Solana’s DEX War, Base’s Flashblocks, and RWAs | Analyst Round Table

Transcript

radium can afford to do things like invest in R&D do partnership Integrations more marketing launch their own pump. fund competitor and it's because of their previous success so I think it's not all gloom and doom because of this optionality that their cash piles give them nothing set on zerox Research is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and any views expressed by anyone on the show are solely our opinions not financi advice bacho Ryan and our guests May hold positions in the company's funds or projects discussed hey guys welcome back to another episode of ox research before we jump into the show today I wanted to give another quick reminder Das it's

coming in a couple of weeks back to New York City um if you haven't already and you want to check it out um you can get tickets with our with our discount code 0x10 at the link in the description below so check it out if you want to meet some cool folks from the research team here at blockworks or you know interesting um individual from around the industry see some live podcasts just meet some great people um learn a little bit more go ahead and check it out that's 0x10 at the link in the description we'll see you at D hopefully um jumping into the conversation today we've got Carlos Dan chapiro and Mark Arjun it's a full sort of research team uh group up today um the market has been not the most exciting um again I think

we're just in a little bit of this sad and disappoint point in time following a a bit of craziness in you know I guess December January post election um we've given a lot of that back um one of the the big pieces of news coming out of this weekend is this um note from Trump about the Crypt Reserve stockpile he seems to use those terms kind of interchangeably but um the big piece of news that hit the timeline was like Bitcoin eth and then xrp salana and Ada would be potentially part of some kind of uh crypto Reserve or stockpile for the US no details beyond that um but it sent the charts on a bit of a whirlwind I guess I'm curious your guys thoughts on

like is this just positioning from from them like are insiders trying to trade this is it like do we actually what are the odds we think this actually gets um kind of implemented in some real form it's it's very vague at the moment I guess uh I can go first I think like everybody in the crypto industry regardless if it leads to pump or not agrees that only Bitcoin should belong in a crypto strategic Reserve um I've seen some takes that are plausible that maybe Trump did this to like gain leverage like on in terms of negotiation like start with this bunch of altcoins and then like gradually go

towards only Bitcoin but at the end of the day I yeah it's not great that announcing this in a Sunday uh pumping altcoins just for a day like it was I think like it was one day after the 7.5 million Soul unlock which like just optically doesn't look good and so yeah it just not great overall and I think like eventually if a crypto strategic Reserve is implemented it should only be Bitcoin in my opinion yeah I mean I'm just going to second that like I think it's kind of ridiculous have anything but Bitcoin considered at this moment and I mean

even Bitcoin it's still going to be a bit of a stretch right because it's kind of unprecedented but I mean you know it's it's it's plausible but for the others and I don't even I mean the trend was that they seem to be all American based whatever that means um I don't know how that's defined and I don't even know if that's true for them necessarily but you know we the government should not be buying crypto assets like that on the long taale I mean I know pan you know during the last um downturn were buying like stocks for their quantitative easing and that even that was a bit extreme and you know it seems to work out but I mean even that is more palatable than some of these other coins um the Sunday announcement yeah I've

heard like okay yeah he did he announced this on a Sunday he did the meme coin drop on a Sunday but then I remember he also did the Tariff announcement on a Sunday I think he just likes to do these things when he knows there's no other major news going on so that it gets a little bit more of attention I don't know if it was necessarily Insider stuff my bet is yeah there were some people who knew but um I just think he likes to do these things on a weekend yeah I mean after the um the Trump meme coin right like I think um you have to think all bets are off in terms of um what Trump's going to do and um yeah I I mean I agree with both you guys like if there is a strategic Reserve or stockpile whatever it is it

should just be Bitcoin um yeah and then the Sunday thing I don't know if it's like by Design um like you know to do it when the Market's IL liquid I don't know if it was by Design to do it before the day of the Soul unlocks um you know you could argue the other two coins he he mentioned were both like top five top top 10 cryptos so you you know I mean there's a couple stable coins or I mean there's tether and um I believe uh liquid Stak eth um lios zst eth is in the top 10 too so like really he picked just like you know Bitcoin eth and those three coins are pretty much um some of only the five actual like non-stable coin or liquid staking tokens in the top 10 so maybe

that's that's what it was I heard that explanation um but then there's like a part of me that thinks that Trump's just kind of shooting from the hip and there is no like plan here nothing's kind of by Design maybe he was just like let's put out a crypto tweet keep the crypto guys happy right like I I don't I don't know how much um one should look into it but what I will say is I do think that the market um completely lacks a narrative right now um really we had the ETF narrative and that kind of got us out of the bare market and up to 70k and then we had Trump getting elected which um was the next big runup and it just seems like without a strong narrative Bitcoin just kind of chopped sideways so

I think the market is um hungry for one and and that showed that um look like the market is I think positioned very heavily U not necessarily short but um whe whether you want to call it flat short um you know there's there's essentially no leverage in the system right now um and I think funding rates on bitcoin have have actually gone negative um for a couple like lower hourly or 4 Hour periods which is very very rare so I think um if there is a positive event like I think that just shows you that like I think uh the the tide will will switch um quickly but um as of now it's like I don't it's it's tough to know what that

narrative is going to be um other than you know like an actual stockpile announcement um I did hear supposedly on like Eric Trump's Discord or something he mentioned that on Friday they're going to announce um uh no taxes for americanmade uh cryptos for long-term cap gains so like I don't know but at at this point you know I think we're just going to chop sideways until uh and down unless there's like a a new narrative that takes hold yeah I think good good points all around um it it is a bit ironic to see the like focus on this Doge initiative and trying to cut spending and then at

the same time talk about some potential like maybe purchasing of like just cryptocurrencies you know outside of maybe Bitcoin which like a few you guys mentioned you know I think the General indust Industry sentiment today is that it would be a bit silly to include really anything other than Bitcoin at the current moment um so that's a bit funny just to see those two like things at play there um and and I guess maybe the other big thing now that's that's Weighing on people is just this kind of decline in interest and you know slumping of prices has led to you know overall all pretty massive reductions in onchain activity um we've seen that sort

of across the board RV numbers are down for you know ethereum for salana obviously like following the Trump token launch like that was a massive Spike of a day of just overall activity fees captured um and we've we've sort of seen that Trend continue now um you know people are just disinterested that the trend has been not uh favorable to like continuing to trade meme coins what have you um we wanted to have Carlos on a few weeks back when um he initially dropped some details on a Salon de landscape breakdown but now that I think the narrative has switched a little bit more towards um we're seeing more conversation around fundamentals um and fundamentals based investing which um not that you can necessarily you know perform great you know you're not going

to see a two to 3x while Bitcoin is maybe heading to the downside um but you might outperform other things um by having some sort of fundamental kind of strengthening underneath it versus just being a kind of valueless thing with with no revenues or earnings um to support your token um but I want to dive into that point around the salon index land landscape like where we're going um if we assume that like activity is falling off like things are changing like what are the I guess looking forward into the future like what should people be thinking about if you're surveying you know soul is still today one of these top onchain economies um and so if you're looking out over the next you maybe 6 12 if not 6 12 months

if not longer um you know it's going to be important to understand you know who are the key players today and who you might think will be the key players going into the future yeah absolutely um so first of all I think like we can all agree that Sala has become the dominant onchain trading Hub there are over 27 million tokens now over 50k tokens deploy per day through pump. fun alone uh and so I think like people have having trying to navigate the senad de landscape and who are the key players here like if you look back at 2022 2023 Orca was the dominant deck on Solana but then like at this at the end of 2023 and all of 2024

and this year uh yeah exactly this chart that we see here radium has been gaining uh basically a lot of market share from worka and is now the dominant Dex with around uh 60% market share and then you can see like they absolutely dominate volumes and he has been on the back of meme coins so I think like if we go to the next chart uh we'll appreciate it a lot a lot uh better like we can see that starting at the end of 2023 meme coins started to gain prevalence on salana De volumes and this trend only accelerated in April 2024 when pm. fun launched uh as you can see like in the past 90 days

like 60% of uh sole Dex volume has come from mcoin purs and this is a trend that has become basically steady since late 2024 and so I think like looking forward like if you think mecoin volumes are like down from here that definitely affects Solana's uh total Dex volume and real economic value as a result because a lot of the Rev that solena generates comes from training activity and mem coins are a huge part of that because uh when you trade meme coins there are a lot of contentious transactions and also a lot of Arbitrage opportunities and

that's what generates a lot of the uh both priority fees and GPS that you see on Sol's real economic value so I think like uh in the next chart we have like a really cool heat map that basically just shows you um like the yeah exactly this one this just shows you like the Dex marketer by asset type so what I want to highlight here is a couple of things first of all you can see that radium dominates mcoin volumes with around an 80% market share uh what's interesting here and I think we'll discuss that a little bit later is that radium do Ates

both pom fun and non- pom Fon volumes um with around uh 79 and 78% market share like respectively and also like radium is the primary beneficiary from increased onchain like retail activity but it is also the deck that suffers the most when we have periods of like downward uh pressure and like down like slopes in activity because it is the deck that benefits the most from like this mem coin Mania kind of thing um another interesting thing is like if you look at linity it is the fourth Dex by overall volume but it is actually the leading

Dex in the so USD pair I think this is interesting because it highlights like as a de they have focused solely on the soul USD pair providing deep liquidity there and they have managed to gain Traction in that market while uh like giving out all other things and they have an very interesting mechanism where they have like protocol own liquidity uh but like yeah we can dive uh later into that if that's interesting um like the final thing that I would note here is orca uh I mentioned that Orca was the dominant Dex on Solana like in 2022 23 however they have lost their leading position in the two most important

verticals which is both meme coins and the so USD trading pair and although they dominate like in Project tokens stable to stable coin swaps and LSD swaps uh the problem is that these verticals only constitute less than 10% of total Dex volumes so even if they lead here that's not very significant in terms of overall volumes uh and then finally we have like uh Meteora and Phoenix uh you have seen that Meteora has benefited a little bit from like the mean coin Mania especially because if they were the primary liquidity venue for the Trum launch and then they were also the venue for the lra launch associated with uh president

mle from Argentina so I think like the problem here is that with every additional public figure that launches a meme coin I I think it's inevitable that we see decreasing marginal returns here and like metora launched like the M3 M3 platform for like a Launchpad to compete with pom Fon that was supposedly going to be fairer and like it was supposed to like I think the quote or the marketing like slogan was something like uh transform mem coins from a race to dump to a race to stake or something like that but like the realities is like the Launches on metora or M3 and3 has had been just as bad as pum fun um and yeah

like that's it if you see like the last thing we have is Phoenix which basically has insignificant uh volumes in every vertical so I don't think it's really worth to dive into that so something I think is interesting I want to highlight is if we look at the recent data if I just share our salana dash at blockworks research you can actually see I like that you highlighted lefin and their sort of dominance of the Soul USD pair we've actually seen that shift like over the past few weeks towards you know back towards your orcas and even towards like Meteora for example and I wonder if this is in part due to like a slight change

in behavior of the typical user you know if the mem coin activity is is declining a little bit and we're we're starting to see that shift um maybe they're not going through lefin just because you know these other dexes are potentially you know if liquidity is moving different different locations or um people who are operating via these decks are just moving their activity to that versus um interacting with meme coins um I guess looking forward the the other like big kind of elephant in the room was the pump fun announcement of their own native amm um which is a big question mark for radium right um I guess Carlos Mark I know you guys did

some work on this curious like what are your guys high level thoughts and then we can maybe jump in more I know we have we've got a new radium dashboard as well um that we can walk folks through too I think high level I mean like what Carlos was saying about radium only dominating meme coins but Ora has a good market share of stable coin swaps and LSD swaps but another thing to note is that those volumes sent to be on the lower te fee pools so even you you could probably dominate maybe um maybe 8% 70% of those kind of volumes but if the the the Decks that has the meme meme coin volumes are the 3% and above I mean like that's where the real money is going to

come in and I think pump. fun you know potentially bring out their own amm you know we have it's in beta right now so I think it's like basically inevitable at this point but um I think that's the biggest story like it radium is going to lose their highest source of volume but also the highest te fee generating pool right and you know radium was a very loved asset you know last year coming into earlier this year because of the strong cash flows and the strong BuyBacks right and it's a very it's a reflexive flywheel in the sense that when if when am when pump that fund launches at amm these BuyBacks are going to decrease in value and then the token becomes you know less um less attractive

and less volumes means Jupiter might route less to them so it's a dangerous it's a dangerous flywheel but I think on the next slide I'll let Carlos talk about this one I thought it was really interesting we like okay so what is the actual impact of pump. fun going to be because we know that once the meme has graduated to radium it stays there and radium retains those volumes so um so there's no fair from the big ones like whiff and the Bon and these larger meme coins that you know let's just call them Blue Chip or yellow chip right um it's really like let's let's see what the what the impact is of the newer graduation tokens and I I um we have a just you know shout out to the data team

atock works for like pulling this together so quickly um I let like Carlos run through it but I think the the the takeaways here are like were really shocking even though we expected some level of this it was still surprising yeah absolutely like shout out to Jacob for pulling this chart like in 30 minutes or like one hour it was incredible um I think like the main question like Mark said we wanted to uh answer here was what is more important basically like is radium like like what is more important for radium like the coins that already graduated like far coin fog or whatnot or the new coins that pom fun uh continually continuously launches uh towards uh the decks and so

what we found is incredible and we found that uh 70% of radium's total trading volumes comes from pools that are less than 30 days old uh this was like like an insane statistic like for both Mark and I because it shows like New volume is way way more important than already existing volume and the fact that pum fun is threatening to launch their own amm means that radium will lose basically its largest source of new trading volume which as we can see here is basically the most important uh like uh yeah like the most important source of their total trading volume I don't

know Mark if you want to add anything no I mean pretty sums it up well there and the the only thing I can think now is that okay radium has been so successful with their BuyBacks I mean I think it was I mean 22% of their tokens I think um they bought back plus they have a uh their existing um treasury which they didn't actually like distribute so they have a a sizable War chest relative to other crypto projects and it it's where do they go from now right given that given that it the likelihood of this happening what are they going to use this this their treasuries for their funds for and this is why I prefer buy back and hold than buyback and burn because okay buyback

and burn is kind of like it's kind of like what traditional you know traditional Finance you know like the apples and the the Mets of the world do and it's a it's a buyback heal it's nice it's nice for investors and it has a tax benefit to overall dividends but for a crypto project you can burn it great to reduce the circulating Supply but you don't get the optionality so you know you can always burn it again but you can we you know radium can afford to do things like invest in R&D do partnership Integrations more marketing launch their own pump. fun competitor and it's because of their previous success so I think it's not all gloom and doom because of this optionality that their cash piles give them and it's it's mostly Ray tokens and it's some usdc and some soul but I think there you know

it's not all gloom and doom and the the pullback the you know the DraStic pullback in the price over the past couple months and from the pump. fun announcement month when Carlos and I were looking at it we did a scenario analysis and you know you know we think that the pullback was definitely Justified and it's still within Fair valuation range especially when compared to some of the other comps in this pair group like Ora and these others so you know there there is a kind of hope and now it comes to now the risk lies on team execution and and how they move forward with that I know there's some other things in the pipeline even before this announcement um but maybe and especially in the downturn know people love teams love to build in the bare markets but you know maybe they can come

out of this with a more sustainable or even more competitive business model I do have one comment that I think is interesting is in talking with some of the radium guys um I think on Twitter but the this idea that like even pump fund doesn't really own their end user um I think that's often a critique of something like radium where you know I think for the most part you know you don't have a large portion of us users that are directly interacting with their front end it's you know they're probably being routed via Jupiter um or maybe it's Bots just you know arbitraging trades that's a you know large majority of the volume in for a lot of asset pairs um but there is this interesting idea that you know maybe even pump fund

doesn't really have the leverage to their users um that maybe the market sort of thinks that they do um when we know that so much volume flows through um telegram trading BRS consumer trading apps you know your photons your bulex is doing you know at least during the kind of height of the market a few months ago you know on the order of several hundred million dollars um of volume a day through just those two if not like near a billion on that Trump launch um doing significant amount of volume on specifically you know we know that 99% plus of all the trading volume on those apps is mem coins um and so I mean maybe that that might be an angle for these other teams to explore um if radium needs to consider building out a

consumer application like we've seen the tensor team um they they kind of have pivoted away from the nft marketplace and they're building you know the vector. fun um consumer kind of trading application as well so um maybe that's the lever or if it's you know different types of assets um entering into the space and like being a kind of hinging on that focal point I think there's a lot of talk about you know everyone is going to the rwa talk now you know tokenizing stocks different things of that nature I guess if you can be the premier venue for that sort of activity I think you'd also expect that to be a very highly valuable and like Revenue generating opportunity in the future um it's just a question of who's GNA actually be able to successfully do that I'm definitely um in the AR rwa

camp but um just on that point with the not controlling their their users not in control of that funnel I mean it's liquidity why does the why do these telegram apps route to pump. fun or route to radium or why do these Bots do it right it's because that's where the liquidity is and if if what we've seen is that most of the new volume comes from most of the volume comes from new tokens like trade less than 30 30 days old then that's where the liquidity is going to come and frankly I think it's a bit Bess to say that because I mean these Bots pay the same fees that users do their money is just as good as anybody else's so I'm not fully convinced in the camp of that but I you know I I but I do see the point and I do

think there is opportunity to maybe control the funnel I agree there like it's a question of what you value most like in terms of distribution like P fum has their interface most users interact there radium only has like the liquidity pools in the back end if pum fun starts routing uh liquidity towards their own amm instead of radium then I don't think there's an argument to be there that radium uh like still owns the user I I I wouldn't think so and like thinking through the scenario analysis like one of the things that stood out for me specifically is that I don't see a scenario like personally where pomon launches an amm and then radium has more

volume one year from now than it has today like in my opinion it's like pretty bearish for like radiums trading volumes like on a forward looking basis but like the caveat here is like and I agree with Mark radium has a very robust financial position and they can like invest in R&D or in new user facing products like you mentioned Danny with like the telegram Bots or they could like Fork pom Fon and launch their own Launchpad like there's a bunch of things they could do to mitigate like this uh potential Tailwind tailwind and I think like they won't sit idle on their hands and watch pom pon take that volume I

think they will like do things to retain as much as possible that liquidity yeah I think that's a fair take before we um before we pivot away entirely from talking about radium I just wanted to highlight we do have a new dashboard up at rum. blockworks research.com um go and check it out it's you know like like we all just mentioned there's some um takes for some takes against they kind of future positioning now that the pump fun amm is out but um this is a really incredible dashboard we've got breakdown of financials um dig into the tokenomics the trading volumes look at different pools LPS um all of that so I think if you're interested in in learning a little bit more about radium getting deeper into the weeds um and understanding that their sort of

current position um and you know maybe building a thesis for yourself on where you think they're going in the future definitely check out this dashboard it's really awesome thanks to the blockworks data guys for for throwing this together um we can we can jump along from radium though unless anyone has some last thoughts there has been some other um sort of interesting news that I I think has kind of been a little bit um glossed over just due to all the the Trump talk on the time line but um Bas has had some interesting announcements they just dropped this flash blocks announcement which is sort of being compared to like salana shreds um there's a little bit of contention on the timeline around um calling them blocks versus calling them

like something more like shreds or like knot blocks I don't know I think the eth and salana like communities love to argue over the technical terminology um we can kind of skip that discussion and just talk like more about the specifics here but um the big thing is really that these are of like pre-confirmation blocks where data gets streamed every 200 milliseconds um sort of giving um you know sort of like a realized 10x speed improvement over the like existing two second blocks today um and the it's available on test net not quite on Main yet main net yet but planned for Q2 um I guess I want to dive into this one a little bit because I think you know I know Dan Smith has commented on this

point a little bit but um there's a lot of talk about how speeding up block times in general just lead to more me Arbitrage opportunities like we would maybe expect to just see increases in trading volume on a particular chain um I know Shapiro you have written about Aerodrome and and about base in the past I'm curious on your thoughts like what this upgrade could mean for base and um you know Downstream impacts you think think this has yeah absolutely so um kind of the core um tradeoff here um that's at play with lower block times um was really um I guess you could say it the discussion around it began um around 2022 2023 um with an a16 Z paper around um loss

versus rebounding and so effectively with any amm um the block time effectively determines the amount of time that an arbitrager has to successfully make a profit and um because of all the block time um effectively implements a minimum bound delay in like the rate that that price you know like the information of the price can be um propagated the result of that is that LPS um typically incur uh negative loss or impermanent loss um be for for providing liquidity um because of this delay in time that a DEX

or an amm can update the price versus where the price Discovery typically occurs which is on a centralized exchange because that's where the most um volume is so as you lower block times um what actually happens is that um you're increasing the frequency of of the ability for arbitragers to effectively um uh make uh change the price so that it's in line with whatever the sex price is right and so when you actually lower block time times though um the rate or or the the percent of successful arbitrages decreases significantly so um if you lowered block times from let's

say 2 seconds to 600 milliseconds that would lower the successful rate of arbitrages by around 90% to down to around 30% um but the downside or but but the upside is is that um liquidity providers for the amm are not losing as much money um to LV are so what that means is that you know you can provide liquid lower block times means that you can provide liquidity liquidity to a DEX and effectively make more profit right so I think um for arbitragers I think um the result is uh the arbitragers actually have to trade

more to make the same profit right because in order to have a successful Arbitrage you need to make more money um than the than the cost you pay right so the amount that you make for the Arbitrage has to be greater than the gas cost the gas cost Let's us assume it's fixed for the purpose of like this theoretically um with a fixed gas cost if the profit is less than that you're not going to take the Arbitrage so the arbitragers end up um you know they have to transact a lot more to make the same money uh to make the same amount of profits that they would have before with higher block times so and we've seen this in in in the data effectively the result of this is that lower block times tends to lead to more Arbitrage volume

and so long as base can keep gas costs low which their goal is to get to like one you know one giga gas a second like then lower block time should then theoretically um increase LP profits um decrease in permanent loss and increase volume so just across the board just makes amm better more efficient and that's critical because dexes and amms they're never going to be um where price Discovery occurs so long as you know LPS are not really incentivized to um to provide liquidity there but if they are incentivized to that I.E they're not

going to lose as much money from impermanent loss now all of a sudden right you might have more LPS that want to LP a decks um with more liquidity that means better execution for Traders means Traders trade more they generate more volume more volume means more trading fees and more trading fees means more LPS are going to want LP there to capture those fees so I think um lower block times is great um so long as you can uh keep gas costs low and I think that it could start you know like a virtuous cycle um that just kind of grows the pie for everyone and really you know potentially reach closer to the end game of like Dex is actually being where the price is Discovery occurs as opposed to um on centralized

exchanges those I think those are great points um the other maybe the sort of Downstream question is like if we think about the venues on base um and how they might be impacted so like if we're going to see you know a potential increase in just generalized trading volume um due to you know this what is like effectively somewhat of a a fast block time um for the users essentially um do we like where do we expect or how do we expect this to impact sort of the onchain economy Building on Base you know like Aerodrome and and uni are like the the two key locations today I know you've written

about Aerodrome in the past I'm curious if we still think that like Aerodrome remains that that primary venue for activity or maybe even grows its share if they're doing you know if either of these places are doing anything specific to capitalize on this or just their existing share like we'd expect that to grow if they're currently the market leader yeah we we'll see um I think I mean something that we do have and we have data on this you can you can show the charts like aerod drum um I believe 83.3% of its volume comes from the comes from eth uh an eth USD pair a eth BTC pair and a btcusd pair so a the vast majority of volume that aerody drum does

is through is just effectively Bitcoin and eth um Unis swap on base the vast majority of its volume comes from meme coins so um you know without commenting on like which one I think will do better in an absolute basis on a relative basis you would think that lower block times would benefit um aerody drone more because lower block times primarily um benefits arbitragers and that um leads to increased Arbitrage volume and you're going to see increased Arbitrage see more Arbitrage opportunities um for an eth or BTC pair rather than memes right that primarily only trade on chain so on a relative basis um I think aerod Drome

right already um captures around like 63% of all volume on base um lower block times it you know so long as the volume by pair type holds um I think would disproportionately benefit aerodrum over Unis Swap and I mean right like also you could say like base they're dropping this block time this is kind of I think it's the same um block time 200 milliseconds as uni chain so um you know I think the trend of Aerodrome being the main um amm and and exchange on base I I think that this will just accelerate that um and I mean I would expect you know unit chain um to start to become

the more dominant hub for all all the unit chain pools so um we'll see what happens there um and then I I did see uh you brought up another chart um I went and just kind of you know pulled some data together this is it's not perfect but um looking at what percentage of uh ethusd spot volume aerody drum does versus um this is versus uh coinbase spot binance spot okx spot and byit spot and you can see that it kind of hovers um recently um it's around 10% um it's been as high as maybe like 35% um and

so you know if you just modeled out different scenarios right like you say lower block times theoretically um it's uh more efficient to uh provide LP or to LP Aerodrome um you know if it's trading a lot of fees then you might actually you know run the numbers be like oh actually you know maybe I should um stake my eth uh or LP my eth on on the eth USD Aero drum pool and maybe lock some arot tokens or something and it offers a you know a nice APR and so you you decide to do that and so maybe you could see uh this ratio increase from maybe like 10% to maybe you get more consistently above 20% and um right

because uh you know ethusd um and and Bitcoin that's like around 80% of their um of aerody drums volumes um if the right if this ratio of Dex to sex volume for aerody drum specifically like if it if it doubled and kind of held there um that would effectively be like a doubling in in Revenue um from Trading fees yeah good points oh go ahead I really I really like the outlook on Arrow just based off of this do we have do we have a rough timeline for when this shred non shred up grade hits main net yeah it's supposedly Q2 for Base main

net so fairly soon I I do think that does keep with kind of in keeping in line with the general sort of like pace of of Base improvements I know at least as well for 2025 they're also basically expecting to increase generalized throughput whether that's via gas or um total blocks times um on like the relative order of like 10 to 12x as well so um and we shared earlier that that gas through put chart like they've just been continuing to to step function that up um kind of week over week um I want to jump back to since I think it's relevant actually to the salon of conversation that we were having but you mentioned some of the metrics around meme volumes vers versus e SD volumes so

um from our our base dashboard here at blockworks research um the probably the big thing to note is that like the ethusd pair is inred incredibly dominant on base like upwards of 50% of the volumes um in many cases and memes have really just been a declining share um ever since it launched and the and the bald token rugged like that first week of of the base launch but um yeah I think when we look at you know like Dex volume by project like as Shapiro mentioned like Aerodrome really had a massive run um last year and gained a ton of dominance and has since then really just maintained this like 60% plus 50 to 60% share of of overall

volumes um and then when we look at the individual categories again comparing Unis Swap and Aerodrome you can see like you mentioned the the meme activity was very highly concentrated around Unis swap pools um and that has dropped off like we've seen you know memes have memes activity has has started to drop off um as well on salana um in this case it's been more strongly like we're seeing a ton more eth USD um pair volume here um and in the case of Aerodrome actually we've seen other pairs start to proliferate um in recent times so what used to just be like massive ethd dominance is now getting filled in by some BTC eth BTC um and even project

tokens kind of cropping up into the mix um so I guess it's interesting to see that both like both applications are seeing a little bit more PR eration of different types of assets um we're getting away from like all memes and all like just just eth um USD pair so that could be a positive sign for just Bas generally going forward um if we're getting away from just this like kind of bodal distribution of assets where it's either you know all pump fun maybe styled memes and and all eth trading and um seeing more of like an ecosystem start to develop around that we'll have to see like going forward if that

continues but um overall I think yeah just reh highlighting some of the points you made there um and highlighting the dashboard we have thanks again to the to the data team yeah and and Danny on on that point of um right like we're seeing these new assets crop up um I think of that that Bitcoin um volume that popped up there was because uh coinbase um brought like an onchain um or they started their like onchain Bitcoin loans with Moro and so so after that integration um I think morphos tvl like 5x or 6X from like 30 30ish m to like over like 150 mil right and so this is something that um I know like uh Brian

Armstrong has has sent out a few tweets saying that um they want to integrate base more closely with the core coinbase product itself um and obviously like these like onchain Bitcoin loans uh bit Bitcoin back loans with Moro was one example and um it seems like the aerodrum team is like hinting at at a bunch of stuff but in like Brian Armstrong tweeted out that um you they could theoretically um connect base uh liquidity to the actual like coinbase main product and um you know if if it would provide better execution they could actually like route trades to uh to the base back end and so I think my

guess and like obviously zero information here but um for something like the ethusd pair like if you go and you know you click like Buy eth on coinbase or your coinbase wallet or whatever um maybe in the future right like they actually connect uh base um to coinbase in in such a way that um they could effectively use the aerody drum e liquidity um for that trade and so I I think that base um I think that's one way um where these base coins and and just the base ecosystem in general could really act like strongly benefit from um I guess like the coinbase partnership

right is that it's beyond like they're not just going to get distribution in the form of like you know you install coinbase wallet and like the first thing that pops up is like go swap on you know aerodrum or go get this Lo loan on morph or whatever but they could actually begin to Route liquidity there and so that's a form of like automatic distribution um that I think could like really um take some of these Bas apps to to the next level so I think that's something to to watch out for yeah that that's a great point I was overlooking the um CBBC launch and integration and Morpho integration here which makes total sense why we see the kind of BTC

pair upticks um kind of to your point you know if we see all whether if it's different coinbase wrapped assets or just other assets that they are building out promoting on the exchange and then bring to base like it wouldn't be surprising to see like the growth of different pairs um kind of based on those continued rollouts of potentially different products going forward um I know there's also this um you know Brian Armstrong has mentioned in the past like this idea of doing like um a a token index like a crypto 50 index or 500 index um you know that might be another example of you know if you could roll up a bunch of these different types of tokens and and get them tokenized and um

have them on base or have this index value on base like Ju Just Another scenario where you know you might be able to take a bunch of these disperate assets that you know currently you can trade on the exchange um like you said I think we're just going to see more and more that they leverage based based the chain um as an opportunity to get get their retail users on there and and make use of different products and leverage the sort of underlying smart contracts or like backend Tech that exists there um for a relatively simplified user experience and Morpho is like the first kind of clear example of that but um I think we'll see more and more like like the other kind of recent um chatter around like using usdc as gas for example on base and trying to simplify

some of that user wallet experience in the coinbase wallet app for example yeah I think it also helps that um coin bases coinbase Ventures was in the rounds for Moro arrow and circle so very very nice flywheel for them there too yeah I think I I tagged um a bunch of uh the coinbase ventures portfolio products in a in a report before so um you know sign up to bwr to get that to get that Alpha but yeah you're absolutely right like there's a there's a flywheel there there's a shared incentive um and uh yeah we'll see I mean I think uh I think basis like we we forget how how young Bas is um it's a

very very early like a lot of other chains at this at the same time in their life cycle weren't as developed uh their egosystem wasn't as developed as bases so um you know I if especially if you know we're in this kind of like mini bare Market or extended pullback whatever this is like they're they're going to be building and I think um coinbase they're in they're in the clear from a regulatory standpoint so um yeah who knows what they're going to come up with like Danny like you're saying like the coin 50 thing like a tokenized um you know single product you could buy like I like I would buy that on coinbase in in a heartbeat right and so I think that a lot of that stuff um is going to be U legal now for them so

um definitely some Tailwinds there have you been getting silon chain this year farming on 10 plus wallets across different different ecosystems well crypto tax calculator is here to help Crypt tax calculator has 3,000 plus Integrations to support all of your wallets Exchange accounts and onchain activity and a custom pricing Oracle to handle even the most chaotic portfolios get started today and make tax season easy you can use our exclusive discount code BW 2025 to enjoy 30% off all paid CTC plans until April 15th of this year follow the link in the show notes below to get started yeah the other big thing I'm uh that you know brought it up earlier was this idea of getting we love to call them World assets I think it's

really hilarious but like you know stocks are also relatively digital as well at this point so it's kind of funny to call them real world assets but either way um there's a lot of discussion of like bringing tokenized stocks on chain um there are some teams building different products here like in defi today I guess the bigger question um maybe for for yall is like whether we think that has relative success or if you would just expect you know the sort of giants of the industries today um to come in and you know build out their own products or or buy up those those products that have been built out on defi rails and you know put their brand on it and um you know Market it to

Consumers and institutions because I think that's that's really the big question of you know Robin Hood and and even coinbase for example they have you know massive sets of of users and a big big moat around that and you know large funnels to where if they did end up being able to and then you know offered like tokenized stocks on their chains for example like if Bas had tokenized apple and Tesla and you could just trade that and then you didn't even need um this if coinbase didn't even necessarily need a more traditional like brokerage offering through their exchange um that's a pretty interesting sort of way to go about doing it for them um if the new sort of regulatory regime allows for it Robin Hood I think is is maybe the

opposite example where they sort of already have all that existing brokerage um stuff in place they don't have their own chain um but you know they could go the the reverse route of of building their own chain and doing that stuff on chain um they're they're sort of maybe on opposite ends of the spectrum um the other question is like does black rock or Fidelity or like pick your favorite if you know Vanguard come in and wave their massive pile of cash and assets and and uh a around and just say no we're going to do this and we're going to be the dominant player um curious any thoughts there I think you know I've seen some different I think Mass money was one that kind of went around um socials a bit the other day around being able to trade like

these um tokenized shares on on chain on like evm chains um and just you know some of the different things like the the kyc requirements um this being in defi not having like the backing of a large institutional partner it just it just makes it a little bit tricky I think until you see the kind of major institutions come on board and say and get the backing of you know maybe the regulatory regime to say yeah this is okay like let's do it if it makes it a better product experience for your users then uh go right ahead I think for now it might be an interesting pilot I mean with stocks I mean we're looking at retail here because they're most likely for onchain products and it's they're interested in Tech Apple Tesla these

kind of big assets already have so much liquidity existing like offchain and the fees already so low I mean Robin Hood is free you know selling order flow and it's free so I I feel like it's probably the lowest hanging fruit but the the rewards aren't too high um for that I mean especially for US citizens like you go into one app and there's you know you can trade stocks or crypto from one app you just click another tab so the convenience is right there for maybe International investors it's no you know it's not dissimilar from an ADR which is kind of like you know if you're a US citizen and you want to trade trade Chinese stocks like Neo Alibaba what you're essentially buying is an ADR

which is just a rapper so it's somebody else who's bought it and you buy that which is basically a some form of tokenization if you know if tokenization is just wrapping it so but so for maybe then it might have some use case but again like US has most of the volumes most of the revenue and like that's probably going to be your your target market for launching these kind of products um and I I think it's a little bit more interesting to probably do private Equity markets something that traditionally hasn't had enough liquidity or any liquidity and bringing that on chain um but I think the complication there might be around like Capital calls you know like you have this hedge fund how are you going to have it in usdc is it going to be interest bearing how do you move that to

these private equities you know every every single company wants to have their own chain to control the funds will they use a public blockchain will they have their own private chains what's the interrupt solution going to look like that for that so um so that one is not as easy to do but I think the benefits of put tokenizing assets are much more clear for those less liquid instruments um and but if we were to go the public route I would kind of agree with what you said in the end where it's probably going to be like a large company like a black rock who has liquidity who has customers who has all of the needs necessary to bootstrap all of this and hit the ground running maybe for in their circumstance it can work um in in

in lowering fees and and having those volumes but um I still think it's going to be pilot projects I think the after the stable coin bill passes this month we're going to see a lot more of that because stable coin bill is just you're just tokenizing a US dollar you know right I think next stops will be hopefully tokenizing um deposits and then you just go down the long tail end to these other things as well yeah I couldn't agree more with what Mark just said I think like especially for like non- us investors it could be beneficial like if you're in the US you have every facility to invest like in stocks but like for instance in my case where I'm not us-based like having it on chain I see benefits in terms of like the Fiat on and off ramps

and how it would be so much easier to just like buy a I don't know coin stock from my wallet than having to uh withraw that money to my bank account push an international wire to like a Charles Schwab or Robin Hood or whatever and then like invest from there like it would be so much easier to do it like from a wallet with my usdc which where I already have like my money so I agree there and I also agree like on targeting more emerging or Niche markets where like are somewhat unattended like private markets I think there was a company called action narat like in Switzerland which already does this where they tokenize like uh private

equity and you can trade that but like one of the challenges of these sort of like Innovations is that you have to remember like for real world assets uh the biggest horal is regulatory so you got to make sure like when you trade this stock onchain there is also an offchain like legal mechanism that grants you the ownership of those uh of those shares so basically how do you equate like the onchain uh world with like the offchain loss so that when you trade something on chain you also have like legal recurse of chain and have that ability to like actually say that you're the owner of of that portion in

this instance yeah the the growth in Emerging Markets I think is a great Point Carlos um and we've we've kind of seen the same thing when it comes to stable coins right like there is usage of stable coins obviously in like the US and pick your other like dominant first world Nations but um when we look at like usage of solutions like tether and other stable coin like applications for sending International transfers things of that nature that like may not really be as much of like a US citizen problem um it they've been quite successful and so maybe that early like user set um or like really interested user set is again from that Emerging Market perspective

where like you know if I'm a US citizen today like yeah I can go get a you know Vanguard account I can get a Fidelity account I can get I can you know use Robin Hood ET there's a million places right where I can go and trade stocks and and also crypto now in a lot of these venues as well um that they've been opening up so um it may not be much of a pain point for me and the the real unlock there might just be you know around some of the other features that that putting this stuff on chain enables like you know in rather close to instantaneous settlement and you know the money is immediately there you don't have to wait for like AC transfers things of that nature maybe it lowers the fees on the back end a little bit for the business itself um those aren't

really like the strongest benefits that are going to drive this all the way to the like take this from zero to 100 but um it could be the you know users outside of the US who you know maybe have a difficult time access this these thing through their legacy systems today um if you open that up a little bit more they might be that that that key like initial kind of onboarding set of users that uh are willing to test it out um and and build some pmf around it before you know businesses at scale make use of the tech for uh you know sort of a a fees based and like saving cost savings kind of benefit on the back end and and I think that's kind of what we're seeing what we've seen with the slow growth of stable coin adoption it's it's really

taken off um like in the East and in the west it's like we've been going through this like slow regulatory hurdle some there's been some adoption here and there of like yeah these actually do make sense like it's it's instant for me to send a payment and um I don't have to wait a few days for it to land in my bank account but uh outside of that like we've we've just been going through the the slow motions there yeah I I think that like unequivocally um we're moving to a world where all assets are tokenized right and they're not known as like real world assets right like those are just assets um and so really it's it's it's just a question of um how you do that right I mean first like the benefits are obvious right like yeah I can go on Robin Hood I

can trade stocks in crypto but like I can't go deposit my my stocks into a defi app I can't go earn yield on them I can't take a loan out against them right like tokenizing them gives them infinite more utility um for the asset issue with themselves if they tokenize their their stocks they get t plus zero settlement they have reduced fees um and they have full transparency of where that asset is and what it's collateralizing what you know what it isn't and so um after8 with uh Dodd Frank Frank act effectively every Bank um you know other Financial Market infrastructures they need to keep like maybe as high as like 1 to 2% of

all their assets just as like um just like in cash just to make sure that like if they're you know like the pipes um you know just or effectively like Grease the wheel right so like if the system um if there's like some form of uh contagion somewhere right like there's there's enough liquidity to like keep the system going right and so like that's a bunch of that's like a bunch of latent capital they could be getting put to work right so the fundamental incentive for all of trafi to tokenize is is there and it will happen it's just a matter of how so like when you buy a stock on on Robin Hood like they're the custodian right so like something like coinbase could do is right like they could become

a registered custodian like they could go buy billions of dollars worth of like the Fang stocks and then they themselves could you know could wrap them um use you know do like something like with proof of Reserve to to prove that like the tokenized version um or like the real version of the stock is like sitting there in custody and then you can go use like the tokenized version right so that's like one way it could potentially happen um you know and this actually goes back to like the radium pump fund thing is like who has who has the leverage here is it is it radium who has the liquidity and and the technology and the pools and the assets or is it the front end

right and my bias is more towards like who has the liquidity and um I mean this is effectively like I like if Black Rock has 10 trillion dollars worth 10 trillion of assets under management whatever and like a large portion of those like are let's say various Financial products that like people want to buy for them like what is stopping them from you know potentially making their own chain tokenizing all their assets and then using an interoperability solution for people to come and buy them right and so um I mean like the other right as opposed to all these individual um you know tokenized asset platforms or or whatever the alternative and um I guess you could say the alternative approach that's been you

know years in the works is is um is chain link strategy um with ccip and and now with um now with their CR their their runtime environment where they're going to effectively create a a platform for any trafi institution to tokenize their assets and then to connect together um with their already existing um infrastructure rails um with their Swift messaging system and then effectively ccips ccip is just an extension of that so I think those are like there's various paths for where of how it could occur but yeah I mean I I think 10 years from now it's not you

know this web 3 and trafi and um you know crypto and whatever it's just a single unified blockchainbased Financial system and everything is just assets yeah and just to add one point to that I think I definitely agree with you and I think in that time frame it's not going to be tokenizing assets that we're going to skip that the ATS will be the DLT and we're just going to list the assets directly on chain there won't be any counterpart on some other you know some other database somewhere else it'll just be directly on chain listed assets but but we're far from that now yeah I guess you you sort of have um a starting your own amm like pump fun problem there where all the existing

assets you have to work through those um going through having two ledgers and then anything that gets created new um can start out on that one and have no problems but yeah there's sort of like the Legacy issue there that that we'll have to if that is truly the future then we'll have to work through the Legacy issue there um maybe just one note to make fun of the um the idea about adding transparency to a lot of these things we might need to work on some of our block explorers I think there's very few people maybe Dan Smith um is one of the only people who can read the Sal block Explorer today uh we might need to work on some of that transparency especially as well around um you know token unlocks who owns what um in terms of insiders for different for different tokens today

um I think we would have problems if uh it was not easy to tell who was the owner um of like a large stock for example I think uh we're going to need to make sure we work on some of that stuff so um just just things to work through you know the data is all out there there's just there's a lot of blockchains to and blocks to read through at this point uh and somebody's got to do it awesome well great up guys anything else maybe any key takeaways um from any anyone on the call to leave off off the the viewers for today or a dash chill if you're going to be there um just just keep grind just keep grinding um it's not a guarantee that uh we have these like Cycles anymore and so um I don't know it's like

trying to square all this you know negative macro stuff that's hitting us while at the same time it it feels like um you know even if Trump like as as we started off like with uh the Strategic Reserve with some um kind of not decentralized kind of scammy Assets in there like whether whether Trump is um you know like truly promoting you know crypto in a positive light or like a scammy light what whatever it is like um regardless of that like I think like there's now there there will be a framework for the good guy for the good actors to actually start building and so um you know like I think just stay locked in and and um yeah I don't think

like now is the time to uh to just be like oh bare Market I'm going you know disappear for a year yeah I'm going to second that this is the great this is the best time to probably be following what's going on I mean with finally under an Administration where the regulatory in um agencies aren't stomping on the neck of the crypto and even if they just let their foot off they're not even doing that they're helping helping the entire industry up by the hand right they're putting us up on a platform so it's it is the government and it's not going to be very cyer Punk of me to say this but you know it's good to have them on our side um but it's the government so it's going to take time it's it's it's not a very quick Endeavor but you know even in the

past week we've seen a lot of um SEC you know cases dismissed you know and there are um different crypto task forces working on various things and the lobbying industry is is pretty strong so I think kind of like zoom out as always and I think it's like we have some structurally positive Tailwinds ahead of us for the next couple of years yeah I like that near-term sentiment is you know observably very poor at the moment but like Mark said it seems that long-term sentiment um for crypto has been more positive than it's ever been um with the Positive regulatory regime kind of stepping into place here so yeah like both mentioned this is the time to you know survey the

landscape figure out you know what are going to be the interesting if it's assets or chains or ecosystems going into the next few years um now is the time to be to be looking around nosing around take a look at that radium dashboard radium blockworks research.com um and take a look at all the other dashboards you know we we mentioned the Bas one as well but uh we will see you guys again next time appreciate you all for watching and and thanks you guys for coming on thanks guys see you [Music]