Consensus Bets Pay Off In 2025 | Weekly Roundup

Transcript

over the last 6 months. Like if you ask someone who's relatively cryptonative what's going to outperform this year, they would have said Hyperliquid, Sooie, Fartcoin. It's one of the first times that it's it's it's actually crazy how well consensus bets have worked out this cycle. As I've seen it, it's never really worked out like that. This episode is brought to you by Scale, the next evolution in layer 1 blockchains. Explore the gas-free ecosystem at scale.space/ecosystem space/ecosystem and follow their journey on X atcale network. Thanks to Scale for making today's episode possible. Nothing said on Empire is a recommendation to buy or sell any investments or products.

This podcast is forformational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Block Works team may hold positions in the company's funds or projects discussed. Boom. What up? Happy Friday, folks. Santi, how we living? Oh, we're surviving, man. We're just day by day. It's about you. Good. Good. Feeling better. Needed a couple days after uh Santi and I got to hang out in person, which was lovely. Amazing. Needed a few days to recover.

No doubt. I mean, uh, you know, there are very few reasons why, as much as I love New York, you know, I I do think that, um, for a second there, um, it was just a very wholesome encounter. And I I'm excited because I'm going to go to Permissionless in a couple weeks. I hope I'm going to spend a few days before and after. I hope we can record some killer pods in the studio. We got some live Yeah. live things coming from Permission List. That'll be good. Yeah. Why don't we This is This is the happiest I've seen you starting an episode after our new producer Jarrett told you uh guested your age and said you are under 30 and I've never seen your smile this big.

I mean you don't make me happy. He was like how do you run? Like I'm looking at your times and I was like how old do you think I am? And he said under 30. And I'm like above that. So yeah buys him at least a year in the role. At least. No doubt. No doubt. All right. Before we jump in, there's um there's I I I want to call out there's a bunch of fake Empire uh producers. So Jared is the real producer. Um if you get a message from someone saying they're Kai or someone else um that that is a scam. There's like probably five times a day I get a message saying like for you know it's a screenshot of someone saying they're an Empire producer and they're inviting you on the show. If you click that link you might get drained. So

beware of those scams. And I guess while we're on it, there's um the Coinbase scams have really picked up. So, I'm getting probably a text or two a day right now. So, just uh don't don't fall for any of the Coinbase scams. That's gone pretty bad. The other scams that I've been seeing going around are the Bitco ones because of course like the FTX um distributions are happening and they're like they're like, "Oh, in order to get distribution, you got to update some like info and just just don't click on any links." My my simple thing is slow down. Nothing's going to move. Like things are not they're always going to catch you on like move fast, do this now. Like appeal to your fear or your anxiety. Slow down.

It always go d click on links. Just bookmark links. Bookmark sites that you trust. Go to your bookmarks tab. Go directly to the site. Call people. Verify. Simple things. Slow down. you don't have a protocol 100%. Um, the last thing is, uh, permissionless tickets are going up. Tickets are starting to rip. We're like two and a half, three and a half weeks out. So, Empire 10, get your ticket. Uh, the full agenda, which people have been waiting for a while, full agenda is live on the site, so go to the promotional site. Let's talk markets. Let's kick it off with markets.

Um, so pretty interesting. Bitcoin's at like, what is Bitcoin at right now? Um, 106. It tipped at like 110, 109, 110, 111, something like that. Um, it there's very there's actually two weird there's two uh market dynamics that I want to get your take on. One is despite the price surge, there's actually pretty low leverage. So, the market leverage remains relatively low. um funding rates turned positive in early May which kind of showed like this renewed bullish sentiment but they remain still pretty below the kind of like if you remember uh the post-election rally um they remain like far below those overheated levels and then trade uh the volume is also pretty

muted so spot volume is pretty subdued throughout this whole rally which I think those two things combined show me that either people are still kind of like sidelined and lingering there's like lingering ing macroeconomic uncertainty. Uh it's either that or there's a lack of retail euphoria. Um which tells me there's maybe like we still got a ways to go. But I'm curious how you read market signals like that. So I've seen some charts going around on I have two conflicting views. One is uh I think retail, you're right, is not like euphoric. Funding rates are not where they are. Like a lot of leverage had been wiped out after liberation day.

Um, and so, so I think like in Google searches and sentiment are like not at the raging highs that you've seen them. So like point number one, I've seen those charts. I don't think retail is falling back force. On the other hand, you had a great link link I check LinkedIn now these days. See, I'm paying attention starts a company, launches a LinkedIn. Let's go. Ladies and gentlemen, I they got me. They got me. They got me. Reed is just stoked. Reed, uh, much respect. I mean, I was there Lincoln. I was going to delete my LinkedIn. I have not I saw your post today which talks about the micro strategy phenomenon and we're starting to see a lot of the same instruments like you know you take a public company that is going nowhere you inject soul ETH ripple whatever avalanche and the um

I I think that's a sentiment of froth um I would characterize more of institutional froth it's the catch-up trade it's the folks that miss micro strategy it's the folks that might have been underallocated And so I don't I I guess it's it's it's hard for me to explain. Like I was uh on the phone with one of the largest issuers today and and I was like explain to me how this like persists like NAV like take take the I'm like I'm a traditionalist Charlie Mer would like scream and say this goes compresses at least to NAV. But but that's telling you I think something that we've talked about in the pod which is like institutions are more excited this time around. Now whether it's uh look at the there's a great stable coin report that

came out today with like I think it was Archim uh Rob from and has dragonfly posted it uh and it was think it was like Nick Carter collaborated to that but it it was like talking about the stable coin market and the composition. The most interesting observation in that was that for I think the first time like B2B stable coin transfers are now I think at or above B TOC which is institutions are using stable coins now the the volume of of what the share that institutions are are using stable coins is now greater than what retail is using them. However, Tron uh is still and Ethereum are still the two largest

chains. Tron still being the most retail phenomenon. But I thought that was interesting. Like um so I I don't know. It's like a very convoluted answer to your question. I want you to pull up the great post you had on LinkedIn. I don't know if you posted anywhere else, but like I thought that was pretty good. Which one was it? I have a lot of great posts on LinkedIn, Santi. Jesus Christ. No, we're seeing the whole sana that I never thought existed. I'm questioning everything. This one? The one about the one about micro strategy I think got a lot of attention. This one? Yeah. Yeah. Yeah. Yeah. Exactly. Yeah. I mean, here here's what I wrote. But I said, "Look, here here's how it's going to go." So the the context is um we saw this public um I'm calling them PCVs. I'm coining the term

PCVs, public crypto vehicles. Um so basically you saw uh this $425 million private placement which was a a pipe. Uh Consensus led it. Joe Luben's the chairman. Uh your guys at Paraf Electric, Panta also invested. So, there was this um uh 400 they raised $425 million to buy ETH. Um and what I wrote was I said, "Look, here's how it's going to go with these public crypto vehicles." I said, "Micro Strategy started it. The game is simple. Access capital markets to acquire Bitcoin, then use financial leverage, uh financial engineering to generate a premium on the underlying BTC." And that's all good, right? Uh and they actually nailed this, right? Sailor is a financial genius. Uh he's brilliant. Um but the problem

becomes a bunch of other people have followed that. There's all the there's probably a dozen Bitcoin treasury vehicles, also kind of fine, whatever. Um, but on in the past few weeks, we're starting to see a bunch of PCVs for ETH and Soul. And so, what's going to start to happen is it's going to get really stupid really quickly. In the next few weeks and next few months, we're going to start to see public crypto vehicles for a bunch of assets in the top 50. I think you and I know both know probably five to seven different assets that are coming in the next couple of weeks. And that's when things get really stupid, right? So what you do is the playbook for this is you take a holding company, you seed it with like 10 to 20 million often from your own treasury, you reverse merge that holding company into

a public shell company, then you raise more, then you buy your own token and you hire a mini Michael Sailor and you market like crazy. And so for Bitcoin, this actually works fine. Um, but obviously for asset number 47 on, you know, Coin Gecko, that's not the same as BTC. And for so for so many reasons, a lot of these won't end well. And actually even for the Bitcoin ones, those are going to get really stupid too because the only way to differentiate from, you know, 21 or uh micro strategy is really with leverage. And so it starts out fine, but you start to take on more and more and more leverage to differentiate. That's where the house of cards starts to cascade down. And I don't know, have you done any of these deals? I don't know if you've done any

any of the deals, but actually from the investor's point of view, uh they're going to make good money. It's actually nearly impossible to lose money on these deals right now if you're a, you know, Paraffy, Pantara, Electric, Dragonfly, whatever. If you're doing these deals, it's nearly impossible to lose money, but retail eventually gets hosed. And um that that was my post. I'm curious how your thoughts on this. Yeah, I think that's right. Um and when you say near impossible is because you you're buying like at a at a discount to NAV or at NAV. And so you know if you deposit the instrument then theoretically that should not go below NAV or it's kind of like a soft like so basically so mechanically the way that they're structured is um you subscribe to the

cryptoback securities or like the public equity placements at or near NAV um with a kind of call option if the company lists or trades at a premium. But in the downside case, like if the listing conditions aren't met or the anything else like that, you build in these clawback provisions that let you reclaim the spot asset, right? So the worst you'll do is you'll um maybe lock up some of your liquidity and get get it back one to one. Maybe you don't yield on that, but it's a heads heads you win, you know, tails you break even type of game. Yeah, absolutely. Yeah, I think you're right. Yeah. Look, I mean, it's it'll be interesting what what that I don't know how much you read on that, but like who is is that um who's bidding these things? Like have you looked at

like who's actually buying like the soul strategies of the world? Is it mostly retail? Is it institutional? All right. Like who who like I guess it depends on the size, right? Micro strategy very different than the smaller ones. I think it's people who the same group of people who are so there are the crypto funds kind of seed these things, right? I mean you it's public who invested in you know this uh new ETH asset. It's like uh Parafi and uh Panta and Electric and stuff like that. The people who are following on I think it ends up being a lot of the same people who are investing in spaxs in 2021 and 2022. It's kind of this like higher net worth accredited investor that that kind of crowd. That's that's what I think. Actually, this is a good tell. My dad messaged me. Shout out

pops. He's like he's like how can I start buying these like crypto public vehicles? I was like awesome. Tom the show top. Yeah. And actually I thought Omar from Dragonfly had a good uh good tweet here. Let me pull it up. He said when a levered soul vehicle says you can get So who's he talking about here? Um DFDV. He said when a levered soul vehicle says you can get more Salana with less risk in their investor presentation. You should probably ask how that's possible. Bonus. When executive compensation is tied to SH sole share over a one-year period but is funded with term debt with plans to issue more debt, you should probably think about alignment. And bonus number two, if compensation tiers are named LFG

and Wagme, you should think through if maybe this sounds a little bit toppy. I tend to agree with that. This episode is brought to you by Scale, the next evolution in layer 1 blockchains. With a gas-free, invisible user experience, instant finality, and robust security, Scale allows for limitless scalability, and has already saved its $50 million users over 11 billion in gas fees. scale's high throughput, zero transaction costs, and powerful web 3 infrastructure make it the ideal platform for gaming, AI, and other high-put apps. To explore the gas-free ecosystem, visit scale.space/ecosystem and follow their

journey on X at scale network. That's scale spelled with a K. Thanks to Scale for making today's episode possible. I wanted to take a moment to tell you about Marinade, the platform connecting Salana holders with the best staking rates on Salana. Marinade unlocks a high-performance staking delegation platform that brings billions in liquidity and security to the Salana market with solutions for both individual traders and global institutions from both DeFi and traditional finance. Use Marinade to earn rewards on your Salana treasuries and holdings. Optimize your Salana staking with Marinade's bestin-market features, including user downside protection through protected staking rewards and optimize delegation via

Marinad's automated auction marketplace. To learn more about Marinade, visit marinade.inance or click the link in the show notes. As always, investments in blockchain technology involve risk, terms, and conditions apply. We've uh talked about like micro strategy. I think it was like over a year ago. We're like talking the same day. It's like deja vu. We're like, "Oh, that the premium is going to collapse. It's going to hurt a bunch of retail. It might like destabilize the cycle, the perception of the industry." And here we are. I mean, what's the premium of micro strategy? Yeah. Yeah. I mean, I actually do believe that Sailor is a financial genius in in in many aspects. like I think he's very very smart and I don't

think that trade will blow up for many many years actually. Um, but where it gets dangerous is when people start to try to follow him. And I know some of the people doing these putting these deals together, they're not financial geniuses. They're they're marketers. And um, Sailor's a marketer, too. But he's I mean I mean, yeah, if you ever spent time with the guy, he's little he's very smart is what he's very smart. Um, yeah. uh little little odd odd bit of an odd duck, but yeah, there there's there's also a phenomenon of like one company can do it exceptionally well and others definitely not. I think um and and I think like like Ripple for instance and what they've been able to

accomplish like it's it's very you're in the rarified field and thinking that you're going to try to copy Ripple and like replicate that is like it's like pretty hard and and like there's only like there's only one Brad there's only one you know sailor and it's like I'm the sailor for soul it's like uh so the interesting thing let me see if I can pull this up. So um so Trump media announced a a big buy. I think it was 2 and a half billion. Uh also GameStop announced a buy. Um the interesting thing is that so these are meme stocks, right? Like Trump media trading at 30 billion is a meme stock. This isn't Trump token. This was Trump Media. Uh they buy Bitcoin. Their stock actually tanks, right? So uh let's see. GameStop

was trading at 37 bucks. Announced a Bitcoin buy, fell to 31. Trump Media trading at I said 30 billion I meant $30 a share. Um trading at $30 uh falls to 22. Um you know Sharl Link 52 trades down to 29. So meme stocks are actually dumping on the news that they bought Bitcoin. It's actually not it's maybe a little counterintuitive but um once you started it's it's adding utility, right? You start to get anchored to like the real world value. So that might actually counteract this trend. Yeah, absolutely.

Um, let me let me ask you let me ask you a um uh there's another trend which is um the winners right now are like uh let let's say who's outperforming right now. It's um here let me pull this up. I was just looking at trading view. It's, you know, Hyperliquid, Sooie, folks like that, Fartcoin. And weirdly enough, you you laugh at it's like those are actually the consensus bets over the last 6 months. Like if you ask someone who's relatively cryptonative, what's going to outperform this year? They would have said Hyperliquid, Suie, Fartcoin, and

those are actually outperforming. And it's one of the runners keep running. Yeah. It's one of the first times that it's it's it's actually crazy how well consensus bets have worked out this cycle. It's never really wor as I've seen it. It's never really worked out like that. Do you do you make how do you think about that? Um yeah, I was talking to uh someone about this in like Salana like in the conferences last week and it's it's one of those where um like hyperlquid is just a very unique asset I think and just the amount of traction that they've gotten and like have cracked where others haven't been able to is like attract a lot of liquidity and you know you know people have seen the analysis and like run rate revenue and the burn mechanism I think

really is drawn like people are drawn to that like crypto's always been a financial is it like financial like it's all trading stuff and so um yeah really impressive I think a lot of the dynamics around the supply and like the you know what I mean like the community and uh the way that they did things is very unique um um I can't really like uh I don't own in a material way no uh I kind of missed it because one of the guys that I really trust was like get on this train super early and I was like just slow to it um But uh I Maple like there's a couple out like Maple I think there there's been a lot in the timeline about their resurgence. I think it's one of those interesting projects where I don't think it was consensus. I

think their TVL like has rebounded a lot and I think they've it's almost like you could have caught like that RWA are a big thing. They're doing something interesting. They just kept at it and then people started to pay it more and more attention. It's funny because a lot of times like there are you got a question say like the relevant exercise is like what's the next hype or what's the next more interesting like a maple I find maple interesting to double click on because it's uh or or you oiler right I think both oiler and maple are assets that had been kind of like left for dead in some ways and then have had a resurgence and and I think there's like a number of there's a number of assets in that

category ory that you could probably start thinking about right now. Not to say that like we can't be in an environment where like the things that have ripped hard like Salana, Suie, hype continue to do very well. probably maybe on a riskadjusted basis, you're kind of better off allocating to some of these names that have like a lot of liquidity because you always want to think about like you know some of these assets are not as liquid or have a lot of ball and so if you can't stomach ball then you probably shouldn't like go as far as out on the risk spectrum. Um but certainly really interesting like um what was the other one that we talked about like Jan like we're talking about like pump and the phenomenon the soul

like activity you could have looked at um what is it uh the decks that uh Jupiter routes to what is it oh yeah yeah I'm blanking on the name my god radium radium yeah it could have looked at radium right as an example so You're talking about the second order effects of of the second order effects, but also stuff like you're seeing straight in the timeline like helium for instance and the amount of like go look at Ariel from Hivemapper. I was just on Accelerate with him on a panel and you know he's been pretty vocal about like look at what's going on Helium. They're adding like a ton of subscribers each day. A lot of the supplies out like it's one of those projects that deepen as a category doesn't catch a bit as much.

it's not as obvious or people don't like it for a variety of reasons and maybe they've had an impression about the asset like dual tokens and telco too complicated too messy but um I like to like have those monitor those assets it it feels like there's starting to be a theme in the in the tokens that are going up and the and the companies that are doing well um it's actually some of the old school founders like you know Sid has been around Sid and Maple have been around for forever Like, you know, back when we were in our small Brooklyn office with a couple people, Sid came in and explained, oh my god, I'm blanking out Sid's co-founder, which I feel really bad about because he's the man as well.

But, um, they came in and like did an explanation of how Maple worked. This was like 2018 or 2019 or something. Um, maybe 2021. I forget the exact year. I don't think there there weren't Defi OG guys. I met him when they were raising their first round, I think, and it was like DeFi summer was well underway and guys, no, maybe this is 2021. Yeah. Yeah. There were Austral as as all as many uh DeFi founders come from the land of down under. Uh Kane the the the syn, you know, obviously the whole Maple and a bunch of others. Um Guy I think was down on down there. Like Oiler is a comeback. They're kind of like these comeback stories. Like Oiler is a massive comeback story. So I it actually makes me happy to see folks like Oiler and Maple winning. One of my best

investments was a right. I mean it had a comeback after the 2018 like ICO and but um I as a bargain hunter like to just probe around and ask like what is that like? Like like for instance you could say like maple syrup for instance an example market cap is 400 million fully diluted is 463. So it's like a lot of the supply has been is out in the market. So you know you're not going to worry about people dumping on you because of big unlocks or whatever. It has a 1.2 billion TVL. Um, you know, I appreciate TVL is not the best metric. I'm preempting the comment. Uh, but it's interesting like on a on a hey, what is

the not not for the purposes of this podcast, but like hey, look at what's the velocity like what is the fee stream? What is but on the surface, you know, it's 463 billion. Like how far can this go? Like uh what is what is the theme that you're catching? You know, again, like what is the family feud style investing? Like what is this thing going to be comped at, right? It's a DeFi name. It's in the, you know, def in the RWA's like, okay, well, look at RWA. How how big is I always like to look at, okay, what is the largest RWA protocol as like the comp, right? What's the upper limit on what the market is telling you? There won't be well go look at, right? And algo Onondo has some certain dynamics that you know market

cap is 2.8 billion fully diluted it's nine. So again like very like a you know big difference there. There's a lot of lock. Um ando uh it has 1.3 billion in TVL. I'm not trying to oversimplify the analysis but like again Maple has 1.2 billion in TVL. It trades at 400 million give or take. It's almost all of the supplies out there. And theno has very similar TVL but like you know what's that uh seven times the valuation mark market cap let alone fully diluted on a full folks like I mean look at this announcement here and on a fully diluted basis you're at 22 like the question is

iso overvalued or is Maple undervalued Maple on a on a market cap basis is like four times you know smaller or is four times larger on a fully diluted ando is 22 times larger than Maple, but they have the similar TVL. So, what's the disconnect? You know, it's like those are the kind of relationships that I like to look at. Um, and and I think smart guys on the timeline are talking about like more about Maple than about, you know. Yeah. I've got one more takeaway here, which is you just need to survive. Like Oiler just I mean Oiler had that massive hack obviously. I think their TVL ran down to nearly zero. um did they and and they and they came

back, right? Maple, I mean s like they got blown up. They got blown up after 2022. Yeah, they had like a bad creditor there, right? And now look at this. Caner Fitzgerald uh financing business announces first transactions. Maple said it closed its first trunch of Bitcoin back financing through Caner's new Bitcoin financing business on Tuesday. So, uh you know, they're running their financing. Caner says it plans to make two billion of financing available in its initial phase. and they're running that through or maybe some of it through Maple. So, by the way, I don't I don't own any syrup or maple. Um, but it's just I and full disclosure, I don't own any syrup or maple. Uh, and nor do I owno. I'm you know, it's just it's just

um I don't mean to discredit or pump or like commend one. people should go do their analysis. But like I find those like if you're going to like look in the crypto space there's hundreds thousands of assets and sectors and so I think it's an exercise of like how do you go about like trying to understand themes and opportunities. This is a type of analysis that you could start making which is I'm going to pick a category that is I think going to catch a bit and interesting RWA or maybe deepen but you know put that aside RWA go from there what are the top names what are names that are you know go meet the team the the the logical next step of this analysis is go join the discords go ask the hard questions go do your

independent analysis then maybe go talk to investors and poke around you know and and I think like you can do a lot of work, right? Yeah. Yeah. Um, by the way, on the Yeah. Well, let's talk news. I just want to wrap all of this up by there was actually the best tweet that I saw this week was by from Shoku. Um, Shoku is building something um on Hyperlid. He said also, he was he was going back and forth with uh with Jez. Jez is talking about trading pers and stuff like that. And Shoku said, "Look, just take your current net worth, put it in a compound calculator, and put 30% a year for 10 years. I don't know the details, but I'm sure it's a big number.

Point is, you don't need to gamble anymore. Fast money is less relevant. Consistency and compounding is note 30% a year is close to impossible, but it's crypto, so it is actually possible for the time being. And I just want to say like yeah, this is a like this was relevant because, you know, I don't know if you were following the James Win stuff, you know, big trader on Hyperlid. He ran it up to 90 million. You could have just brother in Christ. I'm with I'm with like a bunch of my friends are are trading pers like crazy because they're like James Win can do it. I can do it. I'm like, dude, like you're going to lose money on a long enough time horizon, you'll lose money. The the the game around leverage and perp trading is one of timing. And I've never met an

investor that has been caught on the right side of being running a strategy that depends purely on timing. The best investors are in a position to be patient and act when others are quite literally fearful. There's uh in the classical im inversion plug there is of course I like to quote two one quote of Charlie Mer which references I think a German philosopher which is invert always invert right you've heard me say that the second one that I really like is never interrupt something that is compounding never interrupt it because you will ne like it's just so so hard and you know who reminded me of that which is my third plug sus which you met and She officially joined. I've been like biting

my tongue to say this because she was like on garden leave and couldn't announce it. She joined from Goldman. She was there running like their digital asset practice. She has a good you know she's not as prominent on Twitter. Ladies and gentlemen, go give her a follow because I have a bet with her. No, we got to give her a follow on LinkedIn. This is Suz's platform, baby. This is This is She's on LinkedIn. She posted on LinkedIn. I'm like, "What are you doing?" She's like, "This is my audience. let me let me go a community quite literally like there's a whole community and I was like why don't you post on Twitter I don't think she I don't think she's posted on Twitter but anyways I'm incredibly grateful that she uh she's my first hire and uh she she reminded me of the second quote uh of

Charlie Mer which is never interrupt something that is compounding and and it is so true like you know the the math that I like to do is There's a number of ways, but like the law of 72 is also really good. And you heard me talk about this in this spot is like whatever yield your your your return annual rate of return is. Divide 72 by that number and that's a rough approximation of number of years that it's going to take you to double your money. Yeah. Yeah. All right. To wrap this segment up, Sue is at 887 followers. Not not 8,000. 800. Oh, we got to get S to pump up those numbers.

You listen, if there's a a long bet that you should take is like that number. If ladies and gentlemen, if that number is not 10,000, Suz's Twitter handle is Danheim. D A D-N. So, go follow Suz. We got We got to put in here so people act there's evidence of the criminal underfollow that what we have going on here. Ladies and gentlemen, this episode is brought to you by Scale, the next evolution in layer 1 blockchains. With a gas-free, invisible user experience, instant finality, and robust security, Scale allows for limitless scalability, and has already saved its $50 million users over 11 billion in gas fees. scale's high

throughput, zero transaction costs, and powerful web 3 infrastructure make it the ideal platform for gaming, AI, and other high-put apps. To explore the gas-free ecosystem, visit scale.space/ecosystem and follow their journey on X at scale network. That's scale spelled with a K. Thanks to Scale for making today's episode possible. I wanted to take a moment to tell you about Marinade, the platform connecting Salana holders with the best staking rates on Salana. Marinade unlocks a high-performance staking delegation platform that brings billions in liquidity and security to the Salana market with solutions for both

individual traders and global institutions from both DeFi and traditional finance. Use Marinade to earn rewards on your Salana treasuries and holdings. Optimize your Salana staking with Marinade's bestin-market features, including user downside protection through protected staking rewards and optimize delegation via Marinad's automated auction marketplace. To learn more about Marinade, visit marinade.inance or click the link in the show notes. As always, investments in blockchain technology involve risk, terms, and conditions apply. Let's move on. So, Bitcoin conference this week. I want to shout out the Bitcoin conference. David Bailey and that whole team over there, they

crushed it. It is uh now definitively the largest retail conference in the industry. We had some folks there. Um the interesting thing about the that event is it is squarely positioned as this. I think they'll have a 100,000 people one day. It is a retail retail retail event. You know, people were meeting firefighters, policemen, uh you know, folks who worked at Whole Foods who own Bitcoin and these are just these are just Bitcoiners. So, I thought it was just want to give a shout out to them. I think they had 20 to 30,000 people. Um, but there are some quotes I want to call out, very bullish quotes. One, uh, David Saxs, we want innovation, crypto innovation to stay and grow in the US.

Two, they got JD Vance gave a speech. I thought this was an was an interesting line. JD Vance said, "Crypto is a hedge against bad policy from Washington, no matter what party is in control." And I thought that was an interesting way to frame crypto. You know, people think of Bitcoin as a a hedge against inflation or whatever it is. He said, "Crypto is a hedge against bad policy from Washington, no matter what party is controlled, and I like that a lot." Um, Eric Trump said, "Everyone in the world wants Bitcoin. People are allocating billions and billions of dollars to it.

0.1 Bitcoin is going to be worth an absolute fortune." Uh, Mayor Eric Adams of New York said, "Let's get rid of the Bit License for New York." Now, obviously, Adams is uh on his uh campaigning crusade, so he's trying to um go headto-head with Cuomo, and I think one way to do that is to appeal to the crypto crowd, raise some money. But yeah, good good quotes from the Bitcoin conference. There's a uh non-news story, but there was a thing I want to get your take on here. So, I have a buddy who just uh moved over from private equity to venture, and he is appalled. He's told me he is appalled by uh the lack of uh I won't use the exact words but somewhere around the lack of

intelligence by the venture folks um compared to the private equity crowd and the lack of diligence that's being done. And this was interesting in crypto or just in general? No, no, he's he's a trad person. Not not crypto. Yeah. One of my best friends. And he moved over from private equity to venture. um he just said it's like he's like this is uh this is not a real investment firm is how he put it and and it's one of the best venture firms by the way he just it's not it's not about the venture firm and I saw this tweet by this guy Ed Sue I don't know who this is um but he said I have a VC friend and a hedge fund friend who shadowed each other at their respective firms attended IC meetings diligence sessions and team meetings the VC left aed and impressed at how

well-run the hedge fund was in his words quote these guys go to a level of detail and sophistication I didn't think was possible. They're way smarter and harder working than anyone at my firm. The hedge fund guy goes to the VC firm and in his words, "It's utter chaos here. They take random meetings all day long with people they're randomly introduced to. They don't even take notes, don't follow up, don't do any research. They claim to know within five minutes if they want to invest or not based on the founders's body language." It's crazy. The funny thing is they're both very successful investors. as someone who's worked in, you know, banking and, you know, JP Morgan stuff, but also has worked at a venture firm. I'm curious just like if this resonates or not with you. Uh, so I've worked in like three different segments, investment banking

and and interact like in the sponsorship. So that's private equity. Um, I've done growth equity, which is kind of a hybrid, which is it's like a in between between private equity and venture because you have like you're investing in companies that are hitting like hypers scale. And so you have a lot of data to underwrite the investment. And I could tell you there's a range of growth equity investors. Some do a lot of work, others don't do as much work. We were very much on the private equity style of diligence work because it was like partners from KKR. We brought in the guy who used to run KKR ops like consulting arm and then venture which is art science and then you can overlay the crypto dimension which is well fundamental analysis is you know um but I I do think that

like to your what I would say to your buddy is like know what drives value in like in each respective style of investing. I don't think that like a again like I don't think like a private equity person come in a venture of course he's going to react and say what are you guys investing this out of like like go look at like how you how do you value like uh open AI at whatever valuation by any stretch of fundamental analysis it's hard to believe that like maybe not you know Nvidia like some of these private companies even public ones are like hard to value so um a lot of the venture value driver is like the I would say like the concentration of returns is

very much um kai squared so like very clustered on in venture which means it's a relationship game if you are that guy that people call you're going to get into the best deals and if you're not good luck you're going to underperform like there are I think there's like a good stat going around and I don't have it here NBCA posts this stuff like the top the top venture funds account for the vast majority of returns in the industry every every other venture fund does not private But equity funds, it's a bit more distributed, evenly distributed like mo like you know 3x, 4x, 5x, 6x. There's not one that does like a massive outlier. In venture, you do see that. Um, and you know, you hear the phenomenon like the PayPal mafias of the world. Like do do you think that

like Reed is going to do like a discounted cash flow when when he gets a call from his buddy that they worked together at PayPal 20 years ago and they he's like that guy is going to, you know. Um, so I don't I think your buddy is just going to have to reassess and and level up on certain skills that it's like you need to be that person that people call because you can't it's uh I forget who was it. He said in venture it's a game where you can't afford to miss a massive winner. And I think you see that in crypto, like in crypto, if you were a if you're a crypto venture investor and you missed out on like the big winner of the cycle, like a Salana or the DeFi trade or the hyperlquid

trade, then well, what's going on, you know? Yeah. Yeah. Has your buddy spent time looking at um crypto? Because it's like those two worlds like I I would call it like owns none of it. Owns. It's a liquid. It's a liquid venture asset class. So like I guess more interestingly would be not not for not for someone that's come from private equity to venture more so someone that goes from a hedge fund to crypto venture because you'd be like wait a minute these are super liquid capital markets public like quad tokens but venture- like and so I think like that skill set speaking of that speaking of that there was this tweet it's funny I actually bookmarked this tweet and was reading it and just realized this guy works at Blockworks

um I just I just realized this his name Shondaanda Deans, but I don't know. I'm sure I know his Slack name, but I don't know. Anyways, Shondaanda Deans, good good on you. Shout out one of our analysts. Nice. I don't. Anyways, good on good on you, Shondaanda. Um 500 uh All right, so there's this plasma raise. The financial system of tomorrow owned by you announcing the XPL public sale uh using Kobe's new platform. Kobe launched a ICO platform called Sonar. Now it says 10% of XPL will be sold at a 500 million FTV, the same valuation as our latest equity round with founders fund.

So I want to get your take on this. So what uh Sean Devvin said, analyst at Blockworks Research, 500 million FTV, same valuation as our latest equity round. Did Founders Fund actually buy tokens or did they buy equity of the company building plasma? Similar to Uniswap Labs investors, these two are not the same thing at all. Too many projects are raising equity rounds from VCs and only launching tokens as a goto market strategy. Sell VCs equity in your company and sell retail governance tokens which will acrue zero value. Same FTV but completely different instruments. Bonus points. Airdrop your VCs and labs entities some tokens so you control governance and use the community treasury to fund yourself. What do you think of this to a degree or like uh what's your take on this?

Uh okay. If you go down the thread, I think there's some really good responses because I saw this as well. There we go. This one. Yeah. Yeah. That that that exchange I think is where where I want to go. All right. So, Ser so Serpent Text who um runs Ethos Network said what? Equity becomes meaningless when you launch the token. Equity is just the vehicle that gets you to the token launch. Selling a token instead of equity well before your token launch is a no no in the US. This is pretty normal stuff. Shondaa goes, "Equity does not become meaningless after the token launches." UniS swap Labs raised 165 million at 1.6 billion for equity after the token was already trading and valued

at 6 billion. Yes. So I would say there's nuance there. Um and it depends on the project. Like full disclosure, I I invested in unis swap labs the entity when I was a pair of um I I'm not as close to it now but just you know it's important that to disclose that um I guess there is value in in in unis swap equity because they have launched I think they acrew fees on the front end right so if you're trading like you you could trade you don't have to trade directly on unis swap's front end right if you use the protocol like their contracts unis swap

um the token acrews value it's not being distributed but like the fees that the token the the token is like a governance token we all know why because like you know all the activity that gets traded through the protocols I guess you have governance over over the entire kind of protocol labs I think acruise I'm pretty sure ac cruise value on the on all the fees that are charged on top think about like MetaMask right it's no different than that it's they're charging a convenience fee um and so in this case like I think they they capture that and that goes to lab investors it does not go to token

holders to my knowledge right if if you're trading through unis swap's front end which I think a vast majority of the flow goes to because they have the brand they have the visibility and whatnot so in this particular case Shondaanda is is is correct like there is clearly a case where like there is value acring to the equity and then there is some value attached to the token on governance. Um I I would say that's like one example but there are others where like when I when I was investing or still investing like I generally think it's like most value just the equity is just a structure initially and then once you launch the protocol all the value should acrue to the protocol.

Um I I'm not privy and it and I'm not like sure what the discussions were on like unis swap and not to pick on them just but like let's look at like maple for instance we were just talking about it. What do you think is the like equity value of like nothing? I don't know. I don't know if you invested in like Maple like the equity the entity but like all the value I think is like in the in the token right. Um so sometime like again you have to create like a a a entity that touches the real world I guess if you're not doing this and that has to be like some sort of entity that traditional investors invest to initially in the early days.

Um, in the case of Plasma, I also I'm an investor, so like full disclosure. So like I don't know. I don't know what you feel about that. Um, I think there's there both of them are kind of right. Like most people do an equity raise that then converts into a token later on, right? So I I also think the jury's out, right? We don't we don't actually know what the equity is going to be worth because there's been so few exits in crypto that equity equity token or not has been mostly worthless in crypto. There's so few liquidity events for equity based companies that no equity is really worth anything in crypto. I mean that might change like it's starting to change.

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doing one thing better than anyone else, giving Bitcoin holders a secure, transparent way to unlock liquidity without selling. Click the link in the show notes to find out more. Hey everyone, Jason here. Earlier in today's episode, you heard me mention the weekly CIO memo from Bitwise. In an industry as hectic, fast, and complex as ours, it's incredibly hard to get an easy, nononsense stream of what's actually moving crypto. The memo comes from Matt Hogan, Bitwise's chief investment officer. He's been on the show before, and he has this amazing ability to take the most complex topics and break them down with clarity. Trust me on this one.

The Bitwise weekly CIO memo is really worth the five minutes of your time. Check it out at bitweisinvestments.com/ciome/mpire or just hit the link in the description of today's episode to get started. Carefully consider the extreme risks associated with crypto before investing. As always, investments in blockchain technology involve risk terms and conditions apply. Um, actually Katherine um Katherine who writes the Empire newsletter had a phenomenal piece on the Circle Acquisition. So she interviewed uh this guy Jay Woods who uh like kind of close to the you know very familiar with IPOs and stuff like that. Um the

title is why an acquisition of Circle may be off the table as its IPO uh as its IPO approaches and there were a few key key lines here. Um she she said I wrote that in the stable coin issuer that uh that circle is really close to the finish line but I hadn't realized just how close until I caught up with Jay Woods chief global strategist at Freedom Capital Markets. uh he worked on the New York Stock Exchange floor for many years. Um and this uh this quote was pretty interesting. He said, "We're at the point where the bankers have been named, the price has been set, and a timetable has been given. The timetable is for the week of June 2nd." So that's next week. Once you get this far along in the process, I can't think of anything off the top of my head or a

company has not made it to the finish line. Basically, the banking teams have done their DD, investors have been talked to, everything is humming along. So to me, unless somebody comes in with a ridiculous offer and wants to stop this thing from happening and buy them before they go public, it looks like a go. And we've got another, say, 10 trading days or less to figure it out. So my guess is, yeah, I mean, looks like we'll get a circle IPO probably a week from today, maybe next Thursday. What would be the valuation for that? Like the like the aggre like they're selling 600 and change, right? 235 primary and another 300 from insiders. What I've heard is um they're targeting six and a half billion I think roughly. Six and a half billion. So they're like they're 10% of the company.

Yeah. They're raising I think it's a $600 million offering. Yes. $600 million offering give or take plus an aotment for like J like the lead underwriters. So like call it like I don't know. Uh so that would be not all primary. It's I think like a bit more skewed towards secondary. So like that means like primary is when the company sells stock. Secondary is when investors sell. It's like a as the name implies no different than crypto. Uh so not all that goes to the company but like anyways the so 10% of the shares are going to be like exchanging hands of sorts. Um and I think Black Rockck committed to buying 10% of the IPO or I saw it on the title. I I didn't

know that, but Black Rockck and Circle have a very Yeah. very close relationship. Like every time I go to a circle kind of event, there's a you know, the executive Black Rockck is speaking and stuff like that. Yeah, I think so. I saw like a watch guru or something like Whale Guru or something like that, like whale alerts. Um anyways, I mean Black Rockck owns like So here here's the interesting thing is um everyone's focused on like will they get acquired by Coinbase or Ripple or something like that. And I I actually think it's very possible someone like Ripple has been offering them, you know, four, five, six billion dollars to buy the company. Um, I think that would be the offensive acquisition. Coinbase buying them would be the defensive acquisition. Um, if it's actually you you can block an acquisition if you're

private, but the second you go public, if you if uh someone like Ripple comes over the top, let's say they trade around 6 billion, Ripple comes over the top, offers 910 billion, you can't block that acquisition anymore. You've got shareholder you've got shareholders who you've got you've got to take that to the shareholders and let them vote on it, you know. Yeah. So, it'll be interesting how this trades. I mean, six billion that's uh for context, Coinbase is uh at 50 50 I want to say I guess I coin where is this puppy? Yeah. Okay.

Coinbase is at 50 bill uh no [Music] yeah 63 billion. So so 10 times larger. Um that's interesting. Yeah. What what would be So what's the They're trading at four times revenue. No, no, no. Five times revenue. Uh circle. Circle. I'm trying to remember what their revenue was. I don't remember off the top of my head. Yeah. But um yeah, we'll see. I mean, I I think it um a lot of times like um so to going back to stable coins, I feel like everyone uh a lot of

businesses are like trying to develop a strategy with stable coins in the best case scenario like Circle becomes like the cleanest bet to invest on on the on the theme. So, I could see a scenario where like if done correctly, like circle could just be synonymous with like the sta the the stable coin play and and it could maybe trade disconnected from fundamentals as as you know. Um, and I'm also going to look at like how this how this trades to understand and overlay that with these other vehicles that we've talked about that are just warehousing like crypto assets in their balance sheet. U clearly like there's like some sort of euphoric

demand for these things because they're trading at like very disconnected from NAV for for stable coins you're saying or for what? No, no. For for like So, so there's like Oh, for the public crypto. There's like two different like there's two different markets here happening which is like you can look at Coinbase. I I would bucket like Coinbase Circle, probably e Toro, Robin Hood in the camp of like interesting financial like fintech companies, some with better business models, more defensive than others, but by and large, you know, they're trading on like some some sort of semblance of like, you know, cash flow and and then you have another which is like purely like a holdco structure to your point. How do you call them? public company vehicles, PCVs, PCVs, these these PCVs that are warehousing crypto

tokens with I which I hear you have like all this asymmetry and whatever and they're catching a massive bid and are you know disconnected from like the actual balance sheet fundamentals meaning NAV there's like clearly two different two different like uh appetites in the market for these instruments or these securities. um could in a best case scenario what what I'm like I'm thinking is circle if done correctly could catch a bit by being like the institutional play on like oh we're going to go long stable coins and like circle is the only culturally traded company I mean like cuz cuz I how many times have you been in a meeting and a dinner and they're all like oh wow tether like they're vastly profitable per employee bases the company has like

the the most profitable ever uh how do we go long as stable coin it's like well brother in Christ it's not buying USD DC or USDT. It's like how do you express a view on long stables? And I think often times I do get asked that question by a lot of people. It's like you talk on a panel about stable coins. You go to a conference, stable coins are a very important narrative. You haven't had a clean way to express that thesis other than onchain. You go like long maker or long curve or long pick your flavor plasma or whatever you know or tron or what have you. Yeah, in the public markets, Circle will be the first publicly traded said differently. Circle will be the first publicly traded company with the cleanest slate on only stable coins.

Long stable coins left curve thesis. Boom. Buy that is a left curve thesis. I'm not I'm not advocating for that. I'm just saying there is a version of this univer that's probably the bull. Yeah, that's like the most bullish like case. Now of course we just know that like but at the bearish bearish case is like every major bank which I think there was a news out there that Paulo common like welcomed player number two which is like when I think that there were rumors that the circle IPO had been shelved that they were like lead underwriters in the circle IPO have exploring launching their own stable coin and Paulo immediately like went for the jugular and said like oh welcome player number two. It's like yeah like if you're a bank you just went under and understood circle's business model and he said yeah

we probably do this better we have more distribution like nothing is stopping us from launching stable coin what I'm saying is the stable coin issuer business uh is probably tough you know I think you have to have something on a standalone basis if you have distribution is I think it always comes down to that if you have better distribution you win um and we can that would be the thesis for like plasma that's thesis for Tron that's a thesis for why tether has like this connectivity in the world Like you have to build distribution. Athena has distribution on the exchange venues, right? Massive distribution. It is all always always always a distribution game. Yeah, it's always a distribution game. Um, all right. I got to jump unfortunately, but I've got a content recommendation which is uh a crypto content recommendation every every year.

So, um, DBA uh John Charbano's firm DBA hosts a uh a thing called Michael Jordan. Michael and Michael Jordan and MJ. Uh they host a thing called research day and most of the talks end up being too technical for me. I'll still nerd out and and uh I've attended in person but yes yes centralized sequencers totally get all of this. Yeah. Yeah. Definitely. Um but definitely the talk of the year this year was from Felipe from Thea Thea Thea I guess I think they call it Thea Reese. It's a fund the Yeah. Yeah. But uh there are some of the best upandcoming fund managers in the industry. Uh very fundamentals focused and he gave a talk called tokens are broken. So we will link it in the show notes. Um or if we

forget to link it in the show notes, you can just type in wouldn't it wouldn't be the first time, would it? Would not be the first time. You can type in tokens are broken by Felipe and you could probably find it on YouTube. So uh any any content Rex on your end? Uh, no. I've um, no, not really. Not really. I'm dry, you know. Haven't been reading much this week, but um, just a lot of DD. Uh, yeah, I'm not not sleeping if you can tell. Uh, but yeah, I'm I'm no time for reading this week. It's late out there. Midnight. Uh, it's close to midnight. Yeah. And I'm going to go on a probably another three, four hours like uh doing diligence. is this is like this is like very much my

investment banking private equity days just like okay which reminds me I'm gonna plug I'm gonna plug I am looking for uh we're hiring at a version so go look at our we launch our website go look at it I think it's website's clean website's nice I was just showing it to our head of creative actually got some cool fun little move the the mouse makes the little things move it's nice nice I I appreciate it's like Easter eggs you know if you scroll down to the bottom you might find a present uh and so Yeah, we're looking we're looking for people uh three roles in particular. One uh CIO, a one like and we have really good candidates. I'm actually flying to go see one uh in next couple weeks, but like a a a killer like executive that does private equity transactions top to

bottom. Like we're looking at six different acquisitions. Like I can't we can't do it all. Like we need someone to like really quarterback all of that. And then of course we're going to hire like two three analysts under that to support the effort. Um, so CIO, I want to hire a CIO first because I want him to like bring most of the best people like bring their own like unit, you know? Uh, so you know what I mean? Like when you hire a senior person, like a good hire is always someone that says, "Oh yeah, I need to bring like these two other people and they'll follow them." That's like a really good hire. So CIO, uh, head of product and I have some really good leads there. A lot of what we're pretending to do is like make crypto invisible and then like just more

traditional worlds like BP finance, you know, a bean counter of sorts that just make sure that you know we're don't run out of money. Yeah, that's a good way. That's a way good way to recruit someone for the VP of finance. We need we need a bean counter. It is it is really important here. Yeah. Official bean counter. Yeah. No, I don't know. Cool. Well, thanks for listening folks. It was a good uh been a good week. Um and we've got a good episode. What do we have coming out next week? We have ah we have an a debate. We've got an REV vers RSOV debate. We actually haven't recorded yet. We're recording it tomorrow. Um but a big debate on on REV. So if you were reading about REV on the timeline uh and you're like I have no idea what this metric

actually means or what's the why is it good. Uh we will see you on Monday. We got that episode coming out. Pumped. And to to be fair, we uh we did a lot of strategizing over the weekend uh and and we've thought about some really good guests and the sort of themes that we want to cover in the pot. So we'll that's what we're doing. We were strategizing. We were strategizing, ladies and gentlemen. Yeah, we were. Uh anyways, I'm excited to see all of you guys in New York if you're there. We're going to record some great podcasts and uh I think it's in Brooklyn, right? So it should be a fun one indeed. Get your tickets. Empire 10. All right. See you on Monday. [Music]