Rollup TV: November 13th, 2025

Transcript

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>> [music] >> How the [ __ ] [music] [music] >> We'll see you around the timeline. Feels good to be back. >> What's going on, guys? Welcome back to Worldup TV. Thursday, November 13th. We are live from our parents' basements. [snorts] >> It's a bare market. Everyone's dumping on us. We said the institutions is, you know, we're all going to overthrow the institutions. We're going to form a new revolution. And now the institutions are dumping on us. Are we dumping on the

inst are they dumping on us, Andy? >> Dude, I remember in 2017, all we ever wanted to do was dump on the institutions and then we get the chance to do it and you fight me on it. You're like, "No, we can't sell. It's a super cycle. It's a super buddy. I want to nuke my coins on all these dudes heads on their heads. I want to sell my coins to JP Morgan and tell them good riddance. I'll see you a little bit later in 2026 for you. >> Yeah. What are the catalyst? I mean, is it just a bull market fatigue and that's why we're headed lower or is it um any bearish catalyst that you >> look there's just the buyers are just not really available. GM path. GM path.

Good to see you in the chat, brother. Good to see you in the chat. Guys, we got an amazing stream. We're going to start with our AI supercycle segment with the near intense crew. We'll be right back. We're we're going to roll that into and then we'll have a bit more of a chill path forward after we roll that into you guys. So, we'll see you guys in just a sec. get the animation rolling and let's get these guys started. >> [music]

[music] >> All righty, guys. We're going to get Harshet and Alex up on the stage for AI Supercycle episode 10. Welcome back to AI Supercycle powered by Near the Intense privacy AI maxi chain. I mean guys, they have simultaneously won the AI narrative and privacy narrative while also dominating intense for the Zcash trade. Near we are proud to be a partnered with Near on the show. We have actually harsh from the Near Foundation and Alex from Aurora kind of like a subsidiary company. Let's get them up.

Um, and let's start talking near intense, near privacy. Guys, welcome to the show. Real quick, we've got new type saying, "So much uncertainty on the horizon. Government only reopen until January. More layoffs continuing to come in from AI. Trump not releasing government data." There's a lot of FUD out there, guys. But good news is we're not talking about markets today. We're talking about the technology hardit. Alex, welcome to the show. >> Hi, Andrew. Thanks for having us here, [clears throat] >> guys. Near Intense has taken the entire crypto Twitter by storm because of one UI simply because you can go and trade Bitcoin to Zcash to Salana in such an easy way. I did it. I took some ETH from the ETH network on my ledger to the

Bitcoin network. I had a whole Bitcoin instantly. It took about two minutes to show up in my ledger. It was incredibly fast. It was zero slippage. You guys are doing something right. We got a lot to talk about. Um, Harshett, why don't you give us a quick intro about what you do at Near? Uh, what your kind of main focus is. Alex, you as well. Guys, welcome to the show. >> Thank you so much for having us, Andy and Robbie. Um, it's been a pleasure. Longtime fan of the rollup. Um, yeah, so I'm head of strategy at NE Foundation. I've been with NA for five years. Um, and I've been working closely with Alex and the Duse team um, at Scal Ignar Intents. Uh we've been just focused on growth across distribution channels and yeah I'm happy to be on on the podcast

and talk about all things Near. Over to you Alex. >> Yeah I'm Alex. Uh I'm a techie and also responsible for near intense uh has been building the infrastructure for blockchain for 10 years with Near for 5 years. Uh launched Rainbow Bridge the trustless uh bridge in between Ethereum and Near. Uh and then launched Aurora and now near Intense. All of the projects are continuing to live and I'm happy to deliver seamless user experience to all of you. >> I think it's important to mention just some stats around near intent since both of you guys were instrumental in this launch. $4.6 billion of volume since the launch and it's only been live for a few months. Um $500 million in Zcash flows.

Incredible, right? So obviously Zcash has taken the world by storm. People love the idea of privacy, shielded transactions, all of this. Previously, Zcash was this walled garden. Near intense opened this up. So, what what changed to finally unlock this kind of traction, right? When when you guys were looking at the ecosystem of Near, the ecosystem of Zcash, finally launching this product, you were able to essentially unleash these two ecosystems. What was the and and Harsh maybe we'll we'll start with you. What was the strategy behind this product launch? What did you have Zcash in mind?

What was what was going through your mind when you were thinking about the planning and the design stages of Near Intense? >> Yeah, so that's a great question and thank you so much for the kind words. Um, indeed it's been a journey. Um, and fun fact, um, as of yesterday, Near Intense has been live for a full year. We announced Near Intense exactly a year ago at our flagship conference redacted in the past year. Um it's been fun um seeing how far we've come. As far as Zcash and and the design considerations that went into building Near Intents. Um we had this idea from day one that Near Intense should be this onchain marketplace where anyone across the world should have access to any asset that they want. We wanted to get to

feature parity with Binance and Coinbase. Um that was the first goal that we had in mind because like in our view Binance is the best chain attracted app. users don't really know which chain they're on. They can get Zcash, Dogecoin, whatever with simple um cash that they just onramp through through any on-ramp. So that was the vision we had in mind and you know going down the list of chains. We always felt that since we have to support all chains, Zcash was a no-brainer. The chain had Lindy, it has been around and there was just a vocal community of traders and users uh that wanted it. And I don't know um if you guys remember but close to a year ago there were a bunch of these um sort of notices by a bunch of exchanges as in Zcash is a risky asset.

Um and some exchanges were even contemplating delisting Zcash. um near intense around January of the year um was the first onchain avenue to support Zcash trading and even before the whole mania around Zcash started we were supporting the Zcash ecosystem we saw days where one to2 million of Zcash was traded organically um and yeah over the past few few weeks and months we've just been the top avenue to trade Zcash on chain so that that basically was the consideration and that said we have the same vision we do want to roll out more assets across all chains um and make near intense the sort of connective tissue that connects all chains and all assets um across users everywhere. Um Alex, if you have anything to add, feel

free. >> Yeah, the technology wise the core unlock was the designing several um crosschain and chain abraction primitives on the near protocol. One of them is called chain signatures on top of which there is a a trustless bridge that is built. Uh this is like an natural extension of the rainbow bridge and this bridge is called omni bridge and omni because it connects multiple networks and uh uh what these technologies are allowing us is to work with um with chains that do not have smart contracts or do have a strange runtimes the ones that people are usually not developing smart contracts for. And uh we see we saw this

opportunity in this design that the majority of the crosschain infrastructure they are focused on uh what EVM chains and maybe extended a little bit into Salana. But if you're going to take a look at the coin market cap then you will see that the volume of Cardano trading is uh multiple times bigger than the volume of the trading on all of the L2s combined with maybe exception of base. So like there is no need to focus on this long tail. You just need to make sure that all of the assets available. So what would be the good architecture for this? That was the core consideration and uh we are able uh with near intents to add networks pretty

fast. Uh we believe that in um in just this months uh we're going to launch um six seven networks um and uh one of them is already launched. This is Litecoin as of a couple of days ago. Uh so we're just continue making sure that all of the assets are available for everybody. >> One of the things that was, you know, plaguing the interop space for a long long time was the extensibility, right? You could have some uh composability and extensibility within the Ethereum ecosystem in particular, but once you started to go outside of those ecosystems, it really started to fragment. Um and and then we saw some L1s, but they they didn't have as robust of a design if they were operating

across these different VMs, right? And so there was there was, you know, quite a a a rich design space in the interop landscape for this particular design. How have you made this the near intense system so extensible? Right. Bitcoin, Zcash, >> any chain, >> any chain. These are typically walled gardens, right? Yeah. And and my understanding is you need some sort of verification service at least on the destination chain in order to confirm >> Robbie. >> Well, you still need to get some sort of confirmation from the destination chain in order to understand and confirm that your your coins did in fact arrive, right? Of course.

>> Yeah, exactly. This is a very very good question. So, we keep all of these smart contracts available on the near blockchain and through the chain signatures. This technology literally allows these smart contracts to have private keys. these both ECDSA and EDDDSA. So they cover all of the modern blockchains. And what it allows us to have is these smart contracts to keep control of the assets on the other chains. So that's why we don't need to build smart contracts on this networks but we actually need to move the messages of that there is a user who deposited assets into the protocol from other networks to to near um and uh uh there is a tiered approach on how we're

taking care of it with some networks we would like to have a maximum uh uh kind of security in integration and for this we're doing like a super heavy lift that was first done with Rainbow We develop a light client of the specific network as a smart contract on near blockchain. So we can actually prove any single event that is happening on that chains. This is true with Ethereum. This is true with a bitcoin itself with Zcash and this is true with a set of additional networks.

Uh but not for all of the networks you are able to have like clients and it is very resource intensive to support this. So for these networks we're are going with a with an approach of multiple parties who are observing the full nodes of these networks or the RPC providers. So these parties are agreeing about the uh what is actually happening what is the event uh that happens and then this MPC solution is used as a approval authority of the deposit of the assets. So it's like a mix of these different things. uh and obviously over time we are making it more and more robust where we can uh but we start with uh our starting point is already pretty robust.

There are approximately 20 uh kind of participants in the MPC network. This is on par with projects like wormhole that have 19 guardians and uh pretty soon the upgrade to this network will lead us to 100 um observers of these networks. >> Yeah. And so um when it comes to the actually because I was joking about market makers but you know intense is effectively a network of solvers uh and people that need you know that put orders in and solvers create these orders and then you know that there's even like rebalancing that happens.

There's some rebalancing protocols like Everclear does like these crosschain rebalancing. Not sure if you guys are using them or heard of them. U but that's a whole another kind of problem space to solve. Harsh is laughing at me because he's definitely heard of them. Um um how do you guys solve the uh the kind of issue of okay we have you know x amount of of solvers who want to solve different you know routes they prefer to just do bitcoin and zcash or they prefer to do near soul and zcash. How do you guys kind of like create the solver network uh that is so efficient as it is today that effectively has very minimal slippage and what appears to be very like minimal fees. you know, when I used the product uh two weeks ago, I I I

think I you know, it felt like I got I paid zero fees. I don't think that's exactly right, but it's very minimal. Talk to us about the fee structure. Talk to us about the incentivization mechanism for solvers and how you kind of keep them all happy um you know with which routes that they want to solve. So um our core primitive here is that uh the only most efficient thing that you can do with uh in order to create a a very efficient market is make it open like um it's totally known to everybody.

So uh anyone is able to join and market make on on the near intense. It is an open API. Um and uh the thing that we uh but there is no implied from the protocol there is no implied trust to the market makers since we are settling all of the transactions onchain it is either it is settled or it is not. So what the protocol what the backend part of the protocol what we call a solver bus the RFQ system uh what it does it actually monitors the performance of the solvers and in case the solvers are uh you know misbehaving they're signing some kind of quotes that they are not delivering and eventually the transactions are failing uh then uh we are either if we have a contact with the

party then we are saying that like something is wrong or if we don't have a contact with the party well then they're just getting excluded out of the the RFQ propagation. So an open market with uh lots of competition here is what brings a very efficient prices and uh um if you would think of it uh these market makers are able to do lots of things. They are able to hedge their positions through contrading on the biggest centralized exchanges. They're able to hedge their positions with per. They're able to to actually execute some OTC deals for parties who are willing to acquire a particular position and it is okay for them to pay just like the market rate.

It's just because they are earning in some other place. So all of these things literally makes near intense an aggregator of the liquidity not only for the one the liquidity that is onchain but also for the offchain or centralized venues liquidity. That's why the prices are so good and we have the stats that approximately um for the 50% of the trades that are done on the uh near intense the prices are better than on Binance and on any any centralized exchanges just because solvers are combined liquidity from multiple places.

>> Yeah, it's insane. I mean, uh, Kane put out this tweet saying that we have Kane on the show next, and he he's talking about, you know, Infinex TGE, and, you know, he he he writes that Infinex integrates near protocol intense and will soon allow shielded Zcash transactions, which means you can move funds between wallets inside Infinex without exposing your trades. And Harsha, you made a funny point, which is like Binance is the best chain abstracted app in the space. And I think that's what, you know, that's what Kane's trying to basically achieve with Infinex now to kind of take down some of the uh take down some of the DeFi uh or sorry centralized kind of parties here.

I'm curious from your perspective when it comes to the uh kind of growth of Near's intent layer as kind of like this chain abstracted layer for the space. How do you think about this uh more broadly as far as chain abstraction goes as far as the broader growth of this like vision of you know let's take away all the power from centralized exchanges in a sense and try to build this like defi super app that infinex is doing you know what do you have to say more broadly about near's role in that in that vision >> yeah that's a phenomenal question so I yeah I do agree infinex is indeed the closest onchain representation to what a

binance type uh chain abstracted app would look like if it was fully onchain and they're using near intense. So our vision is to go beyond what near intense currently is. So in its current iteration if you go on near intense the UI or any other application that's being powered by near intense it's used for crosschain spot trading basically bridge and swap across chains of native assets. But our ambition is far bigger than uh the current iteration. So if you've seen these diagrams of concentric circles that talk about total addressable market um we believe that the near intense total addressable market is way bigger than the onchain market that we see right now. So we are currently operating in the smallest circle the innermost circle where we're trying to capture we're trying to cater to um users across

various chains offering them crosschain spot trading then a bigger circle outside the current circle would be the real world and onboarding capital from trady um onto onchain rails so integrating things like fat intents um and then the final and the biggest circle which is the biggest market in the next few months and years would be the agentic economy so a thesis that I personally have and that Elilia also talks about quite a quite a lot is the future of onchain orderflow generation will be agentic. So we will see more agent orchestrated and agent generated orderflow than human generated orderflow and intense gives us a best shot um at catering um and positioning um ourselves

for that for that economy when that happens. So that's really the near ambition and the way we we're thinking about evolving the near intense product itself is we will introduce more advanced order types more trading types. So starting with things like DCA, escrow intents, um things like stop-loss um and giving users the opportunity to express their opinion in the form of a trade or intent like derivatives is something that you'll see rolling out in the next few few months. So that basically brings us as I said earlier at par with whatever you would see in just one UI on a centralized exchange and across DeFi you have a lending protocol or per exchange bringing all of these functionalities together into a very simple natural languaged driven agentic

platform is is what we're trying to achieve in the next few months. Yeah, I mean I think that we've kind of just seen the initial wave of this agentic onchain uh experimentation and and I think next year we probably see a lot more of that really really come to light. I think another big uh thing that a lot of people are excited about with what you guys specifically are building is the privacy aspect of this um when it comes to ZCast the shielded transactions and just generally like how you guys are thinking about privacy even when it comes to like the AI stuff that that the team is doing. When it comes to the intent product specifically I I know it's not always private obviously we're dealing with public blockchains here uh

for for the most part. What is the difference in privacy levels when I'm doing a public blockchain transfer from like ETH network to Bitcoin network knowing that I have different addresses, different chains, different entire signature designs? You you've got like SegWid and stuff on Bitcoin and then on Ethereum you've got different types of uh transaction structures. How private is that? And then how private is like the level of I want to go from Bitcoin to Zcash in the shielded manner. um what are the levels of privacy with the near intent product?

>> So if you're trading ETH to bitcoin uh your actual trade is traceable and the connection between your wallets uh can be reproduced. Uh this is uh what we show to people in our explorer but this is also something that people are really asking for when they are doing for example some investigations of the flow of the funds and they would like to try to understand how the uh entities are moving funds. Uh now if we're talking about Zcash uh because of the privacy features of the Zcash users like now we suddenly have only one end of the transaction that is kind of known with the public history because when users are withdrawing assets to Zcash they are

able to shield their assets and then we are losing the trace of this. This is the whole premise of the Zcash's uh privacy um stance and the important thing also to say that they besides only this feature they have an additional feature of paying for something using Zcash and their partners and uh their partners usually are accepting stable coins for payment and what is happening during this transaction is that user funds from the shielded asset shielded address are transferred to near intense and then they are swapped.

All of this is happening publicly and then there is a withdrawal to a service but the origin of funds now is uh shielded and it is private. So I think we're getting into with the privacy aspect um we are getting finally into this um on par world with the traditional finance because up until now we are in this very strange situation when all of the financial transactions are available uh for everybody to see. This is very very strange. It's like you're walking with your wallets that are transparent and everybody knows how much money do you have and we are I I do

not think that like this is like a criminal thing. Privacy is a very very important human right and it is instilled in the traditional financial system and the only thing that Zcash and more protocols who are focused on privacy are trying to get us to is actually just be on the same level of privacy with the traditional finance. And from my point of view, this is a a direction worth going and worth exploring. And hopefully all of the regulators are going to understand it that it's it's okay.

>> I hope so too. [clears throat] >> I I'd love to kind of bring some of these through lines together because on one hand we have private money and then on the other hand we have agentic commerce, right? And agentic money. And so you guys are kind of pushing the envelope from both of these ends, pushing towards the agentic economy, pushing private money and making sure that it's ubiquitous onchain. And I'm just curious how these things are going to converge in your mind, right? Because I think we have like, you know, the centralized AI cabal and then we have, you know, the decentralized open-source AI cabal. And, you know, we're pushing stable coins. We're pushing private money. And I'm just curious how you you guys see and and in particular how you

see Near as a blockchain for AI also a blockchain for private money and connecting a lot of blockchains together producing shielded transactions making sure that the origin of the money is private why how important is that when we transition into more of an agentic economy can you just maybe give some examples or some use cases as to why that's significant >> so I'm going to start in harsh Maybe you can continue. But I have this very straightforward um point of view point of view on the world. Uh there are two ways how I interact with the world. One is when I want something, I want to get some food, transportation, uh or I want to learn Chinese in five years. So there is my intent. I know

what I want. I need to find a counterparty who is going to deliver this to me. And there is a second direction, second way how I interact with the world. And when I'm listening to the world, when the world feeds information into me, this is when I'm scrolling Tik Tok, YouTube or Twitter. And uh uh at this moment in time, all of the algorithms uh in these platforms are tuned the way that uh I am actually the product uh and they are monetizing my attention and I don't like it. I don't want to live in the world where AI is focused on getting more money out of me.

Like this is this is not the way how I want to live. That's why we need to have userowned AI. The AI that is protecting me that is acting on behalf of me, giving me the information that I want to get based on my deep internal knowledge and deep internal goals. At the same time, I'm absolutely okay with paying for implementing of my intents. This is my model of the world and that's why Neo is standing on these two feet. Private AI, userowned AI and also intents that are powering the kind of implementation of the goals of humans.

>> Marsha, anything to add there? >> No, not really. I mean, I think I it's really these various Legos. Privacy is the bedrock for the future of the agent economy. I think it's a prerequisite if if as a user or a developer um you don't have the choice to verify what data you put on the blockchain or what data you put on a model. I think that's we we're living in a nightmarish scenario then. So definitely agree with everything Alex said and let's um do believe it's a prerequisite.

>> Harsha uh people are pretty excited about um the near token. You know, this is like this Zcash near starknet kind of meme going around. I I fielded a question from the community here wondering how near intense um traction and adoption impacts the near token. >> Yeah, that's uh that's always an interesting one, right? So, I mean our our vision is that everything that we do has to drive value back to the near token. that that is the sole mandate for the core team that whatever products we build, whatever value flows we onboard into the near ecosystem should drive value back to the near token. So um the near intent system is already generating

cash flows. It's already generating a significant um economy um and size of economy on chain. The idea would be that down the line maybe um we would conduct buybacks of the near token. So right now the way we look at near intense is we have the opportunity to unite various ecosystems together. So you give this very very cool example of starknet u it's been a pleasure working with their team. They're one of the coolest teams out there who are trying to achieve this end game of zero knowledge scalability. Um and has of course this background of being the Zcash co-founder as well.

there's this great opportunity in front of us to connect a programmable sort of layer 2 environment with this store of value private asset um and near becomes this orchestrating medium that connects these two ecosystems together. So I believe like conventionally builders or founders have looked at um just capturing value playing PVP games. We believe that expanding the pie for crypto as a whole um is the bigger opportunity out there to capture value. Um and we do want to capture value from the centralized custodians of users funds uh not other open source ecosystems. So that's where the value comes for the near token. But I feel like people are wondering like, "Okay, great. You have this adoption. Hyperlink

was doing all these buybacks. UniS swap just announced this unification proposal like like are you guys taking the near token seriously?" Like, like what is this going to look like? How do we get this thing, you know, to start a next, you know, kind of bull cycle? And I I'm not asking you to like sit here and like, you know, pump the token, but like people want a bit more clarity as to like how the team is really thinking about it like strategically, tangibly. Maybe you could you could provide anything there. So the design on the on the way how to properly uh bring the value back into the near token is uh something that we are working on at the moment. There are different models and different protocols are executing once again different models. There are simpler models like hyperlquid. There

are more complicated models like curve is doing for example like with the VE CRV uh and uh besides all of these models uh there are also regulators and then they are also uh asking questions right so we would like to make sure that we are in a good position to deliver something that is compliant uh that is uh tangible and that is actually properly driving value uh to everyone um in the near ecosystem and So as soon as we are going to know how uh this uh value uh appreciation mechanism is going to work uh the near token economy is going to be updated and everybody will know.

If you want to know it first subscribe to my Twitter [laughter] >> why should anything right there. >> No I think uh that was well said. We we definitely are researching um and we'll come out with a very clear plan as to how we conduct any buybacks. uh of sorts. But um I mean I had a tweet uh the past week where I was talking about why we believe in the near revanchism theory internally. So the idea is near has been around for 5 years now. It's a layer one that has gone through cycles. We've seen builders come and go uh with with near intents we have this opportunity to not only expand the space and on board more uh capital collectively into the space but really

do something special for the near ecosystem. So indeed excited for all of that. >> Yeah. Could you could you expand upon that? What what is revanchism? Like what what is the philosophy there at near? >> So it's gaining lost ground basically. So the idea was like I fundamentally believe that all layer ones without a solid product and product market fit that acrru value back to the token will have their premiums eroded. Like no one's going to trade a layer one just because it's a layer one that's been out there for five years. You have to have fundamental value being acrewed back to the token. good products that people want to use and people want to pay for.

So that's really the core focus right now. We are a product first ecosystem instead of an ecosystem first ecosystem if that makes sense. Because like there's this idea that if if we build good products that have product market fit that are generating fees and is being recycled back to the token there will be an organic ecosystem that forms around the token itself uh sorry forms around the product itself. Uh and a good example of that is Solana like their whole thesis um and whole approach to go to market has always been consistent with the fast chain building NASDAQ on chain and you can see that in the use cases that are dominant and predominant on Solana wherein everything is catered towards finance 2.0 or ICM and I think that is the future we see for near as

well where agentic commerce happens on near intense is the enabler and this leads to the token capturing lost ground um in the coming months. Yep. Yep. All right, guys. Well, Harshet, Alex, appreciate your time spending this live stream with us on our AI Supercycle show. You guys have been great partners, have been done amazing work in this space. Um, we're headed down to Dev Connect next week. It's going to be an absolute pleasure seeing all the builders down there in the Ethereum community. I think we're going to meet up with Lane as well down there. Um, so yeah, should be a good week, guys.

Thanks for your time on on on the show. It's a pleasure to have you. >> Thank you for having us. Cheers guys. >> See you next time. Thanks guys. >> Alrighty man that was a great AI super episode Rob. Um I mean look near intense is is absolutely dominating. They are coming to to market with tons of volume and we're getting ready to this agentic world and frankly intents do make a lot of sense for the agentic world. So guys we're going to take a quick break quick pause roll back into this. We got Kane ready to come back in the back. We're going to get started with Kane guys. See you in just a second.

All right, welcome back World TV. We've got Kane. Kane, good to see you, man. >> Hey. Yeah, good to see you, too. >> Nice studio. I see you've done some upgrades. >> Yeah. Yeah, we've [laughter] uh we we used to do it downstairs and we've got two floors in the office. We had a place downstairs and we uh moved it upstairs and uh improved improved the surroundings a little bit. >> We saw you showing off the guitar behind the scenes. Yeah, I've got a guitar back there. Um, I've got more guitars in my house. Uh, so usually if I do a podcast in my house, people are I've got like a Moog uh one as well back there. So any music people are like, "Oo, that's >> Well, dude, let's not bury the lead here. You wrote an article on

paragraph.com, which may be my first time even seeing that site, so props to you for introducing me. It looks like a a mirroresque site, like a web three kind of blog." Yeah, it's the it's so I was I got rugged by mirror uh last week or two weeks ago. Um I think mirror pivoted into paragraph or it's evolved into that or something. So mirror is being shut down and move. So >> well the title is Infinex is inevitable and INX is coming. Um and my biggest takeaway from the entire article was the Gainzy poll of have you tried using Infinex? 23 votes, 91% said no, while everyone else is complaining about

crypto UX. Meanwhile, you've done your part. The first time that we had you on talking about Infinex was well over a year ago. Basically, the theme was, guys, we can't just have all the trading activity and all the new people come on to Binance. It's just not going to work. We need to make a DeFi UX that is better than a centralized exchange that feels better, that operates better, and it's all DeFi. And needless to say, you know, you spent the last 18 months doing that. thing is you told me like or you put a tweet or I I was texting with you and you were saying that you still hadn't reached product market fit.

>> Um this this may have been six months ago. So something changed in the last six months because now Infinex is inevitable. I so I think I think that we are just on the edge like that's the start of the curve right for product market fit where you know we are we're seeing both internally like within our team and and also within like the patron cohort right um you know we've got this patron cabal group of like five or six hundred people um who are like our early testers we're starting to see this loop of like you know they're using it more and more as their daily sort of crypto uh interface, right? The way the way that they're interacting with crypto. Um I think the big shift was like adding an

extension. Um but also the per interface is very good. So, you know, not everyone's a per trader, but if you are, it's it's a very good interface. And then, you know, the the platform itself, uh you know, the gas abstracted, token swapping, bridging, etc. when you add the core functionality of like trading and and um you know an extension so you can interact with DAPs that platform stuff starts to really shine. Before we just had the platform but you couldn't go and use DAPs and that just it didn't [snorts] really land.

>> Yeah. because you have to go to the platform to use the applications and the user journey has been so entrenched for all of us like you just go to a you just go to to the DEX aggregator you know etc. All right. So, let's go through this then because I I kind of like we can make this like the Infinex token, INX, everything that you need to to know kind of get get the a deeper understanding here. Um, yeah, maybe let's start with this idea of the super app. Um, and then, you know, that kind of goes into what you you were saying with this browser extension uh extension uh you know, leading into the token and the sale and these things.

>> Yeah. So, so you know the super app thesis is basically this idea that um centralized exchanges are the best UX that we have in crypto today. And the only way that we're going to be able to replace them or displace them um is if we build something that feels like something [clears throat] pardon me that feels like a centralized exchange but is onchain uses DeFi. And so what does that mean? It means you know you need to be able to buy any token. You need to be able to trade per you need to be able to, you know, do borrow lend. You need to have like confidence in the custody model, etc., etc. And you have to just be able to log into it on any device, right? Um, so, you know, that that

thesis, I think, has emerged over the last two years and is getting more powerful and there's a lot of projects that are trying to take that on. um you know the form factor of an onchain super app I think will be the dominant form factor over the next you know three to five years um but there's a lot of different ways you can approach it people people are trying to do like you know pure mobile approach some people are doing web app um what we've realized is that we kind of need all of the different form factors we need an extension we need a web app we need a mobile app we need mobile responsive design we need all of these different things to um you know make this work Um, and we've finally landed all of them.

Now we've got an extension that's going to roll out to everyone uh, you know, in the next uh, week or so. >> Very cool. Um, I'd love to hear more about uh, INX in particular, how it's integrated into Infinex and, you know, you also talked about how patrons weren't necessarily the right form factor for what this value acrruel mechanism could be. You ended up, you know, transitioning that to what, you know, a more fungeible token looks like. Uh why were patrons wrong? Why was why is INX uh the correct >> the correct >> as patron holders sir? You know >> must mention there a little disclosure >> disclaimer. We are patron holders. We are incentive aligned.

>> Yeah. So so I think you know the patron was designed for um distribution. We did it effectively an ICO back in in September of last year. Um but it was an NFT mint not you know an initial coin offering. Um but the in in principle the approach was the same. We wanted to sell tokens to everyone at the same price. Um and you know not have a seed round that was you know uh fully you know uh spoken for by Dragonfly or something like that right? Um, you know, we wanted to to let everyone have a chance to get access to the token at the same price, but ICOs back then were probably on the edge of the risk curve and so it made more sense

to do an NFT mint. Um, the problem with NFTTS is there's sort of a cursed asset class. Um, and so, you know, there's something to be said for like and I say that I've got a lot of different NFTs. My penguins are just are in a little igloo right now and they're they're quite cold, man. It's >> brutal. It's brutal out there in penguin land. Um but yeah, so so um you know, we did this thing with NFTTS. Um I think in the end what what we will get out of it is that the kind of barriers to entry actually ended up being quite um powerful because it forced people to really understand and so you know we didn't have many tourists. There weren't

many people like oh yeah let me just go to Binance and like buy the token and you know dump it or pers or whatever you had to like go to blur or open c figure out what is this thing why should I own it you know there's a bit of lore behind it so so I think we made it much harder and so the people who became patrons genuinely understood the project understood we were trying to do um but having high barriers to entry for accessing a token is not the best approach long term right so we We eventually realized about six months ago, we're like, "This is just not going to scale." Um, I think at the moment there are like 900 patron holders. Um, uh, it's it's about 3,000 that are in the escrow contract. So, you know, we

people could choose lockups in in the patron sale. So, a lot of people are still in escrow contract, but like genuine liquid holders of this NFT, there are 900 people. Um, which is bad even by like NFT standards. uh you know so so we just don't have wide distribution is the end result and so it's like okay let's do a token if we're going to do a token what should it look like how should we distribute it um we've had some really interesting information come out you know from watching what meth and monad have done so yeah we we've got a plan for how we distribute the token now and and how we get it launched >> and >> and not just what meth and monad have done but what you have done with SNX and

synthetics too, right? I'm sure there's plenty of learnings as a result of that. Anything that you've taken into account, what could have gone well, you know, what could have gone better? What, you know, didn't go so well that now you've implemented into what you're thinking for INX? >> So, I think one thing that we definitely will not do is an airdrop. Uh, >> wasn't that the title of the stream today? ICOs versus airdrops. >> Yeah, exactly. Exactly. And you know I think so here let me I'll give you like this is the um so you know I wrote that blog post uh I think there were like 10 different versions because we were using it as the kind of framework for us to dial in exactly how we were going to approach this like what was the distribution of crates who was it going to all of this stuff. So like this this

blog post was one of the most painful blog posts I've ever written. It took like two weeks and and just a lot of thrashing to get there. Um, but there's no airdrop. Um, but there is in crates, uh, INX vouchers. So, I'll give you the two like and we tried both versions of this in the blog post and one didn't land that well and the other one really lands, right? So, we'll try it in real time here, right? So, um, you know, imagine Andy, I'm saying to you, okay, um, you know, come and connect your, uh, X account to Infinex, you know, connect your Telegram account.

You're a patron, so you get a bonus. Um, and we're going to give you, I don't know, 50,000 INX, right? So, it's going to be like three grand. And you're like, okay, cool, great, awesome. That sounds good, right? Okay. Um, the alternative is come and connect your X account. connect your Telegram, uh, connect your existing Hyperlquid account, right? Or import a wallet, start doing some activity, and we're going to distribute crates. And in some of those crates, there are vouchers that give you the opportunity to buy the Infinex token at a 10 million FTV.

>> Oh, [sighs] that's uh interesting. And so you're like you're like which is like on paper worse like clearly worse um not as positive EV as the airdrop of free tokens right >> but your brain clicks into a different gear of like wait you're telling me I get to buy this token for you >> just start gambling you just want just full gamble mode >> you're like you're like okay that's 100x right >> yeah at the current at the current price right so all of a sudden you're like wait you're giving me a chance to have a 50x, you know, return and all I got to do is find these these vouchers and and it just shifts your versus like, oh yeah, you're giving me some free tokens which

I'm going to cheat straight away. >> Yeah. >> And I'm not going to care about it and I'm I have no skin in the game. I'm not, you know, buying them. There's no risk for me, etc. >> And you know, I wouldn't cheat them because I don't like it, Ken. I would cheat them because I got income tax that I have to pay. >> Sure. >> It's like, >> yeah, exactly. Yeah. do an investment there there becomes a long-term cap gain structure that incentivizes you quite literally not to sell like you know obviously within some given parameters but I mean there's other reasons but as an American airdrops are really not that great >> no they just it's just one line item >> I was I was talking to to Luca about this as well right and like we saw this when we did the Pudgy airdrop we did a

Penangu airdrop to everyone right and we watched this in real time because we have like real-time data you could see the stream of every single person that was like claim claim jeet and you know Infidex is so easy to use. You didn't need to have gas or like we just made it like you know ultra I was like we should have I jokingly said like we should have just had one button which was like just like claim and jeep right like why make people >> press two buttons and it was dude it was like 95% of people just were like like max sell right um and then I came over to the other side of the room because we have like our engineering team and and um our like marketing comms ops teams are separated by like a staircase case in the room. Um, so we call it the DMZ.

And I went over to the other side of the DMZ and I was like, "Hey, um, you know, we need to get a list of all these people that are selling so that we can punish them later." Um, and my head of engineering was like, "What? Uh, we're punishing people. What's going And I was like, did you sell did you just sell your airdrop?" And he's like, "Uh, yeah, I did." I was like, "Dude, come on." >> Even people in the room that were like just like, "Gee, G." >> Yeah. Okay. So, just some just to put some numbers behind this. Um 100% of the INX supply goes to goes to the patrons. There are 100,000 patron NFTts. There'll be 10 billion INX tokens. So 100K INX per patron. This includes the U patron holders as well who will get which is like the the vested ones. Um that the

they'll get a 1 to 10 INX to patrons ratio. Um the Infinex Treasury still has 33% of the supply. Um, and basically still the primary way to access the token is to be holding the NFTs. Um, it'll be a one to 100,000 drop as I just mentioned. Um, and you'll get to keep the NFT which will convert to a PFP kind of like Kaido style if you will. And then there's also going to be a sonar sale. But before we get to the sonar sale, the the the decision that you guys made was to do this crate run idea instead of an airdrop. Um, and the and the incentive structure was such that like you want someone like me to come in, plug in my wallets, plug in my Hyperlquid stuff, plug in my, you know,

Twitter and start to actually use the platform as my main hub of DeFi transacting, uh, to be able to earn different crates and earn the ability to have this early investment opportunity, which feels like a jackpot. Uh, and kind of also is reminiscent of of like Monad boxes in a weird way, too. Um, and so like that structure was just clearly more appealing than just like, "Hey Andy, here's a couple grand like sell it for your tax purposes and then move on and not use my platform." >> Exactly. And you know, you give people an airdrop and there's no, you know, the challenge is, right, you give people an airdrop and make them jump through hoops um like opening boxes over the course of three days and you know, no one

understands what the boxes are. >> Tunes is at our happy hour in New York like last week claiming the fame for it. He's like, "Dude, that was all me. Just, you know, thank me for it, man." I'm like "Bro like >> yeah." And, you know, like it was fun. My kids enjoyed it, right? My kids have pudgies and they enjoyed it. Um, but my daughter the second day was raging because she got less tokens than her brother and she has more pudgies and she's like, "This makes no sense." So, even an eight-year-old was like, "What is this nonsense? Like, why are you doing RNG on these boxes? Like, just like put the tokens in the box, bro.

Like so so [laughter] I think uh I I think there was a there was um a bit of like frustration of you've got to do this stuff which doesn't do anything doesn't help Monad in any way a bunch of hoops like connecting stuff like where was the connectivity to actually you know helping the network launch or whatever like and and so it feels just disconnected and it's like this performative thing. Um, we genuinely believe that we have a good platform and you know, one of the interesting things is we sponsored Gain's stream, right?

Um, and Gainy started using the platform and I watched in real time as he was like, "Holy [ __ ] this is actually really good. Like, what have I been doing with my life?" He's like, "I'm over here using Phantom and like moving Saul and paying gas and like I can just click a button and buy Zcash." And and I was like, "Yes, exactly right." But the problem is everyone on crypto Twitter is like attention poor. Um hard to get, you know, uh hard to get cut through with them. The noise floor is really high. So we're like, okay, we will give you access to the token. We'll give you um some free stuff, prizes, you know, some NFTts, whatever. Um but in order to do that, you have to use the platform.

>> Yeah. >> And and you know, if you don't use the platform, we can never show you that it's good, right? So, we could do an airdrop to 100,000 people and 98,000 of them would dump the token and never look back. And, you know, for what it's worth, I do think there is some sense to that, right? Like to those airdrops because at least those 98,000 people are like, well, I'm not going to FUD them on the timeline. They money. >> Yeah. >> So, [snorts] it's like, ah, whatever. Like, you know, I I've been calling it like the CT mafia, right? >> Yeah. It's like a hush hush. Yeah.

>> Yeah. It's like a nice project there. It would be a shame if I burned it down sort of thing, right? And it's like, oh, here's a sack of cash. And like, yeah, yeah, you're a good kid. Go get out of here. Um, and it and it's like that's what it's become, right? It's become >> 100% agree >> kind of blood money, which is fine. Like, you know, incentives evolve over time, right? And that's where the incentives have evolved to. So, again, I'm like, sure, you can have your blood money. We'll give the CT mafia their tokens, right? Um, but before we give them to you, just use the platform once, bro. Like, just like create an account, import one wallet.

Like, it's not that hard. And then if you hate it or you don't care or whatever, you can cheat the tokens and move on. But like, I'm not going to just give people tokens without getting them to at least try it. >> Yeah. Yeah. Yeah. I think that that's um Yeah. I mean, look, I'm stoked because I've used it multiple times, not in the last, let's say, quarter or two. So I I have not seen like the updated UX but I think like from a you know five to six year onchain DeFi users perspective. It's more kind of about my habitual uh kind of you know thing like I have massive OPSSE and like security paranoia from surviving for six years. So I have my sites bookmarked. I have my my my using like the apps that I use. I have

the chains that I use and I have the, you know, devices that I use and that's it. And any any point of going elsewhere, there has to be like this massive chance of return for me to do it because it's like I have my habits and I know what's safe and I know what's smart and like that's what I'm doing and and and honestly it's not it's I don't love it. Like I used to just go ape into any smart contract at any time and just go for it. And you and I talked about this in Hong Kong how like the memecoins changed the market from like who can be earliest to like who actually has some idea of alpha and has done some research and you know and anyhow so I think it's a lot about >> let me ask you this though right like

when when Rabby came out so presumably you were a MetaMask user >> yeah of course >> so so when Rabby came out um did you try Rabby when >> Until about a year I tried it once I could I instantly converted over and I've never gone back. >> Interesting. Okay. So, it took you a year for you to be like, "All right, this has got enough Lindy or like >> like my friends suggest it, you know, yada yada." I see the UX. I saw some improvements on there and I was like, "All right, I'm going to try this out." And then I once I tried it, I was like, "Okay, I'm this is just >> better."

>> And so, so this is this is kind of the situation we're in, right? We're in that like Rabby Metam Mask moment of like how do we incentivize people to try the thing so that they go, "Oh, wow." >> Yeah. >> You know, you faded rabbi for a year. >> Well, if you if if it's that good, Kane, and you're giving me the option to buy it at 10 mil vow and this thing is an absolute ripper, then it's like, all right, like I'm in. You know what I mean? It's like Yeah. >> So, I think I think the philosophy is right. Let's keep let's keep uh rolling through rolling through this, though. So, you guys will also do a uh sonar sale. Again, this is the distribution that you guys wanted. Um, you know, coming from the NFTts. There's not that much info about it quite yet, but maybe

you can just give us anything that's not in there or any ideas that you have about this about this. >> Yeah. So, you know, again, in the in the patron sale, we had about 3,000 people that participated. It was pretty small. It was more like an NFT mint, right? um you know NFT mints you get a few thousand people and then it takes a bit of time for distribution to happen. Um, Sonar obviously Mega ETH had something like 50,000 wallets participate and like 150,000 people KYC just a an order of magnitude or two more, right? Um and and so um you know we we think that there is an opportunity to um before we do TGE when there's kind of you know maximum

interest uh to you know give people a chance to buy the token again right um the thing we have to dial in is like pricing and you know how many tokens do we sell um obviously um again there's data that is you know emerging in real time like >> monads pricing versus mega and you know meg being 20x overs subscribed versus like a different mechanism that's not an auction like you know there's a lot of different ways that you could cut this so we haven't yet locked down exactly how we're going to do it but the goal is get you know a lot more people exposure to the INX token before TG >> Yep makes sense yeah so I think I mean not that that's not the interesting part

but we got to come back to this crates because I'm reading this more now and there's a you're basically taking the gambler out of all of us and saying, "Go gamble, guys." Like, "Good luck." You know, you're you're going to give away hyper NFTts, pudgy penguins. Um you're there's a chance to buy uh with the INX vouchers. There's a chance to buy the token at $1 million FTD, not 101, all the way up to 500 million. Obviously, I assume there'll be somewhat of a normal distribution curve, uh with the majority being maybe in the 300 range, 250 or maybe even closer to the 500 range. Um, and so, so how do we get So, okay, how do I maximize my crates? Like, I I I just go all in on crate maximization.

What's the strategy here? >> So, so we did this with Crate Run. So, we had a campaign called Crate Run, which was a TVL campaign um late last year um which I think was the most fun, interesting thing that we've done so far. And and you know, people loved it. The the OG crate runners um you know, still talk about it. It was it was um a very fun campaign and it was simple. You just you know the more TVL you put in the more crates you got. But inside the crates we had this um mechanic where you could get basically bonuses like TBL bonuses right and so it created this very interesting race condition where like the earlier you were you got compounding bonuses you got more crates and um you know it it became a very

interesting game theory. Um, we've tweaked that a little bit with this where, you know, this is not about TVL. Um, we, you know, we have 500 mil of TVL now. So, it's not, you know, more TVL is not really useful for us. Um, what we're looking for is as many people as possible to try the platform. Um, so we're we're trying to make it um very easy for people to uh bring their existing um uh seed phrases and import them. Um, so you know, you got a Rabby seed phrase, you can import it, you can use it in the Infinex extension. Um, if you have historical uh, trading activity on pers, whether it's like hyperlquid or um, GMX or synthetics or whatever,

you'll get rewarded for that. Um, so there's a whole bunch of retroactive crates that you'll get and then there's also going to be crates for using the platform today. So the first the first kind of campaign is going to be um, centered around per uh, but eventually we will have a swaps campaign. We'll have an NFT campaign. We'll have a bunch of different campaigns for different features within the platform. So, this is not the only time we're going to do crates. It's probably pret, you know, kind of intentional um to really drive people to create an account, get a wallet that they can start using.

>> Man, this fees paid in ETH for chain usage for me is going to be [laughter] >> oh my gosh. [snorts] >> I know, right? I remember mid2020 looking at it and it was like 50 ETH and that was like five years ago. So I mean we're in there and then so then okay so there's the CT mafia. Your By the way, your writing style is just I mean it's just it's I mean [snorts] come on dude like is this a real industry? Like the [laughter] the bot extermination, the smelly old crates, the what if you don't trade per line? I mean come on then. is just yeah so um will spot volume on hyperlquid perex account or just per volume because I feel like that's a little bit unfair if it's just per volume.

>> Yeah, that's a good point. Um we have uh a bunch of data sets that we're curating right now. Um there are some challenges I guess with the difference between per and spot volume and how you you know uh different fee structures etc. Um so we don't want anything be gameable I guess. Um so we will be looking at that and and figuring out how we dial it in. Um, I'm trying to get like OGDYDX volume and and Antonio's ghosting me. So, um, like hopefully he sees this eventually. I don't know what what he's doing, uh, living over there in Cosmos land, but um, but yeah, hopefully we can get, you know, we're just going to get a pile of, uh, per legacy per data, and then we'll slice it up and figure out how we

distribute it. >> Yep. Yep. Very cool. Um, and then I guess the last thing that we got for you is just like timeline here. I mean anything you that you can share with regards to like like what does your Q4 look like here? >> So I think first thing um you know again this is all leading up to TGE right? So the step one is um do this big release and get the create run uh campaign going um so we can start to get some traction. you know, the anecdotal evidence we have from like new users who've never used Infinex coming in and importing a wallet is that it's fairly compelling when when they see it. Um, so, you know, we're going to be watching very closely for how traction goes in that in that first

period. And, you know, the best vouchers, the cheapest vouchers will be in the first maybe few days or, you know, first week. Um, so there's a strong incentive to come in and like not fade this wait. Yeah. Exactly. So, so, um, that's probably the most alpha, I think. >> Yeah, that is the most alpha. We should we we could have just had this part of the conversation and I cut it out. Yeah, exactly. >> So, that that's probably the first two weeks, right? Once we've got a level of traction there where we've kind of maximized attention, maximized mind share, then we'll do the sonar sale. Um, so that takes us into sometime in December. Um once we've done the sonar sale and that's wrapped up, which we're

going to try and do hopefully in about a week, keep it fairly tight. We don't want it to drag on for a long time. Um then we'll be ready for TG. >> So we're moving quick here. >> It's quick. Like you know, it could be late December, it could be early Jan. Uh no one really knows right now. So if you're uh betting on that poly market uh thing, unfortunately I got no info for you. Um it's still a coin right now. [snorts] Very very cool. I mean that that this is uh this has been what like twoish years in the making since you announced this.

>> Yeah. >> Working on it for three >> like the first so the first uh inkling that I had that I was going to do this right that I was going to like do a new project. Um and it was funny actually. I tried to do it as a like a non because it was going to be just a front end for synthetics, right? So I was like I don't want to have all of the baggage of like me doing stuff. I'm just going to come in and and build this thing, get a small team of like two or three people, do it as an anon team, release it, and just see what happens. Um, that was in uh April of 2023. Um, so you know, we're going we're going I woke up. I had a dream and I the dream was like I've gone this wrong. uh like

synthetics, DeFi, like decentralization and and I woke up from this dream and I was like, I'm going to solve this problem a different way. Um and yeah, that was that was, you know, a long time ago now, two and a half years. >> Yeah. Well, well, thanks for spend some time with us. It's uh it's been fun just kind of watching the Infinex patrons get traded on Blur and OpenC and not really have any inkling to sell at all. just been kind of like, well, I don't know what you guys are doing, but there's something at the end of this tunnel >> and uh it's probably gonna be better than whatever you guys are doing. So, >> um yeah, thank thanks for the full breakdown and I'm just honestly stoked to to have Andre building Flying Tulip,

uh Michael from Curve launching Yield Basis, you launching in Infinex. There was just a lot of like there was a lot of like you know for lack of a better term crash from DeFi summer. Um just for a variety of reasons and it's just good to have you know the boys back in town. You know what I mean? >> 100%. Yeah. Feels like Feels like it's uh cranking again. >> Yeah. All right guys. Uh great episode. >> Yeah. Thank you guys. Thanks, kid. Alrighty guys, that was Kane um

[clears throat] from Synthetics guys at OG new type. Does Infinex have any social aspects in the app? There's a troll box other user platform. Never used it but enough to try it. Uh I don't think they have a troll box, but um they should be working on some social layer apps. That would be a good idea. >> Good call out type. Yeah. [snorts] I mean, try it. Once you >> once this crate thing goes live, you'll be incentivized to try it. So, um >> the crate run has been live for a little while, >> correct? But once like the announcement and stuff goes live, it basically you have to uh you got to send it live quickly. Um, like you have to send you have to join and claim your crates

and start participating as fast as possible to actually get the biggest chance to get the lowest FTV. >> Yeah, Kane's got got you going on some mental gymnastics, which is pretty fun. >> It's a lottery. It's just gambling. It just gets you gambling. [cough] >> Yeah, it's like a lottery raffle. You know, you play play fun game, win fun prizes. >> 100% 100%. So, all right, we got we got a fun one. >> Let's bring him up. >> Surprise guest here. >> Yep. >> Head of >> Dev Connect. >> Yeah, the man the myth himself. The >> the >> man of Dev Connect, the Argentinian.

How are you, Fede? >> Oh, good. You guys, are we going to watch Bokeh? >> Yes, brother. Yes. >> Let's go. >> You're a Bokeh fan, right? >> Yes. >> Okay. So, Bokeh all the way. I'm going to pick up a jersey, bro. >> Cool. It's gonna be fun. >> Good, man. Good. Well, man, I know you're slammed. It's been a crazy couple probably weeks for you leading up to Dev Connect. Um I mean, the whole crypto economy is coming down to Argentina to ar Argentina. I was reading one one of your threads and it said, "I love my country. I'm grateful to the people's representatives for selecting me and I'll do whatever it takes to defend our nation's interests." This was recently

after you posted these photos of you at at the Senate. Maybe you could just, you know, talk us through like what are the national interests of Argentina? How can crypto be a part of that? What what are you representing for your country? >> Good question. So, you know, um I'm 37 years old. My father always tell me I'm like 70 years old because of the amount of stupid un good things I have done in my life on when you grow up you change your ideas. When I was very young, I was liberal. Then I was more like because of university more like central left or even two leftist. And now I'm more like a pro technology. I'm a businessman. I'm

a pragmatic person. And I think Argentina um is a country of immigrants in that sense. It's very similar to the US. on. I think it was always a place for people uh Jewish, poor Italians, Spanish people, Germans uh that came here looking for a new life similar to the US uh to they wanted a country where they had freedom, they had the ability to build companies, they had the ability to believe in whatever they they wanted to have a peaceful life. So from my point of view, Argentina is a country that should uh be proud of its uh west uh origins and values, but it's also a Latin American country. We're more

Celtic. We have like a special sauce of like uh we we we like to fight. uh we're very passionate about anything on yeah I think uh the interest of of my country is the interest of um uh defending the values of freedom the values of uh democracy on defending the the values of being able to create a company and have a pro prosperous life in that sense it's similar it has some diffices but it's pretty similar to the regions of the US >> how does >> let us crypto help with that like how does uh you know crypto is very like it's got libertarian, very freedom oriented, right? It there's a lot of overlap with some of the values that you describe. You're obviously building a

lot of cryptographic technologies here. Uh how have you been able to use and leverage the the technology and the cryptography that you've developed at Lambda and Aligned? How have you been able to use this to advance Argentina's interests? So as I said before I during my life I grew and changed my ideologies or ideas as most people on nowadays I don't have a I don't consider myself a leftist or a libertarian I think I'm more like a technologist acceler accelerationist uh and I always try to convince people in the left and in the right that this is good tech that is this is tech for the people for example my mother um she was very opposed she's a a a hardcore

Christian and she didn't like that I work in crypto because she heard about FTX and she kept telling me like why do you work on an industry that seals from the poor that seals from from the common people um she's a person that believes that one needs to do things that help others and I try to explain her that um crypto uh gives power to the individual on to communities that want to be able to have their own money that they don't depend on somebody else uh screening others. In Argentina we had huge issues with the banks in 2001 multiple times we have not only issues with inflation the banks says the money with governments

from common people on in comparison to other places in the world this created a more leftist movement against central banks against the the the banks on against corporations. Now with our current president, this same anti- authoritarian or centralist uh um type of uh way of ruling countries uh comes more from the right. But the core idea is that I I think you always need to convince people on Argentina is in a place where people from the left and the right are pro crypto in general because it has given rights to common people and to organizations. You I I I couldn't pay salaries at one point uh because I couldn't uh do exports. I couldn't get my money in the bank. The first time I

created the Lambda, it's a crazy story. And there's a a co-founder I had at the beginning. He only stayed for one year in Lambda. We went to one of the biggest banks that is a Spanish bank to create a bank account. And I I was making like 15K per month that in Argene, a lot of money on I went with my flip-flops. I always have flip-flops. [laughter] And I went there. >> Yeah. >> With my This is how I normally look. I'm not in a suit. than like a TV guy [laughter] with a short when I go and start like hey can you open a bank account for my new company and the guy managing the bank told me he started laughing and said like yes you're making that amount of money and I I was 24 years old uh he's like 25 24 he's like yeah and I am

Diego Armando Maradona like there's no chance you're making this amount of money and they didn't create the bank account for me like they didn't want to create the bank account that's crazy like they didn't want to serve a new customer so I was very pissed So, uh, it's a place where naturally crypto grows because people need it. There's a lot of OGs, um, that have even Americans, I I know Brian from Brian Armstrong from Coinbase had uh, work here some time ago. That's uh, something I would like to talk another day. And he I think he met Bitcoin here. I'm not sure, but he already knew about Bitcoin here. So uh there's a lot of people Americans, Chinese people had to do commerce with Argentinians that were were blocked to do exports on got paid in Bitcoin. So

>> man, you had this viral post uh in October 2024. it was I'm going rogue and I know that was a name of a certain idea but since then it seems like you've been on an absolute tear with ethrex with aligned lambda now with this crescent uh you know happenings and debates man like what happened you went into wartime mode fed went full wartime mode over the last like year um and has you know you've gotten a lot done talk us a bit about your mentality and how you approach work and then let's get into some of the details about EtherX, about Dev Connect, about Cresman and just kind of what's happening.

>> Sure. Um, I don't think I went on war mode. Like some people tell me that every once in a while. I think if you meet me, I'm a pretty peaceful person on I can be I can debate very harsh, like aggressively, and I can have very strong opinions, but I also work with people that are very different. I have friends that are uh um Muslims. I have friends that are Jews from Israel. I have friends from the Vatican. I have friends that are hardcore pyonist on the left. I have like partners that I have companies with them. I have companies with people that are extreme libertarians like RJ when he was very young. He used to be like part RJ from Align. He was part of

the small movement that Mle created the RJ when he was very very young. I don't know how his mother was not worried. gifted books to me like like so I I we can do this because we're very flexible. We're pragmatic people but we also have opinions on I can explain you uh what we have been doing but what we're trying to do is raise the bar of what crypto is. I think it's going to become more professional and there's going to be more corporations, more institutions coming in and I think we need to clean a little bit the the mess that crypto created especially after after DeFi summer where we lost a lot of the cipher punk original values on yeah the the the interesting things that brought me to

crypto like I was a hardcore open source fan I have been in open open source movement since 2003 2004 2003 sorry with Linux opens D free of BSD then with Rust Lang I I have been always my life is this so I don't know I have opinions like if you go and speak with people like Linu Theod Rat the creator of OpenBSD um different people in the programming language community they all have opinion if they're known for having strong opinions I don't know why uh sometimes nowadays in crypto having opinion is seen is seen as something um like uh too chaotic or there's too much like kumbaya vibes where things cannot

be debated and I think that's pretty bad. I can give you a concrete example. When we started the line, we wanted to work on privacy. You know what this is told us on some people I cannot mention that are pretty important when you do a token launch told us like don't touch privacy. One week ago I was like the only thing you have to do is privacy. I'm like this is bananas. Like this shows you that sometimes public markets this happens also in traditional businesses. They're so um the feedback loop is so fast that you cannot think on the long term. And if you think about very successful companies, for example, Stripe, I'm pretty sure Stripe is a private company. Please correct me if I'm wrong or other companies are very successful like them. Valve, I'm a huge Valve fan. I think Valve is about to win

against Microsoft in the gaming industry. And it's because they're private. They can think in in the long run. When you have to do things for the next quarter or things for the next pump on the token, uh sometimes that's bad. Like it's bad that's bad for stakeholders. So what I'm trying to do is like I believe I'm more like a traditional capitalist on I try to give opinions in the things I believe as most people do in open source. I don't think I'm in war mode in any way but that's how I see it. Maybe other people see this. >> Yeah. Yeah. No, definitely. I mean Okay. So you you open up the floor to to talk about this Cresento debate. you know, you tagged us in this tweet and it seems like there's some differing opinions as to what the future of Argentinian crypto

looks like, how you want to be approached in this in your home country. What is going on? What what are you not happy about? What needs to be changed? What is going on that is positive? What needs to be looked at for some room for improvement? Where is there a disconnect happening here with Cresman? >> I will answer very clearly. I don't want to avoid the question but I also want to talk about other things uh I think there's many interesting things that we're doing during dev connect uh that I would like to share that are very positive and I don't want to be seen only as a debater I am a builder I build things and I think people respect us for the things we create however we also have opinions I will share my opinion on on this subject very briefly so first of

all I have deep respect for the people is a movement um a co-work space on I have deep respect act for the Argentinians on international people that have been going there. I went a few times. I didn't go more times because I traveled a lot uh until I I came back two months ago in uh to Argentina. So, a I'm in favor of movements that gather people around to work on crypto. I'm in favor of people helping other people to raise money on to create new companies. So, I cannot be against that unless I was jealous or [ __ ] that I'm not. I would not I would I cannot be you're you're an idiot if you're against that.

Like I'm in favor of that. I have friends working there. Uh I I there's a few companies I I can list them but I don't know if they would like it that work in Cimeento co-work Diego Fernandez uh that is a friend on uh we have a company with him. Um he also was part of that. We have differences but normal differences like the ones I can have with you Andy like nothing crazy. So I want to make clear I'm in favor of all that. Okay, that's the first part. Do you have any question on that part? Because now that >> No, no, no. Understood.

>> Perfect. So the part that have a difference, the part that have a difference is that look, Argentina is a sovereign country. We're a G20 country with almost 50 million people on where as most countries that have democracies divided. There's people that vote for the left and people that vote for the right. And as I said before, I believe crypto. I think I I I am a I believe like uh I'm a Christian. Like I I'm a hardcore Christian. The last few years after all the crazy [ __ ] that happened to me, I became more more I believe more during some period of time. I was uh more I I was not sure if I believe in God or not. Now I believe every year I become older and this is a process that

most people go through. I believe more in the in go in God and in in in religion in general. on I realized that we have to convince others like that's part of preaching going on getting people in and I think we need to do that like especially in Argentina because we need crypto. So based on that I think you cannot do things that hurt the long-term process of convincing people and that's my big difference and I will be very concrete on what I mean by this. Imagine I go to the US Argentinian or I go to France or I go to Mexico and I raise money in a Panama entity millions of dollars. I tell people there's already three race already like uh

prepared to be done during dev connect to raise a few million dollars. You write documents and you say literally that this is going to be do done for lobbing. That's the item explaining how the love is going to be do to change regulation to create an economic zone to then launch a token. I mean I don't know I'm not against an economic zone but I am very against people pushing very fast on very hard to do regulatory change that benefits themselves. And the reason is not because I am against private people investing in something. I'm in favor of that. I am against things that can turn out turn bad very fast. I spoke with mobilityians. I was usually in the

Senate. Like these things are not public. I'm friends with the people with people managing the the theist uh uh political movement. I'm very close to people in the libertarian movement. I'm very close to the what's called the rials like central left. Uh I have friends all over the place. I cannot tweet these things. I have been working here and grow up here for 20 years. So I speak with them and all of them are like what the [ __ ] is this the luluess like this is very strange and this is not the way to do things. So I tried to contact them and I told them like dude you cannot raise money in from an outside entity to change local laws or regulation to then benefit from that

regulation to land launch a token. I called friends that were part of crazy mento. told him like, "Dude, I have journalists asking me about this and they're saying I am in favor of this." They even people used my name. So, I'm not off, but I think this is very short-term side, dude. >> Wow. >> Do you think Okay. [clears throat] >> Yeah. There's a lot to there's a lot to sort through here, but it sounds like there's bits and pieces that could be done better. And if they were to do them in a way in which it was it was kind of it was uh for Argentina by Argentinians, right? That that would then have the citizens of the country enacting the local laws rather than bringing this outside entity to come in and try to

extract value from the country. >> Right. Yeah, >> because like you said, there's value in an economic zone, right? And so like if you were if you were going to do this, right, it sounds like, you know, we've been in the US, right? We're starting to see some regulation. Uh and so that seems to be very positive. We're establishing, you know, stable coin regulation and the Genius Act, the Clarity Act in the US. And so you're not against regulation and you're not against an economic zone. You're against foreigners coming into your country telling you how to run things and then launching a token for their benefit?

>> Not even foreigners. I like foreigners. I actually am closer to the American values of business than Argentinian ones. I'm deeply thankful to the US on especially to the San Francisco uh area. I grew up I'm a big fan. I have been like in love with San Francisco on its history, its people. I'm thankful. It's the It's the people that helped me the most in my career. I I love everything that was created in San Francisco. Then we can have differences. Now we change a little bit, but I love everything. I was when I was young on on the back of my bed, I had a Berkeley, the University of Berkeley on the bear, the yellow one with blue because I was a big BSD fan, a computer scientist. I went to MIT the first time I went to with 17 years old.

I went to MIT and I took a very nerdy ugly picture with a big glasses in MIT. I loved the MIT. I I I love the the type of jokes they made. They put cars on the top of MIT. I love that things. I I I I'm a I'm an engineer by my father is an engineer. I love builders. I love that. So, it's not even the fact that there are foreigners. I'm not I'm a nationalist, but I'm not against foreigners. Like, that's I don't see that as nationalistic. I actually want people to come and to invest. The problem I have is that if Argentinians or foreigners do this in a way that is short-term sighted that looks from the outside because it does look like that and that's easy to check. Uh quick way of making a a buck.

>> Yeah. >> Actually [ __ ] up the possibility of creating good regulation. FDX try to do this I guess. Right. >> Yep. >> So I don't like that either on this >> Yeah. It's it's it takes away from the actual quality builders that are trying to do real things and and not just make a dollar and so I'm sure we can hear their side of the story later on and you know they may reach out to us after some of these clips and and whatnot. Let's move on to some of the positive side here guys. Erex Dev Connect Buenosis we got 13,000 people coming to Buenos Aris I have lived there on and off for about a month or two in my life. Uh, I've really thoroughly enjoyed it as well as being in Brazil close by in

Florinopoulos. Um, a lot of the the Argentin Argentinian people come to Florinopoulos in January, February, March to have their holidays. I've met tons of both types. Really all always had an amazing time. Ve, what does Dev Connect in Buenosiris mean to you after all this time building out uh, you know, the cyberpunk values of this industry? What are you most looking forward to? what what does this really mean to you and the Lambda class team? >> So, first of all, I'm very proud and happy that Dev Connect uh is organized here. I think we Argentinians can be a like me a pain in the ass. We're proud of our country. I'm proud of what we do and we

want like you to come to Bokeh. My other friends are from River like Frana was like, "No, no, take them to River." Like we all want to show others like we're very like this come from Italian roots. We want to show we want you to come to our house to meet our mothers, families. So, uh I think we want to show the the the world and people especially in crypto that we are proud of who we are, but we also want to work with people from the outside. Argentina was disconnected uh big part of Argentina was disconnected uh from um for too many years from the outside world. I think that's bad. Like I have a strong opinion. Like I I I think it it doesn't matter if you're left or right. you have to work with the rest of the world.

There's smart people all around the world and we benefit with commerce on with working with people from the outside. So for me the thing I'm more more most excited about the connect is that we can show the talent that is in lambda outside of that lambda there's like other companies some of them I don't have good relationships and that's okay but I'm proud of them existing defi wonderland open sephiline there's a a new company that I love the name it's called fat solutions like the concept of like the nerdy fat guy and they're proud of it um they're working with um Amin on privacy stuff I met them the other day so I want everybody body to know these people. Do we have Mariano from Maker from Sky that works with Rune? Like there's so much talent that I'm proud

that we have this talent and I want to show it to the world. So I think it should be a moment to celebrate that Ethereum is huge. Like Vital I know people that are not engineers or uh they don't know much about crypto on they took pictures of Vitalic running a few years ago in Argentina and Monosirus. I'm pretty sure if you drop Italic in some cities in the world, he would like most people wouldn't know him. Here people are like they know him. They all see him as a crazy they see him as most people see me as a neurodeenerative crazy person that wants to make the world a better place and that is trying to come to their country to help. So I think that's what we want to show like that there's a bunch of nerd that and we want to celebrate our nerdiness and that

we're happy about. [snorts] >> That's incredible man. I think, you know, it it shows that there's so much progress and potential in innovation and and what you're saying is that you've been able to harness this and you're really looking at this technology and you're looking at making this a cultural hub because you see the potential in the technology. I think, you know, there's other countries that that uh suppress this and they they try to fight it because they're so much of a blob. They're so much incumbent intermediaries that uh they stifle innovation uh for the sake of keeping their own power. Um, Fed, I mean, you've you've been a part of like several different companies. I don't know if you would consider yourself a serial entrepreneur, but what are you up to these days? Like, what what are you occupying most of your time

with? What are you most passionate and excited about these days? >> So, yes, uh, I am working on too many things. Yesterday we launched in IGO um a like a website to launch games before Steam uh an hour game an hour long Metroia that is going to be eight hours long. We're going to launch it next in Android, iOS, Steam. We have a like I I I worked quite a bit in back ends for games with big people uh like big players uh Alan and American that is part of our company. he like worked with all the big EA, Microsoft, everyone on he's helping us like create games. So I'm very excited by the gaming division of Lambda. We're

doing anime. Uh we're doing so many things on the creative side of wall of the world. We have a actually a media I want to show you guys afterwards when you come here called 421. It's about um uh life uh games, video games, tech, culture, uh books, stuff, nerdy stuff. I'm a nerd. So I'm proud of my like left side of the brain nerd part like similar to what you guys do is like explaining things showing other people this culture you guys do culture like you're trying you're a cultural movement you try to uh have your opinion on how things are happening in the world and then my more like right like rational side of the brain where we're doing cryptography I'm super proud of the work we're doing on in Ethereum I'm so thankful to the team

foundation uh people have been very harsh from my point of view to the YF especially at the beginning of of the year on the YF has been amazing with us like they help us they they made they like it's not easy to not be an American on a European in an industry where you're so far away and I'm not saying this because I'm like a big team or people that are racist I'm just saying like it's difficult you have less money you are from the outside and it's good to have people that try to help new players who come in and they help new play they help I don't know what other people can say like I can say they help us they help us to connect with correct the correct people. We're working on what's called Linium. Justin Drake, I think uh he has been speaking publicly

quite a bit. I recommend you speak with him about the future of Etheum. We're working there. We we had uh we sent some of our cryptographers, mathematicians, and engineers. >> Beautiful >> Cambridge. We're doing our L1 execution client. We're going to do Rogue. Like that didn't stop. Like there's we are waiting for Fusaka. >> It's coming. >> Exactly. uh it's like a roll up that is gonna from my point of view be the we're doing the future of Ethereum uh a little bit before Ethereum we're going to add some privacy sauce over there uh there's no we won't be in charge of the token I want the the smart contract to be native roll up so that we can don't control the multisig it's like a fully cippher punk

thing when I want other people to be in control of it um on yeah so what I am doing I don't know too many things I can go [laughter] >> wait forgot to say We're working there's going to be a huge announcement of stable coins >> and we're partnering up with a huge institution in Latin America to >> railways of payments too many things I cannot speak yet it's going to be pretty big but what we do our specialty is with working with bigger players than us on being loyal to them on executing on bringing people on board with tech on culture >> beautiful fed we got to let you go man thank you for joining us we'll see you in Buenosarees we'll see you at the uh beautiful space that we have for the Lambda class and rollup event on the

18th. We've got tons of signups already. Look forward to hanging out there. Um and man, it's going to be a great week. >> Thank you so much. Thanks. Thank you for giving us the opportunity to speak openly about things. I think you guys are killing it. I believe you're going to become the biggest media in crypto. >> Thank you so much. We'll see you soon. We'll see you next week. >> All right. Bye. >> Bye. >> All righty, guys. We got Sam coming up. Partner at CMT Digital. They've just put through a massive fund raise. Let's get Sam up in the back and get started. It should be a great conversation, guys.

Absolutely dialed in. $136 million fund raise during a draw down. They've already deployed 25% of it. Should be a great conversation with Sam. Let's bring him up and let's get started. Sam, congrats on the fund raise, man. >> Hey, thanks so much, Andy. Um, great to join you here. Longtime listener, first- time caller. >> I love that saying. [laughter] >> It's a pleasure to have you. >> Congrats, man. $136 million, 25% already deployed. Market's red today. I don't think your fund really cares. It's a 10 year, 20 year time horizon for a lot of these funds. Um, man, how did this

happen? >> Yeah. Well, we've uh we've really got our partners to thank. We've uh raised four funds now and have had a remarkable number of investors from fund one invest in all of our subsequent funds and um some new folks join us and trust us along the way. So without them it's it's it's not possible. And um uh you know as you said earlier it's really a gift to have a long time horizon and get to develop really solid relationships with the founders that we back and um and see you know incredible things play out over long uh time horizons and and and we've been fortunate to be um you know positioned with some really dynamic entrepreneurs that have made some some

awesome things happen. Um and so just thrilled to be able to continue to do that uh going forward here and and uh and and you know it's our our largest fund to date um uh and and some really seismic changes um happening you know at the government level um at the you know institutional you know readiness level um that just make me excited for this next chapter of crypto adoption. >> I love it. I love it man. I I think um you know the US is home to a lot of this innovation. We were just talking to FedE. The Argentinia uh conference next week is also home to a lot of this. But you know we were in New York for SmartCon last week and it was the likes of Fidelity, Black Rockck, the Fed, DTCC, literally we've been saying it

quadrillions in the room. We've we've surpassed trillions. And so you know as as we start to uh bring these two worlds together, DeFi and Wall Street are converging. what what's the thesis? Right? We've been saying that, you know, 2026 is kind of like the institutional year, the year of the institutions. Um what what do you think going forward? What do you what are you guys most focused on at the fund? Yeah, you know, I think like the table is set and it's really an execution game at this point and you know, it's it's really I think everybody can see the long-term vision that um you know, financial assets both you know, public and private will be uh tokenized. Um we

were we had the pleasure of of investing in um uh and and we're still large investors in in a company called a figure founded by Mike Kagny and he demonstrated in 2019 that there are real cost savings um in originating home equity line of credit uh lines of credit on chain you know all the reporting is centralized in one place and um and you can easily uh transact these digital assets um and uh he's just continued to realize more and more efficiencies by having these assets on on chain. And so there are tangible, you know, cost benefits. Um, and cost benefits are interesting because, um, you know, if you're operating on a lower cost

structure than than somebody, like fundamentally, you just kind of win, right? Because you can do things that they can't do. You can spend money that they can't. You kind of have more flexibility than they they can. So, you know, it really is like a black hole and all um all finance is going to collapse into this uh you know, on onchain rails. But, but you know, that's an easy statement to make. The the hard statement to make is how is it going to happen? So, we're looking for entrepreneurs that have a really unique lens and right to win and earned insight into how um capital markets are going to come um on chain. Uh, and so, uh, I think, you know, we're we're, uh,

looking to partner with exceptional individuals that have a differentiated view on, um, you know, this this long-term goal that we we all feel convicted in. And whether it's a um whether it's somebody coming from you know traditional finance or somebody that's grown up in the blockchain and digital asset space I think there's like a unique you know lens by which these different types of entrepreneurs come into um yeah the or look at at you know the adoption of crypto and we're um we are happy to take a look at and ultimately we have invested in you know people coming from both ends of the spectrum. Um, so >> beautiful.

>> Yeah, it's always it's always a go to market uh question. Um, yeah. And and uh that is uh that's that's what gets me out of bed in the morning just you know hearing big kind of secrets that are hidden in plain sight that these uh entrepreneurs uh uncover to me. >> Yeah, man. I mean I feel like um you know you've you've kind of [snorts] orbited around the new kind of categories that you guys are are looking for. You've said that you expect one or two new categories to really emerge, you know, this cycle, quote unquote, or just kind of this time around. We we see it each and every kind of bull cycle. Is there any early signals or market shifts that you're tracking right now that are defining the categories for the next

three to five years? I mean, I think what you've said with regards to bringing capital markets onchain is probably the biggest one, this RWA tokenization kind of push. um you know is that it or is there any other categories that you guys are firmly kind of seeing that you have an edge in or that you've developed a thesis in? >> Yeah, we we have long-term thesis research driven thesis that we've cultivated over several years and we try to validate or invalidate um you know uh based on on on new data that that's uh coming to to bear. I I think that the you know yield generation space I mean

I've heard it said that finance runs on on NIM and um you know there's so much to un unpack there uh but also new financial assets to be created um that can only be made you know uh through tokenization. I think Athena started to define a category of like you know uh tokenized structured products um and and I think there's going to be a lot of innovation um in in that space. I don't know that many people are looking at that as an actual category um in and of itself yet, but I think that's a that's a um a space that we're very interested in and have made um at least one investment into from from fund 4. Um,

I continue to think that the the uh breath and impact of the Genius Act is is is uh you know underappreciated actually by crypto natives. Um and and you know the people that are actually you know funding these companies. Um and so you know I think the the Genius Act uh could be the most powerful tool that the Treasury has um in its arsenal for um exporting US treasuries abroad and um and also you know materially improving the the life of somebody that's you know used to dealing with a highly volatile currency um you know everybody's going down to Argentina um next this week and next week and uh you know that is an economy

that's afflicted by persistent inflation and um has looked to crypto to solve a lot of issues. So I think you know now that it's kind of easier to export treasuries it's it's actually a mandate of you know uh treasury policy um and the policy of the administration. Uh I think we're going to see some really interesting uh um uh you know uh companies emerge in that space that are that become like systemically important as well. Definitely. I mean that is the biggest unlock I think just the clarity is changing. I mean it's we've already seen it just with like traditional DeFi uh companies and investors. We've got the framework guys coming on a bit later and that you know the they've been

talking to us a lot just about how if the founder does not have a very clear business model, a clear revenue generation plan, a very clear and wellacounted for idea, there's just no way it's getting funded. And like that is a seismic shift from two years ago, three years ago. And that is a result of I mean many factors. One being Hyperlid coming out and saying, you know, this is how we're going to do it. So if you guys aren't going to do it this way, well then good good luck keeping up, you know, with us. Two being Trump and the administration and just the all these regulatory clarity actions, you know, coming about. Uh, you know, and then three, I think just the market being overwhelmed with how many tokens there are. I mean, Pump Fun and the the lowering the barrier to entry of token

creation completely change the way that people think about them and I honestly are getting exhausted by them. And so, you know, with with this lens in mind, it does feel harder than ever to be a venture capitalist in crypto. While it is a 20-year bull cycle that we're entering, we we we believe that this year's the line in the sand for the industry, the career risk we feel like has been neutralized significantly. We feel like there's a lot of big swings that are possible to take. At the same time, the sophistication and the maturation of the industry does make it uh harder, meaning there's going to be winners and losers. I I I mean to say that not it was it it was always a layup back in 2018 to 2021 to invest, but it

was a it was less tokens, way less understanding of how everything worked behind the scenes, way less anti-VC rhetoric, and more. And so for founders pitching you now with valuations still under pressure, what differentiates a compelling investment from one you'll pass on? Like what are your 30 secondond filters? What are your musthaves for founders today? >> Yeah, I mean I think um you know so we have a we have a founder matrix that we score um our founders on. you know founder market fit um uh tenacity um you know what are their what are their earned insights um what is their talent magnetism you know Steve Jobs is obvious you know they they say that he

had you know kind of a like a cult he was a cult personality but he had a you know he was he had a magnetic uh or reality distortion field around him right where he was able to like convince you know crazy talented people to join him see that with Elon see that with a lot of um uh you the best investors or uh founders of the day. Um so so you know it all comes back and and and part of this is because it's a early stage investment but even as you know as we've followed on to later stage investments in our portfolios it always comes back to the founders um and uh and so um I think all the things that you had you had mentioned um uh previously are things that yes we're absolutely looking

at but they can all be encapsulated in in you know in the in the founder and and really we want to see um somebody that walks the fine line of of dreaming about building something that is truly worldchanging but is taking the practical steps towards executing with a high you know bias towards action. Then what about more specifically around their their their economics and their business and and that stuff? Like how how like are are you funding like like what do you need to see from a founder to and from a a like a deck slash a really on this revenue idea or on this business model? What are you really looking for?

Yeah, I mean I think they need to be using blockchain in a compelling way to um uh you know build a natural monopoly whether it's the network effects that can be you know created by a by a blockchain whether it's the cost structure that you're able to achieve um uh you know just better unit economics than um other competitors that aren't using this technology uh yet. Those are the things that we look for in uh you know in like the the financial vision.

Um and uh you know we're we we like to uh you know a lot of my inspiration as an investor is is is taken from like 0ero to one and some of the classic you know VC books. But, you know, I like I love hearing about, you know, this the um you know, the question that Peter Teal would ask is what is it what is uh something that uh is is true to you that most people would disagree with? And it's those contrarian insights that provide you the basis for really asymmetric return profiles in in investments. Um and those are like my favorite things to uh to learn about.

And so um it's really understanding you know where the asymmetry li the asymmetric metric risk profile in an investment lies. Yes it may go to zero but it could also go you know 100x a thousandx um and uh and and those are all based on uh you know kind of earned uh or derived insights um that that oftentimes seem extremely contrarian. Um and so just training the muscle to kind of go towards those sprint towards those types of thinkers is is is really important. Um and then you know ultimately we want to see defensibility around the business model. Um defensibility of uh you know economics over time that um that lead to an enduring you know potentially

generational business. and we're going to get a lot wrong and you know hopefully we get a few right along the way and have been fortunate to get a few right along the way in the past and and um and uh it's been extremely rewarding to to partner with um you know companies in this space because I think by definition crypto is is contrarian. I mean less so now than than it used to be. Um but uh but uh Chris Dixon writes in his book that like crypto is is very dis as as as is as disruptive as it can get be as a technology can be because you you are completely displacing legacy technology. You know we talk about the

tokenization of finance. That means that the old rails are out and the old ways of doing business are out and tokens and and blockchains public decentralized blockchains are in. like that's a big that's a that's going to you know piss a lot of people off >> um along the way and um and and we like those um uh entrepreneurs that are unafraid to do that because ultimately it's better for society. >> Sam, man, we appreciate your time today. I know we got a little cut off here a little short. Um it's been a busy busy day. We had special guests, etc. But we've been really holding off on writing checks from our fund. We just have like a, you know, a prop cap fund and basically like, you know, we're looking at the market right now and there's tons

of good good ideas, but they're all they're all in the spirit of the bull market >> and um I love it. I'm excited. Market doesn't look good today. Doesn't really matter. Bitcoin's as long as Bitcoin's around 100K, people are going to be raising, raising, raising. I'm interested to invest again when Bitcoin's at 75K, 70K. we see a bit of a decimation, a bit of a reset, and then we actually get some new founders in that are not just in it to ride the trend of the bull market. So, not sure how how you feel, but that's generally like how I'm thinking about it. >> Yeah, absolutely. I mean, I think I think that um if you uh have the mental fortitude to be um you know, bullish when everybody else is is bearish, that uh has really paid off in especially in

the crypto space over over several cycles. Um, I think the best entrepreneurs or or a lot of times the best entrepreneurs actually come about in the bare market because they're like true believers in the technology more kind of mission driven than than than uh bingo you know driven by uh by uh the prospect of a of a large exit or something like that. And those are the founders that um you know we try to we try to uh find and you know it's uh it's easier in in a bare market when uh when everybody thinks crypto is a is a pariah.

>> Totally agree. >> Got that right. >> We'll be around. We stick through bare markets. Appreciate you bearing with us. >> I don't even think it is a bare market, but it feels like a bare market. [laughter] >> You're You sound like a bear calling for Bitcoin 75K, Andy. I don't know. >> I think I sound very reasonable. 12,000 to 125,000. Okay, let's bring it back to 80K. See where everybody see where the chips lie, you know? >> Yeah, exactly. There you go. >> Sounds great to me. >> Some fun and turmoil along the way. >> Let's bring it down to 80K. Shake some boots, shake some freaking legs, pull some dead bodies up, and let's go again.

>> Yep. Well, that's crypto for you, >> Sam. Thanks for your time, man. >> Appreciate to have you on. We'll see you next time. >> Very nice. Very nice to meet you guys. Finally. >> Yeah, you. All right. Talk later. >> Thank you, man. We'll see you soon. >> Peace. >> All right, guys. Uh we're going to take a quick break. Uh we got another slate of guests coming in. Uh and we'll be right back. See you guys in a sec. Hey hey

hey. Heat. Heat. N. Hey hey hey. Hey,

hey hey. I want you. Hey hey hey.

All right, guys. We will have Damian come up and join us, the head of growth at Starknet. Uh he's in the back. We're ready to go. Uh Damian, I met Damen actually for the first time in Singapore uh I think last year before. Um so glad glad to see that he's still working with Starknet, still cooking. Let's bring him up uh and get the show on the road. That is not Damian. We got to go back. Oopsies. We'll get him up here, guys. Just give us a sec. Um Rob, what's going on in the market, man? Are we going to zero?

>> Um yeah, I mean under 100K, you know, definitely a psychological number there. >> Uh little market talk before uh we have a little more of a technical conversation with Damian. Under 100K, definitely some psychological uh you know, flipping happening. >> Oh yeah. I think there's some structural um you know there's people that bought under 100k and they've got lots of cash and they're not going to want to be underwater. So I remain bullish. I tend to think uh and something that we've talked about uh on this is that these uh these cycles seem to be much shorter and so I mean you could say we never really

had a bull cycle. We never really had a bare cycle. It's just kind of uh oscillating. We never had a bull cycle. >> All right, let's get Damian up. Can't have any more of this uh of this gaslighting here from from Rob. [laughter] Never had a bull. >> Damian, what's going on, brother? >> Hey, what's up, guys? Uh, good to see you guys. >> Good to have you, man. Uh, I mean, it feels like we're returning to fundamentals. ZK, things are coming back. Uh, and Starknet is leading the way. There's like this privacy sort of vibe. Zcash, uh, Stark and Near all kind of, uh, all kind of leading this vibe.

Um, what's been the sentiment like? How how are things at Starknet? What's, uh, what give us a little temperature check over at Starknet? >> Yeah. Yeah, it's it's really exciting. Um, I've been at the foundation for like I think uh maybe just over or close to two years at this stage. Um, I think maybe outside of the airdrop, this is one of the most exciting times that it's been to to be part of the company. Um, it's also the culmination of like a lot of hard work and it's nice to see that the market is starting to revalue fundamentals and revalue like the innovation and the tech that underlies a lot of these uh uh networks. Um, privacy is sort of like it came out of came out of the blue. Um I think a large part of the attention and also uh the interest

has come from the fact that Ellie is uh uh is is a co-founder of both Zcash and and Starknet. Um and he's one of like the original authors of a lot of the papers that um underly how uh these can apply to to blockchain technologies. Um his first I think appearance or his like foray into crypto was like uh the 2013 Bitcoin San Jose at Bitcoin Miami conference I think San Jose. And at that like particular conference, he was talking about how he could apply at the time ZK snarks and I think PCPs to Bitcoin and enable private transactions on Bitcoin. And so this is sort of coming full circle moment. We're moving over to Bitcoin and privacy is becoming really interesting now and it's nice to be able to like fulfill this uh this

original vision. >> Very cool. Awesome. Um and and so I mean we had a conversation earlier with the guys over at Near. was very privacycentric Zcash and obviously these uh shielded transactions. Why why like what is the philosophy around privacy at Starknet? Why is Ellie so uh fixated on it? What what from your perspective is so significant about incorporating privacy into the onchain systems that we have today? >> Yeah, that's a great question. I'm probably going to put my own position here and and I want to try to represent how how Ellie feels. Um, but there's like a a very unified vision of like what we're trying to do at Stocknet and

it's to like there's different ways to put it, right? You can become the execution layer for Bitcoin. You can become uh the financialization layer of Bitcoin. You can make Bitcoin the the the end means by which people transfer and transact in value. Um, I think a lot of us came into crypto wanting this like original vision. Um, if that was to actually ever happen, uh, one of the key characteristics that Bitcoin would need to be able to have would be privacy. um similar to how like I can't see your guys' bank balances right today. Um it's it's one of the fundamental tenants of of uh how of some of the fundamental requirements of money. Um and it's to not know exactly how much someone else has. Um yeah, and so I think like bringing it

back to like uh why this is so important in our broader vision and what we want to do on Bitcoin as well. Um it's that if we uh truly want to bring Bitcoin to the masses and become a network where financial markets and capital markets can be built around Bitcoin um privacy is is one of those characteristics that we need to solve and we need to be able to enable for Bitcoin as well. Um and yeah that's why uh that's why I think this narrative is so exciting because it does feel like these two worlds are like almost meant to be together. Um and it's sooner or later that uh this is going to happen.

>> Yeah. So for those who don't quite understand how starks work it, you know, is starknet as it's designed today a private chain because you know there's a public block explorer there you can go on stark scan you can go on voyager or uh perhaps I've you know messed up the name there you can go on a couple of things see the transactions so stark as it is today isn't necessarily a private chain but how does that like is there a development plan to become a more private zk oriented chain that actually like has the benefits of that or like what is the what is the internal dialogue with regards to the stark net chain with regards to its privacy?

>> Yeah, exactly. So, starket today uh is a transparent blockchain. So, there is a block explorer. It's voyager and stark scan and and you can see transactions on stacknet today. Um everything that we've been building over this last two and a half years has been around scale, right? Um, and I guess to any of your audience that is familiar with ZK, ZK essentially solves two things. It solves scale and solves privacy. Um, we've had this first component as the primary focus for building up a general purpose blockchain. Um, but this next part, privacy is uh uh a product uh milestone or or a product step that can be integrated uh I would say uh pretty easily. Um, what we're very excited is this is the the next focus for us. Um I

can't give an exact timeline but uh if I were to paint a vision for like how privacy could be able to exist on a private blockchain it would look something like an asset standard uh which uh has privacy features or shielding features inbuilt into that asset standard. And so users could swap and unswap from this asset standard. And then when they swap into the asset standard, the underlying either goes into uh some sort of unified uh pull or goes into some sort of mechanism. And then transfers within that asset standard uh become shielded and private and then transfers out of that standard um then become transparent on the blockchain. Again, it's a a midway point. Um but it's a it's an really exciting even like as a thought experiment, a really exciting thought

experiment to go through. Um, I think for compliance systems to be able to uh have a meaningful place and and and and host meaningful financial activity today, it it it definitely requires privacy. Uh, but it requires privacy in so far as it won't censor or in so far as uh uh it's legally compliant and uh it won't enable uh I guess the activity that that like public blockchains uh don't want to take place on the network. um this is in my mind like like how how it would happen. Um but yeah, it's a it's a transparent blockchain today, but adding that feature is uh is something that we're we're looking for now.

>> Yeah. I feel like S2 is a big part of this vision too, right? >> Yeah. Yeah. Exactly. Um >> kind of like the like general purpose ZKVM enabling generalizable ZK proofs, >> you know. >> Yeah. Yeah. Yeah. Exactly. uh Abdell I think is he's the head of ecosystem at starkware which is the lab side for the foundation. Um he's the one who's like really making this big push and he's the one who's sort of uh been like a cyber punk and and and privacy maxi from the beginning as well. Um he's doing a lot of very interesting work on this front. I think they're exploring at this stage a white paper that looks into how we can uh become a Zcash L2. Um there there's there's a lot of really interesting stuff that that's coming out

from his side. So, I think it's uh it's many different angles to to go through for for privacy. >> Now that you guys are you guys are scaling, you're you're incorporating Bitcoin into the into the road map and and you know, bringing Bitcoin DeFi uh as a centerpiece for Starknet. Obviously, you know, you you are an Ethereum L2, but you know, a as you get more and more ingrained into Bitcoin and you this is kind of building on on your last point about becoming a Zcash L2. Is there a certain point where you become an Ethereum L2, a Bitcoin L2, a Zcash L2? You know, what what does the world look like? What what's you know, how are you thinking about becoming a little bit more expansive across the entire onchain landscape?

>> Yeah. Yeah, that's a great question. I think it's really interesting, right? Um the idea for like starknet and even starkx which is the private blockchain that starkware had created for dx and immutable and such. The idea underlying all of these innovations was to be able to enable scale um in an execution environment that had very little uh limited compute. Um and Ethereum at the time happened to be the most applicable environment to apply this technology in. Um Starkware was like I think one of the earliest recipients of a grant from the Ethereum foundation to do this. uh but as sort of like all these systems are developing and you know we have Bitcoin and and all these other things happening like the the same tech can uh theoretically be applied to any like environment with limited compute and so

there's like other like I guess uh implementation questions that need to be considered like what happens in dual settlement what happens if there's um I don't know a reorg on on one of the one of the chains and and there's like more things to be worked out on that front but it's exciting to know that theoretically uh the same thing can can be applied to Zcash, it obviously is applied to Ethereum, it can apply to Bitcoin, it can it can continue to go on um and even if it doesn't happen in this like dual settlement infrastructure, it can happen in a way where uh the uh a new chain is deployed as an L2 and then between these like almost starket L2 instances, the interoperability between them will be very smooth as well. And so

I also foresee this world where you could have a starknet L2 instance on a Zcash and a starket L2 instance on a Bitcoin, a starket L2 instance on an Ethereum. And the interoperability between all those L2 instances is actually very smooth because they all use the same programming language. All the apps can be deployed very easily again on each of these L2 instances and then you run well and then you you don't have to solve for the issue of what happens if there's a a rig on on the base chain. Um but it's it's it's it's very exciting I would say and uh I don't think like like from a technical perspective there's nothing stopping this from happening. Um it's more about an implementation like like how do we actually uh make this happen.

>> Yeah. I mean I think like what what the market's excited about is basically seeing um the entire like cyber fun cipher punk values come back with regards to privacy and then doing this in a way that technically is very sound. And so what you've just described is like a very technical roadmap to get to where you you know you want this uh you know effectively this network to be. And you know I'm a bit worried that Zcash might just be like flash in the pan and people are getting over excited about it. Like do you guys like people are like Arthur Hazel was on a podcast with CoinDes today saying that Zcash is going to get to 20% of Bitcoin's value. Just like like really big claims. Um I don't know man. I don't know.

>> Yeah. Yeah. I mean I can't I can't comment on uh on whether or not it'll be a flash in the pan. Like I I think uh crypto especially valuations in crypto are kind of based on two things. Like you have your fundamentals which can be calculated as like a function of like revenue multiples and then you have mind share which is just completely intangible right you have one thing take off one month and it's just like a thousandx. Um, if I try to boil it back down to like first principles and what people want and what customers want and where the end state will be, I would say that privacy at the very least intuitively feels like it should have a place in that end state. And so maybe this narrative mind share aspect of it right now is a bit of a is that a fever?

Uh, but I would say that it's probably a a core thing that the mind should continue to rotate back to versus a lot of like the other uh more more transitory things that the the industry has been obsessed with uh over this last cycle. >> Yeah, it it it really does feel like it it kind of came out of nowhere. It caught a lot of people by surprise and, you know, it was opened up uh with with near intense. kind of took this walled garden. Um, but I also expect ZK to do something similar where it it'll kind of revitalize the interop landscape and it'll connect a lot of these chains. H how much are you guys thinking about,

you know, what where the next user comes from on Starknet? Are you guys thinking about kind of siphoning off users from Ethereum, you know, kind of looking at, you know, you know, ETH mainet? I I mean or are you guys looking outside the industry at you know more consumer spaces? Where where do you see maybe give us some stats you know on on the user activity of Starknet as of late and then also where you anticipate more of these users coming from? [snorts] >> Yeah, that's a great question. I think maybe to answer it I'll I'll wind back a little bit. Right. So, it feels like this Cambrian explosion in like L2s um arose when like uh ETH gas fees just spiked to crazy amounts in DeFi summer,

right? And everyone's like, "Ah, we need more block space. We need to do more things." And then everyone like, "Oh, more block space. Let's let's build L2s and uh that'll solve the problem." And then we sort of hit this uh reckoning where we're like, "Oh, not everyone well now we have too much block space and not everyone actually wants to transact on this block space." And you see a lot of like L1's and L2s really struggle to gain meaningful uh not even mind share I'll put that aside but but meaningful traction in user activity. Um I think where we differentiate now in particular is it's less about just more block space and more about uh what do people actually want to do with that particular block space. Um I I was very fortunate I got to be a play a big part in the BTC

stuff we were doing recently. Um, but the Bitcoin like play for Starknet I think is genuinely one of the most exciting things that a project in crypto today could be doing. Um, if I look at what the real unlock is and and what people uh actually want to do uh with their Bitcoin today, I would say is they want to access financial markets with their Bitcoin or they want to hold their Bitcoin. And then if you want to access financial markets with your Bitcoin, you really only have centralized financial markets. So like a a sex or like a like a centralized lender or uh someone that's has a counterparty um or or you have decentralized financial markets for Bitcoin. Um and the biggest validation I see for this is actually unit and

hyperlquid rate. um units UBDC and the inflows that they see and and the spot volume that goes on for BTC to ETH trades on Hyperlquid is a testament to show that if you give people a way to maintain the anonymity from Bitcoin into uh an execution environment with financial markets uh and not compromise on I guess there's an added trust assumption for unit but not compromise on security at the very least um then people will actually come in and they'll use that mechanism and then they'll they'll use their bitcoin in financial markets. In that Wales case, it was uh spot markets to sell their Bitcoin for ETH. Um for Starknet, uh the endgame is obviously settling on Bitcoin and then

that settlement allows for trustless Bitcoin. But even before that endgame, uh we have partnerships in place with like Elpin that will allow for uh a bit VM bridge between Bitcoin and Starknet that will be trust minimized. Uh even before that, hopefully we have like a little interim step as well. Uh but the idea is if you can offer uh Bitcoin holders uh a secure way that still maintains their anonymity or their pseudo anonymity which if you deposit Bitcoin onto a centralized exchange you lose a pseudo anonymity. If you can maintain that and then you give them robust financial markets like swaps, like derivatives, like credit, uh they will come and use it. And I think that market is entirely underexplored right now. um we went we skewed way too far on

the uh cheap block space on L2s for Ethereum side and we we really left that aspect of like giving optionality for Bitcoin holders uh behind for practically like two cycles. Um it feels like the market's moving back towards this now. Um and the amount of capital that's kind of locked in that area is uh is is is enormous. Um, and so yeah, I guess uh so a long way to answer your question is the next user that we're targeting for Stocknet is very much that segment of the market that that currently hold Bitcoin that don't want to lose anonymity that want access to financial markets. Uh, and we want that to be on Stocknet.

>> Got it. Makes sense. Uh Annie, I think you're on mute, but >> we're bringing capital markets on chain and they want privacy and they want speed and they want customizability and real reasons to use blogspace, not just all this commoditized same looking Blockspace right? >> Exactly. Exactly. Uh Bitcoin capital markets that that's pretty much it. >> I think one one thing that strikes me about Bitcoin DeFi, Bitcoin capital markets is that it's a mostly institutional asset. these days like crypto Twitter doesn't own any Bitcoin um for the most part. Uh Czech Republic's central [snorts] bank bought a million dollars of Bitcoin today.

Luxembourg has some Bitcoin. Uh like this was always the dream for Bitcoiners was that nation states would buy the bags um and it would be digital gold that would be the reserve asset of the world. and it's kind of happening, but it's an entirely different go to market strategy for an institutional asset class versus a retail asset class. How much do you guys think about this? What is the institutional Bitcoin capital market strategy? >> Yeah, that's a great question. Uh I think I think it's a few, right? Like like you're right. I do think uh the endgame vision many years ago was that nation states would start adopting

Bitcoin and we are seeing really good traction there today. Uh we're seeing more and more institutions add Bitcoin onto their balance sheet and as a way to diversify the treasury which is also very exciting. Uh you're right it it does seem like crypto Twitter as a majority don't hold that much Bitcoin. I I think it's also a product of uh uh crypto Twitter across the last two cycles have kind of come in and like built their bags around uh altcoins. Um, but I would say like maybe if you like move back to like three three cycles ago, um, most of those people had a very large proportion of Bitcoin within their portfolio. Um, I also expect that to change, right? I think uh I I don't know what market this is going to be if it's going to be a bull market or a bare

market, but assuming during the next bare market and there's a big consolidation and a big weakening and the alts that don't actually have PMF and and value proposition and users and traction in a direction that they're actually heading towards the market, uh they'll continually get continue to get crushed and and the market will have to consolidate around hard assets. And those hard assets are either going to be stores of value like Bitcoin or assets that have uh meaningful revenue that they can actually back into like a a reasonable valuation. And I think post that consolidation like that new uh tranch of of crypto Twitter people, they'll again have a lot of Bitcoin and then they'll sort of be looking for these same things again. Um, but I guess like Stocknet, we're still in the early innings now. Like BTC 5 was very much

about building the like onchain financial infrastructure for BTC assets and DeFi to be able to do things uh just generally on chain. There's still a lot of work to be done, right? We need to increase liquidity. We need to increase optionality. Uh we need to have more secure Bitcoin rappers. We need to we need to have privacy features inbuilt into those rappers as well. Um I would say once we have that infrastructure layer really robust uh then we can start looking into uh more institutional specific strategies um and I think that those opportunities will will be uh will become more and more bountiful right as more DATs happen and as more institutions add Bitcoin to the treasury uh they'll similarly want access to to credit or or to uh leverage against that part of the treasury and and to access

cash against it and to fund opex and to hire more people. Um, yeah, all in true course. >> Yep. Incredible. Damian, thanks so much for joining us, man. Starknet has been an incredible uh builder in the space. You have been there for going on two years. We're friends with a lot of people on the team. Ellie's come on several times. I chat with Benjamin on a pretty regular basis. He's doing a great job. And uh, you know, keep up the great work. You guys are >> Are you guys going? >> Yes. Yes, we'll be there. Uh, I'm guessing you guys will be there as well. >> Hell yeah. >> Let's do it.

>> Yeah. Also, Robbie Benjamin's a huge fan of you too, Andy. Um, he says great things about you guys, and it's great to be on here. >> Awesome, dam. >> Absolutely. Well, thanks for coming on, man. We'll we'll see you next time, and uh let's link up. Grab a steak and uh and put on >> Yeah. some some and some wine. >> Let's do it. Let's do it. All right. Thank you, guys. >> Bye, brother. >> Later. >> Cheers. Bye. >> All righty, guys. Take a quick breather here and be back for Clouted from ETH Strategy. Then we've got Vance and Michael from Framework. And yeah, guys, hold on to your butts. See you in a sec.

Hey hey hey. Heat. Heat. Hey hey hey. Heat. Heat.

Yeah. Hey hey hey.

Heat. Heat. Uh yeah, push. We'll go.

All right, we're back from a little commercial break. We got Clouded, the founder of ETH Strategy. Should be a pretty fun conversation. I'm pretty curious because ETH strategy is one of the few uh onchain native treasury companies, if you want to call it that. They're, you know, obviously learning and taking quite a bit from Micro Strategy and some of the other uh Ethereum related treasury companies, Bitmine, Espet, we've talked to some of those guys as well. Uh, but you guys are an onchain native uh Ethereum treasury product. And so I'm pretty curious what your take is on DATs in general and then also how uh how you came to uh ETH strategy and why you chose to build this

onchain cloud. It's your first time on the show, man. Welcome. >> Yeah, thanks for having me. Uh, it's good to be on. I like your I like your show. I think you guys do great streams, so it's awesome to be on. >> Um, and yeah, I guess where do I start? A bunch of questions. So, I mean, thoughts on DATs. Uh, I think DATs are interesting vehicles. Um, I think that, you know, I have a probably a more broad perspective on where they can go. I I actually consider them as uh potentially the future of asset management. Um I would say that the model of accretive dilution and the idea of basically giving the the returns of um the assets under management in the form of uh like

this accretive dilutive leverage to the holders of the company is an interesting model. I think it can go much more beyond just acrewing like one certain asset. it can become like an entire asset management thing. Um, and I do I do think that it enables good exogenous ways of acrewing value uh for the the holders of the shares or the token in our case. So I think I think that's are interesting and we we've only really scratched the surface of where they could go if people are creative enough with the financial engineering behind uh the way that they accumulate and manage assets under management.

>> Yeah. So, give us a little bit of a sense of where we're at today. Um, you know, Bitcoin broke under 100K. Uh, ETH is kind of trailing a little bit, you know, around that 3,200 mark. Maybe it's going to tag 3K, maybe goes under 3K. And obviously, DATs hold a lot of the spot asset and then they have their uh public share circulating on uh, you know, regulated public exchanges. Um what are what are you seeing out there in the DAT world uh given the market conditions that we've seen today over the last couple days? Um and like we were saying, you know, a lot of these DATs were born in more positive market conditions. And it was real easy, right?

The formula makes a lot of sense. you know, spot asset goes up, uh, more net assets, borrow money, buy, uh, or excuse me, raise money, uh, and and sell more shares, um, to and then buy the buy the spot asset again, and the flywheel continues. But that flips in more negative market conditions. So, h how are you seeing DAT react to this change in market structure? Yeah. Well, I think the the first DAT that's done something um different so far, which is the obvious thing to do actually in in the D that space um after going under under NAV is I think it was Ezilla, they actually sold ETH to buy

back their shares. Um and this this does make sense uh from a purely financial perspective because um each share of a DAT should be representing X amount of assets. You know in in this case it's ETH. Uh so if your share is trading under its NAV value, you can effectively buy back and and multiply for the remaining shareholders the assets backing each uh share remaining. Uh it's a it's a tricky flywheel though because whilst it does make sense financially, it increases the effective uh asset backing per share. So ETH per share for their case, it's a slippery slope because you could end up winding down

quite heavily if market conditions continue being bad. Uh so if your stock keeps getting hit uh and you know going down, you're just going to constantly sell your treasury off uh buy back your stock and and it could wind down quite heavily uh and it could hurt you on the on the way back up. So I think whilst it makes sense and probably does benefit existing like the holders that are existing and the shareholders that are existing uh yeah it is a slippery slope. Um I think that the maybe an alternate way I don't want to say better uh I think it's better personally but it's yet to be seen uh to deal with probably more negative market conditions for for DATs is to look into um different forms of uh a creative dilution. So instead of

just pure equity issuance and pure ass uh assets under management utility uh you can look into issuing more exogenous debt products or alternate ways of raising capital in in these different uh market circumstances. And this is something that, you know, ETH strategy actually led with um uh mainly because being onchain, we don't have the certain advantages that these traditional finance stats have where they're able to have this deep liquidity on the stock market to to sell their equities into. Um so we had to go with more of a an exogenous debt issuance to to raise capital. I think for a lot of these treadfi dats that might be the answer in this falling uh market but uh again it's

harder to sell. So it's really a balance on on how much they can raise with the the other exogenous products too. >> Awesome. Makes sense. By exogenous products you mean uh raising debt but not selling any of the asset? uh where where do they you know if if they can only they they I'd imagine have some sort of loan to value ratio as well based on the amount of debt that they have outstanding where where do they find you know the value to collateralize the debt is it still based on the shares that they have >> it would be based on the shares so this is where the financial alchemy comes in and really this is where sailor shines because um sailor cropped onto this basically much quicker and and the

earliest this person to do this and and uh and I believe it's because he had to do this. So Sailor MSTR was not born in a very bullish environment where there was all this irrational bullishness that could just bid their stock to premiums and allow them to just plow their equity into premiums. Um so they had to come up with more creative ways to raise that money, right? And Sailor came up with this convertible note issuance that he has. And what that is is basically it is a loan. Um so they sell corporate bonds but unlike just a very standardized bond where you promise to pay the principal back plus interest um instead of like you can think of it as instead of giving an interest rate on the bond you kind of promise to give the principal back at

maturity or you also promise to give them an option that they can actually exercise to convert to equity. And this is like crucially really important in many dimensions but uh one of them is because if the asset does go up over an extended period of time over the duration of the bond which are usually four five years um it's it's rational for every bond holder to convert to the equity because they're going to make so much more than just getting their principal back. Um and that's where really the accretive dilution comes in and uh and the need for never actually paying off that debt just diluting your equity. uh and because it's it's issued on the equity, you don't actually have this liquidation or margin call feature on the assets under management. It's not

like a normal loan that they'll take against their Bitcoin. >> Um and this is the type of interesting financial engineering that I say that they can use exogenous products to do uh to continue like their flywheels of increasing assets per share. >> Got it. Is this exogenous debt vehicle the same mechanism that you've engineered onchain with ETH strategy? >> Yeah, this is uh this is actually what inspired us uh because we looked at sailor very a long time ago in 2024 before the whole that wave even took off and uh we're a bunch of options traders and quants on our team. So what we were fascinated by uh was actually this convertible debt mechanism that Sailor did. Not so much the fact that he was

you know accumulating Bitcoin or this or that but the fact that he sold 8 billion dollars of these converts. Uh we were wondering like you know why or how. And when we looked into it it was quite genius. >> So being a very ETH maxi as people call me which I am I guess self self-proclaimed. Uh the first thing that like occurred to me was well this should be done but for ETH and then the second thing that occurred to me being the DeFi Maxim is this should be done onchain because it's it's possible to do this and and uh you know in my many years in in DeFi since uh you know it basically was born. Um I think that I I've had this thesis that democratizing you know financial products and building them

from first D5 principles is the future. it's the way to to do things in this space. Um, so naturally that's that's the direction we decided to take is to kind of replicate the core financial engineering of the convertible note trade but as a as a D5 protocol that kind of does that. Um, a very other left curve way of doing this is a left curve way of explaining what we did was you can think of um you can think of Athena as a protocol that also did this. It kind of democratized the basis trade. So people were running the basis trade in Trafi, right? they were using CME futures and spot ETFs and whatnot to kind of like long and short and and ex extract the funding rate. Um, and they had to manage that position and then

along came this protocol that kind of changed it into a one-click product, >> right? >> Uh, and and democratized it for everyone to access. uh we kind of have that same vision with that convertible ARB trade that Sailor did is to to bring that onchain for everyone to be able to uh really access because we believe that it's a it's a great trade to be done. Um, and I can get more into that later if you like, but yeah, that that's the core of E strategy. >> Before we get into that, one one question I have is that most of the value at least, you know, from from the perspective that we've shared on the show has been look, there's marginal buyers that are on the on the periphery looking in and they don't have the

regulatory framework or or the corporate structure that could allow them to buy the underlying asset, right? they just whether it's a they're lacking a custody solution or you know uh there's uh sovereign wealth funds that are only permitted to go into to public regulated markets. You know there there's buyers that are on the outside looking in that don't currently have an the ability to access um ETH Bitcoin these sorts of things. And so by issuing some sort of company share on a publicly regulated exchange that would give these um these marginal buyers a venue in which they can access this market. But by having an

onchain treasury product, you you know there there isn't a publicly registered vehicle or or venue or buyer that's going to that's going to now have access that previously didn't have access, right? Because now it's on chain. if they, you know, have access on chain, they can just buy the underlying spot. And so when when that's the case, right, in the in the case of ETH, ETH strategy, where like what is the additional value? And it's clear there clearly is like additional value, right? Because you guys have uh you're trading at a premium to NAV. So what what would you say is the value proposition of Strat, right?

the the ETH strategy token uh that exceeds uh the underlying ETH in the treasury. >> Yeah, it's a it's a good it's a good framework to think in. So I think that MSTR and the other DATs, they certainly do have a level of access premium like you said. So there's a bunch of there's a bunch of pools out there that um can only buy stocks, you know, equities per se. So there's this access um advantage that comes to these DATs creating these treasuries. Um now crucially if you look into MSTR a lot of those convertible notes that were sold um I don't know too much about you know well no one can really determine the the stock purchases

like you know maybe you can if it's sovereign wealth funds and whatnot but the convertible notes was mainly gobbled up by Wall Street themselves. a lot of investment banks and and uh and funds that you could argue if they wanted Bitcoin exposure, they could have it, right? Um but they still chose to buy his converts. Um and that's because um in finance, right, there's there's many dimensions to when you're bullish on an asset, there's many dimensions to how you want to kind of like get exposure to that. So uh I think the convertible notes offer this extra value that is not possible in in any other way uh even if you just buy bitcoin right it gives you downside protection so if you're a bit

uh risk adverse and you want to take a bet on bitcoin but you want some downside protection buying the convertible note can kind of ensure your principle gets returned back to you but if it does go up you capture a lot of the upside uh and then more so than this crucially uh is actually the fact that because convertible notes have embedded options in them, options themselves are inherently valuable. And this is where we believe most of the demand comes from. And what we've actually done on chain, which I'll get to, is when you have this option to convert, you basically have a call option on the stock. And if the stock is just a proxy for the underlying, because that's all it does, it holds the underlying, you have an option on, you know, essentially

Bitcoin or essentially ETH in our case. And when you have this option, you can do a few things. But crucially, the reason why we and even MSTR back then issued the convertible notes and they sold off so much is because um we purposely mispric the option. So this option is supposed to have a value uh but we sell it for extremely cheap or we basically sell it for the implied cost of capital. Like you could buy a convertible note for a million dollars and instead of getting your whatever your cost of capital is, if you can earn 5% on that mill, uh you're paying that basic cost of capital to own this note instead. But you're getting this option that you can actually use uh to kind of trade the volatility of the underlying

and extract an even higher yield out of this. Um and that's what E strategy has done. So, might be getting a bit too technical looking at your face, but >> No, I'm just thinking I'm just thinking like, you know, why would you mispric the option? Why wouldn't you just set the strike price of the option lower? >> You give up the option for cheap because you as the entity, you only care about one thing. So, there's it's a two-sided market. ETH strategy only cares about accumulating ETH. We only care about buying ETH and we care about holding it for a very long time because we believe over a long period of time the price is going to go up and we want as much exposure to this asset as possible. The best way to do that is to take on debt.

Now the best debt you can take on is non-liquidatable debt. So to take on this non non-lquidatable debt, no one is like [ __ ] enough to give you a loan for free to go and buy an asset and hold it for five years. So you have to give them something of very high value and we don't want it to be a funding rate. So what we give them is this option on our on our equity and uh and basically because this option uh is kind of free what they can do is they can hold it as a very longdated call option on the underlying and then they can go and for example they can sell shortdated options on ETH as a hedge every week and pocket the premiums and that's what we actually

automated on chain. So we have a product that does this with our with our conversion rights on E strategy and it's been live for uh just over two months now I think two months and one week and uh there has not been a week where it's been under 10% yield uh annualized yield and the highest annualized uh week was actually over 70% annualized. >> So by just by selling these weekly call options on on Ethereum against these longdated call options on Strat. Um, and that's basically why we think that there's so much value here is because there is a trade. It's an options trade.

And crucially, it's a volatility trade that is only enabled because someone which is the debtors can acquire mispriced options. If you go and buy an option off of Darabit or Derive today, it's not mispriced. It's perfectly sharply priced because these people only speculate on options. So, they're not going to sell you a cheap option or a free option. There's no ARB there. It's like buying ETH at at the market price. You can't buy ETH on Binance and then go sell it on Coinbase. But if you someone gave you a free Ethereum, >> you can go and sell it for 3,600, 200, whatever the price is. I think it's going down as we speak, but you can sell that immediately and pocket that, right?

So that's that's the AR that's going on here. And um and it only happens because you have this other side of the market which is the equity side which is like strat holders or you know sailor or whoever's on the that side that is irrationally bullish on this asset for a very long period of time. >> Wow. This is and this is f. So, so when you're uh issu So, you issue the uh the option on your protocol and then is there a second? So, there's a secondary market for these options in which I can I there isn't a secondary market for this option. I'm going to go sell a normal uh

>> ETH option >> ETH option. But the option that I get is for from strategy is from ETH strategy. Right. >> Correct. So what we've done is we built a we built an automated vault. It's called ESPN. So it's called ETH strategy perpetual note. And what this does is it allows a normal person to go and put USD here. And it and it acts like a yield vault like you would in any other yield vault in DeFi. And the strategy behind this this yield vault is that it takes the USD and it bonds it to E strategy. when it bonds it to our protocol, our protocol goes and buys ETH with that with that dollars because that's what we do when we take on that loan and we give uh the the vault basically a longdated

call option on our underlying ETH in our treasury >> uh for very cheap. Then this vault uses that as collateral on derive which is the decentralized options platform that we've partnered with because we're very close to the team >> derive >> and okay >> yeah derive and uh everyone should check out derive it's a great platform and uh our vault automatically sells weekly ETH calls every every week against this longdated call that we're holding and we're actually pushing so much volume through derive because of this and uh and we and it spits out yield every week and we give that yield to the vault uh receipt holders that put the USD in and uh and this is kind of what we've we've built on chain to kind of represent that volatility trade and productize it.

>> Wow. And do you guys have to take custody or is this all smart contract based? >> It's uh it's all smart contract based. There is multists in there. >> Okay. >> Yeah. >> Cool. Okay. Um man, Cloud, we've only got a few minutes left. I I just want to give you a chance to kind of kind of like wrap things up, you know, just summarize maybe what we talked about today because it's a very I don't even want to it's when we really think through the mechanism, it's not necessarily complex. I mean, it kind of builds on our understanding of debts and how they issue debt and not just any kind of debt, but this particular type of debt um that offers the lenders who give the money to the debt. it offers

them an option, right, at at uh a pretty fair price uh for those shares. Um and that is part of the incentive as to why lenders are going to lend money to the DAT so that the DAT can buy ETH or Bitcoin or whatever they may choose to buy. Um and because there's a robust options market on the underlying asset, um you can you can do this. >> Yeah. Crucially, they acquire the option for cheap. That's the ARB. Really, it's just a massive arbitrage. And the reason they get the option for cheap is because us, the the [ __ ] Dgens that want to go long, we just want debt that doesn't get liquidated. [laughter] So, we're we're happy to give out these cheap

options, right? So, that's that's the crucial AR that's happening here. And and yeah, like I can wrap it up like I think um like I really appreciate the time on on the stream. I think if everyone wants to go check out E Strategy, um you can look at the Twitter. You should definitely jump into the Telegram. There's a public TG that you can find on our website which is estrat.xyz. Um, and the the product I was talking about was uh ESPN, the E strategy perpetual note. It's live right now, so you can put USD in there. Uh, you can mint the vault tokens and you can kind of like start getting that yield. It's not a perfectly uh redeemable vault, so I wouldn't treat it like a stable coin.

Uh, but it definitely has liquidity buffers and and all these things. uh there's some level of like education curve to look into and feel free to talk to the team in the telegram but yeah it's a it's a very interesting D5 protocol here that we really did bring a trady trade and democratize it in DeFi uh something like no one in DeFi could get yield from the volatility of ETH before this and we brought that to the table >> love it um yeah there certainly is an education gap but hopefully we helped to close that today clouded thank you so much for coming on man absolute pleasure And uh inshallah to our eth bags.

>> Yeah, inshallah. Thank you so much. Have a great day. >> Thank you, man. See you soon. >> Right. >> Bye. >> Love it. That was great. Um man, complex, but you know, this is not just another, you know, unis swap v2 fork bridge fork like copy pasta um code that we see we've seen a thousand times. is not some general purpose L2. Um, you know, they these guys they they recognized the the treasury strategy that was working offchain. Um, and we sort of cleared up the misconception that all of the value was just uh in offering a regulated uh uh product to people that weren't able to asset uh or

access uh the underlying spot asset. And so I think, you know, that certainly uh cleared up things in my mind. And I think these guys are really on to something with this primitive. Um definitely worth checking it out. And I've heard really great things about Derive as well, uh the options protocol. So check them out. I think they're doing some funky things with their token uh like doing a rebrand. Maybe there's some uh ways to get involved there. Definitely check it out. So guys, we're going to have quick standby and then Michael and Vance are going to come on. Anniey's going to join us again and we're gonna keep this thing rolling.

Be right back. Welcome back to Rollup TV. We've got our

lovely friends Vance and Michael calling in from the usual San Fran. Guys, it's freezing in Florida. Um, and Robbie and I are both cold. Hope you guys have had way better weather than us. >> 50 degrees is freezing in Florida. How are you guys doing? >> Good. It's uh cold today, but with 75 and sunny all weekend. There you go. You guys been pretty locked in, huh? Spending a lot of time in the in the office. >> Just like 9 to5 in the same conference rooms basically the entire day. Revolving door of guests just like one after the other.

>> There you go. Why are you guys so busy? What's going on? What's cooking? >> We're we're in the lab. >> Yeah, >> in the lab, huh? Um I think uh the growth of RWAS on chain is driving a lot of interest from people and also a lot of investing and you know pretty colorful past two weeks with those I think three or four small stable coins blowing up. But >> it's funny like every large asset manager in the world is effectively coming on chain and asking how do we bootstrap these things for liquidity. So that you got kind of the institutional side, but you've also got the side of just like the RWA dgens, which I honestly didn't know was a thing until last week, but the people love yield and it makes sense. Last cycle rates were zero, there's really no looping of like

yield to be done, but now with all the tokenized yield products and all the stable coin growth, you are seeing these communities start to form. And so that is uh it's pretty exciting. >> And that's on the user user side. I'd say on [clears throat] the investor side, basically every single LP or investor that we're talking to who would potentially invest in framework is asking us how do we how do they get access to stable coins? And RWA, stable coins, tokenized assets, like they all mean the same thing, which is like tokenizing some form of asset. uh real world or not real world doesn't really matter, but just about every single person who's an asset allocator is looking at what's happening with stable coins in particular or real world assets

um once they dig in a bit and saying, "How do we do it? How do we get access?" And outside of buying USDC, there aren't that many options. Uh obviously I'm joking, but the the yield element is what is definitely driving interest. >> Yeah. I mean, we were just at SmartCon last week and I've never been. So, our live stream setup was in a Fidelity SP uh SP sponsored lounge. We were, you know, you just look at the badges walking by. DTCC, the Fed, White House, JP Morgan, Goldman, all these folks. Um, and it was so funny. I I put out this tweet. It was like, "Guys, the sentiment on crypto Twitter is as if we're in this like deep bare market for the trenches and everyone's lost everything. Meanwhile,

the last four days in New York, it feels like it's a Wolf of Wall Street bull run in tokenization. Like full on get into the war zone, let's chat. Like just absolute man, like manic. Like I mean I I get a environment and I go manic like automatically. But it was just purely like [laughter] wow. And so like there's this dichotomy that's happening that feels like between like the crypto natives versus these institutional bull run. And I mean there's no other way to put it. It's like a stark stark difference >> and probably as it should be like I think all of us are waiting for the thing that will really turn on the alts uh in terms of price action and I think things like clarity things like

tokenization of real world assets coming on chain all the infrastructure stable coins to finance them those are the things that stand to benefit but if you're not in those kind of types of assets there's not really much to be done um and so I think the despair that we see is from people holding like things like like fartcoin from like, you know, a buck and a half to like 20 cents today. Um, I understand why that would be tough, but crypto is bifurcating and and really like the tokenization and wall streetification of the industry has very little to do with the rest of of kind of what has historically been the core of crypto and that's hard to rap, you know, grapple with, but you you kind of do need to understand that.

>> Yeah. What do you what are you guys telling your port host like the what what is the way that they ought to position themselves for the Wall Streetification of crypto? >> It's really easy. Build a business model >> and >> revenue meta strikes again. >> Exactly. Like we're you know people like daylight wrapping energy in stable coins, people like us wrapping GPUs in stable coins. crypto's contribution to this world is going to be financing the next epoch of capital markets and and those are a very real thing that happen on chain today. Um, and so I would say if you're not in that, you know, vector or if you don't stand to benefit from that type of activity, you do need to change your business model just like we

don't fund things like, you know, NFT exchanges or memecoins. Um, you know, like those portfolio companies, of which we have very few, are dealing with kind of an existential debate as to do you continue on, do you return capital, do you pivot? Um, and I think if you're being honest with yourself, probably pivoting is is at least what you need to do. Um, but a lot of crypto has been caught off guard by just how institutional things have gotten. Um, and just how far away from like the more dogmatic cipher punk vision of the future that that we used to have. And that's okay. I think we do have the technology to go off and kind of impose cipher punk values on the rest of the world, but only if you're kind of working with these institutions, which if that's an anthemma to you, it's it's

going to be really tough to to kind of build a real business going forward. >> Yeah, I I agree with you guys. Um, I think building a real business model, it feels like there is this divergence between cryptonative projects that aren't really seeing the forest through the trees and they're getting repriced uh because we're not in this this macroeconomic environment where uh everything is pumping at once because it's such a low interest rate environment and capital's flowing so easily. Um, but because of that decoupling, I'm like, was it Zer Zero Hedge posted this uh this chart the other day of crypto going down while the NASDAQ was going up and so the Wall Streetification isn't hitting crypto more broadly. Vance, you came on, maybe

it wasn't last show, maybe it was the show before and you said, look, you know, first gold, then stocks, then crypto. And so I'm curious, do you guys think crypto is lagging right now or do you think it's a leading indicator? it's bottoming and it's kind of showing where stocks are headed and then we're going to flip the scales. How how do you how are you guys seeing the current uh landscape when it comes to crypto decoupling from equities? Well, like so to be clear, I think one other thing we're telling portfolio companies is if you raise at some high valuation and you don't have a business model or you don't have a path to get to a profitable, you know, economic outcome, you need to reset your valuations and expectations because those need to change if you're going to raise more capital. And so

there there's this kind of like rerating while everything is shifting towards the new business model narrative, revenue nar narrative. But I also think what's happening in the background and this is more particular in the last like maybe three weeks maybe four weeks is basically after 1010 which was almost exactly a month ago um I think a lot of cryptonative capital had their finger on the trigger and was ready to fire sale whatever they could at the first sniff of there being some sort of market correction with the expectation that we're at the end of the four-year cycle and that we're going to have another 60 to 70% draw down and it's going to look exactly like it did. Well, I think that assumes that has pretty pretty fundamentally flawed assumptions um just

baked into it because what it also assumes is that there was this parabolic run up and that we had this blowoff top and then everything came crashing down. And I I I frankly just don't think that you can tie those data points together between 2025 and 2021. Um and for a number of reasons. And so what I think is now happening is actually an oversell in crypto because people have like I just described their their fingers on the triggers ready to fire. And at and that has been the narrative over the last couple of weeks which is why you saw um you know the spot Binance selling kind of um consistently over the course of that week which drew everything else down. That was from like 109 to 101 or 98 even. Um, and I think that that was basically the sell-off.

And I think what you see now is people are just kind of like treading water, waiting to see what happens. It's not very obvious which direction we'd go next. I think that we will probably range be rangebound for a little while here until there's a positive market narrative. But what you also saw today is basically every single growth stock, AI, energy, you know, some of some of the growth kind of like um non-energy or AI related stocks, they all sold off like five to 10%. and and that's after selling off five to 10 percent for the last four or five days. So like some of these are in like 30 40% draw downs and and I think you're you're really starting to see um you know government shutdown I think driving a lot of this which I think in the next like day or so

um or or potentially you know the day that this airs is is the day that we're actually going to have the the government shutdown be over. Um you know that's coming to an end. you have, I think, a lot of risk that was taken off the table because of that. Um, there was an there was a the White House press secretary today said, "We may not even release the the non-formed payroll and the CPI data from October. We're just going to skip it and go to November." Like, it's just like, "Oh, forget it. We're just going to move on forward." Like, there there's just so much weird stuff going on right now. I think it naturally means that investors are taking risk off the table. But I think in crypto this like over rotation, you know, overselling um is frankly what's going on. And I think the second that we

get more data points and maybe move into December or maybe even January as to the proof positive that we have broken through this four-year cycle, we've been talking about this since basically this time last year. There is no more four-year cycle and every single month that that progresses, we further prove this point. I think just this is going to to instantiate the fact that we are not in a four-year cycle. We didn't have a 60 to 70% draw down. Maybe it was a 20% draw down or or 24% 25% draw down, but it's not going to be this massive sell-off. And frankly, there's going to be a lot of people off sides. Like there's going to be a lot of people who sold and who are going to have to buy back in at like 20% higher. And I I think that'll be kind of the December

January narrative. >> Yeah. Yeah. I tweeted that as well. I was like, I I think if we go to all-time highs from here, there's going to be so much capital sidelined. I mean, crypto Twitter is when when Donald goes bearish, then it's just like it takes crypto Twitter by the balls and is like, "Okay, guys, Donald is bearish, so we all need to watch out because, you know, he's the TA guy." And dude, I think he's got great charts, but he's him and like several others have like basically put out that they're that they're selling, that they're kind of like overall net short. But then, you know, Donald also put out a tweet today that was like Bitcoin uh daily is at support, weekly is at support and monthly. So, I don't really hate this. So, it's just kind of everyone's freaking out at support is is

classic. I'm one of them. Rob will tell you he's been trying to take me off the bearish ledge because I'm like, dude, it's been a really good run. Like, we got to at least kind of like, you know, you know, set our bases here. And Rob's just like been pulling me off the off the bare ledge for like at least like the last week or two. >> I mean, here here's a question. what what's the best comp for this situation from what we've seen previously and it actually happened this year. It was end of April, early May when Trump tariff tantrum happened. Everybody was caught off sides. They sold fire sold >> and then had to play catch-up all throughout May and June.

>> Yeah. >> And that's when you saw the market rip like 2x some of the stocks, you know, that were that are doing well now and kind of back to, you know, where they probably should have been like they're they're 5x off the lows. It is going to be an offsides narrative at some point. It's just a question of when and and I I think you know in those types of situations the only situation that's bad is if you are the one that's offsides. >> Yeah. Yep. Um Vance curious anything to add you know this unification of Wall Street and crypto but this decoupling of uh equities from crypto you know how how do we balance these two? I think they're more tightly coupled than people would probably like to admit. Uh like people are saying, you know, oh, crypto is so

badly underperformed uh recently. And then you look at the hot AI data center stocks and they're down like 30 40% including Oracle, which is huge. Um the thing that's really keeping the S&P and QQQs up is Nvidia, which is kind of a whole separate other thing. Um, but look, I think, you know, people are expecting the four-year cycle to play out as it always has. And maybe there's some, you know, it becomes real because people collectively believe it. But even the downside targets people are posting on BTC are pretty weak. Like 80, you know, 7,000, 90,000. It's like, okay, it's like 10% lower than where we are today. Um, and you know, uh, below 100K, there's there's likely a bid. You know,

we understand that there's a few folks that were quite large that pushed it from 90 over 100 in the wake of the Trump win. I think those folks returned, but you know, it takes a while for people to see value for BTC over 100K. And even like checking, you know, prices, it's like BTC is still over 100K. It's pretty wild. It like forever that was the price target that people dreamed about. And um I think what you're going to see going forward is a lot is is happening on Ethereum. like it doesn't necessarily need to happen on Ethereum but it is happening on Ethereum and just like that liquidity builds liquidity and so there is a natural flywheel there um especially with these RWAS which I think are the most interesting part of the market today um we see a lot of people buying Bitine

that are these large institutional funds like the largest shareholder of this stock called iron which I think has literally gone up like eight or 10x this year sold and rotated into Bitine so Tom Lee is going to have additional buying power I think Sailor you know the big trillion dollar question in the market is is he going to be able to sell this STRC product? And I think the base case is that he's going to be able to sell a lot more than people realize. Like he's upsized multiple Euro denominated offerings and it's trading at par. So like I have a pretty good sense of who the next marginal buyer is going to be.

Um, I think sentiment and macro are kind of like this whole other bucket, but zero hedge is like a pretty good barometer of like where people's heads are at. And like they've just been like lathering themselves up into like a frenzy over like, oh my god, the data centers, it's like the next margin call. It's like all going to blow up in everyone's face. Like Oracle is going to go bankrupt. Like they're posting like credit default swap prices on Oracle. I've got news for you. Oracle is not going bankrupt at any point. Um, and so I think a lot of it is just over wrought because things have kind of been slower than people expect. I also think broad swaps of the market are no longer relevant within crypto. Um, but at the same time like you see things like Zcash >> and you kind of get a little inkling of

like, okay, there is a bit out there for these for these hyper concentrated rallies. It feels like flavor of the month, week, quarter, whatever. Like there is interest. Um, but where there is no interest is things that don't have revenue, things that don't have earnings, or things that have, frankly, really shitty cap tables. Because as we, as we all probably understand at this point, if you have a bad cap table, that unlock cycle takes forever. And that isn't different in Trafi either. I think like coreweave is struggling with that, probably some others. But, you know, things are not um you can always find some random stock to cherrypick and say like, "Oh, it's gone up this much in the past five months." And look at crypto, it hasn't done that. That's always been the nature of the beast. But um everything right now is kind of priced

equally in my mind. Like the data center plays can probably double or triple. I would say that's roughly the same with ETH and Bitcoin. Um but then like you know what we think at least and we do do public equities at Framework is like is there anything that will 10x in the public equity space or or like 5x and there's not really honestly. Then you look at crypto and you're like there are things that probably can do that. things need to change, more regulations, disclosures, flows. But I would say the equities and and and the coins are probably priced at parody on the large cap and midcap size. But like on the small cap size, like the billion dollar names, there's far more opportunity in crypto than there is outside of it today.

>> Yeah, there there is uh this secular more specific repricing of assets. Um and it is around the coins that you like you mentioned have business models. UniS swap 2xed. that's not an insignificant market cap of a coin um on their news that they were going to do some sort of buybacks. And I think that's probably how the rericing happens. We set we we see you know this large jump whereas everything else is kind of flat and then it just tends to sustain at that higher level whereas everything else sort of falls uh you know where where the chips do. Um, and and I want to hone in on what you said is probably the most interesting part of the cycle or at least part part of, you know, what's happening right now. And Andy mentioned

something about it earlier on on today's stream as well, which was this this idea that um we're either like rehypothecation is different than recursive lending. And and when you're thinking of RWA looping, I'm curious which bucket it falls into. Maybe you could just illuminate like what is the distinction between those two? Uh, and where does RWA looping fall in? >> Why don't why don't you give us a definition? >> Oh, I'll try I'll try I'll try. All right. So, rehypotheation is basically just more or less like looping. It's like basically similar asset collateral borrowing a similar asset or the same asset and then just kind of like rehypothecating it and looping it. The recursive lending which I is kind of what I think Rob is getting at with you

your tweet Vance about curated lending markets is effectively like I have a I have a D5 project and Michael has D5 project and Vance has D5 project I give Michael money he gives you money then you give me money and then we we do it four times and we all count it as TVL each time um and then and then it blows up in in our faces and and and I think that is a very simplified example of this recursive lending model that kind of caused caused uh some of the problems that we saw with these vaults and with these lending markets. Now Rob, I think you know you're asking about RWAS. I think more about the tweet that you put out Vance, which is about kind of like what happened. Maybe you could just like talk us through like the key learnings there and uh you know is that is am I on

the right track there? I think that's kind of like the right way to think about it. >> I think that's the right description. And I would say the thing that caused the problem was something entirely related but also separate in the sense that there was off-chain managers. So like in these RWAs, you know, >> opaque kind of fund guys. Yeah. >> Right. The question is and we still don't know who those people are is like what are you actually tokenizing? And if you're in like a Janice Henderson AAL ETF, you have very clean looks in terms of what is the credit quality underlying, what are their payment schedules, have they ever missed anything, you have basically perfect information as it relates to that company. um when you literally give someone money and they take it off chain and they say we're going to generate yield for you and you know we'll come

back to you whenever you want it that's when it gets pretty dangerous and so I think just like the main thing is just like credit quality and there are things that have you know yx a bc USD on them um but those are not stable coins those are supposed to represent a dollar denominated amount of that credit but you really have no asurances there and so like the thing that we're really trying to do is push the credit quality underwriting forward. Push the risk management forward. Push the liquidity and trunching up of risk forward. And I think that's really the path that there's no rocket science here, but you need to build things very slowly and thoughtfully and carefully. And and that is generally what Sky and we do best is just like really not compromising on

credit quality or transparency. >> So the kind of curated lending market take here. And Michael, I'm sure you have some thoughts as well. What is the what is the path forward for DeFi? Is it doing it all onchain or is it using some sort of like oracle or some sort of verifiable, you know, ZK kind of uh tech to basically verify onchain the reserves offchain? Does it need to be like half and half fully onchain? How do you guys see the future of like vaults and these curated uh kind of yield strategies going forward now that this has happened?

>> I I I think there's not one sizefits-all, but I think what you have to look at is what the relative risks would be for each different situation. So let's say you're able to take the assets offchain and and you know just to like add a little bit I think of rehypothecation as I am taking assets out that are normally used as collateral and I'm using them in other ways and this is like the three arrows you know we're taking the Bitcoin that people put into Genesis and we're lending that we're giving that to three arrows and you know trust them they'll be fine but it's like off our platform so that you know when three arrows isn't able to give it back well the assets that are stuck you know Genesis has to go bankrupt and So I I think that's where you can get into real danger when you

don't have verification or you don't have basically provenence and ownership over those assets that are being used as collateral. And so [clears throat] when it comes to I don't know curated lending markets, whatever you want to call it, um if you look at Sky for instance, and there's the Janice Henderson CLLO that is tokenized and put on chain. It's tokenized by Centrifuge. Daylight just announced that they're going to be tokenizing their asset as well um with Defi today. Um but imagine that there's a tokenization engine. Um there's a custodian relationship and Securitize is also doing this. They are a custodian. They are basically an accounting and and um audit firm as well. Um but imagine that there's a custodian of brokerageowned assets. They are doing the buying of those brokerage

assets on your behalf and then representing them on chain. And so if for instance you need to reclaim that collateral because something becomes underolateralized, you can reclaim the Janice Henderson CLLO ETF shares and if you need to you can sell those. It it may be T plus3 for settlement to occur but that's something that you can do and it can be represented on chain. And so in those types of situations you should be able to get pretty substantial leverage or pretty substantial margin off of those assets because they are instantiated on chain. And I think that that just provides more trust and therefore there's lower risk and therefore you should get higher leverage or or credit uh margin. And if it's something where you're saying, "Trust me, bro. I'm good." Um and give me the capital and I'll I'll let you have the

borrow. That's obviously just going to be way less uh trustworthy and and way less um uh creditworthy. So Janice Henderson is a maybe don't want to throw anyone under the bus, but that's a good example of, you know, uh one that's doing things the right way because they have uh the right mechanism in place to do those redemptions. Is there is there any that you point to that you're like, hey, like maybe this is a mechanism that we could implement in some of those other products. um don't want to talk ill of anyone but I think uh you know generally speaking the ones that are gaining AUM and TVL are winning >> and doing things the right way and those that are losing TVL and AUM are doing things the wrong way.

>> The market always votes on this stuff. Uh and hopefully it doesn't vote so quickly that people get hurt but as we've seen that is often the case with these small stable coins. I mean and and going back to it as we saw with what happened on you know Binance if that is exactly you know the case where USDE had an issue with its pricing oracle on Binance internal and that could be another risk as well. So it's not just the redemption but it's how do you price this how do you make sure that you're getting a fair and accurate pricing especially if you're using this as real-time margin or collateral for other aspects or other products like that that is just as important as being able to get to liquidity.

Yeah, guys, I'd like to switch back to the unis swap uh topic and the lido buyback topic. Um revenue meta in full swing. I did see an interesting tweet though about like the So basically there's a couple things going on with Uniswap. First is this unification of the token. You know, they've obviously had this equity uh you know token bifurcation where their their labs companies been making I think it's nine figures a year in revenue effectively and the token holders have gotten zero. they've been, you know, part of Andre Cronier's, you know, valueless governance token era, which had its time in place and was likely a major result of Gendler and the lack of regulation.

So, you know, fast forward to now, obviously, Hyperlid has came in and said, you know what, guys, we're we're going to do it this way and you guys are either going to adhere to what we've done or, you know, kick rocks. And, you know, lo and behold, some teams will kick rocks, but some teams aren't going to, you know, create a business. UniS swap is going to keep dominating, but they've introduced attack vectors to their business. What I mean by that is the VE token model that the curve guy Michael created with Andre and that they kind of like built out is actually mechanically and perhaps this is arguable but a better way to distribute revenue back to token holders over the long term and and kind of like effectively mitigate sell pressure and create a more kind of like

long-term ecosystem. And the the aerodrome founder tweeted yesterday and quote tweeted the the unis swap announcement and was like wow I cannot believe that they would make this big mistake the day before we announce our huge announcement. The huge announcement today is that they're combining aerodrome and drrome and they're going to launch on arc as well as ethereum and some other chains and try to basically become like the dominant decks of EVM. Um and so it poses a question where it's like okay unis swap charges the 3% to the LPS any LP you know knows that they've introduced their UX fee uh either last year or earlier this year I think it's like 25 bips or 75 bips to

swap on it and now they're introducing basically the you know uh return of some revenue from I don't have the proposal in front of me but back to the token holders and so like there's now cyber like cippher punk devs on the timeline saying, "Yeah, let's go ahead and rent seek off an immutable smart contract and call it a business. Why would I ever go to this smart contract? I'm just going to just we can just fork it and make our own and you know, yada yada or XYZ." And so there's kind of this like there's two kind of sides to the unis swap coin here. I'm curious from your perspectives whether it be in relation to the competition in relation to like the ideals of the uh space or just pure economics like what is what was your

first reaction to this and um how do you think this dex kind of landscape plays out as a result of this proposal from the number one decks in the space? Well, I I think my visceral reaction and and look, this is paired with an understanding that unis swap has been bleeding TVL and volume to competitors basically for the last four years. Um my visceral reaction was it's great that they're making changes that imbune value into the token. Um but it's sort of like four years too late. We we have had four years of innovation and and differentiation and changes and models that we've tested and tried and um they just haven't because they haven't been playing in this game. It's kind of like

when OpenC finally after five years decided that oh we're going to launch a token or or at least you know said suggested that they are. We'll see what happens but it's like congrats you know you you've kind of missed the window like people have moved on. Um, and so I I hope that they're able to play catch-up um and do something of value because I think they are still important infrastructure and and kind of plumbing for the system. Um, but yeah, you know, you raised $100 million for an equity company. Like what happens to those shareholders? You also, you know, raised a ton of money for this token and people have been holding it, buying it, waiting for this to happen. H how do you how are you going to subset the the revenue and the value that flows to the token versus the equity? like there's just so many

open-ended questions that I think you're going to ultimately hurt one uh subset in in the fullness of time and um you know whether or not unis swap the the token is a security like I think there's a very strong argument that it is not but the shareholders of the equity have definitely purchase securities in the form of the equity and you you have a fiduciary duty as someone you know who's running that company to um to those shareholders to security holders So there there is naturally going to be a bias to help the the equity holders at least keep them um in the loop in terms of value acral versus the token and and so that's going to be a natural you know difficulty there. Um like this is

they're they're kind of stuck between a rock and a hard place I would say. Um, and so it's going to be really fascinating to find out. But, um, yeah, it feels like we have moved way past these different token models and like things that have worked and haven't worked, we've figured out and and you know, innovated. But, um, I I think they're just at the start of that journey. >> Anything to add? >> No. Uh, I think, you know, we have followed the Aerodrome Uniswap kind of beef for a while and it seems like it's, you know, simmering to a boil now. I I don't know what it kind of the future brings for the actual fees that come to the token given that we've seen some analysis by and again mostly the aerodyum team that a lot of the actual uh volume could fade when there's

actually a fee implemented. Um and so there could be some loss of volume that comes with this. I do think this the spiritual notion that they're going to go all in in the token is a good one and it can lead to a path for value recovery for basically all tokens that choose to do so. So, I think, you know, the first reaction that I had is just checking the price and seeing it up 50%. The market loves it and and at the end of the day, that's what really matters and and there's a lot of other caveats with they're going to need a 20 million uni per year budget to run things and all of that. Um, and so there's kind of a few tie-ups. It's not like a very clean just the token is being burnt and you know, huzzah, but it is a helpful path forward

and and I do commend them for going there. It's it's great to see. >> Yeah. Yeah. Yeah. I mean, Lido came out as well and also announced buybacks in a different fashion. Effectively, like when the market's up and their tokens up, they're able to buy back more and then when it's down, they they don't want the treasury as much was kind of like the general idea. Um, again, I just see Hyperlid came in and said, "Guys, we're going to do it this way." And I mean, it's really forced the hand of the entire industry to really rethink. And I don't know if it's just that, but it's it's easy to draw that parallel.

>> So >> yeah, what once one does it, the rest of the field looks absolutely silly if they're not also doing it. So um >> because you got now these store of value like now, you know, Zcash is being pitched as a store of value thing like early Bitcoin, right? Because it's like, well, it makes no money. So like there's really like this make money or like have this moneyiness property which you could argue Ethereum has just barely, you know, gotten into. uh Bitcoin has and that the rest are kind of, you know, still searching. >> Yep. And I I think people will come to this space and and write research and and good things about the ones who do and the ones that don't will kind of be left by the wayside and that's going to be really tough, but you know, we do

have to filter the wheat from the chaff at some point and I think it's just about time. So, we're happy to see it and we're only investing in projects that really can deliver that type of value. >> That's good to hear. Um then just kind of to close that loop, it did feel like there is this gap right now or this time period where you can get away with this double dipping, right? So if you're a company, you can IPO and maybe launch either a tokenized equity version or a token and kind of like double dip. That's what a lot of these uh you know teams have been doing effectively. I is that also coming to an end? Is that getting started? Am I missing something here? I mean we don't we we we have yet to have a single publicly traded company

that has launched a token. >> Yeah. So >> stop. >> Okay. >> So I don't think that that is a path forward. >> Yeah. >> At least in current, you know, form unless there's a material change. And look, this should all change with the Clarity Act. And I know that we saw the draft this week from the ad committee. Uh Senate comm Senate Banking Committee has put forward their draft. We have to merge those two in some, you know, Senate passable form. Um so like all of this could change with that but I don't think anything will change without that. >> Yeah. Yeah. Uh the other interesting thing that came up today on on the wire was uh ARC has announced that they want to launch a token. So I think in a similar vein here you want to get exposure to stable coins

right? You can buy Coinbase stock you can buy circle stock and then you can now buy ARC. You know obviously there's the plasmas couple other ways. Tether equity um and some other ways. But for the common folk, ARC now becomes a third asset under kind of like the Coinbase umbrella. Do we think that this further fractures the circle coin ARC trade? Does it add value to it? How do you guys think about ARC token? >> I I mean imagine just imagine you're a massive shareholder of Circle stock and you are probably down.

>> That would never be me by the I mean, >> I'm saying imagine >> [ __ ] you can't imagine it. >> Uh, but you know, you're probably down. Um, unless you bought in >> um >> of earnings, you're down, by the way. >> Um, and you you forecast out and you see that we're probably entering in a bit of a rate cutting cycle, which is the main form of revenue for for the company. Uh, and you see that now they are launching a token. Uh, that was not, I think, disclosed in their risk um, disclosures or in their S1. Um, I don't think it's been something that's been disclosed up until now. I don't know what the process is for disclosing exactly if they had to back then, but um, you would imagine that some value would acrue to that

token that should have otherwise accured to the equity. How do you feel? Well, this is kind of what I was getting to is is just like there's this kind of window here where teams are like, you know, MetaMask is going to launch a token and consensus is going to IPO. >> We're all >> We're also Yeah, go ahead, Vance. >> I I think uh it's different in some ways, but I totally get your point. I think the question at the end of the day is like the shareholders are the ones that have the real legal rights, aka the ability to sue. Um, and so I think we're going to kind of feel our way through this, but it's not very clean in the same way that like unis swap labs versus

unis swap the token is not clean. Someone usually loses. >> Yeah, my two cents. I'll chip in. I was going to uh push back a little bit and say that there doesn't have to be value acrruel back to the token, right? Like we still live in this world where valueless governance tokens still carry billion dollar market valuations. So shareholders can get revenue, token holders can get this piece of whatever tok token is with no value acrruel and everyone can be happy. And >> as we talked about the revenue meta t-shirts that you guys are making.

>> Yeah, we are. >> That's alpha by the way guys. That [laughter] >> look I I I get the perspective that you know there are still things that exist. Um I I think that that is a fleeting perspective um and a fleeting reality. Yeah. >> Right. Ultimately there these things get more defined and they end up converging and splitting value between one another. >> Well, that's the thing is it's going to fracture one way or another. I think that's kind of like the main point here from Mike. Um guys, staking ETFs, Ethereum, Salana approved. Um do do people that you guys speak to really care about staking? Like are people really trying to get the extra yield?

How do they like do you guys see real demand coming from I see Michael saying no, Vance saying yes. So, so there's difference. People that we speak to are are not caring about the extra 3% on their Ethereum. Like we're talking about like venture investors. It's very different landscape, but the vast majority of capital, especially the ones that are investing in these ETFs, definitely care a ton about an extra 3% denominated in the native asset. Like that's a 3% compounding. It's like you get more Apple shares for owning Apple. Like that's great. and >> would never know what it feels like.

[laughter] >> And and I I'd generally say it's a very big deal. I'd also say um if you are not Tom Lee or you are not Michael Sailor and you are running a DAT, this is a negative. This is a huge negative for you as well. >> Yeah. >> Can you explain that? Well, there was an argument that because the staking ETFs did not have the ability to stake um that the DATs were actually a more capital efficient way of maintaining, you know, ownership in this network. Um there still is an argument that because of the rules and requirements around the liquidity that you need to be able to stake, they won't be able to fully stake their entire like ETH ETF. And and while

that is still true, I would imagine that there will be some uh rules and regulations around staking. Um like right now the staking queue for for Ethereum is, you know, weeks long. Um and so for you to be able to have a massive amount of ETH staked within the protocol, you're going to have to be able to get to liquidity over some reasonable amount of time. So they won't be able to state all of it. That is more like a nuance, I would say, less a strong argument. Um, and there will probably be new rules um to allow ETFs to have some staking um that is commensurate to the full staking rate.

So all of this is to say I'd say um you used to have this as a point of differentiation. Um if you were the number three, number four, number five DAT within a stakeable asset category. Now that argument is gone. Um you have much less of a reason to exist. >> Chad, it's been a great episode. >> I got one one last thing for you. is the uh just on the topic of dats, the hyperlquid strategies uh deal should be closing here in this week or next week before Thanksgiving, I think. Uh we had David Sheamus come on and tell us that there was upwards of 350 to 400 million in capital that was pretty much dry powder ready to go. Just curious how you guys are thinking about hype and hyperlid going into uh going into this

deal closing. >> Look, I I think we're extremely excited about hype in general. Uh but the the other thing is I I would say um everybody thinks that there's this massive unlock happening and and there is for all intents and purposes, but I I just post the question as to like what's their incentive to sell? You know, if if Jeff is the one that funded all of this through the gains of the market maker, um do you think that he's going to be one who onchain is selling assets, you know, right at the unlock? Um or do you think that he's going to be holding on to this for a very long period of time?

And if he has the vast majority of the team's share, um what if the, you know, unlock, uh event, um as you know, cliche as it is to say this, it's actually a bullish unlock. >> I knew that was coming, dude. >> Said those two words, but [laughter] >> well, it becomes a supply sync instead of a new supply like uh you know, movement because a big problem is that the FTV is so high, right, versus the current valuation. kind of throws investors off. >> Last thing I'll throw at you guys, I know we're, you know, quite a bit over.

Um, lighter raised 68 million 1.5 bill. The the idea on the market was there's hyperlquid and there's nobody else. There's zero competition. Now it's like there's hyperlquid and then there's kind of like lighter now. And so does that open the the door to like there's hyperlquid and then there's XYZ, you know, ABC. How do you guys think about lighter, you know, mainet launch, token launch? Do you guys even give a [ __ ] Like where are we at? >> Don't think about them at all. >> I I I would say the perpetual widowmaker trade is trying to be in the number two or number three of a massive category within crypto. It has largely never worked out. And I I think perpetuals and per uh markets are going to play out the

same way. It it's, you know, 90% value acral to the top one right now, 10% to the rest. I think that ultimately gets to 99%. So you still got another 10x value approval to go. Um but I I will say you one thing that we are looking forward to is I I think December 2nd or December 3rd maybe the date for Fusaka um being able to see the upgrade for Fusaka which should actually increase TPS on layer 2s and create the base fee um uh minimum or or threshold um for how those layer 2s are paying for gas. Um, I actually think that's a pretty fundamental change on the core economics of Ethereum. Lighter will actually be one of the largest burners of uh,

Ethereum tokens um, in the process. So, not excited necessarily about lighter directly, but lighter as a L2 on top of ETH is really exciting. >> Yeah. >> All right, lads. Thanks for your time. >> Thanks, man. Great, >> guys. See you next time. >> [music]