The Rollup TV: Thursday, June 19th

Transcript

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Heat. Heat. [Music] Hey,

hey hey. Ah, [Applause] [Music] what's going on, guys? Welcome back to the Rollup TV. Today we have five awesome guests. Starting off with Jake from Win uh Trader. Uh the Win's been getting a lot of a lot of [ __ ] lately

for Polyra and just blaming them for any sort of token dump. So have some fun on that one. We got Reagan from Lattis Bone, R.J. from Malign, Surup or uh Sid from Maple and um Bobby from Dupe uh which is gonna be interesting one as well. So fun segments today. Uh, welcome back to World TV, your premier show live from New York City. Uh, right now, three times a week. Uh, coming to you live next week at Permissionless as well. The good stuff happens live. Thanks for being here. We're changing up the format a bit today. Uh, and kind of going into a bit of a new format uh with uh some of the the the beginning of the show. So, actually what what we're going to do

today is uh react to some meme tweets uh from the clip that went viral on Twitter uh from the Monday show, I believe. And that should be fun. And then we got some by the numbers segment. We have five guests. We have some news coming in between. Um and yeah, we've just been actively working on bringing different types of entertaining formats. So, uh, kind of looping in our first debate next Monday, uh, on collabs, uh, with two smart minds. That'll be cool. Um, and then bringing in some, uh, other kind of like countdown formats. And I'm trying to get sound effects amongst other things. So, yeah, excited to kind of just see, uh, where we can take this in from a iteration perspective. Again,

it's just me today. Uh, Rob will be back next week. Uh thankfully I've been on the on the grind solo here, but why don't get right into it. Um and and roll out some of the mean tweets. Um and let's do it. So the first tweet uh is from Ian Morton and uh it was a comment on the host from from uh from Monday's clip. And basically what what happened here actually I think the first one's going to be from disruption Joe but we can just look at all the mean tweets here in uh in this thread. So disruption Joe D accelerate says why would you post

this? It clearly shows you don't know how rollups work. Kind weird considering your name. Yeah disruption Joe. I mean, I I think somebody told you to watch the whole clip, but what's funny is that this is actually a guy arguing against the way that roll-ups work and us putting it out there as a response to the way that we know rollups work. And disruption Joe is not happy. So, Disruption Joe, I hope you got your fix there. Um, and you know, I think I think it's a funny tweet.

Um, we can we we we can actually click on some of these other ones in here as well. There's uh there's there's quite a few good ones uh just within this thread even. Uh there's another really good one. I think this this next one is is my favorite one from from Ian Nordon. Um Ian's Ian Street was hilarious. Kind of along the same lines of Joe actually. Why was a podcast called The Rollup not able or willing to push back against incorrect understanding about how finality works in rollups? And why is that podcast now spreading that incorrect understanding on Twitter? Ian,

man. Ian. Ian, this did numbers. 47 likes, man. You ratioed us right there. So let me give you the the reasoning here Ian once again. The original question was around bottleneck between execution and consensus. And uh Jonah was commenting on what was misconstrued as the optimistic finality of a 7-day fraud uh period with the actual inclusion of a transaction. And we posted this specifically because we wanted to provide what was considered to be a view of why L1's namely Salana in Jonah's case that he mentioned uh why he

thought that they were better suited for clubs. But Ian, you know, I feel your pain, man. Why was a podcast called the rollup not able to push back against an incorrect understanding about how finality works in rollups? you know, you have a you rais a good point and thank you for your consideration here. Uh, one more mean tweet that I that I thought was pretty funny was from Old City who I've actually met this guy in uh in person in um in St. Morris, I believe. Uh we we hung out. Uh if you just scroll up a bit, I think I already copy pasted it, but all of these are pretty funny.

Um yeah. Yeah. Keep going up a bit more. Here we go. Here we go. Dude, why even bother? This is an investor being interviewed by a podcaster who Oh, little technical difficulties here.

Um, dude, why even bother? This is an investor being interviewed by a podcast. Okay, so first of all, Finny, I claimed that clubs were new because we didn't have the infrastructure stack to actually support them in crypto until recently, which is true. That's why you're building on uh and using starboard technology. Second, there's nothing wrong with this world. This is a ragebait uh tweet that apparently upset people because this this small nuance was missed here. So, uh, Fiddy, you know, I know we're friends, man. I don't take it too seriously, but I thought this was pretty funny. All right, so all right, guys. That's all the mean tweets

that we have for today. Uh, that thread was was funny. Uh, we take the responsibility of, uh, prioritization, but also like fun. Uh, with this with this new format, we're having a lot more fun and doing more entertainment style. Um, and yeah, we hope that you guys enjoy. um into the next segment for today's show is by the numbers. Um so we have uh some interesting uh stable coin news here that I would like to bring out. Um and so when you look at the numbers here, we'll pull it up. So Coinbase was up 14% and Circle up 20% after the

Genius passed. Uh that was yesterday. I I I believe today is the holiday. Happy Junth. Um, and so there's no open markets today, but yesterday we had uh Circle with a surge, Coinbase with a huge surge. I put out a tweet saying that, you know, people weren't ready for this and that, you know, kind of we underestimated how much people wanted stable coin exposure. Um, you know, I think I think that was clear in this. And so, um, when I'm when I'm looking at by the numbers here, I'm seeing that it's very clear that stable coins are here to stay. Um, these market caps are massive.

Um, and coin and circle are surging and continue, I think, to do so. And I think I I'd like to pull up the next post about buy the numbers as well, get a bit more specific on what's actually happening on chain with stable coins. And that is actually from Deli Digital, our friends there, who have put out a post around uh the the numbers about stable coin market cap um and what that means for the space. So, let's just get that pulled up here in a sec.

I I believe that I believe the big number was actually uh 250 billion in market cap. So, stable coins have just recently uh passed $250 billion dollars market cap. Yield bearing stable coins are growing fast. Athena has grown to nearly $6 billion since launch. Um, you know, Tether and Circle still dominate. I'm going to put out a revenue tier a revenue meta tier list. Um, but if you look at this chart here, I mean, it's it's insane. It's it's just an complete upon chart of stable coin supply.

Everyone that I speak to in the space is expecting a 10 to 15x in stable coin supply within, you know, by the end of the decade or within 18 months to two years. Um, so look, I wouldn't be surprised to see this in a trillion by the end of next year, a 4x from here uh as the space really heats up uh with regards to two stable coins. Um, so look, I think that if we're looking at this from by the numbers purely, this is one of the best looking charts in as far as all metrics go in crypto. Um, there really isn't much better than this. And so my takeaway here is Circle is probably what all of Trad is going to do to uh stay in the stable coin game in

the stable coin race. Um, and I expect them to uh basically be bidding circle uh heavily. I was wrong on a couple streams ago. I was like I think circle was at 90. I was like look I don't really want to own it here because I own coal already. Was wrong completely. It's at 190 now pushing over 215 after hours. I think that's the only way right now to get public market exposure to stable coins. Um and I mean clearly if you look by the numbers here with Deli uh our friends at Deli I mean it's very clear that Tether and Circle are so guys that is the by the number segment of today's uh session. Um looking forward to having

our first guest on uh which is Jake from Wintermute. Should be a good session. Uh he he'll be joining us here shortly. Uh Jake and Wintermute have been under the brunt of actually being kind of in the in the wrong in the fire a bit uh from a lot of people in the space. Um so yeah, looking forward to seeing what his takes are on the current market sentiment, the dynamics, and more uh when we get him up here. So uh should just be a second or two. Um he's he's been a trader at Wintermute if you look at some of his recent content. um he's been focusing a lot on uh obviously the

the Middle East. Um he did a a recent stream talking about um kind of like options and that type of work and and yeah, obviously stable coin season and and more. So looking forward to getting them up. Um and yeah, guys, all no harm, no foul on the mean tweets. Uh it's always fun to uh you know kind of joke joke around with some of the people that take the timeline seriously. So I I'm a I'm a pretty joking type of guy. Hope you guys uh hope you guys can understand that. And uh yeah, so topics of of coverage for Jake is going to be uh option strategies, kind

of where the market's at. Um, so some of the macro environment, institutional rotation, um, kind of where Win is at, um, some of the stuff from Neil and more. Uh, so we're gonna get Jake up here in a sec and we'll be live. Jake, man, how are you? Good to have you on. Hey. Yeah, good to have you. Well, good to have me. Sorry. Yeah, man. Good to be here. Good to be here. Thanks for having market closed today, isn't it? It is. Yeah, it is. It's It's uh It's closed, but it always feels like this something on edge could happen, especially at the moment. So, everyone's

sort of working away here. Yeah, it does feel like we're at a bit of like a a decision point in the markets, right? I mean, I think I I think a slow summer has been what a lot of people have been expecting or at least, you know, can think about as of the last couple years like, okay, you know, summers people sign off. But it does feel like BTC in the broader market, it it is at quite a point of kind of like, you know, compression, consolidation, and I'm sure you're seeing some of of of the option stuff kind of get tightened up as well. Um, yeah. What's your thoughts here on the uh on the next, you know, couple weeks into the end of Q2 and into Q3?

Yeah, I think we'd sort of come out of a bit of a weird environment whereby we were obviously being driven by a sort of post liberation day dump lower and then it was almost like fairly mechanical then back up into retesting all time all-time highs and we sort of got there. We tried to break through and I guess like it never really followed through and I think the market at the moment is waiting for a little bit of a a new catalyst. We obviously then had sort of tensions again with sort of um Israel and and Iran coming to the forefront and that is obviously leaning on trad obviously oil spiked but I mean these things the geopolitical side of things like no one really has an edge there in all honesty like it's a it's a tape driven environment which ultimately

since Trump's taken office since the inauguration really it has been very headline driven so I guess that's sort of what we're seeing at the moment it's a surprise how much that sort of Bitcoin Voss have come off. But then if you put into the context sort of where all these corporate treasuries have been leaning into the market and sort of being that marginal buyer um and then obviously like selling VS on that treasury to generate and make it productive. So there's sort of this weird dislocation sort of between like the spot action and and what we're seeing in V. Um and at the moment sort of people have been leaning definitely at the shorter end in into the hedging. Um, so people have been hedging spot books, but ultimately that's what the options markets are for,

right? Like people are looking at the skew at the moment thinking, yeah, it looks a bit soft. But what it does allow people to do is have a spot book and hedge that downside because obviously if we do take the highs, people are looking for a big move, but equally like if you get caught rolling over here, you people would feel sort of uh I guess retrospectively like they should have put hedges on. So I think we're seeing a lot of that at the moment. Yeah, man. You you know what's on the option side is I saw a post with regards to adoption of of of um pers in uh you know traditional finance right now that Coinbase has okayed uh you know per on in in the states and I think the tweet was from Moon Overlord and he said he

said look man if if um per you know are available in the states then options are going to completely lose you know the majority of of of their volume and they're basically cooked. Um, what's your take on that? It are are options traders in Trady going to move to per because of their because they're a better product or are these two separate groups of of speculators onchain or you know offchain in this sense? Yeah, I think you definitely have to there's there's different there's very very very different um use cases for these products, right? Like the argument that's made in crypto as to the reason why options hasn't taken up way more of the open interest that per offer is people often lean into okay you get the

same sort of convex payoff if you just put margin in an in in an account whether that's on a sect or or now obviously more so a DEX and you can obviously just treat that as an option with a linear payoff but where it really sort of kicks in and where the options markets are used a lot is where you Okay, well, something could happen. I still want to stay long. Um, I want the tails covered, whether that's the left or right tail, and you can just pay the premium. You can sleep at night. A per doesn't really give you that because if you're then having to hedge, then ultimately you're taking yourself from long to arguably delta neutral if you hedge with a per. So, yeah, it takes the risk off the table if you 100% know what's going to happen tomorrow, but

outside of that, you don't really have any idea. And I mean options are used for so many different things. Like in traditional markets it's very very more m it's it's seriously more mature. Like in crypto people just see them or have done until arguably this year is like a pure speculative tool. Whereas in trad they're used more to hedge an underlying book. You've got a risk manager and if you're on the buy side that's constantly saying where's your risk? What's covering your risk? What happens if this happens? And as long as you can put points some protection, whether that's from an offsetting position somewhere or even better if you've got um some sort of V product on the downside that you're protected, then you can at least say you've done your job. And I just think

they're very very different use cases uh in all honesty. So I wouldn't say I sort of fully agree with that. Yeah. Yep. Yeah. I just think a lot of what like a lot of what the like the um out of the money zero day options traders would do is what like a perpetual is a similar crowd to somebody who would trade like 50x on purpose you know similar crowd yeah I think that's probably yeah I mean like there there is a use case for zero DTE um and that's why I think since they've been rolled out in the S&P for example there has have taken a huge amount of of volume there's been numerous studies that have shown that yes okay on face value. Everyone was looking at that saying it's changing the structure of the market but and it's

allowing a lot of retail to come in and punt but there are institutions that do use these products to hedge and I think you have say seen a big bit of a shift in the v surface around key events and this is we're talking obviously trads here but it allows people to say okay for example last night instead of buying a monthend contracts obviously in the S&P they're they're way more frequent anyway but like hypothetically it means you can just hedge your risk on that day around the event and you do see a little bit of that or even at the moment obviously you've got some of those fronts elevated because of of these tensions and and it does allow you to hedge a book a little bit better but ultimately that's what I mean options are are insurance contracts right that's that's sort of the very nature of them

yeah yeah um you know working at Winston must be uh pretty interesting as of as of recent you guys have have bared the brunt of some of the uh of the crypto Twitter shenanigans with with regards to to Polyhedra and some of these others. And I I don't I forget exactly who it was on on your team, but um they had a meme that was like a guy riding on his bike and then it was like my girlfriend dumped me and then he fell over and it was like [ __ ] winter mute. Um what you know, what is it like being being, you know, a target of of just like consistent uh let's just say FUD in in in the space? to be honest like a lot of us we don't really no one really is is

super active on Twitter like I mean I try and sort of get on there occasionally but I very rarely would sort of look too deep into what's going on I think there's a huge amount of sort of misconceptions about not just us right like again about the industry as a whole um and I think a lot of the time it's just not really worth engaging I think people have tried in the past but ultimately look like we we we know we're sort of operating within the confines of like what you would expect someone to be doing in a traditional finance environment in a high highly regulated sort of industry. So we know that sort of our our our sort of morals are clear with it. So it's yeah and people see one side of of of of a trade and a lot of

the time like things get spun out of control and obviously we all know that that Twitter or X is an echo chamber. So yeah don't really have too much to say on it. So when you're looking at um you know trading you know within the you know strategies etc. Uh are you mostly your your options and and kind of trading stuff onchain or offchain? Like where are the best venues that you found um to kind of e execute some of these thesises whether onchain or offchain? So, we're I guess we're one of the largest, if not the largest liquidity provider on sort of most centralized and arguably most decentralized exchanges as

well. Um, we'll be on a venue if the counterparty risk is thought to be solid enough for us to have capital tied up there. Um, and then obviously within the confines of what we can do, what we I guess withdrawals, deposits, all of this sort of stuff comes into play. what the sort of UI is like, how we can plug in obviously via APIs, what's the settlement flow, all of this stuff feeds into the decisions, but we are obviously very very active. Um, we're doing uh obviously bulk of the volume um on a lot of these sort of big tier one, tier tier 2 exchanges um and that's both on sort of the sex and decentralized um as well.

Yeah. Yeah. Yeah. What's your take on on um on some on some of the actual onchain options protocols like derive premia has uh their new launch uh keon um and you know there's there's a couple others are there any onchain options protocols that you find interestingly do is category that will you know take off more than it currently Guys, I can Yep, I can I can hear

Yeah. Yeah. Yeah. Yeah. I mean, they've kind of struggled to uh just give us one sec here, Jake. I think we're having a little bit of audio stuff. Um, yes.

Give us a sec here, guys. We're just going to uh check the audio. Just give us one sec. Jake's gonna rejoin. Um, yeah, I I didn't think that they would trade too much onchain options. There's just not enough liquidity yet. So, uh, it wasn't a big surprise there. Um, but just couple last ones left for Jake and we'll we'll we'll, uh, move on here.

All right. Um, yeah. So, Jake, I mean, I think I think people who are looking at Winston's success and just like the the success of the space, um, you know, it can feel daunting, right? And like you can feel like it's hard to get off the ground and start. Hib recently put out a pretty good tweet saying that that there's a famous line from um Mark Andre when he moved to Silicon Valley in 1994 saying that the internet boom was already underway. You know, he felt like too late and he felt the same way got into cryptoc 2018. um you know says like was there really more space for another crypto PC

you know and then wrote around Bitcoin being onetenth of gold less than 1% of the world is on chain um you know you're still not late however with that being said Bitcoin's at 100K you know the total crypto market cap is is is hovering around three trillion you know um you know where do you think we are in the in the life cycle of this asset class um and how How reasonably early do you think this like the maturity of crypto as as a whole is like is right or or or is he just kind of you know playing along playing along the lines of you know you're still early you know kumbaya I think I guess without sort of

reverberating like exactly what he said I shared that because I think it was the best overview of sort of my feelings personally and I mean I wouldn't have sort of jumped straight ship from tradition finance to join a fully cryptonative firm if I didn't believe in the industry and I do think we're still early and I think just to reiterate some things that he said like there's no regulation yet it's coming around it's forming itself now we are at the forefront of what's happening we see a huge amount of institutions coming into the space and not just sort of the cryptonative firms now you're talking like big names that are involved we've got corporates that are adding it to the balance sheet um we've got sovereign nations Even the fact we're

discussing people like the US adding this stuff to sovereign sovereign like structures is is just a far cry from where we thought we'd be when I guess four years ago or post FTX in that world where we thought okay the industry is done no one's going to ever trust any of the actors in this space again and we've now built a really solid institutional framework that looks like prime brokers custodians um LPs like funds all interacting in this purely sort of almost regulated kind of framework that we've just come so far and I think yeah ultimately we're just getting off the ground and we're starting to see I mean look at look at sort of the stable coin space at the

moment that's arguably the first sort of real product market fit that has been that TRA has picked up and ran with outside of Bitcoin and I think it just shows there are rails that are going to exist in the in in the wider world and all of that is being built and is is trading at moment arguably a lot of it we just don't know who the sort of big winners are going to be. Yeah. Yeah. Yeah, I think we need to also have a deeper look at as as as far as like all this is happening in terms of like the most bullish backdrop, right? Stable coins where we're at these treasury vehicles, all the things that you mentioned and then simultaneously within the like the sphere of crypto. It also feels like people are a bit more

apathetic than than they you know performances of a lot of tokens is not where it's like not what people expect. I think a lot of people are are let down. I think there's an abundance of tokens. we need a bit more uh you know cleaner looser monetary policy and also I think just like need to figure out like okay the technology is good but like there's just literally z like almost zero demand for some of these tokens um and so like there's just this big disconnect happening still um and I'm not sure what the resolution is going to be outside of somewhat of this power law playing out with regards to uh asset bifurcation and just dispersion of actual results and performance So

yeah. No, I I definitely agree with that. Um obviously I think if you look at like weekly sort of linear unlocks that hit the market. I mean I think next next week we have like 800 million and then it sort of tails off. But even on like a slow week at the moment you've got between sort of four and six um 100 million that's hitting the market. So yeah, you're right. We have to churn through that and it's not going to be immediate. But ultimately it does present some really interesting opportunities for people with a really strong view because ultimately at the end of the day these protocols are still going to be the same when the tokconomics do shift to not so inflationary and for those people who are willing to sit through that I think that's where people are finding a lot of

alpha and interest. Yeah. Yep. Jake, I appreciate your time coming on and sharing your uh look forward to the next couple months in the space broadly and uh checking more and more of your work. Hope you have a good hope you have a good summer in the trenches and and that the the end end of the year treats us well. We can uh run it back sometime around then and see what's changed. Awesome. Yeah. Thanks for having me on. Thanks, Jake. See you soon. Take care. Bye. Bye. Alrighty. Um, gotta love the the the options market, even though it's something that I think a a lot of us probably don't spend that much time on.

Um, it's something that that some of the the most intelligent and just brightest minds in the space do. Um, okay. We're going to dive into a pressing concern here from yesterday, which is the A16Z uh Twitter account was hacked. Um, this is this is uh this is not great um for the for for the program. Just wasn't really aware that that that this was even happening until I saw it on my feed today. Don't need to cover it for too long. Just just wanted to present it to you guys because I thought it was I thought it was pressing AC's Twitter account being hacked. Not great for Twitter. And also I saw

actually a friend who's who's a VC was used as a deep fake in a Zoom call recently and that did not turn out well. So not not a huge fan of these types of developments but I just wanted to bring this to your attention guys make a call for OPs that uh guys you you really can't be careful enough um and you know I think it's very important to stay vigilant. So, all right guys, up next we have Reagan Boseman. Uh, one of the co-founders of Lattis Capital. Uh, got some questions for him about startup circle VCs, uh, what he's seeing and more. So, a fellow PJ Penguin decided to

bring him up, get him into the background, get him on to the stage and get going. So, um, give us one sec and we'll we'll get that rolling here. But yeah, guys, just one last call. Be vigilant. Do not do Zoom calls. Use 2FA and do not use the UBS 2FA everything that you possibly can when it comes to your accounts. Um, please, please, please. So, all right, guys. I think Reagan is in the backdrop ready to join us today.

Let's get him up here. Reagan, welcome to the show, man. Yeah, thanks for having me on. A fellow budgy penguin. I don't know how long you've had that be, but I think I've had mine for nearly nearly three years now. I've had it for a long time. And then I bought I bought my wife one. This is probably when it was like maybe one or one and a half each. She didn't want it. So I I sold it for maybe four. And then I feel like even trying to explain the like mechanics, it's like okay well like you should have held the NFT because like there's this other token and you would have got you know it's like um it's it's kind of like hard to explain. But uh no what Lucas and those that team has done is like it's really it's very impressive. Um it's really hard to argue

with you know he's pushing that idea of social currency now rather than like memecoin right more like this social currency idea. What's your thoughts there? Like is that is that kind of hocus pocus or is that the real deal? Um I definitely don't want to call anything he's doing hocus focus. So I don't I mean it's like a decent rebrand. It sounds, you know, it sounds better um I think than memecoins, but you know, I think it's like a good what they did is a good lesson that like IP is like a grind, right? Like they had a cute thing, they've made toys, they've gotten into stores, the blockchain is still like very early and and most of the other like NFT things, right? Like

the the either the IP itself wasn't great, right? Like can you imagine like a plush toy of a board ape? It'd be like like a kid a little kid would cry if they saw that, right? It's like it's horrifying visually. Um or like you know it's just a grind, right? They've been working at that for a while. It is a grind. I mean yeah them and Zuki have been the only ones who kind of I mean I guess apes a bit you know the two teams that really kind of took that IP path and tried to go out and basically open up a top of funnel in a non-financialized way for you know crypto brands. So yeah, I think everybody should support that more broadly in the space. And uh um you know, I think that I think that social currency could work with the right

implementations, but if you build a community that actually uses it for some sort of, you know, in games, in chats, etc. But um anyway, Rean, you have a ton of good content and I' I've been following some of your work as well as just have general questions for you. Um, obviously yesterday's circle was the talk of the town. Uh, pumped up to like 210, 215. Um, and that was one of the one of the largest, I think, you know, the largest crypto IPO now in terms of just hype performance um, and coming on to market other than basically Coinbase and Galaxy. Uh, we probably see more and more. In addition to that, we saw Stripe by Privy um, and some other large

acquisitions in the space by Stripe with Bridge as well as other companies. You put out a tweet saying eight months ago there had been zero1 billion dollar acquisitions in crypto. There have been three since circle has just IPOed. So my thought to you is and I I I keep tweeting this guys. This is a sign of mania. This is sign of mania. But $3 billion crypto acquisitions have just happened. Is this like a a dot boomesque you know cryptos version of that or is this just the warm-up here? I think it's the world, but I mean I think it's I think it's like the opposite of mania, right? It's almost like the markets have been too subdued relative to where these companies have

been. I mean the fact that like the most profitable company on earth per employee Tether is a crypto business a wild amount of like just such a wildly efficient business and like no businesses have wanted to buy crypto businesses. I think it's a sign that like the market just slept on the industry for a long time and part of it was regulatory, right? Like an M&A process, especially from a large acquirer. They tend to either be public companies or regulated to some extent. You had none of it. And so I don't know if it's a sign of mania. I think it's just a sign of companies waking up to the opportunity. So I think it's really exciting partially because I feel like so many teams like Privy which is a portfolio company of ours has spent

years building real businesses generating real revenue and maybe taken the hard option of like not even going down the token path. Yeah. But like very few of those teams had really been rewarded from a monetary perspective and now I think a lot more of those businesses will be funded which is is just great for the space. Yeah. Yeah. So you think that there will be more of these large acquisitions then coming soon? 100%. I mean I think the two buckets of acquirers where you haven't seen anything yet, one is just like software companies, right? Amazon, Google, you know, they have businesses that are relatively analogous to something like what Alchemy does. Um, and there's been

very little M&A there. And then banks, obviously there are a huge number of financial institutions with large balance sheets. A lot of those businesses, whether it's through the ET like Bitcoin ETFs or through stable coins, are starting to dip their toes in the water and whether that's like trading infrastructure or security companies, like I think we'll start to see a lot more M&A over the next few years. Yeah. Interesting. All right. More of a more of a kind of like historical question for you. What is one startup that you wish you had a piece of right now and and what made you miss that deal?

So, we spoke to a bunch of like Latin American focused stable coin savings apps maybe two years ago and there were a bunch like Lemon Dollar app. They're maybe like 50,000 users maybe like$1 or2 million dollars in revenue and talked to a bunch of people who are like more experienced in the region than I did. Got a lot of feedback that like expanding from somewhere like Argentina as an example to Colombia, it's harder than you think. and you know who the acquirers of these businesses are maybe a little bit unclear, right? Um and so we just like didn't end up going that deep down. didn't invest in any of these companies and now there's like a handful of them that are just 50x bigger

than when we um when we invested and you know you see the size of Marcato Libre or New Bank like the size of some of these Latin American focus fintexs they're tens of billions of dollars right there's really large outcomes and we just like miss it and you saw I think Felix Pago raised $80 million two or three weeks ago like yeah totally a miss on our part and one we're we're trying to correct like we've been talking to a bunch of companies building around that region. So then what have been some of your of your best wins then? Privy assumably so. Um yeah.

Um recently, you know, we're investors in a company called Lrange. They're at the cutting edge of kind of like zero knowledge and all the infrastructure around that. They had a really successful token launch a few weeks ago. Um, I think we're really excited about like tokens starting to become more interesting financial assets. So, we've been supporters of layer 3 since honestly like almost when we started the fund in 2021. If anyone is not familiar, they're basically like the performance marketing engine of crypto. Coinbase, Binance, like every large crypto company if they want to acquire new users, activate existing ones on new products, like they use layer three to basically like run that marketing. um probably had a 17 $18 million annualized revenue run rate and they've started to like

actually use those profits to like buy back tokens. And so, um, I think what we're excited about is like, you know, post election, obviously, Trump has like changed a lot, but if you think about how teams design tokens to avoid the eye of US securities laws, it was basically like, let's make these things [ __ ] useless, right? Like cash flows or like governance rights or like actually kind of like really doing anything. You you just like couldn't do any of that. And so I think we're starting to see like companies in our portfolio that have built real businesses start to just create like interesting onchain economies and we're really excited about that. Yeah. I mean I think that there's um a largely a renewed focus around um you know let's just call sort of

flywheel to economics. I've been I've been kind of uh you know uh you know saying that it's a result of the administration with Trump and then also Hyperlquid has kind of forced a lot of people's hands in terms of thinking about things differently. Um and I assume when founders are coming to pitch you now because I know because you know our fund also did lron do kind of like small size checks. Um, and and you know, for for a lot of the DD, and maybe I'm exposing myself here, but it's just been kind of like founder-based uh good good technology and really just understanding what the product is and where there's going to be some sort of use case for it, but very little like, okay, token's going to do this, revenue from here is going to come in into this, like like

it's just been kind of hands off. But I do feel like in the last six inch months that's likely changed a lot with regard to types of pitches that you're getting or at least the way that you're thinking about allocating capital into new deals based on like well you know how are you going to create something unique that actually drives value back to the shareholders or token holders and then also you uniquely I think there's a there's a situation here coming up where like this the divergence between equity and token holders is going to become like somewhat of an issue for some tokens that I've heard uh on the public trading markets now uh that are going to kind of like allocate future value to equity holders rather than token holders. So there's like interesting

dynamics happening at token level. Um I don't really have a question but those are just two things that I've been noticing and just want you hear your thoughts. Yeah. No, I I I think it's a really interesting time to be investing in the space. I think one of the common knocks on crypto is like oh it's speculative. What the [ __ ] even do these like tokens do? And and like it's a fair question, right? Like what does Uni do? I don't know. Like yeah, maybe you can like you're one vote of a billion, but like it's not a right to cash flows, which is what's what uh mo most equities are. I think what we've seen in a market that really hasn't seen that many net new inflows kind of let's exclude Bitcoin for that, but like the alts market over the last 18 months, how many

net new traders, users, speculators, like are there really? it's probably been pretty flat. And so I think in a back in a in a macro environment like that, any team that is able to use their profits to like bend the supply and demand curve, they are going to like chime, right? And hyperlquid, I mean, I think for a few reasons, but that's definitely one of them where like there is a like buyer of last resort for hype on any given day, right? Just because there are very very real profits. I think that that's going to like drive more more tokens to go in that direction. And like does that mean like fundamental seasons here?

I don't know if like any time like if you've made that bet in crypto, you've probably lost like lost money. Um if you've made that bet a few times, but I I think like that's just where the market is headed. Yeah. All right. So in that in that lens then is there a particular ecosystem or chain or set of applications which you believe will outperform with regards to doesn't have to be price performance but mind share users revenue is there a set of uh do you have a general idea of a category the team or an ecosystem which is going to outperform in these in these metrics and perhaps you know you can explain some of that thesis a bit. Yeah. So, we've been large investors in Deepin

honestly almost since we started the fund. One of the first investments we made was a company called Demo focused on like automoility data and we've seated a handful of companies like Daylight and Glow that are kind of building at the intersection of crypto and energy and similarly using deepin models. I think there you have businesses like GeoNet, like Helium that have real onchain revenues. I think a lot of those businesses, yeah, they are I mean the token ironically has done like terribly. nothing. It doesn't make any sense though, man. It's there's such a disconnect here. Well, there there is. I mean, I think one counterargument to like the fundamental season is like if you just wanted to like speculate on future cash flows, you should go trade equities,

right? So, I think the ven diagram of like people who like want to invest in these fundamentals businesses and crypto, it's probably not that large, although I think it's pretty clearly growing. What's exciting about Helium, right, is like you can just look at the data on chain and see the uh data offload starting to increase like data credits earned like starting to increase. So we think a lot of these deep pin businesses maybe now they're generating like a million dollars in annualized um revenue like that should be able to 10 to 25x this year. So I would say that's a category we're definitely very excited about. Yeah.

Yeah. Yeah. have heard that quite a bit and and just generally seen those have seen the adoption. Yeah. Just weirdly has have not seen like the the the market catch up to like wanting to buy these things and like bid them up based on these revenues or or these user numbers. Like Helium has a million users per day which is pretty insane for Yeah. I mean, you know, another thing and and like I'm I'm not I don't have firsthand knowledge of this, but like a lot of these teams that raised a lot of money like Helium, like WorldCoin, you also just have like a lot of natural sell pressure. Yeah. And I think like I mean the number I don't want to go down this

[ __ ] low float high FTV thing too much time talking about it, but like I think it's also just a good illustration that like those those things matter at the end of the day, right? Yeah. Yeah. Yeah, I'm curious what what your takes are on some of these uh like you know next generation DeFi companies that have been kind of you know token wise have been doing well revenue wise have been doing well and just kind of like how you're thinking about more on the liquid side like companies like um you know even like like pancake swap has insane in insane revenues as of recent like when you're looking at DeFi as a sector um you know and looking at some of these outliers when it comes to

revenues and like users etc. What matters to you from an investment perspective in the liquid side? I I know that you you guys mostly venture, but if if I'm looking to analyze these different DeFiations, like what is the right way to think about um selecting assets per se based on onchain metrics? So, I think it's a really exciting time for D5 broadly. I would say like two years ago, we we had the view internally that like most of the obvious categories had kind of like they all had like blue chip winners, right? There was Uniswap and A and like it seemed a little bit unclear how a team was going to come in

and disrupt them and honestly RV was wrong because you look at what Morpho and Oiler have done with like this vault strategy and very clearly like could feasibly disrupt a um so I think that's been really exciting because I think if you go back to like what got a lot of people excited about onchain products in the first place it was like DeFi, right? was like, "All right, if DeFi like was wasn't going to work, then like maybe this whole thing was like was not going to um and so I think it's been really exciting to just see that market catalyze and obviously hyperlquid which we hold some out of our fund. I mean the revenue, the growth, like it's just exploded. Um, so I think that's really exciting. And our view

now, and I'll talk more about the venture side because that's more of what we do. But our view is that certain things like fixed rate lending, which we invested in a company called Tenor that is building a products there, that have never really worked just because these markets have been like very fast money, very speculative. We think now are potentially going to start working. And I think even you know some products like I spent a lot of time working in index co-op which is basically trying to build like onchain ETPs back in kind of DeFi summer like there was like a flash in the pan of success but like it was never really sustainable. But I think now you look at like the amount of onchain liquidity you have in order books given hyperlquid success compared to like a year ago and

I think there's actually like a whole broad just range of new products you can build and then if you believe like the float of stable coins is just going to continue going parabolic which we do the addressable market for any of these products is like way higher than it was you know a year ago. Um, so we're really excited and we I'd say where we've been like more active than in trading like liquid DeFi assets is like real world companies building various flavors of real world assets. And the view there is really like you look at a spectrum of like liquid and fungeible assets and the highest one is probably the US dollar.

You go a little bit below that and you have like onchain like T bills and we're starting to see like go all the way down the stack to less liquid and less fungeible assets come onchain and that could be real estate, it could be venture. Um but we think there's going to be like many many large companies in a handful of those categories. Yeah. Yeah. Yeah, I mean I think I mean stable coins have done more to improve the perception of our industry to outsiders and to institutions than I think anything else since the genesis. And I it's just been great to see that. And now you have um politicians and regulatory bodies wanting to extend the dollar's dominance. You com you combine that with a renewed DeFi ecosystem as

you said bit more of these fixed rate lending which it it was tried in 2019 and 2020 and 21 but it just never kind of picked up. It was it's just too boring and I think now it's like now you know now there's people that want to do it. Now there's actually capital allocators that would see the value in this. Um and then you you know you extrapolate that all the RWA tokenized assets, bonds, etc. Um real estate and I mean yeah it's an exciting time to be on on chain and investing. Um any closing thoughts Reagan? I appreciate you coming on man.

Um we're really excited. Like I think the opportunity set in front of us in crypto has like never been it's never been larger, right? It's like let's just I don't know. Let's keep building. We will, sir. Good to see you and uh yeah, thanks for having me on. Have have a great day. All right, buddy. Yeah, you too. Cheers. Cheers, man. All right, guys. Uh we are uh we are we are bullish on on the on Deepen from Reagan. We're bullish on the growth of RWA's fixate lending on chain. Um they have a really good portfolio. They also invested in Lrange, which is kind of on that AI ZK lens right in between. um amongst other other kind of of those I

think we probably have a couple shared portfolio companies actually my key takeaways there was um the crossber payments and the Latin American uh adoption of crypto I think was slept on by a lot of VCs second is that uh that is now one of the larger categories in the space um that I think that is unignorable and um third is that like I mean if if venture investors are seeing this type of return and this type of interest then I think that that there's clear demand for more speculation on chain coming soon. Uh unfortunately guys another hack uh as as we brace for RJ to come up. Um so it looks like the uh the hacker

collective has released the full source code of an Iranian crypto exchange um after orchestrating a$und00 million exploit. This comes at the uh precipice of a war between Israel and Iran. Truly a really really sad time. Uh but once again guys, I just want to uh uh prioritize that OBS sec and keeping yourself safe in these times is very very important. Um I I I don't really know what the ramifications are of this exchange being hacked are in the immediate term, but I do know that it's something that you ought to be careful of. And actually today, I think something that we didn't even cover was

there were 16 billion um you know uh either accounts or passwords leaked. Um so guys, once again, just check your 2FA, check your um your back end and make sure everything is good. All right, guys. Up next, we have R.J. the founder of Aligned. uh looking forward to having him up uh on stage. We are gonna bring him up shortly. R.J. is a good friend of the show. R.J., welcome to the show, man. Good to have you on. Hi, everyone. Thank you for having me. Yeah, man. Where are you calling in from today? Um, right now my new wife, so in the south of the world. Beautiful. You just did a trip to Europe though, right? Yeah. Uh, actually I arrived here yesterday. So, I

have been in many different time zones. Nice man. What were you uh what were you guys doing in Europe? I saw some alpha around sort of institutional stuff. Yeah. So we have been traveling a lot because we have u some clients from different backgrounds that they want to use a line and I was there trying to explain what's the stack that we're building and trying to understand also the needs so we can check exactly what we can offer and if it's useful. So most of them are institutions or web two companies or finance companies that want to use Etheum as a financial back end and yeah we're talking with them trying to understand their needs and improving

our offering so we can cover everything they need. Yeah man. Yeah man. Very cool. So um it seems like like the the reality of Z into practice is uh you know is is happening not just in our industry but outside and recently you got a pretty spicy tweet saying at this point if you don't recognize that ZK default solution for scalability and verifiable applications you are out of your mind that that doesn't mean that ZK alone solves everything but if you don't adopt it to improve your protocol you will fall behind quickly now I have a I have a counter point for you which is sometimes I feel like people in ZK um treat ZK as it is a a solution to

everything and that and that they they think about the solution before the problem. Maybe you can talk us through some of the actual problems that you guys are seeing teams in the ZK space solve. What are the most exciting problems and and teams that are solving these problems including what you guys are doing at aligned? Yeah. So I actually agree with you like what what what I'm trying to say with the tweet is the following. CK is a tool right and right now this tool is very good and if you want to do certain things on Ethereum or any blockchain this gets you 80 or 90% where you want to go that is actually verifying certain compute uh proving certain comput and verifying directly on Ethereum and what

we're trying to explain is like yes we are using CK you could say we are in CK company but in the end we're using CK to package the trust of Ethereum and allow people to access the liquidity and the trust of Ethereum uh using CK as the tool right so many many type of companies are working in in CK trying to build different use cases right I think that we could cate them in maybe three companies three type of categories one is rollouts what they want to do they want to verify their state direct on Ethereum and have a reach a native bridge directly with the the L1 then we have machine learning or CKML that has been maybe lagging behind because it's a very particular use case

and it needs a lot of uh advancements and new technologies. I think there's a company for example called Giza they're doing amazing work uh in using this tech and actually they're also very pragmatic then they are building a product and at the same time improving the tech behind it using CK. So when CK is actually ready for production for what they need they actually will have the best technology. Um and then what we have is a new a new sector that I think is coming that is verifiable applications are not they're rollups but they are not EBM rollups right there are applications written in RA probably uh we have seen a few order books and the idea is for offering these services to be verifiable direct on Ethereum um and improving the experience

like many of the stuff that Star War did in the past with Stark I think a lot of people are realizing that was very useful and we're using new technologies in order to offer all of So the the point of the tweet or what I'm trying to express is say CK is already here like before it was very slow and it was very hard to use now it's very fast and it's actually pretty easy to use because you just write briding a protocol in crypto or in in other in other industries you now have a tool that is actually ready to help you improve and simplify the protocol. So if we think it the other way around, not of CK going to solve a problem, but more like hey now that you want to solve a

specific problems, there's something that is already ready in order to help you and simplify the whole thing. Yeah. And we have been talking with certain companies that they are doing that and the good thing is it's easier to build and what we're trying to offer is help them make things even easier. So making the proofs easier, providing toolkits and more infrastructure. So, we were actually both at stablecon and well, first of all, I I agree with with what you're saying and I appreciate the clarification because I think that I think that it's a common thing in infrastructure in general in in crypto to sometimes create solutions to made up problems, but clearly ZK is world itself uh with regards to it. I mean, just the

advancement we've seen in the last year or two years. I mean, we're not talking like 10 X's, we're talking 100 X's and a thousand X's in terms of performance and in speed and such. I mean it's hard to see from the outside but it is happening. Um so kind of flipping switches here. We were at stable con maybe like three weeks ago together actually and um there was a uh a lot of crossborder cross in uh uh infrastructure for stable coins. Um, recently Matt uh Hugan, the CIO of Bitwise, put out a tweet saying, "Wait a second. I thought you said credit cards were good enough and that stable coins didn't have a use case in payments because retailers were seen using stable

coins to push back against card fees. Maybe you could talk to us a bit about your experience from uh stable coins and their use cases with regard payments. How is decay conting to this world and specifically coming from South America and being a native of that part of the world kind of what what the rise of stable coins means for for you in terms of crossber payments. I know that we talked a lot about how there's a lot of supply in the states and demand globally per se. So maybe you could extrapolate on that with regards to Matt's tweet here about uh retailers using stable coins to push back on card fees.

Yeah. So I think the stable market is very different from emerging markets and from the US for Europe right. So the use cases are completely different and I probably we didn't spoke about this but table the thing I noticed there were two main people or actually three stripe and and prey together working and building new solutions banks that are the supply side and then I saw a lot of new companies from Africa and Latin America that were very busy uh trying to solve specific issues and growing a lot and the way I mean I I I having used stable coins for over maybe 10 years now and I always say that allian wouldn't exist without stable

coins. We would have wouldn't have been possible to build any of this um and if you speak probably with FedEx he will say the same that is not only a tool that we want everyone to use. is something that I have been using for a long time and I know it solves specific issues for me and people from our team and the the what the data is showing I don't know if you guys saw there's a report from Artis they do data analytics they did a report that is very very useful around stable coins they grab data that is just KYC stable coin usage and one of the things they notice is stable coin adoption is not getting used only in B2B but there's already $1.1 billion dollars of credit cards backed by stable coins

that is used monthly. Wow. So, it's not only for payments, but it's actually what people are using is being able to access dollars. When you're in these countries, you don't have bank accounts that can accept dollars outside the US. Um, and the primary use case is not only for fees, but it's actually, hey, I don't have a way to use dollars, and it's not only cash. And this is the only tool I have in order to use dollars on the internet. And that's why I have been using stables for example for a long time and the technology is catching up right now. You use a a wallet that has bridge that was acquired by stripe. You receive dollars directly from the US.

You get stable coins and you can start spending with a card. That's five minutes to get on boarded. So more than payments I think what we have seen now is access to dollars. The next phase the next phase is payments. But I think too Yeah. and yield because you don't have any way to access yield in dollars. what is like 4% maybe that you can get on a or depending on the market right and the next wave I believe it will be like we will flood with stable coins all of these blockchains and natively we will need payment solutions to pay from arbitrun to Solana like we will need a visa like for stable coins for all for all of the the volume that we'll have because these people for

now are using as a gateway a visa masterard with the cards but we will need a a way to start paying to merchants and all of them or between each other that is native stable coin. Yeah. So I think that that is the next frontier in terms of infrastructure and I think CK is going to be useful there because the next bottleneck for adoption of stable coins in my opinion is privacy. I don't want to go to a coffee shop and have the people know if I spend in a flat white or in a matcha match a ladder. Right. So I think that's that's where Sik is going to be very useful for stable coins. Yeah man. I mean I the the industry underindexed on privacy and is now kind of really whirling back to it like, oh man, we really need to

prioritize this because it's going to be something that's very important and if we don't we're you know the these systems could never operate in a in a public environment. Just imagine if your current financial life was in a public environment, right? So, one one uh interesting thing that you guys have pushed from the aligned side has been your new ZK uh rollup RAS basically a way to easily spin up rollups in uh using aligned. Uh I'm curious kind of what your thought process was behind this given that uh you know RAS has been a an active an active uh sector for some time. What are your your key differentiators? Why would somebody use

aligned to build their own chain? Yeah. So the reasoning behind it why we want to do one on our own is because we are not satisfied what we see in the market. Uh most of the RAS providers that we see for example they offer every single step or most of them right they offer average room optimism um well polygon CDK now is deprecating but they offer all of them and from our philosophy point of view we want to offer the best experience ever and and for that you need to remove certain dependencies and have something that is vertically integrated so what we will have is going to be cheaper it's going to be faster and it's going to be easier

to use like you will go to a website, you will you will connect your wallet for the deployment, you will pay us and you will be able to launch your roll up in one click and the whole idea is for us to help you facilitate and run infrastructure but you should be able to launch to your rollup even without us. Like if you don't want to use us, you still should be able to launch your stack and we're using the stack built by uh by lambda class that is building a a CK based based rollup stack using ERA. So we're packaging up we're using this and saying okay we want to make the deployment very easier and connect to everything that we're offering with the line. So you will be able to aggregate proofs directly with us you will be able to have interoperability because we're

building interpity protocol and in the future you will work across um our meta proving service as well. So you don't need we know the future is CK for this technology and we're building the whole infrastructure for these rollups using uh CK and in the future based rollups and the providers that we see in the market because they're offering many type of solutions is not tailor suited for this technology. So we thought everything from the ground up knowing that we will only use this stack that uses CK TES and in the future it will be offering base rollups and all of this is a business decision not just a tech you need base because you want to access liquidity of the old one and you want to use CK because it's the safest faster

and cheapest solution to verify state. So you guys are working with um FedE with his Erex product which is allowing you guys to launch ZK rollups with aligned. Yeah the integration um they have been building this L1 client that then is also used for L2 is very minimalistic has I think the goal is to have around 50,000 lines of code uh for the whole thing. um is already very performant in the launching benchmarks and is designed knowing that you will run a RA line execution client you will use a CKVM either SP1 or Xio in the future any that is very performant and

you should also use TS because we are extreme like we're probably one of the the teams who is most excited about CK but at the same time we know that there might be issues and you need to hedge against that so we're using TE's in order to have like a multi-prover setting. Very interesting. Okay. And what is it like uh working with FedEx? Um is going like in a Ferrari in a or in a Formula 1 track. You're constantly uh at max speed and you don't know when and you don't know when you need to take another turn and and you have another crazy idea and you have to go even faster. Uh so it's very fast but uh in a extremely high paced environment which

is good. I like it. RJ um one last thing for you. If you're if you're looking at the space uh of native rollups uh Justin Drake has been putting a lot of effort into this. He actually recently uh gave us a a talk at L2 days in Berlin uh which is happening I guess this just this week. Uh this has been something that that has been exciting. a a researcher at the Ethereum Foundation, Toratner, I think you've heard of him, put out a thread about native rollups um and just kind of the problems and the uh mechanisms of creating them as well as why they matter. Uh what's your take on native roll-ups? something that is going

to kind of, you know, be a big splash of base rollups and then end up having not as much adoption or do do you think native rollups is a big solution to uh uh solving some of the L2 scaling problems? No, I think it's going to be a great upgrade and it's something that we're actually excited about like both BA and uh native rollups, you need both and and especially it's going to make our lives easier. Like one of the things we talk a lot about internally is we are helping businesses build on top of Ethereum. So making it as easy as easier as possible to launch your own rollup because you want sovereignty and you want many other things that we can discuss in another time and having

native rollups will make things safer and easier and to implement. So the stack solution it will be easier and on the other side this is something that we always say on the other side of the these businesses they're also CTOs. So we need to make sure that the tech is also easy to understand to people who do not come from the same background that us but they make technical decisions and they care about certain things. The simpler it is and the safer it is is going to be better for them and it's going to make the on boarding of them way uh easier and we will have less friction and governance of all of these rollups is an issue. native rollups is going to solve many of these things and I'm excited to to have all of these things and align will will integrate all

of these technology. We are very very bullish in the in the road map that Justin Drake and the whole team in Ethereum is is pushing forward. RJ appreciate your time and have a great rest of your day. Uh look forward to seeing you in here in New York next week and Ken I think you'll probably be at one of the two or at least some of the team will be we'll be there in France. Thank you Andy and thank you for everything and congrats on everything. I think this is a great show and you guys I appreciate you man. Thank you. Byebye. Speak to All righty guys. Um it's good to get caught up on the ZK and the rollup side of things because we spend less time in the ZK space but having having a etc. uh it's just it's a consistent

reminder of the progress happening in that space. Um all right guys, the next topic that that we have is around L2B's recategorization. So L2B recently put out a tweet um and and a post signaling their recategorization is the biggest update to their framework yet, redefining what it means to be an Ethereum L2. Uh noticeably they had some some people on their team pushing back against AltDA specifically uh because of the risk parameters of ALTDA and they had over 130 projects were re-evaluated.

Many of them were effectively lowered in their risk parameters or sorry you know technically increasing in their risk lowered in their categorization. Um, and yeah, I mean, look, I I think that there's a lot to uh take away from L2B's work. They've done an incredible job in the space and continue to do so. And look, I think this is bullish, but I think uh it also forces the hand of Celestia DA a veil to actually pay attention here and um update some of their I believe what DA bridge to Ethereum being the main thing that uh L2B is now looking for in some of these recategorizations. Um there was kind of

a push back against alt dials as there if it was a failure. I saw bread guy comments in there saying that he thought that this is probably the only way that these will be able to compete with alt L1s in terms of scale and speed. So, um, look, I'm bullish on L2B. Absolutely love their work and excited to see this recategorization go live. And yeah. All right, guys. Up next, we have Sid Powell, Theo, co-founder of Maple. One of the most amazing stories of DeFi in the past years. I probably spoke to Sid for the first time when I was like 21 in in like 2020 or something or 21. Um, you know, so a lot has a lot has changed

since then. We got him up here now, Sid. Good to see you again, man. Good man. Not as good as you, man. Congratulations on on some of the recent success. No, thank you. Thank you. I appreciate it. It's been Yes, I think we've had pretty good momentum so far this year, but I don't take it for granted. There's certainly a lot of grinding behind the scenes. Yeah, man. So, look, I I gotta I I gotta tell you that I started this this poll two weeks ago or so. It was like, uh, how long will the revenue meta last? And I got absolutely blasted on Twitter for it, you know, but but the options that I put were less than three months, less than six months, less than a year, less than two years. I think I

should have put more than two years. Um yeah, but a lot of people paid like less than three more less than two years, which assumably is like more like it's going to last forever. Um I do feel like you guys have been building for this moment of of people actually caring about let's just say revenue and such more so than others. Um, I'm just curious like what's the state of things with regards to your view of how the market is assessing different DeFi protocols based on different onchain metrics and kind of like how you're viewing it from the founders perspective or the donor's perspective as far as like what the north star is or one or

two things to really kind of focus on in terms of metrics. It's a good question. And I'd say it's kind of my view on it has shifted over the last 12 months. If you'd asked me Andy, 12 months ago what I was focused on, I would have said it was 90% TVL and then maybe 10% or less revenue. Like we're we certainly paid attention to it because that's what pays to keep the lights on. Uh but I would have said that, you know, us internally and then also the VCs and the funds and everybody who who holds our token, what they cared about more was TVL. And now I would say it's kind of shifted. I don't know if it's hit 5050 yet, but nowadays anytime I talk to a fund, whether it's a liquid

fund, kind of looking at the token, one of our existing venture backers or just the community, what comes up more and more is is the revenue side of things. Uh, so I'd say it's maybe not quite 50/50, but we've gone from 9010 to maybe like 60 6040, getting close to to 50/50. And I think across the board, the other thing that we hear as well is every liquid fund we're talking to is kind of trying to identify revenue producing teams and protocols and focusing on that rather rather than TVL because unfortunately we've seen that in a lot of cases you have this massive explosion of TVL that then quickly evaporates once a team or a protocol launches their token. So it's it's not

sticky. It's not a durable business and that's what they're using revenue as a proxy for now. Okay. And and I've been kind of using the the mental model for these funds and for these investors who are now really trying to get get, you know, a bit more exposure to these types of assets as look, I mean, it was the it was the new administration in the states. Yeah. and and really just kind of catapulted people out of this mindset that I almost kind of I don't blame Andre Cronier's Medium blogs back in the day, but like he really kind of started this like this is a useless governance token, do not buy like you know what I mean, right?

And which would have been straight out of would have been straight out of uh the memo from his lawyer, right? Is like you have to tell everybody that's worthless so that you don't get sued. Exactly. Right. And and that was a state of affairs which looking back on it was so silly. So that happened and then and then the other kind of thing that I'm pointing to is obviously just like the success of Hyperlid the model there the token etc. that just changed the way that that the market has has thought about uh tokens and DeFi in general and it seems like that's also coming at a time where uh there's also kind of the power law hitting the market in a in a stronger way than ever as far as the performance dispersion of different assets uh in the altcoin market broadly.

Yeah, I think so. And you you have uh I think a couple of things kind of contributed to it and and to kind of the rise of the the let's call it the revenue meta, but you had a lot of uh L1's and L2s that were valued at you know 2 to three billion last year or in private rounds in 2023 and 2022 and uh a lot of those are now valued at you know 2 to30 million FTV because they never landed re like they never landed users or or activity on their chains and so meanwhile you you've seen the uh you've seen the interest flip to now where you want to own the kind of the app because that's where the customer relationship is which is where you can kind of charge revenue and you've seen I think where we've tried to position ourselves is we

think that DeFi protocols are going to outperform memes this year because I I I similar to you similarly to you I think memes were an equal and opposite reaction to if you do a DeFi protocol you get sued into oblivion and uh so you you know a lot of people then useless value coin tokens. But in a world where you can build protocols that have real businesses that are sustainable, I think there's going to be less oxygen for for memecoins. And so I think uh we are trying to position ourselves to stand out by being a DeFi protocol that has revenues. The only way I know how to do a business for for 20 years that'll have it survive is if you can generate

revenues to pay for everything for the 20 years. Otherwise, you're effectively just on a melting ice cube. And so, we, you know, we value independence and being in control of our own destiny. So, we we want to continue to generate revenues. And I think there's maybe going to be half a dozen DeFi protocols that can do that. And so, we want to be part of that pack. And uh and so I I think that that's that's how we are trying to stand out. And I think that's that's going to be the play for this year for for teams who are successful. Yeah. Yeah. I agree. I mean, I think that that that's going to keep happening. I I don't discount that there will be select memes that do well. I mean there always will be, but I I think this dispersion is going to hit harder

on like I like yeah some of these L1 L2 tokens um some of these kind of infrastructure style plays which are seemingly just trying to figure it out as well because I think a lot of them have to figure out how to almost like dog food their own technology and then build applications on top of what they already have that like attract some sort of users. Shifting shifting gears here uh more in towards like uh the nitty-gritty of DeFi. Um so you've kind of prioritized Maple around stable coin growth, private credit market, taking share away from banks in general, uh asset management shifting onchain as well. Um I'm curious like at the at the kind of like

intersection of of of all three of these you must be working with different teams and and uh protocols that are specialized or do well in enabling you to do this. you know who the most important to the maple finance best story uh you know whether it be infrastructure providers yield partners etc you know and kind of how have these partners really helped you succeed uh it's it's a really good question it's a very broad question I'll I'll do my best to kind of answer it uh succinctly so I think where we've seen the most growth this year has been on syrup USD And a lot of that success has been due

to our DeFi partnerships. So I I would attribute a lot of the success and and and the kind of the value in partnerships there to you know we got we got syrup USDC on boarded as collateral to Moro and Oiler. Uh so those were really important partnerships. Um our first major DeFi partnership there was uh Pendle. So they helped with hedging and and also speculation on the interest rates. And then more recently, we've had a really large partnership with uh with Spark and uh and the Sky ecosystem and we want to continue growing that. We view them almost as the central bank of the DeFi space and uh and uh and then recently about 2 3 weeks ago we we launched on uh Salana and that the big

the big partnership there has uh has been Camino. So Syrup USDC is in the lending market there and uh and has been able to be looped. So there's a number of partners, but I think those DeFi partnerships have probably been the the biggest driver of our growth over the last 9 months. Uh and then in terms of infrastructure, we are not only DeFi, we we actually have a lot of CFI partners and I think that's one of our our unique differentiators is we can accept collateral in a qualified custodian. So we do a lot of work with Anchorage, uh with BitGo, uh Copper. So I think that custodial infrastructure has been really important for us in serving uh you know serving institutional borrowers. So they

post us Bitcoin or Soul or ETH or XRP and and we send them loans on chain. But we couldn't do that if we didn't have these custodial partners. Yeah. I mean that's the part of the business that I more so than ever previously from 21 and 22. But I think this expansion to stable coins and also just into more uh in into more like uh into more markets that anybody can participate in has has really served you guys well. Obviously there's been this kind of like power cohort of D5 protocols as well that have really emerged uh you know given the ones that you've named as well as on the C5. One question I have. Yeah. Yeah. Go ahead. I was I was I was going to say and and I

think one of the interesting trends we've seen is that some of the DeFi protocols who have done really well lately have kind of uh had this almost hybrid CFI defi approach where there are aspects that are quite centralized and then there are aspects that are fully on chain. I think hyperlquid and Athena are two of the other ones that really come to mind in a strong way. Yeah. Yeah, definitely. I mean that the you know the puck is going there, right? So, I mean, teams that are skating towards RWA in institutions, it's very clear. Um, and I mean, the the news the last three months looking back, you know, to to where we were has been uh shocking in in the best way possible.

Um, okay. So, one thesis that I have is around opinionated applications, right? So there is a world where application reaches enough product market fit on a given shared state on a given chain like Ethereum like Salana and you have enough of a sticky user base actually go and basically create your own uh your own chain or your own um app chain etc. You have the application being the core of it. uh the chain like the you know like the bottom of the funnel and you basically build this thing out as like as a as a uni chain as a you know as a Maple chain. Will Maple ever launch a chain or is that just not something that you're thinking about?

Uh it's a good question. I would I would not launch a chain for the sake of launching a chain. I think we would launch one if we found that it was the answer to a big problem for us. Right now, the the main things in front of us, you know, we're trying to keep the blinders on this year and so our goals are deploy more cash into loans. So, we we we've been growing exceptionally fast and that means that uh we we build up cash that we we are trying to deploy and make sure we stay, you know, as as close to fully utilized as possible. and then uh and then has been to uh get syrup USDC crosschain and then also grow the uh the the TVL through growth of the the Bitcoin yield product. But uh I think

the to do an app chain we would have to see there's very low friction and bringing in new deposits and and also that it doesn't uh upset our borrowers who are used to taking down funds from us on at the moment Ethereum but maybe another chain in future. So, uh, I don't need I don't need the same speed advantage that a hyperlquid or that a dydx needs. Like we're not a high frequency protocol. So, I have less of an impetus to go and start an app chain to reduce cost and and and improve speed. The people who come to us for loans, they they get one, you know, maybe every week or every every few weeks. It's not it's not a high frequency type operation. And so,

that, you know, that kind of protects us on that front. Yep. Yeah. Yep. Good point. Yeah, I think more around like sovereignty of of of um you know excessive gas fees or things of this nature. But you know if people are moving large sums of capital, I think what probably matters to a lot of your users is more about um you know censorship resistance and these types of properties. Yeah, exactly. And the other point I'd add is where we where we've had some interest before has been the idea that we could have synthetic assets that represent your your assets in custody. Like if you post $100 million of Bitcoin to uh to Anchorage that we could give you like a synthetic receipt for that so that everyone can track it

for transparency. That's kind of been the that's so far been the biggest um plus that we've looked at for an app chain. But but otherwise we don't feel tremendous pressure. We just want to focus on kind of growing the core business. Yeah. Yeah. Um, one, when you're looking at the landscape of being a founder, right? You're looking at going through the last bare market, um, you know, hunkering down, gritting through that. What kind of advice do you have for other founders who have gone through um you know long bare markets, have gone through uh you know uncomfortable situations on chain, who have you know you know had to persevere in the way that syrup has in the way that that Oiler has and the way that a

lot of DeFi has just grown its resilience as a whole as a category. What kind of advice do you have for for founders who um you know are are in a situation like that or perhaps are are headed for one and don't yet realize it because it it just kind of jumps out at you. I tell you that. Yeah. Yeah. It it never happens when you expect it. I'll tell you that. So uh I I'd kind of put put three three points or three key kind of points. Some of them are tactical, some of them are philosophical. So on the tactical point, I think when you're going through a crisis, take the worst take take all the medicine you can up front. So we had to do layoffs and then everyone who stayed had to do salary

reductions post FDX, but we did it up front. We didn't do paper cuts where you do one round of cuts and then you wait a couple of months and you do another. We took all the we took all the medicine and and ripped off the band-aid up front. And I think that was important. One, to give people certainty that there wasn't going to be another round. to just transparency and and we we got it out of the way quickly. So so there wasn't any lingering dread. Uh but it also gave us the most optionality because we started saving we saved the most money rather than trying to like you know hope and pray um that things would get better. So take take your negative you know take your medicine up front. The second thing I' I'd say is you know focus on what you can control

and keep everyone on the team aligned to a north star. it was really important to to keep morale up and uh you know and know that we were still building towards something much bigger. And then the uh the third point I would say is you know there's exactly zero great businesses out there that have not gone through a period of major setback right like you look at Amazon their stock cratered 97% after the dot crash uh you know you look at Facebook they had this crisis point with the shift to mobile you look at I mean how many near-death experiences has Tesla had same with SpaceX so there there's exactly zero great businesses that have not gone through one of these moments I would just say almost expect that it's going to have to happen to And uh and your key is most businesses

are not incredibly successful in the first 5 years. So you actually have to plan to be doing this for 10, 20, 30 plus years. Like look at um look at Jensen Hang from Nvidia, right? He's one of the longest serving CEOs in the market. Most of their success has been in the last 10 years, right? He uh he he wasn't benchmarking himself against everyone else at year six. And so I think that's the way to operate. Do it for the long term. Man, I think taking the pain early is something that I've learned in in life that it's hard to do. Goes for everything. Goes for relationships for just kind of cutting losses for because you get caught in like this like sunk cost theory where or sunk cost bias, right? Where it's like,

oh man, I can't I can't cut this because ah just, you know, but it's like no, no, no, like man, you know, even just saving 1% 10% is better than losing, you know, 99.9%. You know what I mean? Sometimes you can't finish the day with a win, but you just have to not lose, not suffer an L during the day. And so, and but you just accumulate those over time. You you get up and you keep you keep grinding through every day. And Sid, one last thing for you as well on the advice side for uh working with expanding out of cryptonatives and into institutional uh basically capital and that kind of world. What what kind of advice do you have for founders who are also looking to um break into that world more with their protocol? You know, when it goes

to communicating with with these uh you know, more traditional financial firms when it goes to uh kind of understanding what they want and need, you know, maybe you could just provide a bit of insight as to what you found like you know uh relationship wise, strategy wise, and really what these institutions want uh you know, and then how you're going about providing it for them. Yeah, it's a it's a good question and it's one that a lot of people are dealing with like as we're seeing more interest from institutional and traditional Wall Street players in in what's going on in DeFi and crypto, uh you're going to have to navigate it more. So, I think expect it to take a while. You know, we you know, we we recently had the announcement of of

closing a deal with Caner, but that, you know, that was months of work and and a lot of negotiation and kind of prep behind the scenes. Congrats. expect it expect it to take a take a long time. Uh also in terms of selling I think a lot of people focus too much on expounding on the virtues of their tech and the tech doesn't sell itself. Instead what you have to do is show how whatever you're producing aligns with their self-interest. So in our case, you know, if we're borrowing from someone, we're we're paying interest and uh so we're we're we're generating revenue for them and we're showing how the relationship can scale. And so I think really emphasizing how the relationship can

scale because for a lot of these businesses, they're very large and there's an imbalance where most of the crypto teams trying to work with them are going to be startups or or pretty close to startups. And so you have to sell them on investing in the the future scalability of the relationship and tying it back to their self-interest. They're not going to do it out of benevolence or some underlying belief in the technology. They're going to do it because you help them earn a bonus at the end of the year. And so you better make sure it's a damn good bonus for them. And that's going to come from from you being able to show this is going to be a large relationship in future or a show that's going to generate them some revenue.

Yeah. Yeah, man. They want to see like Well, yeah. First of all, tech techwise I I think a lot of us overindexed on, you know, how much of the tech these these would care about. In fact, I think a lot of us overindex on how much Ethereum would win these relationships versus the the other chains. Like I was quite shocked, frankly, to see Black Rockck's build go to Avalanche and Salana so fast. I I just remember thinking back in the day like oh wow it's just it's just Ethereum because like no no no they want they want to expand where anybody is and they also will likely want some sort of like permissioned chains as well. That's like on the tech. Yeah. Yeah. It's uh it's Peter Thiel's point right like the

product doesn't actually sell itself. you have to uh you have to have really good you have to invest in sales and uh you know even if you look at somebody like Elon Musk he always talks about how he doesn't have marketing team well that's cuz he is you know one of the best marketers in the world right and so you know the idea that Ethereum would just sell itself I think is mistaken and you actually have to have I think Salon has done a much better job of this than Ethereum uh and Ethereum's kind of recogniz I think the Ethereum foundation is recognizing that now but you actually have to be selling the product and you have to have dedicated sales teams. It doesn't it doesn't just go and sell itself. Well, Sid, man, I hope you guys hit that goal of four bill AUM by the

end of the year. Um, and I hope you double your monthly revenue and I hope that token keeps going up, man. Andy, thanks for coming on and uh appreciate your time and hopefully see you next week in the city, man. I'll be around. Yeah, would love that. Thanks for having me on, Andy. Cheers. Cheers, man. Speak soon. Peace. All righty, guys. Um, up next we have some interesting news with regards to stable coins uh from Coinbase. Uh, Sid is is is a great friend uh been part of the show for or been part of the show I guess since like 21 2020.

Uh we we covered Maple in that regard. um and and they were just doing the private uh kind of uncolateralized loans. Obviously got burned through FTX, but have had one of the best comeback stories, you know, in the in the in the market as a whole. Um all right, so guys, what we had for Coinbase is uh the Coinbase derivatives and um NATO clear will enable USDC as collateral in US futures markets, advancing stable coin adoption and regulatory approval. Guys, I I just think that Coinbase is going to push forward on pers very very quickly.

Um there's going to be an acceleration of of adoption from from US-based companies using Coinbase. Um and this is just another signal to this stable coin super cycle. Is it real? I would have to say you have to look at the circle chart. If you've missed that trade, I think your best bet is going to be it looking like an airdrop fractal where it kind of rips off the start, pulls back, kind of levels out, and that hopefully you can get some good DCAs in. I missed that trade. I'm a big coin holder, as you guys know, if you watched some of the early episodes, we talked about our portfolios uh here at the rollup. Um, and so yeah, that's where we're at on on the stable coin side of things. It's now

more and more of a prominent sector in the show. So, um yeah, coming up I think we have Bobby. Um I need to confirm briefly. Um but if not, we will been a good great show so far. Lots of different opinions, different people. Um just generally just a different category of people on the show. Uh, always great to see that. All right, so I think Bobby is is is running dupe.com.

Um, dupe is actually quite an interesting uh project. So dupe is a has kind of got like ruffled the feathers of different people in the space. Uh but basically um they are part of this internet capital markets uh category right which is like been this this really rise of these projects that are actually uh you know generating revenue and then tokenizing themselves. Um so dupe is one of them. Um again I think we may have to push them back but hopefully not. Um, but basically what you can do with dupe is look for uh similar products uh for far less money. So you can search for

different clothing uh furniture etc. Bobby was the is the host of high resolution pod and co-founded live candid and now is a CEO of dupe which is uh snapping up your dream furniture at the lowest price um powered by Solano. I think we got him. Can you hear me? I think we're good, Bobby. I think we're running on on uh the the last extension of it, the internet right now. Well, let let me tell you right now, I've got 17% battery. Generators going at Soho House.

Wi-Fi is [ __ ] So, I'm basically connected to a hot spot. I'm standing at a DJ booth. If you guys see that, dude. No way. in a freaking room that people are gonna come in and out of. But we're gonna Wait, so so the Wi-Fi dropped at Soho House. Yes. Ah, wow. Yeah, there was a there was a massive lightning strike. So I'm just across the road in Queens here and there was a massive lightning strike that I saw. Why? It was huge. I'm in the city and I'm getting I'm getting bombarded. But we're here.

We're We're gonna go until my battery's at zero. How about that? If I drop, it's because of that. All right, boss man. Um, all right, man. Well, first, uh, I would love to just understand your perspective of this internet capital markets idea. Um, and and kind of why why you feel that this something that has been worth pursuing for you kind of coming from your background. I know that you guys are focused on some some of these kind of uh, I would call them like commerce hacks that are beneficial for consumers. Um but yeah man, maybe walk us through the internet capital markets thesis. Why is this a new category of of of the crypto landscape and of capital formation and um you know why is this

something that you're a part of? Yeah. So I'm not going to give any like grand philosophical take here. Uh I think the broad strokes is we accidentally entered this market and I saw an opportunity to capitalize on some of the benefits that that crypto brings to the table. First of all, I noticed very quickly that Dupe has like a a huge following online already from from like normie people and we just acquired a whole new customer base in the crypto world. And the crypto world is like very very uh incentivized to talk about talk about us every day much loud much louder and like inviting their friends and family and neighbors and co-workers onto the platform because they're like invested in the success of our our token. Uh which is you know different to the company obviously. Uh,

but by the way, you guys are going to hear people go in and out. Dude, all good. Let it fly. In and out. Let it fly. Uh, and so like we came into it accidentally. We didn't really know what we were doing. We didn't even realize the potential of what we were doing until we started noticing how quickly we were getting feedback, how much people started talking about us, the thesis that they were writing about the company, which aligned very closely with like our our perspective on on how how big this can get. And so like the the whole like the big idea was um can we can we jiu-jitsu all of this new energy that we found into uh into something that like exponentiates our growth, speeds up our growth faster. Uh what we found is by having a token you can do

some really interesting things. Like in web 2 we have this concept called points right? Like you guys know this if you've used Rakitin, if you've used, you know, cashback sites like Capital One Shopping and stuff, they incentivize you to buy from partner brands. Well, if you use a token, you can actually do more than that. You can incentivize people to use your product more. We've built a cash machine at Dupe, so the more people use Dupe, the more money we make. And so incentivizing people using our coin turns out to be like a really great mousetrap um and uh in a way that we didn't even anticipate. And so, so I think that there's a lot of opportunity to use our token that benefits not just our growth and getting people incentivized. Like we have I think seven or eight thousand holders of our coin at

this point. They're all talking about Dupe a lot, but also normie moms, normie like college grads who aren't in crypto get into crypto in like a really in like a really interesting way by using a website that they love to use and incentivizing them to bring their friends and family on board in like a in like a very scaled way as well. So like these are these are things that we're currently playing around with and that's how we see the the potential right now for Duke. Yeah. Yeah. I mean I think the the target market of your core consumer is probably different than the people that are holding the token. But what the token does is it it then allows you to have as you said like like some sort of flywheel for attention and then thus is if you can keep value within the token

it it provides then your actual target market to have these benefits that they wouldn't previously have have had. And I think part of this idea is around okay you guys have a business uh that you've been running that is you know I think there's like what four million users in the last month or something like that. No no no no no we don't have four million users. We have a million We have a million monthly active users, but million our our goal is to get to four million monthly active users by end of year. By end of the year. Gotcha. Yeah. Misread that tweet. So a million users. Um you know you know uh powering a lot of these this shopping experience. Um and so it's kind of like you're combining two parts of the world that like previously would not have been

combined. is is never like like if I even use the word crypto to like a mom in the middle, you know, middle states in in the United States. Oh, yeah. What the are you talking about like this doesn't sound right and I don't know what you're talking about. So, so we use the word points, right? Because they understand that. So, the the the magic happens when you take the vocabulary and the the kind of state of the world understanding that they have by bringing it into crypto without all of the crypto jargon. Yeah. without all of the crypto rails, without complications of wallets and stuff like this. And so I think we're going to be one of the first, maybe the first web 2 company that has scale that brings normies to crypto in a way that is digestible to them. And that

is that is actually like really really exciting. And it does not dilute the offering of the product, which is ultimately our eeky guy, right? Like what we're good at, what the world needs, what they pay us for is deals. like ultimately we can use this token to lubricate how good your deals are as well. So, um I think uh I think it's like really really exciting and it's still like very early days. So, does does how it work is like the this some sort of agent LLM goes and scrapes the internet for what you're searching for and and just effectively runs a massive comparison of like similar or same items at scale and then presents you like the best options basically. Nailed it. Yeah.

So, we we like to use the word generative marketplace. We generate a marketplace for every like every time you run a deal search on on on dupe, you tell us what you want. So, we have a URL hack. Any product page that you're on on the internet, if you just type dupe.com/in front of that product URL, we instantly generate a deal page that is unique to you. That's your deal page based on what you're looking for. So, we have like millions and tens of millions of these pages at this point where where people are telling us what they want, but they are also telling us I'm willing to pay less if you can help me find something for less, right? And um that yes, like that that is the job to be done of the product. Uh and we use agents, we have we ingest feeds, there's

uh LLMs involved. We're actually redoing the entire input box right now, which is a very simple input box where we're going to allow much larger context awareness so that we can make our results even better. We're working through that right now. So when you're looking at the the other kind of like the other you know landscape of these these kind of companies on on um on believe and these types of what other what other projects have have you found compelling like what other what other companies have been exciting for you that you've used um you know is is there any that that have stood out more than others? Uh yeah, there there are um first of all, I'm

very impressed with founders who take their time to understand the legal landmines because there are some of course uh and it's very easy to run headirst into the crypto market and bullpost the hell out of your project and like get people excited to buy your coin. I think it's a big mistake to operate in that way. I think you really need to understand what you can and can't say, how often you can say it, what you can offer, how you can market, um, and what importantly what not to say, what not to offer, well, how not to market, right? Uh, and so we did a lot of that leg work up front. And the founders that I think are are are doing like a great job of this, some of them are much smaller. You haven't heard of them yet because they haven't launched their product. Like Cryptogey is one

that comes to mind. Uh another uh that comes to mind that is actually like fairly large but doesn't yet have the mind share in in ICM that in my opinion they deserve is Bitcoin. Um like like these guys have gone viral on socials and that is really hard to do to go organically viral. They have like 100,000 users or more even. They have real usage of their product. Uh, I'm very impressed by them because they do the harder thing, which is not to bull all day, but to actually get users to use your product a lot. To make a sticky product is very hard and to market it the right way organically is very hard.

And these guys have shown time and time again that they're really good at it. So, I'm very excited about that about that project as well. And there there's a few others, but like those are the two that come to mind. Yeah. Yeah. Um, one one thing that I'd like to get your take on is is from that um the KLED founder went viral with posting that um that VC email. Um, do do you think that was fake or do you think that was real? I don't know. I mean, his investor said that it was real. I saw that. And so I I I would believe that it's that it's real. Uh I think it would be really stupid to post like a like a fake a fake email in that way. Not illegal. I

actually don't know that that right the question is like whether it's illegal or not. I don't think I don't know if it's illegal but the question is is that good form? It's great to get eyeballs. Right. So just to give you an example. Yeah. We've had we've had acquisition offers multiple times from who? I'm not going to tell you that. But these are companies that you would know and they're massive multi- uh that no hundred billion dollar companies that you know um Amazon team Shopify very quickly put out an email that shows me like telling them not interested right and that's going to get them millions and millions of of views but is that good form? I think it's very you have to be very careful about how you say what

you say when you say and who you include in these posts. You don't want to burn bridges. You don't want people to feel stupid. You never know when you want people, these investors, these companies back in your fray. And by burning that bridge, that's a one-way door. They don't forget. And so, be careful about that stuff. Uh, but clearly that founder is like very good at bulling himself, his product, uh, and some of the activity around it. So, like I I get it. Uh, but also I I don't know that I entirely agree with it. All right, last one for you. when it comes to the the innovation in the world, what has been some of the biggest bottlenecks for uh building Duke like let's say you're iterating on these generative market

places and you're trying to you know solve a problem that perhaps it's a perhaps it's a you know consistently failing sort of like request uh or getting wrong answers like like when dealing directly with programming the uh LLM or just like the AI tools what have been the challenges that you've seen most when building specifically with regard to like the AI side of things uh because it's like too early in it development or needs better training etc. Just generally curious as you know what you've been struggling with. It's it's a good question. So like there there's certain like context awareness that we need for products to be able to understand which products belong in

which deal pages. I'd say we got it like right 95% of the time. that last five% is probably like tens or maybe even hundreds of millions of dollars of capex involved in training. Um it's it's easy to like have a lot of context awareness if you don't care about the unit economics, but if you care about the unit economics and you're trying to get the highest level of context for the end customer, right? Like that's that's the challenge. Like it's very expensive to train a model. very very expens because you need a lot of data, you need a lot of engineering focus and you need time and those things cost money. And so our challenge is always, you know, the push and pull is like we're we're well funded but do we want to burn all our capital

on growing? Is is our product good enough to grow as is or we think we need to solve that last 5% and expend, you know, five or six million dollars training, ingesting feeds, training these models, etc. in order to grow. And so that's always the the tension like we want our results to be better. Yeah. We are very unit economics conscious. For example, when we spend marketing dollars, our payback period is the same day, right? Like CAC payback in one day or less than one day is like it's pretty insane. It's insane. It's it's but that is how we operate. We are conservative when it comes to stuff like this. But now that we we we've raised more capital, so we will be burning more cash on marketing. we're

doing things like podcast ads and stuff like this, it will increase the payback period. But am I comfortable being in a six-month payback period? Like, I'll tell you right now, I'm not because I don't know what's going to happen in the market in six months from now. And like making a bet and growing my my operating expenses right now for a payback six months from now is like a very big question mark. Um, so for me, I like to find ways to market, you know, the barbell marketing approach, which is paid and organic. So I turn up our paid when our organic is on fire. It does. Does that make sense? Because then I can turn up my paid and if the organic is not on fire. Yeah. Yeah. There's no need to spend to solve this and then I I go go to

paid. Now that's not always the right answer. Sometimes it just pays to get attention fast because you've got a lot of competitors a lot of competitors in the fray. We have certain modes, not least of which is our brand, which you know, like you know, Duke.com is a very memorable, very powerful brand. Uh, and you know, for us, investing in that brand, doing it organically, making this work, and then cranking the engine on the paid side makes more sense. So, that's how we like to operate at least right now. Bobby, I appreciate it, man. Thanks for your time. Thanks for the uh insights. Just raw honesty in the middle of Soho House on a hot spot on the DJ stand. DJ stand. Let me Let me show you this room, guys. Come on. Like, literally, I'm in a box with a DJ st. I

don't know what to do with this, but I might have to spin some music. All right, Bali. Be easy, man. I appreciate you. See you soon. Thank you, guys. All righty. Peace. All right, guys. Good stream today. Um, it was a fun uh lot going on. It's literally like stoming and lightning out here. Uh, Bobby's internet crashed. Uh, batteries are running low across the board. Uh, someone know I I enjoyed the format. I enjoyed the uh overall uh feeling and just each of the guests. Looking forward to having Rob back as well. Uh definitely going to make the show a bit more dynamic and uh a bit less uh kind of mental for me. So guys, thanks for

coming back and we'll see you on Monday. Have a great weekend. Peace.