Building the Perfect Crypto Portfolio | Avi Felman & Roshun Patel

Transcript

that I think that we've you know and you know crossed the Rubicon I I don't necessarily believe in the idea of Cycles anymore I think that the market participant and the way that Bitcoin trades is going to be radically different from the past why did Bitcoin Cycles happen because retail what they tend to do in small ticket investors and people that aren't professional investors what they tend to do is they tend to fomo in and they tend to fomo out and institutional investors do this too and so the composition of people in Bitcoin has changed and so I think what we probably get is we get a new Dynamic that is going to look a lot more like gold than Bitcoin of 2017 or 2021 hey everyone if you have been listening to Empire you know that Santi and I are fed up with unaffordable

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a.com blockworks terms and conditions apply C sight for details you'll hear more about Aura later in the show hey everyone Santi and I have been talking about salana a lot recently and we're excited to have a salana sponsor of Empire marinade marinade is a staking protocol on salana and the only stake pool that delivers autore rebalancing me rewards and automatic downside protection with their new protected staking rewards optimize your soul steak with marinade by hitting the link in the show notes big thanks to marinade we'll talk more about them later in the show are you tired of high gas fees I'm excited to let you know about scale a zero gas fee modular blockchain that's become a perfect fit for gaming and AI

apps because of their instant finality and lack of me explore the scale ecosystem today at scale dospace ecosystem and stay up to date with the gasless blockchain on X at scale Network that's at scale Network big thanks to scale for sponsoring Empire [Music] uh all right what's up everyone we got uh Santi and then we got uh Ai and um we we've eliminated Jonah uh from this we were do we're doing a trading in macro and you know where are we at in the market conversation but uh Jonah has been eliminated and in his place we have we have row he's been liquidated he's been liquidated yeah we've got row uh

Rose Legend been in space for a while was a Genesis for a while deeply understands the like credit and trading space and now he on the on the Venture side at hack so Obi R welcome to the show guys thank you I already missed Jonah we can bring him on another time like a special guest but Rose Rose's great I love you too Ro yeah hopefully I don't disappoint you Obby um yeah thank you as always so OB your uh markets dumped and uh you left San Trope huh yeah immediately I couldn't afford it anymore actually I I will say it's like amazing still no matter where you travel in this world no matter how expensive anything is New York just when you come back it's like still the most expensive place in the world not

really yeah San's like oh really like I one up definitely uh talking out of experience it is definitely not like Dubai is uh I was just there for talking 2049 like real estate prices in Dubai are like the same or more expensive in London uh of course all Russians have mooved there but like there's a reason like real estate services are not not cheap at all there nor are they in Singapore Hong Kong and know Paris London mon yeah I mean I'm I'm not talking real estate real because I mean real estate I don't want to compete with places like Monaco that's crazy the stuff that goes on there but in terms of you know going out getting food just like buying anything from from a store it's staying in hotels Way New York is still crazy expensive we in s for for

two weeks got a two-bedroom Villa like 500 bucks a night so let me get this you left SRO B the markets are doing the thing I heard you say that you're incredibly bearish you have been bearish for a while so so so when did this bearishness permeate into your system uh because you know Soros has been shorting the market for the last 12 years and lost like a couple billion bucks on it so you know at what point did you start becoming bearish um I mean you can track it on the uh on on the Pod and the my my public statements but basically after we failed to break 73k three times and ETF inflow started going down uh stable coin market cap stopped go stopped going up my you know when I say incredibly bearish I'm not talking about 25k I'm

not talking about 15K I'm just talking about hey it's very reasonable and possible that we can trade 50 52 you know and it's very possible that alts go down 70 80% and so far that's actually happened in a lot of cases I mean a lot of alts are down 50% since uh since since I first started talking about this and I just always go back to my base case uh which is do you know what made you money do you understand why you made the money that you did and if I look at the market why did we make the money that we did why did everything go up why why were things so amazing it's because of the ETF trade that was it that was the key and so now that the ETF trade is closed we have the ETF the inflows have

slowed down we're starting to get we're starting to get outflows there's no Edge in predicting that those flows are going to come back there's no know oh you know I figured it out in in exactly four weeks these are going to come back so my view whenever the trade is over is you just step back you drisk and you just watch and so that's that's my that that's my take right now is I have no way of telling you whether this is going to go to 70k or 50k first but I'm leaning towards 50 because the trade is over and so conversely let me ask you a question like so like the ETF um you know at what point you did that straight did that trade commence uh and when your track and flows because on the timeline

I don't know I've asked this question multiple people like who was actually predicting we' be alltime highs uh and rates on change at like five and a half no rate cuts and then we're alltime highs like you're saying that all part of ETF toade at what like a lot of people in the timeline were skeptical with ETF it happened but like at what point were you bullish going into this setup and like uh how are you tracking flows and where are they coming from I mean flows flows you can publish them on chain or sorry not they're published every day so you can just look at not just for the ETF just like generally right not just ETF just like in general crypto flows yeah cry crypto flows it's pretty pretty simple you can just look at stable coin market cap I think that

that's a and it's flatlined for a bit now hasn't hasn't been going up and then on the ETF I mean I think that's what's been driving the market more than more than anything else so you just look at the inflows and outflows into the ETFs himself and I agree with you that you know there were a lot of different opinions on whether the ETF would happen or not but the overwhelming consensus starting at about 30 to 35k was that was very likely that the ETF was going to be approved in January um you know I didn't bottom tick this I didn't I didn't buy buy 25k but by the time we broke above 30 uh we were tra trading 35 I think that was a you know we we ended up getting quite long at my at my pre at my previous fund and we man we managed to capture substantial

portion of the of the rally now when I look at the market it doesn't really matter when I got like let's say let's say I missed the entire rally let's say you're a Trader you're out there you missed the entire rally because you didn't believe the ETF was coming like that approach does that that that that's past it doesn't really matter the reality is that the market went up in anticipation of that trade so the aggregate amount of people in the market said we think the ETF is going to get approved so therefore we're going to bet on it and then you got that run up to about 50k betting on the ETF approval then the ETF gets approved and you get a ton of outflows from gbtc that are somewhat offset by the inflows and so everybody sells off they go it goes from 50k back

down back down to 40 and then what ends up happening is that the inflows surprised everybody to the upside we started getting a ton of inflows into this Market from you know brokerages people were flooding into the ETFs and that caused everyone to re rate again and say oh wait a second maybe these inflows will continue for an extended period of time and so everybody got back in the market the inflows started helping and that pushed us to altime highs now what I'm saying is that Dynamic has changed and we're just not seeing those inflows anymore and so if you're a Trader and you're trying to trade this on a you know one two three month time Horizon then it makes sense to drisk a little bit now do I think that you know we're done that the Cycle's over that we're never going to

get to 100K that we're never going to get to 150 of course not uh but I'm a Trader at the end of the day and if I can avoid a 40% draw down and an 80% draw down in alss I'm going to do my best to do that right you know I don't I don't want to be caught yeah Ro you're trafficking I guess mostly down privates I guess with hack um how are you guys thinking about it just in general uh I've seen you on a bunch of rounds we've Co invested together so like it doesn't seem like you guys are slowing down the pace of deployment you're obviously trafficking earlier stage where like as we were talking earlier like the rounds are not getting really out of whack I think the the rounds that are getting really out of whack are like the jump

from like 200 FTV to like two to three billion like month apart you're like uh did the tech justest become incredibly better uh but yeah how are you guys thinking about it yeah no for sure and also just to be clear you know we're still um pretty active on the liquid side so can touch on ai's point first um just real quick uh disclaimer here is viewer my own and should be only for informational purposes not uh relied upon as legal business investment or tax advice all right now that that's out of the way um how happy are is your lawyer right now bro super happy he's gonna for plus one toi me and yo we're all yeah yeah it goes for everyone um as far as with obious saying I actually I I

don't necessarily disagree with it at all in in the sense that like 50 after a runup like this is completely reasonable I kind of think about this stuff from especially now from a more you know zoomed out view here in the sense of risk reward from a 100K sort of bell weather for Bitcoin so if you're looking at 63 like you're risking kind of like I don't know 23 to make 37 here if you get down to 40 it's even better like you know maybe risking five to 10 to make 60 that feels pretty good so if you're a type of Trader that can drisk now and then also have the wherewithal to like load it up at 50 or 45 or whatever sure go for it but if you're not going to have the confidence to buy over there or like be on top of enough to do it I

don't really see a reason to go crazy right now that being said like having cash you know at least 10 20% of uh liquid portfolio I think makes sense for the scenario that AI described and the market is chopping and it's not retaking um it's not really painting uh higher lows per se so you know definitely pretty cautious there so that's just kind of what I'd say on obious front like totally hear you there um yeah and then on the private side yeah it's pretty much what you said there Santi like preed seed is there's still some good stuff there and like the markups aren't ridiculous and I've mentioned this before publicly I think when you look back at 21 22 the sort of most regrettable kind of things you

could have done is probably just doing like these larger growth stage rounds um that are kind of like BC sort of deals but are still pre-launch or pre- tge pre-product even that's where you can get into a lot of trouble so exercising caution on the later stage here I think definitely sense but keeping the eyes wide open on the earlier stage so that's kind of the approach here I'd say and uh you know there's there's there's still ways to structure good later stage is deals but at the end of the day you really have to be careful here for sure yeah question for both of you guys I mean you can always make money in any Market regime environment even though we're chopping there's certain narratives to catch you know um you know good and bad right is there anything

that you guys are paying attention to uh both on the long and short side stuff you really like something you definitely wouldn't touch um you know deep end memes uh defi different ecosystems yeah I can go first I mean well one I think shorting if you're pair trading is like sure but generally averse to doing that uh you know cash is kind of a short position in many ways but um yeah I mean if I if we wanted to start on the short side I think there there's there's some stuff this summer where you know you have a lot of Supply coming into the market I won't necessarily name specific names but the low circulating High float kind of stuff eventually like there's a component of

gravity here and you have to tread Waters very carefully there and a lot of these places are trying to you know push back vesting through a variety of different structured deals so that's like kind of indicative of of telling you where uh they think that this stuff could go on like the Deep ins side of things just on that point are you looking at like recent launches and how they've traded and most of them have just really just been down only some recent launches although others you know you could think of like Ono pith like Z even like some of these low float kind of things that have uh done pretty well since their token is launched but yeah maybe more recently smaller though but if you look at the larger ones which tells you like how's Market going to absorb I layers of the

world which are billions and billions of unlock like arbitrum went from two to one yeah and the East chart looks terrible yeah the larg say because I'm an investor so yeah each chart when you price it against Bitcoin looks pretty pretty awful um but yeah I that thing looks like it's begging to go lower we'll see kind of where it finds the floor but yeah like that you know short side it's it's really just this float stuff I would say like that's that's really where you you can get into a lot of trouble kind of longing um some stuff and then just get absolutely trucked in the order book over time so alongside like I think there's some Catalyst driven stuff that could be interesting like for example like I mean this one's been talked about quite a lot and

there's some positioning here uh that that that you have to be aware of but something like maker where like there's a clear sort of very telegraphed thing that they're doing that hasn't been done yet I think crypto markets like generally yeah there's some degree of pricing it in but really like the day the announcement happens like that's when people actually most people really realize what's going on and it's kind of a late follower mechanic there so like Catalyst driven things where there's fundament Al um changes to either even like token Supply splits or or what the token does like you can argue something like J uh Buu has you know tweeted very uh hinting at like getting into some other business lines that could that

could drive some narrative outside of just like being a a solid validator um and yeah similar things to that I mean honestly I don't hate uh ethereum as well maybe that's a contrarian take like as far as down versus upside risk goes because look there's going to be an ethereum ETF and Obby just talked about this whole Bitcoin ETF thing it's it's it's unquestionable to me like if you think Larry Fink is a one-trick pony here like that's just wrong like it's a question of really when not if um so I think you could start positioning into that for sure it's been like battered down and hated but I think the narrative that eth has today is even better than two to three months ago because like people think you know people think that there's this hot new thing that works

flawlessly all the time and then reality comes in and Strikes and at the end of the day on L1 you can always pay for finality and it's worth something and it has some windy effects so I don't hate ethereum honestly yeah maybe I'll get a lot of [ __ ] for that but what's what say you on ethereum okay so I don't hate ethereum at all right now I think that it's actually just from a price action standpoint the fact that the market has sold off so aggressively and ethereum has managed to stay up and actually climb and keep Pace with BTC that's that's a very good sign I think that the market has generally been extremely underallocation is so bad for ethereum

that we're heading into we're we're head we're heading into a good time for ethereum to recapture uh Rec recapture mind share and then prove that prove that out with with PR price action I think that salana metaphorically hit it and metaphorically and physically hit its limits uh you know when when it start stopped stopped working and I think that that made that made people realize that this thing isn't you know infallible which it seemed for for quite some time it's like oh wow you know ethereum doesn't really get have downtime in the same way that salana salana has downtime and I do think that in in the past it wasn't technically downtime as before it was just a Spam issue which was now resolved

transactions are landing but your point is broadly taken it was just I want to clarify it wasn't downtime yeah not not not specifically downtime but I I think I think this the the issue that I've had with ethereum for a very long time is that I think that the fragmentation into all these different l2s makes it difficult to have a coales community I mean you have people that are more interested in optimism that are more interested in arbitrum that are more interested in bass that are you know you had the the the mtic Fanatics for for a while that that seems to have completely disappeared now but basically what I'm trying to say is that when you have a fragmented community that all in theory are part of one but in practice are are are

competitive that is bad for token price and it's it's bad also for usage because what you get is you just get a a bunch of different protocols a bunch of different apps building on a bunch of different protocols that are effectively the same that are just carbon carbon copies of each other right so do you really need a you know specific applications for Bas for specific applications for arbitrum specific applications for optimism I think it just dilutes ethereum whereas salonic captures everything because it's just one and I I I am I am seeing that uh still still play out um so I don't actually know how that resolves I'd be curious to

get your take your take on this Santi are you but at least from a sentiment standpoint ethereum is in a is in a good position to get reallocation I disagree like uh I think the ETF it's the next one right so you could expect similar price action like to your point like it was it's Telegraph it's coming there's like six different or plus applications uh for the ETF it's going to happen probably this sometime this year and the question perhaps more Nuance is okay you're saying we chop both of you seem to think like probably maybe we chop for a couple months you know there's been pretty significant price action um it always serves to have some cash you know to go shopping for ethereum specifically so if you're constructive ethereum

around certain catalysts like the ETF do you hold spot eth or do you go along uh some of the l2s like ARB op um or you know starware or some of the other ones but primarily the big ones like ARB from optim um like the relative um valuation of like eth relative to an L2 are you long that short that like how do you think that trades I'm personally short it you think you think eth will outperform the l2s I don't know if eth will outperform the l2s in an absolute sense but in a risk adjusted sense and liquidity sense for sure I mean you might have eth up 50% and maybe arum's

up 75% uh in that in that same time period but I'd still rather just buy more eth I completely agreee than b Trump I think there just too many idiosyncratic issues with l2s you you just don't know where the activity is going to actually flow uh you can make you can make your bets on arbitrum and optimism and starkware and ckyc if they launch their token in a reasonable amount of time uh but I don't think that you know you if you're bullish on ethereum you buy these things cart blanch you have to really you have to really have a specific thesis and be bullish around that specific product you can't just say hey I'm bullish on E

therefore I will buy all of these l2s because I think there's a very reasonable chance that you know the supply side overwhelms them that they don't actually capture uh you user user volume so I'm just if you're if you're bullish on eth the way that I would play it if you really want beta is you what about what about something like coinbase with Bas and um you know they're making a bunch of money through sequencing fees I believe now they're going to publish earnings on May 2nd or thir I mean the Stock's got a huge runup but nonetheless I'm curious yeah I don't hate that either if you if you land on a on the if you land on the fact that you're constructively bullet she or something

you have um ETF whatever reason you get to it and then you figure out some amount of capital you want to put towards that I would go like at least something like 80% maybe a little lower maybe a little higher into eth itself and then you can do some nfts some some some meme coins um coinbase whatever for the tail end there but you want to be right if e you want to make money if etheria does what you think it does and you can get really tied up if you if you have that view and then you go express it in in l2s or some something random and then get run over by an event you hadn't foreseen unlock or a holder behaving erratically because the liquidity is just way worse um so that's my take on it and I think coinbase falls

into that for sure yeah OB I want to go back to kind of your current state what would invalidate your overall bearishness this idea that we're going to chop for a while like are there some things that you're looking at that might you know make you turn yeah uh two two specific things I want to see stable coin market cap start going up again I want to see real inflows I want to see uh genuine inflows into the ETF and an understanding of why they're they're coming in so for example one one way that this could be invalidated is let's say we get you know 300 $400 million of inflows into into the ETF and it's coinciding with these issuers telling us that they're ramping

up their marketing efforts and they're targeting new types of clients which you know you can call these you know you can call these people up you can you can look at their press releases you can look at what they're saying on on Twitter uh you can start you you can try to figure the stuff out um so that if something materially changes in terms of inflows and I understand why then that would in invalidate my thesis the other thing that could invalidate my thesis not around around BTC but around ethereum for example I mean yeah if if we start getting activity on ethereum go through the roof if we start getting uh if it's very clear to me that there's front running of an ETF on eth which is

probably eth BTC going to 0.55 you know maybe maybe we need to hop hop on that hop on that train and start and start punting punting eth or if you know there are real breakthrough applications on that aren't just meme coins mem coins going up that are actually generating real users in a meaningful in a meaningful way and real revenue for a variety different protocols then that could catalyze a run in itself um you know it's just a few things that I'm I'm always looking at to be invalidated because look at the end of the day I'm bullish on the space I wouldn't be here if I wasn't true so the uh I'm always I'm always looking for reasons to be bullish it's generally

hard to find me there's a bullish bias you know there's there's like inherently a bullish bias so for me to be a bear you know it's actually a pretty high high bar for the most part what do you think about uh Ro I want to give you a chance to just think about respond to that as well well I I mean yeah I think those are really those are really reasonable signals to look for I also will kind of throw one out of left field here like you know in early December to February we chopped for about I I was looking at it about 70 days in the 40K range currently our 60k range chop like including the 596 is about 57 days one way to play this thing with vs getting crushed is just by uh at the money straddles like go long ball like into

like the next two to three weeks like you could be upside Downs sign I do feel like this sense of some potential energy Brewing like something's going to happen and that's kind of a way to to play like some sort of move in in either direction so I I don't hate that that way of a if if you're really looking for something to do while you wait for this shop because maybe it can be boring like I I don't I don't I don't hate to add money implied Vols here for Bitcoin so I'll just throw that in there as like maybe the response yeah you also don't have to do anything yeah that's the other know there's no impossible there's no crazy yeah I just you know throwing it out there you don't always have to be looking for a trade you don't always have to we all just go to cro pay and

just want to go look I'm down guys let's go it's offseason it's cheap let's get already yeah dude I I will say when you're bored and like the last thing you do is go long ball like that that's really the how do you br how do you square this idea that you're that you don't love the L2 trade but then hack is maybe making some investments in like you know eclipse or movement or monad like those are I mean some of those are like evm l2s right some they're parallelized or they're bringing move to the to ethereum but like yeah how do how do you kind of square those two ideas together well I I want to be granular about it if you're you know bullish e going into like an

ETF Catalyst like this cycle whatever and E eat's going to go up and you want to express that view I think eat's a very clean way to do it like hack this is a 10year venture fund cycle here this is and the price matters a lot so on that element and scale at the right price like yeah empirically you've seen these things do really well it's kind of hard to to ignore that so that that's it's just different time on this point alone like I've asked this question a number of times and I've actually look at the data like across all my investments if you would have done an infrastructure deal or pretty much any investment sub 50 million fully diluted it's generally positive EV you're taking duration risk maybe your hands are tied sometimes that's a good thing that you can't actually you know yeah but uh it's

uh it typically it's really hard to outperform like eth and Bitcoin over the long term um but generally speaking like it's all very price like driven uh which is the new on you talking about like it's very different if you're investing moan out of three billion versus you know 100 million yeah widely different and the the the question I'm maybe Obby not as uh appropriate for you because I think you tend to traffic more on liquids but like if you were to you have a portfolio you can draw it from scratch today what would your relative allocation be across just stuff salana you could buy anything and I want to understand the ratio of liquids to privat so I come with to carve out how

do you play that how do you think about like timing that that's a really tough question I without putting numbers into it because I might I mess up adding up to 100 well maybe I can a little bit we'll help you don't worry yeah yeah okay well I think you know have it really depends on your propensity like what who are we talking about here we talking about like great question you both heard yeah professional money management and and and you have size it's not like so like you know maybe I don't know I think the answer changes on the margin but just let's assume it's just 100 yeah let's say you're money manager and you have some degree of valuing liquidity so at minimum I would go at least just start

with like keep 50% liquid of which you're going want to have a cash position you could earn decent yield doing stuff like basis whatever um fire into like 50 40K if you get there or something like that like that's good so like let's say of the 50% cash position of the 50% liquid 20% cash then the rest you can buy a smattering of salana ethereum Bitcoin coinbase on the private side then I would split it up so that's like kind of anything in particular in the ratio of like e to Soul particularly e to so to BTC like what ratio I mean if you don't want to mess it up I would go something like probably even split across them if you want it it's kind of like the when you like do a your wealth front or these Robo advisors if you want a little more risk

I would go heavier salana to be honest there's more upside there just sort it by market cap right if you want a more uh you know middle of the road bag go go uh Bitcoin ethereum I actually don't hate if I had to pick one if you had to put a gun to my head I would probably go a little overweight e then Bitcoin then salana if I if I had to if I had to pick one of the ructions and I think a a lot of that comes from what Obi was talking about earlier which is just positioning in eth and general hatred towards the thing and how awful the eth BTC chart looks like I'm expecting to be wrong on that chart but not to be able to find the floor it like just kind of being like it looks pretty bad right now like

let's just start um so that's that on the private side does that make sense on liquid yeah yep on the private side um I think you know you have two main things that you could do here it's like there's the infrastructure like there's the l1s kind of things or Al then there's like more of the application layer people building things on on application on on l1's in existing block space um and those the latter tends to be more like pre-seed seed stuff and the former at least now is more like growth although there are some newer ones coming out but a lot of the big rounds kind of got done it does pain me a little bit that applications just empirically ACR less value than the l1s because they are so cool and I love taking calls with them but you know

depending on the size of you let's say like size is not a constraint like you're not moving a billion dollars here or something smaller uh I would you know if you can get applications at the right price like I'm talking like sub 20 sub 15 even like going like 20 30% going like of that 50% like let's say 40% 30% into like applications on promising ecosystems that are coming out relevant in this cycle which would probably be like bar chain um you can argue maybe monad uh depending on kind of how that comes out and then maybe some ones that are like moving to their own L2 or roll up that that are promising and have users like something like a hyper liquid or whatever it might be like those things you know at the right price early would make sense and then the rest I

would focus on uh infra infra plays like l1's you know you have to be dicey there because you have to be careful because a lot of them have been marked up a lot but look like if you're thinking on the long term and thinking about the relative value of Sal on ethereum versus these things like even some of these price year rounds or even where these things open liquid you can earmark that for like day one M uh Toops into things that just list hopefully maybe you get lucky maybe maybe some of these things list when bitcoin's trading at 50 like yeah you're you're looking good day one potentially there and then that's kind of how I do it and then yeah so it's pretty it maybe you could do like 1% into mun coins maybe I should throw that in there yeah yeah before I go to you

roow um on this point uh just a little bit of nuance you're speaking from like a fund that has like a 10-year investment Horizon you're comfortable taking duration risk you're kind of playing if you're investing in a private round today feels like you're probably G to catch a next cycle kind of thing is that the general yeah that that that's that's from someone that doesn't feel like they need any degree of liquidity for whatever reason over the next like seven years I would say if you value liquidity a lot just change that initial ratio make it 70% liquid 30% and then up the cash position a little bit because of the volatility so that's kind of how I i' think about it um generally it's it's it's for yeah if if you're okay with the duration a over to you yeah I I think so just a just a

prefis I do I still do a little bit of Angel Investing um and I so I do think about how to put this put this into into the portfolio the way that I would allocate liquids right now is I would focus heavily on making sure that you have cash to buy if things if things really fall out so I'd probably be somewhere between 30 to 40% cash um but if you're allocating you know and you you want to just say okay I'm in crypto then the way that I would do it especially if you're looking for you know to hold and not trade over the next year two years three years if you just want to set and forget portfolio what I would do is I would probably have it something like 30%

BTC you know 30% you know 20 20% eth uh 30% soul and then basically anything else that you find valuable on the application side I probably wouldn't choose any other l1s or or l2s to put in that basket but anything that you think is a good product or you've done research into that you know you you really like I would I would allocate to the application layer across these types because I do think that if you're going to bet on crypto you have to make the bet that applications are going to be winners in the future the whole meme coin game cannot last that much longer this cannot

last another year another two years another five years uh there will always be mem coins that will do well and there will always be mem coins that will make that will make you money but if we don't have applications then your investments in crypto are probably not worth anything anyway so it's uh you know I think it's I think it's important to have to to have some allocation to this to to this uh the this this sector if you're a set and forget kind of person if you're just a hey I want to allocate to crypto I do think that right now allocating allocating to privates is is tough just because you you have to be a very talented investor like you know you have to be a rower a

Santi to get access to these good deals right now otherwise you're not gonna like is like in the other Angels category yeah notable Angels other angels I mean realistically I just don't think it's at this point in the cycle I just don't think it's reasonable to assume that unless you already have a brand and unless you've already been a good angel that you're going to get any allocation to any good deal uh so there's probably a ton of adverse selection to people that are trying to Angel right now that you know aren't able to provide a ton of value to these

projects um I mean and even if you are able to provide a ton of value if you haven't in the past and you don't have that reputation you're very difficult to get in right so I think for your you know average investor and even for your average VC fund it probably doesn't make a ton of sense to be doing a ton of venture right now all right I mentioned them in the pre-roll now I'm going to bring them up again it's arbitrum Santi and I are really fed up with these high fees and we're really excited to have teamed up with arbitrum for the next couple of months on Empire as the leading ethereum scaling solution arbitrum now Powers hundreds of decentralized apps across defi perss nfts gaming and a whole lot more the team has showed us everything in the ecosystem both now and what's to

come and we're really really excited about it arbitrum allows both daily users and developers to interact with ethereum at scale with low fees and faster transactions the way the team got me excited was through portal arbit .io so my call to action to you is to get started by visiting portal. arbitrum doio go experience on chain like it was meant to be this episode is brought to you by Aura online crime is growing at an alarming rate and cyber criminals continue to find crypto investors like the Empire Community lucrative targets we've all heard of someone who's Fallen victim to some sort of online attack Aura helps prevent against that for example if your online accounts or your passwords were leaked online or if

someone tries to open a bank account your name you'll get notified in real time about that with 24/7 USB support or his team will be there for you to resolve fraud issues even if it means getting on a three-way call with your bank at midnight not saying I had to do that but I might have had to do that so a.com blockwork sign up for the 14-day free trial terms and conditions apply seide for details Aura is the new standard in digital safety check them out a.com blockworks free 14-day trial hey everyone Santi and I have been talking about salana a lot recently and we're excited to have a salana sponsor of Empire marinade is a staking protocol in salana I remember when they launched I think it was back at a salana hackathon

and they were funded with this 80k grant it's super cool to see how far they've come they're the only Stak pool today that delivers Auto rebalancing me rewards and automatic downside protection with their new protected staking rewards you can stake natively or liquid steak with marinade and get the same high performance deleg ation strategy that thousands are using already to stake your soul to over a 100 of the best Salon of validators marinade has been live for over 2 years and they have audits completed by four of the top security firms in crypto the delegation strategy is a first of its kind so if you're staking your salana if you want to start staking your salana if you want to get some yield from your soul start staking today with marinade go hit the

link in the show notes big thanks to marinade for everything that they've done in salana staking land go check them out go stake salana with marinade today hey everyone Jason here I know you've been hearing a lot about the intersection of crypto and Ai and that's why I'm really excited to share our newest partner and sponsored Empire scale a high performance modular blockchain that's revolutionizing gaming and AI with zero fees and instant finality scale's unique architecture allows for massive scalability and has already saved users over 6 billion in gas fees the five main takeaways that you need to know for scale one Z gas fees two scale has instant finality and lack of muv three the zero gas fee model of scale is really important for

blockchain gaming adoption as Gamers don't have to pay transaction costs or have the skl token four scale is multi-chain this design allows for nodes to be combined to create chains and for individual sub nodes to actually be removed and relocated which creates greater security and collusion resistance and five scale has become a really good fit for AI daps because they're fast automated zero featur transactions big thank you to scale for sponsoring Empire we're excited to partner with you guys bridge over to scale if you're listening to this at scale dospace for/ ecosystem follow the journey along with scale on X at scale Network that's at scale Network big thanks again to scale for sponsoring Empire what about um it's a excellent um

kind of analysis from both of you guys really insightful uh we've had the salana auction multiple rounds second one closed yesterday I heard that this discount was very very a fraction of what it was in the first one um how do you interpret that um and I think it was like widely over subscribed um I I have two insights in it or just I read into that and say like most funds are probably underexposed to Soul um and are kind of waking up there is obviously it's a it has had issues but I think most funds are like very much ethereum Centric still are the vast majority now there's been a huge price up in um but funs are kind of trying to catch up to the trade and they're

taking like arguably like you look at that and you say why don't you just long soul I mean isn't that like a strong signal that the market like if it's 7x over subscrib it's pushing it up like you're willing to like the vesting is like multiple years four or five years isn't that like a clear signal that you can take and anyone can look at and say well you know in many ways you think about flows you have a lot lot of dry powder from a bunch of crypto funds when it didn't get the auction like is that something that you look at and say okay well maybe there something here not to the not to the extent of like an ETF approval and the magnitude of the flows but also it's a you know fraction of the size of Bitcoin I do I do think I do think a lot

of that just understanding how funds operate um a lot of it is the idea that one you could hedg it if need be uh if at a future date sure and two that the yield looks amazing because you're buying it at a discount right if so just using simple numbers if Soul's giving you 7% but you're buying it at 50 and it's trading at 150 you're getting 21% on your dollar right yeah and so the yield looks really good from that perspective whenever you buy something that you can stake at a stake at a discount so what I would say is it's probably 70% what you said and 30% it's actually it's a good trade like it's a

good I did it I did even even if you I get the second someone out bid like someone what was the vest on the first so the first price was like 6 65 and the vest was like four years or something five yeah I will I will add like the the one thing you have to keep in mind here on as well is if you're a natural Soul holder and have had a bunch for a while and you're in like the long-term territory or you know maybe you're in a Dr stst doesn't even have taxes it makes a lot of sense to just sell it and rotate into the liquid or into the into the IL liquid kind of thing and I think a lot of that was a lot of that a chunk of that flow is definitely recycled so that's not necessarily net new buyer so

you have to be careful about that component good point and the other is I mean I was looking at I think maybe it was figure some some of these places where they have like a salana investment opportunity like just smacked on their front page and a lot of this flow is like people writing a good memo reeling in some LPS collecting some carry SPV style stuff where the actual people that did the pitch and like were making a little bit on it it's relatively risk-free to them so that's the second thing you have to be aware of so those things could damp in the hey this is like a no-brainer like good demand situation that being said I do think it's less than 50 like it's probably less than 50% of the flows that kind of fall into either of the two categories there so on net it's probably fine but

there are things that can you know you have to like double click into to make sure that like you don't think of this as just pure like hey all this is coming into this thing and yeah the last price if if I'm here if the rumors are right because to be clear was not in it um it seems pretty aggressive like within single digit percent of where we got liquidated Wicks too that was not the case in the in the yeah that the point that I was trying to make it's like um around it's impossible to time these markets I'm not one you guys are more sophisticated in that front I do I do pay attention when I see kind of this type of exuberance right where um you know the amount of capital and the terms matter a lot and if you're

taking something that has over a year lockup there should be a certain degree of discount and I understand soul is like you know different than you know uh U you know application or whatever type of investment just by share market cap the discount should be tighter but still like you know I um you know last cycle like we saw a lot of funds that had no interest in crypto come in late uh buy stuff like FDX uh and just no diligence like let's let's just go like I want exposure you have now Jane Street has over 5% of all the coinbase stock I the 13f is also misleading road to your point because they might be doing a whole B bunch of other stuff on the back end yeah that's like when Renaissance own 5% exactly you can't just look that and say oh they're incredibly bullish

coin maybe like shorting it or whatever you know it's just uh difficult to just make simple analysis but nonetheless I'm curious more of a general question around the timing of the cycle like um both of you sort of near-term bearish still constructive longterm feels like we're there's not been an invalidation of a bull market um you have draw Downs in a bull market it's normal any bull market has had that I'm curious um if there's anything else that you guys are paying attention to in terms of how long this cycle this cycle lasts in terms of flows in terms of inflation and the Market's ability to absorb that applications like how are you guys feeling about generally 2024 I would just add to that I would add on top of

that question question like one thing that would be interesting to hear is both your guys' take on comparing this where we're at today in this cycle to the last cycle like are we is this the beginning of 2021 is this are we in 2020 like where where are we relative to last cycle I'm I'm a cycle denier personally yeah I was gonna say something like that ior please I I I think that I think that we've you know in you know cross the Rubicon I I don't necessarily believe in the idea of Cycles anymore I think that the market participant and the way that Bitcoin trades is going to be radically different from the past Mo you know in large part because of the ETF but also because it's now so large it's a genuine macro asset and so I don't think that we'll get those same

80% draw Downs you know 10x 20x 30X UPS I think that it's much more likely that we get muted draw downs and when I say muted maybe 40% 50% and then slow climbs back higher you know with shorter power parabolic runs on a March to the right over the course of the next 10 years that's my that that that's my take is I think that Bitcoin volatility is going to dampen because think about this why did Bitcoin Cycles happen because retail what they tend to do and small ticket investors and people that aren't professional investors what they tend to do is they tend to fomo in and they tend to fomo out and institutional investors do this too that's why we're

not going to lose sight of yes there will be periods of massive expansion and then big collapse but it's going to be muted because institutional investors tend to move more slowly and allocate on longer term time Horizons and that's what's that is the now shifting holder base of BTC away from your fast money speculators to people that are allocating as part of a portfolio um you know and when I say institutional investors I don't necessarily just mean you know the hedge funds of the world it's it's a mindset right your at your person that lives in Iowa that is buying Bitcoin through their Fidelity 401K is much less likely to trade that than somebody in 2017 who's

22 years old and trying to hit 100x right and so the composition of people in Bitcoin has changed and so I think what we probably get is we get a new Dynamic that is going to look a lot more like gold than Bitcoin of 2017 or 2021 yeah um I'll add I mean I largely agree with a lot a lot of what you said there you look at previous um Commodities particularly oil and gold after the existence of a Futures market and then in turn uh spot ETF Market the volatility just naturally dampens over time and part of that it's like a maturity thing so you have structural differences cycle to cycle and Everyone likes to say you know maybe this time is

different whatever but in this case like the ETF is is a big structural difference and how that plays out is going to be different and I think when I think when you think about cycle tops or like really really like what you're really asking is like when do I sell or dris to like uh save myself from like a 60% draw down and then like rotate back into I think if you try to pick that point right now and if it's like in November of this year if it's in March of NE of the year after whatever it's really hard to do that there there better ways to do it which is you can just look at the same things each day and then when the things uh give you the signals that you want to deris then then that's when you can call a cycle and one

of the the main things look at I I think there's there's this interesting it's like junglebeat do.a some kid made this I don't know um we can maybe link it or whatever but it's a very good sentiment indicator with like app store rankings and things like that and it's and you remember November of of the last cycle when when Disney and Nike and all these brands are saying wag me and friend on uh Twitter and when you feel like the reach of celebr yeah that that thing it's pretty good you go down to the bottom there's like this um there's really all the way at the bottom there's a really good this thing yeah this thing is really interesting so I like this uh indicator quite a lot um those are the kinds of things you can look for if you're

thinking about how to do it actually nailed the kind of 70k thing too this year which is interesting um those are the kinds of things I look for when you're thinking about how to do risk but yeah I'm not I'm I no one I can't say with with a straight face like hey March of next year is going to be the top for X Y and Z macro reason and my expectations of the FED all this stuff changes and you have to be just I think hyperware in the moment roow how do you think about so the last cycle can largely be credited to credit I think um whether it's like I mean the genesis's book got freaking insane obviously you could say Luna and terara was like a version of credit I heard you talking about that on another podcast um you know blockfi Celsius like the it was it

was a very credit driven cycle I think in 2021 um Market basically boomed in 2020 and then credit led the rest of the cycle I would argue so right now we're not right now we're not seeing that you're seeing a lot of I think pent up demand for credit but the supply has not come in to fill that demand so what's your expectation for like how credit evolves and drives this cycle yeah um so one thing I'll start with is I think humans will always try to price a yield for a credit risk like it's a natural thing that you you always perennially do um so to that end credit will come back in some form of another and it's starting to in in in its early stages I

think it'll just be done in a lot smarter way like there used to be this significant element of trust in crypto credit markets which is you know it's sort of ironic relative to what crypto actually is but things kind of just happened and there was like Hey like locked you know if you want to lend against locked warrants and you know random things like that that aren't isn't really liquidable good collateral people did it um obviously like like the grayscale thing was a big part of that I think now there's just general generally more awareness around what is good collateral and how you can liquidate it we even saw it over this weekend with um Renzo eth uh D pegging quite a lot um some of this stuff is is pretty Li

liquid and so you have to be really careful I think like stuff like what some take for example something like Moro what they're doing is kind of cool where they're like hey you can isolate this risk um for Lending pools into these specific sort of vaults and with managers of risk that that that do the thing and you as a lender can choose which one you want to be exposed to and it sort of segregates this whole thing out uh into these sort of silos where like you know one can be more risky than the other but there's no contagion risk between the two and I think generally smart contracts help facilitate that structure of credit markets the problem you had before was that all this stuff was bundled into one sort of net pool of contagion prone credit so I think the future is more calculated it has uh

better collateral of course but also more isolated collateral and less contagion risk and more onchain versus offchain and less lending against uh locked warrants or saps or anything like that and I think that's the healthy sort of rebuilding of the credit Market that will occur um but it it's gonna take some time it's gonna be slow and yeah like a lot of people you I think GCR tweeted this he's seen a lot of people get burned by just looking for one thing in life which is yield right so like there's this element like crypto is volatile innately and if you're bullish the thing like owning spot is already a form of return quite a lot like you don't need to complicate it by earning maybe like an incremental yield on your Bitcoin for taking some crazy risk on some Bitcoin L2 with a trust assumption

you don't understand so there's been that shift but I do think what I said before it's going to rebuild in a healthier way in more isolated smart contract enabled functions to reduce contagion risk and and come back in a in in a in a better form do you guys think that Revenue like uh there's like fundament and Def will matter the cycle or no there's a lot ofer charts floating around Twitter like a makers is capturing I think 40% of the fees in defi right now like will these matter at all this cycle or no I think the long yeah go ahead Obby yeah I think they will I mean you you already you already see it with maker right it has outperformed a lot of defi uh just by virtue of actually being

being a good product I think that it's you know unfortunately dwarfed by the gains that you got from meme coins but it's proven out that people do actually care about good products and you know I I I think that moving forward what we kind of need to see is we need to see gains in other nonproductive areas go down and then you'll start to see the market care a little bit more about you know things like Revenue things things like good products because they're going to have to put their money somewhere and it's it's a matter of when they're you know the reason that it quote unquote doesn't matter is because if you can hit a 10x on a meme coin then you're going

to do that instead but as that starts to dry up which I think it will over the next year this is going to start to matter a lot more when you say nonproductive this reminds me a lot of like Charlie Monger uh who was critical of games when you say games are are you talking about like memec coin trading games or just gaming in general and and how how do you make the distinction between what is productive and what is not productive to the crypto economy I would say if it's if it's solely based on other other than BTC if it's solely based on greater fool and there's no you know there's no actual product there other than community community is obviously very important

but the way that I would just say it is if there's no other product than Community then it's an unproductive asset so I'm thinking of your sheas your doas your uh you know Pepe pepos anything that is sold in sou for that matter un productive I yeah entertainment Valley is not productive uh I I think look you know you know me I'm uh like I I do punt meme coins I do buy these things I'm not saying that they're not gonna that that they're that they're not going to go up in fact they can't go down I mean it's the question whether they go up or down is irrelevant to whether they're productive or not but I think that I I do the way that I would describe it is I

don't think that crypto can survive if it's comprised of solely you know entertainment value I think it actually needs to be you know it needs in order to grow past where it does today it needs productive assets like maker to to Really to really push through I mean I think I think that there's just an upper ceiling that we're probably close to in terms of nonproductive asset I mean hundred billion dollar worth of value 200 billion I don't think there's a ion dollar here right in terms of on productive value that can be created by the market yeah to that end Obby I actually I think there's been a pretty promising sort of uh cultural shift in the way I've seen tokenomics get constructed especially at the earlier

stage here I think part of it comes from the fact that Unis SW swap has put out this proposal for um potential fees switch you know how that plays out regardless like that's out there and then dydx moved to this app chain model um which is which is quite promising you're starting to see more I think places just be less scared of like uh not doing like a just a pure governance token and kind of wishy-washy figuring it out later like they're willing to take the risk and actually drive value to the token and I think it matters less honestly at the earlier stage like no one cares like keep it governance whatever it's fine like you're not making huge revenues but it's it's it is really interesting to see when things get big like maker like Unis swap that and and like dydx they're making that

shift and I think that's the promising part on the fundamental side of things and I think um over time like objectively that will matter and I don't think meme coins necessarily need to die to make that happen like they can exist tangentially like uh you know maybe you capture some flows to points to that but I I do see that that Trend um kind of formulating right now and I think that's that's promising on the on the fundamental side I think you know the original question was maybe more related to um like indicators and signals and sure yeah so for like mature stage things that are thinking about putting their token into a more valuable value ACC crewing State like I do think like yeah looking at some of these how much

fees are paying and like what reasonable split could go between um the token versus like you know fees to LPS or other participants on the platform like that that stuff I think is quite relevant and less people look at that but I think they also I think it's a mistake to look at it when when it when something is in its nency like it has to be more mature to flick this on like no one cares if you're making 100 200k like it's got to be big um the other things I look at is like ethy a lot like ethy discount to spot like that that that could be quite an interesting trade coming up um it's pretty deep and I think that's that's a function of sentiment um and and ETF sort of uh uh doubts but I mean historically the gbtc trade you could have bought Bitcoin at

like 9k in the bar or something like that I for best trade ever yeah and Bitcoin has done this whole thing and like ifig is going to let you do it again and also the same products like E versus gbtc like I heard too discount as well yeah there was a big premium there's a discount the thing is that one's pretty thin I think like as far as float goes so fair kind of see so aty discount is definitely one I'm I I I I panic Less on big exchange flows I think those get like kind of a lot of hype on Twitter like oh like big wallet moves X to Y sometimes it's fine for Majors I think it matters less for more for smaller market cap coins like yeah there could be something there but for Majors I think um yeah I don't I that's super

short term and a little and a little bit I think overhyped relative to what kind of signal and act actionable Insight it gives you um and then obviously there's the usual ones basis is probably still the most important one historically and moving forward there's like never a day I'm not looking at funding rates funding rates for me are the most important and then like also like stable coin yields in in money markets like a and compound maker yeah yeah that's if that goes on hand you just know people going really long and just uh and where those flows are going also yeah that's underappreciated for sure the latter yeah um I'm curious um I mean r you gotta go in a bit but um like what um I'm good I'm good okay worries what um what do you what do you guys think

like the market or just General market participants are getting really wrong or have gotten really wrong particular as of late I have one um okay I'll go first I think uh I this is going to be controver I think Bitcoin defi that's the one that that that that they've gotten wrong and I think there's this narrative that um OG Bitcoin holders are going to wake up out of the you know Villas of St Trope and and and start using def5 because they can canonically do it at the end of the day when you think about these things one is if you if you have block times for whatever Bitcoin L2 you're

building and they're faster than 10 minutes there's some trust assumption in there at minimum and some of these l2s look no different than ethereum for what for what for what ethereum is to bitcoin as as this Bitcoin L2 is it's just branded in a way that makes it seem adjacent to bitcoin if you do have 10-minute block times um there are generally less trust assumptions but still something there like maybe it's an offchain index or something that's Computing smart contract code and no one asks for defi but 10 minutes and slower and more painful to use before this is not I don't think this is unlocking new Bitcoin OG holder liquidity and I think you have the same pool of bridge pro PVP Capital slashing around in these Bitcoin uh you know

areas and I think that's apparently controversial because a lot of people think it I I get the positive side which is like look at you know e2s versus but I generally agree like most of the pitches I've seen from these people trying to build an L2 on bitcoin I'm like you fundamentally don't understand the Bitcoin holder yet again so like if you look at like D5 summer Peak D5 summer you had like Badger you had tbtc like wbtc like people could bridge over to ethereum the core majority of bcoin holders are like no [ __ ] way I'm G to bridge my stuff over to this shitty ecosystem with smart contract risk but ironically they ended up depositing a lot of their stack in things that blew up like blockfi um yeah ex I kind of like I see the aggregate size of blockfi and the

deposits that they were able to gather as kind of a good proxy not just block five but like like some of the other players um because ultimately a lot of Bitcoin holders were just more comfortable or just wanted to capture some yield to your point it just at some point gets at you I'm not saying the entire Market but um so I I do think like uh there's some technical debt of like stuff like stacks and stuff like that I think new designs I mean obviously bias because I've invested in in two but I do agree with you the nuances most designs are just cuz hear a lot of teams saying well look at the L1 L2 stuff like most people are punting in optimism they don't even have fraud proofs today even offchain Labs disclose some vulnerabilities in the in the fraud

proofs that are in beta like if you without fraud proofs it's a multi seek there's it's just a huge amount of risk and people are saying oh you know that's gonna be the same with Bitcoin I I agree with you that's likely not gonna be the case they're they're probably overstating the market size at least yeah and for now a lot of these things look like hey stick your Bitcoin in this little box lock it up for 30 60 90 days and get this other little thing that's not what Bitcoin ogs want They Don't Really they they just want they want like protection purchasing power and like inflationary long-term stuff like they don't want to put their Bitcoin against some random token in an amm on but feel comfortable about it because it's all running on bitcoin and I do think the existence of blockfi or stuff

like that where like yeah on one hand they did go into that but the fact they blew up doesn't really I don't I don't think help the the case here like that happen too right so yeah I'm pretty I think it's I'm not necessarily super like net bearish on it I think the hype relative to reality needs to be tempered that makes sense yeah I think that's that's a reasonable take I think the the one the one area where I probably disagree is I do think Bitcoin nfts have lasting and staying staying power I just because of the of the permanency I agre that too but I agree with you on on bitcoin defi I think for for me and I'm I'm very curious to hear everybody else's take on this because this is somewhat loosely held but I haven't

found any good arguments against it I'm I'm I'm pretty bearish on the idea of reaking I know everybody gets super excited about it uh and everyone gets up in arms but I just don't see where the demand side is really going to come from to justify the crazy valuations that people have assigned to these types of products and so all of the hype around these you know Renzo of the world and nigen layers and I I I don't see how they justify the valuations that they have uh based on the expected demand for you know the eth that that's restak and so I think we're going to have a Reckoning where all these things are probably down 80% over the next year to your point I I agree with you I think it's unproductive that was my question around like what do how do you define

productive applications productive use of capital because people are like all like IG layer is sort of the Saving Face Grace of like ethereum this cycle it's sort of like has reignited all this interest people looking at TBL and deposits and IG L it's like so what okay you're going to take it's like all Financial engineering but what's the actual productive use case of it some some designs like I I I get like ethos were just trying to like lower the security cost to spin up an app chain using restake e like okay like I I get the like um shared security model um like allocating that perhaps more efficiently like principle but I do agree with you that's different than I think the whole other component which is

just like like reaking and it's just uh yield on yield on yield on yield and it's sort of we know how that ends I mean it's from in my mind I think mem coins are far vastly more productive from an onboarding perspective from an attention perspective arguably yeah like regulatory stuff like people are critical of the industry like it's like on the margin but I think they are more productive in that sense than uh reaking like oh I think I got to take the other side of that one like if you're yeah like like 10 times like recursive Leverage The productivity is that if you're an operator or you're founder today and you want to go start something like you the I don't know Ro I saw you

guys invested in uh alignment or like aligned or whatever it's called like they're Rome yeah Rome too I'm not there's distinction between Anan and like everything else that is now on top of Ian like doing the nth recursive leverage on your eth that like there's the there's two sides of this there's the leverage okay so today there's like 10 billion re uh restak on igen Lair or whatever it is 15 billion I don't know the actual number the I think you guys like Obi makes a great Point like there are not enough avss in the world that need that 10 billion so what's going to end up happening is like they igen layer needs to keep incentivizing people to do this reaking and it's there aren't enough like avss

to basically like capture that 10 billion but I mean I think the the thesis is that there will be because like if you're a Founder you're an operator whatever and you need you want to get that security from from ethereum like the easiest and the best way to do that today is to go through is to just create an AVS on igen layer um so there's like the yield piling on top of each other side of this but then there's the like it does bring some productivity to the industry because it's the best or maybe maybe not the best security I think shared security is a novel construct I I just said that yeah especially for like some like Cosmos look look at e like yes not not just eth as a collateral I think generally speaking shared security brings a lot it's a big unlock I think it inces some

security issu but but yeah no it's I'm not arguing that I'm just arguing the recursive leverage reaking that is sort of like a question going nowhere and act adding more fragility to the system uh on liquid restake tokens like I could see about the fragility and sort of iterative contract RIS who taking there I think the broader thing here is that crypto go to markets just generally like even reaking space but also deepin and some other areas they tend to be very supply side focused out the gate and then like you there's a big question where the demand is and whether it comes in or not and How Deeply it comes in in the case of igir I do think right now like yeah there's a lot of Supply in there but I think the market will naturally find some equilibrium here when you log in and the abss start

coming out and you're earning like a very incremental yield to Native staking like it's not necessarily worth it for the slashing risk so Capital should log Ally outflow and then maybe that equilibrium point is 5 billion maybe it's 200 million where the premium on the interest rate you're earning for providing these abss where you do have some degree of slashing risk is actually priced correctly and it'll take some time to find that but I think for now for sure it's way too supply side driven so that's my that's my thing there I'd say I definitely agree with that that's a really good point yeah and my my yeah my my initial statement was just articulating that right now it's way too high and that I'm probably closer to your one bill like that a 1 billion number than I am to a five billion or

definitely definitely to a 10 billion yeah right I I just think that what we've seen is that we historically this type of architecture hasn't actually been taken up uh in a particularly effect in effective manner so while in theory it is productive in practice did you build a product for nobody and that that remains to be seen good point we got to end this on a higher on a better note than that uh well you know if world three breaks out bitcoin's probably going to 150k I don't I don't know about that gold gold is going to the moon but I'm not sure if Bitcoin is Bitcoin Bitcoin is for sure going to the Moon in World War I scenario no no no question so every day we inch clo closer to that and

every day we inch closer to 150k BTC AI row let's end on this um give me your price predictions end of cycle not Financial advice etc for end of cycle Bitcoin eth and salana yeah know there is no cycle anymore and of there's no cycle yeah didn't you listen to the damn podcast give me a give me a year give me a year 12 12 months yeah one year from now I think one year from now we're trading at we're probably trading at 85k after a run up to after after run up past 100 okay what about Ethan soul

eth is probably at five maybe like four and a half K 5K Soul's probably at 400 it's my guess okay row how do you do um yeah so I I'm back now good were you asking for Price prodctions 12 12 months from now yeah prices we're gonna have you guys we're gonna have you guys in a year from now so yeah what's so month for now April of okay um I think bitcoin's probably over 100k for sure I think eat's definitely above 5K um emphasis on I think this is not Financial advice I really get scared at the price RS and salana is uh above two I think they all break their out their previous

highs and and and then buy some margin yeah that that's kind of my take I also will add on a more positive note like 12 months out is is fine but on the long term you you you really you know you really can't lose the against the governments inflating their currencies so yeah that's uh e e 10K longterm Bitcoin probably 200 250 Sal maybe like 700 agreed Jens good pod appreciate you guys coming great pod on really fun combo yeah chat with you guys everyone Jason here thank you so much for watching today's episode wanted to take a quick second to thank today's title sponsor arbitrum we know you are

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