of gray area that we were operating in for a while that kind of prohibited a lot of the stuff that we were actually just talking about with banks coming in and other institutional managers coming in. So, now that we know that at least the the top crypto assets are indeed digital commodities, what does this mean for the market making business? What does this mean for the institutional side of crypto adoption?

Yeah, I mean this this ruling this announcement was actually a huge unlock, right? Because you know, as as you said, people just held back. Institutions just held back. These tokens were actually delisted in a lot of these exchanges. So, now what that does is provides some sort of clarity that they bring back on and relist them on exchange, right? Because it's it's it's all about the whole security laws element all now applies to transactions as opposed to the underlying token right now, right? So, now the now the fact is that there's some clarity there has ramifications down upstream and downstream from from an asset management perspective or just trading in general.

These tokens can now be used as collateral, right? Think about it. Like what did the CME announce recently in their in their pilot program? They're going to use Bitcoin, e-stable coins, tokenized treasuries, etc. as collateral against all the river trades, crypto derivative trades. So, it makes the market a lot more capital efficient. It helps it scale, brings in new capital, new institutional capital you know, into the market. Now also the fact is it's going to be relisted it'll increase volumes in these tokens as well. You you had a huge divergence in terms of if you look at where the volumes traded were globally, it was all in Asia, the offshore offshore markets, right? Now the volume can can can come back to the US. Yeah, this kind of onshoring effect, right?

>> whole onshoring effect. >> Yeah, back to the US, which I think is super important because I mean New York's kind of being established as the crypto capital of the world and then you know, the US securities regulation also applies in a global manner, right? Like SBF is here in in New York trial, and that's kind of tends tends to be how these things roll out. There was an interesting dialogue that we had as well about the adoption from large players like JP Morgan and other banks that also have a market making arm. And so you've got a lot of these firms doing POCs for a blockchain or for or building out like a head of digital assets team and kind of pushing for this adoption, pushing for this.

And then on the flip side, some of these firms have these market these market making businesses which are traditionally ran on the 9:30 to 5 hours Monday to Friday. And all of this is happening while the NYSE, the NASDAQ, and Cboe are all pushing towards tokenized equity trading on a 24/7 basis. >> Yeah. And so you've got parts of these companies pushing forward for this because they want to be in the lead there and be kind of taking advantage of this. But then you've got other kind of parts of these companies, specifically on the market making side, who are kind of like, "No, no, no, no, no, we can't do that because we need to change our entire infrastructure stack to be able to actually compete in these markets now." How do you think about this kind

of like dichotomy between these these subsectors of these larger enterprises as it pertains to digital assets? Look, I think it's not going to be an option. Okay, you're going to have um there there are two forces at play here, right? You have uh the old way of doing things in the crypto world, which is converging more towards TradFi, but TradFi can't stay the same either, right? So TradFi has to converge, at least in terms of the infrastructure and the and the rails, uh more to more of a crypto way of doing things, right? So it's 24/7 uh trading that's going to involve building up infrastructure manpower resources around that.

Um you know, custody, uh, market making businesses around that, just the talent around that that needs to be built. I don't think it's an option. They have They have to get there, right? So, on the derivative side, you spent a lot of time in the derivative space. What's your take on the perpetual futures side of things, right? This is obviously an innovative product from Arthur Hayes in in the early BitMEX days. Now we've got these kind of perps DEXes on-chain venues. Yesterday as well, the S&P granted an exclusive license to trade XYZ to allow for the not or sorry for for the prohibitive use of that license on Hyperliquid only.

How do you think about the growing perpetuals market? Is TradFi and the kind of traditional brokerages going to offer perps at some point? Or like how do you expect perps to kind of bleed over into the traditional finance space? Perps were an amazing innovation. I mean, you think about the volume outside of the US in perps. 2025 $93 were traded in perps, okay? Um, and it what what's what does CME trade? You got $3 in crypto futures alone. So, look at the magnitude. Look at the difference there. Hyperliquid way ahead in terms of the its innovation, still behind uh Binance, which is where most of it happens, but um but you know, like

perps is being currently led because of geopolitical situation, like 30 to 40% of the volume on Hyperliquid is non-crypto perps. I mean, think about that. That's and that's I think where uh where the growth is going to happen. So, you talked about S&P. Um, think about the situation where uh you know, this whole geopolitical situation again, okay? When when these attacks happen, when uh when the um you know, when these attacks happen, especially happen on a Saturday, happen on a Friday night when markets were closed, how does an asset manager, how does one an institution take a view or hedge in the meantime, right? Because the markets are closed.

You have to go to a 27 platform. You know, hyperliquid or Binance or any any any of the perp perp exchanges. That's how you take that view. And once and once the non-crypto perps gain more traction like you mentioned the S&P, what better way to hedge than short perps, short short S&P perps, go long crude oil perps. So that that product area is expanding tremendously and that's where a lot of the volume is going to flow into. >> Yeah, so but you don't anticipate traditional brokers like Schwab, TD Ameritrade, these types, you don't anticipate them to offer perps, do you?

>> There will be US exchanges that will. The difference will yeah, Coinbase, you know, will have >> too or just on crypto assets? Could be on equities. Kraken for example will eventually offer in the in the US. It'll come. It's it's just an innovation that that that makes a lot of sense. The difference though is going to be that you're not going to see the 100 times leverage on these perps, okay? You'll see much lower leverage levels. 30, 40? 10 10 yeah, 10 maybe 20. You're not going to see the 100 times that you see see abroad. You know, it's just it's just not the culture in the US to to do that. That's a that's a very sort of regional way of doing things there.

Yeah. And so in one of these recent articles, you know, aligned in the same in the same strain here of 24/7 trading, there was a pushback from the institutional folks probably similar to the market making point that I brought up earlier is that they expect retail to be the primary initial user set of these higher leverage perpetual future offerings on tokenized commodities, equities and that actually the institutions that are used to the T+1, T+2 settlement and the market hours are resisting it and will be kind of like the later adopters.

Do you agree with that? I don't 100% agree with that. I think the US will end up being a uh I shouldn't say that, but it's it's going I think it'll be skewed towards an institutional market. I mean, the the way the regulations are going it's going to be very geared towards towards institutions, but they'll have product offerings for for retail as well. I mean, if you look at the CME, the Bitcoin minis and the ETH minis is a large part of where the volume grew for CME and that's smaller retail type of products. I think they'll have they'll have a market or they'll they'll launch products to cater to retail.

And there's a huge market for that, no doubt. I mean, look at the last the the options market. Look at the run by retail. Look at the digital asset treasuries when they launched, you know, most of the option volume and the spot volume on the ETF volume and the spot volume was driven by retail at the end of day. So, they have to cater to that, but it'll take a different form. Yeah. Yeah. Um there's been this rise of vaults, this idea of these kind of RIA looking curators. The the Rockaways, the Gauntlets of the world, perhaps even some of the work at G20 creating a parameter set of an on-chain either like RWA looping strategy, some

sort of DeFi vault on-chain using Aave or Morpho or Skyer or the likes of these. And these being a product that the capital allocators that are kind of coming to the space with size are excited about. What's the chatter from your perspective on on vaults? Is there chatter? Is there Is there better yields on-chain than there are that exist in the stratified world or kind of what's the actual real separation from the fluff and the hype here on the vault side of things? I think there are two arguments going on. There's your traditional DeFi yields or on-chain yields, okay? And like you said, some of it is looping, some of it is incentive base, the sort of funny money that that we've seen in the past

Uh on D5. A lot of it is is RWA related, but that also involves looping as well. So, borrowing from Ave or Morpho and and recycling that into a similar similar sort sort of strategy. So, that's definitely happening. I'm not 100% sure your traditional institutions will come in and want to allocate to these type of strategies. Okay, I think more of a more crypto native firms will be will be comfortable. So, I think ultimately what will happen is that you need to grow the RWA space and and real strategy. So, what happens in the private credit world? What happens in just your plain treasuries?

How do you How do you allocate according to risk rather than just going into a yield market in general and saying yes, I like this manager, you know, I want to optimize for my to maximize yield because a lot of what's happening now is funds are coming in or allocations happening and they search for the highest yield. Okay. with a recognized manager, no doubt. What's not really happening is actually optimizing for risk. And in fact, that's something we're looking at as well. So, if I'm an if I'm an asset manager, I don't care about 20% yield if I know there's if I know that where where the yield is coming from is is is just manufactured.

You know what I mean? So, but if if I know this is a a serious credit on the other side and I know where this yield is coming from. It could be could be anything. It could be collateralized lending. Could be you know, something related to private credit or whatnot. I'd be more interested in that because I I can identify the risk a little bit more. Yeah, and are the are the partners in the institutional allocators that you guys work with on the G20 side, are they like educated enough to understand smart contract risk and different kind of like on-chain yield risks or like They're not. Where's that >> No. No. No.

>> There's a huge learning curve there. Uh Especially with DeFi, we've seen all the hacks over the years. Especially in the in the vault space recently as well. You know, and obviously there's that's a huge hurdle to cross. It's the education piece on on protocols and smart contracts risk. If you restrict it to a walled garden whitelisted addresses, whitelisted protocols, you know, that that helps a lot, but it's still a huge hurdle to cross. And so really the first step in in terms of traditional allocators, if they get to that stage, it's it's I I still think there's a lot of time that for that to happen. But the first step is really how vaults solve the transparency issue, how it solves the operational issue,

just the whole documentation issue. It's that that is that is a lower hurdle to cross than than the whole smart contract issue, right? >> Yeah. Yeah, because when you think of vaults, they're kind of like this black box, right? Where it's like, all right, here's the Here's the protocol. Here's the strategy. It's often a changing strategy as well based on the conditions of the on-chain environment, whether you know, a couple whales come in and deposit and kind of dilute a given yield pool, or there's some risk that came up, or the curator has a different idea of where to get yield. And so there's this kind of issue that I am thinking about here where I think there's going to be potential regulatory action around vault curators suggesting

that they might look more like RIAs. And I asked the Bitwise President this about this in DC. He kind of gave an answer here. Is there Is there a way to kind of create a distinction between like the role of a registered investment advisor and a vault curator? I know that you're not a lawyer here, but kind of how do we think about the regulatory kind of environment for vault curators? Because they are essentially, you know, signing off on a given risk of a protocol or strategy offering a yield. They may not be soliciting funds, but they will have some distribution partner who is soliciting funds. Then they're kind of deploying those funds typically in somewhat of a non-custodial manner,

sometimes in a custodial manner. Perhaps that's the line in the sand. How do we kind of distinguish between an RIA and and a vault curator? I mean, theoretically, the lines are blurry, right? For sure. I mean, the RIA is responsible for for allocating those assets in specific strategies. So that's they're definitely in theory should be a role to play for regulators here. But I think that's we're too early for them to regulate regulate the vaults at this point. I'm Yeah, we're still we just approved a list of tokens to be classified as commodities. I mean, that's just like the the bare minimum, right? And then I think it'll fall into the whole innovation sandbox,

and then I think regulations will eventually catch up. Uh but I think if you segregate the curators into specific strategies, Mhm. right? Rather than have them give them the the sort of leeway of just allocating themselves to wherever you want. But if you allocate to specific if you separate them into specific strategies and have a risk layer on top that allocates according to to what you think maybe the allocator's risk bucket is, right? So, you know, if they just want treasuries, I know where to go. If they if they just want basis trading, I know where to go. So yeah.

Yeah, and I think there's going to be a world where this is going to be accelerating and kind of delegated to some LLM as well. Or like at least incorporated with human kind of like sign-off, but there's going to be like an LLM part of the strategy, too. >> Absolutely. Yeah, and the LLM will keep track of performance, keep track track of risk, you know, in real time, right? It's the agents, not necessarily LLMs, but the agents right? And and uh, they'll keep track in real time. And they'll be able to pull allocation, you know, increase allocation accordingly right?

>> Yeah. So, one of the prominent stablecoins of 2025 was Athena and their USDE. And this was basically backed by the yields from the basis trade. Yeah. Um, which you as a function of the perpetual futures market, right? You have these funding rates and you're able to kind of, especially in a bullish market, create a structure on a on a product across you know, three or four centralized exchanges where you can create yield by by hedging and kind of creating a delta neutral strategy, but you get this you earn the funding rate. Yeah. The basis trade has not been around the last 6 to 8 months. It's really kind of compressed. Market structure has changed post 1010. Yeah. From the derivative side, is there an emerging new trade

that you're seeing that allocators are putting on? Is the basis trade like alive? Is it going to come back? >> Yeah. Where we seeing kind of the actual innovation on the perpetual futures and derivatives kind of arbitrage and basis trades? Yeah, there are a lot of forces at play here. One is the market regime we're in, right? So, yes, we're in a bear market. Um, it's compressed the whole basis trade completely. That's just a function of leverage in the system right now. Uh, it's it's it's not much better than treasuries. Yeah. Or if if at all that much. So, once we see a rally, you see that that increase a little bit, but but the core is is uh, the core fact is that basis trading is is

pretty much depressed uh, at this point in time. Plus, you have another thing that going on where um, it's a crowded trade in a lot of cases in um, especially the large venues, right? Uh, so it's a bit of a crowded trade. Uh, everyone's doing it. So, you've got to figure out okay, how to increase alpha uh, on on top of that, right? Um, and that becomes all sort of related to operational efficiencies, related to collateral mobility, uh related to identifying other liquidity fragments where there's mispricing as well. So, you can So, you don't have to go into the main venues, you can arbitrage in in other venues as well, provided that all the other risks are handled. So, on a risk-adjusted basis, you're doing better. So, So, what are

the innovations now in the perp space? So, let's say we get back to a neutral to a bull market, the core perp trade, spot versus perp, uh will remain. Okay, that will give you a you know, a in in our view is sort of a neutral market will give you anything between 8 to 10% on that, which is still great. Okay, a bull market will give you up to 15% on that with side leverage, right? Which is still amazing. Okay, but uh but as soon as you get to other venues, which is less frequented, you can increase that alpha a little bit. Cross-exchange arbitrage is another layer that you can add on top. Exchange arb between DEXes and CEXes is another layer. Uh funding rate arb, um you know, now you have these tokenized uh stocks, tokenized RWAs. Uh there's plenty of arbitrage opportunity between

traditional markets and these these RWA perps as well. Um you know, we there's certain platforms that are market-making tokenized stocks as soon as they're listed on chain. There's plenty of opportunity there as well. So, I would say there's not a lack of opportunity. It's a case of just Okay, what's the next level and how can you set your set the infrastructure up to be able to take advantage of that. Yeah. So, you would anticipate then that uh Athena kind of is in this slower phase now, but once this basis trade comes back, they kind of can experience a next leg of their stablecoin growth and of their basis trade kind of Yeah.

revival. But, it's it's constantly moving, right? It's like from anyone who's just trying to get alpha from this from this perpetual futures market, it's just not the same It's not the same strategy is what you're saying as what it was last year. It's not the same strategy. Uh you're going to have to take a little bit more risk. It's a little crowded, so even when the market recover, I'm not 100% sure how, uh how uh like what yield would Athena generate at that point in time, either. Because it's a little bit of a crowded trade. Um, you know, you have, uh, I mean, look at CME basis trading there, you know, it's, uh, over time as the volumes increase, as there's more collateral efficiency, you're going to get these, uh, get the yields compressed more and more. So, you have to take on more leverage, more risk

in order to, in order to increase that as well. So, part of the thesis on the tokenized equities or or or kind of commodities stocks, etc., it could be or it must be that the largest market makers in the traditional exchanges and brokers, they've yet to really take the jump into market making off market hours outside of that one or two hour window pre and post market. Is that part of the thesis? Is that on the weekends and then overnights there are more opportunities to basically market make these markets that are yet to be kind of uh, infiltrated by the larger kind of firms like the Citadels of the world, etc., or not really? Yeah, I I think they're already in there, the Citadels of the world. Yeah, I would imagine because

they are in this market and, you know, but, uh, but, yeah, everywhere. Uh, but, but it's not a common occurrence, so there's still mispricing, uh, to take take advantage of. Uh, you know, there's always studies done about, uh, you know, where, you know, where does mispricing actually take place or when does it take place? So, there's calendar studies there's uh uh, you know, time of the day studies in terms of, uh, where these mispricings happen and, you know, these quantitative trading firms take advantage of that misinformation all the time, right? So, if, uh, again, geopolitically if something happens and that happens over the weekend and, uh, all of a sudden, uh, you have a, uh, you know, you have an investor coming in short, uh, S&P futures or go long crude futures,

this mispricing. So, when the uh the market opens later on, uh, Sunday night or Monday morning, you know, there's a there's an arbitrage to be done there or there's some dislocation that you can take advantage of there as well. >> Yeah. Yeah, interesting. Yeah, it just feel like there's all these little pockets now where there's new innovation happening and of course there's kind of a rush to make those markets more efficient. >> Yeah. The crypto markets have been, you know, primarily some of the most inefficient markets in the world for a while. I think that's gradually changed over the last couple years. I mean, from your perspective, has it been harder to to find alpha in market making post ETFs and kind of this institutional adoption or like Yeah. Yeah. Yeah, it's it's been

a lot harder. It's been I wouldn't say harder, it's a lot more challenging, you know, for sure. Maybe it's the same thing, but but yeah, I mean, there are a lot more players. The market is the number of projects, for example, the TG projects, it's gone down tremendously right now. >> for, isn't it, right now? >> is completely like >> has delayed their IPO. Yeah, exactly. You know, you would have thought that there was this equity window still available. Yeah, but it's not. >> Certainly not in the token side. >> Right. And not only that, but the ones that did IPO got repriced immediately, right? So, there's a little bit of that going on. And if you look at the new token projects that are being launched, you know, it's nowhere near where it used to be.

The sort of the fully diluted value. You know, you see these pumps on the token prices and immediately they sell off to a new to a new sort of base line at this point. Part of it is like the markets figured out that they're not valued as much as they thought as as as much as they used to be a couple years ago. The whole narrative has changed as well. Yeah, I mean, they're the whole industry is being compared to equities now or any business with a P/E ratio sales revenue earnings these things.

There's going to be another wave of token launches though. That's that's that's one thing that I think that we can guarantee in this world. I've been through three cycles. They always look different. There's always a new mechanism. You know, we had the ICOs, then we had these governance tokens, then we kind of had these L1, L2s, kind of like chain tokens and infrastructure. Do you have any insight into what kind of the next era of token launches may look like? Um part of the thesis that we're kind of drilling into here is that it may look like more like equity structures.

Um that these things may look more uh like something that you have a claim on cash flows, you have a clear shareholder right. But I'm not sure how that actually looks in practice and like how can a a token founder or or a company that's raised 5, 10, 20 million dollars there was one path to launch a token that's clearly not going to work anymore. Any insight on GTM or just kind of what that evolution of of launches may look like? You know, we have this debate all the time with new projects and what a year ago if you asked anybody who wanted to launch a project that would be seed funded, the whole question was when do we launch our token? Now that the whole conversation is do we even need a token?

Right? So that's the whole thing. So future launches, I'm not 100% sure how they would be structured. One thing though is that this recent announcement from the SEC with the CFTC, one thing that that has uh basically pointed the the spotlight on is You know, that there's a provision in there about uh staking, uh about um mining pools, etc. how they're in the safe harbor sort of pilot program as well. I think that's a great sort of unlock for for governance tokens and utility tokens that didn't have any value accrual. So that may be and I'll tell you how. That could be a way that future tokens could

operate. Yeah, you know, we all know about this whole Uniswap's fee switch. Uh you know, they delayed it for a long time a long time because of regulatory hurdles but now there's a way to there's a mechanism by which they can accrue value to the governance token and and that's mechanism you know they you either burn them you know use the fees generated by the protocol and burn the tokens buy and burn the tokens or you know stake the tokens and you know and essentially burn them that way okay or or or accrue fees that way in some shape or form right? Because according to the announcement these that whole process is basically being paid for infrastructure support right? It's not a dividend as in a typical security

etc. I think that ultimately will go into a tokenomics as well how how these things are designed so utility token then in the future could accrue value and could have some claim so to speak not legally but to the fees generated on that protocol in some shape or form but otherwise I'm not 100% sure how um if it if it would be equity like it anyway. Yeah. Yeah because I mean then if you're going to go to launch like a equity like structure on on a token you're going to you're going to be faced with all of the rules and regulations that kind of prohibit you from doing a lot of things the way that they've been done and a lot of this has been regulatory arbitrage at

least in some capacity. Yeah. Looking ahead here what is the next 12 months of institutional adoption of digital assets going to be characterized by? What do you anticipate being the core drivers of whether it's metrics on chain adoption like what are the core drivers here and the characterizations that are going to be on the headlines on the news as kind of like the core drivers of institutions entering the space? What do you anticipate those to really be? Um from the I guess from the infrastructure side, the drivers are going to be you know stable coins.

It's going to be perpetual contracts. It's going to be just tokenization at large. It's going to be a lot of it is also going to be the efficiency of collateral collateral mobility because that's the one of the biggest inefficiencies in the market right now is the fact that you have all this liquidity fragmentation everywhere globally. How do you how do you align that and take advantage of that? Again you have asset managers, you have essentially dealing desks who who operate in an environment where it's balance sheet it's become balance sheet intensive. So if I want to trade a certain token contract, I want to take advantage of all the where the best liquidity is.

Well, that requires balance sheet, right? That requires moving collateral back and forth between exchanges. Now you we have infrastructure that helps manage that at the moment, you know, off-chain settlements, prime brokers, etc. I think that's the next wave of institutional development is how do you is the growth in that and and better support. Right now that's available, but it costs a lot. Okay, that that kind of eats into your return. So that's going to be a main driver from an asset management perspective is it's still yield and return, right? At the end of the day there's still a lot of innovation happening. It's there's still a lot of alpha to be made there. But even more than that just from from an infrastructure standpoint as an asset

manager I can cut a whole layer of costs, right? Just using blockchain, just using vaults, just using you know, agents to to kind of arbitrage that the operational side of things as well. Yeah. I think one last thing that I like to add to that and curious your take as well as yesterday we had again the inventor of ZK sync Alex talking about not not necessarily his bank chain, but that there's this dynamic going on with the the desire for the NYSE, the ICE, uh Cboe, Nasdaq, all these firms coming on chain and wanting to effectively operate in their own sandbox rather than operating on the top any of their direct competitors sandbox.

Goes for banks, goes for brokers, exchanges. If I'm JP Morgan, I want to be using JP Morgan chain. If I'm Goldman Sachs, I want to be using Goldman Sachs chain. I don't want to be using a competitive bank's blockchain. And so his take was rather than any of these type of like enterprise chains getting real adoption and actually being a place for global finance to happen, it's going to happen on a credibly neutral blockchain. He's He's obviously very bullish on Ethereum, but I think it could be the likes of Solana, Alts, L1s at large. Do you Do you think that there's some some merit to this claim? Do you Do you think that there there is a desire to operate on a neutral base layer from the banks and from the institutions? Canton is kind of

proving this wrong as well. They have a set of super validators across tons of different kind of institutional allocators and firms. What's your take on the credible neutrality as a important part of their initiatives and kind of like how that plays into the competitive factors? Yeah, I I kind of lean in that direction as well. Um an an interoperable sort of neutral sort of blockchain uh because there's plenty of block block space around anyway, so I don't I don't I don't I don't see any any true um I don't see any any true winner there. Uh so yeah, a a neutral blockchain there as well. I I kind of lean in that direction as

well. >> Yeah. Naman, thank you for joining us today, man. Absolutely great segment. >> you very much. Ladies and gentlemen, we'll be right back with our next guest in the studio here live. Quick break. See you guys in just a second. >> All right you guys, we are back. We are

monitoring the situation again. Brent oil Brent crude oil surges to 116 following strikes on oil refineries and gas plants in the Middle East. Um we talked about this earlier with Eitan on the side shot. Not great here. Not great for for the markets. I don't think the markets are really reacting quite well to this. Uh let's have a quick look here. Height back above 40. Looks like crypto's bouncing back a bit across the board here. But yeah, I don't think the markets like this at all. Um and we talked about why. We talked about some of the larger kind of scale impacts of what's happening. And yeah, man. I mean Uh you don't you don't love to see this.

So really hope that everything kind of gets de-escalated there sooner than later. Don't have much to add on the on the oil situation. I am deeply entrenched in digital assets here. Uh not so much into oil. So, we're actually going to just cruise on through oil here. All right, guys. XRP Treasury Evernorth fires S4 for $1 billion SPAC deal to go public on Nasdaq. Another kind of digital assets treasury company coming to Nasdaq with a $1 billion SPAC deal. Um I don't have much to say on this, either. I mean, I'm not the biggest Ripple fan. They're great. Um they got ruled a digital commodity. Congrats to them. Glad that

they were able to pull that off and get that through. I personally, I don't own any Ripple. I don't think I have since 2017. But, this is just a sign of the times here, guys. We have digital asset treasury companies filing SPACs at at and raising a billion dollars to do it to go public. And yeah, I expect that we see more of this. I mean, this is something that if you look at the DAT landscape, it's very very depressed. As the man said about the basis trade in in the perpetual markets being very very depressed, so is the DAT trade. I I don't know what these DATs are going to do unless they generate more revenue outside of just holding the underlying asset that they are holding. So, not

much to add here on the XRP. Congrats to Evernorth. And yeah, glad that they were able to, you know, pull this through for themselves. So, let's let's keep it rolling. Mark Davis says, "If no new Fed chair is confirmed by the end of my term, I will serve as the chair after Powell will remain if Kevin Warsh is not confirmed. I do not think this is going to happen. Let's go ahead and end and play this video if we can here. Uh there is a signaling that there's not going to be more rate cuts this year. We had no rate changes yesterday across the board and I

think that that's something that I think the the market was a bit caught off guard here. Let's hear what Powell has to say. There's no Federal Reserve chairman confirmed on May 15th. Would you stay on? So, if my successor is not confirmed by the end of my term as chair, I would serve as chair pro tem until he is confirmed. Um that is what the law calls for. Uh that's what we've done on several occasions including involving me and it's what we're going to do in this situation. If there's no Federal Reserve chairman confirmed >> on May 15th, would you Signaling for higher for longer policies.

>> is not >> I actually saw that the European Central Bank suggested that they might have two rate hikes this year as a result of their natural gas prices today. We'll see where that really lands. That's what we've done But yeah, I mean, I don't think Powell's going to stay in. I think I think this is hocus pocus. Warsh is going to get confirmed. Trump's not going to let that happen. I think anybody but Powell is also bullish for risk and so I think we're like at the maximum disbelief in what's coming in that we have a effectively a new war happening. We have a new Fed chair coming in. We have the best regulatory climate for digital assets. I think all of this is going to get priced in into like this bear market

first half of the year into into this year and I expect that I expect it to be obvious in hindsight. I expect that we're going to look back and be like Fed chair Powell was you know, taken out of office. Warsh came in under Trump. We have the best digital assets clarity that we've seen in years and we had the worst set of macro conditions possible to lead this bear. We have the most institutional adoption happening. I expect a lot of these things which kind of go under the rug in the bear to come out as being obvious once the market turns around and flips. So, don't have much to say here other than I don't buy this. Powell will be out, Warsh will be in, or somebody else to

replace him. And we move. This is an interesting debate. The line decentralization doesn't matter. Haseeb and Mason debated about if decentralization was ex- essential to prediction markets at all and kind of already answered that already and it's not much at all. It's not very important. Like I commend Polymarket for, you know, trying to use like UMA Oracles, but I think that's like the net negative to like their ability to like create new markets, resolve markets. And so, I think if you think about it from the user perspective, like they don't care about decentralization at all. Now, to the extent that you can sell them on value propositions of like using stablecoins in a wallet, or you can sell

to institutions that there's like no counterparty risk because like they're not owning user data, like that's a different story. And that's like the value you have to sell if you think decentralization is important, but the consumer has time and time again said like this is not a feature I care about. I think that's completely wrong. So, obviously, Polymarket has been operating much longer than Kalshi, and it operates in every country in the world because it's decentralized. It doesn't have a license, right? So, like they have a US product, it's not live yet. All the volume on Polymarket is on chain, and the reason why is because they're decentralized, because they're actually on chain. So, now, like that's not to say that it's the only thing that matters. Like Kalshi has become very successful with a US license, with only US customers, with trade surveillance, with all these things that you need to

do if you are licensed and operating in the US under the CFTC regulatory guardrails, right? But the But the overseas or the global Polymarket product is not CFTC licensed. It's just a YOLO on chain thing, and it still exists and it's huge. But decentralization is not inherently like because like the volume is on chain like decentralization is not important to that quality. Like I guess when you're talking about decentralization of a prediction market like what I'm referring to is really the market resolution. Yeah, yeah, fine. You could You could argue that like okay, maybe Uma Oracle suck. I don't disagree with you, but okay, you need different Oracles that are also not controlled by you in order to not have to go get a CFTC license. Then you're just talking about like regulatory arbitrage in Yeah, that's a big part of why crypto exist.

That's why Bitcoin was created was so that you could create non-sovereign money in a way that previously was not possible with everybody trying to produce it. I guess extended in the future like extend the end state of of Polymarket. Do you think they go and get licensed and regulated in more countries? Like that cuz that to me >> Plausibly. Plausibly. But like That's like the more likely path of the future. >> Right, but like I mean you take the same analogy to Hyperliquid, right? I mean, what is your argument for Hyperliquid then? Are you say well, there's no point in making that decentralized. I think there's a level of decentralization that people care about and beyond that it is not as much of a feature. Correct. Like Polymarket has a web domain, they have a Twitter account, they're tweeting, they're like marketing stuff, they're deciding which markets get listed. Like

clearly they're doing stuff. There's some degree of control, but there's also a lot of degree of not control. I guess when you think of decentralization you're and I agree with you. I think Hyperliquid's probably the same. Like why do people use Hyperliquid? Cuz like they don't have to KYC on that platform. Right, because it's available in every country in the world, especially in a lot of countries where you cannot get access to a Perps account, right? If you're in Korea, you cannot get Perps. It's not available to you. It's illegal in that country. So a lot of the a lot of those people in Korea they're trading on Hyperliquid, right? In the same way, there are many people I mean obviously there's a lot of Americans on Hyper on Polymarket, but there's also a lot of non-Americans for whom it is disallowed in their country to use a prediction

market, right? You go to I I was just in Hong Kong. Hong Kong like you can't access Polymarket. Go to Singapore, you can't access Polymarket. >> Sure, but maybe let's use like crypto exchanges as a framing, right? Because like these are exchanges and exchanges over time are going to get regulated in these countries and then like if you go to any person who's buying Bitcoin like you said you can buy it anywhere like most people are buying it on a regulated exchange somewhere. Yeah, it's true cuz you need fiat, right? You need you need to get the fiat leg in. Crypto has always claimed prediction markets as one of the core use cases for crypto, right? If you go to Kalshi, Kalshi does not use crypto. There's nothing about a US CFTC regulated exchange that requires crypto in any way. So why is it that you go to

the Ethereum white paper which was written in 2013 and in there there's a section about prediction markets. Why is it in there? The answer why is because these things were illegal. They were illegal in the US to trade on prediction markets, okay? There's a reason why people have if people in crypto have always felt that we needed decentralized censorship resistant systems to create these markets that regulators and lawmakers would not allow. There's something intrinsically subversive about that concept. Is that this market is not allowed to exist, but we will make it exist by creating these uncontrollable marketplaces, okay? It's easy to forget that now. Now that crypto's really big, it's regulated, it's all really cool.

We're now you know BlackRock's in the game and blah blah blah and these you know these companies are now big and raising huge rounds and it's all great, right? And obviously I'm I'm a beneficiary of that so I don't spit in the face of that. But it's also important to recognize why we got here. Why we're talking about prediction markets at a crypto conference, right? Why are we not talking about this at a financial conference? And the answer is because we got here from people breaking the rules. That's how we got here. We got here from Polymarket and Kalshi breaking the rules and fighting for a right that their lawmakers did not give them. And that's been true for so many other technologies that got us to where we got to today. And so I I I want to underscore that. And it's not to say

that we should continue breaking the rules. It's not to say that there are no rules worth following, but like that moral conviction that decentralization matters to change something about the world or about society, I think it's important not to lose sight of that. Mhm. Wow. Yeah, I mean guys, I mean on the Okay, so this is a this is a really good debate. On the point of do we need decentralization outside of prediction markets right now? I think the whole decentralization fugazi and theater is basically being ran over and ran through right now as institutional

capital comes on chain and people really start to allocate to these markets, they don't really care. And we're seeing teams shift their entire product strategy away from decentralization. And so that's happening. That's for sure happening, will continue to happen. On the point specifically about prediction markets, look, a diplomatic answer is these guys are both right. Haseeb's right. We have a very decentralized Oracle UMA providing price feeds to a Polymarket blockchain-based application with a centralized front end and a domain and a Twitter account that is ran by a marketing team, but

on the other side we have Kalshi. Kalshi's fully ran like a centralized broker like a Schwab on the CME. Like they're trading, they are managing the order books, they're market making the entire book themselves internally. Both founders have math degrees, they're you know, quant level, you know, that type. And so Haseeb's right that the only reason that we're even having this conversation is because the regulation was set up in such a way that we weren't even able to do any of these things without being thrown in jail. And so we had to do them in a decentralized manner. And so it is silly to think that we need to just throw that part away because of the current administration

because as soon as the next administration comes in, those rules can be flipped quickly unless they're codified, written in law, and actually implemented as laws. And so, while Mason has the right point here that maybe prediction markets don't really need decentralized everything. We're operating in a landscape where Kalshi's having to go through so many hoops and rules and regulations to expand outside the US, outside into new markets. Polymarket is already there across the board in a lot of ways, does not require KYC.

That is another thing that is going to happen is is that okay? Are venues like Hyperliquid and Polymarket going to be able to continue to operate without KYC? I don't know. I honestly I think that there's going to be rules once these tokenized securities come on to exchange venues like like Hyperliquid, they're going to require some sort of KYC or AML. Wouldn't be shocked if Polymarket had the same thing happen to them. My response to this is I think that both of these guys have good points, but I think that understanding where we came from as Sisi mentions is important to understand why we have the products built in the way that we have. And so, look, I don't have any horse in this race. Uh Kalshi was

once a partner of the show. Polymarket, I think is one of the best breakout applications in the space. Happy to see prediction markets grow on chain and think that they should continue to grow on chain. Guys, we've got the Pantera guys joining us up next. We're going to talk about the agentic future. What's happening in the AI agents on chain space? These guys are really really fired up about the AI economy. And so, we are we're going to chat with Cosmo and Jay of Pantera about the Agoric Economy. And so guys, looking forward to chatting with them. Haven't talked to Cosmos since I think the the latest that run that we had. So, Tempo just launched, I think that was

yesterday. As you guys heard on the rumor mill, this was coming. We knew it was coming by the end of the month. We didn't know when, but we did know that it was coming. And I'm curious what these guys had to say about this. Jay's been doing a lot of research himself about the actual growth of the AI economy and kind of what's happening there. So, excited to hear from him as well on that front. And yeah guys, I mean with without further ado, let's get Cosmo and Jay up on the up on the air and talk about the Agoric AI economy guys. It's happening. It's happening at light speed.

Tempo MPP has gotten a lot of interest and excitement from some folks saying that it's I think the Stripe founder, obviously is is biased here. He said it's one of the most interesting things on the tech side since Waymo, which I think is is particularly interesting. So guys, let's go ahead and get Cosmo and Jay up. Let's talk about the the intersection and the crossover between AI and digital assets. Guys, we're live here from the Empire State Building. We went to DC last 2 days. Cosmo, Jay, welcome to the show guys.

Hey, how's it going man? Good good good to have you guys back on. Jay, I've been loving the long-form research on the Agoric economy. Some very nice graphics in there as well. So, props to you man. >> all. Thank you all. Yeah, it's been a great show as well. Yeah. Thanks Jay. Thanks. Good to have you back on Cosmo. Um, lots to talk about here guys. It feels like this convergence between these two kind of worlds has been happening at light speed. I've got James coming on after to talk about Bit Tensor and what's been happening there. But I think the the really really kind of crux of this is this agentic finance narrative is blown out of proportion over the last 3 months. It's happening.

Tempo launched yesterday. They have their new MPP protocol that I was just kind of prefacing with. Jay Cosmo, let's just start with the separation from the hype and fluff here. How would you characterize and define agentic payments? And really like what is this term of agentic finance actually mean? Mhm. Yeah, I think maybe I can start here. To me, what agentic finance actually means is how can we build the banking rails for agents? And my main argument is that crypto is the banking layer for agents of choice. And if you think about what a bank really is, right? Yes, it's a place where you store money, where you spend money, where you like grow your money and whatever. But it's also a place that

does more than that. It's a place where you register your identity. It's a place where you do arbitration. It's a place that does AML, KYC, all of these things with all of these security guardrails. And I think the the error that a lot of people fall into when it comes to like agentic finance as a category is that they think that it's only to do with, you know, agents purely making transactions on chain. It's more than that. It's how do you build this entire stack of financial rails, of all of these like guardrails, of identity, of authorization, of like liquidity provision, and all of these through an on-chain framework. Now, you can do it using like traditional rails, using cards, using all of these legacy rails, or you can do it on the blockchain, which is um per measure list and there's a lot of

advantages to that. And I'm a big proponent of how do you build these new rails using crypto tech. Mhm. So, big believer in the >> exactly right. Jake gets all the details exactly right. And I think, you know, I like to try to keep things simple, which is that we are at an inflection point in the economy where uh you know, AI is clearly increasing its penetration across many use cases. And increasingly, you know, we realize that these AI can be relatively autonomous actors. And so they're you know, we call we call them agents.

And you know, the next natural for your agent to start with just doing basic tasks for you, starts with secretarial work, starts with coding, starts with things that are very you know, defined and objective. But as as the objectives become more complex, you realize that these these agents actually need need you need more capability, they need more autonomy. And especially as they become more real and as we trust them more, we're going to trust them with the stuff that we hold dearest, which is which is commerce and and our finances. And >> Yeah. if you're an agent today, you know the every large tech company right now, every large fintech company is building towards enabling agents to transact or you know, this would be agentic finance, which is enabling an agent-driven agent-driven economy.

I think what's exciting and where blockchain plays a large part is as agents, you know, truly become autonomous, that's when it starts to really matter, right? Like the reality is today, you know, Stripe is building out great APIs, you know, the the you know, other Anthropic and ChatGPT and OpenAI are all building like interesting tools for agents to use to interact with commerce. But it's because like all these agents are largely directed by humans. But as we move more and more towards a world where agents are truly autonomous, where or at least abstracted so far away from the human that, you know, we aren't really directing them to go and transact with a bunch of people, they just feel like they need to to get stuff done.

Um in that world, like it becomes more and more important that that that commerce is frictionless, that their ability to interact and and transact with each other is frictionless. And blockchain is more effective permissionless frictionless rails. Yeah, man. I'm I mean, I think the the unique part about this agentic finance kind of like concept is that everyone thinks it's going to happen. Like it's it's not a non-consensus take. It's just a matter of like when and then like how. So, I would love to just get some clarity onto kind of what's happening now that you you guys are seeing in the experimental landscape. Like is it is it transactions? Is it negotiating? Is it buying from websites and browsers? Is it

Is it kind of payments? Like where we at right now as far as like investability and usability from a Pantera side, from your individual explorations and kind of like what is actually in the in the mix now? Yeah, I think that's a great question. First of all, in my mind, agentic commerce is an e-commerce sized opportunity. It's a massive opportunity, but it's going to happen like gradually and in waves. We're at a really interesting inflection point right now where we see a huge influx of really really talented teams coming in. Not just within like from like crypto-native backgrounds, but also like from like traditional, let's say SaaS or YC style backgrounds. Alumni of companies like Stripe, of Coinbase, you

know, all of these fintech incumbent, Brex and whatever. All of these fintech incumbent alumni starting to really pay attention to this space. And so this huge influx of talent has like brought I think a lot of really interesting products and a lot of really interesting innovation. Right now it's still like I think early in the phases. So we have That's why also we haven't seen like huge amounts of like volumes or like amounts of like transactions, etc. But I think like I'm very optimistic just given the quality of teams that have been entering this space. And so I think from an investor landscape, we're still in the early phases, but I think right now the space is definitely maturing at a very very

fast rate. Yeah, I mean I think some of the early evidence and you know, Jay's maybe being coy because you know, he's he's deep with all these entrepreneurs that and especially coming out of the recent YC batch. But like, you know, the first uh the reality is like the initial a agentic like excitement on blockchain rails really happened over a year ago when we started to see this take off all these, you know, it wasn't they truly they weren't truly autonomous agents yet, but it felt like these agents could start to talk to each other, could start to think and you know, people were giving them money. And so, you know, this you know, famously there was um uh uh famously there there you know, there was uh wow, I'm forgetting the name, but like the >> Zeus bro and the other >> agents that were there taking off about

a year ago. And um uh the you know, but that stuff was sort of like not that interesting cuz a lot of that stuff was speculation and and even today, you know, a lot of agents are used to to enable you know, basic financial speculation. Like that's not necessarily what's most exciting and why blockchain rails are are really helpful. It's like, you know, the first step will really be these agents buying like doing things that we need to do in everyday lives to be productive. So, that's you know, buying data, compute services well, what they what they're really what they're really doing. And so, we're seeing a lot of entrepreneurs really focus on that intersection first is like, well, what are all the tools and what's all the enablement that we need uh for agents to really begin to uh explore this world of agentic commerce.

Um and uh yeah, I I'm really curious like Jay, you you've seen a ton of these kinds of like very specific use cases. Some I'm sure are are more far out than others. Like what do you what do you think is most exciting? Oh, yeah. I think definitely the category I'm most excited by is how do you automate all of these different like SAS requests and different APIs and stuff like that because when I'm vibe coding today, right? The when Claude is like humming in the background, what I do most of the time is really just register for a bunch of different API keys um on all of these different websites and that kind of breaks the flow and is also not very like friendly for a like someone for example that does not necessarily have like a technical background. Um and so like what I'm very

excited by and starting to see these use cases is these sorts of like paper request type payment. So using something like XRO 2 or MPP like the focus of these protocols is to replace the existing API model so that whenever your cloud code actually needs to make like a request let's say to some server to Nansen for example to get data, they can just directly create an XRO 2 request and get that data rather than um rather than for example um me registering for like an API key. Um for example one of our portfolio companies Surf recently also launched an XRO 2 endpoint and uh Surf is also like basically like a crypto specific intelligence agent. So it's like how [snorts] it gives you like a read on the market or it gives you a read on a particular um product and then you can

kind of like just ping that using an XRO 2 request and get like a market diligence report let's say on Hyperliquid and stuff like that. So these sorts of workflows in a much more like intuitive and a much more streamlined process. That's something that I've been very very excited by and to Cosmo's point about creating this sort of like um the all of these different services that you can kind of allow these agents to access um and just kind of pay as you go. That to me is a really really exciting opportunity there. Um to kind of throw the question back to like um Cosmo as well. I love to just like get kind of Cosmo's perspective um being a technology investor for like a long time. It's like how you see like the rise of AI and crypto right now versus like some of these previous technology

cycles whether it's like SaaS or like cloud and stuff like that. I mean look, I think it technology adoption comes in waves as we all know. Um and you know, well like like I said like this agent this agentic stuff is really exciting because it it's really the the intersection of AI and blockchain that that enables the most interesting innovation. Uh you know, most cutting edge frontier stuff and you know, last year with the launch of virtuals and code and and all that stuff was was really exciting and drove a lot of transaction activity on chain. But then it died out because like it we realized that the initial iterations of things are always like not really the end iterations. Um and you know, we're seeing that we're seeing to some extent that happen again this year

when uh Open Claw was really first taking off. Uh not that it's not still taking off, but when Open Claw was really first taking off and Multibook was taking off, we started to see at the same time this explosion in usage of Solana Solana wallets, as well as creation and transactions. And you know, you go on Multibook and you and you lurk around and you realize it's because they're all joking about opening crypto wallets or in order to pay each other for their services. And so, we're already sort of seeing that play out to some extent. Now, there's a lot of limitations to that. Like to some extent to a large extent, you know, AI agents are sort of like bad facsimiles of of humans because they're trained on human data. And so, I think because humans think they need to use blockchain rails they are using

blockchain rails. But I I also do think that, you know, they will naturally choose that as they become truly more autonomous and and real. And and so, all this to say like, you know, we had a we had a mini boom a year ago. We're having like the next wave of boom really right now, and it's exciting exciting to see all these large tech companies really embrace it and all these startups really embrace it. Um but I expect there to come in waves and it expects to die off a little bit again while we kind of really figure out where the real first breakout use case is going to be. But when we see it and it it's really hard to know, um you know, as an investor for a long time, you you just like these these things like they they can uh you never

really know what feature it is that's going to take on a life of its own. You know, Sam Altman also said that with ChatGPT, he thought it would be a very small thing, but turned out it it became the fastest growing user app in the whole world. Um the uh you never really know what's going to take off uh and go viral, but it just feels like there's the ingredients are there. And so, that's why we're super excited to lean in as an investment firm. Yeah definitely. One of the things that I think is interesting from the investing side as well as from the tech side for you both is this concept of identity and kind of like how you think about agentic entities as an individual almost, right?

Like so if you think of these things that are kind of like a human brain, they're like a neural network effectively, they have their own autonomy at a certain at a certain point and to a certain extent. How do you we think about identity as part of these agentic commerce rails and kind of this future that we're heading towards where, you know, myself, Jay, Cosmo, we may have one or two or three agents operating in separate capacities, you know, operating in a financial uh sense, a social sense, a, you know, others, and kind of how do we think about namings and jurisdictional rights and freedoms and it's kind of a weird conversation

when you start to think about these things as their own, almost like their own human, but what is the investment angle for the identity of agents and how they will kind of intersect with each other in this in this future economy? So, I I kind of smile and laugh when you ask that question because you mentioned we have two or three agents for each of us. I I guarantee you Jay already has two or three agents for each of us running in the background by himself. So, so we're we're we're we're well we're well past there. Um but uh the and and and and that's actually, you know, the a really important nuance to to address your question, which is that a lot of these agents may not really represent single humans, right? Like some of them will be tied to human

identities, but some will be tied to amorphous things like the DMV agent or, you know, the uh or the the the like coffee shop agent down the street. And so, like what's the identity of that agent? Like is it really tied to a human? Not not really. Um and so, we do need true identity solutions that we can know because at the end of the day we the reason why identity matters it's a it's about creating, you know, a track record of trust. Um, and a and a track record a track record of trust in order to have give credit and enable more frictionless commerce, right? Commerce is built on trust. Um, but it's also so that you can have a persistent identity so people can remember you and there's a data aggregation element to it. Um, so that

you know, people have context. And so, both those things though are very uh can be very fraught. All right. Uh, like data is something that we care deeply about keeping private and then only revealing in very specific ways. Uh, and you know, and you know, clearly keeping data security uh today is is a huge problem and a huge market. And you know, what better solution than taking the latest and greatest cryptographic uh cryptographic proofs, cryptographic technology to enable that and do it in a permissionless censorship resistant way. And so, that's why we think you know, that is one of the key reasons and key constraints of growing a gigantic commerce economy that's really solved by blockchain. This idea of creating permissioned identity and persistent

identity. Um, and uh and and a persistent identity that you can really build credit on. Uh, you know, there are there are really interesting protocols that are trying to do this. Uh, you know, we're investors in World which is uh the identity solution founded by Sam Altman and the team at Tools for Humanity. But the whole idea there at first was really about how do we separate truly separate humans from non-humans because you know, every day I'm probably pretty okay interacting with agents for most of my life, but sometimes I'll want to talk to a real human. And you know, we have to be able to encode that or be able to trust that in a digital world. And so, World ID is trying to build this you know, crypto cryptographically secure global permissionless identity system

to to really identify who's human and who's not. And then recently along with recently just this week they announced the launch of their agent kit so that agents can be tied to human identities or perhaps not tied to human identities and they can have a persistent ID as well. And so, all these all these are super super interesting things that we think are going to grow tremendously. Yeah, I had DC Builder on talking about the uh Tinder use case Mhm. for world. I thought that was particularly interesting. Jake, curious your takes on the identity or maybe even just kind of like the next step further. What what what does a agentic economy look like when we do have proper identity solutions that that that are private, that are secure from the data

perspective? What does that actually enable? Yeah, yeah, super great question. I think to to piggyback off of like Cosmos' point, um I think identity is obviously like a crucial part for agents. And my mental framework for what identity actually is, it's basically a tree. It's basically a family tree linking each agent or each individual together. So, if you think about for example, um I think there's many ways to design this sort of tree. Like if you think about like something like Visa Intelligence Commerce, right? Um which allows for example agents to have like little cards and stuff like that. What that does is essentially tie an agent back to a human's KYC bank account.

That's one type of identity that you can do. I can have a KYC bank account, I have a credit card, and then I give like my agent an Apple Pay type like tokenized credential and then they can go and spend on behalf of me um or something like that. But it's not the only one. And this is where I think something like um blockchains and um basically come in because what crypto wallets allow you to do is to expand that sort of like trust structure, expand the root of that family tree to beyond just a human KYC um bank account, but also to things like for example like my TikTok login or like an Instagram like social login or like some other like headless smart contract or any basically with crypto wallets any digital surface, whether that's like a server, whether that's like a social

login, whether that's like an exchange or a bank account, that all becomes payable because you can kind of connect that agent's family tree back to a particular social identity. And that to me is kind of the unique power of why like crypto wallets will be kind of used as kind of like this sort of authorization scheme for AI agents and why I think AI and crypto naturally have this such a nice convergence when it comes to identity. Yeah, then just kicking back to you on that wallet side, I have this kind of growing thesis that front ends and like wallets are kind of obsolete in an era of zeros and ones, of agents reading smart contracts directly from a block explorers or just directly

on chain. Is the Is the agentic economy on chain, is that going to cause a disruption in the wallet space? Like has this industry over invested in creating UX for humans and and under thought that we've just enabled a far better agentic economy which agents don't really need a pretty brand and a nice UX and a and a you know, a safety button? Like how do you think about the emergence of agents as it pertains to disrupting the kind of front end UX wallet uh kind of you know, yeah. Agents also needed a UX, but that UX is not like an actual like graphical user interface that like we

humans are like used to, right? It's basically a command line interface, which is basically all of the terminals and particular commands and stuff like that. And yes, I agree with your point that like we probably over the last 2 years or like the last decade, like because humans were essentially the only entities transacting on chain, we kind of optimized for human like pretty little pretty little logins and things like that. But, to agents like that's actually really, really bad. That's like all of the code level stuff. What agents want is a single command line kit where you can just type, for example, create wallet, you know, MPX create wallet, and then it will suddenly like create a wallet for you, MPX transact, and it will transact for you. So, it's a different type of UX. I still think that

um it's UX will be a very key part of how, for example, all of these different um wallet providers and skill providers going to distinguish themselves. In fact, um for to Cosmo's like earlier point, uh I've installed a bunch of different wallet services providers for my open claw onto my claw code, and just kind of imported all of these different skill files. And now sometimes my agent just gets very, very confused on which skill file or which um wallet to actually use when it's making a particular type of transaction, right? So, like all of that requires a better source of like um like UX and like just better UX, but coming not from a human perspective, but from an agent perspective.

>> Yeah, a different type. Cosmo, then kind of piggybacking on that, we had this kind of fat wallet thesis, this ownership of distribution that that was going to be where there's going to be able to be a monetizable moat. That still exists is exists across pretty much all industries. But, thinking about the future of the agentic commerce on chain and and kind of bringing these agents on chain rapidly, the question from in the investors' perspective that I'm sure that you're fielding from LPs as well as just generally thinking about is like who captures the value? Where does this capture? If the agentic thesis is right and, you know, trillions of dollars of commerce is being uh mediated on chain through agents,

which company benefits the most? Well, I think this it's all about uh you know, entrepreneurs make different bets at at different levels of abstraction um and the, you know, ultimately where it plays out it it could it could play out in many ways, but, you know, the the reality is there will be, you know, there there always is some sort of choke point where uh where the where the vast majority of value gets created, and it's not clear which level of abstraction that it is. You know, you talked about today a lot of wallets being very focused on servicing servicing humans.

The reality is those wallets could, you know, abstract one step further and be a great interface for you as a human to manage your your team of agents. All right? Um, and uh and and, you know, importantly, they already have the brand and the capture of the human, so they can be the one that has the right to to sell that sell that secondary service or sell that broader service. Um, I do think, you know, there are huge moats uh that exist in the large tech companies today. Uh, you know, Google everyone knows about and everyone trusts, you know, Meta everyone knows about and trusts, Stripe everyone knows about and trusts.

But, we found that uh and, you know, that brand power is very strong, and so they have a real right to win when it comes to being that that single pane of glass or that that user interface for us to interact um in an agentic economy. Uh, but it's also possible that, you know, if someone comes out with some real killer use cases, people will will transition to use that instead. And, you know, we saw that with, you know, OpenAI, right? With ChatGPT to start, like ChatGPT became one of the hugest brands in very short period of time because they had one breakout killer app. And all of a sudden, you know, everyone uses OpenAI OpenAI's ChatGPT.

Similarly, Anthropic didn't really catch on with consumers in a big way until they released until um you know, until someone released Open Claude built on the built on uh built on Claude, and that enabled Anthropic to really grow in a huge way with with users. I mean, I was I was getting a haircut earlier this week. My barber talked about setting up a Claude bot with me, And I was like, "Whoa, that's like he's he's like setting up a cloud bot to run his business." I'm like, "That's that's fantastic." And so, it's um uh Ultimately, it's like the the people who are best able and this is, you know, just as a consumer internet investor, what I've observed is that the people who are most able to create viral attention and then use that and leverage that to cap leverage that with a real use case that captures and and retains

users will be the ones that can that really retain the value. But, it does come back to utility, it comes back to marketing, and getting the getting the uh getting the fortune and serendipity of having both at the same time. Yeah, Jay, as we kind of come to a close here, curious if you have a similar or different take there as far as kind of value capture goes in this agentic on-chain economy. Yeah, I think like the general um like my my general thesis is that this is going to be kind of like the entire economy going forward. So, uh as we kind of like enter this new like era, um so I think I can see value capture kind of happening throughout the entire stack.

But, maybe one of the most um important layers in my mind is how do you do the right like um basically finding the right skills and doing this sort of like search capability of like how do you actually match towards, let's say, I want to um buy a flight or something like that. How do I find the right skill that like, okay, um I can also use this Expedia API or I can use some other um different API, and then you kind of like package that together, and then you route order flow um basically through to each of these different things. So, that orchestration layer is something that I'm very excited by because the flip side of that is also this uh emerging trend like agent SEO or generative um

GO, right? So, which is basically how do you allow a particular endpoint or particular service to be rendered legible for AI agents. I I we're still very in the very early stages of exploring how that works, how for example to use ChatGPT to trigger shopping queries and stuff like that. There's certain There's been studies done of like how do you actually do those sorts of things? Um but we're in the early phases, but I do think that this is like a massive way that agents could capture um value in the new economy. Yeah, and I I think if I were to really think about it, um you know, the the reality is agent because agents are pretty uh agents ultimately are limited by how much you know, compute power they have, but let's assume compute gets cheaper and that models get cheaper to run over

time, energy gets, you know, more abundant. Like they will be able to price shop everything against each other pretty easily. And so in the old world where humans uh humans effectively choose goods and therefore platforms able monetize value by by by offering cheap, fast, convenient, and up to a certain point of friction, you know, that point of friction is is going to be infinitesimally small for for agents. And so it a lot of I think a lot of a lot of people might be surprised or one very likely end and and state is that you know, agentic finance really explodes and we see uh a lot of activity happen on agent-to-agent basis, but you know, it's not the rails that like very few people will make money doing that.

It's really at the end of the day it's like the people that are best serving humans and human use cases uh and and ultimately addressing that, you know, that pain points that humans have of fast, cheap, convenient will be the ones that capture uh that that capture the value. Maybe it's things as simple as you know, do you have a data mode because the the the the human uses your uses your LLM the most and so you have the most data about this human. Is it you know, you offer the best uh the best user interface for the or best organizational interface for them to manage all their agents and therefore the human feel sticky and and captured by you. Um and so I I do think it it does come back to the human and that, you know, it's great that we're building all these agentic tools because

ultimately that creates, you know, it makes everything cheaper, flatter, creates enormous uh it's surplus for the economy. Um but [snorts] it's possible that it's consumer surplus and that's not, you know, enterprise value creation and enterprise value creation ends up still being with the human-facing applications. Mhm. Wow, guys, this is a new world. I mean Jay, I I don't know how many agents you have running. Um I don't know I don't know if you have girlfriend agents yet, but man, oh man, this is Yeah, this is intense. Guys, this is This is the most exciting topic that folks are excited about Q1 here now. It was very, very

kind of slow over the last year, but really has picked up. Expecting more and more um and really getting you know, getting to the bottom of like where this is actually going to happen on chain and like seeing that shift happen in real time is going to be It's going to be a sight to see cuz it feels like it's kind of boiling up and then as you said, Cosmo, there's going to be like a chat GPT moment where it's just like, "Wow, there's thousands and thousands of agents interacting on chain." It feels like we're on the precipice of that now. Yeah, man. I mean, look, I really think blockchain and AI are the two most disruptive and highest growth areas of technology going forward. That's why it's so important that Pantera is spending a ton of time at the

intersection of blockchain and AI because they like each each individually is going to be very high growth and so the intersection even more so. And so yeah, we're just really excited to be living in this time and have the great privilege of, you know, raising capital from our investors and deploy and and be able to meet these entrepreneurs and support them in their journeys as they as they attack this this problem space. Cosmo, Jay, guys, have a great rest of your Thursday. Thanks for joining on here to talk agentic economy and the future of agents. Jay, again, love your work. Keep it up on Twitter. Cosmo, great to see you guys. See you probably next week at DAS. All right.

>> man. Take care, guys. Thanks for having me. All right. Cheers, guys. >> [cheering] >> AI agents on chain. It is happening and it is happening fast. Guys, the Pantera team is one of the best in the space from the investing side. Guys, coming up next we've got James Ross, the founder of Synth. We just talked about the agentic economy. We're going to talk about BitTensor. We're going to get to the bottom of what's happening with subnets, what's happening with BitTensor. Now, guys, we'll take a super quick break, get him set up, and we'll be right back with you. Stay here. Stick with us. See you in just a second.

>> [music] >> Welcome back to AI Supercycle, our premier AI show airing every single week presented by Near. We cover the ins and outs of decentralized AI, privacy, and the future of this massive technology. Near is the blockchain for AI and the execution of AI-native apps. You can check out Near's latest AI product at near.ai. So, sit back, relax, and enjoy the show. Welcome back to AI Supercycle, our weekly premier AI show diving into the intersection of AI and blockchain, agentic finance, and agentic commerce.

Powered by our friends at Near. Go to near.ai to learn more. Iron Claw, their private confidential intense and more. Near is our partner today on the AI Supercycle episode 25, the Bittensor bull thesis for 2026 with James Ross. James, welcome to the studio. Let's go. Thank you. Thank you so much for having me. I mean, we've done a few shows before over the years, and this is by far the most impressive location I've been. Thank you. Thank you. Well, welcome to the nest, the tokenization tower. Man, we have seen chatter on Twitter the last couple weeks. Bittensor, Bittensor, Bittensor from the likes of Jason Calcanacus as well.

>> Yeah. I would love just to understand the Bittensor Let's just start with like the architecture. What is Bittensor? Yeah, absolutely. So, I mean, the way I would describe Bittensor is it's essentially an incentive mechanism or it's this network that has these subnets and subnets are an incentivization mechanism, right? They create a competitive environment to essentially run a task or a competition or a challenge that gets lots of people from around the world competing to solve some kind of cool problem for some outcome. So, you have subnets like shoots, which is compute. You have Templar, which has

been going crazy the last couple weeks, which is doing like pre-training. You have subnets like synth, which is like a data science competition. So, subnets are essentially these incentivization mechanisms and Bittensor is a network which powers all of these subnets. Okay, so Bittensor, the blockchain powers the subnets. Some have called it like the Bitcoin of AI. Yeah. And kind of like referring to it that way, is there is there a way to articulate the value of the blockchain itself? So, they it it provides this incentive mechanism for these subnets.

What is the right way to think about the actual base layer blockchain itself? Absolutely. So, I think like the reason why people compare Bittensor to Bitcoin is because you're essentially mining intelligence. Like Bittensor's purpose is to create the environment for people to compete to create intelligence. And there's multiple similarities with Bitcoin from very like surface level things like there's 21 million tokens, Tao tokens. They run on a inflationary model. They have halving similar to Bitcoin, right? But then the actual network design, it's a substrate chain.

Um, and it uses a lot of different mechanics from different ecosystems and blockchains to create these subnets which have these like hyper-competitive environments with miners who compete to earn tokens. Um, and this is all powered by Tao. So, what we saw last week with Templa getting a lot of like mainstream attention in AI, um, made people want to go and to take their Tao and stake it into Templa's subnet, right?

>> Yeah. And, you know, that immediately creates more demand for Tao, and that kind of lifts the value of all subnets and all subnet tokens, and you get this crazy flywheel. Um, so, yeah, what we're seeing right now is I think what we've seen with Templa is an example of like a subnet being very successful. Um, people like Jason talking about it. Apparently, he's just been talking about it, um, at the Nvidia conference as well. I just saw a tweet before coming on. So, like it's it's like an impressive subnet that's doing something in the real world, and that's driving demand for Tao. Um, Tao is going into the pool of this subnet, and yeah, this is increasing the

value of kind of all the subnets at once. So, it's a very cool ecosystem. Um, there is a lot of complexity to get stuck into, but for anyone who's been in crypto for a little while, um, it's a really interesting place, and there's it's 128 subnets. There's a lot of interesting experimentation happening. Um, and it's all kind of starting to break through now. Yeah, definitely has, and I'm glad we're having this conversation at this time. I think it the general context of the rise of AI in the last year or two is also contributing to this. And you mentioned that kind of BitTensor is this is this platform for intelligence. And and and the way that Jat um Jason Calacanis explained it was he was

like there's this decentralized intelligence like rise happening and you know if you have a hundred bucks instead of spending eighty dollars on on tequila I think he said I think he said put twenty into Tao but maybe we can understand why this decentralized intelligence even makes sense from the context of this boom in AI. Like what does that even mean to have decentralized intelligence as it relates to like more closed source models and you know kind of like the big names open AI and tropics these types.

Absolutely. So I'm not like um an expert on LLMs or necessary this wider aspect but I think what we've seen especially with Templar and with training is a lot of people thought it wasn't possible or decentralized training is very expensive. It's ridiculously expensive. You can never compete. Um and this is to do with bandwidth. You know you need huge servers massive servers like the centralized companies have to be able to train cost effectively.

What Templar has shown is that actually they've managed to optimize seventy people using their own like hardware around the world to train a model and it's had impressive results versus like centralized counterparties. Um and they're continuously improving this with that incentive mechanism which is all powered by Tao. Um you know as there's more improvements the people improving uh the model get more back like they're earning money for this. So essentially what I think we're seeing now is like before it was like well decentralized AI can't compete there's no point. And now it's like actually it's a lot of impressive stuff is happening and it's beginning to compete

and it's becoming like a big topic again in the centralized world, too. Um and that's what we're seeing at like yeah, the video's conference and we're starting to see big people in like mainstream tech go, wait, actually like these experiments are very valid. Um and if they keep progressing like this, then they could be competing. And what that gives us is you know, we can train models without OpenAI or without Anthropic owning everything, right? And we have this sense of uh yeah, like intelligence owned by the people, right? Versus being owned by one group, one company. Yeah. Okay, so you've mentioned Templar quite a bit.

So, I take my Tao, I deposit or I stake it with the Templar subnet. Yeah. Okay. And then what does that allow me to do? It allows me to to like earn Templar tokens? So, or >> Yeah. >> [laughter] >> Yeah, essentially. Like >> Okay. Essentially what you do is you you take your Tao, you stake into the subnet, um you receive their subnet token back, right? That alpha token. That earns APY. Um and that's you just like participating, right? If you think that the subnet is going to go on and continue to do great things and rise in value, then that's great. You hold you hold it. Um some subnets enable you to like pay for services with that token.

But um mostly like the incentive mechanism is there to pay the miners on the network. So, that's really why like, you know, the miners get paid in um the Templar token, the subnet token. Um and the validators as well on the network. And yeah, that kind of creates like the flywheel for the the subnet. And then so okay, so I stake into Templar and then I'm contributing to Templar's uh ability to do the service that it wants to do. Exactly. >> And that's how the subnets were so effectively as a Tao holder, you have like this like venture portfolio of subnets where you're like, all right, which of these are innovative, which team do I think is going to do well? You

can take your Tao and then deposit it or stake it with any of these subnets. >> Yeah. As effectively a way to earn yield in those tokens as like a bet on that project. >> Exactly. >> Okay. Exactly. >> Yeah. And yeah, there's 128 subnets I think right now. Um and so I think there's a few interesting features of subnets. The first is that um subnets have like UniV2 uh pools, right? So it's like a like there's not really any centralized exchanges. So you put Tao in, um the slippage is just dependent on how much you put in. It's like a UniV2. There's Tao on one side, there's subnet alpha token on the other. Mhm. So you put in

your Tao, you get back the alpha token. If you deposit your Tao back, uh if you do do the other thing, you know, you get the get the Tao back. So that's quite a nice design. It's very simple. Um and these pools essentially um depending on how much Tao's going into them, they receive Tao from the network being like drip-fed in every block. >> So you also have Tao going into these pools from the network. Um Tao's distributed on this like inflationary course. Mhm. And these pools are getting really big. I don't know how much um Tao is in like the biggest pools, like Shoots pool, but I think it's maybe like $20 either side. So $20 of token, $20 of

Tao. In the synth pool, we have like $4 million of Tao, $4 million of alpha token. So there's like a very liquid group of subnets right now that people can like go into with size. And this is like fairly unique like I've spent a lot of time like in Ethereum community, Solana community, um and a big problem is often you get like you know, lots of interesting new tokens, but there's no liquidity, right? If you want to go in with like any size, it's it's not working. Um and there's obviously lots of risks around like, yeah, things might like not be there tomorrow, right?

Um whereas Bittensor subnets, they're intentionally built for the long term. Um and really like the founders of these subnets are only going to get value by building like for the long term because there's this inflationary tokenomics. Yeah. So, help me understand why this isn't just a big giant circle of money slashing around. Like, are any of these subnets delivering any actual value? Like, are any of these things doing anything innovative and and like it just kind of sounds like a way to take Tao tokens, put them into different subnets, farm different tokens, dump them, move on, buy more Tao, and just kind of do this endless cycle. It doesn't seem very productive to me.

I think yeah, like they're all like the subnets are doing lots of different things, right? There's like a huge variety of things subnets are doing. And like with Synth, we're focused on running this uh essentially like data science competition. And uh we have this incentive mechanism. We reward people uh for creating machine learning models that model volatility. And we take all that data and we serve it as an API, and we charge people for um using that API, right? So, we're like a revenue-generating company.

And our goal is to buy back um Synth Alpha tokens and to make sure the price stays high or high enough that we have consistently high competition within our network, right? >> Mhm. And we see uh like projects like Shoots doing the same thing. Um they have pretty significant revenues. I don't know the exact numbers, but I think there was like a few million dollars a year, maybe higher, maybe like near $10 million a year. They're buying back their token, and that's increasing the value of yeah, their subnet.

Making sure that the miners are getting paid. Another subnet, Score. They are doing like computer vision. They have a number of big clients across like um the sports world, like football teams. Uh that also like doing computer vision within like enterprises. They're revenue generating. Again, like I'm not sure how much revenue, but it's very significant. So, there are many subnets generating revenue, and I think 6 months ago, it was very much like how how are they driving revenue back to the ecosystem? Is this just money sloshing around? Now, it's definitely not the case. Now, it's very much like these companies are businesses.

The Bittensor network, in some respects, has helped them bootstrap. Yeah. Now, they have like these very strong foundations, and they're going into the world and yeah, doing all this cool stuff. Yeah. And so, if this Bittensor thesis plays out, like how big are we talking here as far as like the adjustable market for the subnets and the Tao token? Like give us some of like the like your formulated bull thesis here for Bittensor. Like how how big is the TAM? And like what are what are some of the comparables that you think about?

I think that like Bittensor is recreating a lot of like the early interest that people saw in like DeFi summer, um where there's multiple projects launching. Um there's a way to like get access to these projects very easily. Um I think that if we think of like, you know, the like how AI's moving, right? AI's growing at a rapid pace. Um it's hard to get exposure to big AI companies, very difficult. Like we can't just go out and, you know, get exposure from OpenAI or

like to Anthropic unless we have a friend in the valley who's trying to sell us an SPV marked up 20%. That's a terrible idea. Yeah. Um I think that there's a big opportunity uh for yeah, like hundreds of millions of dollars to come into Bittensor. Potentially like TAO will do like a 10, 20X, 50X from here. I'm not sure, but I think we got like a glimpse of it with what happened um in the last couple weeks with Templar. It was like they did something remarkable. Um a lot of interest came into Templar.

This increased the price of TAO by roughly like 30, 40%. And I think we will continue to see this happen over and over again over the coming year. Um and so yeah, I think there's massive upside potential. I think uh yeah, a good friend of mine, Mark, um has a fund with Jason um called Still Core and they were saying like $3,000 TAO by the end of the year. I don't know if I'm that bullish. I'm very bullish. Um but yeah, I think that's a cool target. So if you're thinking about the, you know, a way to get exposure to the AI trade in the digital asset space, like Bittensor is the way. I think yeah.

>> It's a strong way, a very strong way. Um especially yeah, if you're looking at decentralized AI, you should definitely looking at look at TAO and also the subnets for sure. And then when it comes to some of like the private or privacy features or kind of anything on like the user-owned side, I know you're not like too deep into LLMs and these things, but how does how does Bittensor fare up in in terms of like the or or or the subnets in terms of like privacy or kind of like this user owners- user ownership on data? Is is there anything particularly interesting happening there in in the ecosystem?

Yeah, so I believe Shoots is doing confidential compute and a couple others. Um but yeah, I'm not like an an expert on that. I mean I've used a few different solutions. I mean, not Subnet, but I used Venice um before. That's also a cool project. Um yeah, but there's there's a lot happening uh around yeah, decentralized AI, privacy, confidential compute, things like this. So, I expect that's to continue expanding. And and is there any sort of like um I don't know if if you've heard like any chatter or rumblings about like actually large capital allocators entering into Bittensor ecosystem? Like is there like any institutional adoption? I know that there that there was a DAT or an ETF. Is

Is there anything in the community that cuz I know this community is like like rabid. They're very very It's kind of like early XRP vibes. Is there anything on that front that you've heard about or Yeah so um I believe so, Stillmark is one large capital allocator. Um DSV is a Bittensor native fund. Uh Crucible Capital and Suitcase Capital. There's quite a few Bittensor native funds that have been raising additional capital and raising I think a considerable amount. Um there's also yeah, a DAT that launched. Um I think that was that white James Ultra potentially. Don't quote me on that. Um

but yeah, it looks like there's going to be significant capital coming in this year and it seems like Stillmark is really the one pushing this with Jason like being at like Nvidia's conference and like really toweling everyone at like that highest level of Silicon Valley. So, yeah, I feel like you know, it's it's coming in waves for sure. So, yeah, so how do you even get started? Like do you need a So, it's a substrate chain. So you have to get like a a substrate wallet? Like walk me through what it's like to participate in subnets? Like what does that process look like? Yeah, absolutely. So it's fairly simple if you've used like Metamask or something like that before.

You download a wallet to I would recommend there's Tal Stats. Tal Stats is kind of like a mix of Etherscan and um Yeah, like it also lists all the subnets. So it's like Etherscan and CoinMarketCap combined. Uh there's tal.com. They have their own wallet which is really nice. So basically yeah, you get Tal on a centralized exchange. You put it into you move it into your wallet. And then you can very quickly like just stake or unstake from subnets. Yeah, like the resources are very good around the ecosystem. And yeah, I think that like it's going to yeah, it's it's kind of

set up for like good growth. There's like a very good foundation. The community's been working hard and yeah, it shows like I think there's a lot that is impressive like the founders especially Jacob Const. He does something called novelty search where he interviews the subnets and he really grows them. Like he doesn't give you an easy time. He like really digs into what you're doing. Um There's a very high bar for being like a successful subnet. Anyone who's trying to come in and like do any kind of grifting at all, they get completely shunned and completely pushed out straight away like as they should.

So they're trying to keep BitTensor very high signal. Um and we're continuing to see like yeah, the founder supporting projects individually like really like pushing them forward. Um We're continuing to see like yeah, the the liquidity in these subnets grow which is derisking them a lot. So yeah, it's exciting times. And so from the investing kind of lens here, is there So there's obviously subnets that are like the largest by by their market cap and by growth. Yeah. And then there's obviously it goes all the way down to like very, very small ones. Like very, very small market caps, like sub 1 million, sub 500k market cap things. And they tend to kind of move together. Like I saw when Bittensor was running, all these subnets were running as well and

they kind of act as like a high beta to the to the Tao token? >> Yeah. Yeah. >> Yeah, exactly. I think it's similar like, you know, when like ETH was like the only token that people used to do liquidity pools with, right? Like ETH would pump and everything would pump around there. >> Right. Um, good times. Remember those well. >> DeFi times. >> [laughter] >> Doesn't seem to be happening so often recently, but yeah. Yeah. Um, but yeah, it's the same like these the pools have Tao and the alpha token. >> Right. Um, and yeah, as Tao rises in price, it kind of brings, you know, lifts all boats >> with it. So. Yeah. Yeah, it's very interesting. I think people who've been involved in Ethereum or Solana ecosystem um, can potentially do very well trading

subnets. Um, either trading on like, yeah, uh, their performance, um, on narratives. There's like a lot of opportunity there. And I don't think too many people are spending time like really researching subnets and yeah, actively trading them. So, I think it's early days for that, but yeah, that's something that I'm excited to see more of. Yeah. Yeah. James, thanks for your time, man. Thanks you for giving us the Bittensor bull thesis. I don't know any Tao. I feel Tao-less after this conversation.

>> you some. I think our community wanted to kind of hear about it, get in front of it. Um, we talk a lot about AI, we talk about a lot about agentic payments, kind of what's happening. Uh, but Bittensor's kind of been like this dark horse in in the space at large. It hasn't really been covered as much by like the broader space as something like hyperliquid >> Yeah. or even any of the majors. Yeah. Yeah. Yeah, it's uh it's an interesting ecosystem. I think like not many VCs also have exposure. >> Right, that's yeah. Yeah. >> Like there are some big ones like Polychain, um Dal 5 or Tal 5, um DCG of course. Yeah. Uh there are lots of Oh yeah, um Yeah, and Barry is big on it.

Barry Silbert is big on it. Yeah, yeah, yeah. Yeah. Yeah, absolutely. I forgot to say like yeah, if you're thinking of capital allocators, he's been pushing for a long time. Yeah. I think potentially like things like ETFs could come. DCG's driving a lot. They have a Yuma Group, and Yuma Group is bringing huge amounts of capital. Um and it's helping accelerate subnets as well. Yeah. Ladies and gentlemen, this has been AI Supercycle episode number 25. James Ross on the Bittensor bullthesis. That wraps us up for the day here on the Rollup, guys. We'll see you tomorrow live from the Tokenization Tower from New York City. Guys, thanks for being a part of the show.

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