Crypto's $150 Trillion Opportunity

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So when you take that three trillion and you make it 150 trillion with the asset base that's sitting underneath it, I think you're going to create some very big businesses in in the process of that happening.
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But I think having access to a much higher quality or group of quality assets is really exciting.
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It's just a much higher utility, much better product market fit for the existing user base.
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I think if once you get these things unchained, uh you can do some cooler stuff with them, right?
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The upside for this while people are bullish on it is uh bigger than we're sort of like thinking about right now.
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All right, welcome back to the Delphi Hive Mind podcast.
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Unfortunately, unlike last time, this one is back to our regularly scheduled virtual programming.
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Uh, but we got some really good feedback on the in-person one.
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We're definitely looking to do that more.
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So thanks everybody for tuning in.
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If you haven't checked that episode out, definitely go and check that out uh before you even listen to this one.
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Um we've got another special episode today, and I won't give it away quite yet, you know, the reason why, but we've got a close friend of Delphi who's gonna join us in a few minutes.
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But I wanted to start off with over the last couple of weeks, you know, last time we recorded this, market was doing really well.
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We're kind of in this, not necessarily like a blow-off top phase, but the market was definitely gaining some serious momentum.
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Things have cooled off a little bit, I would say, in the last couple weeks since we last recorded.
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So I'd love to just kind of start with what's our current feel on the market?
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Are we losing momentum?
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Is this just a nothing burger and like we're gonna continue going up only through the end of the year?
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Jason, maybe I'll put you on the spot to kind of kick us off with your your high-level you know, markets thoughts.
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But uh, yeah, let's start there.
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Sure.
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Yeah.
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No, I um I'm I think everything looks pretty good, to be honest.
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Uh I think equities are just grinding higher.
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I think kind of like paying too much attention to like the Iran stuff, pretty much anything at this point has kind of turned out to be a mistake, right?
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Like markets have just chugged higher.
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And that's generally like how this stuff goes, right?
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Um, everybody freaks out for a while, market kind of shrugs it off, and then three, four, five months later, you're at all-time highs again, and that's kind of where equities are just chugging along.
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And Bitcoin looks great, right?
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Like you you continuously see good ETF flows since the you know, the treasury peasant kind of pivot a couple weeks back, or at this point, what is it like a month and a half back?
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Um, and so like I'm just like my my whole like thesis for being long risk was essentially just like I'm long risk into the midterms.
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Like I just don't see how you know an administration that kind of has made it its calling card that comes out and soothes markets or kind of you know tells markets what it wants it to think throughout the last several years is gonna not do the same thing heading into midterms right now.
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Um and that's kind of like what you've seen.
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And so I'm still like I I kind of took off a lot of my leverage um last weekend and I'm just holding spot.
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Like I just I I have no I don't see any reason to sell right now.
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I'm just kind of long into uh long the core things, right?
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Like like hype for me.
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I know a lot of you guys hold things like Zcash as well.
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Um Pump, I'm so glad I sold that shit at the lows.
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I think it's then completely just ripped.
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Uh, but I think like it's just like the cycle's kind of turning out to be it's like I think you could just hold like the core good coins and just not do much else.
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Kind of kind of a lot like 2024.
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Um I think the on-chain stuff is looking pretty bad to the point that you're making.
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Um, I think Pons and Robinhood is pretty cooked for a while.
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Um I think Stonk and that eco is pretty cooked for a while, right?
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It kind of goes back to all the stuff we were saying, right?
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Like how sustainable is like a you know, a 3% trading fee meme coin that's paired with a stock or or a major, right?
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Like at some point that game ends um when the trading activity kind of decreases, which is what you're seeing, or which is what you're seeing, you're seeing a lot of the rugs and things pop up on on on Robinhood chain and and stonk and stuff, right?
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Like it's it it's how all these on-chain games kind of end and play out, right?
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Like they start out PvE, everybody makes a bunch of money, and then it's like, oh wait, now all the PvP extractors come.
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You see it time and time again on like the pump eco, seeing it now.
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So it's just like kind of what I was expecting to happen.
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So it's kind of why I never really got involved because I didn't really want to play the you know.
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I I think I think what's interesting about this on-chain is that there it's like they're kind of just been up only and then down only, right?
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Like pawns went on this insane run where there was no entries and it went straight up to basically a billion, and now it's just down every day.
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Same with uh AI.
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Um Stonk stuff did similar.
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There's that period where literally everything in Stonk Ego, you could buy any cat on that platform and 10 extra money in like a day.
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Um, and it's just distribution everywhere.
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But like you look at hype, Zcash, and Pump, and which are those are like the core three for me now.
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I like kind of put pump back in the core three.
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I think that at this point you have to just respect pump.
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Like, I thought a few weeks ago it was like, okay, pump missed the Robin Hood thing, and then FOMO came along, and FOMO was like the hot mobile app, and then Stomp came on Solana, and it's like, wow, Pump is they missed Robin Hood, FOMO is like the new app, Stonk is now doing stuff on Solana, but then like I was looking at the metrics, and they were still their revenue, it didn't really change that much over that period, right?
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And now you see all those other things cool off, and pump is just back, looks like it's going to new all-time high soon.
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And I think that you know, if there's like one launch pad competitor to pump, that's a problem.
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I think if there's 10, it's like those are just like future features for them, right?
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Because all these all these launch pads are also doing things a little bit differently.
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Like long is doing something where they add liquidity to the coins, Stonk did like the reflection thing.
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There's these new ones called uh Hook Hooker on Robinhood and Hooked on Solana, which have hooks, and it's like where you can put all these like interesting custom rules in.
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Um, and it seems like pump is just the behemoth where this is a playbook that's not new to like crypto.
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Like, there are a lot of companies like Meta did this, right?
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Where Instagram basically just stole a lot of stuff from Snapchat.
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Like, remember when Instagram added stories and it was like, oh, they're just putting Snapchat in Instagram?
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Like, that's never gonna work.
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And then obviously you can just do things like that, right?
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So I think, yeah, pump is pretty strong, but yeah, hype pump and zcash all look very, very good to me.
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Bitcoin looks not bad.
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Um, and then there are some these like good on-chain pockets, right?
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You're seeing you're seeing a lot of good on-chain coins recently with like grass and um Ina, you know, obviously.
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Um, that Orbio one with like Venice too, right?
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Venice has been looking pretty good.
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There's a lot of strong Geo GeoNet.
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Tempest wrote about that the other day.
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A lot of people are talking about Geo these days.
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Um, it's actually interesting, Geo and Grass too, like kind of D-Penny type.
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I don't know if you grass is D pin, but it was kind of originally in that bucket.
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It's up the D pin.
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Yeah, so you're actually getting I mean, physical, I guess it's it's software, but it's using bandwidth, which has a physical-ish component I don't know.
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There's no hardware.
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Yeah, you are seeing that kind of like some D-Penny tokens actually showing that they actually did make sense.
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Um pump was so painful to me.
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I like I didn't sell the bottom, but I sold it like two cents.
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Yeah, yeah, dude.
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I wanted for like fucking dogs.
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My initial plan was I'm gonna buy this and I I wanna I wanna be out before unlocks.
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And uh so like basically heading into unlocked, I just sold it.
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You got the reverse with the reverse price actually.
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And I had sized it as well, so it was just like a very painful.
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Um, but I bought it again.
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Um but yeah, I I it's so annoying.
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I had it for like more both.
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They're analyzing more revenue than hyperliquid now, I think.
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Like they're doing like uh I think they were doing like two and a half mil a day this weekend, which is fucking and it just stayed consistent all through the bear market.
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Like, I just that whole time I was like, how is this happening?
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Like this crypto is literally dead, and these guys are making printing like a million a day on meme coins.
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Like, who is who is paying this?
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You know?
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But uh I mean somebody dude somebody is paying it.
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We need to get the the we need to get some like real trenchers on this this show one day.
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But yeah, market definitely looks good, you know.
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It's it's it's this is kind of ideally how you want it to go after a long rally where you kind of create some wall of worry and and doubt and and chop and accumulation and reason for people to kind of get short again, um, and and have this kind of grind higher.
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And I'm I'm fine with the trenches getting nuked.
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Ultimately, I don't think trenches coming back are what brings capital in, right?
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Like you're not gonna have larger players deploying size, knowing that the game they have to play is this 90-second hold for for like four to five figure size positions.
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No one's really gonna be doing that.
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And so having majors lead being a good sponge for outside money, which is ultimately kind of what you need for this market to keep going, is is I think uh is huge.
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And and you have people getting behind or just the ability to get behind a thesis with some conviction versus these kind of just pure trade opportunities that I think just end in youth and Asia roller coaster.
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So yeah, there's there's definitely market leaders and they kind of continue to look good.
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I mean, Bitcoin looks good.
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How close is Sailor to getting his STRC repegged?
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That's a pretty big one, right?
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Yeah, he's also been a non-factor.
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I think he he bought like 300 BTC last week, which is it seems like he's trying to get this to be repegged maybe before their earnings call, which is in like a month or so.
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Yeah, I don't know what OI is on STRC, but that's always that's gonna be a big hurdle for them.
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Yeah, it's good to see him not driving the market like he used to and being just less and less of a factor.
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Right.
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And I think it's uh it's a good time to, as we mentioned at the top of this, bring in our our guest of this week.
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Uh, as I mentioned, close friend of Delphi, founder of Athena, Mr.
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Guy Young.
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Guy, welcome to the show.
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Good to have you, man.
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Thanks for having me.
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So let's start here.
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Let's get you in on this round table.
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What is what is your current read on this market right now?
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Um yeah, I wouldn't uh I'm probably not the person to ask for advice in the markets, I think, every time I'm sharing opinions with you, and then uh you've been pretty good, to be honest.
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Yeah.
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In our personal chats, you've been pretty good.
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You like you you were you were bearish close to the top last year.
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You got pretty bearish.
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I think you've been, yeah, you're underrating yourself there.
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Um Yeah, I think I I was personally quite surprised by um the recovery in the market, I think, uh, you know, two, three months ago.
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I think uh in my mind I thought you always needed some sort of catalyst like we had with the ETFs at the beginning of last cycle, and I couldn't really point towards what that actually was this time, other than you know, crypto was just down so bad versus every other risk asset in the world, and it just seemed to kind of uh start to mean revert.
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Um I think Sailor in the you know middle of the year even shook me out of some of my longer-term Bitcoin bags where I kind of just looked at what was happening with stretch and uh I kind of thought that Bitcoin is actually kind of a tainted asset with him being as involved in the way that he was, and you kind of, you know, the thesis had drifted quite a bit through time where the you know MicroStrategy was a smart vehicle to give people exposure to Bitcoin with a small amount of like intelligent leverage, and then that sort of transformed into him day trading it uh at like fifty billion dollars of size, and it's just like, do I want to be long in asset that this guy is kind of day trading on leverage at that scale?
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Um so I got I actually got shaken out, I think uh Jose's overstating uh yeah, my my uh positioning like going into the whole thing.
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Um I don't spend like a ton of time now on the markets.
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I think I used to do that a little bit more last cycle and kind of just feel like I'm long enough now with what I'm doing on my day jobs that I uh if it goes up, great, but I'm not kind of spending that much time thinking about it.
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I would say I don't really have like a clear view on kind of where we go from here.
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I was quite surprised with how strong the move was and especially how much like alt's moved relative to Bitcoin.
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Uh, you know, a ton of them are up like three, five, you know, sometimes more X, and Bitcoin's only up like 40% or whatever it is in the last couple of months.
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So I wouldn't be surprised if we sort of cool off for a while.
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Yeah, I think that's a that's a good read.
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And one of the things that or themes that we've been talking a bunch about um that we've been bullish on, and I think took some of us by surprise is just how strong this, let's call it, tokenization, RWA, on-chain stock wave has really taken off, especially in the last couple months, right?
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And I know there's a good amount, this kind of overlaps with a lot of what you guys are doing, and you've got some announcements that we'll get to that will kind of work into this conversation.
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But like as a as a founder in this space, price obviously, it's hard to get away from price, right?
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Even when you're kind of heads down building.
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I'm curious just how you're viewing this whole tokenization wave, right?
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And and hopefully getting away from crypto and some of these products being very, very, let's say, cyclical with the crypto market and kind of diversifying into much larger potential revenue streams and just potential markets with, you know, this oncoming, call it tokenization wave.
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Really, really curious just to see, to hear kind of what you're seeing in your seat right now with that.
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Yes, I think um, you know, it's pretty incredible.
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I think the stuff that's actually happening is all the stuff that we're talking about, you know, two, three, four years ago in terms of like the dream scenarios of what crypto would enable and what the technology could enable.
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And then I think that's actually was one of the largest sources of kind of people's despair in this last spare cycle where I kind of felt that sentiment might have even been worse than like post-FTX.
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And I think the kind of root cause for that was actually, in some senses, you got everything that you ever asked for right, but the prices of the assets that you owned didn't reflect like your thesis being correct, i.e., like all of the adoption in stable coins, all of the growth in tokenization, fintechs plugging into DeFi, backends, all of these things we've been speaking about for four years kind of happened.
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And then the coins that you owned like didn't go up in the process of of that sort of being true.
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Uh so I think that there was like a real disconnect between, you know, the reality of like pretty amazing things getting done and then just asset prices disconnecting from that almost entirely.
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Um I think we're the most excited we've been in terms of like real businesses building real products and sort of being recognized for that now more than ever before.
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And uh yeah, I think you know, more specifically to the question that you had around tokenization, it's not like fully core to what we do as a business, so we're not like a tokenization issuer, but we obviously work with quite a few of them.
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I think Athena is like the second largest holder of RWAs within crypto uh in total.
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I do think that there is like a split in this market when we're talking about tokenized equities and then tokenized sort of fixed income or you know, savings products.
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Uh the tokenized equities I do think is quite exciting, and I think the analogue here is just thinking about, you know, what did stable coins do?
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They just kind of uh created a digital version of a dollar and really just exported that out to everyone who wasn't in the US, and that's really where I found product market fit, which was giving access to a dollar for someone who is not sitting within the US financial system.
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Like tokenized equities, I don't think that there's uh anything actually interesting from like a technology perspective that's going on.
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It's all like a regulatory arbitrage piece that is actually interesting, which is broadening access for these assets to people who don't have a brokerage sitting in the US.
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Uh so you know, there's I won't name who it is, but there's a podcast with odd odd lots with one of the large exchange owners, and they asked like a very simple question of like, explain to me why this technology actually enables something new and why this isn't just kind of like uh kind of ignoring securities laws to just uh you know sell equities to people who can't get access now.
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And he didn't have a straight answer to that question at all, which is kind of the first thing that you'd expect him to be able to answer.
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Uh so I do think that a lot of this stuff, it's less of like a tech story, it's really like crypto enabling, broader access, permissionless access for these assets, which is still a valuable thing to do, and you can build a very big business around that regulatory arbitrage.
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I think my cynicism is more just around uh I don't think there's anything like super interesting from a technology perspective that's going on there.
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Yeah.
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Yeah, I would tend to revibe.
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You're still cynical.
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Markets up, sir.
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No, but I think I I do think it's a it's a it's a good point, right?
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And and us as call it crypto optimists are obviously being very, very much in the um, this is very much in our day-to-day.
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I think one of the things that it's less on the technology side and more just on the distribution and increase in service area of high quality assets, right, that can now be traded across these on-chain rails, right?
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And I think that opens up obviously a ton of opportunities.
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We've talked a little bit about and the other guys, you guys can chime in if you have thoughts, like the experimentation that this opens up, right, where you can actually be having some of these assets on-chain.
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Like I personally don't get super excited about tokenizing NVIDIA stock, right?
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And have and maybe that's just because I sit in the US and that process is relatively easy.
00:17:45.920 --> 00:18:14.559
But I think having access to a much higher quality or group of quality assets is really exciting because then these rails don't necessarily solely depend on, you know, a handful of or a small handful of like what we consider high quality assets in crypto today or crypto native assets, or a bunch of these tokens that let's be honest, have pretty shoddy value accrual mechanisms, but we're just kind of almost trying to like hopium our way into them having value.
00:18:14.720 --> 00:18:21.039
Like this just gives a lot more volume for high-quality assets can be traded, can be used in innovative ways.
00:18:21.279 --> 00:18:25.279
I think that aspect is is exciting, or at least yeah, I would love to hear others' thoughts.
00:18:25.519 --> 00:18:32.000
I mean, if we never to perpanize NVIDIA, yeah, I was gonna say I think the perp side is is more interesting for a lot of these assets.
00:18:32.240 --> 00:18:46.079
It's just a much higher utility, much better product market fit for the existing user base, um, more volume, easier to create liquidity, especially once you get those funding rates low.
00:18:47.200 --> 00:18:50.799
Uh, which would be a nice segue into what you guys are doing.
00:18:51.039 --> 00:19:04.400
But uh I I do like, you know, if you can get them relatively low, then it becomes a a very attractive product for for the international audience versus is my hymns paired with boner and am I getting some yeah.
00:19:04.720 --> 00:19:09.680
Yeah, I mean I think if once you get these things on chain, uh you can do some cooler stuff with them, right?
00:19:09.920 --> 00:19:16.799
I mean, yeah, hymns paired with boner is maybe not the you know, maybe it's the innovation we deserve, not what we wanted, but what we deserve.
00:19:17.200 --> 00:19:20.000
But um I think there's gonna be interesting stuff.
00:19:20.079 --> 00:19:21.759
It's it's kind of the same with stable coins, right?
00:19:21.839 --> 00:19:26.640
You you could also say, and you can say that you can say this regulatory ARP stuff about a lot of crypto.
00:19:27.279 --> 00:19:29.839
Um but I yeah, I'm curious, yeah.
00:19:30.000 --> 00:19:37.039
I don't know if you want to go into the the real world asset perps thing, or maybe just like what you're bullish on right now, guy, like what you're what you're excited about.
00:19:37.359 --> 00:19:37.759
Yeah, for sure.
00:19:37.839 --> 00:19:39.119
I think um what's happening in crypto.
00:19:39.440 --> 00:19:41.599
Yeah, like I definitely agree with Jan's view.
00:19:41.680 --> 00:19:45.839
I think the stuff that's going on with derivatives around these asset assets is incredibly interesting.
00:19:45.920 --> 00:19:48.319
And actually, like we created something that was net new, right?
00:19:48.400 --> 00:19:56.400
Which is kind of moving these markets to 24-7, which actually just didn't exist at all, even 12 months ago, which is a pretty incredible thing if you think back.
00:19:56.799 --> 00:20:01.839
Uh that we pretty much had like sub 100 mil OI on any of these names like a year ago.
00:20:02.160 --> 00:20:07.759
And now TradFi is like looking at these markets and actually like using it to inform the way that they're pricing things.
00:20:07.920 --> 00:20:10.160
So uh I think that that's been incredible.
00:20:10.240 --> 00:20:18.400
Um, I do think the upside for this, while people are bullish bullish on it, is uh bigger than we're sort of like thinking about right now.
00:20:18.480 --> 00:20:31.839
I think the very high-level kind of framework that we think about this is, you know, we created a few hundred billion dollar plus businesses, just creating derivatives on a two and a half trillion dollar to three trillion dollar asset class with crypto being the underlying.
00:20:32.160 --> 00:20:40.720
So when you take that three trillion and you make it 150 trillion with the asset base that's sitting underneath it, I think you're going to create some very big businesses in in the process of that happening.
00:20:41.039 --> 00:20:54.240
Uh so yeah, I think my high-level view, and I kind of wrote about this the week that TradeXYZ came out with the first perp on Hyperliquid, I think within like 24 months, RWA perps flip, crypto perps in OI volume.
00:20:54.319 --> 00:20:55.680
I think it's already got to like 50%.
00:20:56.000 --> 00:20:59.039
You guys probably know better on hyperliquid like a couple of months ago.
00:20:59.200 --> 00:21:03.440
I think that that number like fully flips the crypto perps in the next 24 months.
00:21:03.680 --> 00:21:11.839
And um, yeah, I guess the way that we will like the piece that's exciting about that to us is uh we came out like a couple of weeks ago sort of expanding what we did.
00:21:11.920 --> 00:21:22.720
Uh the core idea obviously is expanded beyond just crypto basis and that same sort of thesis that I was describing there of sort of taking the asset base of what got us to$15 billion at the peak last year.
00:21:22.960 --> 00:21:31.599
When you move that from$3 trillion of crypto to$150 trillion of other assets, it's obviously just a really exciting sort of like expansion in time in that process.
00:21:31.839 --> 00:21:41.599
Um, I think one of the other things without trying to get like too uh like nerdy around the smaller details is also just think about like the nature of the funding rates on these assets.
00:21:41.839 --> 00:21:49.759
Where if you kind of uh look at things, it has a much more positive skew uh in terms of how uh consistently positive the funding rates on equities are versus crypto.
00:21:50.000 --> 00:21:55.599
And the intuitive way to sort of think about that is that like, you know, every three or four years crypto goes down eighty percent.
00:21:55.680 --> 00:22:02.240
And so, you know, it's pretty logical that you don't want to pay a positive interest rate to be long uh crypto at the end of that three to four year cycle.
00:22:02.480 --> 00:22:13.519
While equities have just been up into a straight line for twenty years pretty much, where it kind of at at no moment in time did it not make sense to kind of be long equities and and sort of pay for the privilege.
00:22:14.000 --> 00:22:24.319
So I think that just the nature of the underlying in terms of what is actually sitting within these products and sort of the shape of them actually lends itself better to the sort of product that we uh yeah that we sort of bring to users.
00:22:24.640 --> 00:22:30.000
In previous cycles you had every reason to kind of pull money out once you thought the cycle was done.
00:22:30.319 --> 00:22:46.160
But now with increased utility and increased uh asset exposure you can just kind of rebalance and continue to operate your day to day and and keep the money in the system which then I think makes it much easier to to redeploy when when when things are going well again.
00:22:46.400 --> 00:22:52.319
Whether it's just like a yeah mental block or or just you know the the hurdle of of kind of having to deposit again.
00:22:52.400 --> 00:22:59.200
I I think people kind of underestimate how much capital just gets stuck not coming back in as a result.
00:22:59.759 --> 00:23:16.559
Yeah I mean even like at the end of last cycle right if you remember that was like when the first T bills were being brought on chain was like 2023 and lending rates in DeFi were like a full 150 basis points below the risk-free rate and like it was literally trap capital that couldn't even get into a T-bill.
00:23:17.039 --> 00:23:22.400
Like that's how crazy the mismatch was between like trad fi rates and what was happening on chain.
00:23:22.559 --> 00:23:28.400
And now obviously that's not even that's like an afterthought completely now just in terms of the access that you have to these products sitting on chain.
00:23:28.640 --> 00:23:32.400
Where you can kind of actually see that in the stablecoin supply figures, right?
00:23:32.480 --> 00:23:48.720
They it barely kind of dipped on an aggregate basis the at the end of this cycle it kind of I think maybe came down five percent ish in total uh like total stable coins while at the end of last cycle it was down 40% because there was just a drain of capital out of the system to go chase uh risk-free rates in in TradFi.
00:23:48.960 --> 00:23:58.160
So I think that's actually a very good like indication that stable coins didn't really leave the system at the end of the cycle because there was so much more uh to sort of leave your money and and benefit from on turn.
00:23:58.240 --> 00:23:58.319
Yeah.
00:23:58.720 --> 00:24:29.279
Curious how how you think about uh interest rates within crypto um right there's there's genuine gen generally a complaint that you're not really getting paid adequate yield for the risk you're taking on um but I I think it's it's very tricky because there's so many various risks that that different yield products are exposed to and so it's it's hard to kind of view them in the same steridized way you do in in Tradfy where it's just credit generally and then obviously like duration and everything else but or like the tenor and stuff.
00:24:29.440 --> 00:24:59.039
But um you guys have have kind of gone through a bunch of stuff and I and and we've mentioned this multiple times but I think you guys have have handled and and dealt with everything really well both in terms of transparency uh immediate responsiveness um also just not actually suffering any any uh you know financial damage and it's it's kind of just kind of misunderstandings from from the market and then you know immediate clarification.
00:24:59.200 --> 00:25:08.000
So I think you guys have uh a very unique Lindy position um and and I think you know the broader uh integrations that you guys have are are further evidence of that.
00:25:08.079 --> 00:25:22.559
But yeah curious how you view the the evolution of of kind of yields across the space and whether it kind of coalesces to a handful of players or or people will kind of continue to allocate to some of these more esoteric elevated yields.
00:25:23.119 --> 00:25:37.440
Yeah so I think like since Athena kind of came to market interest rates have basically just converged across every source that you can imagine in crypto into one rate which is kind of the USD rate which I kind of view as like the reference rate now in DeFi at least.
00:25:37.920 --> 00:25:48.240
If you remember when we first came out you had like an insane disconnect between funding rates that's out within C Fi that would be paying like 30, 40, 50% and then the lending rates in DeFi were at like 10.
00:25:48.319 --> 00:25:59.759
So you could actually just borrow dollars off of Ave and put them on Binance and you'd make like a thousand basis one spread, which is obviously just an insane concept to think about now, but that was like the practical reality like even two years ago.
00:26:00.079 --> 00:26:14.640
So I think with like one kind of forcing function that Athena created was just like the convergence of all interest rates in crypto kind of came down to the same number just because you kind of provided capital into so many different pieces of the system through USD.
00:26:15.519 --> 00:26:40.799
I think one of the misunderstandings or maybe pieces that I disagree with like the simplistic analysis when people look at like RB lending rates or other rates in DeFi and then comp it to SOFA and just say like this makes no sense that you're lending to Ave at like 350 basis points when SOFA's at the same I think the piece that people misunderstand there is that like the option value of having a dollar in crypto is worth a lot when it's immediately liquid.
00:26:40.960 --> 00:26:55.759
And so your ability to pull out USDT or USDC from a DeFi app within a block and then go and do something with that dollar sometimes is incredibly valuable where it's much more valuable than uh being stuck in a T-bill that might take you a day or two to get out.
00:26:56.000 --> 00:27:13.039
And so if you think about like trading entities that need to be able to provide liquidity within CFI or even just like the, you know, every like three or four months we seem to have a uh three sigma event in crypto that you just want to have cash to be able to buy some sort of dislocation within the market and you'll make five or ten percent on the day.
00:27:13.519 --> 00:27:29.599
I think people do like understate how important having like immediate liquidity is within crypto and how much that's actually valued where I would actually take below sofa rates if I could get close to it, but then always have like on demand liquidity to be able to to go and do something with those dollars basically within the system.
00:27:29.839 --> 00:27:36.799
So I think there's one piece there that like people underestimate relative to how valuable a liquid dollar in crypto can sometimes be.
00:27:37.119 --> 00:27:57.119
And then I think the other piece is also um like yeah a lot of the capital that I think sits within DeFi is kind of trap money in Asia that can't actually go in like KYC and touch like regulated products that sit within the US and so uh lending within a DeFi application is kind of the best that they can get and so if they're getting close to SOFA that's like the only option that there is.
00:27:57.279 --> 00:28:08.559
And so yeah as it relates to some of those questions around like why do we see rates get to the levels that they are I think that there are some of these softer points that you know aren't immediately obvious when you're just comparing them to risk-free rates.
00:28:08.640 --> 00:28:39.519
Yeah or you not to totally put you on the spot but I I know you've launched the um trying to launch the equity perps with or using Binance we've had a lot of discussions on this show around obviously perps but we've got some hype longs some lighter longs what's your general take on those let's say more crypto native per platforms versus some of like the centralized exchange players and distribution can be part of this too and like how you guys are thinking about that.
00:28:39.680 --> 00:28:48.640
But more broadly like are you are you bullish on it's called the crypto native versions of this actually being able to win out over incumbents over time.
00:28:48.960 --> 00:29:01.359
Uh yeah for sure I think um you can just kind of look at that very basic I think it's the only important graph to like answer this question is just like percentage of DEX volume versus sex and it's just been like up into a straight line for the last like two to three years.
00:29:01.839 --> 00:29:22.640
I do think that that continues and that's because they kind of have uh if you can produce something with a relatively comparable UX which is where I think that they've got to you just have such an unfair advantage as a business because you're not running a full KYC compliance sort of department and then also you don't have custody costs like a centralized exchange would with uh all the security costs that comes with that.
00:29:22.799 --> 00:29:34.960
So just at like a structural level uh DEXs are just kind of in a much more powerful position from like a um you know the way that you can run your business and how efficiently you can do that versus a centralized exchange.
00:29:35.200 --> 00:29:39.599
And uh yeah you can kind of see that in the numbers in terms of dominance increasing through time.
00:29:40.160 --> 00:29:54.960
The reason that we haven't done this on-chain from like an Athena perspective is that while I'm bullish on those platforms and that trend continuing in the direction that it has, uh like our principal job is like to not lose people's money and that's the thing that I care about the most.
00:29:55.200 --> 00:30:03.599
And it's just objectively safer to do what we're doing in C Fi right now than DeFi, which is kind of maybe not what people would expect me to say.
00:30:04.000 --> 00:30:05.359
There's a few different reasons for this.
00:30:05.519 --> 00:30:13.759
So one of them is that uh on on DEXs uh there isn't really a recognition if your account is delta neutral or long.
00:30:13.920 --> 00:30:22.319
And so if you're doing this in C Fi and the exchange clicks like yes this is a delta neutral account, you get moved to the bottom of the ADL queue if something ever goes wrong.
00:30:22.480 --> 00:30:27.440
While in DeFi you're basically all tr all treated as the same account basically.
00:30:28.000 --> 00:30:31.039
Another one is also just like the aggression of the ADL mechanics.
00:30:31.200 --> 00:30:40.319
So in C Fi B2C and ETH contracts on the venues that we're on haven't actually been ADL'd since 2018 and that includes 1010 at the back end of last year.
00:30:40.559 --> 00:30:47.440
So even with what happened on 1010 there wasn't a single ADL on the venues that we were touching while HyperLid did ADL.
00:30:47.519 --> 00:30:53.839
And that's not a knock on HyperLiquid by the way it's just in the docs and that's the way that they set up their ADL and so you can choose to participate or not.
00:30:54.079 --> 00:30:57.680
It's just not set up in a way that is like favorable to the thing that we are trying to do.
00:30:58.240 --> 00:31:35.359
And then I think the final piece is also just around insurance funds which uh yeah I think people forget that like the centralized exchanges have quite literally billions of dollars sitting in like dollars not in tokens uh behind the contracts where if something ever goes wrong there's just a pool of dollars that they can dip into uh to make sure that we're whole and a lot of the DAXs have taken the decision to sort of take excess earnings to buy the token which has obviously been a great uh you know uh move to sort of get people excited about the business and for the price of the token but it also just means that you have less of a safety buffer versus someone who decides to keep that in dollars uh as a safety net behind the product.
00:31:35.599 --> 00:31:37.039
Yeah I think those are great points.
00:31:37.200 --> 00:31:43.279
And I I I think it's interesting too like this question around distribution integrations.
00:31:43.440 --> 00:31:52.799
I mean one of the big ones I think this happened after the last time we recorded right so we haven't really touched on this yet but Robinhood for example going with Bitstamp, right?
00:31:52.960 --> 00:32:01.119
Versus lighter which a lot of like the you could argue some of the price run up might have been pricing in that integration because it's such a massive distribution partner.
00:32:01.359 --> 00:32:10.079
I'm curious you other guys you can you can jump in like do we think that that's like a material change to the thesis for lighter or is it just a matter of time?
00:32:10.160 --> 00:32:13.680
It's a it's more of a when not an if question on their integration.
00:32:14.000 --> 00:32:34.400
Seems like more of a when than an if but I I think still potentially a little damaging to the thesis because I think what was assumed was that it was an absolute and and almost not exclusive but uh like the the the priority partner was was kind of I think what was assumed.
00:32:35.039 --> 00:32:42.880
Yeah it felt more of a sure shot yeah it all I feel like if that was assumed it should have traded way higher than than what it was.
00:32:42.960 --> 00:32:47.359
And it kind of traded heavy going into those news going into the big people knew.
00:32:47.759 --> 00:33:04.559
Yeah obviously did you guys hey did you guys somebody above five dollars I was like man this dude is unloading a ton of tokens man hopefully he's wrong about some some media did you guys read um so my new favorite account is definitely tulip king it makes me laugh so hard.
00:33:05.200 --> 00:33:09.119
I don't agree with everything he says but I really like like how he thinks through things.
00:33:09.359 --> 00:33:17.839
I love his energy and I love you did have you did have a good that recent uh post on or like walkthrough of like how he thinks about crypto cycles I actually thought was was pretty good.
00:33:18.079 --> 00:33:18.319
Right.
00:33:18.400 --> 00:33:31.200
So his point here is like you kind of just want to own the best of each category and because not only are they the best but they actually deserve a higher premium than everything else because of that.
00:33:31.440 --> 00:33:46.000
And so it's like you know own hype over lit own pump over all the other launch pads um own Bitcoin and Zcash over like other that one's a bit weird but his point I think in that one is Zcash.
00:33:53.519 --> 00:33:57.440
Should people just own I mean I own hype I don't own lit.
00:33:57.839 --> 00:34:06.960
Obviously lit you look at it and it seems like it has way more upside than hype but um I think it depends on how plugged in you are into the market.
00:34:07.599 --> 00:34:11.280
For a very extended period light smoked hype.
00:34:12.239 --> 00:35:28.480
So you you do have these extended periods of outperformance when the two get too dislocated or one has catalysts or or there's you know a mismatch in expectations where you know everyone thought lighter was kind of dead but in reality there was so much stake so little floating and and and it just didn't really take much to to then move it off the bottom um and and so I mean do you agree with this point that like the earnings multiple you should give a bigger multiple to the top one versus the other ones um yes I think it kind of depends on motes right earnings multiples growth and combination of growth and durability and and so you could argue the the smaller ones have more growth potential and thus maybe you know it depends on how much of a moat the the top ones have so like you have moat generally going for the top but but growth probably favoring the the smaller players so it it it really depends on their ability to kind of eat into the the TAM and and how kind of commoditized the offering is or if there's like a unique approach that a smaller one can offer that that'll allow them to capture a certain pocket of the market where if they capture even that smaller part it can lead to a lot of kind of fundamental uh results for the for the asset.
00:35:28.559 --> 00:35:31.519
And so uh I I think it it it really depends.
00:35:31.679 --> 00:35:46.320
Like you you have just periods of outperformance going back and forth and and so if you're trying to maybe do like a a cycle long set it and forget it maybe but it also I don't know I think it's team dependent right that's fair.
00:35:46.480 --> 00:36:20.800
Yeah I mean I I would say probably generally agree with with the take right I think it was pretty similar last cycle like um I don't tweet a lot but the only tweet that's ever done well was actually kind of like about this last cycle um where I was pretty much just like why is everybody fighting this whole like meme thing like the market has clearly told you that it likes memes so just like buy the couple good memes right like the obvious couple good memes and just like it is what the market is just accept it and either you know respect the pump in those assets or don't but like it's up to you.
00:36:20.880 --> 00:36:37.280
And like I think it's pretty clear this time around that like you can probably like to Jan's point right like I guess it yeah like if you just want like least amount of stress and just kind of want to chill like I think you could probably very easily get away with that strategy and and be very very happy with the outcome.
00:36:37.920 --> 00:36:46.079
Um for things like lighter like I think this whole thing like I'm kind of trying to like reevaluate it because I was like relatively bullish.
00:36:46.800 --> 00:36:50.880
And then I was kind of like thinking about this whole like Vlad stuff right Robin Hood.
00:36:51.199 --> 00:37:16.159
Like I wouldn't be so like I don't think it's an exclude it's clearly not an exclusive agreement with lighter right and everybody's kind of waking up to the fact that lighter's success at least in part depends on external parties not necessarily themselves right everybody's kind of looking at this Robin Hood distribution as like the oomph to kind of get them to the next you know next part of their their journey.
00:37:16.320 --> 00:37:38.079
And so when you kind of like rely on that or the market kind of realizes that it kind of just kind of takes your destiny out of your own hands to to a certain degree and like what does that look like if say six months from now Robinhood has integrations with both lighter and hyperliquid right like and so uh I'm just trying to reevaluate it.
00:37:38.159 --> 00:37:55.599
And obviously lighter has a lot of investors that are up a ton on Lockstart in a couple months and so that's obviously something that kind of weighs into how I want to like position with perps but like I don't know I think I like lighter I use lighter um I still own some lighter but I'm trying to kind of figure that out.
00:37:55.679 --> 00:38:01.840
Like I I I think height trades better than light or lit into year end um because of all of those things.
00:38:03.119 --> 00:38:34.960
It is quite interesting as well you seem to um kind of get away with being long beta but only like the number two basically and as you fall below two it's like a graveyard and I think there's just so many examples I don't know why it is the case where you always have a duopoly across almost every market segment in crypto except for centralized exchanges maybe is the one exception but you have like the tethering circle you got the RB Morfo you got the hyperliquid lit it always seems to be a power unisor aerodrome but then when you go beyond that uh there isn't just anything that sort of comes close.
00:38:35.119 --> 00:38:39.599
So uh don't know why why that is the case but it always seems to be could come in pairs.
00:38:39.679 --> 00:38:39.920
Yeah.
00:38:40.159 --> 00:38:41.280
Yeah I agree.
00:38:41.519 --> 00:38:48.719
Yeah I think it also depends on where you are in just the maturation cycle of each of these sectors are verticals, right?
00:38:48.800 --> 00:38:52.400
We talked about last time you know as the question around options, right?
00:38:52.480 --> 00:38:59.920
And options being one of the the last remaining let's say like frontiers or primitives that a lot of people here are bullish on.
00:39:00.159 --> 00:39:10.800
But because it's still so early and that that TAM is so big, maybe owning the top three or even top four can make sense depending on where you think because it's just too early to like call a winner.
00:39:10.880 --> 00:39:26.079
I feel like with hype and lit it's you're further along on the journey to to take let's say larger positions or have more conviction in like that duopoly doing well versus earlier stage stuff.
00:39:26.400 --> 00:39:27.599
Also to that point, right?
00:39:27.679 --> 00:40:02.800
Like in the per like if you if you uh rewind like a year there was a lot of perp decs right you had you had Aster coming out you had Pacifica you had paradex which has kind of shifted more towards the options things recently um you had a ton of these perp Dexes coming out uh and like didn't work out for most of them and so last year was perp dec summer this year's launchpad summer launch pad summer well I think the the the the thing was like with with perp decks is prior to RWA stuff coming out you were all competing it was like the ultimate race to zero.
00:40:02.880 --> 00:40:07.199
There's only so many assets that are gobbling up all the volume and you're just it's a good buffering commodity.
00:40:07.360 --> 00:40:31.920
With RWAs you can actually differentiate with you know com tech and and asset exposure and and so um and and the expansion of surface area on the RWA front makes it so that there's just like infinite obviously it it'll get saturated at some point but I don't think we're quite there yet and right just even the guys the the number the numbers the guy mentioned earlier about just the the the size of the markets relative to each other.
00:40:32.000 --> 00:40:51.920
And so there's a lot of growth there and I think that's probably why what uh what makes options even more interesting to make multiple bets and because you know one of the issues is you just you have so many different order books to make liquidity in and so it's it's really hard to be hyper competitive and and and there's just a lot of assets that that can be uh tackled here.
00:40:52.000 --> 00:41:10.159
And so uh I think the same reasons that lighter and and hyperliquid make are are able to kind of coexist and and and still gain market share the option stuff is that just an order of magnitude higher because of the just the the complexity of of market making adding liquidity and and the variety of assets that have no liquidity.
00:41:10.800 --> 00:41:22.559
Did you guys see this morning that hyperliquid got added to Bloomberg terminal like that's one of those things where it's like no other perp exchange crypto perp exchange is probably going to get that like why right Bloomberg's just going to add hype.
00:41:22.639 --> 00:41:24.800
Yeah they're just green it's WSL go hype.
00:41:24.880 --> 00:41:26.320
Maybe you could pull it up Dev.
00:41:26.800 --> 00:41:28.719
Yeah give me a snack I got to log in.
00:41:28.880 --> 00:42:31.679
Oh yeah you have an actual terminal I do it just slows my comp down oh jeez um you just pause the Bloomberg terminal for one month subscription you could buy a nice computer what a riff off that thing is hey now hey no hey now don't don't don't be done don't be dogging that's a that's a personal opinion that's not the uh opinion of the firm here but no I mean I think it's paying for good points Kevin or no no not at all I'm not paying for that myself you guys are subsidizing my Bloomberg terminal uh no I I do think it's a good point though I mean it's it's funny because like again I think guy mentioned this at the beginning two three four years ago like we're talking about a lot of this stuff eventually happening and now that it's here I do think that there's a another re-rating and for some of these absent toys that we're talking about the re-rating will come but the re-rating will not be evenly distributed.
00:42:31.760 --> 00:42:31.920
Right.
00:42:32.079 --> 00:42:39.920
And I think like it's that question around whether the dispersion that we thought would happen throughout this year, which has happened like would continue.
00:42:40.079 --> 00:42:41.679
And I definitely think it does.
00:42:41.920 --> 00:42:59.119
And it's it's but it's there's also the flip side of this where if you look on like Bloomberg TV for example, like they still list let's call it five crypto assets that now are permanently on the screen but it's like Bitcoin ETH Stoul XRP and Bitcoin Cash.
00:42:59.360 --> 00:43:04.079
So like there is still like this disconnect between yeah between that I guess.
00:43:04.239 --> 00:43:17.440
But for launch pads, I mean it's a similar type of argument like you just made right there's if this is launch pad summer pump is still like to say that pump has a Lindy effect I think is probably a little bit too early or maybe a bit of a stretch.
00:43:17.599 --> 00:43:25.280
But it is impressive how they have survived throughout like the rise of of all this competition.
00:43:25.760 --> 00:43:41.679
Yeah I don't know it's like last year they had all this competition you had like bunk fun this thing sugar uh some other things that I forget but they were all kind of doing the exact same thing as pump sugar what what what what kind of sugar are you talking about?
00:43:41.840 --> 00:43:58.320
Sugar sugar sugar light there's like a couple you own like 10% of this thing and you're trying to get some exit liquidity I never owned it I I only own pump and I just had that radium guy on my replies every day yelling at me um but only own pump.
00:43:58.719 --> 00:44:02.559
But they wrote the Same as pump last year, there's like some small differences.
00:44:02.719 --> 00:44:21.679
But I mean, I talked about this at the beginning where like now you actually do have like innovation in launch pads where people are actually doing some more interesting things, but it's like yeah, pump can kind of just wait and see like what features are worth adding, and it's pretty trivial for them to do that.
00:44:21.920 --> 00:44:24.880
Uh and they just have like so much money still.
00:44:25.199 --> 00:44:38.400
So I do think that there will be especially in like EVM land because pump is not really ventured out there, and so there's still a chance for someone to kind of dominate that, but um it's just hard.
00:44:38.480 --> 00:44:48.880
You're seeing like both Radium and Solana have you know, pump bypasses them all, they have their own AMM, and so Radium has barely been pushing stonk.
00:44:49.039 --> 00:44:52.559
Uh Meteora has working with the hook stuff.
00:44:52.800 --> 00:44:55.920
Um so you see that like competition within the eco.
00:44:56.880 --> 00:45:01.679
Uh but yeah, I don't know, and I also don't agree.
00:45:01.840 --> 00:45:05.519
Some people bring up this like whole trust thing with Pump because they don't do the airdrop.
00:45:05.599 --> 00:45:07.440
I don't I just like don't think that matters.
00:45:07.679 --> 00:45:11.199
I really don't think they ever need to do an airdrop or really should, honestly.
00:45:11.280 --> 00:45:12.559
I know people are gonna hate that.
00:45:12.719 --> 00:45:20.639
Um, I don't think they need to like rebuild trust of people they didn't get an airdrop to, like, they're kind of irrelevant in the token price performance, to be frank.
00:45:20.960 --> 00:45:23.760
Um will they do something someday?
00:45:23.840 --> 00:45:25.199
Maybe maybe we'll see.
00:45:25.280 --> 00:45:32.239
But it's like it would be much better spent just trying to incentivize something new if they really want to go down that route.
00:45:32.559 --> 00:45:37.360
So uh it's like they still have a pretty low multiple too, right?
00:45:37.519 --> 00:45:39.360
Just compared to a lot of other stuff.
00:45:39.760 --> 00:45:48.239
People still don't a lot of people just still don't want to admit that like meme coins have product market fit.
00:45:48.559 --> 00:45:51.760
Entrenching has like product market fit and it does.
00:45:52.159 --> 00:46:04.559
Um I think it's hard to to digest for most, like how this this this giga extractive short-term trading can continue to have legs when majority of people lose.
00:46:04.719 --> 00:46:14.079
It's clearly there, and I think just the the the the the issue of understanding how it can persist is is what like gives them multiples or makes them as little as they are.
00:46:14.159 --> 00:46:15.679
Even with all the other launch pads, right?
00:46:15.760 --> 00:46:16.800
They trade even more cheaply.
00:46:16.960 --> 00:46:22.320
Some of them are like you know, sub two to three X revenue type thing.
00:46:22.480 --> 00:46:30.400
Um it's just like it's a hard thesis to get behind to do some like longer-term discounting of.
00:46:31.039 --> 00:46:35.360
That's so crazy that they still that they just make a million to two million dollars a day.
00:46:35.599 --> 00:46:39.360
It's just I gotta meet these people, man.
00:46:40.239 --> 00:46:43.199
Who who is betting on pre-graduated?
00:46:43.440 --> 00:46:46.480
I'm telling you, we gotta get some actual trenchers on.
00:46:46.960 --> 00:46:48.800
We gotta get some actual trenchers on.
00:46:49.199 --> 00:46:51.280
Like the pre-graduated coins, right?
00:46:51.360 --> 00:46:52.639
Like who is betting on these?
00:46:52.960 --> 00:46:55.360
Yeah, there are people who only play the bonding curve.
00:46:55.679 --> 00:46:57.360
Who is buying this?
00:46:57.599 --> 00:47:01.119
Like their entire their entire thing is.
00:47:23.519 --> 00:47:24.719
I'm a fundamental investor.
00:47:24.960 --> 00:47:27.360
No, but isn't that like where the bulk of their revenue is made too?
00:47:28.000 --> 00:47:29.360
And because that's where the fees are the highest.
00:47:29.519 --> 00:47:29.760
Yeah, yeah.
00:47:30.480 --> 00:47:34.800
So like pump versus stonk, it's it's it is actually really good to understand like how they all make money.
00:47:34.960 --> 00:47:40.079
Like stonk makes its money off of all these transfer tax fees, right?
00:47:40.320 --> 00:47:43.599
And it actually is more beneficial for stonk.
00:47:43.760 --> 00:47:48.639
They make more money when you have like very high market cap coins and a lot of trading activity, right?
00:47:48.800 --> 00:47:54.639
Whereas pump coins getting to really high market caps isn't doesn't help them, doesn't help them as much.
00:47:54.800 --> 00:48:04.000
What helps pump is just the mass deploying and like all of these launches, and it's different like from other kind of models, right?
00:48:04.239 --> 00:48:06.400
But they're just still able to like kind of do it.
00:48:06.480 --> 00:48:09.280
It's too is that because don't they have the dex trading fees?
00:48:09.519 --> 00:48:10.000
They do.
00:48:10.239 --> 00:48:12.159
It's just so much higher on the bonding curve, though.
00:48:12.320 --> 00:48:13.840
Yeah, so much higher.
00:48:14.079 --> 00:48:15.119
Um that's crazy.
00:48:15.280 --> 00:48:23.360
So are there just like two to three big deployers that just deploy a shitload of memes on pump pre-bond, and then everybody gamble?
00:48:23.519 --> 00:48:24.800
Like what exactly are they?
00:48:24.880 --> 00:48:35.519
No, they're the top of the poop tree, and then there's like a bunch of these dudes that just straight up like bundling, and yeah, it's it's I I know a dude who does it, and and uh is that kind of what it is?
00:48:35.599 --> 00:48:37.519
It's just like oh Jesus.
00:48:37.679 --> 00:48:44.320
I gotta I gotta again get how do they trade on like photon still, or like what like where are these people trenching?
00:48:44.639 --> 00:48:49.599
Is there like a better I think if you're buying a bonding curve, you're probably on the front end.
00:48:49.679 --> 00:48:55.039
Uh well, like if they build on an Axiom last year, I don't know if people are still using those to do.
00:48:55.519 --> 00:48:58.000
No, Axiom has gone down so much with FOMO.
00:48:58.320 --> 00:49:02.559
FOMO's kind of like totally taken over a lot of Axiom users.
00:49:03.440 --> 00:49:06.639
FOMO is a good app to use, like it is.
00:49:06.719 --> 00:49:11.119
It it it can you're probably not gonna make money using it, but it is like a nice app.
00:49:11.360 --> 00:49:11.840
I agree.
00:49:11.920 --> 00:49:16.320
Um, and you get all like the uh the people just posting funny comments on the chart.
00:49:16.960 --> 00:49:21.920
Good for discovery and everything, and discovery to get dumped on, but like still discovery.
00:49:22.159 --> 00:49:24.639
Um but I don't know.
00:49:24.800 --> 00:49:26.639
I thought the app was, but it's funny, yeah.
00:49:26.719 --> 00:49:36.800
Like I created a FOMO account and did really well for like a week or two, and then luckily I was like taking profit, but um it uh yeah, it's it's tough.
00:49:36.880 --> 00:49:40.800
You see someone big buy and then you're like, oh I gotta I gotta tail them, and then that's like your buy.
00:49:41.119 --> 00:49:42.079
Oh, I got the right tail.
00:49:42.719 --> 00:49:45.920
It's like yeah.
00:49:46.480 --> 00:49:47.280
Oh man.
00:49:47.599 --> 00:49:50.719
So it's literally just going to the casino is what this is, right?
00:49:50.800 --> 00:49:53.280
It's just it's effectively just worse like what it is.
00:49:53.360 --> 00:49:53.920
That's all it is.
00:49:54.079 --> 00:49:55.280
Or it's it's just worse.
00:49:55.599 --> 00:49:58.000
It's worse, it's worse, but it's better.
00:49:58.159 --> 00:50:04.960
Like your EV is less, but you have a chance of a bigger payout than you do at the casino.
00:50:05.679 --> 00:50:11.119
There, I mean you can just bet on a number instead of red and black, and you get like you get a pretty good pay.
00:50:11.440 --> 00:50:12.000
Yeah.
00:50:13.119 --> 00:50:15.840
Um, but you're I genuinely I don't know, man.
00:50:15.920 --> 00:50:20.079
I think that there's definitely some skill entrenching.
00:50:20.400 --> 00:50:25.599
And if you're really plugged in, it is definitely way higher EV to figure out.
00:50:26.000 --> 00:50:33.599
I think the metaphor is like uh if you're counting cards in blackjack and you know the deck is heavy with tens, you can size into stuff.
00:50:33.679 --> 00:50:47.360
And so if you're in a bullish environment where just a bunch of the shitters are going up, then you play, and then once it's cooling off and the deck is full of low cards, you kind of take chips off the table.
00:50:47.760 --> 00:50:58.880
Yeah, I think that's that's definitely fair, and I think you do and you need to you need to be selling, like you should pull up, you should pull up those the pawns and how that's just dad, I just don't find this interesting at all.
00:50:58.960 --> 00:51:01.280
I don't know, like how is this sustainable?
00:51:01.440 --> 00:51:04.159
Like you just have you everyone's losing money.
00:51:04.320 --> 00:51:07.760
Um, like there's no because you you need some some PV, right?
00:51:07.840 --> 00:51:20.880
You need you need it, you need the possibility of a coin just like breaking out and getting like outside external bids, you know, for some reason, whether it's it's a store of value, there's a narrative around it, or it has cash flows or whatever.
00:51:21.039 --> 00:51:28.000
Like you can't have this this game of like eventually enough people go broke bro go broke that surely this like starts having legs.
00:51:28.320 --> 00:51:29.199
Well, ebbs and flows.
00:51:29.280 --> 00:51:44.400
I mean, I think it I think it's it like it's it's a like a centimeter deep and and many, many miles wide, where there's people trenching with like tens to hundreds of dollars and are just getting in and out with with positions that they hold for less than a minute.
00:51:44.480 --> 00:51:47.119
So it's like high school kids and all this other shit.
00:51:47.199 --> 00:51:51.840
Um one dude in your school makes some money and everyone's going nuts about it.
00:51:51.920 --> 00:51:56.400
This is the kind of the social element where you see somebody win and then everyone's like, that could be me, and then they keep playing.
00:51:56.719 --> 00:52:00.159
Honestly, that's that's the that's sustainability.
00:52:00.800 --> 00:52:07.440
Like I was talking to some family members, like some you know, younger nieces, nephews, friends that are younger and stuff.
00:52:07.599 --> 00:52:08.719
It's so prevalent.
00:52:08.880 --> 00:52:12.719
It's like kids are just ripping shit coins in class.
00:52:12.960 --> 00:52:18.159
Um probably like you know, what kids used to do go outside, sneak a snake behind the bleachers or something.
00:52:18.239 --> 00:52:21.679
Everybody's just ripping shit coins on their phone in class.
00:52:22.239 --> 00:52:24.400
I don't know, you know, it just is what it is.
00:52:24.559 --> 00:52:27.039
Um what's what's worse for your long-term health?
00:52:27.119 --> 00:52:31.280
Ripping tag or the shit coins for sure.
00:52:31.679 --> 00:52:40.400
But one thing it's like, yeah, you really make money from the true like click on these charts, Kevin, and like I'm sure they don't look too different today.
00:52:40.559 --> 00:52:43.280
But it's like these are just worsting charts, right?
00:52:43.360 --> 00:52:45.039
Like, and then go to the next one, just click down.
00:52:45.280 --> 00:52:46.960
It's like they looked exactly the same, right?
00:52:47.280 --> 00:52:48.480
That one got Trump though, right?
00:52:48.559 --> 00:52:51.599
Asn't SI the one that after he renamed it, this thing got cooked.
00:52:51.840 --> 00:52:53.920
That's so that's why it sold up.
00:52:54.320 --> 00:52:54.960
Yeah.
00:52:56.400 --> 00:52:57.519
It's no longer artificial.
00:52:58.079 --> 00:53:02.400
Even though it's it's backing a Paris NVIDIA, it's just oh my god.
00:53:03.039 --> 00:53:06.239
But yeah, I mean, we'll see how the Robin Hood stuff does.
00:53:06.400 --> 00:53:10.880
There's some more interesting parts on Robinhood that have been doing well, like Orbio's been doing well.
00:53:11.199 --> 00:53:12.320
Orbio's cool.
00:53:13.519 --> 00:53:16.880
There are a couple other things.
00:53:17.199 --> 00:53:21.920
So yeah, I'm not sure if like the launch pad stuff is gonna do it.
00:53:22.159 --> 00:53:24.239
What's that support at 10 cents, Kevin?
00:53:24.320 --> 00:53:25.760
Is that what your chart looks like?
00:53:26.800 --> 00:53:28.960
Yeah, it's it's nowhere near support.
00:53:29.039 --> 00:53:30.400
That's what the chart shows.
00:53:30.719 --> 00:53:34.559
Or is that three cents if you go down to that?
00:53:35.440 --> 00:53:36.639
There's some fibs on it.
00:53:36.719 --> 00:53:39.519
This is this is yeah, this is yeah, 15.
00:53:40.239 --> 00:53:46.639
Honestly, the this chart is kind of why I'm pretty bearish, Robinhood chain right now, at least in the short to medium term.
00:53:46.719 --> 00:53:52.800
Like it could probably it'll probably come back at some point with activity, but like um, like it's just like the wealth effect type thing, right?
00:53:52.960 --> 00:53:54.719
Robin Hood Chain didn't have a wealth effect.
00:53:55.039 --> 00:54:07.840
Pons effectively was the wealth effect, and nobody's taking profits because all of their favorite social traders are sitting on$10 million on realized PL in their you know, FOMO wallet, clearly not selling on the side or anything.
00:54:08.239 --> 00:54:20.159
Um so like if this retraces, I think a ton of the activity, a ton of the you know, quote unquote wealth effects that happened on Robinhood chain just evaporates and everybody's just gonna be butthurt for a while.
00:54:20.400 --> 00:54:25.920
Honestly, man, Solana is just I'm kind of already seeing it on the timeline that people are just capitulating, yeah.
00:54:26.000 --> 00:54:32.320
Um, and being like, we should have gone into the good alt, like redo nominated into Z Zcash or whatever.
00:54:32.880 --> 00:54:35.920
Yeah, meet a lot of the it seems like people seeing all the time.
00:54:36.079 --> 00:54:39.360
Which is the like I think that is like the the right takeaway, right?
00:54:39.440 --> 00:54:49.360
Like I think people should just like most people aren't the you know one or two percent of people who are gonna make money trading alt and you know, change their like they're not, you know, the top five percent of perp traders.
00:54:49.440 --> 00:54:58.559
They should just like listen to the market and take and just bet on the things that the market has kind of said that the market has said for years will go up, right?
00:54:58.639 --> 00:55:01.760
Like for the last two years, hype has just kind of been grinding higher.
00:55:01.920 --> 00:55:08.159
For the last years, eCash has pretty much just been grinding higher, pump more so in the last six months.
00:55:08.239 --> 00:55:12.320
But like there's things out there that like you just have to be a little bit patient on.
00:55:12.480 --> 00:55:16.239
I guess people don't want to hold like hype has only been out for 24 months, right?
00:55:16.320 --> 00:55:22.880
Not even like 24 month hold period for like TradFi is table stakes a lot of the times for things, right?
00:55:23.039 --> 00:55:28.639
And you're getting a 40x, 50x from TGE on hype 18, 19 months out.
00:55:28.719 --> 00:55:31.519
It's kind of like just have a little patience, believe in something.
00:55:31.679 --> 00:55:32.239
What happened?
00:55:32.559 --> 00:55:34.800
Yeah, what do you think of the option stuff, actually, guy?
00:55:35.360 --> 00:55:40.880
Curious if you've used any of them or like we're pretty bullish on it as a category.
00:55:41.199 --> 00:55:52.480
Yeah, I think um it I it always made sense to me that I think like perps were just a better instrument for like the simple leverage speculation versus options, and I think we could just kind of saw that in the volumes.
00:55:52.800 --> 00:55:58.239
In crypto, I think it was like 95 to 5, you know, derbit versus perps and everything else.
00:55:58.559 --> 00:56:09.119
Um it does have a place though, in the sense that like you can do some things with options that you just uh you know cannot do with perps in terms of like risk management and creating different payoff structures.
00:56:09.360 --> 00:56:11.360
Um I do I do think it has a place.
00:56:11.440 --> 00:56:19.679
I just think that the predominant user in crypto is just I want to get X along the underlying, and I think a perp is just a better way to do that.
00:56:19.920 --> 00:56:23.519
Uh but options should have a place and and can get to some scale.
00:56:23.760 --> 00:56:33.280
I think the issue is that we just never really had a good options platform until the Rive basically came around and sort of properly started to scale this year with proper order book and stuff.
00:56:33.360 --> 00:56:45.519
All the stuff that we saw last cycle was a pretty kind of mash together with kind of virtual AMM, something, you know, some sort of duct tape over the fact that it just wasn't a performance order book that was sitting in the background.
00:56:45.760 --> 00:56:47.280
And so I think they did an incredible job.
00:56:47.360 --> 00:56:51.440
I think w want to also just call out Nick, uh the founder of Derive.
00:56:51.599 --> 00:56:56.480
We uh actually kind of worked with them, I think, over a year ago uh at Athena as well.
00:56:57.039 --> 00:57:03.280
Had just seen sort of like the struggle that he went through uh chewing glass for like five to six years uh with different attempts.
00:57:03.519 --> 00:57:17.360
And it was just pretty incredible to sort of see their comeback because it was like one of those really just good stories of like a solid team, you know, honest founder that's just working for very long until they sort of see the uh you know overnight success in five years uh this year.
00:57:17.519 --> 00:57:20.800
So um it's been really cool to see see them come through this year.
00:57:21.119 --> 00:57:21.360
Yeah.
00:57:21.599 --> 00:57:23.679
Why do you think it's so much so different in TradFi?
00:57:23.920 --> 00:57:27.519
Like the options are such a big portion in in in TradFi.
00:57:27.760 --> 00:57:31.920
Is it just the use of because even in even at not even sort of institutions, right?
00:57:32.000 --> 00:57:36.239
Even on Robinhood, retail traders like love these these uh options.
00:57:36.559 --> 00:57:41.920
Uh it seems like it should be, I don't know, seems like there should be a way to make it work in crypto.
00:57:42.079 --> 00:57:44.000
The drive you like derives crushed it.
00:57:44.079 --> 00:57:45.280
Uh I tried to use it the other day.
00:57:45.360 --> 00:57:48.800
It's still pretty complicated for someone that that isn't familiar with options.
00:57:48.960 --> 00:57:49.679
But uh yeah.
00:57:49.920 --> 00:57:54.239
Yeah, I just been told that if you're trying to buy options on derive, you have to use the RFQ.
00:57:54.800 --> 00:58:07.199
Yeah, I d uh as to like w why is it so much more popular in Tribe Fi, um, you know, I just don't think retail users on Robinhood had the option to do something else other than uh trade these, like a perp wasn't sitting there and wasn't available.
00:58:07.360 --> 00:58:19.679
And I think if the two were side by side and all you wanted was just leverage on the underlying, the perp is just a much more intuitive way to do that to your comment, uh, you know, Zay, around like the ease of even understanding what you're getting into.
00:58:20.079 --> 00:58:21.920
I think at like the most simplistic level, right?
00:58:22.079 --> 00:58:31.119
It's like when you're buying an option, you're not kind of expressing a view necessarily on just the price of the underlying, you're actually pricing volatility like Greeks.
00:58:31.360 --> 00:58:37.760
Like there's a lot more that's going into that, and that's not really what a retail user is signing up for when they're just saying, I want to get X leverage long.
00:58:38.480 --> 00:58:43.039
Um I think it's just that there wasn't really actually the ability to use other instruments.
00:58:43.360 --> 00:58:44.559
And this is just what was around.
00:58:44.639 --> 00:58:58.239
And there's also just a very nice matching, which is you had like retail that wanted to use them for leverage speculation, but then there's actually a lot of institutional hedging on the other side of that, uh, which doesn't exist at the same scale within uh within crypto.
00:58:58.320 --> 00:58:58.800
Yeah.
00:58:59.119 --> 00:59:02.239
So it was a much more like two-way market there in Tradfire, I think.
00:59:02.320 --> 00:59:02.559
Yeah.
00:59:02.800 --> 00:59:09.440
And maybe uh I know today is today or yesterday is the the FINA last unlock, right?
00:59:09.599 --> 00:59:11.280
Don't which you've don't remind them, bro.
00:59:11.599 --> 00:59:12.239
Yeah.
00:59:12.960 --> 00:59:14.000
Gonna get their coins.
00:59:14.159 --> 00:59:15.039
I think they know.
00:59:15.199 --> 00:59:20.960
I think judging by the speed at which those coins move, I'm pretty sure they know.
00:59:21.199 --> 00:59:28.719
Um what what uh how does it feel, man, to finally be free of uh of of this overhang that has kind of haunted you?
00:59:28.960 --> 00:59:38.000
And have you had it are there any learnings from from going through that other than just like don't sell so many coins pre pre pre-launched?
00:59:38.320 --> 00:59:48.880
Yeah, I mean, um obviously some of that is uh inside of your control and some of it is outside of it where um uh yeah, you obviously need to fundraise if you haven't made money before starting something.
00:59:48.960 --> 00:59:54.000
But I think that was like a very harsh lesson that I learned just in terms of who you got around uh the cap table.
00:59:54.239 --> 01:00:06.800
Um so yeah, I made a ton of those kind of mistakes uh very early on, which just took a long while to course correct um on our side, but it's not the good thing is that it's not like a problem that you that is impossible to solve.
01:00:06.880 --> 01:00:09.599
It's just a painful thing that you need to solve over time.
01:00:09.840 --> 01:00:16.880
Um so yeah, I think just a lot of the pools of capital and crypto are kind of uh hedge funds like masquerading as VCs.
01:00:16.960 --> 01:00:29.440
And um, you know, I think that uh uh just being aware of the type of people that you're getting uh into bed with to work with for a multi-year sort of horizon is just something that you should be a bit more thoughtful of in the beginning.
01:00:29.599 --> 01:00:40.320
But I know, you know, a lot of people that are starting businesses for the first time or fundraising for the first time, it's just not something that you're necessarily thinking about in the very beginning when you're excited to bring out a product and that's kind of what you're most focused on.
01:00:40.400 --> 01:00:46.079
And you know, raising money is just feels like a happy thing in the beginning rather than a problem that you're gonna have to deal with uh later.
01:00:46.239 --> 01:00:49.920
So uh yeah, I'm sort of glad that we're getting towards the end of the whole thing.
01:00:50.000 --> 01:01:01.519
I think, as I said, a lot of the pieces of this were mismanaged on my side, but we've tried to course correct with some of the stuff that we did this year, and I think we just kind of try to put our hands up and acknowledge some of those mistakes.
01:01:01.679 --> 01:01:18.880
And um Yeah, some of the things we try to just address this year was kind of in in some senses, I think Athena was sort of seen as the poster child of kind of uh l low float, high FTV, VC kind of like scam, extraction scam was kind of the uh one-liners that I'll probably see the most on the timeline.
01:01:19.119 --> 01:01:28.960
And I think we just try to address a few of those head on, which was just uh buying out kind of the weakest hand of VCs, uh, you know, pretty close to the lows in the summer of this year.
01:01:29.519 --> 01:01:37.519
Uh being a lot more clear around how we sort of capture revenue and value back to the token, which is something that we was long overdue on our side to sort of do in a proper way.
01:01:38.079 --> 01:01:50.719
And then uh also just aligning the token inequity, where I think, you know, when we came out it was just a slightly different era in terms of having these uh disconnects between a foundation and like the entity that was kind of creating the IP and that kind of stuff.
01:01:50.800 --> 01:02:01.360
So I think we went one step further than most people have, which is actually kind of actually moving the IP over from the equity entity and any future sale proceeds actually being uh due to the token rather than the equity.
01:02:01.440 --> 01:02:09.679
So I think we've seen a few of these cases, right, where token project kind of gets bought out and then the team walks off with 20 mil and just kind of zeroes the token on the other side.
01:02:10.159 --> 01:02:14.320
Uh all of those kind of protections have now been taken out of the equity and given to the token.
01:02:15.039 --> 01:02:22.400
Uh so yeah, I think we try to you know address a few of the pieces that uh we'd been listening to the market in terms of what they didn't like.
01:02:23.039 --> 01:02:35.199
And uh yeah, it feels good to be able to just go focus on building product because I think I've wasted a lot of time in the last few years just trying to kind of manage this entire piece of uh things, which has been a pretty yeah uh unhelpful distraction.
01:02:35.599 --> 01:02:40.000
Do you think it would have been better if like all investors were basically just unlocked day one?
01:02:41.360 --> 01:02:43.679
Uh yeah, potentially.
01:02:43.840 --> 01:02:59.280
Um I think that there is some um there is some benefit to having like a one-year runway of not having to worry about selling at all to just kind of like grow into your valuation or go and build and try do something that can kind of justify the valuation that you have in the beginning.
01:02:59.599 --> 01:03:03.360
Uh so in some senses that like first year when you don't have to worry about this at all.
01:03:03.599 --> 01:03:10.000
It's kind of the moment that you can spend the most time on actually growing into uh you know people's expect expectations of you.
01:03:10.239 --> 01:03:17.440
But I think on that first unlock after the first 12 months, uh it is probably better to just find like true price discovery for investors.
01:03:17.519 --> 01:03:19.840
I don't think that's the right thing to do for the team, by the way.
01:03:19.920 --> 01:03:25.679
You obviously just need to keep the team locked up and incentivized to continue building this over five to ten years.
01:03:25.920 --> 01:03:31.599
But like the whole the whole investor thing is just like if they want to sell, you're kind of always fighting gravity, right?
01:03:31.679 --> 01:03:35.119
Which is like if you're trying to delay delay these things and kick the can down the road.
01:03:35.360 --> 01:03:43.760
It's just uh yeah, you're just fighting gravity, and then the quicker that you can get them out and uh you know get new supporters on, it's uh actually just the better for you, I think.
01:03:43.840 --> 01:03:44.000
Yeah.
01:03:44.239 --> 01:03:58.159
I kind of feel like a lot of projects that have this long vesting, I actually think we'll see a lot just um unlock everybody at once very early, um, over the next year or two.
01:03:58.400 --> 01:04:16.159
And I don't know if I'll be like proven right on that or not, but for instance, like Mana's a good example, like I'm an angel as a disclosure, but it's like, wouldn't it just be better if like everyone it's an L1, like you just unlock the investors right after a year instead of just having this drip for like four years?
01:04:16.400 --> 01:04:19.280
Like the drip, I just feel like the drip is the worst part.
01:04:19.360 --> 01:04:24.159
You'd rather just have the big event and then let whatever happens happen.
01:04:24.480 --> 01:04:28.639
Um, because the drip is also just a psychological thing.
01:04:28.960 --> 01:04:31.199
I'm not selling I'm not selling Mana here, man.
01:04:31.360 --> 01:04:36.960
I think I think it has a I think Mana legitimately has a shot still to be one of the main EVM chains.
01:04:37.119 --> 01:04:40.559
I'm not like a big fan of L2s, I just think they're just I don't know, man.
01:04:40.639 --> 01:04:47.679
Like Solana is I just find Solana to be such a better complete blockchain ecosystem than all these L2s.
01:04:48.079 --> 01:04:51.440
Um I just feel like who who who still cares about blockchains though?
01:04:51.599 --> 01:04:55.440
But like L1s, I think builders I think feel like it's it's it's over.
01:04:56.079 --> 01:04:57.440
It was over like three years ago.
01:04:57.519 --> 01:04:57.920
I don't know.
01:04:58.000 --> 01:04:58.320
I don't know.
01:04:58.800 --> 01:05:00.400
Do we still care about blockchains?
01:05:00.639 --> 01:05:02.639
I mean, people who are building on them care.
01:05:03.440 --> 01:05:10.400
On the the unlocked thing, though, I think if you raise knowing that you're gonna be unlocked day one, you could probably get higher vows too.
01:05:11.119 --> 01:05:20.639
So like the worst of both is if you raise with a lockup because people demand a discount and then unlock it later in terms of like raising most capital at the at the most efficient price.
01:05:20.800 --> 01:05:25.039
But if you say day one you're unlocked, I think there's the propensity to spend that.
01:05:25.679 --> 01:05:30.239
Some of these are down 90% from their raise valve, and so it's kind of like that's a skill issue.
01:05:30.400 --> 01:05:32.079
Maybe just like get it over with.
01:05:32.400 --> 01:05:34.639
Yeah, I think that there's a lot of projects.
01:05:34.880 --> 01:05:35.519
Sorry, go ahead.
01:05:35.760 --> 01:05:36.960
No, sorry, I didn't mean to cut you off.
01:05:37.039 --> 01:05:59.760
I was just gonna say um, you know, a slightly unspoken thing as well, which is like uh yeah, people probably don't want to talk about it, but it's also like you uh it is very dependent as well where you think you are in the sort of maturity of your own product or like finding PMF, where you know us doing it this summer was kind of a bit of a fuck you, right, to the rest of the market, which is like if you guys want to get out, then get out, which is going.
01:06:00.159 --> 01:06:04.239
And continue building and we have sort of confidence in ourselves that we don't care if you dump everything now.
01:06:04.320 --> 01:06:06.800
And that was kind of the message that I was sending to them.
01:06:07.039 --> 01:06:24.880
But I think other, you know, if you don't have the confidence in your own product, it is helpful for you to actually like find PMF if you have a big FTV, which is something that people don't talk about much, which is like if you have a big FTV, you attract more talent to your company, you are able to strike better commercial deals with distribution partners, etc.
01:06:25.039 --> 01:06:25.199
etc.
01:06:25.440 --> 01:06:36.960
You just have a bigger, you know, even if the number is somewhat fake as you're sort of like growing to that FTV, the practical reality is it actually does allow you to get closer to PMF uh when uh that is the case.
01:06:37.039 --> 01:06:47.760
And so I think there is a bit of nuance there, which is like if you have the confidence that you don't need some of those more gimmicky pieces around having a large valuation that you know everyone doesn't really think is real.
01:06:48.000 --> 01:06:57.440
Um you know, if you don't think that that is important, then yeah, unlock everyone, but it does sometimes actually help you kind of stop pretending and grow into the real thing uh when you do have that.
01:06:57.519 --> 01:06:57.679
Yeah.
01:06:58.239 --> 01:07:01.840
Yeah, I just wonder what kind of founders are gonna want to do go through this.
01:07:02.239 --> 01:07:09.039
Like that's my kind of like sort of bear case for for tokens in a sense, is just like you can do equity rounds, right?
01:07:09.199 --> 01:07:16.159
And it's in a sense, it's the best high FDV low float scam, especially in a bull market, right?
01:07:16.239 --> 01:07:18.719
In a in a like uh private markets bull market.
01:07:19.039 --> 01:07:25.840
You can just have you literally get priced by like two or three investors, and then that's your mark for for all your employees and stuff like that.
01:07:26.239 --> 01:07:29.599
Generally, there's enough liquidity to take secondary if you're hot right now.
01:07:30.000 --> 01:07:38.639
Um so like what's the advantage of going through this gauntlet of public token and and retards on the timeline, you know, uh sending shit to you.
01:07:38.719 --> 01:07:43.519
And yeah, I think if the if you need a token for incentives, that that's one.
01:07:43.679 --> 01:07:44.960
You can't you can't do that with equity.
01:07:45.519 --> 01:07:47.360
And then also if how acquirable your business is.
01:07:49.679 --> 01:07:52.000
And then how acquirable your business is.
01:07:52.239 --> 01:07:57.360
I think if doing that with equity would be such a nightmare, man, like it's uh I I don't I don't think that it will be.
01:07:57.440 --> 01:08:03.519
But um and then yeah, the your actual long-term exit path is are you acquirable?
01:08:03.599 --> 01:08:09.920
Is this gonna go public or is this just gonna be a standalone business that may be best monetized through a token?
01:08:10.239 --> 01:08:11.280
Yeah, what do you think, guy?
01:08:11.360 --> 01:08:12.400
You've you've kind of been through it.
01:08:12.480 --> 01:08:15.760
Maybe you probably get to get founders asking you for advice on it.
01:08:16.159 --> 01:08:21.039
Yeah, I I definitely don't um regret doing that or going down that path in general.
01:08:21.119 --> 01:08:26.640
I would just say like sometimes the nature of what you're building isn't rewarded when you're doing it as a token.
01:08:26.800 --> 01:08:44.720
So if it's like a almost casino type business, you know, the ones that trade at like 2x revenue or whatever it is and they print a ton of cash, you I think you'd actually be worse off financially kind of trying to put that cash flow into a token to appease holders rather than just kind of monetizing a dividend basically with the business that you've created.
01:08:44.880 --> 01:08:50.800
So I think there are just some types of businesses that people look at and just say, I'm gonna ascribe basically no multiple to it at all.
01:08:50.960 --> 01:09:02.319
And so if you're gonna just be shoveling all the cash to kind of make token holders happy into something that are not valuing at a high multiple, that's probably the uh one one time that it really doesn't make much sense at all.
01:09:02.560 --> 01:09:08.079
Uh but I do agree, like the whole kind of calculus has changed massively over the last three to four years, right?
01:09:08.159 --> 01:09:22.720
Like people were rushing into tokens because of the froth that kind of existed around them, and then last year we were trying to take tokens and put them into equity and sort of sell them as debts in the opposite direction when uh equity markets were more frothy, and so you've almost seen an invert, right?
01:09:22.800 --> 01:09:27.680
Which is like uh crypto lost its froth while equities had all of that last year.
01:09:27.920 --> 01:09:35.279
Um and yeah, I uh but I I definitely don't regret like the broad sort of decision to go down that path.
01:09:35.439 --> 01:09:36.079
Yeah.
01:09:36.479 --> 01:09:37.279
Yeah, 100%.
01:09:37.760 --> 01:09:49.359
I think one last final question we had that definitely want to get your take on is I think at the beginning of the year we all expected stablecoin supply to be considerably higher than it is today.
01:09:49.439 --> 01:09:51.840
It seems like it's plateaued a little bit.
01:09:52.000 --> 01:09:58.960
Um, I think some of our predictions were 500 million, maybe even you know, a billion by the or a trillion by the end of the year.
01:09:59.439 --> 01:10:06.399
Do you have any thoughts on why that is or why we've seen this stagnate and what kind of restarts stable coin supply growth?
01:10:06.800 --> 01:10:16.000
Yeah, I think um, you know, it is one of the examples of like a non-speculative use case that kind of found proper adoption and product market fit outside of crypto.
01:10:16.159 --> 01:10:22.880
But I think that that one liner that I just gave you there also misses some of the nuances, which is it is still driven by speculation.
01:10:23.039 --> 01:10:27.199
Uh uh, the majority of like the sharp growth that you see on stablecoin.
01:10:27.279 --> 01:10:32.239
So if you just chart like Bitcoin price versus stablecoin growth, it's actually pretty correlated.
01:10:32.319 --> 01:10:39.199
Like when Bitcoin went down in 2022, people in Argentina weren't waking up and thinking that this wasn't a useful piece of technology to them anymore.
01:10:39.439 --> 01:10:47.439
And the supply shrank, it's because like crypto imploded, there was no basis, there was no nothing interesting to do in terms of like generating yield or return.
01:10:47.520 --> 01:10:49.359
And so the the supply shrank 40%.
01:10:49.760 --> 01:10:56.000
And then the sharpest sharpest periods of growth, right, when Trump was coming in, ETFs were being announced, etc.
01:10:56.239 --> 01:10:56.479
etc.
01:10:56.960 --> 01:11:00.239
Stablecoins are going like ballistic, adding one to two bill a week.
01:11:00.319 --> 01:11:03.520
It's because it was just chasing like the returns within crypto as that was happening.
01:11:03.680 --> 01:11:20.560
So uh I do think the trend is up and to the right, and it has like become less reliant on crypto speculation, but like still the biggest demand driver for like the biggest changes or rate of change that you see within stable coins is still related to I want to get dollars into crypto if it's going up and I want to pull out dollars when it's going down.
01:11:20.640 --> 01:11:21.279
Yeah.
01:11:22.000 --> 01:11:22.319
Yeah.
01:11:22.479 --> 01:11:24.239
No, I think it's a I think it's a really good take.
01:11:24.319 --> 01:11:25.600
Um we'll see how it plays out, right?
01:11:25.680 --> 01:11:32.239
Maybe we'll have you we'll have you back on uh in a few months or something and we can compare notes and and see if a lot of these things actually played out.
01:11:32.560 --> 01:11:34.079
I think that's a good place to end it.
01:11:34.239 --> 01:11:35.840
Um big shout out to you guy.
01:11:36.000 --> 01:11:39.680
Really appreciate you hopping on and joining, like I mentioned, been a close friend of Delphi for a while.
01:11:39.920 --> 01:11:41.520
We've been wanting to get you on the show for a bit.
01:11:41.600 --> 01:11:44.319
So appreciate you you hopping on and sharing your takes.
01:11:44.560 --> 01:11:45.600
Yeah, thank you guys.
01:11:45.840 --> 01:11:46.560
Appreciate that.