Tarun Chitra and Jon Charbonneau on Solana vs. Ethereum Valuation Outlook

Transcript

it doesn't matter if it's 20% or 0% it doesn't matter moned monetary Theory yeah yeah John is soul going to flip eth that is the question that is the million dollar question the billion dollar question it's starting to sound less like the rollup Centric road map and more like the reaking Centric road map so translation the ticker is soul not sweet I'd say it's genuinely probably something like solid 50/50 at this point we're here in Bangkok in the in the basement studio with the two biggest research K's in all of Thailand our our mission is to hold the biggest brains hostage for yeah these guys aren't going to make it out of here this is secretly uh you know hostage taking video we're going to have to hold up some signs proving that at a certain time today's

newspaper oh man well we we brought this together to uh address John Char's Infamous quote tweets of salana at the same market cap of ethereum which is not much anymore so um yeah John is soul going to flip eth that is the question that is the million dollar question the billion dollar question yeah 100 it's almost a trilli it's trillion dollar question um yeah I mean I mean so I mean so part of it was like the timing of it was I was just like at the point where I was like most I I feel like there's a lot that the ethereum community like I think needs to like acknowledge and kind of learn from the from the past few years and like you know see what Sal is doing what can we improve on stuff like

that I think there's been like directly a little too much just like denial and just kind of ignoring everything that's going on there so part of it was just like I was like all right [ __ ] it I'm going to be really loud like really explicit on this like see if people start to listen um very concretely like I I'd say it's genuinely probably something like solid 50/50 at this point um that Soul or I mean maybe honestly another smart contract platform does I would say like I'd say 50/50 in the next like call it five years or so is what I'd say the odds are at least um I think it's still tough to happen in the like near to Med term if not if for nothing else of I mean like look like ethereum has the ETF even with the new Administration like it's probably going

to be like a decent little while before so get like can seriously get an ETF there's a lot to overcome there so I I think it's like pretty tough to happen in the near- to medium term but if you just like if you just look at them both objectively at this point you just like play out the trajectories of where both of them are going especially with I I mean I think it helped obviously salana a lot like the election in the past week I think that like meaningfully increased the odds to be honest um because one it means the bull market keeps going and what happens in the bull market is like we see it now is like a ton of new activity is all going to keep going to salana like it doesn't give time for like another competitor to kind of come

and chip away at that and it's probably going to reduce ethereum's regulatory mode in the call like medium term where like so get an ETF and then you have like less of just this kind of like inherent Advantage um so I like I think there's a real chance like with the trajectory of both of them are going on like very concretely like Sol is continuing to attract a [ __ ] ton of like new Builders bringing real applications it's like actually getting a lot of value people are using the chain is onboarding new people if you just like keep playing that out and ethereum just like kind of stays in this Middle Ground of like ah like we're not really sure what we're doing with the L1 like maybe we improve it in a couple years or like maybe we just kind of kick everyone off

to the l2s and like Unis Swap and everyone should like kind of go you know just like dip out and go make their own chains and we like stay in this weird middle ground and then we're just like sort of hoping like basing these other twos just like kind of just like pump eth a bunch like that seems like a risky bet where like if you just keep playing that out like yeah I think there's like a very good chance that like Soul would kind of flip in that scenario um yeah that's where I'm at now so so translation the ticker is soul notu uh sorry just to give you like uh just to give like the 30 IQ translations like very very literally yes I just I'm just trying trying to help our audience yeah I mean not not not financi not final um I mean I mean like I mean the

sweet thing is also hysterical to me like I don't know that'll probably keep going up too I no 32 billion FD yeah it's insane yeah I just pumping what's the NASDAQ uh valuation it's like 40 or 50 billion I think it's like something like that yeah it's nuts yeah so is this a similar sentiment that you share with regards to e flipping Bitcoin because we haven't heard of the flipping in a long time I mean it's been some time I know T you were saying that the old Bitcoin Maxis are coming out of the woodwork oh yeah like so like you know a lot of the Bitcoin Maxis I've followed since like 2014 or 15 on Twitter a lot of them the funny thing is like they were really Hardline like like [ __ ] [ __ ] throughout D5 D5 summer throughout 2021 and then FTX happens and you think

they're like it's a perfect time for them to dance on the grave of all this stuff but then they all disappear because it turns out they're all paid by blockfi uh and so of course that blew up um but all of those people have been either running out of money or reimagining their lives and they've decided that uh they want to talk about soul soul flipping eth instead of uh eth flipping Bitcoin so uh I'm not sure exactly why I find it funny the Bitcoin Maxis are aligning themselves well I I think it's like very boring thinking to just be like the enemy of my enemy is is my friend but like that's clearly what's happening but I don't feel like the salon of people are reciprocating that to bitcoin Hest yeah it's like a oneway thing yeah I mean like it was like what

I like I I was kind of joking about it like I had a tweet like like basically along those lines a couple weeks ago is like very posible scenario and like I think it's like a very plausible scenario is at some point like Soul flips eth and then once that happens and the seal is kind of broke is like most of the other smart contract platforms like you really even more aggressive become like all right these things are like probably just fighting it out on the tech and the users you know this thing isn't money like there's nothing inherently special about them and then Bitcoin gets to like really stay the like very special snowflake we're like I I think ethereum has like some credibility of like I'll wear special snowflake too like we were very early on we're super decentralized incredibly neutral blah blah blah it's like sort of

hard for like anyone to argue that like soul is going to be the Global Currency when just like Kyle owns as much of it as he does like honestly like that's like kind of tough to sell to people and like like that's pretty tough like I I think that's concretely the reason why like Bitcoin people see it is because if ethereum is the winning like smart contract platform looking thing I think there's like a I think there's a real argument in that world that like I think the probability of eth flipping Bitcoin in that world is much higher than the world where like soul is the winning smart contract platform what are the odds of Soul flipping Bitcoin in that world I think it's like Way High in the you're implicitly making some assumptions there because you're kind of saying soul will be the winning smart

contract platform oh no I'm I'm saying in either of those scenarios of like let's say that we like let's assume that like eth wins as the smart contract platform like soul never flips it swe blah blah blah like none of these chains ever end up doing anything I think in that world the odds of eth flipping yeah let's say that like if ethereum wins let's say the odds of eth flipping Bitcoin just for Simplicity is like 50% in that world if we say like this alternate world is like okay let's say that soul flip e and like they win the then you're saying nothing flips yeah I'm saying in that world the odds of Soul flipping Bitcoin is like maybe it's like 10% I and like I I feel pretty confident that there's like a meaningful Delta between those two of like what is the odds of that asset like beating

Bitcoin depending on who the platform it mean to be the winning smart contract platform sorry I'm stealing your jobs I think the simpl way to measure the eth Maxes are going to be out en Force if this is just so pumping no I mean like I think the like I think the honest way to measure it and I think that people like underrate this measure because I don't know they don't want to like sound like it it's like I I think the valuation of the asset is like a very simple measure of like how successful are you right now like the fact that eth is worth 300 billion it's all worth 100 billion is like a very direct measure of like we kind of think that eth is more successful right now like what if you're a what if you're a just to play Devil's

out here what if you're like a company that spends like basically distributes all your Revenue to your Affiliates because like by having more Affiliates you grow faster like say Amazon in the 2000s where like the valuation didn't really reflect the market share and Market power of Amazon and only eventually once they were they started actually taking the revenue back to the the main company and kind of having more of a value capture mechanism did they kind of dominate so there there is this trade-off that like potentially and I'm not saying this is true because it none of the rollups have proven other than maybe base that they could do this and Hyper liquid those are the the two to to

really think about um is sort of like that maybe these are the Affiliates that are generating a ton of usage of your asset but like you're giving them all the revenue effectively and for a while until for now and then you find a way of enforcing it later and and to to some extent this is one reason why I think to foreshadow our debate that we're going to have later this week I I think reaking is a way better value capture mechanism for L1 than rollups yeah so that's that actually gets to the point though of why I don't think the Amazon analogy works here is because that that was definitely the case in like a company where the thing is like very literally valued on like we think that this thing will make money in the future

that would work if Ethan Soul were valued on do we think that they're valued on like Revenue capture and like ability to do that in the future and I think in practice neither of them are I think both of them are like in this handwavy way measured on like ah how successful do we think the thing is like is it going to be money and I think that's actually more correlated to that not like how much refence is it going to capture and that's why I think that the market cap of it is actually like a pretty good proxy for like how successful is the thing being because I think the closest thing that people are pricing the thing based on is like how much economic activity is like sort of happening in this realm and we think it's like sort of money and that thing I

think in practice like that is what it's being priced like more off of than like oh we think the uh future cash flows of ethereum is GNA be like three High well I don't necessarily think it's cash flows as much as just like value uh created by the system versus value extracted by the system like Amazon basically just spent 20 years like creating a ton of value extracting zero but it did that in order to maximize market share and how the value gets captured might not necessarily be Revenue it might be like doing Burns it might be like the rollups start burning their fees it might it might be more like raking so like there's just a lot of weird ways where it doesn't like look like Revenue but from an equity or well okay these are not Securities whatever

but Equity like instrument you know like there's lots of ways you can kind of you know make their value go up that are not necessarily hey we have a dividend and they're giving you Revenue I'm not sure if you need those disclaimers anymore we're also In tha everything SEC so John then to kind of add to your thesis um do you think that soul is starting to have some of these money properties that are present in Bitcoin specifically for sure and then ether's kind of you know acur those over the last 5 years or so as well as like the Lindy effect has picked up and as different kind of monetary policies have changed like do you think soul is also starting to get a little bit of that

moneyness or is it still purely like a technology software like meme coin chain I I think that we can say at least empirically there is some level of the market is valuing this thing based on something above whatever we expect the cash flows of this thing to be yeah um so empirically there's something being added to that valuation and I think when you talk to like most Market participants is like there's like some degree of this is like a commodity money like thing and like that like that is something that we value so I I think very literally that like that is certainly like it has monetary qualities and that like people are very literally valuing it in some way like taking that into account um but yeah I mean when you compare soul to Ether Bitcoin I I think

that there is like an order of magnitude difference of like Bitcoin is just obviously like way ahead of everyone eth is definitely behind but like you know a lot of the money like properties are there and then I think like everyone everything else is just like way behind in terms of just like what do we think of just like all of these more I mean some of them are measurable but like a lot of subjective features of like what do we think is the general kind of neutrality of this asset like what is the predictability of you know what do we think it's Supply and everything is going to be in the future like what is the decentralization of the owner base um all of those kinds of things those things in general I would say are like in order magnitude stronger in ethereum versus Soul which is like not a surprise

I mean like well there's no unlocks yeah yeah no exactly like there's no like FTX VC rounds exactly like there there's no like US dollar unlocks like that's kind of like a weird thing if you're saying like ah this thing is money but like ah all the VCS like own half of it and like there's like a bunch of structured unlocks like that's kind of a weird thing so I I mean like on all of those qualities and and this is back to the point of like why I think Bitcoin people would love for Sal to flip eth is because I think it's like really hard to like cross that gap of like oh this is the decentralized non-sovereign World money thing when like that's the it turns it turns everything into that Meme of like the two people fighting and the one person smoking the bar and bigcoin

is like smoking the bong and the other two are fighting and but you need both of them at the same level to be fighting yeah I I I would maybe take a slightly different view of this which is like you know something bitcoiners love talking about and ethereum people hate talking about is uh monetary premium um and monetary premium is usually sort of defined as like the you you know there's a value of producing a good there's a value that the good is valued at and like is there a gap between those and is that Gap sustainable like is it always uh kind of higher than um such that there's sort of some some systemic kind of profit like looking thing and classical economics I was saying this you know quantity theory of money thing which is like money velocity times

quantity is sort of some gives you some notion of monetary premium but I think in crypto the the thing people have always been kind of especially post Bitcoin people are well money velocity is basically infinite like I can send arbitrarily High uh amounts of capital for like the same duration as sending a dollar um or a dollar's worth of the ass that's bullish because that means monetary premium is infinite like that but like I think that's often why I think the econ kind of logic for this is wrong but the way I prefer thinking about it is kind of you have some notion of revenue for the system so like maybe it's me maybe execution fees maybe it's da and then you have some notion of um

people who are willing to hold the asset and stake the asset relative to how much they're getting in fees and how much are they unstaking or leaving or joining the network right and from those metrics soul and sort of eth both kind of actually look pretty good because people are not really unstaking very much or they're trying to capture extra revenue from the staking derivatives but the one place they are very different is their like collateral usefulness and I think that's the thing to me that like separates them as Mone and like in eth you can use as collateral in like everywhere Soul you know even in ethereum land there's just not that much you can use Soul

collateral you can like trade soul perss and like maybe your position could be used as collateral but there's really no like synthetic soul that people trust which is is kind of a difference right like if you think about Bitcoin there's WRA Bitcoin on every other chain that's like a sign that you're you're actually valuable collateral even as a synthetic version uh there's wrapped ethereum on salana but there's not the other way and I think like when salana is money people will view it as good enough collateral to be going the other way and that that's sort of like a very stupid but like obvious kind of thing that you could could say so rather than make it Solana versus like eth we already got the Solana flipping eth thesis as a smart contract platform what is the the

the thesis that you're starting to describe for ethereum as usefulness of collateral um like I'm curious to get your like eth flipping Bitcoin thesis because it's starting to sound more like Le it's starting to sound less like the rollup Centric road map and more like the reaking Centric road map or the the collateral Centric road map yeah I mean so so one reason I think rollups value capture mechanism for the L1 is quite low it's a little bit like Amazon doing again like affiliate marketing and the Affiliates take 90% of the the profit and the company takes like nothing but the Affiliates now have to go Source all these goods and deliver them to the end user right because like 90% of things you buy on Amazon now are not really coming from Amazon like they they're at Amazon warehouses but like some other

distributor is like fulfilling it right that's what I mean by affiliate and I I like to think of the rollups in this again it's never none of these analogies are perfect all analogies are wrong in here yeah yeah but like like jar I think it's I think it's a it's a kind of useful to think um especially in terms of aany that just completely disregarded profit motive for many years to to capture market share and I I do kind of view the rollup road map as doing that the problem is the Roll-Ups can only impact eth price indirectly like they're taking away a bunch of fees so people don't have to buy as much eth on uh main net um or they don't just don't have to buy as much eth uh to pay main net fees and

the fees on the L2 are way lower um so the only way they really are impacting the L1 price is the fees uh all paid on the L2 need to be a lot higher in aggregate over all the users like you've increased the volume so much that the aggregate fees are close to what you were taking away from the L1 and then you you know all the users had to buy that eth and push the price up some someone so it's kind of this indirect mechanism it's not like that even if a rollup is using eth as its gas token which is by so social Fiat right it's not like that's a forced thing but like let's assume that everyone's alignment is whatever they're going to use eth as the gas token even then there's no real they're not really using

eth as collateral there like they sort of are but uh you know the the way the withdrawal structure works in the L2 it's not really the same whereas in reaking you're actually forcibly locking the the thing as collateral and it because it has value at risk it actually has to be earning income um and so people will be buying the base asset to earn that income which is very different than just like flow-based um purchases to pay for fees and so I I I'm just sort of a a believer that collateral value for Bitcoin has always been where it drove a lot of value it never was you know like the gesso story of payments and people sending Bitcoin transactions if I compared the total amount of collateralized Bitcoin transactions that

like centralized exchanges and in in derivatives like wbtc and then I compare that to like the total number of Bitcoin transfers over time it's like everything is going into like all the value generated is coming from using Bitcoin as collateral not as as payments effectively right and so I think ethereum has to cross that Chasm and I just don't think rollups do that so so that's my that's my that would be my reason I think it would be hard to flip unless reaking starts generating insane Revenue in that Paradigm how do you calculate monetary premium because it it's not it's no longer like the velocity versus Quant yeah yeah so the velocity versus quantity thing is like some kind of equilibrium Theory right like it assumes that you have like infinitely many people trading and

arbitrarily liquid markets right but in practice that's obviously not true that's why I think also a lot of e Communists kind of don't really use it but there's there is a sense in which there's sort of a collateral value of money which is like how much can I earn per unit collateral in a risk adjusted Manner and over what it costs me to buy the input asset right so like if I think about the production of ethereum or or any asset in proof of stake so in proof of work the cost of producing the asset is somewhat divorced from the asset itself right because the cost is like buying electricity opening data centers whatever in proof of stake that cost is basically zero and most of your cost is the collateral cost of buying the 32e or buying the one e or whatever you know

the minimum threshold will be and then locking it up and being able to earn Revenue without kind of losing money right so it's like I'm putting up one e of collateral I'm earning x% per year right and the point is something like reaking immediately improves your monetary premium you're your in the sense of the value of the asset is not just the future cash flows of the network itself it's the future cash flows of of other networks using it as collateral and I think rollups just don't do that right they're not really using the assets collateral they're using the asset just for for netting which is like a lot lower of a price impact it's not going to increase the price as much anything to add there John safe is moving the world's GDP onchain with the introduction of safe net safe

is taking this to the next step very soon check out net. safe. Global to learn more about how safe is moving the world's GDP on chain welcome aboard on our journey into the singularity this is the endgame road map for fra and fractal the new L2 out of the fra ecosystem that is totally based on fract scaling fraxel a modular L2 blockchain built by fra with modular and fractal scaling in mind fractal scaling is based on the mandal BR set of fractal images and it explains how l2s become l3s and the entire app chain life cycle goes through its

Evolution the FRX ecosystem is made of some of the top builders in the space and has stemmed from its OG days of the frax stable coin it is now in the LST space the LRT space and this frax L2 joins the existing Suite of fra products including Frack Swap and fra lend you can see FRA faery the bridge to go from any chain arbitrum optimism or main net into the fra still main net Bridge your tokens and bring your FRA assets into the fractal ecosystem join today to get the best out of fraxel you are still

early join today take part in our Expedition into the singularity Redstone modular oracles are available on 50 plus chains trusted by over 100 clients and over 6 billion in total value secured visit redstone. Finance to find out more no yeah no I I agree with that I mean like this is a big part of why I mean like why I have also been arguing a lot lately of I I think you should improve the L1 a lot for a lot of these reasons of I I think that the like act activity happening on the L1 in my mind is just strictly better for the asset compared to it happening on the L2 of if you think that the value is coming from fees like you are strictly going to get more fees to the asset based on you know the

same activity happening on the L1 versus the L2 and then at the same time of like the gas token a lot of these places l2s they're probably going to disintermediate as a gas token because like ah [ __ ] it like users want to use usdc I mean you already saw blast right like all the native yield stuff basically showed people are not necessarily going to use e exactly like that that's going to happen and then the other big part is in practice like where is the vast majority of eth like used today throughout defi as collateral all these things it's on the L1 like it's it's not on the l2s so in practice like if you want to have this be this like high quality liquid asset that's used you know throughout defi like whether it's Min stable coins against it you know used in trading used in reaking

like most of that comes from like you should just improve the L1 quite frankly um and have that stuff kind of natively happen there I must say ethon or Defi and arbitrum has gotten pretty deep in terms of liquidity daps so I would say arbitrum is kind of one exception one one thing though that's funny about that is all around onethird of arbitrum tvl is in the hyper liquid Bridge contract and when hyper liquid leaves and to start their own chain then that's oneir of TV has gone in some ways you could view hyper liquid indirectly as a sort of vampire attack on the theorem if you they are completely I mean because they're just going to launch it on L1 from what I understand and that tvl is likely going to migrate because it's generally active investors it's not like

it's not like tvl and like L1 lending protocols where people forget that well there's a lot of points farming going on right now still you know you can just drop your ether uscc in a vault so there's there there's you know there's some of those people there one thing that I also wanted to add to your salana collateral point is that outside of just the actual usage of soul on other chains actually just collateralizing soul and borrowing against it and do and like using it from from from a user perspective of mine over the last like four or five years on chain I actually feel like quite a bit more risky borrowing against my soul or like doing different things with it on Soul defi compared to like a a very a very clear re a very clear statistical thing and this has been coming down so this is not

because like salana defi is dying in fact I would argue the protocols there are improving at a faster velocity than the ethereum protocols but but a very clear measure of the premium being worse and one way you often times measure monetary Pia of bonds is you look at the volatility of the interest rates for the repo market so like I own a bunch of bonds I want to borrow cash against it because I have some you know thing expense I have to pay and then I'll I'll pay it back and usually those repo rates are like how you compare different currencies like comparing the Euro to the the dollar and the repo rates for soul if we make an analogy of being like the rates in Camino or the rates in other Ling Protocols are much higher and more volatile than the eth eth ones

right they're they're like double dig unold right now % just to deposit in commo the usdc borrow rate is very similar to Ether right now it's like 12% because it's very speculative times like currently but I I noticed that as well so basically that's a result of of what property exactly well the the main thing is that like a there's not that many people who want to supply their soul that way they would rather earn 7% effectively riskless staking yep plus me reward so it actually could go higher uh versus putting it using it as collateral right and this comes back to to John's point about the emissions right each emissions are basically zero so like with at zero emissions it make you have to go to the the repo market right but but here and so like you know if I

compare this to say like the US government the US government issues a ton of bonds right they're they're issuing a ton of debt but yet people are willing to treat it as the Best Collateral why is that there's a [ __ ] ton of demand so it's like there's just not that much demand for the soulside sort of rewards in the sense that people aren't really selling they're just kind of like locking into stake and and not really reh hypothecating in the way that I think people on eth are where they're like taking stake eth and then putting into all the it's a result of like E5 being more battle tested there's Lindy effect of all that also I think the users are a bit of a different segment and then also just I mean inflation I think the lack the lack of of protocol

inflation is like actually the biggest but but I think I think like if I were to take the kind of you know John talks about improving the L1 for eth I think if what I would do in Soul and and it's kind of hard to do because they have this unlock overhang but I would definitely be trying to like systematically reduce the inflation yeah I agree with that was just to get the actual demand for Defi and collateral on chain on chain will better yeah like like soless collateral and centralized exchanges is actually much more comparable to e yeah I think it's just that like the defi usage is more true to like how much risk and how people how people value it as collateral um and so and the other thing that's interesting I think that probably improves the monetary premium longterm but shortterm

might not is slashing and Sal just went live in in the 2.0 release so you know you actually are have value at risk Now versus before there was noing Free Ride also reaking on soul is being built out slowly but shortly as well yeah so so I think I think soul is actually if they can get the inflation down like a lot like ironically I think when ethereum was doing the ultrasound money thing they probably didn't really need to be as aggressive as they were but I think Soul actually is the opposite they need to be more aggressive on this ultrasound type so how do they get their inflation done is this like it's got to be like a governance process like a soul Improvement yeah yeah just have sys to like lower the curve so what would you recommend like a a slow implementation

over the next like couple years or would you just a slow implementation where like as there's an unlock you have a large you have a larger jump down and then before the unlocks a slower cuz like you want to basically compensate people for the amount when there's the unlock where like there's going to like imagine there's an unlock that's like 10 million and 5 million was going to get sold that 5 million pushes a so price down by let's say like 10% I'm you know making some hypothetical over here right and you want to basically make sure that inflation covers people who stay locked through the unlock and are still staking so the idea is you want the inflation curve to be kind of like not too steep um until the unlock and then after the unlock you drop okay based on based on

how it goes so like like I think stuff like that is like a way of um dealing with this I don't think eth had to deal with this at the scale that salana is at because of the unlocks or just because well starting p is is is you know a much more beautiful it's a beautiful much more beautiful dist Advent of defi as well so like it was like this is brand new it was a lot more like oh my God this is crazy new tokens airdrops and I think Stak eth actually like Lio Bridging the Gap between p and POS for a year cuz like the beacon chain was live that was huge that like helped really build in salana they didn't really have a there's not that much CH time to do that like went live is still super low really yeah yeah interesting

so so these are all these things that I think makes Aon of not money all but like you can see the direction it would have to go to be that yeah no I definitely agree with that don't kill me Raj you know like I mean you know have you got you know Raj's fa favorite I'll kill you tweet so that's why I'm like don't kill me John you wna add something yeah no I I definitely agree with that of like most of the like it's funny because most of the conversations around stuff like ISU I think like they end up being like kind of kind of dumb conversations like most of them end up being the thing which like I like I've written about before of like a lot of people do this like dumb like profit uh for the chain equals fees minus issu thing which is

like doesn't make any sense um and so you can take that to one side of it like to say like okay issuance like completely doesn't matter it doesn't matter if it's 20% or 0% it doesn't matter mon AR Theory yeah just and debits bro that's all it is and like there is some sense in which it doesn't matter of the like yeah I think the p&l calculations people are doing it wrong and like you're sort of moving money around you can stake it like that doesn't really matter but it does very tangibly matter for stuff like this of when we're talking about like okay but what are very literally the impacts on uh defy and how the asset is used it makes a big difference if you know the asset for the has like you know 20% inflation or 1% inflation that completely changes like what is your

defa going to look like how is the asset going to be used and especially when a lot of this is like alleviated in some sense if like everyone on salana just used Jos soul and like just treated that as like exactly the same thing but I mean you also just in practice do not see that at all like most stuff is still Soul based that is what most of defi is um and so you end up with this big problem there um where there is like a big opportunity cost to it and like that does change the way the defi end up looking it's also somewhat path dependent right like yeah ethereum had an entire defi summer of yield farming and and people got accustomed to that behavior of like depositing and E got known for for apy and sole people know it for beam coins not for depositing

into yield Farms although it it I feel like as the meme coins crash you saw you definitely saw the like the tvl go the other direction recently so like I I would say like you the next three months will be interesting as a is it a regime shift or is it still staying in me quins I think the other thing that's maybe kind of worth pointing out is like this this whole monetary premium discussion is like generally semi theoretical but one way it wouldn't be theoretical is if flash Bots say like jeto had a token and you were actually able to measure like the net revenue generated by flash Bots the token versus goo the token versus the base underlying and the difference between those is somehow this like you

know excess collateral magic plus whatever Animal Spirits could you just explain that for uh for smooth brains please yeah yeah so so so if I think about like the revenue the me Revenue that the chain is getting like realistically if we think about who is getting the revenue right now it's like basically the proposers themselves right and so that represents like some some Revenue they're getting that they kind of add to their overall belief but if we think about sort of flash Bots Oro in the not to keep making this Amazon analogy but they're kind of like we TR think of them as like the like person who's the market place who's like getting them this excess revenue and then taking a cut from from the different affiliates the amount of

Revenue they're taking so like let's suppose they took a fee switch let's say the fee switch was like 2% of me revenue and then look at where their token trades relative to like the implied value from the fees because arguably flash Bots and goo if they were like businesses are cash flow businesses right they like they have very clear cash flow revenues right and so then you then then from the goo token price if you know how much it's trading above it's sort of cash flow then you can use that as a lower Bound for how much soul is trading cash flow now so J will have a fee switch on soon so I think you can do this calculation for soul like once that's alive and see how much it changes the token price over like a few months

is this a flash Bots token Alpha no no no there there is there is there is no such thing I just just I was just saying I think if if there was a world in which it was like J and you could like compare Ethan Soul Apples to Apples but it's like not so so you unfortunately can't yeah yeah well guys I think this has been fantastic thanks for uh joining us and uh having a fun conversation yeah yeah definitely it was great cheers