The Attention Economy, Hyperliquid’s Success, and New Asset Classes | Roundup

Transcript

you've had these issues before where you you have brand unsaved content matched with you know advertisers that are paying monetization and I think it's kind of the same thing it's like how do you separate you know the stuff that's really grimy and and gross with stuff that's like kind of fun and frivolous and and should be you know fun for speculators and and that's kind of what the economy is built for but um it's in any of these ecosystems if left unchecked you're going to have you know people that can do kind of like gross stuff with it hey everyone this episode is brought to you by Unis swap Labs who is launching the largest bug Bounty program in the entire history of crypto it's a $ 15.5 million program this is aiming to be the most rigorously

reviewed codebase ever deployed to ethereum so if you want more eligibility on the scope rewards payouts Etc just click the link in the bottom of the show notes to tell them that I sent you you'll be hearing all about Unis swap Labs later in the program hey everyone quick disclaimer before we get into today's episode nothing said on bell curve is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and the views expressed by anyone on the show are solely our opinions not Financial advice our guest and I may hold positions in the companies funds or projects discussed hey everyone welcome back to another episode of B curve today you got Michaels one and two holding down the fort Vance is out sick so pouring one out for Vance today and before we get into it just want to give a quick shout

out to this episode sponsor a a is the largest liquidity protocol and one of the oldest and most trusted protocols in all of Defi and crypto at large they've got over2 billion worth of tvl you can supply borrow swap steak do whatever you want all on a so uh thank you very much to a and then Michael how we doing just the best you know got the two the two uh the two champs on on the Pod today all we need yeah yeah we've uh separated the wheat from the chaff here so this will be a good one um been a relatively slow week I feel like in terms of news but uh you know one thing that I was curious to get your take I thought we could maybe you know what we should be doing our own predictions actually we got to revisit

the predictions that we did last year um and see how those hold up I can't really remember a lot of them uh gonna have to go back and check yeah the one that I remember because there's so bad for a while was the nft call which is squeaking in just at the end of this year those Pudgies you gota you got 18 more days to make it happen oh God you know do you so here's the thing about nfts that I still find compelling is a I I know everyone hates this but the profile picture thing it makes a lot of sense to me that people would want to pay a lot of money to flex to some cool profile picture the the problem is maybe nfts aren't cool anymore or never will be ever again so I'm not really sure if it applies but

I've I've never hated the pfp thesis yeah no I I I think the I mean look this perspective goes all the way back to like 2017 2018 um and you know for those that don't know Vance and I started an nft company back then um and spent a lot of time in the space before anybody really cared about it I think that the thing that we were talking about back then which is still true is there's there has to be a canonical like display case or a place to show it off that that's how you have you know the the sentimental value or just like the the aesthetic value of whatever it is that you're buying and pfps were the thing and they didn't really exist as much in 2018 2019 um

some people were using them as pfps but now that you have the social profiles as the core construct of the social infrastructure for crypto of course that's like your your display case and so that I think is something that will always be real but until we have like a Crypton native consumer application ecosystem or like a place to show them off I think pfps is kind of like the one venue that you have to be able to show off whatever you have let me ask you this so for something like pudgy penguin specifically there are airdrops that are coming up here so they announced that there's going to be a pangu meme coin which is going live on salana actually which is relatively interesting because the team behind pudgy Penguins is also

developing their own L2 which is abstract chain and so I think people for a while were thinking about an abstract potentially airdrop for pudgy Penguins holders and now there's been explicitly promised some pangu mcoin uh trading so what do you think though about nft collections that also end up launching a token um there there was a I guess a couple parallels to this there's obviously uh board Apes so board Apes have many different collections uh maybe on a smaller basis tensor which is one of the um at one point was the very dominant nft trading platform on salana they had an nft collection torians and then they also did a token and I just curious how you think about these because I'm sure that's why uh pudgy

Penguins is running up right now in terms of price but what do you from a mental model perspective how do you think about these events where there's already one collection and then another token drops you how do you think about that well so I think in the same vein as what I was just describing you know you could kind of boil this all down into utility it's like social utility which is showcasing whatever you have and and that's what I mean by the display case then there's like you know board Apes went after the real world utility with like AP World and all the different events that they would hold and had to have it to get in like everybody's been testing these how do you provide or imbu utility and functionality into this asset that you have and in L2 and an ecosystem could be

an interesting way of getting in there it's just you have to you have to be able to continue to deliver utility and value and so like the question would be what is the value and is it something that the holders will care about is it something that people will ascribe consistent value to and the tough part is I mean the I I think the downfall of something like Top Shot was and it ran up massively in 2020 when it launched and it was the first you know we have friends who were like Top Shot whales and they were like yes I got you know Klay Thompson dunking in this sick you know shot and what everybody forgot is that oh wait next season he's gonna do the same

thing and there's gonna be another one of them and like the original that I had was going to be you know diluted by more you know plays and so I think you have to balance know scarcity with being able to have utility and also building a larger and larger audience and like that's such a fine balance where you know if there's only 10,000 of them there's only 10,000 potential people that can have them so that's the community size you know the terminal Community size but how do you grow that into something that is massive and all of these things I think of as interesting experiments I don't think that there's like a a version that is by and large working right now other than pfps I mean pfps are coming back you know they've been through the bear cycle

you uh you may have correctly called that but yeah it's it's it's all interesting to see kind of like these shots on all here's what I've always squinted at and seen something interesting with nft there's a media angle to it almost there's kind of two different business models in media which is you want to be mass media and just get as large of an audience as you possibly can because of its size it ends up being commoditized and you sell ads against that large audience then there's this other model which is I always think of this sort of as the bar stool sports model where I don't know how many true fans bar stool has maybe I would guess somewhere in the range of 100,000 something like that of just true

everyday tune in you're reading the blog multiple times a day you listen to podcasts and this is the audience that actually might go to Live Events and stuff like that and so even barc's got these this ad network but really at the core of the business is these 100,000 people that they can actually get to do all of these things and blockworks has that too to a certain extent we've got there's a there's an audience of really core I don't know how many true fans blockworks has versus our actual audience size but that's what nfts seem to serve a little bit so that's an interesting mental model for yeah you're absolutely right there's something limiting about only having 10 so it's almost like you want to scale your collection relative to what you think your true your true fan audience size is that's an interesting concept to me yeah

it's like I don't know if this is a clean analogy but um you know like Wall Street Journal would be like the business Community but it's Mass right and it's everybody who wants to read The Wall Street Journal and then like media companies have been trying to figure this out for the last I don't know probably decade at this point where it's like where do you put the pay wall like how many how many articles can you read before it's like oh you gotta pay for it oh you gotta subscribe and then on the other side you've got and I I you know it it definitely was more relevant earlier this year but like political Pro where if you work in DC if you work in politics it's like required subscription to have at least you know that's my understanding and if you don't then it's

probably not as relevant because it's super in the weeds it's super deep and you know it's all the Scuttle but of what's happening on Capitol Hill and in DC and you kind of have to have that to be in the know and so that's like a more highlevel but you know segmented audience and you're not going to be able to run ads against that but they're paying I think I don't know like 50 60 maybe 100 bucks a month to be able to get that and so yeah it's like a media company is actually really interesting analogy for how to think about nfts and nft collections what I think is really hard is once you've chosen one of those paths if you're mass or if you're kind of like really refined you and switching uh being able to have both or try to go from one to the other I think is a

really hard thing to do because it's like you know if you started with 10,000 it's hard to like 10x that if you want to go from 10,000 to 100,000 or a million you know what do you how does that make your original audience feel and so yeah it's a hard hard thing to solve so this is also I think you gave still to this day the best explanation for meme coins that that I've really liked which is maybe it feels a little bit like the early days of the internet where you had those weird viral YouTube videos that you might remember from you know 2008 sort of time frame um and I was thinking about that actually this week as well with did you see so obviously there's this CEO um assassination of United Healthcare and

they there's an as salent that was led on a pretty public Manhunt I would say and it was all over the news and you had this guy's smile and I think they ended up getting him and the GU is Luigi I mean allegedly right we haven't gone to trial or whatever but Luigi mangion and there was a Luigi so we can sufficient evidence yeah cool um so he so there was a meme coin that got launched Luigi mangion and it just pumped and first of all that is disgusting no one ever lik likes to see people making money off of something like that but if you look at memecoins as this attention-based algorithm it is it's kind of like yeah I mean there's a lot of attention that's going towards this guy it's in a negative way um so you could look at it as a really gross

exploitation of a really tragic situation which is the right way to look at it I'm sure but also if you look at memec coins as hey this is a way to uh like a market based algorithm for attention then it should be going towards even things that are negative also I mean yeah there there's uh the attention economy I think is is changing uh in terms of Market structure and um I mean one of the things that so uh I I was at Snapchat and worked on you know the monetization side and built ads product U and a bunch of other things there but you know one of the big things that any of these ad platforms have to deal with is like if you've got uh if you've got uh you know aage advertisers

that are paying you you know hundreds of thousands millions of dollars a year they want to know that their ads are running alongside content that's not brand unsafe and one of one of the situations that uh snap didn't run into but I I can't remember which platform but um when uh um The Washington Post um journalist was killed um and there was like all these stories about how you know he was mutilated and terrible stuff and like taken out in in a AG uh um like that connection in the algorithm on one of these platforms ran with like in a way uh uh advertisement and so you've got like you you've had these issues

before where you you have brand unsaved content matched with you know advertisers that are paying monetization and I think it's kind of the same thing it's like how do you separate you know the stuff that's really grimy and and gross with stuff that's like kind of fun and frivolous and should be you know fun for speculators and and that's kind of what the economy is built for but um it's in any of these ecosystems if left unchecked you're going to have you know people that can do kind of like gross stuff with it and I don't I don't think that there's like a checks and balances that'll work but I we're at the stage of like anything goes right now um and I'm sure it'll change eventually I mean you've already seen t uh pump like kind of change their process with the live

streaming because that was getting you know kind of weird and and also grows and and I think you're going to start to see some of the platforms that are doing meme coins like recognize they can't you know put out anything just because you know there there's going to be people that do anything um so we're I think continuing along this timeline we're we're still in the like mid 2000s range of you know um the attention economy but now applied to meme coins but I think as you get further and further down this process it it in a weird way kind of legitimizes it because it forces them to have conversations and think about these you know maybe Fringe cases um that wouldn't have otherwise popped up when you were conceiving the idea of pump fun

and meme coins nobody really thought about like what happens if somebody does you know a Luigi coin and and uh I I think now having to answer those types of questions will kind of in a weird way legitimize it um once they solve the problems so let me ask you something I want to check in on uh just salana or like the meme coin Market in general so I'm showing here is this is a uh the blockworks research salana dashboard and we track something called rev which is transaction fees plus um meev tips so you can see goo absolutely cooking here but there's also priority fees base fees and then this little yellow bar here is vote fees and my I I'm probably going to get shouted at this by some Salon of

people but this I feel like is basically representative of the meme coin market and what's happening and uh and my my question is is how are you feeling about the current there's obviously been a a pretty a decent sized draw down in terms of RV since the peak back in late um late November and so this has been one of those really difficult charts for a long time where it looks like there are these Peaks but then it ultimately just ends up coming back much much stronger and it's hard to predict where the mcoin market is ultimately going to go but I don't know I've been it's been this one has been a really tough one to follow because on the one hand there's just so much Supply coming online from pump. fun every day it also I can just you know that that Meme that Everyone likes of

the roller coaster where the first one is really big and the others are smaller and you know Meme coins now it used to be they got to you know one or five billion now they get then they got to 100 million with sort of the or 500 million 100 million now most of them are just going to 20 before they die all of those signs to me just pattern matching say that at some point here it's just not looking super healthy but what do you think about well look the lifeblood of all of this is liquidity and I think what you are seeing you know in this chart in particular is you know what happened in that what happened in that middle week in that middle first week of November while the election happened and that's

when you had you know excitement uh exuberance but you also had much more liquidity much more trading volume assets started to go up the wealth effect in crypto for crypto natives went up and what was was the first thing that people were going to you know continue to punt or speculate on of course it was going to be meme coins because nothing had materially changed other than asset values going up I think the what you can probably say with this chart as well is there's a couple of factors that are going on simultaneously number one you've got a lot of competition happening on other platforms other than salana you've got bass meme coins um you've got um I mean people are are talking about how you know be chain when it launches and is going to be sort of

like a meme chain um meme coin platform I think you're you're gonna start to see the fragmentation of in particular the salana memo ecosystem and not to say that they won't all continue to do well but I do think that you're going to start to see the same types of products in different ways I mean we've seen pitches for you know basically pump fun on every single chain um and maybe not all of them are going to work but some of them may start to steal share especially in you know an ethereum based ecosystem um and yeah I think the other thing too is like as other assets and nobody really knew what was going to happen um or at least it you know prediction Market said it was 5050 I think some of us who kind of understood the tea leaves uh knew

kind of the election was going to go in this way and leading into 2025 I think you're going to start to see yeah um exactly this this is BAS yeah this is transaction fee Revenue we don't have quite built out um to the to we haven't built out rev yet for this uh for this chain but yeah this is priority fees uh base fees and L1 fees so for folks so L1 fees are basically just the pass through of what uh base has to pay down to ethereum right um base fees are uh or priority fees are obviously what people are paying to uh move their transactions to you know probably the top of the block or whatever it is and then base fees are uh congestion so yeah exactly yeah super representative of uh and I

completely agree there's fragmentation across different ecosystems and chains here and and so I mean we don't know exactly what's in these priority fees to your point we don't know um there's been a ton of activity on base in general and so it's hard to disaggregate like exactly what this chart um completely represents but I I think what I what I was sort of getting at broadly is there's fragmentation across mcoin platforms um there's also going to be fragmentation across categories and if we're thinking about the global liquidity profile of crypto you know across every single asset class defi games uh you know layer ones meme coins like all all of them are fighting for in

the short term the aggregate liquidity that is available as assets go up liquidity potential goes up as well it's like you know potential energy versus kinetic energy and and I think you're going to start to see fragmentation away from Main coins as other asset categories become en voge you've seen over the last couple of weeks you know gaming has taken a narrative um and and game chains game coins have been doing really really well um I I think in one of our you know not not huge spoiler but of course um 2025 one of our predictions is that defi especially the kind of like OG defi uh comes back in a meaningful way especially with regulatory change on

the horizon um and um and so yeah I think you're going to start to see like multiple layers of fragmentation um across salana meme coins um but mem coins in general and um you know someone who's trading meme coins maybe look at some of these D5 protocols that are you know cash flow positive buying back their own token and say okay well I can continue to punt these meme coins that are you know losing their luster from a market cap perspective to your point or I can go and like speculate on other things and and it's just kind of a question of like attention and liquidity uh and who's driving what yeah so I I'm just I was just trying to draw up uh I'd love to talk to Def talk about defi here

um a little bit as well so you know we had on our docket that world Liberty fi is buying up uh ether and then also apparently a as well someone found their track their address on Arkham and saw that they're buying that up before we get there there I had one thing about the yeah I I think that the salon as being the home of meme coins I I have less of a perspective on I think that it's going to it's still probably going to be the canonical home even pudgy Penguins launching pengus there is probably indicative of that but around the edges right on the margin I think you are going to see that market get eaten and two all right everyone listen up like I said at the top of the episode Unis swap Labs is rolling out the red carpet and launching a

15.5 million doll bug Bounty this is the largest bug bounty in the entire history of crypto to anyone that can find a critical bug with the Unis swap B4 protocol this bug bount aims to make it the most rigorously reviewed codebase ever deployed to ethereum now the Unis swap name is basically synonymous with security $2.4 trillion in cumulative volume has passed through Unis swap V2 and V3 without a single hack so Unis swap V4 is dedicated to bringing that same level of security and transparency to the V4 protocol so if you want more information or eligibility or scope or Rewards or payout or any of that good stuff there is a link in the bottom of the show notes I highly recommend that

you stop listening right now go to the show notes click the link head over and that I sent you start earning money today I got a question for you what are your thoughts if you have any on hyper liquid I so I've missed hyper liquid so I'm in the cop SE Camp here of the people that but I I don't know just pattern matching here it feels like hyper liquid has potential to just be the fastest horse this cycle and make everyone angry because there's a bunch of people that are sidelined right it wasn't a VC invested coin in the beginning I've just it's rare that you see a coin come out of the gate this hot and just it's offered no dips to buyers at Al it's on street from $4 to 18 um and I don't know it's also started to I've noticed it's starting to trigger uh

salana people a little bit um which I find kind of interesting because this is exactly what happened with salana neth right and uh NASDAQ on chain means that you got to build the NASDAQ on chain yeah yeah right now right now it it doesn't seem like that's the The Narrative um and I I I I think look at you know hats off to them we know the team um and uh you know they they were a very very successful prop trading firm prior to starting hyper liquid so that afforded them two things number one uh a large Capital base to not have to require Venture funding um so they were able to sell fund the entire way through and and number two they understood Market structure and crypto Market

structure and how to build a hyper liquid to the point where it's now competitive with you know I would say um at least on the path to competition of of centralized exchanges um I think the um yeah it has definitely you know stolen kind of the The Narrative of um the trading execution engine on chain which was supposed to be you know what salana was but we got meme points instead um and I I think the the exential question for Solana is going to be can you bridge um to other application categories I I last I I saw this is you know I can't remember where I saw this but I saw that over 90% of

the volume on salana is mcoins um or or the the fee volume at least um because many people are trying to pay these priority fees to get into these you know transactions um and so the The Narrative that is overwhelmingly the case on salana Is MeMe coins and that leaves a void for other opportunities like hyper liquid and they're going to continue to operate and execute and um it's kind of like they're they're running in a direction um where others now have to catch up so you know what I've been wondering about this for a little while is I'm from the obviously the long-term hope for crypto is that we move all these different types of applications on chain and that transactions from you

know game gaming or dpin or whatever ends up getting settled down and recorded on a blockchain but from a business model standpoint from an L1 or an l2's perspective I'm kind of wondering or questioning whether anything other than trading is really good is really good from the business model standpoint of a of a chain and the reason I mean even we were talking about something like Bas right and if you just look at their model they've got three buckets of Revenue there's the priority fees the congestion fees and then the L1 fees and all those are recorded as Revenue but whatever fees the L the L1 is just a pass through right like basically base just passes on the cost of settling to you as a user so technically that's revenue for base but

there's no margin right it's just a pass through cost and then when you look at the other parts of of where that revenue is coming from there's the congestion fee and then the sequencing fee and or you know sequencing and uh congestion fees should go down over time it's kind of a funny concept it's just how big can my uh you know how how quickly can I offer Computing and basically the the delta in between you know my total computing power based on what however many um you know nodes I have and whatever the hardware requirements for those nodes are like anything in excess of that is what I'm going to charge apps but it's a weird it's you're you're kind of setting this weird arbitrary Mark and anything over that is what you get

charged so that should be really commoditized down to almost nothing over time and so really where it seems like the value is is just uh you know preferred inclusion at like top of block it's I don't know you know what I mean um and then why why for DP or anything like that would that even be valuable it's that's going to fall into that L1 pass through bucket no one's going to pay for um well so a couple of thoughts the the first is maybe an analogy to think about here would be in the case of bass like let's analogize it with I don't know AWS and you've got you know segments of the cost structure of AWS are probably pretty similar if we think about them where you've got Hardware which is the physical servers you've got I don't know electricity and the overhead of like

running the servers and then you also have like people who are managing you know the data centers and um all those costs I think you know they get passed along but they get put into a single price and like that's that's what the End customer of AWS sees I I also think um when we're thinking about like what matters most from the business model perspective what you're describing is with the core Assumption of individuals and individual users as the core user of this infrastructure where like if you think about it like do I really care that I'm like trying to fight for someone who's putting through a trading uh execution transaction and needs to be first versus like I don't

know posting on foraster and like do I need it to happen right now or can it happen in three seconds is kind of the the point I think but what if we were to assume that the vast majority of the transactions that are happening on Bas are not actually individual users but other applications or other other ecosystems or it's infrastructure that maybe can choose okay I'm GNA settle this now or like if the congestion is super high I'm going to wait five seconds because it doesn't really matter for me when I settle it's just that I sell settle it within this period And I I think that that you know is also how computer infrastructure has worked as well where if you really want to be first and you are like let's say a

prop trading firm and you want to have you know fastest connection with fiber to The Exchange um you're GNA pay and you're GNA pay up for that but if you're Facebook and you're built or or Dropbox and you're built on AWS it doesn't really matter um which one you're choosing so it's not a Perfect Analogy but I do think that there is something to um when it's users and it's trading yes they're going to want to be first um trading is always going to want to be first and we have you know web two examples trafi examples for for all of that um but I think over time we're going to start to see less and less of the transactions be originated from Individual people as opposed to other applications or frankly agents or other

you know ecosystems that are working on top of base and can choose the the right allocation but um maybe also want to settle within a period and and bloat just becomes a factor of their cost structure because there's so many transactions that are trying to process yeah it's an interesting one uh to see play out here I'm uh I'm pretty curious about yeah I'm curious about this in general and I'm starting to look more the other thing about hyper liquid that I'm still trying to fully wrap my mental model around is how much is an L1 really does it make sense actually to have the sort of enshrine decks in an L1 if so much of the fees that are getting generated by that layer are from that you know where transactions get priced I

don't know it's an interesting interesting concept I think the question for hyper liquid is they obviously they've got you know an engine and an ecosystem right now can they expand past that you know is is this the end all be all for hyper liquid or are they going to build an ecosystem where defi where other applications want to build on top of it as well and that I think is the core question for them right now um and yeah I mean I'm sure people are excited about it I know you know some def5 Protocols are talking about Integrations but um yeah that I'd say that's kind of the core question for them the the other thing too that's interesting and I think Protocols are starting to experiment with is this balance in between first and third party applications so there's

been this blending of projects that are building both infrastructure and applications and on the one hand that makes a lot of sense right you build something that you hope is an ecosystem or a Marketplace or platform or whatever it is and no one's just going to come there and build to begin with so you might actually build your own first-party apps and there are lots of benefits to that it's something to get people in the door maybe it's a way to subsidize your preferred business model on the infrastructure standpoint the challenge is one of focus within the organization two completely different org structures with maybe different comp expectations across those org structures how do you make it all seamlessly flow together super difficult uh you probably don't want to work for sometimes working for a startup and then a startup is a little different than working for the

startup itself and so there are all these these funny challenges that come along with it but the big one that frankly is just unanswered at this point I don't know is do other applications thirdparty applications feel competitive with whatever the first-party applications are that the infro team is building and you know that's going to be the big question here this is a tale as old as time in in the traditional industry um you know just as we were talking about AWS was an internal pro project for Amazon and then they were like oh wait we can sell this to other people I I think it's a question of like where do you start is it uh the application and you get users on board and you got you know a way to dog food your own infrastructure and then you realize the

infrastructure is valuable and you want to you know open that up and sell it to others or do you start with the infrastructure and you say okay like we're building this platform but like we've got a couple apps here we built them internally and I think that to your point goes into organizational structure of whoever is building this like what is what is the primary focus like that's that's what startups are you they're just like a a mechanism for focus and successful ones can figure that out and navigate it well do you start by focusing on the application or do you start with the infrastructure this is the chicken or the egg problem exactly yeah so there are there are I think really ambitious teams that are this feels like the trend right now

that's happening so you have goo I think is a good example of this of someone that dog foods their own um and you know like the the the synergies in between reaking and liquid staking I think are and like the me infrastructure that they built out are really huge Ian to their credit did this as well there's reaking then the first primitive which is Da they built themselves right um Atlas from Ellipsis yeah lots of examples here but that's going to be the interesting challenge those are all example great great examples I I think the other just like thing to call out is that there was a period of time where um if you were an application that wasn't you know like doing super hot especially over the last few years it was really hard to raise it

was really hard to move forward and you probably got a bit of a a narrative bid and and potentially even like a fundraising bid if you were like we're actually going to turn this into an L2 and like our token is going to be used as the L2 token for this ecosystem yeah and so I think there's also a lot of noise in this analysis because I I think many protocols or or many applications use this as a fundraising mechanism to continue forward should they have should they not have time will tell um but but there definitely you know was that as like a that was definitely a narrative for a while okay I've got uh one question for you this wasn't on the docket but I just remember that this happened this week is

Max Resnik uh moved over to is taking his talents to to Anza in salana and this is It's just without commenting on some of the the gossip or parts of this I'd be curious what just what like what your reaction was to this and you know Max Resnik is someone who's been deeply involved in we had him on the podcast maybe a month and a half ago or two months ago with Anatolia talking about multiple concurrent proposers you know he's been very obsessed with this idea of um censor ship resistance in auctions uh specifically at the Block auction level for a long time and he's been internally leading a push toward to moving more activity back to the ethereum L1 essentially and so um it's felt a little bit like a internal push

away from I really view it as more of a moderation on the rollup Centric road map of just saying hey we need some more act we need to like roughly balance out the amount of activity that's happening on L1 versus l2s I think he probably rustled some feathers and you know if I'm being honest maybe sometimes the message was delivered in a way that felt a little uh maybe more callous than it otherwise could have to to people or didn't react I I will say that to his credit when you're trying to affect change it's always going to feel like that right no one's ever going to thank you for it but either way it feels as though he wasn't able to get the momentum that he wanted on the ethereum side so he joined Anza which is I believe it's been off of salana labs but

now they're an independent team which is one of the core uh contributors and Dev Coos for working on Salon of the protocol so he's going to be their Chief Economist there so yeah I mean look respect for Max respect to Max for all the stuff that he was pushing um I I think it we have to be in an ecosystem um any of these ecosystems have to be able to take feedback and perspectives in an open way and um I think there the critique of the ethereum ecosystem is that um it's potentially insor and it mindset and slow moving and um he was trying to change that and so respect for that I think the delivery yes was not

perfect but to your point you kind of have to to ruffle feathers if you want to you know get noticed and break through the noise and um I don't know you know the internal perspectives or you know why exactly he wanted to leave and join uh Anza but um I I think that we're also in a phase now of a lot of people kind of like changing where they're working and changing you know what they're doing and I know you saw um Austin Fedora from previously salana um come out and um with his new startup um I I think you're seeing a lot of people who've been working over the last few years on foundations or protocols or they're they're kind of like jumping into the

next thing right now um as it feels like we're in a turning point for the industry not surprising that we're starting to see a turning point of what people are working on or making announcements uh around things that they've probably been thinking about for a while um and um you know it doesn't just happen overnight let's say um and so yeah I mean wish him the best of luck and um I think uh um yeah it it'll be interesting to see what they do yeah it'll be interesting I agree and um yeah I I is I basically Echo all of your thoughts I think it's it's it's really tough to put yourself out there and be you know go against the grain and and people don't really thank you for it at the time um ever I I do think that

probably if I'm being honest a little bit I think some of the way that message got delivered wasn't always the most effective maybe and I know there was this yeah but you know um I'm interested to see what he does at at Ana and the problem I think is that you know and this is like a a problem within crypto is that uh broadly I would say is that um you have a lot of really really strong perspectives and people are talking about things that people are arguing about the ways that things should work but the time frames are like years yeah and and it's not something that you're ever gonna like No One's Gonna Be right and wrong as you're arguing on the internet because the only time where you're GNA find this out is in is in retrospect and it's gonna be

like 2028 we be like oh yeah he was right we should have put more on than L1 uh and so yeah it is kind of like a thankless um uh non congratulatory uh role to be the the naysayer or the the stick in the mud but um yeah I so respect for stepping out and doing that but um yeah I think it's it's hard because no everybody is right and everybody is wrong simultaneously until proven otherwise in that time frame is years Michael where do you sit on the activity on the L1 versus moving it up to l2s do you think there needs to be more balance where do you sit on that whole debate um I would

say look I think we need more activity in general um and there are use cases where L1 makes a lot of sense I think where one of one of the one of the things that I previously thought that has changed recently was um L1 is where all of the core rwas will sit because financial institutions will not feel comfortable putting things on l2s and if that's the case then we need to build applications and infrastructure around those assets you know the bidle product or any new like Franklin Templeton assets that are going on train I think that that has changed in the last few weeks to months as You' started to see them put those assets on l2s um and and maybe you know they feel

comfortable with the security profile now maybe you know everything will move to l2s but I think um generally you have to go where the assets want to go and it seems right now that most of the assets still are on L1 which means that we shouldn't try to like convince people to pull their assets over to L2 so they can use things we should just build these things where the assets are and so yeah I'm I'm generally in the camp of I agree we should put more more activity and more engagement on L1 and maybe that means we got to speed up L1 maybe that means we got to increase the gas limit more than you know a 20% bump um I I was hopeful that it we'd see it higher but um yeah I

I generally think we need more on L1 and more activity on l2s um and you know one of the other things too is like we're starting to see the blobs hit above their limit pretty consistently like that's another interesting chart that tracks almost perfectly with the election which is kind of funny um but I I think you're going to continue to see you know the The Blob uh limit surpassed um you know more and more like as we start to see these applications turn into l2s or these l2s start to have more activity um I think these these kind of like um you know um you know sleeping applications let's call them that were

didn't have a ton of activity didn't launch they weren't ready I mean there's so many things that are launching right now there's so many things that are you know getting out there after everybody kind of universally recognizes the the tie of Shifting in the industry that you're going to start see a lot more l2s um and so maybe the L2 road map starts to speed up a bit um in in the next couple of months um wouldn't be surprised to see that but it has been positive from the L2 front over the last few weeks yeah it absolutely has one thing too that is interesting to note is that maybe liquidity is slightly less fungible than you might think going from L1 to L2 or these these these ecosystems are scary yeah it is man so I don't know I I was actually talking to I think I've

mentioned this a couple times on this podcast but uniswap as an interesting example here when we did this uh Dex design season with Dan Robinson back maybe a year ago now I was asking him why aren't more you know why isn't more activity migrating up to Unis swap on uh different l2s and he was like search me you know it's it's free for people to do that but the vast majority of trading was still happening on L1 where gas fees is obviously much much higher and you know I was speaking to someone at Unis swap at Devcon this year and it's kind of mentioning that users end up staying often times and this actually happens in between when like uni V1 versus V2 versus V3 versus V4 gets rolled out there's still an enormous amount of

activity on the old versions and a has this so a a V2 makes more money than a V3 um even though they've jacked rates up and are trying to push people onto the new you know onto the new platform and so yeah I think that there might be some amount of inactivity or stickiness or user preference to stay on one layer and people might migrate much less than you might think that they would just based on what their pure economic incentives are so I think l2s need to go out and attract net new participants it's not even the mental model of okay I was you know have a user on L1 if I move them to L2 they're going to do x times more transactions I'm not 100% sure if that holds for the majority of L1 users and LTS are useful for going in and

bringing net new people into the ecosystem that's what it I agree I agree I I do think that there is I'd be curious I saw Jesse posting about the countdown to a million eth Bridge the base um I'm sure at this point has probably hit I think it was like 99,999 whatever last night so it's probably been hit um but I'd be curious to know how much of that eth is bridged from L1 versus moved over from a centralized entity and centralized entity would denote like probably a net new user and someone who's taking assets from you know dollars to eth and then putting it on base kind of thing um as opposed to something you know an asset

that's lived on L1 for a while and is finally like you know okay fine I'll move it over um and yeah I I think bridging is scary um you know native minting is kind of what I think of as being the the core driver of growth of an L2 like do you have native minting of usdc do you have native minting of usdt or or are you trusting in this bridge to keep your asset safe um uh and you know coinbase helps with this on base and that's why I think there's a huge Advantage for base um but yeah it's a scary proposition until bridging gets better or or you've got instant native um bridging for most assets as well like U moving assets from

l2s as well which is not as actively talked about but when you move assets from from like optimism you still have a 7-Day waiting period unless you want to take a a a hit on how much you're you're swapping and the liquidity for for a lot of the assets is pretty low so you know you're waiting seven days to get your asset they like literally get sent and they're not in your wallet anymore and you're like well I hope these things come back it's just like a terrible ux um so I I until all of these things are solved you got instantaneous movement of assets and full trust in bridges I I think you know this is why Max had a point it's really funny around the optimistic versus EK ux there

and I do Wonder a little bit because on the one hand it would probably be nice if all of these rollups were just ZK Roll-Ups and from my understanding that's roughly what the market thinks is that over time optimism and arbitrum are just going to become ZK rollups but there is a weird there's an incentive in there to not do that right that that poor ux is actually a massive moat and definitely increases the stickiness of their users because probably a lot of people don't fully know about that 7-Day waiting period or they're not thinking about it when they bridge to ape into some stupid thing and then once it comes to getting the assets back off people like oh I forgot about this yeah yes but I I I think that that would be you know retail that's not necessarily that large and therefore

that you know needing to pay attention as closely as a black rock who's going to say like where am I putting my assets or Franklin Templeton and so like I yes I think you can get a ret Audience by them not knowing you can kind of like Wax poetic until they figure this out but um you know you're not going to get the big players to get involved yeah all right I've got a final question for you here about just Market psychology and in general because I was you know I was pulling up the the bitwise predictions for 2025 which are great we should go through some of those you know what it feels I was talking to Yo about this last night it feels like one thing that's a little bit different about this cycle is that if if I had to try to put

my finger on it everyone's expectations are a little bit more muted than they typically are when crypto runs the way that it has recently and what I mean by that is usually when crypto and Bitcoin convincingly breaks his previous all-time high you start getting these crazy predictions from people and they're they're everything from really high price targets people calling for 500 G Bitcoin or a million dollar Bitcoin which Michael sailor is doing in Spades but you know those crazy price predictions to things like uh you know Bitcoin is going to flip gold or every you know they're going to be uh you know tokens are going to overtake the NASDAQ next year whatever it is these kind of nutso predictions that you probably remember and you could go back and listen to 2021 or 2022 predictions and get some of these and it just

doesn't feel like that's happening right now everyone's expectations are slightly more muted um I if I had to guess what the Market's expectation of where Bitcoin Tops This cycle it's like 125k or 150 you don't have many people actually thinking that it's going to be higher than that and so it it almost feels like everyone's still hedged a little bit or not as euphoric as they have been in previous Cycles do you agree with that overall sentiment or do you not well as much as I don't want to believe in the fouryear cycle I think everything about the fouryear cycle has played out so far yeah and um I think when you saw those crazy predictions it wasn't happening in December 2020 it was

happening in like September 2021 yeah you're so right yeah and so thinking about us being in like the December 20 version of of the history um I I think you know it's rightfully so still muted there's still a lot to figure out I think anyone who who kind of is in the know and has been paying attention in particular to what's going on in Washington understands that there is an absolute sea change and while we don't necessarily know exactly how it will happen we do kind of understand what the time frame will be which is um obviously you've got the the ETFs and the inflows like eth like eth inflows

another call out for like a spot-on prediction was Matt Hogan um talking about how he predicted that there would be net 1.5 billion into the eth ETFs by the end of the year just complete Bullseye that and it didn't look like he was going to come close for a while um but has completely run up in in the last couple of weeks post election I I think the what we do know about you know expectations around time frame for next year which is what everybody's thinking about like what's going to happen in the first half what's going to happen in the second half well the the seminal crypto regulation that everybody is waiting for and looking for even have like the New York Stock Exchange CEO come out being like we are

ready to to work with blockchains we just need to know how to do it and Goldman Sachs saying we are also ready to do assets on chain we just need to know how to do it everybody is waiting for this and and those are the major catalysts we also have an expectation that it won't be until next fall that you get something um you know that's pen to paper or we're voting on and yes we already had the fit 21 bill passed the house that will probably be an outline of what is put into this next canono bill but things that are high higher priority frankly are going to take precedence um you know in in this Administration in the first half of next year and so we know that there's going to be a positive Market Catalyst at the end of next year which would divert from

um you know the traditional four-year you know price action um so that's probably one of the reasons why people are muted um but I I do think you know Tom Lee uh from fund Strat had his predictions and he's calling for 250k Bitcoin next year and 237 I think is the math that he had um where it's a quarter the size of gold and and so a million Bitcoin or or even higher than that is is where you actually flip the market cap of gold so we got a long way to go before that I do think that the 250k you know call out is it's not unreasonable to expect um and Tom Lee has been right more than he's been wrong um and he's definitely had some bad calls but he's

been right more than wrong um he also predicts that the S SMP is going to go to 7K in the first half of next year and then settle somewhere around 66 6700 by the end of next year um and as contacts we at 6K right now um but I I generally think that we're under appreciating how constructive next year will be from a regulatory front I think that there's also going to be a lot of uh new budgets that open up in q1 whether this is hedge funds whether this is asset allocators whether this is family offices that are just like waiting for the new year I think that that is something that's coming up on the horizon we have those

conversations a lot you know with investors in the space you know allocators in the space um so definitely have boots on the ground perspective of that um and yeah I think you know we're also going to start to see not just regulatory change but um or or legislative change but you know The Regulators are changing as well um you know Gary Gensler already said he's stepping down on January 20th yeah supposed to be a vote this week to confirm Caroline kensaw at the SEC that didn't happen it it's looking like it's going to be a harder sled for them to be able to get her reconfirmed um I I think there's a lot of momentum on the side of um Washington and and regulators and legislators and um I I think we are under appreciating how big that is but

once again we're in December 2020 right now the game hasn't even started I think that's a really good point um and I'm trying to remember what it's hard to even remember what you felt like at various different points and you know I have also probably my emotional reaction to this stuff has changed a little bit I I felt almost no Euphoria yet this entire this entire cycle and so yeah probably this is if you're if you're listening to this and you've lived through or been working in crypto for since the 2020 cycle yeah probably I agree with that it is probably best to match this to roughly December 2020 um that's what the rough time frame is there there's also a uh a chart that I saw which almost perfectly match is the breakout of December 2020 with uh the

the I think it was the three or the five day charts candles um and it's almost perfect to a te uh of what we we saw in December 2020 and um I think there's no reason to believe that or or no reason to suggest that it wouldn't be the same yeah and that's you know the other point that you talked about uh you know allocators moving into the space a little bit more one one of the things that we've missed a little bit this cycle compared to previous Cycles is these huge 100 or $200 million funding rounds that were going into these big like kind of the ledgers of the world or the Geminis of the world the exchanges that's a huge shot in the arm to the ecosystem because those are huge companies they end up spending a lot of

money those are big headlines it we just haven't really seen that yet and so yeah two points one all of those things that you're talking about happened in 2021 last cycle you're absolutely right now you're so right yeah and number two they were happening from traditional Venture investors that were looking at crypto and trying to play catchup and I would say you know the tiger globals of the world and you know sequ of the world throwing you know hundreds of millions billions of dollars into these rounds and um we have yet to see the the non- crypto natives come back uh I was just having this conversation yesterday with another investor uh crypto Venture investor it's like when do we see that and we saw the first I think um uh or or even do we see

that I'm I'm still on the fence as to whether or not we see them come back and force and and play catchup again but we saw the first um non- crypto native round uh I think this week with lava um Keith boy and um at Coastal Adventures ended up doing that deal and I think Founders fund with Joey um ended up participating but and it's like a centralized company it's not you know Crypton native protocol investing um but it's definitely you know a signal that we think about is to like when do you start to see you know the SEO and the grey loocks and the whomever come back and start throwing money into protocol rounds or do you because all of them got

absolutely fleeced last time and you know a lot of the people that were making those deals at those firms are not at those firms anymore so it will be interesting to see you know if and when and of what size they come back with so the this is actually a great chart to look at because it I think this chart gets misinterpreted a lot of the time and so what we're looking at here is the amount of uh Crypt VC Capital invested and uh deal count it's broken out by quarter since 2016 to Q3 of 24 and so you can see yeah you're absolutely right basically investment 2121 is where you see that first bar pop yeah yeah you're yeah you're absolutely right so and and

just like anything but the reason I showed this chart and maybe it'll just be a little Alpha reminder of people is this chart tends to get trotted out at the absolute worst times and the logic that people will apply is look at how much VC is being invested into this space this is going to hold everyone over and this is It's evidence that a trend is going to continue rather than it's at its peak and so like also keep in mind two things number one the the timing of these announced raises is usually a pretty long time after the actual ual deals are done like sometimes even like six months after so that's number one number two keep in mind what was going on at this period of time in 20120 we started covid and in 2021 every

single thing went nuts not just crypto and not just Venture absolutely everything went berserk and so there there's like a I I think we won't see something similar to this at all um and but we will see a jump I think in activity I I think once again the the signal that is most interesting is non- crypto natives chasing crypto native deals yeah one thing that would be healthy for the ecosystem we've talked about it a little bit in the past but you know there is a so one thing that doesn't really happen very much in crypto because there haven't been many successful exits is later grow stage uh Capital coming in and so I would make push back on that okay why well you're seeing I mean over

the last year you saw a bunch of different protocols raised at a billion plus yeah that's a good so the it what it feels like is there are two markets right now there is the traditional sort of Market where you start as a private company and then you eventually either get acquired or you IPO on you know the NASDAQ or wherever you're trying to list and then there's another route which is you launch a protocol and you launch a token and it's starting to just feel like that is the capital Market dour or of choice for Crypton native protocols and I've been wondering yeah I you know how we always used to ask does this really need a token um I kind of think you're going to see just way way more tokens on every

sort of company which operates in crypto I I think this is one of those things where people used to say this for podcasts when we were first getting into podcasting like the Market's already so saturated and Jason my perspective was we're not even we're at the beginning of a massive Mega Trend here and I think that's what it's going to be for tokens I think just going to be more and more tokens and then you know if you can have this Global extremely liquid Market of attractive assets yeah no I know this all right here's a far out prediction for not 2025 but at on a 10year Time Horizon maybe eventually these sort of global global uh token markets might actually end up competing with something like us Capital markets which would be fascinating but I could see it I know that's I can see it you just basically

rattled off most of or some of some of the for framework I mean this is our entire thesis and and that you know digital assets crypto assets are a new capital asset class yeah and what you can assume with that structural change I mean and it's not people think about technology cycles and you know you've got like you know mainframes to PCS to internet to like mo mobile social blah blah blah all of that is with the same perspective of you have Equity as the primary Capital asset for fundraising and funding innovation there I I think with AI you kind of do have a question as to whether or not Equity is the most viable way of funding for the major companies in that ecosystem it I would

actually argue that something like private credit is probably Morin and you know there's an existential question for the traditional Venture class as to whether or not they're going to be able to play in the AI ecosystem and be competitive versus someone who's got you know tens of billions that can apply to you know the the capital expenses that are required to build large language models and so is there kind of a venture class of AI investable assets TBD but what I do know is that especially with with you know some of the changes the market structure changes that we're talking about what that means is that digital assets crypto tokens are a new capital asset class and if you're an entrepreneur and you're starting something that is technical in nature

and it's you decentralized and it's going to be a protocol you have two paths you can raise equity for it never launch a token and sell SAS service fees or you can launch a token and have it be the way that you fund raise the way that you incentivize you know activity and engagement the way that you have value acral through through decentralization there's kind of no choice ultimately um and I I I think Bill Gates gets credit credited with this but like people overestimate what's going to happen in in two years underestimate going to happen in 10 years and I think we're at that point where you know the tenure is pretty pretty clear and it's probably going to happen much sooner than that but um yeah I mean our our view structurally is that

digital assets or our new capital asset class and we need to recognize it as such and that's what a market structure bill will do yeah I'm pumped for all this I I think people are still you know there's sort of two camps here which is the I'm also pretty on board with it's hard to argue with the four-year cycle at this point it's yeah it is played through to a right it has a perfect track yeah perfect track record so okay but at the same time I do think that you have to take into account external factors and the US embracing crypto is a pretty Monumental change and I think that the market is going into 20125 not quite bullish enough one of our analysts bacho

likes to say forgot how to believe and I think people have forgotten how to believe a little bit and it's been two years of a tiate and yeah you know we've been beaten down and it's like you peek your head out from behind the like the the brick wall and be like is it safe yet like yeah I feel like that's where we're at as an industry um and the answer is yes it's safe we are we are in a comfortable position everybody Play Everybody recognize it yeah so I think 25 2025 is g to be a good year we should I know we got to run now but we should do a a review of the predictions that we did going into this year I have not Revisited those at any time time let's plan that for next week yeah yeah let's

do that next week let's do that NWS um all right buddy this was a fun one um I will see you uh next week sounds good later