Smart use of leverage and Coinbase's verified pools on Uniswap

Transcript

DM good morning welcome to the milroad show The Daily crypto show that levels the playing field no inheritance no hedge fund no problem I'm your host Jay Hamilton it's Saturday March 29th which means we are back with the milroad pro research team that's right we got Kyle Martin and Adrien in the house these guys all they do is research and think about crypto all day every day into today's conversation we're going to break down crypto leverage have you ever thought about doing leverage are you doing leverage or do you want to learn how to do leverage Martin breaks down his plan or I should say he breaks down exactly how he's doing leverage right now super interesting conversation uh

also coinbase drops a massive update we're going to talk about that we're going to talk about stable coins and so much more now this episode was available to Pro members on Tuesday we released it to you guys for free on Saturday if you want to get this Alpha on Tuesday you can go pro today also if you go pro and one reason why you might want to go pro right now to be honest is we just dropped today a report on data availability and the opportunity we see to invest in some specific tokens in that space it's a massive opportunity data availability is really the the next layer of blockchain that we think could have asymmetric returns so you might want to go pro to get that report uh

honestly you actually you can hit the link in the show not you can read the first part part of the pro for free and then decide if you want to read the rest no pressure of course today's episode is brought to you by definitive Advanced trading of every chain it's also brought to you by coin shift powering top crypto treasuries with their yield bearing stable coin CS usdl without further Ado let's hear from the boys all right welcome everyone back to another episode uh another Pro research meeting we're here with the boys and um we're going to talk talk shop I almost said chat and talk at the same time and uh that didn't make any sense all right well we're going to talk a little bit actually we're going to start the conversation um about a question I wanted to talk to Martin

about because I noticed on his Twitter his uh his cover photo I actually just share it it's a terrible looking cover photo by the way so Martin we need to um we need to fix this we need someone to redesign it but this says understand the technology contribute to web 3 maximize dollar debt and I was like the other day I was like Martin do you take leverage like do you take out debt to acquire more crypto and he said yes and so I want to understand how he does that because I know he's also very risk adverse so we're going to chat there because obviously we always say no leverage uh and then we're going to talk about something that um coinbase launched uh last week which was um verified liquidity pools we think this is a pretty big deal we're g just chat

about that what that means for air Drome uh and we're also going to introduce something new that we're doing for pro called token snapshots so make sure you check that out and then we're going to talk stable coins um probably the coolest thing right now in crypto although crypto natives don't believe that but I definitely do uh a lot of growth happening there and we're excited so we'll chat about that okay let's first start on this topic of Leverage Martin who is our resident um nonen right he's like the risk adverse person who's just like you know wants to make sure he's always taking care of what his portfolio turns out he's levered up to the tip no I'm kidding but he does have a little bit of Leverage and I want to understand how he does it why he does it um so Martin I'm just going to throw it

to you you told me that use dollar debt to acquire crypto tell me how you do this uh and why maybe I'll start with why and the reason is quite simple I I think there is a trend of of crypto and you know crypto is now three trillion but we think that we are heading to 10 trillion then maybe I don't know 30 and then 50 whatever but the trend is quite obvious I I just don't know when we are going to hit 10 trillion is it going to be in 6 months or eight months I don't know but I think it's going to happen eventually and if I can borrow and pay I don't know let's say 6 8% uh some external money which I

wouldn't otherwise have and buy more crypto then I'm gonna do it and I don't mind paying like six eight% per year for having that leverage because I know that at some point I will be selling the tokens and I will be like hugely um reward rewarded for for doing so um now I want to say I don't recommend anyone to take leverage because it's very risky and I guess if it's your first or second cycle I wouldn't still recommend taking leverage and especially because people are not good in managing risks and um just yeah in general like this is not a good idea

for most people I would say when you say you're taking Leverage is this you're putting your ether your Bitcoin for example into something to get dollars back or you're taking out a loan at the bank where there's no like collateral you're just like you got a line of credit that you pay six% on and you're using that to buy crypto which type of Leverage are we talking here on on the blockchains on blockchains okay so you're using defi to take out leverage yes and outside of that like in traditional world I use mortgage like everyone else here which is pretty much the same thing I will just yeah this is my contract I'm getting some money so give me like you know much more and I will buy house or whatever it's it's kind of similar thing but here you need to put the collateral in right so the

bet you're making is I think that I can outperform six to eight% in a year and so if I just take that out grab however much in dollars and then buy crypto with that I'm going to outperform 68% then I can take the profits of that and and pay back my loan um is it a trade for one cycle margin for this bull run or longer yeah like at some point I'm going to probably sell and get rid of all the leverage I have but on a like then I will probably start to do another leverage like for the next cycle so I would say like maybe it's Cycles driven because it doesn't make too much sense like you know we were talking about the price predictions

of I don't know Bitcoin hitting 200k e 10K whatever so like if we are getting close to these prices like I want to be already out of this trade and like I don't want to have any leverage at that point and then probably I don't know after two three years I'm gonna probably start doing the same trade again this is the key so if I had to guess you probably took out this loan originally in what 2023 2024 when did you when did you first take out the loan yeah like I took some loan like I also DCA the loans kind of thing so it's not like onetime thing um I'm just trying to um make sure that my loan to value

ratio is somehow safe and it makes me feel you know uh safe also so I can what is that what is your loan to value ratio like um right now it's 25% maybe 30% but like I I don't think we are going much lower and if even if we we are I'm still like I would still handle quite well if there is another 50% drop right so like you you wouldn't get liquidated unless E I don't know what you're using ether Bitcoin whatever but unless it went down another what 50 75% from here like yeah need to go down like over 75% right so like e would have to be at

like 500 bucks yeah 750 bucks okay so couple things to understand here for those list listening um he's maximizing his dollar debt because it's pretty cheap to get a loan and he feels and he's also using this to buy Majors that he thinks will go up over time but there's two really really important things to understand here we always say don't use leverage and and I still believe that so just everyone listening here don't think that this is the ticket to go and do it because there's two really important things that Martin said you take out leverage in bare markets or at the beginning of a bull market first of all right because then your risk there's not a lot of downside risk if you bought and did this in early 2023 right when we when we FTX collapses you have all the bad news you can possibly

have and it's kind of sitting there and you're like there's no way this stuff can go any lower that's when you take out leverage now here's the flip side most people do the opposite they take out leverage at the end of the cycle at the top of the cycle because that's when they're most bullish and euphoric and excited everyone I know did that last cycle and that's why all my friends got blown up every single one of them they all took out leverage using Celsius FTX blockfi Etc and they got blown up on their LTV or their um uh their ratios and then they put had to put more money in to make sure they didn't get blown up and then the things collapsed and so they got double screwed okay so like first of all if you're going to do this probably don't do it on on centralized

lenders but more importantly you take out the loan early just like what we always say is like at the bottom of the business cycle that's when you allocate that's when you start to add in more risk that's when you would do this if you were ever to do it then the other key thing here is this is not a 10x leverage or 100 leverage or whatever this is a very very small leverage to get a little bit extra and he can stomach 80 90% ball here and he still doesn't get liquidated and so it's it's it's a very very very low risk and the other thing I would say I would also imagine if I was asked Martin let's say Martin has I have no idea how much eth he has but let's say he has a 100 eth just for like a round number I would imagine you didn't put a

100 eth into this loan you probably put 10 or 20 or 30 so that if ever it was needed you could refill back up and protect that collateral am I right or am I wrong in that or is it all of it I wouldn't say 20% I would say more like 70 80% and then the rest is like if I want to use something else interesting but yeah okay did you recently increase the leverage um in the current draw down and basically borrow more and buy more of your asset to land it then a little bit yes but it wasn't any significant like I have most of the stack for for a long

time so yeah um no big changes by the way there was a world where um I remember this really coming out last cycle where you actually never really need to sell your assets you can just continue to accumulate Bitcoin or eth again these have to be assets that longterm go up uh over time and if they do continue to go up then you can Contin continuously just increase your loans against them and use that to pay for things in the real world right um and as long as it keeps appreciating then um you actually don't have to pay it back essentially there there's ways to get around it with Defi and so there's a world where you never have to use cash like like your income to buy things you

can continuously just dollar cost average it to bitcoin which increases the amount and then you just keep taking out dollars to pay for your expenses um and as long as the the underlying asset continues to appreciate then it works out um again not an easy thing to do not something I recommend anyone do but there is a world where that does make sense especially with something like Bitcoin that has gone up historically 100 and whatever percent year over year over year um but very interesting I did not know that you did that Martin and I appreciate you sharing that with uh with our listeners I would be interesting for those listening how many of you guys do the same I know in our Pro Discord as much as we say don't do leverage there's a lot of people a lot of our PR members actually do use leverage um now there's

a difference in this kind kind of Leverage which is kind of like just a long-term small um uh loan versus like 10x trading right trying to swing trade on like pumps and dumps and stuff like that like is very different thing um but curious just in general who who else uh is doing that so please comment below just let us know we want to know what our what our audience does anything else on this side of things before we move to the next topic maybe got hang on pause for a second who's got music in in the background oh okay it's me I guess sorry if it's not a truck driving by or kid screaming he's got elevator music

on it's how he stays calm during tough markets when he's [Laughter] overleveraged all right anything else on on this side of thing cool okay on which blockchain do you already do you do this Mar do you do it on or on base at and then I have also some L on S I still feel like did you turn the music back on the the music is still on yeah what the heck is going on has a DK in his [Laughter] house I still feel that the big money

and the big players and pretty much everyone managing like a decent portfolio they are still using main like base and arbit room optimism everything is cool and nice but there are still multix and I feel very safe using ethereum and nothing else pretty much which protocol where do you get your loans is it Moro or spark uh spark or or summery which is kind of front end for spark I would say which will let you toate some things very interesting if you're only trading on centralized exchanges then you're not going to make it the best Traders know

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is quite interesting I'll give a quick um summary of what this is and then uh and then we'll leave it up for discussion on if this is good thing bad thing or like what this means so coinbase introduced last week um coinbase verified pools uh which um this is essentially a way to trade uh in a more let's call it trusted way but using kyc so essentially you have liquidity pools on Unis swap right or on any Dex and anyone can interact with those permissionless what um coinbase has created is verified pools meaning you have to be verified or kyc to interact with those pools to provide liquidity and to trade with them and so what coinbase can do is um just as an example

um institutions they have certain requirements different institutions on which types of Capital around the world that they are allowed to participate in so like sanctioned um you know Investments and financial assets they're not allowed to touch right uh Investments or assets that were you know held or created by terrorists and things like that like they are not allowed to touch that stuff they have to stay away from that stuff and that's really hard to do on chain because everything's permissionless and Global and there's no way to stop that and so what um coinbase has done is using Unis Swap and their um what is it called uh not frames but hooks hooks yeah hooks they have created basically a an integration into Unis swap where they

can have these kind of verified liquidity pools um and coinbase has verification through the coinbase app through coinbase Prime which is their institutional thing um and through their um they have like onchain verified credentials uh and so they have a bunch of different ways to actually bring kyc onchain instead of forcing them to use it in the app itself they can actually move onchain and they can um by putting kind of like a verification credential in the wallet they can see if that wallet is actually a um you know a verified person that is not a criminal Etc um and so pretty cool they' built this on base using Unis Swap and um Unis swap V4 protocol and I think this is um this is a step in the right direction

for tokenized stocks something we've talked about a bunch if they want to bring stocks on chain right one of the big things is stocks you need to well there's certain things so like private stocks or private shares need to be accredit investors and so we need kyc to know are they a credit investor or not and then actual stocks like in the US for example they can only have certain us um people or other people around the world but certain people can actually buy the stuff and hold on to it and it's illegal to have others and so this is their way to kind of like enable that while still keeping it permissionless and keeping it or not sorry not permissionless but keeping it still self- custodial right so it's not I don't have to trust coinbase to hold it I can still hold it but only certain

people can actually touch it so crypto ogs with the ethos probably don't like it others probably in the tradire world they do like it we'll leave it up to discussion here is this a good thing is a bad thing like what's going on here Martin I know you have some thoughts so I'll throw it to you first I think there is something more that coinbase decided to use these verified pools outside of just hey this is good for institutions then they can provide kyc and it's only accessible to kind of verified users because you you could only leave it on on your centralized exchange and just use centralized order Brooks and just let people to trade and your market makers would manage all the liquidity and everything so like what what's the

the right purpose here to moving that liquidity from your centralized exchange to the outside world on the blockchain it starts to feel like they see obviously more potential on the blockchains versus if it's just isolated on their you know centralized servers so that's kind of one thing but it's still just verified it so you still need to be like just coinbase user or somehow um kyc by coinbase to to kind of use that liquidity or provide that liquidity there so yes tokenized stocks could be a a good example here but outside of the tokenized stocks like if

I want to trade just I don't know let's say eth and usdc why they should just introduce and use um I don't know Aerodrome or cow swap or you know whoever else who will always provide like very good trades with with like very reduced slippage anyways so there there needs to be something and to me it starts to feel like okay we need to pay all these market makers anyway to provide liquidity on our exchange and it's very costly and expensive for us to to make sure that we cover all all the tokens because we we have seen a lot of new New Meme coins that were not

available on uh coinbase or not just meme coins you know like even cow cow protocol we we like cow and they were C token were listed on coinbase just a couple months ago so it feels like it's very costly for them to kind of incentivize the market makers and be able to offer enough liquidity for everything that people wants to trade and now it's start starting to feel like now let's try to move other centralized books to the blockchains but still just have you know kind of control who can access them and who can provide that liquidity but eventually maybe we will open it for everyone because at that

point we will already have enough liquidity and a lot of users and a lot of aggregators will be using our liquidity pools so then you you get that advantage and then you can eventually kind of open those pools to everyone and it will just attract more liquidity to don't you think that they're doing the verified because of Regulation and you need this in the traditional world to bring accredited investors and institutions in so I I think they'll always have two liquidity pools they'll have one that's open in permissionless for anyone to trade and then and you'll probably get better rates and things there and then you'll have one that is is for verified um users only uh and that is for probably institutions and those that

have like rules and regulations like Banks and things like that that's the way I see it yeah I'm not sure if that will remain the thing that like if I am I don't know bank I cannot trade on just permissionless blockchains I think this is Shifting and now right changes regulation around yeah yeah I think so and also like if you if you listen black rock or some people from Bank of America they they are saying like yeah we we might thought first that we are gonna use private blockchains but now we are want to use like public blockchains yeah so it's also kind of feeling that that's that's the direction you know when you

say this is coinbase moving there I'll throw it over you in a second Adrian but I just want to comment on thing you said this is coinbase moving their centralized um uh order books over on to decentralize infrastructure um the reason they do this by the way is because the margins are way better when you move it on chain than when you do it a centralized fashion Robin Hood for example the founder of Robin Hood Vlad he was on an interview and he said um onchain assets are 10x more profitable or have 10x better margins than offchain products so he's like all we want is more things that are onchain which is why not only they bringing a bunch of crypto assets into Robin Hood they're also trying to bring stocks onchain rather than offchain because there's way less middlemen like I don't think people

realize how many middlemen are involved to trade a stock it's like it's next level you wouldn't even imagine you don't even want to go down that rabbit hole because it's disgusting there's so many fees and all these different people and it's like this little piece of paper of ownership of a stock just gets passed around from person to person or entity to entity all around the world it's just like what is this thing and everyone's just like I'll take a little bit of a cut a little bit of a cut a little bit of a cut and so when you can remove all those people uh and all that those fees it's the margins are way better um and it can settle and move much faster which is which is fantastic right right now I'm trying to like move um some I own so there's this thing called the Norbert

Gambit I don't know if anyone knows what that is but basically uh if there are stocks in Canada for example that are traded in CAD the Canadian dollar and then there's the same stock in the US that's traded in the US dollar and if um I can do a what's called a journal share or norber Gambit where I can just ask my broker to move that stock from the Canadian one to the US one and I don't pay any conversion fees it just Auto transfers the shares over and instead of me having to sell that and then convert my Canadian into us to then buy the US Stock um which would cost me about 1.5% so imagine you're moving a 100 Grand 1.5% that is a that's 1500 bucks just to move over it's crazy it's free to do it this way and um and so

dex's make that you know it's going to take four days for them to do this four freaking days I like four days I got to wait for you guys to move this thing over that's insane and of course when things move on chain it settles immediately it would take me two seconds and it wouldn't have to ask him to do it so the the um the reasons that they're trying to move things on chain are so obvious and it makes sense for both user and uh and the the business themselves um adrianas I know you had a comment you want to say yeah completely agree with the onchain thesis and it's more efficient basically there are more fees to be generated but verified pools might still be just an experiment because we don't know whether there's really a Target group if I remember correctly a

had a Arc an Institutional lending platform basically and they stopped it because there was just no demand from institutions the most liquidity will be in the general def5 pools so why should they use verified pools when fees are higher when there's less liquidity so we will see I don't know that there's going to be less liquidity like we got to remember here the numbers that we at today are nothing right trafi has trillions of dollars retail is what makes up all the liquidity pools today our numbers are peanuts compared to the trafi world where there's literally trillions if not more than trillions when you get into derivatives when trafi

comes and actually uses Defi and creates liquidity pools they're going to just eat the retail liquidity pools so I think they're going to be way way way bigger um and until what Martin said of potentially regulation changes where they can just participate in in open permissionless liquidity pools if they can't do that like if that doesn't change I think that verified liquidity pools will get much bigger um but we'll we could have a cold start problem there because if there's no liquidity from the beginning then uh nobody will use it yeah yep could but I think coinbase already has that liquidity offchain and it's it's not difficult for them to just move that onchain right for for the Trader for the average person right they don't necessarily know or realize where

they're doing it it but for coinbase underneath this is better for their operating business right so they might just again kind of like what they did with Moro where they just integrated into it you still do it on the app they could just do that right like there's a really good chance that coinbase app all the trades that happen on coinbase app just run through these verified pools instead uh and so instead of them trading offchain they're just doing it through this uh and that's just way better for their business which hopefully they can pass those better fees onto the users will they do that I don't know Banks don't do that but you know maybe crypto companies will I don't know we'll see anyone else have thoughts here one more thing here I want to mention is we have seen coinbase using Moro and now using Unis Swap and what it

tells us is they are using their codes kind of smart contracts but they are not necessarily us using their products which are you know like coinbase provide access to more for WS but they will just hey Moro here is your code thank you we are going to use your your code but they are not necessarily using the products that Moro brings like to the market so if you if you the the point I want to make is is it going to be the future where the coinbase and other fex they will just use the codes that are written by existing defi apps

or are they really going to use the products that are available on defi so instead of just using the code they will tap into the network effects that it brings with everything else so because that's something we haven't seen yet and I wonder if that's already kind of showing us the the the direction where we are headed so is there no fee being crewed back to Moro for these loans no in that coinbase integration interesting and same with Unis swap I guess because they're just using the hook yeah that is interesting I don't know what that's going to look like but that is um that's a good point Jay you were going to say something does this does verified pools bring more liquidity

in the short term you know the the discussion of long-term WEA institutions will use this or not who knows but that's long term right that's not even medium-term like those types of regulations take years and years and years to change so short term does this bring more liquidity on chain I think so I mean I don't think they would have launched this if they didn't already talk to the market makers and like try to figure out how to do this like why would they waste their time uh I think for sure I think that there's Capital that wants to come on chain but is not allowed to come on chain and this allows them to come on chain so um I know a did this previously you're saying Adrian but like I assume that was pre everything being ready to do it now it's pretty

clear that regulations about to change we're going to get a market structure bill this year stable coin bills it's like we've kind of got the green light although not fully yet until those bills are passed but but like it's a different world today than it was even just you know 6 months ago uh and so I think um the institutional products weren't really ready back then um and it didn't make sense because the demand wasn't there I think the demand is definitely there now uh and it's I mean a also just launched their new institution protocol as well so like I think um they might have turned it off and now they're coming back so I think I think it does bring liquidity now how long does this take I don't know Chad five moves slow so like I don't expect this like to happen tomorrow right um like when coin

Bas integrated with Moro it was like within the next week they had you know hundred million do worth of usdc on there uh back loans and um I don't know that this happens because again this will take a while they've got to get approval they've got it's going to take a bit but does It ultimately bring the Cody I think so I don't know yeah but I agree with your point um Jay that in the short term I don't see like Banks and funds like yeah now not be able to I don't know buy eth or bit or whatever and suddenly hey there are verified pools on coinbase let's buy let's use them you know so like I agree um and but maybe like retail they are going to use it because now like they they might not

feel safe using like open permissionless protocols but now there is a stamp this is verified by you know coinbase so like I can see a people using these pools and instead of just going out there and looking for Dex aggregators or whatever so I see it the complete opposite I don't think retail gives a and even thinks about that at all I don't even think they know what any of this is I think they either just trade on Unis Swap and they hope for the best or they just trade on coinbase app the people who do know about this and do actually care as institutions because many of them are just not allowed to trade on public blockchains right now you know I would have agreed I would have agreed with you until a few days ago we're working with moonpay they're they're a

sponsor coming up on the show uh next month and chatting with them they and and moon pay is I mean massive yeah crypto company and they really pointed this out to me and I did not almost didn't really believe them was that they have a large one of their biggest portions of their customer base is exactly that it is people who want to be on retail who wants to be on chain but they're very afraid of security and scams and risk and they don't love defi they want like centralized on and they want verified onchain which I was like wow really but then look at moonay and look how big it is so you know I think you you you might be right Martin there

is it's not us and it's not a lot of the community that we see the crypto crypto natives but there is they're out there because we all live in a bubble like we all we think everyone knows cowap everyone knows I don't know one in and these aggregators but people don't they don't like they they want to do some Trad or swap tokens but they don't know where so they will always use coinbase or SW I was gon to say don't you ever milro swap says L small what about ours what about ours give it some respect put some respect on its name milro swap don't forget it all right the one thing that was brought up from this that I thought was

the most interesting and had a lot of conversation on um on Twitter was coinbase decided to use Unis Swap and one of the things that we've talked about is we said many times that coinbase is going to integrate with a DEX I've been saying this since their earnings call back in whenever that was I thought it was going to be Aerodrome because Aerodrome similar to Moro is like native to base pre-share coinbase Ventures invested in Aerodrome just like they did Moro so like it's that flywheel that they're building on base where you know let's fund these companies to build cool products and then as they build them we'll integrate into them and that makes our business better blah blah blah and they didn't actually do it now um they did swap because Airdrome doesn't have hooks so they don't have the

ability to create verified pools yet so that is what they said the founder of a Drome actually said they came to us I think he said about eight months ago coinbase did uh and talked about this and they were just like yeah we don't want to work on that right now we've got other things we got to build they're they're obviously a much newer company protocol than Unis swap so they actually at least what the founder says on Twitter is they turn down coinbase to do this and so that's why coinbase been a mistake I completely agree it's like what do you mean you've got the biggest company in in all of crypto except for binance that wants to build on your on your protocol and you said no because we want to work on whatever they're working on uh I don't know that's smart decision

but anyway that's I guess what happened um so is this bearish or just doesn't really matter for Aerodrome um I guess we can start with that question then I want to introduce something these token snapshots something that we've created with with Pro but just quick thoughts on this I'll just say that coinbase coinbase Ventures that they are they invested in in Aerodrome does it mean that they are really bullish on AO the token and the team and whatever they build or is their goal just like hey just support whoever Builds on base and we don't care you don't need to bring any money just you know here are some money and just allocate it in the ecosystem and kind of

support the growth of Base ecosystem because I I would argue that probably this the second the second thing is true they they are they're just trying to support the ecosystem growth and they don't need to bring any money any returns uh agreed however if they did like let's say they own half of Aer drop air drum sorry air drop and you integrate it into coinbase you've created this flywheel right where like you have these users on coin base you're moving them over to base using this protocol that you own half of it's exactly what they're doing with circle they own close to half of circle or something like that I don't know what the percent actually is but it's estimates of around there so they push people to use usdc not because like they

do that because well they own half of it and so any of the the revenue that comes from usdc they have upside from that right so like why wouldn't you want to do that with the things you invest in now maybe they're invested Unis swap I don't know they could also be invested in uni token they probably are to honest maybe also because like if you provide liquidity on aod Drome you are getting money they're pretty much printing new a tokens and those are your incentives and rewards so I can imagine if coinbase is using them then what about all these users are those kind of rewards that they will have to tax put taxes on or like how would that work you know so it's much more complicated rather than just hey this is unis swap you can just

launch there and you will only earn trading fees it's a different thing it's definitely a lot less risk to go with Unis swap versus Air Drome because air Drome is still I don't know what a year old maybe something like that uh and they're still new they're still doing a lot of token incentives they still got a lot of things to figure out over there and so like for risk purposes which we know coinbase really cares about kind of makes sense to go to go Unis swap but um that was one of my bullish potential cases for Airdrome with that I guess it's not out the window they can always go back to Airdrome it's not like this is set in stone but I think that definitely changes my Outlook on Arrow at least for the short term um any more thoughts on this before we show show the

new token snapshot I think that many people see Ira token as a better play for base so like everyone was bullish on base but there is no base token so what's what's the best kind of token I could buy and give me that exposure and it's iro so yeah um now we we see some rumors that probably coin is gonna be tokenized and available pretty soon on the blockchains and maybe there there there is never going to be a base token itself but there will be coin the the kind of token representing everything that's happening there and so it might also take some of the kind of flows from Ira here's a quick question for you guys

and this is a little bit off topic do you guys think that they will use coin as gas fees on base or for example Robin Hood launches an L2 tokenizes hood and Hood becomes the the like currency or the gas fee of their L2 uh don't love that at all I think it makes no sense but I've just seen people talking about it you guys bullish on that idea or not bullish on that idea like why would they do it no utility for their token right a reason for people to buy their their their token or their their stock wait is it a separate coin token it's not a tokenized coinbase stock no tokenized coinbase stock is what I mean I think we will pay like all blockchain fees will be eventually paid in stable coins because users are not going to pay

those fees like apps are going to probably pay those fees for the users and I don't want to have liability of some token that is super volatile instead I want to have something stable and make sure that I can kind of predict my cost so like yeah it just doesn't make sense to it's true it probably just gets abstracted away yeah yeah Okay cool so check this out guys we want to show you something uh and we will bring it up on the show every once in a while um we've launched something new called token snapshot and this is essentially we have our Pro portfolio which you guys know about those of you that are not pro members um You probably don't know about

it but GoPro you can see our entire portfolio how we allocate uh exact amounts of what we allocate to different tokens uh and Investments um but one of the things is we always get a ton of questions about uh a bunch of tokens that we don't necessarily hold in our portfolio but um we do look into and they might eventually make it into our portfolio or they might not and so one of the things we did recently was we launched the token Center that was maybe last month or something um where we kind of have a list of 20 or so tokens right now and we sort of just give a bullish bearish or neutral um rating on these tokens you can see them all again at the token Center as a PR member um but what we didn't put with that was much analysis around the tokens so there

wasn't really a lot of thought as to why we gave those ratings and so what we've decided to do is we will only add tokens to the Token Center moving forward if we've done and created a sort of full not full analysis but a um we call this like a snapshot analysis so we look at the token or we look at the project today we kind of analyze it what's the what is it what's the bull case what are the opportunities what's the bare case or what are the challenges and then what to watch for basically like here's the things you should look for the metrics you should look at the things you might need to happen for it to be bullish or bearish or neutral um the first one I have up here is air Drome that we've launched this week so basically we just

explain what it is you can see the bull case for it which is around the idea of um Aerodrome currently is the number one decks on base in terms of trading volume uh and uh and so um and it's it's pretty large volumes at this point so that's one interesting thing um the idea of it being integrated in with coinbase is obviously something that could be a big deal but right now not so much uh and then Arrow was also included into coinbase 50 index recently which is quite cool this is like um a thing that now is not huge for coinbase but we think will be if it makes it into kind of like an ETF um which is basically coinbase saying here's the top 50 tokens in the space if you want exposure to crypto at large um you can invest in this one token called coinbase 50 or

this one stock sorry and um right now Arrow was added to that I think last month so that's a pretty bullish case if this thing does explode coin or Arrow would get a lot of um would get a lot of passive flows as a result of that and I do think you know Jays had Matt Hogan on the podcast who talked a lot about this like indexes will be the future for crypto and there aren't really any yet and so those are coming and if coinbase can be one of the first ones that's going to be a really really big deal um I would definitely put uh capital on this I think I would definitely recommend our audience do the same uh on the bare side of things though um everything still kind of new and Aerodrome is incentivizing a lot of their volumes so they still have

incentives kind of like what a lot of D5 um projects used to do where they just give away their tokens for people to um to trade or like do things on their on their protocol and so a lot of this volume that's making air Drome the number one on base that everyone's all excited about which actually I have down on a chart here they're currently I don't know a little over 50% so beating Unis swap um which is like the only deck to do this on basically any chain that Unis swaps on but that's because it's being incentivized we think anyway and so when those incentives turn off it's very likely that those volumes I don't know if go away but probably go down a lot so that's our big thing to watch for is like what happens as those incentives go lower will the volume still continue

um and uh and what kind of happens these Integrations with coinbase Etc Unis swap is a beast and it's going to be very hard to beat them um so that's just we kind of have our list of what to watch for here you can find this in the token Center so you just log into um your milk Road Pro uh account there you'll see it there um we're GNA have more of these so arrow is our first one um this was all Adrian's work so kudos to Adrian for setting this up he's gonna have a bunch of these for those that are in Pro in the community he's also going to run polls on like which ones we should cover uh in the future so make sure to check that out anyone want to add anything else to um to the Token snapshot this is

incredible this is amazing I love this I'm hyped wow uh and to be clear this is not Financial advice necessarily this is more like giving you guys a detailed uh fairly detailed like overview of of we're going to try and cover a lot of the most popular tokens in the space um and so this just kind of helps you guys make decisions we're not saying we are buying or not buying we do put a bullish neutral or bearish rating on it if you have to go sign up and check out our token center to see what our our um rating is on aerodrum I'm not going to tell you that here um but basically that's comparing it to the market the overall crypto Market not necessarily to like the USD um so if we put bearish the the token could still go up we just

think that there's other competitors that might do better uh Adrian you were gonna say something yeah it's interesting because competition is really Fierce on base now with Unis swap having less volume but actually generating a lot more fees almost double the fees of Aerodrome so we always hear about Aerodrome the number one decks on base but yeah actually this might be changing and Unis has a lot more active wallets trading even though there's a lot of bots also using primarily Unis instead of Aerodrome so interesting to watch this and see whether it could be a potential portfolio pick in the future yeah I think um people often fine charts on Twitter like the fact that Airdrome

has more volume than anything than anyone else in base and they just go okay that's super bullish we got to invest in that and the reason for these one pages are like hey let's look behind the hood because there might be a reason for that that might not actually be sustainable um which we clearly lay out in that in that one pager so um you got to go you always got to go a bit deeper than you think when you're analyzing uh tokens especially smaller ones there's there's generally a lot of things that are untrue uh or that you might not realize um okay let's go to our last uh topic of the day which we are going to discuss stable coins because they are actually having a massive growth period at the current moment so I've got um I've got defi llama up looking at

stablecoin uh market cap which um is just exploding over the last I mean two years uh it's incredible to see to be completely honest uh it is really really cool where's the right there we go and we're currently sitting at $233.6 billion do in stable coins up four billion dollar in the last seven days which is um is pretty insane uh up billion in the last 24 hours and up 7.3 billion in the last uh 30 days so these things they are growing fast the largest growth for the large ones are combination of usdc continues to be a a big Gainer over the last year and a

little bit um tether is obviously still growing but in terms of growth percentage it's actually usdc um and then D or or Sky continue to grow and then what's this first digital USD they've got 20% growth which is um it's pretty massive might be the new one from Finance no not sure I think this is like a a centralized one that's been around for a while I think yeah well they're at 2.18 billion so that's that's pretty big and then I mean bid they're actually counting B here as a stable coin uh 1.7 billion uh they've doubled in the last seven days or 14 days and just today this is Tuesday they announced they're launching on salana as well um so also really really big news um my question is

actually first here's the predictions that I made this morning by May 1st and we are at March 25th I think we hit 250 billion so that's in a month and five days or six days by July 1 300 billion so first half of this year 300 billion market cap by Jan 1 so the end of this year 500 billion and by Jan 1st 2027 one trillion uh and then my question I'm gonna have two questions one is like what does this mean for the crypto industry uh if you know dollars on chain Forex in the next two years that's a lot of capital and it might even be more I don't know we'll see so that's a big thing but my other question just more first question is who the heck is buying all these like putting all these dollars on chain is this the US government or

other governments that are like they want to hold the US Dollars and this is the easiest way to do it and the cheapest way to do it is this corporations is this whales or people like how are we getting billions and billions of dollars on chain does anyone have any insight into who's actually doing this because I get why like we all understand the use case stable coins but like who's really doing this right now and on which chain well most of this is happening on ethereum at the moment is where most of the growth is but um yeah but who's doing it what do you guys think he what are the options for who's doing it because I have no idea and I have the exact same question of who's doing it so okay could be governments could be corporations in like institutional investors I don't really see the

reasoning for them to do it as much I can see I can see the corporate use case the the easiest it's probably the easiest use case for me to see is like you're a corporation you're doing payments and remittances around the world you see that you can do that much cheaper in onchain dollars and you have in you have great infrastructure for your people to receive onchain dollars which I think was like a big a big holdup was a lot of your a lot of your vendors and your staff and who you're paying were're like I don't really want crypto yet but I we've seen that grow a lot so corpse is what makes the most sense to me but I don't know I I think corpse as well mainly like for example

30% of our is it corpse or crops Kyle saw I like for me it makes sense that corporations are doing this like we do it right and I mean we're not a massive Corporation by any means but 30% of our employees are already paid in stable coins and a large part of our treasury is also in uh bearing stable coins in in Sky uh I don't see why others wouldn't be doing that uh right like there's a lot of companies that have employes outside of the us as an American company or Canadian company and it's like it is so much cheaper and faster to do stable coins like why wouldn't you um and so I would imagine that's the large part of it and I think the reason why we're

seeing so much growth right now is the stable coin bill is likely coming in the next like 60 days like we might have it in April and if that happens like corporations are are definitely going to flood into this the other one I could see is is is um governments like every government around the world in central bank they hold dollars and it's way easier and faster to do it through usdc than to do it in the other way so I could see them starting now that one's a little bit like iffy like maybe not but I especially if they make Partnerships or deals with usdc which is how it tends to work is like like coinbase for example has a partnership with circle now they're also an owner but they get a percent of the the treasury yield and

exchanges do this a lot exchanges actually get you know a percent of the yield we don't as retail buying it on chain but the larger corporations they do they make they swing deals with circle and um you know agoric and some of these other ones that are out there they actually can get a piece of the yield and so I imagine if a government went to Circle or a large corporation like apple went to circle now I don't think Apple's doing this but if they did said hey we'll throw a billion or five billion or 10 billion or we'll accumulate billions over the next year but we want x amount of bips of the yield circle's going to say yeah absolutely let's do that right that's kind of their BISD model that's what they do it's how they've been able to grow as much as they have um tether

doesn't do this I think they they show share next to none of it but um they're in a different world uh but maybe they do by the scenes we don't actually know but so I could see both Corps and governments doing this uh and trying to get a share of the yield are we talking about are we talking about govern institutions or central banks yeah it's a good question central banks maybe like obviously that's harder for them to do like are they even allowed to I don't know it depends like I would bet there's countries like El Salvador right or like other countries that don't care about the rules that are just like I want dollars and I'm gonna hold dollars however I can and so they're GNA do it you know uh and so I do think there are some central banks that are that are

probably accumulating this um yeah I I really do think that there are because they need dos they want to hold them anyway why not get a little bit of yeld on them and do it this way makes sense to me I think there are also two Trends emerging here if you would look deeper into that stable coin growth one of them is yield bearing stable coins have seen growth of 80% since Trump was elected versus usdt and usdt just 3% obviously they are already like much much higher but you yield bearing stable coins are growing like almost three times faster right now and the second Trend here is ethereum dominance was at

50% back in um October now it's it's increasing again and we are now at 50 58% so it's it's also showing quite a trend here that maybe like if you would see the trend of the dominance of eum for stable coins it kind of slowed down but now since Trump was elected it's starting to grow again so it's just telling me like okay we are all bullish on stable coins and where are all these new stable coins M it and most of them are minted on ethereum so it's telling me like okay institutions are coming we don't know who are the

users today but probably most of that activity is going to happen on ethereum because that's where most of these stable coins are minted and then the second Trend again yield bearing stable coins so think of it like if Bank of America revolute PayPal whoever creates their own stable coin that's awesome great but that's think of it as a onboarding tool for people to get into crypto and to the blockchain world but then those people those money will be looking for some yield so I think it's very positive and bullish for like you know maker atina these kind of guys because they are going to offer what

ultimately all the people will look for and that's the yield for their stable cons yeah and it's it starts with Stables then it turns to yield right and just put some context in the numbers you just said of yield bearing are growing faster so sky in the last month is up 20.7% uh in terms of of new Supply so it's up $800 million in literally 30 days um and it's only a uh what does it have total tvl like a few billion so like that's a obviously a large amount um Athena is up despite the yield reduction when did that happen Martin yeah despite the yield reduction so that okay yeah they're still growing uh Athena up

1,222 per. now this is Athena usdb which I don't think is like a different one that they have but either way still one that you can get yield on um then you have what were some of the other ones I was looking at here andos which is yield bearing stable coin up 40% um there's one other one that I can't seem to find right now but anyway the when you look and you see the big growth numbers it's always in the um it's in the stable coins that have Oh Black Rock up 200% uh they obviously have yield as well so any the yield ones are growing much much much faster but to see usdc in that hey here's a question for you guys a lot of people are like well um are talking about Supply growth of stable coins the bare Market people are saying we're in a bare Market but

usually stable coin Supply continues to grow for like six months eight months afterwards that's what happened last cycle and that's what will happen this cycle my take is we're going to grow stable coins be or bull might even pick up during bare Market to be completely honest so like I think that take is absolute rubbish my other question though is if I look at this chart here of stable coins we were growing like crazy we were growing for six to eight months after the bare Market probably because people just wanted to get out of crypto and hold stable coins the only reason we stopped growing was because ter Luna collapsed and then we had a stable coin bar Market but that was because people were afraid to hold stable coins altogether because one that was worth 40 billion went to zero if taluna never collapsed like I think we

still would have had a bare Market would stable coins have actually gone down I I don't know I think that would have just continued up and we would have been way higher from here um you guys have a thought on that this is just something I was thinking about the other day I think it would still go down because then 2022 2023 there were no yield in on the blockchains so you would get much better yield using us treasuries or whatever so like I feel you always need to look for incentives right and like back then stripe revolute PayPal they were not interested in using stable

coins yet and it was still you know on the road map so I think we would still go down down because there wouldn't be yield and all the people that show interest today about stable coins were not showing that interest like three years ago so I I think we would still go down I don't know I don't know I think I think we would have gone down but only only slightly or flat right like which is what we already kind of were here yeah you can I mean you can see it in the chart right like that remove that Wick straight down on like May 1 or whenever taluna collapsed and it still goes down but not not as much not nearly

if you remove that Wick yeah well lots of good times ahead good things are happening in the space uh it's exciting we get to talk about cool stuff fun stuff because there's actually cool being built on the blockchain right now and I think that's exciting although I know a lot of crypto native people are very bearish right now uh and a lot of retails very bearish because they hold I don't know Meme coins and a bunch of garbage but like when you look through all that uh things are looking fantastic and I couldn't be happier to be in the space right now I don't know about you guys and anticyclic [Laughter] people always cry that I don't know VCS are I don't know um bad for the markets whatever that institutions are just

using retail liquidity whatever but right now retail is bearish on crypto while institutions are bullish as and that's exactly the situations that like everyone like that's how the markets work all the time like people are crying and now like you know everything outside of Bitcoin is going down and we should only hold Bitcoin whatever but institutions they are coming and they are going to use stable coins they are gonna tokenize everything and that's happening on the public blockchains on ethereum or elsewhere so like we are just at the beginning of this huge next wave and institutions

adoption so just be bullish and just don't get your emotions get through you and yeah people are just looking at the prices and like okay nothing's working and blah blah blah whatever don't look at the prices just look at what's happening in the markets and where everything is kind of heading in the next I don't know years it's super fantastic and I you you you couldn't be more bullish when you listen I don't know Black Rock strip PayPal all these guys good times to just listen to this episode every Saturday and nothing else you can maybe listen to some of Jay's other episodes maybe one what Monday through Friday

[Laughter] too don't give up just don't give up that's that's my main message right now right like if you if if you give up now you're giving up at possibly the worst time right like it is everything is is everything is looking so good long term but expectations have screwed everybody PRI prices are down and everybody expected something different and when you have I mean it's true in anything in life right if I expect something from My Wife and she doesn't deliver it's very very you know I'm upset I'm disappointed right but I don't expect anything anymore and then I'm happy all the time

that is wonderful life advice let's wrap it up on that that's great thanks for listening folks that's wrap on another awesome episode high fives allar around if you are sticking with me to the end I appreciate you so so much I want to tell you guys about a question that I get asked a lot which is what are the ways that you can get gains from your crypto especially your Bitcoin if you've been holding Bitcoin for a long time you got a big stack you want to sell it because you don't want to get Ted on it well what do you do one of the best things you can do is you can take a loan against your Bitcoin and if you want to take a loan I really recommend you guys check out salt lending Salt's been a trusted name in the space they've

done over 500 million in loans and their platform allows you to do loans quickly permissionless usually get your loan within 24 to 48 hours no credit checks hit the link in the show notes if you want to check it out you guys won't be upset thanks again for listening in folks we'll see you guys back again Monday have a wicked awesome weekend as always if you liked today's episode please hit subscribe and make sure you follow us you don't miss out on the next one there's also a link in the description to our free 5 minute daily newsletter where we simplify crypto for you while making you laugh and if you're willing to step up your crypto investing game we're going to also leave a link for milk Road Pro you get access to our

portfolio where you can see exactly what we are buying this is your number one resource to help you invest successfully in crypto one final note this show is for educational purposes only and nothing we say is financial advice investing in crypto or any asset is risky and you should never invest more than you can afford to lose thanks so much for listening in my friends have a wicked awesome day