Why Wall Street Believes Next Bull Market is Already Here with Vance Spencer and Michael Anderson

Transcript

They all sold off like 5 to 10%. And and that's after selling off 5 to 10% for the last four or five days. So like some of these are in like 30 40% draw downs. >> You know, the first reaction that I had is just checking the price and seeing it up 50%. The market loves it and and at the end of the day, that's what really matters. >> How do you think this DEX kind of landscape plays out as a result of this proposal from the number one DEX in the space? What is the way that they ought to position themselves for the Wall Streetification of crypto? >> Welcome back to the rule. >> This is your home to learn from the biggest guests, the brightest minds at the tip of innovation. [music] Our goal is to help spread the collective knowledge of everyone in our community.

>> We are breaking crypto out of its echo chamber and taking it to the real world. >> Sit back, relax, [music] and enjoy it. Welcome back to World TV. We've got our lovely friends Vance and Michael calling in from the usual San Fran. Guys, it's freezing in Florida. Um, and Robbie and I are both cold. Hope you guys have had way better weather than us. >> 50 degrees is freezing in Florida. How you guys doing? >> Good. It's uh cold today, but was 75 and sunny all weekend. >> There you go.

>> You guys been pretty locked in, huh? Spending a lot of time in the in the office. just like nine to five in the same conference rooms basically the entire day revolving door of guests just like one after the other. >> There you go. >> Why are you guys so busy? What's going on? What's cooking? >> We're we're in the lab. >> Yeah, >> in the lab, huh? >> Um I think uh the growth of RWAs on chain is driving a lot of interest from people and also a lot of investing and you know pretty colorful past two weeks with those I think three or four small stable coins blowing up. But >> it's funny like every large asset manager in the world is effectively coming on chain and asking how do we bootstrap these things for liquidity. So

that you got kind of the institutional side, but you've also got the side of just like the RWA dgens, which I honestly didn't know was a thing until last week. But the people love yield and it makes sense. Last cycle rates were zero. There's really no looping of like yield to be done. But now with all the tokenized yield products and all the stable coin growth, you are seeing these communities start to form. And so that is uh it's pretty exciting. >> And that's on the user user side. I'd say on the [clears throat] investor side, basically every single LP or investor that we're talking to who would potentially invest in framework is asking us how do we how do they get access to stable coins? And RWA, stable coins, tokenized assets, like they all

mean the same thing, which is like tokenizing some form of asset, uh, real world or not real world, doesn't really matter, but just about every single person who's an asset allocator is looking at what's happening with stable coins in particular or real world assets, um, once they dig in a bit and saying, "How do we do it? How do we get access?" And outside of buying USDC, there aren't that many options. Uh, obviously I'm joking, but the the yield element is what is definitely driving. >> Yeah. I mean, we were just at SmartCon last week and I've never been So, our live stream setup was in a Fidelity SP uh sponsored lounge. We were, you know, you just look at the badges walking by DTCC,

the Fed, White House, JP Morgan, Goldman, all these folks. Um, and it was so funny. I I put out this tweet. It was like, "Guys, the sentiment on crypto Twitter is as if we're in this like deep bare market for the trenches and everyone's lost everything." Meanwhile, the last four days in New York, it feels like it's a Wolf of Wall Street bull run in tokenization. Like fullon get into the war zone. Let's chat. Like just absolute man like manic. Like I mean I I get in that environment and I go manic like automatically, but it was just purely [laughter] like wow. And so like there's this dichotomy that's happening that feels like between like the crypto natives versus these institutional bull run. And I mean

there's no other way to put it. It's like a stark stark difference >> and probably as it should be like I think all of us are waiting for the thing that will really turn on the alts uh in terms of price action and I think things like clarity things like tokenization of real world assets coming on chain all the infrastructure stable coins to finance them those are the things that stand to benefit but if you're not in those kind of types of assets there's not really much to be done um and so I think the despair that we see is from people holding like things like fartcoin from like, you know, a buck and a half to like 20 cents today. Um, I understand why that would be tough, but crypto is bifurcating and and really like the tokenization and Wall Streetification of the industry has

very little to do with the rest of of kind of what has historically been the core of crypto and that's hard to rap, you know, grapple with, but you you kind of do need to understand that. >> Yeah. What do you what are you guys telling your port host like the what what is the way that they ought to position themselves for the Wall Streetification of crypto? >> It's really easy. Build a business model >> and >> revenue meta strikes again. >> Exactly. Like we're you know people like Daylight wrapping energy in stable coins, people like us wrapping GPUs in stable coins. crypto's contribution to this world is going to be financing the next epoch of capital markets and and those are a very real thing that happen

on chain today. Um, and so I would say if you're not in that, you know, vector or if you don't stand to benefit from that type of activity, you do need to change your business model just like we don't fund things like, you know, NFT exchanges or memecoins. Um, you know, like those portfolio companies, of which we have very few, are dealing with kind of an existential debate as to do you continue on, do you return capital, do you pivot? Um, and I think if you're being honest with yourself, probably pivoting is is at least what you need to do. Um, but a lot of crypto has been caught off guard by just how institutional things have gotten. Um, and just how far away from like the more dogmatic cipher punk vision of the future that that we used to have. And

that's okay. I think we do have the technology to go off and kind of impose cipher punk values on the rest of the world, but only if you're kind of working with these institutions, which if that's an anthemma to you, it's it's going to be really tough to to kind of build a real business going forward. >> Yeah, I I agree with you guys. Um, I think building a real business model, it feels like there is this divergence between cryptonative projects that aren't really seeing the forest through the trees and they're getting repriced uh because we're not in this this macroeconomic environment where uh everything is pumping at once because it's such a low interest rate environment and capital's flowing so easily. Um, but because of that decoupling, I'm like, was it Zero Hedge posted this uh this chart the other day

of crypto going down while the NASDAQ was going up and so the Wall Street certification isn't hitting crypto more broadly. Vance, you came on, maybe it wasn't last show, maybe it was the show before, and you said, look, you know, first gold, then stocks, then crypto. And so I'm curious, do you guys think crypto is lagging right now or do you think it's a leading indicator? it's bottoming and it's kind of showing where stocks are headed and then we're going to flip the scales. How how do you how are you guys seeing the current uh landscape when it comes to crypto decoupling from equities? Well, like so to be clear, I think one other thing we are telling portfolio companies is if you raise at that some high valuation and you don't have a business model or you don't have a path to get to a

profitable, you know, economic outcome, you need to reset your valuations and expectations because those need to change if you're going to raise more capital. And so there there's this kind of like rerating while everything is shifting towards the new business model narrative, revenue nar narrative. But I also think what's happening in the background and this is more particular in the last like maybe three weeks maybe four weeks is basically after 1010 which was almost exactly a month ago um I think a lot of cryptonative capital had their finger on the trigger and was ready to fire sale whatever they could at the first sniff of there being some sort of market correction with the expectation that we're at the end of the four-year cycle and that we're going to

have another 60 to 70% draw down and it's going to look exactly like it did. Well, I think that assumes that it's pretty pretty fundamentally flawed assumptions um just baked into it because what it also assumes is that there was this parabolic run up and that we had this blowoff top and then everything came crashing down. And I I I frankly just don't think that you can tie those data points together between 2025 and 2021. um and for a number of reasons. And so what I think is now happening is actually an oversell in crypto because people have like I just described their their fingers on the triggers ready to fire. And at and that has been the narrative over the last couple of weeks, which is why you saw um you know the spot Binance selling kind

of um consistently over the course of that week, which drew everything else down. That was from like 109 to 101 or 98 even. Um, and I think that that was basically the sell-off. And I think what you see now is people are just kind of like treading water, waiting to see what happens. It's not very obvious which direction we'd go next. I think that we will probably range be rangebound for a little while here until there's a positive market narrative. But what you also saw today is basically every single growth stock, AI, energy, you know, some of some of the growth year kind of like um non-energy or AI related stocks, they all sold off like 5 to 10%. and and that's after selling off five to 10 percent for the last four or five days.

So like some of these are in like 30 40% draw downs and and I think you're you're really starting to see um you know government shutdown I think driving a lot of this which I think in the next like day or so um or or potentially you know the day that this airs is is the day that we're actually going to have the the government shutdown be over. Um you know that's coming to an end. you you have I think a lot of risk that was taken off the table because of that. Um there was an there was a the White House press secretary today said we may not even release the the non-form payroll and the CPI data from October. We're just going to skip it and go to November. Like it's just like oh forget it. We're just going to move on forward.

Like there there's just so much weird stuff going on right now. I think it naturally means that investors are taking risk off the table. But I think in crypto this like over rotation, you know, overselling um is frankly what's going on. And I think the second that we get more data points and maybe move into December or maybe even January as to the proof positive that we have broken through this four-year cycle, we've been talking about this since basically this time last year. There is no more four-year cycle. And every single month that that progresses, we further prove this point. I think just this is going to to instantiate the fact that we are not in a four-year cycle. We didn't have a 60 to 70% draw down. Maybe it was a 20% draw down or or 24% 25% draw down, but it's not going to be this massive

sell-off. And frankly, there's going to be a lot of people off sides. Like there's going to be a lot of people who sold and who are going to have to buy back in at like 20% higher. And I I think that'll be kind of the December January narrative. Relay, low fees, lightning speed, and the power of multi-chain at your fingertips. [music] Instant multi-chain payments. Choose any token on any chain. 75 plus network supported. More than 5 million users. 8 billion plus volume processed. 70 million plus transactions. Fast, reliable, everywhere. Start swapping today. Only on Relay. Habachi provable.

Trade per with speed and security. Earn rewards. Visit hibbachi.xyz. [music] Trading on fire. Blockchain shortcuts, templates, and widgets. [music] Launch without friction for builders by builders. Visit enso.build. Yeah, I tweeted that as well. I was like, I I think if we go to all-time highs from here, there's going to be so much capital sidelined. I mean, crypto Twitter is when when Donald goes bearish, then it's just like it takes crypto Twitter by the balls and it's like, "Okay, guys, Donald is bearish."

So, we all need to watch out because, you know, he's the TA guy. And, dude, I think he's got great charts, but he's him and like several others have like basically put out that they're that they're selling, that they're kind of like overall net short, but then, you know, Donald also put out a tweet today that was like Bitcoin uh daily is at support, weekly is at support, and monthly. I don't really hate this. So, it's just kind of everyone's freaking out at support is is classic. I'm one of them. Rob will tell you he's been trying to tick me off the bearish ledge because I'm like, dude, it's been a really good run. Like, we got to at least kind of like, you know, you know, set our bases here and Rob's just like been pulling me off the off the bare ledge for like at

least like the last week or two. >> I mean, here here's a question. What what's the best comp for this situation from what we've seen previously? And it actually happened this year. It was end of April, early May when Trump tariff tantrum happened. Everybody was caught off sides. They sold, fire sold, >> and then had to play catch-up all throughout May and June. >> Yeah. >> And that's when you saw the market rip like 2x some of the stocks, you know, that were that are doing well now and kind of back to, you know, where they probably should have been. Like they're they're 5x off the lows. It is going to be an offsides narrative at some point.

It's just a question of when. And and I I think you know in those types of situations the only situation that's bad is if you are the one that's off sides. >> Yeah. Yep. Uh Vance curious anything to add you know this unification of Wall Street and crypto but this decoupling of uh equities from crypto you know how how do we balance these two? >> I think they're more tightly coupled than people would probably like to admit. uh like people are saying, you know, oh, crypto is so badly underperformed uh recently. And then you look at the hot AI data center stocks and they're down like 30 40% including Oracle, which is huge. Um the thing that's really keeping the S&P and QQQs

up is Nvidia, which is kind of a whole separate other thing. Um but look, I think, you know, people are expecting the four-year cycle to play out as it always has. And maybe there's some, you know, it becomes real because people collectively believe it. But even the downside targets people are posting on BTC are pretty weak. Like 80, you know, 7,000, 90,000. It's like, okay, it's like 10% lower than where we are today. Um, and you know, uh, below 100K there's there's likely a bid. You know, we understand that there's a few folks that were quite large that pushed it from 90 over 100 in the wake of the Trump win. I think those folks return, but you know, it takes a while for people to see value for BTC over 100K. And even like

checking, you know, prices, it's like BTC is still over 100K. It's pretty wild. It like forever that was the price target that people dreamed about. And um I think what you're going to see going forward is a lot is is happening on Ethereum. Like it doesn't necessarily need to happen on Ethereum, but it is happening on Ethereum. And just like that liquidity builds liquidity, so there is a natural flywheel there. Um especially with these RWAS which I think are the most interesting part of the market today. Um we see a lot of people buying Bitine that are these large institutional funds like the largest shareholder of this stock called iron which I think has literally gone up like eight or 10x this year sold and rotated into bitine. So Tom Le is going to have additional buying power. I think Sailor

you know the big trillion dollar question in the market is is he going to be able to sell this STRC product? And I think the base case is that he's going to be able to sell a lot more than people realize. Like he's upsized multiple euro denominated offerings and it's trading at par. So like I have a pretty good sense of who who the next marginal buyer is going to be. Um I think sentiment and macro are kind of like this whole other bucket. But zero hedge is like a pretty good barometer of like where people's heads are at. And like they've just been like lathering themselves up into like a frenzy over like oh my god the data centers it's like the next margin call. it's like all going to blow up in everyone's face.

Like Oracle is going to go bankrupt. Like they're posting like credit default swap prices on Oracle. I've got news for you. Oracle is not going bankrupt at any point. Um and so I think a lot of it is just over wrought because things have kind of been slower than people expect. I also think broad swaps of the market are no longer relevant within crypto. Um but at the same time like you see things like Zcash >> and you kind of get a little inkling of like okay there is a bit out there for these for these hyper concentrated rallies it feels like flavor of the month quarter whatever like there is interest. Um, but where there is no interest is things that don't have revenue, things that don't have earnings, or things that have, frankly, really shitty cap tables. Because as we

as we all probably understand at this point, if you have a bad cap table, that unlock cycle takes forever. And that isn't different in Tradfi either. I think like Core Weeb is struggling with that, probably some others. But, you know, things are not um you can always find some random stock to cherrypick and say like, "Oh, it's gone up this much in the past five months." And look at crypto, it hasn't done that. That's always been the nature of the beast. But um everything right now is kind of priced equally in my mind. Like the data center plays can probably double or triple. I would say that's roughly the same with ETH and Bitcoin. Um but then like you know what we think at least and we do do public equities at Framework is like is there anything that will 10x in the public equity space or or like 5x

and there's not really honestly. Then you look at crypto and you're like there are things that probably can do that. things need to change, more regulations, disclosures, flows. But I would say the equities and and and the coins are probably priced at parody on the large cap and midcap size. But like on the small cap size, like the billion dollar names, there's far more opportunity in crypto than there is outside of it today. >> Yeah, there there is uh this secular more specific repricing of assets. Um and it is around the coins that you like you mentioned have business models. Unis swap 2xed. that's not an insignificant market cap of a coin um on their news that they were going to do some sort of buybacks. And I think that's probably

how the rericing happens. We set we we see you know this large jump whereas everything else is kind of flat and then it just tends to sustain at that higher level whereas everything else sort of falls uh you know where where the chips do. Um, and and I want to hone in on what you said is probably the most interesting part of the cycle or at least part part of, you know, what's happening right now. And Andy mentioned something about it earlier on on today's stream as well, which was this this idea that um we're either like rehypothecation is different than recursive lending. And and when you're thinking of RWA looping, I'm curious which bucket it falls into. Maybe you could just illuminate like what is the distinction between those two? Uh, and

where does RWA looping fall in? >> Why don't why don't you give us a definition? >> Well, I'll try I'll try I'll try. All right. So, rehypotheation is basically just more or less like looping. It's like basically similar asset collateral borrowing a similar asset or the same asset and then just kind of like rehypothecating it and looping it. the recursive lending which I is kind of what I think Rob is getting at with you your tweet Vance about curated lending markets is effectively like I have a I have a D5 project and Michael has D5 project and Vance has D5 project I give Michael money he gives you money then you give me money and then we do it four times and we all count it as TVL each time um and then and then it blows up in

in our faces and and and I think that is a very simplified example of this recursive lending model that kind of caused caused uh some of the problems that we saw with these vaults and with these lending markets. Now Rob, I think you know you're asking about RWAS. I think more about the tweet that you put out Vance, which is about kind of like what happened. Maybe you could just like talk us through like the key learnings there and uh you know is that is am I on the right track there? I think that's kind of like the right way to think about it. >> I think that's the right description. And I would say the thing that caused the problem was something entirely related but also separate in the sense that there was off-chain managers. So like in these RWAS, you know, >> opaque kind of fund guys. Yeah.

>> Right. The question is and we still don't know who those people are is like what are you actually tokenizing? And if you're in like a Janice Henderson AAL ETF, you have very clean looks in terms of what is the credit quality underlying, what are their payment schedules, have they ever missed anything, you have basically perfect information as it relates to that company. um when you literally give someone money and they take it off chain and they say we're going to generate yield for you and you know we'll come back to you whenever you want it that's when it gets pretty dangerous and so I think just like the main thing is just like credit quality and there are things that have you know yx a b c usd on them um but those are not stable coins those are supposed to represent a dollar

denominated amount of that credit but you really have no asurances there and so like the thing that we're really trying to do is just push the credit quality underwriting forward, push the risk management forward, push the liquidity and trunching up of risk forward. And I think that's really the path that there's no rocket science here, but you need to build things very slowly and thoughtfully and carefully. And and that is generally what Sky and we do best is just like really not compromising on credit quality or transparency. So the kind of curated lending market take here and Michael I'm sure you have some thoughts as well. What is the what is the path forward for DeFi? Is it doing it all onchain or is it using some

sort of like oracle or some sort of verifiable you know ZK kind of uh tech to basically verify onchain the reserves offchain? Does it need to be like half and half fully onchain? How do you guys see the future of like vaults and these curated uh kind of yield strategies going forward now that this has happened? >> I I I think there's not one sizefits-all, but I think what you have to look at is what the relative risks would be for each different situation. So let's say you're able to take the assets offchain and and you know just to like add a little bit I think of rehypothecation is I am taking assets out that are normally used as collateral and I'm using them in other ways. And this is like the three arrows, you know,

we're taking the Bitcoin that people put into Genesis and we're lending that, we're giving that to three arrows and, you know, trust them, they'll be fine. But it's like off our platform so that, you know, when Three Arrows isn't able to give it back, well, the assets that are stuck, you know, Genesis has to go bankrupt. And so I think that's where you can get into real danger when you don't have verification or you don't have basically provenence and ownership over those assets that are being used as collateral. And [clears throat] so when it comes to I don't know curated lending markets whatever you want to call it um if you look at Sky for instance and there's the Janice Henderson CLLO that is tokenized and put onchain it's tokenized by centrifuge daylight just announced that they're going to be

tokenizing their asset as well um with Defi today um but imagine that there's a tokenization engine um there's a custodian relationship and securityize is also doing this they are a custodian they are basically an accounting and and um audit firm as well. Um but imagine that there's a custodian of brokerageowned assets. They are doing the buying of those brokerage assets on your behalf and then representing them on chain. And so if for instance you need to reclaim that collateral because something becomes under collateralized, you can reclaim the Janice Henderson CLLO ETF shares. And if you need to, you can sell those. it it may be T plus3 for settlement to occur, but that's something that you can do and it can be

represented on chain. And so in those types of situations, you should be able to get pretty substantial leverage or pretty substantial margin off of those assets because they are instantiated on chain. And I think that that just provides more trust and therefore there's lower risk and therefore you should get higher leverage or or credit uh margin. And if it's something where you're saying, "Trust me, bro, I'm good. um and give me the capital and I'll I'll let you have the borrow. That's obviously just going to be way less uh trustworthy and way less um uh creditw worthy.

>> So Janice Henderson is a maybe don't want to throw anyone under the bus, but that's a good example of, you know, uh one that's doing things the right way because they have uh the right mechanism in place to do those redemptions. Is there is there any that you point to that you're like hey like maybe this is a mechanism that we could implement in some of those other products. >> Um don't want to talk ill of anyone but I think uh you know generally speaking the ones that are gaining AUM and TVL are winning >> and doing things the right way and those that are losing TVL and AUM are doing things the wrong way.

>> The market always votes on this stuff. uh and hopefully it doesn't vote so quickly that people get hurt but as we've seen that is often the case with these small stable coins. >> I mean and and going back to it as we saw with what happened on you know Binance if that is exactly you know the case where USDE had an issue with its pricing oracle on Binance internal and that could be another risk as well. So it's not just the redemption but it's how do you price this? How do you make sure that you're getting a fair and accurate pricing? Especially if you're using this as real-time margin or collateral for other aspects or other products like that that is just as important as being able to get to liquidity. Asset management redefined [music] built on ERC7621.

Standardize how you launch, manage, and trade onchain baskets. This is Alvara, the standard for onchain asset management. The wait is over. The Talis [music] test net is live. Be part of the revolution. join now at testnet.talis.network. [music] >> Yeah, guys, I'd like to switch back to the unis swap uh topic and the lido buyback topic. Um, revenue meta is in full swing. I did see an interesting tweet though about like the So, basically, there's a couple things going on with Uniswap. First is this unification of the token. you know, they've obviously had this equity uh, you know, token bifurcation where their their labs companies been making, I think it's nine figures a year in

revenue effectively and the token holders have gotten zero. They've been, you know, part of Andre Cronier's, you know, valueless governance token era, which had its time in place and was likely a major result of Gendler and the lack of regulation. So, you know, fast forward to now, obviously, Hyperliquid has came in and said, you know what, guys? We're we're going to do it this way, and you guys are either going to adhere to what we've done or, you know, kick rocks. And, you know, lo and behold, some teams will kick rocks, but some teams are going, you know, create a business. Unis swap is going to keep dominating, but they've introduced attack vectors to their business.

[snorts] What I mean by that is the VE token model that the curve guy Michael created with Andre and that they kind of like built out is actually mechanically and perhaps this is arguable but a better way to distribute revenue back to token holders over the long term and and kind of like effectively mitigate sell pressure and create a more kind of like long-term ecosystem. And the the aerad drrome founder tweeted yesterday and quote tweeted the the unis swap announcement and it was like wow I cannot believe that they would make this big mistake the day before we announce our huge announcement. The huge announcement today is that they're

combining a drrome and drrome and they're going to launch on arc as well as ethereum and some other chains and try to basically become like the dominant decks of EVM. Um and so it poses a question where it's like okay unis swap charges the.3% to the LPs any LP you know knows that they've introduced their UX fee uh either last year or earlier this year I think it's like 25 bips or 75 bips to swap on it and now they're introducing basically the you know uh return of some revenue from I don't have the proposal in front of me but back to the token holders and so like there's now cyber like cippher punk devs on the timeline saying, "Yeah,

let's go ahead and rent seek off an immutable smart contract and call it a business. Why would I ever go to this smart contract? I'm just going to just we can just fork it and make our own and you know, yada yada or XYZ." And so there's kind of this like there's two kind of sides to the unis swap coin here. I'm curious from your perspectives whether it be in relation to the competition in relation to like the ideals of the uh space or just pure economics like what is what was your first reaction to this and um how do you think this DEX kind of landscape plays out as a result of this proposal from the number one DEX in the space? Well, I I think my visceral reaction and and look, this is paired with an

understanding that unis swap has been bleeding TVL and volume to competitors basically for the last four years. Um, my visual reaction was it's great that they're making changes that imbune value into the token. Um, but it's sort of like four years too late. We we have had four years of innovation and and differentiation and changes and models that we've tested and tried and um they just haven't because they haven't been playing in this game. It's kind of like when OpenC finally after five years decided that oh we're going to launch a token or or at least you know said suggested that they are. We'll see what happens but it's like congrats you know you've kind of missed the window like people have moved on. Um, and so I I hope that they're able to play catch-up

um, and do something of value because I think they are still important infrastructure and and kind of plumbing for the system. Um, but yeah, you know, you raised $100 million for an equity company. Like what happens to those shareholders? You also, you know, raised a ton of money for this token and people have been holding it, buying it, waiting for this to happen. H how do you how are you going to subset the revenue and the value that flows to the token versus the equity? like there's just so many open-ended questions that I think you're going to ultimately hurt one uh subset in in the fullness of time and um you know whether or not unis swap the the token is a security like I think there's a very strong argument that it is not but the shareholders of the equity have

definitely purchase securities in the form of the equity and you you have a fiduciary duty as someone you know who is running that company to um to those shareholders to security holders So there there is naturally going to be a bias to help the the equity holders at least keep them um in the loop in terms of value acral versus the token and and so that's going to be a natural you know difficulty there. Um like this is they're they're kind of stuck between a rock and a hard place I would say. Um, and so it's going to be really fascinating to find out. But, um, yeah, it feels like we have moved way past these different token models and like things that have worked and haven't worked, we've figured out and and you know, innovated. But, um, I I think they're just at the start of that

journey. >> Anything to add? >> No. Uh, I think, you know, we have followed the Aerodrome Uniswap kind of beef for a while and it seems like it's, you know, simmering to a boil now. I I don't know what it kind of the future brings for the actual fees that come to the token given that we've seen some analysis by and again mostly the aerodyone team that a lot of the actual uh volume could fade when there's actually a fee implemented um and so there could be some loss of volume that comes with this. I do think this the spiritual notion that they're going to go all in on in the token is a good one and it can lead to a path for value

recovery for basically all tokens that choose to do so. So, I think, you know, the first reaction that I had is just checking the price and seeing it up 50%. The market loves it and and at the end of the day, that's what really matters and and there's a lot of other caveats with they're going to need a 20 million uni per year budget to run things and all of that. Um, and so there's kind of a few tie-ups. It's not like a very clean just the token is being burnt and you know, huzzah, but it is a helpful path forward and and I do commend them for going there. It's it's great to see. >> Yeah. Yeah. Yeah. I mean, Lido came out as well and also announced buybacks in a different fashion. Effectively, like when the market's up and their tokens up, they're able to buy back more and

then when it's down, they they don't want the Treasury as much was kind of like the general idea. Um, again, I just see Hyperlid came in and said, "Guys, we're going to do it this way." And I mean, it's really forced the hand of the entire industry to really rethink. And I don't know if it's just that, but it's it's easy to draw that parallel. >> So >> yeah, what once one does it, the rest of the field looks absolutely silly if they're not also doing it. So >> because you got now these store of value like now, you know, Zcash is being pitched as a store of value thing like early Bitcoin, right? Because it's like, well, it makes no money. So like there's really like this make money or like have this moneyiness property which you could argue Ethereum has just barely, you

know, gotten into. uh Bitcoin has and that the rest are kind of, you know, still searching. >> Yep. And I I think people will come to this space and and write research and and good things about the ones who do and the ones that don't will kind of be left by the wayside >> and that's going to be really tough, but you know, we do have to filter the wheat from the chaff at some point. And I think it's just about time. So, we're happy to see it and we're only investing in projects that really can deliver that type of value. >> That's good to hear. Um then just kind of to close that loop, it did feel like there is this gap right now or this time period where you can get away with this double dipping, right? So if you're a

company, you can IPO and maybe launch either a tokenized equity version or a token and kind of like double dip. That's what a lot of these uh you know teams have been doing effectively. I is that also coming to an end? Is that getting started? Am I missing something here? I mean we don't h we we we have yet to have a single publicly traded company that has launched a token. >> Yeah. So >> stop. >> Okay. >> So I don't think that that is a path forward. >> Yeah. >> At least in current, you know, form unless there's a material change. And look, this should all change with the Clarity Act. And I know that we saw the draft this week from the ad committee.

Uh Senate comm Senate Banking Committee has put forward their draft. We have to merge those two in some, you know, Senate passable form. Um so like all of this could change with that but I don't think anything will change without that. >> Yeah. Yeah. Uh the other interesting thing that came up today on on the wire was uh ARC has announced that they want to launch a token. So I think in a similar vein here you want to get exposure to stable coins right you can buy Coinbase stock you can buy circle stock and then you can now buy ARC. You know obviously there's the plasmas couple other ways. Tether equity um and some other ways. But for the common folk, ARC now becomes a third asset under kind of like the Coinbase

umbrella. Do we think that this further fractures the Circle Coin ARC trade? Does it add value to it? How do you guys think about ARC's token? >> I I mean, imagine just imagine you're a massive shareholder of Circle stock and you are probably down. >> That would never be me, by the way. I mean, I'm saying imagine is >> can't imagine it. >> Uh but you know, you're probably down. Um unless you bought in >> um >> of earnings, you're down by the way.

>> Um and you you forecast out and you see that we're probably entering a bit of a rate cutting cycle, which is the main form of revenue for for the company. Uh and you see that now they are launching a token. Uh that was not I think disclosed in their wrist um disclosures or in their S1. Um I don't think it's been something that's been disclosed up until now. I don't know what the process is for disclosing exactly if they had to back then, but um you would imagine that some value would acrue to that token that should have otherwise acrewed to the equity. How do you feel? Well, this is kind of what I was getting to is is just like there's this kind of window here where teams are like, you know, MetaMask is going to launch a token and consensus is going to IPO.

>> We're all >> We're also Yeah, go ahead, Vance. >> I I think uh it's different in some ways, but I totally get your point. I think the question at the end of the day is like the shareholders are the ones that have the real legal rights, aka the ability to sue. Um, and so I think we're going to kind of feel our way through this, but it's not very clean in the same way that like Uniswap Labs versus Uniswap the token is not clean. Someone usually loses. >> Yeah, my two cents. I'll chip in. I was going to uh push back a little bit and say that there doesn't have to be value acrruel back to the token, right? Like we still live in this world where

valueless governance tokens still carry billion dollar market valuations. So shareholders can get revenue, token holders can get this piece of whatever tok token is with no value acrruel and everyone can be happy. And >> as we talked about the revenue meta t-shirts that you guys are making. >> Yeah, we are. [laughter] >> That's alpha by the way guys that >> look I I I get the perspective that you know there are still things that exist. Um I I think that that is a fleeting perspective um and a fleeting reality.

Yeah. >> Right. Ultimately there these things get more defined and they end up converging and splitting value between one another. >> Well that's the thing is it's going to fracture one way or another. I think that's kind of like the main point here from Mike. Um guys staking ETFs Ethereum Salana approved. Um do do people that you guys speak to really care about staking? Like are people really trying to get the extra yield? How do they like do you guys see real demand coming from I see Michael saying no. Vance saying yes. So, so there's difference. People that we speak to are are not caring about the extra 3% on their Ethereum. Like the we're talking about like venture investors. It's a very different landscape, but the vast majority of capital, especially the ones

that are investing in these ETFs, definitely care a ton about an extra 3% denominated in the native asset. Like that's a 3% compounding. It's like you get more Apple shares for owning Apple. Like that's great. and [laughter] >> and I I'd generally say it's a very big deal. I'd also say um if you are not Tom Lee or you are not Michael Sailor and you are running a DAT, this is a negative. This is a huge negative for you as well. >> Yeah.

>> Can you explain that? Well, there was an argument that because the staking ETFs did not have the ability to stake um that the DATs were actually a more capital efficient way of maintaining, you know, ownership in this network. Um there still is an argument that because of the rules and requirements around the liquidity that you need to be able to stake, they won't be able to fully stake their entire like ETH ETF. And and while that is still true, I would imagine that there will be some uh rules and regulations around staking. Um like right now the staking queue for for Ethereum is, you know, weeks long. Um and so for you to be able to have a massive amount of ETH staked

within the protocol, you're going to have to be able to get to liquidity over some reasonable amount of time. So they won't be able to state all of it. That is more like a nuance, I would say, less a strong argument. Um, and there will probably be new rules um to allow ETFs to have some staking um that is commensurate to the full staking rate. So, all of this is to say I'd say um you used to have this as a point of differentiation. Um if you were the number three, number four, number five DAT within a stakeable asset category, now that argument is gone. Um you have much less of a reason to exist. [snorts] >> Chad, it's been a great episode.

>> I got one one last thing for you. is the uh just on the topic of dats, the hyperlquid strategies uh deal should be closing here in this week or next week before Thanksgiving, I think. Uh we had David Sheamus come on and tell us that there was upwards of 350 to 400 million in capital that was pretty much dry powder ready to go. Just curious how you guys are thinking about hype and hyperlquid going into uh going into this deal closing. Look, I I think we're extremely excited about in general. Uh but the the other thing is I I would say um everybody thinks that there's this massive unlock happening and and there is for all intents and purposes, but I I just posed a question as to like what's their

incentive to sell? you know, if if Jeff is the one that funded all of this through the gains of the market maker, um do you think that he's going to be one who onchain is selling assets, you know, right at the unlock? Um or do you think that he's going to be holding on to this for a very long period of time and if he has the vast majority of the team's share? Um what if the, you know, unlock uh event, um as you know, cliche as it is to say this is actually a bullish unlock. >> I knew that was coming, dude. It's been a while since I said those two words, but [laughter] >> well, it becomes a supply sync instead of a new supply like uh, you know, movement because a big problem is that the FTV is so high, right? Versus the

current valuation. It kind of throws investors off. >> Last thing I'll throw at you guys, I know we're, you know, quite a bit over. Um, >> lighter raised 68 million at 1.5 bill. The the idea in the market was there's hyperlquid and there's nobody else. There's zero competition. Now it's like there's hyperlquid and then there's kind of like lighter now. And so does that open the the door to like there's hyperlquid and then there's XYZ, you know, ABC. How do you guys think about lighter, you know, mainet launch, token launch? Do you guys even give a Like where are we at?

>> Don't think about them at all. >> I I I would say the perpetual widowmaker trade is trying to be in the number two or number three of a massive category within crypto. it has largely never worked out. And I I think perpetuals and per uh markets are going to play out the same way. It's, you know, 90% value acral to the top one right now, 10% to the rest. I think that ultimately gets to 99%. So, you still got another 10x value acral to go. Um, but I I will say one thing that we are looking forward to is I I think December 2nd or December 3rd maybe the date for Fusaka.

um being able to see the upgrade for Fusaka, which should actually increase TPS on layer 2s and create the base fee um uh minimum or or threshold um for how those layer twos are paying for gas. Um I actually think that's a pretty fundamental change on the core economics of Ethereum. Lighter will actually be one of the largest burners of uh Ethereum tokens um in the process. So, not excited necessarily about lighter directly, but lighter as a L2 on top of ETH is really exciting.

>> Yeah. >> All right, Lad. Thanks for your time. >> Thanks, man. >> Great, guys. Till next time.