State of The Market, How to Value Hyperliquid & Tempo Launches Mainnet

Transcript

Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds or projects discussed, >> monitoring the situation to say the least. Uh uh why don't we just start there? Poly market announced [music] it's opening a bar in New York. Uh look >> it's in DC. It's in DC.

>> Oh it's in DC. There you go. >> I'm I'm going to DC to monitor the situation next time. So >> when is uh when is it opening by the way? >> I think it's opening either this week or early next week. Sometime next week. >> Yeah. When I think about all the things that you could use the cash that they've raised, that is probably one of the better things to do. Uh looks pretty cool. Yeah. Have you ever been? There was a um a bar or like a restaurant in New York City like in Times Square called uh ESPN Zone. I'm guessing you've never been to so I don't even know why I asked you that question. You do not look like an ESPN zone guy to me. But when I was like younger, like the like the first time I went to to Time Square, like it went to

ESPN zone and it's like literally like a million just like screens everywhere showing everything and you can, you know, drink and and eat and like this is that for all of all of Twitter. Uh, and that actually sounds like a lot of fun. So I'm I'm I'm in it. I I thought you were going to say there's a bar I think in Germany that tracks the price of beer and it's a real time like consumption and so you could see like how many people are like if if a particular pint or craft is getting more traction like it's basically real time markets. Um but yeah I mean again like the name of the game here is like customer retention and >> can I just say something to that before you before we go into that? There's nothing that highlights the difference between you and I more than I'm like,

"Hey, have you been to ESPN zone?" And you're like, "Have you been to this esoteric bar in Germany that tracks the price of different beers?" [laughter] >> Yeah. Well, converge on Poly Market. It's uh like the reason I bring it up is um we got to start with macro. Uh we are not geopolitical experts. Um, but it's pretty um I mean oil is sitting at uh on on what is it 116 bucks or 120 bucks. Um >> yeah, traded up again this morning. So >> tried to get in this morning. So yeah, what's a read on macro? What's a house view out there?

>> I mean obviously did did you read Bology's uh tweet uh yesterday and you know he talked a little bit about the um >> you know what the broader macroeconomic effect might be of of this war. Clearly the market has been trying to digest what has happened and I think originally when the war started there was a perspective that okay maybe this will be like Venezuela um you know clearly that's what the administration had been saying and this will be over quickly and that's probably good because there's more you know we've had a little we've you know killed a lot of this leadership who might be looking to destabilize the region. Um, and as time's gone on, it looks very clear that that is not true. And not only is that

not true, I think we we clearly did did not foresee that the um IRGC would look to harm and attack a lot of the infrastructure in the region, right? And so, uh, you know, we had this period of time where the market was like very shaky. be traded down. But there was still clear to me that the equity market expected that we were probably going to get a relatively good resolution within, you know, maybe four to four to eight weeks. I think the administration at one point said four weeks and they said eight weeks. Um and and then what happened in the last you know call it week is that the the straight of her moose has been closed uh which you know

significant amount of the world's oil supply goes through the trade of her muse. There's the administration has been trying to get a you know other countries to come and help open that the straight um and that hasn't happened today. And so there's been of course a a supply shock in oil and so that's why we had the initial you know oil trading up to I think we traded up to about 110. Um then the then then the administration came out and said hey listen like you know this will be okay like we're opening up. We see that there's potentially going to be a resolution.

Oil came back down to like 90 95 bucks and the market you know kind of really traded up the end of of last week. Uh and we saw crypto really rally on this. So I think Bitcoin ended up going up to about 70 maybe it was earlier this week but it went up to about 75 bucks or 75k and um you know hype went up to over 40 uh dollars. We saw you know pretty much everything up 10 20 30%. And uh it was clear that there was a bit of um a relief uh and an expectation that now this is over. And then all of that changed yesterday or I guess the last two days uh when the um the IRGC struck a uh I think it is the it is called the the south pars uh field in

Qatar that um is part of the same reservoir that also Iran has a piece of that is 20% of the world's liquid natural gas supply. uh it's estimated to have cost like 70 80 billion dollars to build the infrastructure to take that natural gas out of the ground and then we I mean we're denying it but some version of us Israel you know etc looks to have then struck the Qatari side of that same reservoir and we've now it looks like potentially that the you know something like 20% of the world's electrical natural gas supply might go offline for a very extended period of time and that has downstream effects

that are in every way inflationary and uh and and bad for growth, right? And so now you've seen it happen. We we you know the the Fed held rates steady yesterday and they uh now the market is only pricing one rate cut this year which is obviously bad for risk assets and the if you looked at the front end uh of the UK Treasury market this morning like it was clear that they're a lot of macro funds were really struggling with what was happening uh in in the market as well and if we were going to see a lot more inflation and how they should react to the rate hikes and and so I say all of that to say that this is a really an Iran inflation growth story and all of it is downstream

from what's happening in the energy markets and we just really do not know and I do think crypto has a good backdrop right now um more broadly and and Bitcoin has traded relatively well but you know if there continues to be this macroeconomic shock and we have this downstream effect that is is you know quite um impactful I I don't know if we're we're going to be able to have risk assets really take off uh in the in the near medium term. >> Yeah, [clears throat] just to give people some context, I mean what before this Operation Epic Fury, I mean oil is traded up roughly 50%. I mean it started at 70 bucks a barrel, right? When the uh war broke out over the weekend a couple

weeks ago, it was traded up to 86 bucks on um on Hyperlid. Now it's sitting at like what 116 120. Uh I think it hit a peak of 130. So yeah, I think it's been a deteriorating situation. Um we're going to continue to monitor the situation. But uh what's interesting though is like um we should probably have a a commodities kind of expert come on. Um but one of the things is um like what does the curve look like for oil? And I think it's still very much like um like WTI futures like they're like uh like it's it's there's massive backwardation which means like you know the front of the curve is much higher than the the uh the back end of the curve. Um that tends to be kind of like

common when there's these supply shocks. Um but [clears throat] that's something that I am monitoring is like how does that curve look like and how does it shape up because I think typically the market would have assumed like hey this is going to get resolved the straight of horm is going to open up and uh this is going to be like a Venezuela type situation but I it's starting to look like it's probably going to be a bit longer. I don't know if it's going to be like an Iraq Afghanistan type situation but u yeah I think there's uneasiness and uh in the market and I think um who knows uh how quickly this gets resolved but certainly to your point like u things have escalated uh uh I was a bit shocked of the retaliation like a lot of these you know Iran is basically I think send a

communication around anyone that is in like these oil fields should probably evacuate which means that they're going to target them uh and want to avoid casualties, but they're looking to destroy massive amounts of infrastructure. Um, there's no amount of like theories of 3D chess of like what this means like um I I don't know if I buy any of those or nor should we necessarily talk about them here. But um what is interesting though is you know hyperl continues to get a ton of traction. Uh that continues to be a strong theme as a result of all of this. Um should we briefly touch on uh S&P uh per that I think just recently launched um and and and um what your take is on that. ZKSync is

the bank stack of Ethereum. ZKSync's Pervidium is the only Ethereum secured platform that is purpose-built for institutions [music] that demand privacy, compliance, and full control of their data. ZKSync enables financial institutions to thrive in the digital assets economy [music] by launching and monetizing their own chains, tokenize real world assets, build programmable markets and settle [music] crossborder in real time. Visit zksync.io to learn more about the bankstack of Ethereum and book a demo.

As always, investments in blockchain technology involve risk terms and conditions apply. The Blockworks Digital Asset Summit is back in New York March 24th through 26th. We'll have top speakers from leading asset managers, financial institutions, DeFi protocols, crypto companies, and policy makers all under one roof. Think Black Rockck, Coinbase, Robin Hood, and more. Follow the link in today's show notes to buy tickets, and make sure to use code Empire 200 for $200 off at checkout. >> Yeah, I mean, super interesting. the um the S&P has been pretty forward thinking around this space. Uh I actually did I worked with the team over there to do an

announcement for they they did a tokenized index fund last year in 2025. I think it actually launched in September and so we we announced that I I helped them do that announcement with Centrifuge and um and uh I think it was Janice Henderson uh like last like July or so. Uh and that funds them pretty well. think it's 55 5600 million of AUM right now. And so the clearly, you know, S&P was already thinking about like, okay, how do they want to be on chain? You know, what sort of like tokenized asset um strategy should they be should they be doing? And to your point, you know, trade XYZ uh with these these hip three markets has just really kind of come to the forefront of um just

everybody's like every trader is thinking through, you know, how do I get access to the things that are happening over the weekend 247 there is no kind of you know centralized exchange way to do this with real liquidity. It is hyperlquid today that that dominates that market. I mean we've seen it be on the front of journal of the journal in front of Bloomberg like everybody's talking about this right now and so you know obviously they would have been working on this for for a long period of time wouldn't have started today but it it seems very timely that now you know it it's not just hey okay well we're going to launch a hip 3 market that has some sort of you know kind of pulled together oracle that we did right right from like a data uh feed that we're getting from you know uh that we're

paying for from you know one of the exchanges or something but now we're going to work directly with the S&P to be able to uh uh offer like a an official product. And that does to me signal a world where right now Hyperlid is still very much a proumer product and maybe to me signals a place where we can maybe in the future get institutions trading these markets as well. There's still a bunch of KYC and other other concerns that you need for the institutions, but this is obviously a really good step in that direction and congratulations to to Shoku and the team there for freedom is done. Yeah. No, it's big. Uh I wonder how much volume uh they're going to get over the next like if you were to predict like how much volume these guys get versus like the

like some of the commodity like oil or copper or silver or gold that has been pretty active. Do you think this actually surpasses them fairly quickly? >> No. I mean you look at traditional markets right like you know FX commodities they trade more right. Um I I I I would think that these markets and and they've traded more in hyperlquid. I I I would think that these markets would mirror traditional markets because it just tra I I do think you know sometimes you see these like volume blowouts on specific equity names because they become like meme coins for the retail crowd right I think for the index like I think it'll do well but I would expect it not to you know necessarily be um you know outsized

relative to to other stuff so >> yeah uh Hyperliquid sitting at 40 bucks. I mean, that's a 37 billion FTB uh roughly 9 billion uh market cap. Um I've heard a lot of chatter on the timeline around, hey, look, it's kind of over for some of the other networks like Hyperlink was just dominated. Perps are a killer product. Um uh what's a I mean it so it's still a fraction of some of the other networks like what's a what's the argument around can Hyperlid um or the validity around can Hyperlid just become bigger than Salana? Can it become bigger than some of the other networks? Uh or

like what is the argument of it being pretty fairly priced at this point? Um I mean if you look at like a traditional like you know exchange multiple and and and decide that like fees are you know entirely just revenue. Fees and revenue are the same thing which I think is probably not the right um the right way to think about it but but some people do. Uh both hyperlid and lighter actually trade at discounts to uh on a multiple basis to traditional um exchanges. I think the the synrecy guys put out a um you know some some data around this uh this week that I saw and I I haven't looked at it I haven't checked their work but I'm just assuming they're right um based on the data they

put out. uh and so I think there's obviously you know a world where these markets continue to get I mean these applications should continue to get bigger like I think it's very clear that you know per markets onchain offer very good product and they will continue to grow they continue to take market share from the you know centralized exchange venues um and over time the real headwind or the real risk right now is definitely regulatory and what that means over time but um you hasn't, you know, in this uh with these regulators who definitely want to be pro- innovation. Um, you know, I think that's less of a risk than maybe, you know, at another time. And so they're going to

continue to grow, right? And obviously the and will they grow, revenue will grow. And there hasn't been a, you know, a fee compression or anything yet at this point. >> Um, >> yeah. >> But but then your your question is, okay, well, what does that mean in terms of like a broader network, right? And I think on the broader network side it is it's interesting because applications can definitely be more valuable than some of the networks. Like there's no doubt that Poly Market and maybe Hyperlquid and you know some of these these big guys will be more like Poly Market is is is worth more than than Polygon is today, right? And yet they they have all of their um all of their volume on Polygon. I think that will that type of flip will continue to happen where the best applications acrew more of the value.

>> Um But do do I think Hyperlquid is going to you know Hyper EVM is going to become like a huge Salana competitor for like the everything else that happens on chain like probably not right but they're going to continue to build this incredibly um robust and and a really great application and an ecosystem around trading that they're doing. >> Yeah. I mean just to give folks some perspective over the last 90 days Hyperlquid is um uh top of leaderboard in terms of rev um uh they've um even total revenue they they pulled in 140 million over the last 90 days. Second of that is Tron at 82 then Salana at you know 90 then Ethereum at 60 the 01. Um so on that basis I mean hyperlucrin

continues to be probably the and my my estimation is it it likely dominates like if you over the next 12 months in terms of fees just given the I'm continue to be very encouraged uh by hip 3 and the activity you're seeing there. Um, so I I I don't necessarily like would attach that much value to the Hyper EVM. Like I I actually don't necessarily care that much about that other than like do do you continue to believe that people are going to trade these things and if so, they're likely going to trade on Hyperlid. Um, and so yeah, I mean on a you know me, I'm a midcurving it on a revenue uh sort basis, but uh yeah, it's pretty impressive what they've done. Yeah, I

mean literally like their ability to launch markets quickly to let to bootstrap liquidity quickly to uh build a lot is you know a really great product from a technical perspective and the way that they think through you know how fees or how uh trades are ordered and um you know how people get um uh are able to how the matching works like like very clearly like they've done an incredible job you know great product it'll continue to grow there's definitely headwinds around the regulatory side but there's people like S&P who are willing to put their, you know, institutional stamp on it, which is, um, which is awesome. Uh, and I do still continue to believe that like you're wrong about like how these the broader networks get valued. Like it's not a nobody's going

to like if what do you think HTTP is worth today, right? Like you tell me what that what it is worth, but it has no value. >> It's it's an irrelevant question because the value crew just was not there or designed to do that, right? Um but >> but I think I would argue that like Salana wasn't really designed to acrew value either with how low their fees are. >> Uh but yeah, but when you look at the the composition like my when I invest in these things, I don't assume fees are going to be the bulk of of the revenue. It's actually me, right? So rev like collectively like if if you're creating like heterogeneous markets, it will always allow for me, right? there's always going to be someone that wants to pay for block inclusion and that allows

for um higher margin products. In this case, like I'm never going to bake my assumption that it just fees being the the dominant u in in fact over the long term fees should encompass less and less of a share of how much value gets captured by the L1. I do also agree with your point like apps should collectively the apps sitting on top of the L1 should be worth more than the L1 itself. Um but >> that doesn't mean the L1 itself should be directly compared to its revenue for in terms of value, right? And how you think of it through the value of, you know, what the token is worth or what the the L1 itself is worth.

>> Uh, I mean, you could argue that a lot of it is, uh, I mean, clearly the market sees value in some sort of mimemetic component and wealth creation and brand and goodwill. I just don't like underwriting that. Uh but I am like if you look at this chart for instance I am encouraged by hyperlquid you know revenue continues to grow up grow quite a bit um you know you have a reasonable price to sales like here that is not totally disconnected from reality right when I look at should I actually put a position on this thing or not versus go buy something in the real world like figure at 7 billion you know market cap and and growing and pretty interesting like that that that's what I'm saying like um I want to bring on the frictionless guys

who've done a lot of thinking around valuing these things. I'm not saying like you strictly should look at it through its lens, but I do think that um it is a forcing function of saying okay what do I need to believe for this thing to actually eventually shows up in revenue. If you're not capturing that much revenue all this hypothetical discussion around modes and uh you know if you can't acrue value then that is u you know representative of the quality of the product the community all this stuff that people talk about um and and so um >> there are a lot of technologies that are sell for very high valuations or are worth very high uh amounts of money uh

who don't acrue a lot of value, right? But they enable a lot of value to be >> like what's a good example of that? >> Um I mean like obviously like we talked about HTTP, right? But there's like significant amount >> value of HTTP like no one ever attached value to that. They provide they provide a useful service. It's a common good in the same way that you know >> Well, there's a lot of common goods, right? And that are that are worth something, right? And there's a lot of I mean there's a lot of businesses I I don't want to name specific businesses but you and I both know there are a lot of businesses that have have sold at 300 times revenue uh because of the uh revenue the the value that they allow someone else to acrewue right or the synergies that they allow for somebody

else right who by themselves and we've seen this in crypto we've seen this in in AI that by themselves they actually don't capture a lot of value there are a lot of of of companies uh in our space in AI right now some of the deep tech spaces who are not by themselves good businesses but they are really good technologies that enable other businesses to be built on top of and that is worth something. What is that? What is that worth? Is it worth? Is it Moors law? Is there you know network value and you know the some you know call it um you know multiple of the amount of value that's exists in the amount of nodes or the amount of value that that is built there. I don't know if that's true and and exactly how to value them is I think still very up in

the air. But I think what is true is that you know assigning a revenue multiple to an L1 is the wrong way to think about it. >> The Sure. I mean look uh you and I can have different opinions on that. Uh I think about railroads. >> We have to agree on everything. >> No no defin I mean railroads are a good example of this. Like historically you can look at that and like who actually accured the most amount of value. It wasn't railroads, it was the cities that were connected and all the values and services that were built on top of that. Uh I do think that this is like one of the things like I'm I'm not going to go out and short L1's because crypto markets defy rationality by any stretch of the imagination and so you know I don't think it's a useful exercise to go

out and short these things. Uh but I'm not going to put in a position on them. I'd rather invest in applications sitting on top of these networks that are reaping the value of that. like you know uh you know fees going back to fees like the the average transaction price has gone dramatically down even in Ethereum L1 uh if you were to have built your analysis around oh that fees being high uh it actually like this Gvon's paradox right like fees should continue to go down to allow for more transactions and what have you um but um it's probably something that o over the next 5 10 years. I don't think that a lot of value will acrew to L1's unless

they diversify and like there's growing me. But like let's talk about tempo because I think that's something that we should we should just kind of like not not have this theoretical discussion on price to sales, price revenue. Like who cares, right? Ultimately the market believes there's a quelling buyer and seller at that price. So, you know, we're not here to fight that. Um, but Tempo is interesting because uh like I've heard a lot of folks just converge on this idea that like stable coin transfers in and of themselves don't acrue like much value. It's the values the the other things that are enabled by you know having stable like instant settlement and instant you know payouts.

Um, so yeah, like why don't we just touch on on tempo if you want to give us a rundown and then like um Yeah. >> Yeah. I mean I think everybody at this point knows about tempo. Uh obviously it's the um uh the paradigm plus you know Stripe collaboration for you know really trying to build a payments focused or payments first uh blockchain. The ways they do that are you a couple different things and there's some technical nuances to how they uh have built certain products that are embedded into the chain. Uh the main thing that I think matters is that they basically preserve the majority of the block for stable coin transfers and they basically depprioritize any non-stable

coin transfers. Uh and they also provide it's also there's like a a fee schedule and they do kind of dynamic fees which and so it's it's very much trying to incentivize stable coin transfers and the idea is that like instead of being permissioned you're just putting the right economic incentives in place so that the only thing people actually want to do on the chain or the the the thing that people hopefully want to do on the chain is is do you know payments essentially now you know it launched yesterday may not launched in I think within 10 minutes there was a Epstein related memecoin on uh on on on Tempo, but that maybe that's just that's just crypto. Uh but I clearly what they've done is they've built it in such a way that's supposed to be like this is for payments, right? And all of their

business development around what they're doing with Stripe, Bridge, Privy, the entire ecosystem there has been about how do we bring people a package of doing onchain payments inclusive of of this thing, right? And so they launched yesterday. They also announced uh uh I forget it's called MPP. I forget exactly what MPP stands for now. >> Machine payments protocol. Open machine payments protocol. >> Payments. Yeah. >> Yeah. And so that's like an agent payments protocol that you can use um you know stable coins or or um cards or a bunch of different types of payment mechanisms and and trying to be kind of an open standard for uh for for for you know agent payments and agent um act economic activity that is anybody can technically extend it but most of the

the governance like basically all the governance right now is done at you know that the tempo level and so it's not quite an open source you know project yet, but um in terms of like, you know, actually being able to have, you know, other people um impact the way it works. Uh but I think I expect they'll do that over time. But that competes, you know, kind of directly with, you know, some of these other protocols or these these kind of standards. It's really a standard uh for, you know, agentic economic commerce. So things like X42, which you know, Coinbase is obviously behind um and you know, Open AI and the foundational modelers all launched their own. Google launched their own. Uh and so there's a lot of these people kind of have these standards out there. Uh and so you know that's also I think somewhat

interesting at a time when everyone's thinking about agentic uh agentic activity. But all of that to be said that brings it back to your original question which is like okay so this is an interesting piece of the you know stripe you know pie right but does tempo itself acrew value right and that was kind of what you were asking because it raised at a $5 billion valuation but will the fees and all of the economic value acral be done by other strike products or you know other bridge products or privy not tempo itself unless maybe launches a token. So, I don't know what's your perspective there.

>> Yeah, I I don't think like uh uh stable coins alone carry the boat to justify that valuation. It's what it allows um like value added services on top. Um um so is it worth five billion today? Probably not. Um is it going to be useful in the aggregate for Stripe? Yes. You know, providing better services to their customer base. What was interesting is I mean part of part of the benefit here is the muscle that they have. I mean out of the gate they have Visa collaborating with them. We have a bunch of other ecosystem partners. Um you know uh I I quote for example our design partner Visa has already extended MPP to support card-based payments on their network. Stripe has extended it to

support cards, wallets and other payment methods through their platform. Uh Lightpark has also extended for Bitcoin payments over Lightning Network. Uh and I think like that that's um you know we've talked about it here at length which is like this is kind of like when Libra launched with a very impressive set of partners that never got off the ground. Um obviously uh I I I'm I am very curious about what what uh how much traction they get. Um I forget but I I saw a chart around like um was it X42 payments or the activity there is like kind of been declining um and it was all the rage a couple months back and now like there hasn't been that much activity. Um I I am I am curious.

>> I mean there's been basically no uh organic X402 activity ever. >> So there was like some people there were some like um uh people who were like launching on top of X42 that uh if you look it looks like wash trading. People thought maybe there would be some you know base or X42 like you know value you know token value across. >> Yeah. Yeah. I uh I'm looking here cumitive stats. 75.4 million transactions 24.2 in total volume uh less than 100k buyers. Uh I I am uh when you look at that like does that um I don't know if you guys made investments in like aentic commerce or it is a it is

a key narrative right around like you know people get excited like the the common thread that I'm hearing now is like you know blockchains were not built for humans they're built for robots and you know this is crypto trying to be relevant in an age of AI. Uh, but how do how do you see um I I actually do think it it will it makes sense to spin up an agent and give it you know for an agent to use stable coins uh when it can't KYC and whatnot like I do buy into that narrative. I think it's quite real. Um but what would you attribute the the is it just the X 402 like was that just there's not enough use cases people are not thinking about there's not enough

>> there is no agentic commerce today like that there is no agent commerce at all like it like we are all talking about agentic commerce it does not exist right now that doesn't mean it I mean not zero obviously but like it's dimminimous right and all of the agenda commerce that is happening today is happening through traditional rails using stripes APIs for the most start right now. Does that mean it won't exist in the future? No, that does not what that means. Uh, but X42 and the Google and OpenAI and Anthropic and now MP all of these standards exist, but nobody has agreed on a standard yet, right? And there needs to be some agreement on a standard uh in the future for us to continue to build um, you know, more economic value around that and and you know, products

around that. So, we're going to have to see one of these things win over time, right? We're also just going to have to see agents get better because agents are great in a lot of ways today, but the near-term, you know, activity that we're seeing is things like enterprise use cases for which is like really like advanced RPA, right? It's like automation work, right? Or it's, you know, helpers to you and I who on research and on um you know, maybe you know, some of our workflows, right? But uh even it was not really a way for us to do I mean there are a lot of people who have like perplexely launched a product and other people launched a product around like oh could we pay with an agent to do something those those products are still very clunky today and

and also the reality is is like because of the amount of approvals that you have to do in those today it you it would take me longer and to buy you know toilet paper through perplexity than it would just to do it myself and click into my Amazon app right and so it's like not a great user experience that and also there's for a lot of things humans want to buy they want to be buying things and so I think the story that you were you were referencing earlier which is the better story isn't about merchant acceptance from agents uh it's more about is there an um an economy that exists outside of human to merchant you know payments or or business to merchant payments um that is

net knew and that agents are doing. I think that's the story. That market is very very far away from actually existing. There are a lot of people building around it today, but we haven't done a a deal there yet because it feels so far out in the future and so unclear how that market will exist that we're doing we're having the conversations. We're meeting the entrepreneurs. We're we're trying to be smart about it, but it just hasn't yet felt like the riskreward is there relative to how hot the market is and the valuations that these companies are getting when you know when it doesn't exist yet.

>> Yeah, I got a I had to really look at a deal that this particular uh individual was leaving one of the larger car networks and said, "Hey, I'm going to I feel like this is going to be a big thing. I want to launch my own." I I didn't end up investing that because I I I do think that distribution is king here and and I it's very what Tempo's gotten very well is like they just have an impressive BD muscle and distribution partners out of the gate and um it doesn't mean that other you know there isn't an opportunity for other folks to to thrive but it's just hard to compete against a super wellresourced very human capital dense organization that has a lot of partners out of the gate. Um but we'll see. I mean I think um um um are have there been

projects that have come to you in the kind of early stage and said hey we're going to build on top of tempo um because that's an interesting stat like if you look at like the for instance the uh there was a time where like there's 99% of the projects were just purely Ethereum and then that pendulum swung a little bit more towards Salana. Now you're seeing some activity in hype like hype like hype EBM like you know that ecosystem being built out of it. Have you seen major changes or people come to you and say hey I want to build on top of tempo is that even a thing or is it mostly closed source and people are just not building on top of it?

>> So so we haven't seen a lot in the way of like net new entrepreneurs yet. Um there are obviously people I was sitting next to at dinner last night next to the founders of one of the largest DeFi protocols and you know I don't I don't think they've publicly announced it but they've already been deployed there for a little bit and they'll they'll do some work there and there obviously a lot of people deploying there >> in tempo >> and yeah on tempo u they just haven't announced it yet. Um but but I I the thing they did do is they like enshrined their own decks, right? And so they will I think in the same way that you know some of the other more commercially minded L1 ones have done they they will just create winners because if they create winners then liquidity will

aggregate and if liquidity aggregates then like it's a better product right >> and so I I we haven't seen much in the way yet of what I would say developer uh net new like you know call it projects building there that are trying to raise capital. I'm sure it'll happen you know uh over time but the the business you know the the the way it's built which is really around payments like like they do not care they they are very opinionated about what they want to be and they don't care if like the latest DeFi you know person or latest DeFi entrepreneur wants to build there like that is not their business and they they've they've explicitly said that right and they've made design decisions to do that right and so if that's the case like you're

just going to see less new net new entrepreneur And what it is going to be though is it's going to be um focused on this one use case really focused on this one use case and it's probably at least in the near term going to live or die based on the BD emotion of Stripe, >> right? Eventually maybe it'll be broader and there's you know referrals and there's liquidity um uh sort of like liquidity liquidity and being on the same chain as the partner, you know, is a good thing, right? But but today it's it's um it's going to live or die based on Stripe. >> Yeah. who um there's a lot of opinions on the timeline that we don't have enough time to discuss, but who stands to benefit other than Stripe? Uh equity holders, I would argue, who stands to benefit and

who stands to lose the most in a world where Tempo is successful? I can think of who loses. Um but I'm curious, >> you always go this podcast, Rob, since you're the newest member here. you you just want me to say the the spicy things so people >> Well, you know, I I sort of stop competing against who's going to get the first 10 seconds clip of like, you know, that that's your role, Rob. I'm I'm I'm happy in my lane. Just I don't deliver that. I'm like an old dog, man. You know, my takes are watched down. Like, you know, I'm um >> You're like that um that meme of like the guy in the hot tub, you know, like unbothered

>> unbothered moisturizing my lane as the world blows up. No. Um but yeah, like who who I mean you and I share I'll maybe I'll start. You and I share this investment for Codeex first. You know, it is top of mind here. Very sharp guys. A lot of really uh very opinionated as well. I think they have really unique insights. Uh but they've again super specific on this like um you could argue they uh are now going to compete against Tempo, right? And I can think of others, but yeah, how do you think about the >> Yeah, the the Codex guys, obviously there's more more to that story in terms of like the partnerships. They've actually pivoted. They announced it

today. You you probably haven't seen it, but um they're now entirely focused on FX business. Um, and so they they they kind of launched their rebrand today. Um, and they're actually doing a few hundred million a month in FXit, uh, right now. Uh, uh, so, um, they're, uh, and that's growing quickly. So, kind of a different business. Uh, and I'm, like to your point, I'm big fans of of Han and and Momo. Um, I I think on the loser side, obviously, like know who's competing the most like who has dedicated payments teams that's competing on payments, right? Salana has a big dedicated payments team. uh Manet as a big dedicated payments team and they have very good people there. Raj who um came from Visa uh and then Portal runs that business for them. Um you know

there's a then there's kind of like the it's like circle arc right which hasn't launched yet and there's um you know then there's the you know you can debate whether or not it's not clear to me that like plasma or or stable or any of these guys actually wanted to be payments. They just wanted to be kind of like places for for you know tether to sit. Um but there's definitely people have like you know pitched the stable coin chain before probably actually the one that the the other two that are people talk about less but that have been done more of the work there have been polygon and and um uh and um >> uh no Tron. Yeah. And then and then there's the one the first one that Stripe invested in um which is um uh anyways I I'll I'll remember the name

earlier but the the PayPal the ex PayPal head of crypto um is there now. Uh those are actually the guy >> that's uh that's uh Polygon. >> No, no, no. Uh Polygon took somebody from Stripe, a guy named John Egan. >> Yeah. Oh, PayPal. You mean? Yeah. Yeah. >> Yeah. But the um uh listen, Polygon is actually doing like a lot of payments volume today and they have a bunch of institutional payments partners like they are now directly head and they they did that acquisition or two acquisitions I guess. It was either early January or >> or December that made them kind of a fully verticalized payment stack, right?

And that's essentially what's happening here with Tempo and Stripe and Bridge. And so, you know, they're that they're going to be a real competitor, right? Salana is obviously taking a little bit of a different approach because um they started I think leading some VC deals. So they're definitely trying to you know continue to put money into and and um you know work to get the right people building on top of them. Uh but they're they haven't necessarily owned you know that call uh the fully verticalized stack today. Um and so you know that's the competitive set right and those are the people who obviously are going to be uh going to be worried about about tempo. Um I think to your point around okay well well what happens in a world where where they're really successful

like who acrews value well yeah I mean clearly the stripe equity holders acrew value um theoretically the tempo equity holders acrew value or if they launch a token uh I I do a lot of economic activity happening on an EVM chain is probably just good for all of crypto in some sense it is a rising tide but it's you know it's probably less good for Ethereum than it is good for Tempo, but it's not bad for Ethereum if more economic activity from corporations is happening on Tempo in my mind, right?

Maybe it's bad for the payments to focus guys or, you know, the the L2s. I don't think it's bad for like Ethereum mainet, right? Because that was never going to be a place where you did, you know, a large scale amount of traditional, you know, payments, right? So I I I actually think >> I mean >> I think there's a rising tides lift all boats thing that's happening here with >> that's a rosy that's always been the rosy kind of uh you more activity lifts all boats and so the incre if someone wins in some part of the ecosystem it benefits everything. I I actually think my stance is a bit more uh cutthroat now. I think uh you know that there is likely going to be um you know that's always the position of a weak of a weak

player right it's like oh this is good but the reality is I I think probably more concentrated volume um even though there's interoperability even though there's you know uh you know the user that enters via tempo could maybe go to Ethereum uh probably may maybe I'm I'm I'm not sure Um but uh we'll see. I mean I I think the tendency for companies whether you're Salana or layer zero or stripe is to own that user and not share with anyone else if if you don't have to. Um but uh >> I just have a perspective and by the way it was it was Stellar I was talking

about earlier because I actually today Stellar and and Polygon are definitely doing um probably the most payments in terms of like actual payments. you know, Salana is there as well, but um you know, they've started to get a lot of partnerships on board. A lot of those partnerships aren't really haven't really scaled yet. Um, but the if more and more of what you and I do on a daily basis happens to be on chain, more businesses will build on chain and there'll be more RWAs, there'll be more tokenized assets, there'll be more stable coins, there will be more um net new novel products that will exist because blockchains enable that, right?

And I I I think it's very clear that like there is no one chain that will win all activity, right? Like I think that's a very myopic view that doesn't really make a lot of sense. Uh we will probably eventually have a fully abstracted, you know, routing system at some point that all of these guys will plug into that will, you know, give you breast price essentially across all of these different chains. uh and the fact that you know Tempo might let's say Tempo is really successful and they own you know all of the like crossber payments right um those at after that crossorder payments happening they're being delivered to somebody if it's going to an end user that end user will have a wallet that end user with that wallet

will figure out ways to spend and save and do all of these other things and um you know the design decisions Tempo has made today is not to serve that that ecosystem it's to serve the crossboard payment ecosystem. >> Yeah. Uh yeah, I think this goes back to what I was saying earlier and and you know, you probably heard me say this a year ago when I was starting off at emerging, which is more value will acrue to to the applications, the clariners of the world, the new banks of the world, they can choose the infrastructure beneath them, right, to lower the cost of to serve. Um I think time and time again over crypto like once a new player comes in, it just introduces more competition at that infrastructure layer and that's always been beneficial for the end customer.

um above anything else, right? When Salana came in and like sucked in a lot of DeFi activity from Ethereum, that like galvanized the Ethereum community to say, "Okay, we got to get our together because, you know, we're getting our ass, you know, we're getting our ass kicked here." And I think tempo coming into the full like in the same with the hyperlquid made it abundantly clear to the Salana leadership that they missed like they dropped the ball on on pers. Now you have bulk uh response to hyperlquid and it they launched like this week and so that's something that I'm paying attention to. But I think that competition at the inflayer is good for the app sitting on top and ultimately the consumer that is seeing that because they have just access to more products. They don't really care

what that gets routed to. To your point, right? I mean, it's, you know, going back to HTTPS, like all you cared about was like, "Oh gosh, I could have access to Gmail, not just Hotmail, and that's good for me." You know, this is seems pretty good. And commerce online just became safer. So, I think um um that that's where I I sort of mean like I think I'd rather be investing in sitting a layer on top because it is just fiercely competitive at the infrastructure layer. And um but netnet it's good for apps, it's good for developers, it's good for end customers that are just going to benefit from greater ease uh and convenience uh when they're trying to use any sort of stable coin or crypto enabled product for that matter.

>> Yeah. I mean there's no doubt it's being on chain is better for consumers, right? >> Yeah. >> And like that the consumers are the ones who are going to win uh in the end. >> Yeah. I got uh five minutes, bro, because I have a expensive call with uh with a lawyer here that I don't want to be late for. But there's just a couple things before we get to content of the week. My favorite part uh Kraken, we've talked about it at length. They just came out saying that they're delaying IPO plans, I think. >> So, they didn't they didn't say it. >> Well, there's a coin there's a CoinDesk article that said it. >> Um >> I don't know if that's actually true or not. And I I will say that, you know, I know the team there pretty well and I I

think um uh I I I don't expect this to be a material uh bump in the road for them. >> Yeah, I think when they were raising the last round, a lot of there was certainly like a lot of SPBS, a lot of people that came in. It was a big round. A lot of them were kind of looking at like, hey, there's there's likely going to be an IPO event. Uh I don't think anyone under wrote this year. I think most people assumed there was going to be like a within the next three years kind of thing. And I would probably think that that continues to be on track um reg you know irrespective of like macro conditions and whatnot like they've been they've been like in this IPO readiness track for for quite a bit of time and they continue to ship really good

products and so I I think it happens within probably probably next year. Um unless there's some like major kind of catastrophic market event I think they could probably be ready to IPO next year. >> Yeah I I I um I still think this year is possible. So really >> um yeah. Are there are there on this point are there other uh in the docket like uh I think we saw just a huge wave. The last one is Bitco. Is there anything else that's coming on? >> There's a bunch of people who might come this year. Uh I think nobody has decided for sure. I think it depends a little bit. The markets probably need to stabilize like like the IPO market all of a sudden kind of shut again with the the war in Iran, right? And so you know until the risk risk markets are back

like you're not going to see any good IPOs, let alone uh the you know the crypto ones. You also probably don't want to be going at the same time that Open AI and SpaceX are going >> and so you probably want to avoid that. And so you're probably your window is like, you know, call it the next three to six months or else you want to push it to next year. So, but there's a lot of people I I will say that I do think a lot of people want to get um get out before the next election. >> Yeah. Yeah, we should. Yano is our res, you know, in-house political expert.

We'll save that discussion for next week at Dash, which I'm really excited about. Um, and we should talk about like what it means for crypto. Uh, if the war continues and, you know, approval ratings go down, like you know, you have a different, you know, shakeup in the houses, like what that means for the Clarity Act and a bunch of other things. But, >> I mean, if you look at Poly Rocket right now, it's it's it's flashing to you uh, pretty clearly what they think is going to happen in the midterms. >> Yeah. Does that worry you? >> No. I mean, it's also typical in the midterms, right? Like the u the House is almost certainly going to flip. Uh the Senate is in play. I don't think anybody thought the Senate would be in play, but but now it is. Um we'll see. I think,

you know, the number one thing will be kind of the downstream effects from Iran War and how long the Iran war goes to be honest. >> Yeah. Yeah. Speaking of, as an aside before we go to content of the week, uh we So, token got cancelled. I think a lot of conferences I think tooken Singapore is still going to happen but uh you can expect airfare to be dramatically more expensive uh going forward. Um just kind of wild how that spiked. So I hope I hope you booked your travel in advance rase conferences. I know you and I are going to go to an event that you guys are doing in an undisclosed location but uh um I'm glad I booked that airfare well in advance because it's looking pretty pretty steep now. I >> I've already got my airfare booked to Monaco to come see you. So [laughter]

Yeah, >> no worries. >> You have you have a couch, man. You know. Um, all right. Well, that's uh at risk of going down geopolitical route yet again. Uh I think we've we've maintained ourselves pretty pretty good here. Uh not not done too much into that. Uh what's the content of the week here? >> Two things. One, the most obvious thing which is it's March Madness. So like it is, you know, it's college basketball. One of the most fun. What's What's What's March Madness? >> No, you're not serious. >> You're not serious.

>> I'm not I'm not that bad. >> I won't let you I won't let you have that. Um so March Madness, you know, obviously that's on my mind. And then um >> are you are you a Buckeye? Uh >> yeah. Yeah. Ohio State Buckeye fan. So they have an eight seed, you know. Um so we'll uh you know, it's a football school, not a not a basketball school, but we'll we'll see. The basketball team's had no season, so we'll see how it goes. Um, and then, uh, you know, I have to get back to to my horror movie roots. And there's a there was a a movie called Ready or Not, which was actually like a very fun, um, movie about a woman who, you know, got married into a family. And it turns out this family has sort of a very odd tradition about um,

having to like sacrifice, you know, kind of the new uh, the the new bride. Um, and then she kind of ends up beating the beating the family and and end up not being sacrificed. But the sequel to that comes out tomorrow. It's actually very fun. It's cool movie, you know, kind of a action horror movie. Um, and so I'll be seeing that on opening day. >> So, you're going to go to the movie theater and popcorn and all that stuff. >> Oh, yeah. The the the the there's a >> the one you go to serves like old fashions and this. >> I'm I'm gonna have an oldfashioned and maybe I'll have a you know, a popcorn or maybe I'll have a burger. You know, >> if you ever want to go a lot Friday, >> I feel like we leak a lot of alpha. If

you ever want to raise from from Dragonfly, you just have basically gotten a blueprint as to how to approach uh talk about horror, have an opinion on oldfashioned. Um and and >> I'm an old fashioned connoisseur. You should know that. >> Yeah, I know. I know that now. I think the market now knows that. And so I think we use this podcast. If you ever want to raise a round from Dragonfly, there's a lot of primary like alpha here, the breadcrumbs that you can just pick up and and and and like show that you're prepared. Um, so my content of the week is is always more boring here.

Uh, I started uh reading uh Carl Malone's book born to be wired. Uh, just a really fantastic I've always had it on my list. I I read Ted Turner's um book uh a while back and that's obviously the uh intertwined. Uh, but this one is just phenomenal. Um just a really fascinating story of how they did rollups of the cable industry. Um of course they now have Liberty Media. I know how much you like F1. They bought F1 which is probably one of a phenomenal investment in my mind. But it tells you everything like just uh they laid the the fiber um first the cable then fiber uh which obviously allowed for the internet and whatnot. And then um yeah really really fascinating story. Uh it's called Born to be Wired. Uh I'm halfway through it.

I started it a couple days ago and it's just really really really good book. So, highly recommend. >> Cool. I'll check it out. >> All right. So, what? Next week, Dash, we're gonna be recording live in person. >> Yeah, that's gonna be fun. >> Big time. >> And it'll be Yano's big >> comeback. >> Come back. Yes. That's right. That's right. That's going to be fun, man. I'm excited for that. And uh if if you guys are in New York, let us know. Uh this is probably the time where Yano would be doing a plug to get your tickets to D. Prices are going to go up like in 20. >> I think it's almost sold out.

>> Sold out. Sold out. It's going to be a great event. Um, if you're in the area, swing by, let us know, and excited to hang out with you guys in person. >> Cool. >> All right, next week. >> See you next week, guys.