Ai16z Agents, Raydium Is A Cash Machine, We Love and Hate Solana| Analyst Round Table

Transcript

this is cash flow operating cash flow for the business right so if you really want to valuate on cash flow the average S&P 500 company is probably like 30 something and you know radium now is probably like around 10 because it's the same thing as earnings cash flow earnings the same thing so I mean it's doubled in price but it's you know it's still attractive it's still the number one decks and it's not reliant on Meme coins for volume that you know people are seeing the kind of revenues and earnings that radium are making and they want to tap into some of that so there there is competition creeping up right now but for now it's the market nothing said on zerox Research is a recommendation to buy or sell

Securities or tokens this podcast is for informational purposes only and any views expressed by anyone on the show are solely our opinions not Financial advice bacho Ryan and our guests May hold positions in the company's funds or projects discussed what's up guys welcome back to another episode of zerox research today I'm joined by Mark and Ryan from The Block Works research team how you guys doing all great Bitcoin hitting above 72 so couldn't be happier right now hopefully when the Pod goes live it will be at 74 75k what about you Ryan you've been bearish this whole way up uh I haven't been bearish this whole

way up I am always short-term bearish and long-term bullish so AB very good um so apart from Bitcoin doing very very well we have a few interesting things that have happened over the past week week and a half I think the big one is well like for the past two weeks that have been AI tokens um so there's the interesting ones which I the ones that I find more interesting which are like Dao AI tokens which I'm going to get into but there's also regular AI tokens such as goat which which is based off goaty which is something that I can't talk about on the podcast but if you're interested in the lore you can just search it up goaty

um and everything else just seems to have died out but goat got listed and it's done quite well Mark did you want to say something I was just goingon to say you could not search it up as well you don't you don't have to yeah potentially don't search it up every pod that I've listened to warns the viewers not to search it and you're going the PR opposite direction oh well I think people should find out what they're buying and why they're buying it if they're really interested in the token um got list got listed on a bunch of exchanges I think it's like 700 Mar either way that's not the interesting what I've been finding more and more interesting is um the AI 16z fund which was launched on wait up I have this all on my little

presentation which I'm going to put up on the screen right now ai 16z is the first aivc fund fully managed by Mark AI Dron and Dron with recommendations from members of The Da so this is uh this was created through dow. fund this is not Financial advice by the way don't buy this so I you can if you want to but the gist is that it was a AI character um Creator on Twitter and supposedly likely not but manages this fund and what it invests in I um maybe I I'll stop there and I'll let you guys tell me about what you think about this thing because I I've been like there's a few takes on this one is

the very cynical short-term bearish take that's oh I don't really like find these like these are clearly fake and I don't really find them very interesting and then there's the optimistic long-term bullish take which is uh this is like a new paradigm where we're actually seeing AI interplay with crypto it wasn't a joke the whole time AI is actually like interested in this stuff or AI has to be interested in this stuff what do we think yeah I think um I I can start by saying um that I was totally incorrect about AI agents in crypto I thought that it was like a plus 12 months thing I was very wrong been wrong with my timing on a lot of AI stuff just as far as like thinking about when products will launch

and like you know the the Cadence of product Innovation um but like they're clearly here to some degree we can call it like semi-autonomous um and I think it's really interesting and I think that um you know I think we're on a precipice of like a new um new stage in the meme coin cycle where I mean look if you go back to like last October like meme coins were hard to launch um then like deck screener groom prominence you know gecko terminal groom prominence then you got curation and Discovery um then pump fun fund launched and um it became you know it lowered the barriers to um you know launching new coins and now you're seeing these um kind of like AI

meme coin Dows emerge where you're turning these meme coins from like static memes to like these Dynamic interactive games where um you know imagine if Doge was Dynamic interactive when you know Elon started pumping it and like the Doge account could like respond back in some like unique and way like I think I think it really takes the potential for virality to another level and it makes the game more fun so you know I think we've entered a new era in the mem coin in the meme coin thing and it's and it's driven by Ai and I don't think anyone predicted that which is pretty cool yeah definitely agreed um I mean I thought I thought AI was going to

come for maybe some of the other jobs first but looks like Traders is first on its list um I mean more power to it it but I think I like the Dows I like the Dows concept um you know you you're tokenizing uh semi investment fund and basically the entire prospectus is codified right and so you can like you know it's it has one year and then the token the net asset value the funds of the Dow automatically return to investors and you know if it it has one week to do fundraising and all of this is just codified there's no lawyers involved so it really lowers the barrier entry which we love and I guess AI loves as well and you know I'm you know you're

combining AI memes crypto so the potential for virality is really there and I'm I'm I'm looking to the next stage of this where these like Dows start to invest in the other Dows the other tokenized Dows so it's Dows of dows like funds of funds right so I mean it's only a matter of time right um but I I think it's an interesting concept and you know I I I like that it's it's here now for the memes but it is really something that could be used outside of that as well um just like shortterm funds and hopefully maybe this kind of attention leads to something a little bit more trafi productive like in the

future you know so shortterm bullish long-term bullish that's fair I um actually Mark I'm glad you brought up thous um because I feel like I didn't do that enough justice so like you mentioned they have one week to fund raise um and soul and once the fund raise is over the da can invest those tokens and then it has a it has one year to um return the fund back to it doesn't have to return the fund but it has to return the funds to investors like you said I think this is pretty cool as well we've had a few attempts of this I don't know if you guys know sdfx it's actually like murad's you know must up morat his old protocol it was kind of like but it

wasn't a year it was like per trade so you could invest in somebody trade I could say I'm gonna go long Solana right now and Mark you could chuck money at me Ryan you could chuck money at me and then that's like my Vault that I manag this is like you said a new thing where it's like I'm not sure how useful it will be I typically find in crypto that people have quite High sophistication or like they think they have high sophistication so they want to manage their own money like why invest in a DA when you could like you think you have the right calls you don't think like some random Dow has it um which I think is like has been the case for these Vault

style products or fun style products on the other hand um like you said it's easy to Rally around the Dow and like if AI can do it I also think that's pretty cool to give like AI access to funds you know it's going to lose it like but it's at least a valid attempt at trying out something new at least you're losing it in a fun way um but I kind of hoped and maybe there's a next iteration where they shorten the lock the um Locker period from like I mean one year in crypto like who knows what's going to happen you know if they could have maybe different tears with a like three months one month I think that would be interesting as well I mean we're going more and more down the DJ curve but I

mean it's permissionless Finance that's why we're here right so I'd like to see that personally yeah completely agree and Ryan on your point of like expecting AI agents to do well later on I completely agree I think in my head when I wrote Because I wrote about parallel coloni and wayfinder a while back maybe like four months back and in my head I I thought like this will be ready second half of 2025 realistically um but increasingly I think and this is one of my favorite things about memec coins like apart from the financial n stuff that a lot of people like to parir it I do think that Financial incentives and that like Risk taking really makes people work hard for their bags and work hard to

like find a new like devs need to work hard to make money again it's not like you can't just launch a third four reaking protocol or an L2 like it we saw this with pump. fun and with friend Tech and there's something Bergie also mentioned on the Pod it's like there's money out there for you as a Dev to make money um there's enough money out there if you can build something cool related to mem coins for you like as a DE to make money and I think these kinds of products are kind of the result like pump. fund would it did well so people see that it did well and they want to launch the newx pump. fund which is d. fund maybe maybe not but like we're constantly getting this reiteration and I think that's going to I'm not sure if we can call

these things AI agents but I do think that the AI agent to mcoin um Interlink has led to more and more financial Innovation to the point that like whatever we're thinking right now wayfinder maybe not in six months but in two months for mem coins just because the team realizes that there's a lot of money out there that wants to use this thing and they just launched it yeah pump fund was was very important in the um signaling for potential of um for for potential profits for new Dev tenter the space for sure um it's a great examp examp Le 150 million in what less than 12 months um it's you know it's fantastic um and you know we have

what does the Electric Capital report say we have like 26,000 Builders um numbers like that get out and they Peak Interest and um it helps that these things are permissionless and it's easier to spend new things up it's G to be exciting to see any other AI agent takes or should we move on I think that there's the potential like with the um with these decentralized GPU networks or distributed Compu networks that we have in crypto um we wrote a report on them about seven or eight months ago and what we did was instead of like focusing on like the cost advantage that we had we theorized about some like some natural first

customers um and you know one obvious one is just startups who don't have existing Cloud relationships that are cost sensitive um the other the number two like Highest Potential first customer was um like the crypto Natives and so far we really haven't had a reason for crypto native firms to use these decentralized GPU networks um I think you start to see people test these things out now if you're running a if you're running a Twitter AI agent that interacts with some AI Dow um you might want to as a fun experiment or to create confidence in the market prove

that your inference is happening on some decentralized Network right there's been questions about how decentralized these things actually are I think there's been some challenges around or or some rumors about um these Dows front running some of the Investments that they've made or some of the ones that were suggested by the community so to kind of like prove that decentralized interest I think um you might see like a short-term bump in revenue for these things as devs experiment with decentralized inference in the context of these AI Dows and these um Twitter AI agents so the obvious names there are uh IO render acos um kusco um there you know there's a

handful of of projects there that makes sense one thing I I've been thinking about is stuff like virtuals that um or really any other like AI agent protocol that lets you launch AI agents um for characters so I I mentioned this today on call as well I think there's going to be a market for it's kind of a sad thing to talk about but I'm going to talk about there's going to be a market for like less um regulated AI chat Bots and AI Bots and that's I think that's a pretty natural fit for crypto even though I don't like it when these things are natural but permissionless Finance but it's also like permissionless you can do whatever the hell you want kind of if it's decentralized or at least that's what

we've convinced ourselves um so I can see that being a thing I also think in general AI agents aren't going to be what we T them to be which is um they're just going to be using crypto money all along I think that's kind of cope I do like the mem coin AI agent think but I think it'll be a fad I'm kind of excited for AI agents to do stuff for me on chain I would love one that can just like Auto compound for me stuff that I have to manually compound into like if I'm farming something cuz I hate doing those interactions and I would much rather for agents to do that and I think that's probably a bit Niche just like crypto very crypto focused but I could

see that being the thing with G you Marketplace and offf I have no hot takes I think you're right I think those are going to probably struggle to find um demand for some time still I just I don't like like I was wrong as well I thought too was going to be the AI meme coin like the BTC of AI it's it's always better to just go if you're going to go left curve to go as left curve as possible like buy the AI meme or whatever don't buy the narrative leader or whatever you want to call it yeah it's certainly The Meta the cycle I want to go back though to where you said of like launching these um agents with different personalities I should think

that there's like there's a big barrier to entry there if you look at this goat meme it was fine-tuned by a professional on very esoteric data sets and the reason that it's viral is because it has very interesting colorful replies that are not off the shelf from Claude and the chat GB3 or chat gbt uh 3 and4 apis right this is like a very Niche data set that was used to fine-tune this thing so like what I'm excited about like on the Venture side is like click to launch AI agents with these very Niche

personalities and to do it right you actually have to curate some really interesting data sets it's much harder than a pump fun there's a big barrier to entry there especially if you're going to have like some system scrape the relevant data for you to then fine-tune that agent right like you need some real AI chops to um to build a system like that so the barrier to entry is going to be a little bit higher the friction to launching these AI agents with these um unique personalities is going to be challenging but I think I mean I take the other side I think that this AI agent meme coin thing is not a I I think

I think it's likely more likely than not that it's here to stay I don't think it's going to be a fat at all it's um in the history of the internet we went from uh text to image to video content has gotten more and more immersive and the trend there for Content the effect of that Trend becoming more immersive is that the interactions and like time spent in these systems by consumers by retail is longer and stronger right the penetration is deeper so now that memes are becoming um much more interactive um I think the same trend is going to I think it's going to exhibit the same Trend that um these things are

going to be much stickier than the prior generation of of meme coins but yeah but on that note the we've gone from text to image to video and then now to kind of value and kind of what Bach was saying earlier like don't we assume that these AI Adan or whatever however you want to describe them are going to use blockchain rails it's I mean it's like the least barrier to entry for them it's there's there's no API or pay walls needed and it's less fees I mean we're even seeing like you know fintech behemoths like stripe you know with that with their recent acquisition their 1.1 billion acquisition of of bridge which is the I think the largest crypto

acquisition ever like we're seeing these companies lean heavily into you know using crypto and specifically stable coins as payment rails and I just I feel like you know that's going to be the Evolution for maybe larger processing like um remittances and stuff but then also for for AI agents but I don't know if you'll if you disagree with that but I just see that as the next Evolution I think that's a good point I think my gut reaction has always been like institutions aren't going to let us take that um I just feel like AI agents if we think it's going to be as big as like whatever we think it is then it would make no sense for or um non- crypto rails to give that up you know what I mean

because you're talking about potentially millions and millions and millions of dollars in fees um for basically something that you don't have to provide any customer service to like this thing is just going to transact and transact there's no it's not like a human where you have to deal with it it's just a bot that is giving you free money constantly I I wouldn't give it up I don't know if and I get what you mean though it makes sense like crypto is the easiest way to enter this I just think they'll make it easy enough that they'll capture a percent of it instead of giving it up yeah I think where we're getting at here is like this this common argument that like oh like AI agents need crypto rails like I don't buy that at all um stripe

works fine there's huge network network effects there um all the money is over there right if you're going to make an AI agent for some non non web3 use case like you're going to plug it into stripe let people like you know let it do things on Shopify with dollars there's no reason that it needs to be on crypto rails um so that's kind of that's kind of my that's kind of my point in saying like you will just use a stripe you will use whichever intermediate platform that makes the PSP service seamless right and then if stripe just happens to use Financial rails like a Solana in the back hand just because it's maybe you know faster settlement times and quicker and cheaper then they will use that and you're deploying your agent via what you

think is web to and you have no idea that the rails in the back are you know stable coins and so that's kind of where I was getting at not not not that necessarily we who are used to using this stuff directly on chain will be the prime Marketplace for these things yeah when do you think that that happens I think that that's so far away Ryan you can't keep saying I think that's so far away and then come back in three months and be like oh actually I was wrong guys it was not that far away yeah I don't know it's um there's not a lot of evidence of like institutional adoption of stable coins picking up in that way um maybe with some regular may like all crypto often like references like Network effects as a

reason why something is sticky or why it's hard to compete with something or why crypto will grow and like why do crypto folks always forget about like the network of effects of like the traditional Financial system like it's really it's a pain in the ass to move like your custodian it's a pain in the ass to implement some like new software when the like the take from something like the you know the the cost associated with the traditional Financial system like they're not like an insurmountable cost for trfi institutions like it's working fine no I I I agree with that but I think maybe maybe sooner than you think and you did

mention maybe with regulations and then we had Micah pass this year and summer in in Europe and you know institutions don't need to adjust until I think I think December 31st is the deadline so we we have stable coin regulations there and then you know we have some drafts in the US of various stable coin bills which if any regulation is going to pass that's going to be the first one and I am I'm again predicting next year for that so and the fact that stripe which is you know 20% growth per year and you know it makes costs cheaper on the on the B2B side I think the fact that they're putting such a large bet in into this backend

infrastructure and the fact that their fees are a little bit lower in it kind of like it's just it's setting up the um setting up the play field I think that's fair I um I want to touch back on something you mentioned Ryan which was about training these models on data sets I um it's not a great segue but grass launched yesterday um and their whole thing is data sets they scrape the Internet by using our residential proxies um our unused band with I had Dre on the podcast a few months back if my listeners don't know what grass does you guys can check that out but Ryan I I want to talk you talk with you through this in my mind I think this

captures something that we haven't seen in um crypto x aai yet like we haven't seen a lot of data focused protocols um I think this is the only one really and I hear sometimes that people say we're running out of good data and we don't have a lot of data um and the data that we do have is typically uh owned by centralized parties who don't want to give it out and I mean this is pretty clear now you if anybody wants to use the Twitter API it's thousands of dollars um Ryan do you think there's actually I guess value in this and like how do you would you approach this as a like thinking for this the grass example

specifically it doesn't it doesn't have to be grass I don't want to talk too much about like data D price and yeah both both are good I think I I don't like data DS the only exact like the only experiences that I've had have been bad so maybe that's why I don't want to talk about data but I'm happy to talk about both of them and how you see the market shaping out because to me it's very I think it's I think it'll be lucrative just based on like what I've seen and I like the way that grass is approaching it um I typically think data that like dowo structures are inefficient um unless it's run by people who really know their I think in general like anytime you try to do some form of dazation around the product it

just goes to there's never anything getting done but what do you think yeah I think that there are two flavors of data projects potentially in crypto very broadly one of them is like very much being built today the other is like TBD but I think has higher potential the first flavor is just like data Dows like incentivizing the creation and maintenance of some new and ex some new and unique data set so I think that grass fits that mold I think that these wearables in crypto that are hitting the market fit that

mold um there are some like Asset Management based ones that like will scrape your data and use it to like trade in financial markets if it's e-commerce data um those all fit that mold and I think that they're definitely useful especially in the healthcare space uh in the United States uh electronic Healthcare records are like actually very rare in this country um few countries have very good data sets like Israel being one of them so you're you have this very obvious moment in AI where um you know we're we're solving major problems just having these models churn and churn and churn and figure out the problems on their own essentially um

but we don't have great health like data and Healthcare to do that I think that's some incentivized like crypto thing to have people contribute their data to a DA via some wearable or you know or or another means is like probably a useful thing and like and again grass fits in that category where they're getting a unique data set that's free of data poisoning um to ensure like the proper training of these models like yeah makes a lot of sense on on the other side there's another flavor which is synthetic data um I don't think that there's much incremental data like the data that we've used to train these AI mod models like just like from a rounding perspective like we've used it all so what's next um is uh synthetic

data and I think these compute D pins are uniquely positioned to generate synthetic data uh because they amass a lot of consumer hard Hardware that's cheaper to run and um it's not a latency sensitive business so when you have a latency sensitive business like you know the consumer has to click the button they have to get the answer it's not really true with the um compute or sorry with with synthetic data generation you just need to pump it out via inference so I think that you know the compute Deens are pretty well positioned to generate that type that type of data into some Dow structure to then like sell to like an LOL like a foundation or Frontier um model LOL company

um there's I and and the the prices that they can charge are massive right like if you if you know what a hedge fund pays for like unique data sets you know they'll pay the tens of millions of dollars like these things can be really profitable um if they if they um if they do their BD right they build the right and they build the right product hey guys welcome back to another million snippet today I'm joined by Miguel uh thanks for joining us Miguel thank you bacho it's great to be here um what is personalized AI well it's um it's a key evolutionary step in AI uh and it is when AI gets you you know gets to know you better when AI

actually knows everything about you and everything that makes you you and it's a necessary step um in order for AI to to be really useful if you think in terms of a of a servant a good servant has to know all the dark secrets about their master um so in order for AI to become This truly useful tool that you know you can you find helpful and and knows everything you know about you and really understands your way of thinking and your needs and everything it has to know all your dark secrets it has to know all about you and that's that's what we call personalized Ai and most llm networks are now nowadays not personalized AI

because they're trained on public data mostly but the trend is to to get towards that so we've seen that with open AI getting now access and getting like a sort of memory and others following that same same path so uh companies are are are aware of of that that that's an evolutionary necessary step and are developing their Technologies so that they manipulate more and more information about you so that they can contextualize their responses and make them more useful perfect and um how is private compute and storage important for personalized AI yeah so the good thing about this personalized AI is that as I said it's going to make AI more more useful for us

but there's there's a concern um because if web 2 was a raise for your attention now with a personalized AI it's it's turning into a race for intimacy companies do want to know you very well you know from the inside out they want to learn everything about you even the things you wouldn't like to share um so the level three information that we were talking about last time um all all that information is really sensitive about you and gives a lot of power to the companies having access to it so we believe that no company should ever wield so much power over you not only because they could share that data behind your back um but also because

they could use it in ways um that are inconceivable right now to manipulate you in you know in an undetectable way or fashion um because they do know also your blind spots they do know your weaknesses so they could exploit those and even if you think about in terms of Ip or or intellectual property they could extract they could mine your ideas and thoughts and creative uh processes just through your daily conversations with the AI um so why would a company hire you when it has this little clone of you that you know is in con constant um contact with you kind of extracting

all that valuable information and companies can actually use that for their benefit so there's a lot of wicked ways in which you can think about turning this level three data into things that are not necessarily good for you but are very good for the company this creates very dangerous incentives so this calls for for a you know bringing in privacy into the equation we we can't be sharing our prompts with all that high value data with future personalized a we we can't be giving AI companies our level three data we need private computer and storage essentially to protect us from all those risks that makes sense and how was neillian approaching personalized AI

specific yeah so to begin with we are supporting a lot of data to earn products um those are products that um are actually offering you the possibility to store your personal data in a safe way in in and and by while returning retaining full control over it in our Network so if you think about that in comparison to what web 2 offers web 2 offers you a private way of storing information but it's not fully private because the company has access to that information because eventually you will want to run processes and and will want to you know action that information and that will require the company to actually decrypt it so that

means they have the means to access that information here we're talking about something different so what nilon provides is a storage layer whereby nodes never get access to your data they don't have a a magic key that enables them to decrypt it um your data remains truly under your your own and soul control so you're the only one who's able to um kind of remove the encryption layer and have access to to that information so that that's a very different type of privacy we call it decentralized privacy compared to the centralized version in in web 2 so that's step one um bring all the the the personal data into our into our platform

step two is to innovate on all the bottlenecks that um privacy enhancing Technologies encounter when they try to run all the AI models and essentially they revolve around the evaluation of nonlinear functions that is what you typically find found in activation functions and in their nor normalization layers and there we have Pioneer the effort of bringing a technology from um image processing which is called the discrete wave transform for example is is the it is used in the jpeg 2000 standard to compress images it has that ability to compress um things so we've taken that technology and um implemented it on top of cryptographic protocols to

compress the lookup tables that are typically used to eval those nonlinear functions that you find in a in a in an AI model and so we have S successfully accelerated the evaluation of of model significantly so that's number two and number three is to embrace what's coming which is Agents as a first step towards personalized AI agents are a significant step because they they take um llms away from this high frequency interaction mode to something that is slightly lower frequency but with more intelligence in it because instead of giving you the response um it actually thinks or kind

of runs other prompts on that response to enhance its its value and make it more useful to you but in doing so it kind of takes more time to the to the llm to respond to you that's very important because um it puts privacy enhancing Technologies in a less um demanding position in terms of performance but at the same time is it is the path towards personalized AI because that path will provide more and more Independence to the AI more and more intelligence the AI will have more will spend more time thinking on itself about the problems that you put in front in front of it so to us um embracing

agents and you know incorporating them into into our network is uh a very important way or or you to to get ready for what's coming next which is the the end goal which is personalized AI perfect thank you so much Miguel you're welcome bacho for what it's worth I am extremely excited about AI agents because I hate doing scheduling stuff and email stuff so I just I just want one yes yes yeah me too it's really exciting subject how far do you think are from work like not like semi- working but like working actually AI

agents yeah I don't know there's like these four um a um agentic flows in llms um you have um the reflection one that is working pretty well which is when you produce something you analyze it from different perspectives but that's not really like helping you I think in the way that you mean then you have um like like tooling which is oh we're going to use um tools to send emails we're going to use tools to I don't know manipulate images and videos and so on I think that one is is pretty Advanced and I I don't think there's we should be seeing um um like Innovations in that front um in in short

I would I would imagine um and then you have um planning which is not working that well is is more experimental which is before solving a task you kind of plan for it and then you you follow the steps by creating different prompts and then the multi multi-agent staff which is where you have different agents with different roles like for example it's a it's a company you you have a marketing llm and a sales llm and a you know engineering llm um whatever product llm and so on and you throw a problem at them and they discuss between them and and they come up with a with a solution that's also kind of experimental I think the tooling one and the reflection one are the the shortest that we will see

happening anytime soon but are also kind of the most most helpful I think in the short term yeah I hope there the consumer facing one relatively soon the multi-agent one sounds really really cool I can imagine it will take much longer but it sounds very cool I think yeah it sounds cool right like having all the power of a startup uh like throw a problem at it and and then you you have something like a product maybe it codes but it also kind of figures out the the goto market and the business model around it is I think it's really interesting all right what's up guys we're back um Ryan do you want to give you a weekly salana rant sure um full disclosure I don't want to give a weekly

salana rant it just so happens to be that that's the ecosystem that's um gaining the Mind share uh producing the results launching the interesting things like not my fault I did not want to talk about salana rev um but we have to be because it hit all-time highs um Bach do you have a chart for that so yes salana um real economic value which you can think of as a uh measure of like Revenue something analogous to trafi revenue uh real economic value on a weekly basis hit uh six about 60 million up from like a low of like five in September um the

lowest week in September uh the composition of rev is um priority fees base fees uh and tips for Mev and yeah salev is at all-time highs and it's surpassing like the Giant and the space ethereum um why does that matter like look the whole Space is kind of in this like constant argument about whether or not cash flows matter and people say like they do matter people say that they don't matter um even the people who say that they don't matter they end up referencing them and the you know rate of change of those measures at least as a kpi so they certainly have some bearing on the valuation um I

obviously think that they do matter um but this has implications right like if we live in a world where um you know trafi is coming and the regulatory barriers for them investing in the space decline um why wouldn't they look at the fees that these systems are generating that flow back to stakers and token holders so um you know this is incredibly important um driven mostly by memec coin activity on salana but again you guys know how I feel about that uh it's just really exciting to see um there's real earnings power for these tokens and I think that the more this compounds uh the more precisely we can measure it contrasted with um the contrasted with monetary premium

which like you simply can't measure um it's kind of like no question to me like how we're going to Value these things going forward and what's going to matter to the incremental Trad five buyer I mostly agree with you well about the real economic value stuff I do agree with you because the charts are right there but I've become in now I am a Solon aable and I have been for a really really long time um no flex but what I do want to say is I am a little bit concerned about free things and and I think like they're not enough of a concern for me to be like oh ethereum is better but it is stuff that I think people aren't necessarily focusing on and talking about um the first one is

unlocks soana unlocks are happening and they'll continue to happen like from investors um number two is emissions Solana has high emission rates which I think it won't ever get that like store of value narrative which is fine that's historically been a meme but going forward if it doesn't if it isn't a meme that might be something interesting to think about and number three is I am worried about fire dancer not that it won't work but that it won't work as well as people think it should and the main thing is now grass airdrop didn't affect the chain too much it did okay you still couldn't get a transaction through for some time um like Solana gets congested and your transactions

fail like on ethereum you have to pay more but on Solana you just have to try it like 15 times in a row I think it's fine for now and I think fire dance will probably help but that's my only concern is that it's the bull and you can't get a transaction on salana now we've historically seen that the narrative around congestion and transactions failing and Chain's not working if it's due to activity is bullish people will say oh it's because like the chain is being used too much so like last cycle it was fine but I just think like not enough people are talking about about it and it's something that should be like if I'm the trafy institution that's coming in and saying

oh like look at the fees on this bad boy you know so Le look at the chart looks fantastic I think you should still consider that there are some of these risks involved that I think a lot of the market ignores especially the thing around the unlocks um regarding discounted tokens sold like past year I think something that we ignore quite a bit so this is my like I guess my point is blockworks research isn't only bull posting Solana we also care about the potential risks involved oh what do you think I it's probably a nothing Burger but I think it's yeah right the interesting thing the interesting things about framing

those risks is that we did not mention another chain like we didn't mention a competitor um the the unlocks I think like 15% of the supply is locked and then you have a 7% inflation rate like that's it's not huge especially I mean look at the new chains that have launched like their floats are you know infantes compared to what's locked so like from a relative basis not that concerned there uh if you're staking if you're liquid staking which anyone in size will be um like you're not you know you cut that potential Supply overhang in half and yeah I think that the fire dancer thing is a risk for sure like underwhelming the market um and then

like you know salana is going to shift the narrative if it underwhelms right it's going to be like oh it's about having a second client it's not about like the Speed and Performance but like I'm excited for the Speed and Performance because if drift can do 2x the transactions that they did yesterday and they charge the same fee for TR transaction or even just like reduce it by 25% like it's going to be it's going to be a big deal for them and now like and it shouldn't be a 2X right it should be more than that so yeah like fire dancer to me is the biggest risk but because it's such a slow roll out like I don't think it has the potential to like underwhelm the market like in the same way that a um like a bad earnings report from a trafi company will be right like

we're expecting this roll out like slowly over 12 months um and I think that kind of mitigates that risk from like a token price perspective um obviously long term like you need to get to something like a million TPS to I think like really I hate kind of using this phraseology but like win the space um I think you need to get somewhere there before everyone else so um you know I I I think that that's critical for like maximum outcome for salana but you know we'll see I also don't I agree with you in a sense that I don't think that the emissions are that big of a deal because I mean look at ethereum ethereum basically has less rounding era zero emissions like point something percent per year sometimes deflationary

sometimes slightly and that really you know it's more the demand side that matters and and but then also why why are people buying Soul right now over e you know are people going on on online looking at charts saying oh look at the look at the Rev today look at the projected R let let's let's look at revenues and burn rates no people are just people are just buying sold because everybody's using the network when people are on boarding what are you doing you're on sold right so it does right now it does kind of feel it has more of that sorry to say it monetary speculative commodity whatever insert word here premium that and and that's the reason why soul is going up because of the the same network he Felts built

from having a great chain and you know just all vertically integrated so I I do think in the future um I I do think it matters now RV Revenue burn stuff but I and I think it will matter more in the future but for at the moment I don't think people are doing the kind of deep analysis that maybe you and I do every day um before like looking at before putting money into these chains yeah I think that's a good point and I think that's something that [Music] we we've had a bit of a shift this year where like fundamentals matter more but I think like you said at the end of the day people are buying the token for the chain that they use um I don't know how retail dominate the space still is but I'm sure that people see that a lot of

people are using Solano and are thus more interested in Solano over etherium and Ryan the reason that I didn't mention another token is because I didn't want people to think that I was bullish e Soul or something like that so that's why I didn't bringing up any other l1s um I think to end it off I'm gonna pass the mic over to mark for his radium um well you wrote a radium report a while back and it's been doing fantastically so going to pull up some charts so that you can walk us through it and I can tell you why radium is a bad product but it the price is going up yeah I think that's a it's a good segue from Solana everybody using it to talk talking about radio which is like which

is the number one decks in salana by I don't know choose your metric um but be you know I think I wrote about it in August and it's up like 100% since and I before I go into it I wanted to show this chart because I wanted to point out that it's not for radium it's not all about the meme coins like if you look at this chart here you kind of see that you know soul soul usdc soulle usdt whatever on different T pools that's the number one um number one token pays by volume right so you know Meme coin uh meme coins for my color blind viewers is like the small little red redish one or the top of the

chart right so you know I can't even maybe that's 5% of volumes but anyway it ranges between five and 20% of of volume on depending on the week right so radium is a DEX that's being used for a lot more trading than just the than just meme coins right that being said right and I have this next chart the thing with meme coins is that they tend to be a lot lot more volatile and because they're more volatile they tend to be in the higher te fee pools then that brings in a lot more revenue for radium so like you see here like since like the September August lows mem coins are back in and so the revenue that radium is making from

this trading volume is a lot higher um because of the tare um f and you know last week I think I tweeted out that radium used a portion of their revenues they do this on a weekly basis to buy back their tokens last week they bought back $3.5 Million worth of radium and this is like a programmatic buyback that they do 3 and a half million in one week 3 and a half million is probably more than many tokens make in Revenue in a year right and this is and this is used to buy back the token and some of it is used for you know payments emissions some of it is used just goes to the balance sheet um but you know their BuyBacks if you annualize it it's

like 12% BuyBacks per year and then for you know for context Apple does 2% BuyBacks per year meta probably does around 3% right so 12% is is high no matter try terms no matter how you spin it that that's a that's a lot of BuyBacks and and then I think also what I like about it is devaluation still um when I wrote about it in the end of August it was trading at a price to earnings of I think just under four right and right you know the the tokens doubled and revenues gone up a bit so you know I think the last I kind of checked the PE was around a 10x right I mean for reference um average S&P 5 00 compan is 16 XP ratio so by that metric

it's cheap and if you want to get you know really pedantic which as an analyst I'm going to um these these earnings are usdc tokens right this is cash this is cash flow operating cash flow for the business right so if you really want to valuate on cash flow the average the average um S&P 500 company is probably like 30 something and you know radium now is probably like around 10 because it's the same thing as earnings Capal earnings the same thing so I mean it's doubled in price but it's you know it's still attractive it's still the number one decks and it's not reliant on Meme coins for volume and that being said I

do think you know there's some you know a lot of the volume come a lot of the mem coin volume IE Revenue comes from pump. fund because of you know it's programmatic after it reaches a certain market cap so I think that you know I know pump that fund might want to launch its own um exchange which might you know see itself as a competitor and I know Jupiter which ends up routing a lot of volume to radium launched their own ap. proo something like that some their own mem coin making or trading stuff so that you know people are seeing the kind of revenues and earnings that radium are making and they want to tap into some of that so there there is competition creeping up right now but for now it's the market leader radium is just so so clear to point that all activities on

Solana like you said all mcoin activities on Solana and mem coins earn the most fees so it just makes sense for how much money rating is making three and a half mil is crazy they pay 10x that to on optimism they pay 10x St to get l2s to launch on their CH so that could also be used I don't know how else to include ethereum into any conversation it's literally just oh we did BD we paid 50 um Ryan do you have any useless useful takes uh I I think that that um you know when did you release this report mark on on August 27th or or yeah I think I how many funds have we seen come out

public and say like I'm buying the radium token within the last like two weeks right like I feel like it's been more than a handful and that's just the ones that came out publicly and said and NF said it so um I think it's a fantastic story um and a really really great great report all right um Mark Ryan thanks for coming on listeners thank you for listening anything you're dying to tell our listeners Mark we'll let you have the last word today I think I ended up last time with I was still bullish on eth because of the ETFs and I'm just going to reiterate that do not fade the ETFs that's it oh [Music]