Data Deep Dive: Are Memecoins Dead? | Analyst Round Table

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and so I think what this shows is like as a as a use case being able to create new tokens out of th a and trade those tokens to me is like clearly a super high Revenue generating um activity and one that people do continuously like even during the this sort of quote unquote bare Market or choppy Market people are still launching a ton of tokens and so to me I think we've just found a great use case nothing set on zerox Research is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and any views expressed by anyone on the show are solely our opinions not Financial advice pachio Ryan and our guests May

hold positions in the companies funds or projects discussed hey guys welcome back to another episode of zerox research today I am joined by just Westy we've got a bit of a Danny Westy Power Hour all of the uh or pretty much all of the research team and a lot of the folks from the other teams of blockworks are going to be at this week um the lucky few that are left over um get to have a little bit of a Vibe session um how you doing wesy I'm doing pretty good can't complain definitely a little bit of D fomo going on um just all the great people are going to be there great speakers James Kristoff Man In the Flesh um so definitely a little fomo but you know good to be here good to to sort of

take over zerox from from Bach uh whenever I get the chance so yeah thanks for having me yeah sometimes it's good to mix up bacho mode and get some Westy mode in here get some data mode um you know we like to Shi the data product as much as we can and um yeah I heard we know James Kristoff is gonna be there supposedly he's got the creamy at this at the venue he's gonna be mixing up some crazy drinks so if you're at d uh hopefully you get a chance to meet him and uh meet the legend of the of the telegram group um anyway guess moving on like just covering the market I think we've been making this a bit of a a regular thing but how are we feeling feeling in general like I think you know the Vibes

are definitely down in the dumps um some people you know we've seen the conversation around you know is fundamental you know investing back in crypto you know look for fundamentals type of Vibes memes are memes are done um what are your thoughts is this just like we need some time to kind of you know digest what's happening in markets generally or how are you sitting yeah I I have a lot of thoughts here it depends on how much you want me to rant but I've been basically the resident bear me and and James Kristoff the resident Bears of the zerox telegram chat and yeah basically I got pretty

cautious after the SBR announcement and just a ton of good news coming from the administration ation that the market didn't seem to care about uh at the highs and so got pretty cautious and bearish in sort of the short to medium term from there and the thesis has turned out correct so far and and sort of where we're at right now is this weird limbo state for basically everybody um even the Bears like me who think there's probably some more downside that we're sort of in this space where we might start to see some sort of echo bounce or or dead cat bounce whatever you want to call it and then others who think this this is some sort of cycle pullback that we're

destined for alltime highs once we get through some Trump uncertainty that we're we're also in this weird sort of space where we're just waiting for that to clear and so right now things seem kind of quiet for the most part and the like are we in a bare Market is a weird question we're just kind of chopping going sideways um seems like every little thing that could spark controversy like is sparking controversy and maybe we we talk about the salana ad for a bit but it feels like there's just not much going on so when there's even a little bit people are clinging on to it and so while I have I have certain thoughts that I think we we do end up lower um I

think and I also think that we don't see new highs uh within 12 months unless something significant ific L changes on the macr front or we get some sort of ID idiosyncratic uh Catalyst for the crypto industry and maybe that's like lumus lumus is Bill actually having uh a strong chance of passing or something similar um of just like this huge Catalyst within the industry I just think we're we're due for just I wouldn't call it like some brutal bare bare market we've seen in the past for just just a ton of chop you know and just some time to digest all the good news that we've gotten from the the Trump Administration the like the just think like in 2022 the cycle started

we've seen incredible price action like Bitcoin itself is up six to 7x uh from the lows a lot of alts did extremely well depending on which pockets and well we didn't have that like alt season where everything goes up like some Pockets performed extremely well if you're on your toes and so yeah that's what what I currently think uh where we are in the market we're just kind of in this limbo chop round boring kind of face yeah I think that's totally fair it seems like across the board whether you look at Global macro equities crypto like you name it uncertainty seems to be the kind of key word right now in terms of you know maybe chop maybe up maybe

down who who really knows uh seeing a lot of like you know maybe it's time to to touch some grass for a while um it is interesting to see like older tokens like maybe a prior crop of like you know if you want to call them VC tokens or like you know low market cap High FDB things with investing schedules ongoing um see big bounces I don't know if that's late shorting activity people looking for things to short now and then getting you know liquidated out of those positions um wouldn't be surprising if that is the case but um you know seeing odd jumps in in just kind of random tokens that like aren't in the spotlight um which is always odd to see and then yeah I think your point

definitely resonates around like what people are talking about and kind of the the vitriol we're we're very much back in like the everyone is very angry and upset because think prices are down and they're very fixated on on certain you know current events so the big one right now the other day was the new salana ad which had the video has already actually been taken down um I don't know if that was the right decision I guess maybe just for some quick takeaways like uh I don't have the video to pull up but the the ad itself just focused very much on like this anti-woke philosophy um you know this guy at his therapist and um you know the therapist offering a bunch

of like well maybe you know think about pronouns and gender terms and and things of this nature and the guys like getting upset and angry about it like no I just want to innovate um I think the general vibe that the community got was like you know it's a bit odd to like maybe swing to this side or like try to attach yourself to one side of this like kind of political ideology at this point this anti- wokeism kind of movement um my maybe my biggest thoughts and then I guess if if you want to jump in is like I just thought the ad was bad it was long it was like two and a half minutes long they're like sitting there like driving this point home like for over two minutes of just like okay what about

genders okay what about pronouns okay what about like this thing or that thing or that thing and it's like like man I get it you could have made this joke in like 30 seconds I just think it was like a bit of a waste of time it wasn't funny like a bit old like maybe if they had done this like pre-election it would have been it would have hit a little harder um but the timing just feels odd and yeah I I just think they kind of missed the mark like I think I think my biggest takeaway right now is that people expect like a lot of quality out of salana produced things at this point in time and so to get something that's like just so clear not that um is a bit jarring and so I'm like not I'm not too surprised one because markets are down

and people are like they want to find scape goats right now um in terms of people being upset but also just like I think it's like a more of a surprise reaction of like I saw comments that were like you know I would expect the EF to drop an ad like this but maybe on the opposite side of the political Spectrum but not salana so it's I think that's maybe a lot of the reaction that people are having is just like it's kind of a weird vibe coming from them yeah I definitely like the biggest thing is definitely how they scripted it like if it was just one joke on the pronouns of this like two-minute ad about America's back I think it would have been fine I think it was just they weirdly like dug themselves into a hole of just like continuously beating this one joke into

the ground and so I think they just yeah they they missed the mark completely from that point of view and then I mean this is probably my like bearish lens uh coming out and I'm happy to be like the the resident bear until Bach kicks me out of the Pod for another couple months uh but it's also this like the way that I viewed it like that like sort of immediately hit me was sort of it felt like a ton of hubris coming from the salana camp of like you think back to 20 22 and 2023 where they were they were the underdog and they were the Phoenix rising from the es like they

were supposed to be dead and here they are like thriving and they were sort of punching up you know whenever you'd have someone like mert or just the salonic community in general just like fighting back against fud Etc like you you built this really really passionate Community from the ground up that way I think at the time it really hit hard because they were the underdog and at at this point this just felt like sort of the opposite than now that they're they've done extremely well and they're on top it felt like punching down um and they felt it felt cocky to me to be honest like that's that's the way that I interpreted it at first and and to me this is like typical of like

late cycle things of like things get over their skis prices go up and then people get really cocky and comfortable and they they make mistakes and to me this is one of those mistakes um I still very much respect the salana foundation and all of they they've done they have a superstellar team I just think this was like one small mistake with an advertisement um I don't think this is some like big strike against them certainly if if prices continue to go down they're going to get dunked on even more for this thing um but I think yeah just it's it's one small mistake um that I think will will blow over in due time but I think it was just emblematic

of they they felt comfortable they felt like they they won and and now uh they can punch down so didn't like it for that reason yeah I think I think that's a fair take across the board um and I I think maybe the upside here is like counter to like late 2021 20 2022 where we had Super Bowl ads for a lot of the large exchanges um you know I think your your comment there about like being like a late cycle thing as interesting from that perspective obviously this ad was just posted on Twitter like they didn't have to buy a very expensive Super Bowl commercial slot so um I guess really the only costs were just like the production budget um you know actors producing that

scripting that Etc um and it's you know you can freely post ads on Twitter as much as you want so they can you know this is an easy recovery like I agree with you that like the ad doesn't really shouldn't really mean anything assuming this isn't Like A vibe that they're like permanently entrenching themselves in going forward I don't think that would be a good good look for the for the brand or the culture there but um I expect given that they already withdrew the the the Tweet um that they're looking to maybe think a little bit more deeply going into their whatever their next ad looks like this episode is brought to you by Ledger the global leader in digital asset security celebrating 10 years of innovation Ledger Remains the most secure Hardware

wallet for your crypto and logins trusted by 7 million users and securing 20% of the world's digital assets follow the link in today's show notes to grab your Ledger now so maybe just a good learning opportunity I guess I guess we'll see going forward um but I think it does highlight there is still a lot of like combis over this like evm versus salana debate I think it you you mentioned like you know they're sort of the top dog now but what's interesting is I think that the conversation on CT is still that like I think people believe now that like salana is a very consensus bet and yet the community is still like there's still this very strong like ethereum evm

eth aligned side of the community that is like no like the salon vision is is wrong or incorrect or what have you um and I think we we kind of see that consistently in this in this topic of like are memes dead have memes died is the meme chain salana like done for now that memes are dead uh I wanted to share a couple of tweets just to spark this off but there was some back and forth between umy and toly on Twitter um talking about isn't they had a longer conversation around like ethereum's approach versus Solana's approach which I'm G to skip over um if you want to read that go ahead but got to this conversation of like isn't the most popular application just a factory for

creating valueless tokens um totally tried to sh kind of shot back and said it's like ethereum but faster and cheaper users can create value can skip creating a valueless L2 and just launch a token instead um you know he he he went for the the jugular and the funnies there um and then cash flows Connor and Max res Resnik also commented um on the same concept here where Max mentioned you know year-to dat revenue for pump is higher than all year-to-date ethereum protocol revenues combined um which really slaps back on like you know it isn't salana and isn't this like most popular app just this Factory for valueless nothing it's like if it's valueless nothing and it's it's outproducing everything on ethereum like I don't know you're really not um

holding yourself to very high standard there um and then Ryan added a little tidbit here that app revenues since 216 so excluding the Trump kind of trading um weekend and and week that followed um salana apps inclusive of pump are something like 3x ethereum apps in total revenue and pump itself is you know what 30% or so underneath all ethereum apps combined um and above you know all B&B apps all base apps in revenues so I think it leads into this discussion of like I mean people are are constantly debating this are memes dead is it over is the trade done but um I think interestingly what we see is that sure pump revenues might be down but revenues

across the board are down for a lot of apps um and and still today like the most profitable and like highly itive applications things that people use are just just simple trading applications like hyper liquid is is a very talked about and um you know I think people find this exciting for a lot of reasons right big airdrops etc etc but fundamentally it's it's just a trading app um in the same way that that pump fund tokens are really just a trading app and a speculative app um so I guess I'd be curious to get your thoughts we can go into some of the data as well we have a ton of data to look at kind of what's going on with meme activity and I'll pull some up but uh just wanted to kick it off and get your thoughts like are memes dead what

are your thoughts here like this is what everyone is saying memes are dead and now it's time for fundamentals what do you think so a lot to unpack there I think my thoughts um so to me if you are running a blockchain you're optimizing for one thing and one thing only and that's rev how much are people paying to be included in in your blocks period and the thing that's going to maximize continuous rev is constant activity and for blockchains like that thing is trading like that's the thing we found that has continuous activity

and with r you have Priority Access to state so people paying more for priority fees or tips to be included because being included now as opposed to later has like infinitely more potential um in order to to gain a profit and so if you're maximizing RV then really what you're maximizing is trading volume and and then what you're maximizing in particular is sort of retail lower quality volume because that allows for more fees to be generated higher spreads which means more

Arbitrage opportunities which increases R and so from that point of view like the dunk that oh all all that's being launched on salana are these useless tokens well the useless tokens are driving all the fundamental value on chains period and that's salana that's base that's basically every chain that has significant Revenue comes from this the speculation on on new newly launched tokens and those tokens can be worthless like pictures of animals or they can be this AI agent craze that we saw um in December and January of this year and SO trading new tokens is a very clear use case and to me one of the

clearest use cases of blockchains in general is the best casino on the planet like that that is a use case um and it's something that people are paying like willingly paying a lot of money for is to trade these tokens and so I think just hand waving that away and saying that like it's a low low quality use case I think is just wrong because of just how much value continuously is driven even now like like you said like year-to dat revenues although I would probably maybe do some calculations on like the the top of Bitcoin and from that date on how things have done relatively but I'd still say like pump fun is probably the number one app U by

still buy a wide margin uh in terms of application revenue generated and so yeah I'm sure you have some some good data to pull up here um on the RV side yeah let's I want to walk through some of the points you made so you mentioned RV um I think when we look at Network RV and we compare you know top chains we see we do see that recently like there was definitely following this this Trump weekend um and you know maybe it correlated as well with like like you know the Bitcoin top or the events at that time but um we saw a bit of a a peak here for Souls relative dominance to other chains I

guess if we look at the kind of absolute value you can see here that like that that weekend of the 19th the Trump token launch um was definitely a bit of like a blowoff peak in terms of overall RV there was a ton of trading volume and activity on that day we'll see that reflected in all the charts but um as a percentage Soul RV is still making up like 40 % of the total across top chains and um ethereum has actually seen some expansion within this category in the past few months but um it's hard to say how lasting that is I think the more interesting thing is that we're seeing like Tron and BNB take some meaningful share um and I don't you know I think to some extent like B&B had a bit of a meme craze as well um it it seems

like like some of that might just be in maintaining the amount of activity that they had um at least at least on Tron for example like we know a lot of that is associated with stable coin activity so if they've just maintained their relative level of of rev as others have declined like we just saw in the in the absolute value chart like then you know you'd expect to see an increasing share here but when we zoom out like this is still incredibly constructive salana and a not very constructive eth um is what I would say on on the weekly basis where Soul has kind of just been grinding up and then taking more and more uh of like Global R if you want to call it that um and you can see sort of the the big

upticks in I guess if we look back here in December of 2023 um just as the meme craze and like trading activity on salana was about to start like ramping up um really kicked off through into 2024 we had that sort of down period in the like late summer going into the election and then you know post election a bunch of trading activity again um which I think just fueled kind of that that recent Peak here but um still a significant share and then you mentioned specific applications um and I think this will I hate the colors on this because they're so similar but if we break this out like some of the largest today are you know we'll see Jupiter in there we'll see

hyper liquid we'll see pump and pancake swap is another one you know just the the BSC decks um so it's not surprising to see like when I go down this list in its entirety it's like okay token Launchpad deck Photon bullex troan like multiple trading Bots Bonk bot um a couple wallets multiple other dexes and then maker Dow makes it up in there and Hyper liquid so um really yeah when we look at top applications by Revenue it's all trading like and whether that's you know speculative trading whether that's all pump fund coins or if it's just you know memes generally or if it's other assets like we we've seen fundamentally that just trading drives so much of the

revenues like you said um and we see that from kind of the the blockchain RV breakdown and where like share has gone there as well as just in application revenues and where like total aggregate revenues are going uh on a per app basis yeah I also think what's interesting on the share piece if you see change like BNB and Avalanche gaining sort of percentage market share of R but a lot of that's also coming from like trading meme tokens as of recently like Avalanche has had a couple uh breakout memes maybe we'll get to uh like some of the base data like clanker has also been chugging out a bunch of uh new tokens as well and so I think what

this shows is like as a as a use case being able to create new tokens out of th Air and Trade those tokens to me is like clearly a super like high Revenue generating um activity and one that people do continuously like even during the this sort of quote unquote bare Market or choppy Market people are still launching a ton of tokens and so to me I think we've just found a great use case yeah yeah I like that you highlighted um base tokens and this the AI Trend I think is more interesting like there's probably a better question to ask of like is the AI trade dead more so than our memes dead um I think a lot of AI tokens were sort of subset of you know

like a meme category basically um in the past few months and we what we're seeing on base like in terms of AI agents um like largely from virtuals is that volumes have gone from you know what were significant like 30 million 50 million a peak of 60 million on AI agent um token volumes down to less than a million a day in the recent week um and actual like tokens launched from hundreds down to maybe one or two or a few uh on a daily basis so like this that excitement that flywheel there is completely gone um when it comes to memes generally let me just jump across

to we'll come back to base but we'll do the pump comparison as well when we look at pump specifically there's definitely been a draw down and this highlights it perfectly but new tokens created from a peak of like somewhere in the 70,000 um a day down to maybe 20 something thousand um and we can also look at graduations as well where graduations peaked at somewhere around like a thousand a day and now down to a couple hundred so yeah like a significant draw down like 80% but not like a disappearance of the activity like we're seeing with some of the AI um like specific platforms where it's basically completely R up which is is interesting like that's such a marked

like significant rise in activity like massive massive blowoff and like tons of excitement around it to see it actually Trend entirely to zero in the span of a few months yeah it's pretty wild to see and to me what the data is showing me is like I said I think we've we've found a great use case and being able to create tokens from thin air and trade them but it's clear to me that sort of the foreign factor of that is going to evolve over time constantly and so that that sort of like you can look at that as like okay what sort of form the tokens take so started with like animal memes then it became AI agents um and then it became sort of

like like start like Tech startups launching tokens and like the form factor is going to change and it's also going to change where these tokens are launching so they were launching on salana all cycle and now you see resurant on Avalanche and on BAS and so I think you just if you're trading these things you sort of need to be on your toes about how the meta is evolving over time um and where basically where you need to be to catch the next wave um so to me that's sort of my my take away from all the data you're showing yeah I think that's a great Point that's um you know I think this is something we've debated I know bacho would get heated in an argument like

this uh we've had some some debates over but I I agree with this premise that like you know we're I think naturally are going to see these these shifts and like the types of things get traded or if it's like the specific mechanisms by how they're traded but not not necessarily like a shift a entirely away from this like speculative trading activity um you know I think people call for like at some point people will just stop trading memes and maybe they will because they'll trade something else that captures that speculative trading activity but um I think fundamentally like this uh Outlet of like that type of like desire for significant upside or

like volatility on a short-term basis like it it's just it's targeting a particular like type of user that like wants to spend money in a certain way and is like has certain hopes um about what type of returns they might get with that in the same way that like lottery tickets sales are basically up only year-over-year and sports betting like is is up only over the past few years like parlay trades parlay bets um have seen explosive growth like people love them even though on aggregate they lose more money on them um I I think it just it plays into some of these things so um yeah it wouldn't be surprising to see like the category of the day or even like the platform um slightly change Ledger is the global leader in digital asset security trusted by 7 million

users and securing 20% of the world's digital assets in recent years Ledger has built a comprehensive ecosystem of products and services making digital ownership more secure and accessible for everyone Ledger's newest devices Ledger stacks and Ledger Flex introduce the world's first secure touch screens making it easier and safer to manage your transactions and assets alongside Ledger stacks and Ledger Flex they have also launched The Ledger security key app offering a safer alternative to traditional passwords and enhancing your digital security follow the link into Today's Show notes to get started with Ledger today and I think we're seeing that here like to kind of segue this into what you were mentioning around like keeping an eye on where things are going or where things are happening base has seen uh an uptick in mcoin launch activity um from clanker and this and

this Banker bot as well where tokens here this massive rise of like a few hundred tokens a day from clanker to like 10 15,000 a day uh massive uptick like what on the order of 30X or so is being fueled it sounds like partially by like interaction on various platforms so like tweets that can call this Banker bot and then like spin up a token and Associate it with like a Twitter account for example um and people are just kind of playing into this and it's it's spinning up that flywheel a little bit um I I think this was played with a little bit last summer where we saw there were a lot of pump fun copycats um last summer like on B&B and Tron and that tried to play into that narrative

and I think one of the early ideas was like yeah let's do uh let's make memes directly from tweets and like let me just like comment on this tweet and make it into a meme coin that didn't really like turn out well but this this has a little bit of a different spin on it where um this Banker bot and like people interacting with it are able to essentially like uh associate Twitter accounts with coins and and other things um and and it's not necessarily the case that like you know there's some conversation on like grock made a token it's like not quite the case like somebody prompted grock and like used it to come up with some detail and then Associated like the grock account with like the wallet or the the

token That Was Then created um using this like Bank robbot integration uh but either way that's like that's kind of where the excitement in the in the sentiment is now uh let me pull up this tweet here this thread um there's some details here from privy talking about Banker bot and it's just saying you've seen some lots of Buzz about grock getting provision a wallet on X to raise funds for US debt relief um all this is powered by Banker clanker one of the coolest imp implementations of previous server wallets so basically what they do is um Banker is an agent that allows people to execute transactions from from Twitter um so like I was mentioning and then they're using privy wallets under the hood so if you can tag Bank Orbot and you know basically tell them to spin

up a token or spin up a wallet for a particular account or address then that you know that Twitter account that those credentials have access to that wallet um grock the grock account could theoretically like gain access to this wallet that was created for it um it seems like mostly this is people are having fun with it but the numbers are pretty crazy um just going back to the to the data we have the like I said seeing launches in the tens of thousands a day is a significant uptick for base um and we saw I think a few months back where there was a bit of like a bass kind of like meme Trend and it tapered off I guess I'll just be curious to see like is this durable do people like are people having fun with this does it does it have like sustained interest um

because we haven't really seen that yet yeah I think all this is is really cool um I mean just think of some of the biggest tokens to come out of last cycle sort of like you think of goat as an example like it came out of a tweet and an interaction between this AI agent account and another account that created a token on pump fun is just like sort of streamlining that where any any prominent Twitter account can now actually be attached to this token and launch it straight from Twitter and allow for that like super Fair launch ability and so I think from that lens is really cool uh I again going back to what we talked about earlier in the Pod

like if you think we're in this like choppy sideways Market is there enough momentum for there to be a sustained sort of game or like like iteration within this sort of minicycle if you will I wrote an interesting blog post which was basically me trying to rec out the the cycle From The Trenches and like why I thought the sort of game that we were playing was oversaturated we had sort of reached yeah like a saturation Point within the game because we'd gone through enough iterations where there wasn't like another thing to top the last iteration and so we needed the trenches to cool off for a while and so you should be on the lookout for like

what sparks that next sort of like we people talk about the euthanasia roller coaster and so we're sort of in the downward spiral now but at what point does do we see the sort of the opposite um where we start to see the roller coaster in the in the the positive direction and maybe that starts now but you have to sort of think of these things within the macro environment and my take is probably that this is like a short-term little bump but things sort of calm down from here but it's one of those things yeah you got to you got to look out for if you like trading these things you need toay pay attention to what's happening and and develop a thesis but overall like it's really cool

that uh we have access to this data uh like all of this stuff is on chain and and that you know us at block work's reseearch we really think that onchain data is like we say improve the data improve the industry and we think that like having access to this onchain data really makes for everyone in the industry whether you're a Trader whether you're working at one of these protocols to make better decisions and I think us running to this as a perfect example we were able to perfectly dissect what's been going on Within These trenches in 15 minutes and and really seeing points from many different angles and so yeah glad we we walked through this

today Shameless shill for the blockworks data product um we love that and I think your point about kind of using the data to understand what's going on um Rings true for another recent event um sana's simd 228 proposal and vote um sparked a little bit of controversy as well and there's this great dashboard not on the blockworks platform but on Dune from kagran zero going into who who voted what basically and a summary of the votes and and how much stake was voted Etc but um we had close to a th000 validators voting upwards of 75 74 75% of stake um was voted which is pretty impressive um

that's a ton of participation um and then I think the big thing that we I want to dive into is there is this kind of ongoing or sort of there was this narrative um that people had that the sort of staking as a service cartel um kind of caused this vote to not go through as expected um and when we look at uh Top validators by votes as well as like how they voted um we can kind of get a feel for maybe what they mean there um so some notables that didn't vote like binance did not take a stance here but when we look at like coinbase and Galaxy it seems that these guys you know voted maybe in alignment

with some of their key stakeholders or constituents however that may be they didn't take like a particular stance here um so it sounds like they sort of maybe listen to the aggregate um of some key stakeholders to make their decision can't really fault them there um I think these guys are servicing a lot of customers so that makes sense helas generally voted in favor there and then some of the big names that stick out are like Ledger by figment we've got everst p2p.ie um this was sort of the opinion I think

of people online that like this didn't pass because those guys said no and like they weren't going to let it happen what's interesting is when we look at validators voting by stake level we actually see that at the top end of the curve most were in favor um something like yeah so upwards of 65% with stake over a million um were voting in favor whereas at the bottom end of the curve smaller Val validators largely voted against this proposal so I don't think it's so cut and dry that like these large staking service validators killed this proposal more so like a combination thing here of I think there were clear um opposition arguments in terms of like smaller validators might not be able to

remain um viable or competitive with the change to the to the Dynamics and so I think it's natural to see them vote against this as well um and those seem to be maybe the two large groups that played a factor here uh I guess I'm curious on your thoughts here wesy like with this data in mind like my expectation would be that you know if if there's still a goal here to change how um the staking rewards work on salana that you know you would want to dive into this sta analyze a little bit figure out like how you might modify a proposal to get more of whether it's the validators at the bottom or some of these validators at the top um to align with you what are your thoughts yeah I have a lot of thoughts here I mean based on what you just said

one of the things we do want to dive into blog Works research is what we call governance data so things all around these lines of important governance proposals in in particular like especially protocols with with delegations and a lot of past votes like looking at data at how teams and entities have voted over time and how that might translate to Future votes is like a super interesting sort of data science like lens to look at these types of decisions so first of all like having the data available again is like really really awesome that we have this at a high level my takeaways from the vote in

general are so I typically when you when you're looking at especially an L1 blockchain there's sort of four entities that you need to sort of strike a balance in their power in the system and you basically you have validators you have stakers you have uh protocols and you have users and like those four groups you as an L1 blockchain need to sort of like make sure you're playing all of these sides and that you need to be very particular in the trade-off spectrum of like how much power you're giving to each of these groups and there's there's interplays between some of these groups like The validators and stakers are sort of a back and forth um and that comes through through the

typically through like commission rate but this is I think a perfect example of that balance as well in that the validators themselves were the ones that really had most of the power and I think the reason why you saw the the like the biggest validators voting yes um was because they were able to strike this balance between the Stiers and the validator they were able to take input from their Stiers to say hey you guys like what what do you want to vote for and typically like your typical Staker or your user like your Community member was in favor of this thing and so the larger

validators that's why they leaned sort of in the direction of yes but when it came to the validators that didn't have that input from their stakers that had this unilateral decision to vote Yes or no they typically voted like 100% no and that was a majority of the reason why this thing didn't pass and so I think in general uh salana has made some decisions to give validators a little too much power and that goes by like not burning some of the transaction fees and having those go to validators I think if this is how we want to set up governance then validators continue to have a lot of power because they can they can choose whether to listen to their

stakers or not there needs to be some sort of enforced mechanism for stakers to like force their vote that like maybe if they just like don't vote at all then then the validator can have a say but they should be able to override Cosmos has this kind of system and so I think there needs to be just more checks and balances and more thinking from like a mechanistic point of view to make sure that they're properly balancing each of these individual groups and their power within the system I think bar chain has done an interesting like not to like pivot to a whole different chain but they've done interesting things of like balancing different user segments and that they're trying to give a lot of

power to the protocols and less to the stakers and validators and create a flywheel of applications and I think that's like an interesting point of view and point on the trade-off spectrum that I hope all their new chains take of like really prioritizing protocols and users versus these like passive stakers or validators in the network and which like have traditionally held all the power and stake systems in the past and so over time I hope yeah we see more experiments and how we Balance power between all these entities and yeah that's my that's my simd 228 rant right there love it I think yeah it's it's unsurprising and I think it's natural to expect that there will probably in in

perpetuity be these like conflicts between different groups with different sort of like voting capabilities uh I think you can really you can relate it and compare compare it to like the traditional voting systems of various governments um you know I think maybe one of the bigger concerns like out in the political world is how money affects politics and like you know how much does your vote really matter but in this case it's it seems more about like who has the voice and the capability to like make or decide to vote um but to that point around money having some power I did want to bring up something that I found interesting was um fried or shaanu got into this um interesting

application of permissionless trading really in that they made in the original tweet made 10% of our vote on simd 228 available to buy on Meteora um so literally just put up a trading pool for their vote and said go at it if you want to buy our vote go ahead and then you can vote um and then announced at the end of it we did sell 10% of our vote for 19.2 Soul so a couple thousand bucks um um which were distributed and then they distributed um those rewards to you know some s Soul holders um you know for their for their protocol Etc but I I guess just an interesting Dynamic here that um might have to be addressed or talked about going into the future of

you know there's a less of a blurred line between money and voting in these systems especially when you can just directly tokenize your votes and put them up for sale um that's not quite how it works in the traditional political system maybe in some countries you know not all I think it's there's usually a little bit more of like smoke and mirrors and um you know some some more obscured things happening behind the scenes that um you know kind of enable some like money to have power over elections but in this case it it's more direct and I do Wonder like if we see a trend here where people become concerned about like the direct monetary you know purchasing of of future votes going

forward if this like sort of practice becomes an adopted thing you know I could see if you're um a smaller validator and maybe you don't hold an opinion in a in a proposal you know why not put your votes up for sale I think you know you'd be uh directly incentivized to do so if you don't have a particular uh you know up or downside to you know whether that vote is yes or no U or like if you don't feel impacted by the outcome of that of that particular vote so it's an interesting like maybe point of future discussion that that might come up again yeah I always thought we'd Trend in this direction especially after last cycle the creation of curve in P to

economics basically like there's just like distinct bribe in order for people to like direct the missions to their desired pool I figured that would translate to a more like actual governance system at some point I think it sort of depends because most votes don't really have a change in sort of like monetary outcomes but something like this where validator staking rewards are changed I think because there's that monetary component it makes sense to put a price tag on the vote um I also think it's interesting like these types of agreements certainly would happen anyway

and the fact that it's onchain and transparent I think is better than it being like you said smoking mirrors behind the scenes like if you're gonna if you're going to do it I'd rather have it on chain and available and that's similar to the me infrastructure we've sort of gotten to uh on eel one where like the fact that it's like available to anyone it's democratized transparent is better than it being a dark Forest but there's still this question of like should it be even allowed any way like should be allow sandwiching and in this case should be allow governance votes to be swayed by money like clearly that's illegal and real election so why do we allow it here kind of thing and maybe there needs to be like like a lay of the

land like the problem with having completely permissionless systems is you can't really if you're trying to be intellectually consistent um you can't really hammer down and make rules necessarily um you sort of have have to force them in this direction of being on chain and transparent but it's yeah it's an interesting question and I think we're just going to see more and more of this and we're going to have to deal more and more with this question of whether it's something we want and how we want to do it yeah I think that's a great point I I do think that like there is one point here that fundamentally all these systems come down to like a social consensus component and so like if a network really decided like if the overwhelming

majority was of the opinion that like no you should not be able to sell your votes for you know direct payment um you know you could think of any number of systems right like you just it's all transparent on chain right you can find all those entities and say like hey you're you got a warning if you do it again like you're out and then you you can just like Blacklist him from the network that's like a really extreme example but um I do think that's how a lot of these conversations and like decisions ultimately will get made going into the future is just like what's the the sort of social consensus around this thing what's the agreement what what do people think about it and I think we've seen that with like various types of things where the outrage is always like these are supposed to be permissionless

systems like I can do whatever I want but then like when somebody puts like a racially charged like mcoin on chain and then you know front ends like deck screeners say well we're not going to show those because those are kind of weird and like people don't like that um you know you just see where the gray zones and like where the rubber hits the road like when people get upset like you know you're bound to see reactions to these things and social consensus to you know ends up defining a lot of this stuff regardless of if the system itself is like ideally meant to be per permissionless what have you um but yeah good points all around I think you you covered that beautifully have you been getting silon chain this year farming on 10 plus wallets across different different ecosystems well Crypt tax

calculator is here to help Crypt tax calculator has 3,000 plus Integrations to support all of your wallets Exchange accounts and onchain activity and a custom pricing Oracle to handle even the most chaotic portfolios get started today and make tax season easy you can use our exclusive discount code BW 2025 to enjoy 30% off all paid CTC plans until April 15th of this year follow the link in the show notes below to get started and I think it leads into maybe just one last point that I want to discuss that I think a lot of us have maybe been weighing recently I Know Dan Smith uh he had a funny tweet uh comment remarking on a Gart tweet about how um Robin Hood he the the basic gist of the Tweet was that so we really built all

this open source Tech and Robin Hood is going to roll in and just like copy it all for free and make all the money huh um and Dan Smith has been remarking that like wow I've been really thinking about this for like a week now um but I think it's I think it's an important point and it's I've been thinking a lot about this point as well that there's like this spectrum of businesses and like potential outcomes going into the future that hasn't been hasn't needed to be as like prominent as a of a thought in Prior Cycles where like real adoption like via institutions or or trafi businesses was still very far away um today that's not the case right with the sort of loosening regulatory regime and like the sort of expected onboarding of maybe traditional

um you know Partners to and like users of crypto technology and like blockchains um there's a there's a nearer future of you know tra five businesses or like existing fexs like really delving into this world and competing with like the existing D teams and solutions that exist um and so like the the main thought here is that like you know if you're a big D guy and like maybe you love a do they really win if you know if the finex of the world if the robin hoods or if at some point in the future the slower movers like the you know the fidelities and the Bank of America the big the big big money houses you know come in and say well there's

all this great open source Tech like let's just copy how a was built and then just serve that straight to our users we don't even have to pay a a fee for it um because it's freely available for us um I'm curious any thoughts you have here this is something I've been weighing I think there's a lot of models I think a good example to maybe like Kickstart this convo is like Moro and and the moro and coinbase partnership where it's a bit hairy because there's a lot of things going on here but but basically like coinbase is now offering this you know lend your Bitcoin borrow usdc and it just natively uses Moro on base in the background um that users don't have to worry about which is a cool integration um just like like a CI defi direct connection of like making use of

these you know defi onchain lending markets but you know coinbase CI customers can can access that through the app or their phone Etc um and it's super easy all the complexity is obvious skated away um but there's some differences here like I don't know that coinbase is like doing this out of the goodness of their heart like they want to offer a good product to their users but also like they're invested in Moro like CB Ventures backs them they're part of Moro is part of the base ecosystem fund so like they're incentivized to like participate in the upside of Moro I guess if you want to call it that if Morpho does well like that's a win-win for coinbase as well um so I guess I'm just curious on your thoughts like like leading D5 teams leading CI teams and then like

potentially in the future leading Trad fi teams like there's a variety of outcomes here it's really I think to me it's not clear who's going to win yeah I have I have so many thoughts along these lines so in terms of like Ci coming in this is a thesis I've had for a long time or at least like a potential future where like you said these systems are by Design open source and I always thought well if JP Morgan wanted to come in and Fork a and all of a sudden SE it with a bunch of liquidity like what's to stop them from becoming like a power player within this industry and competing directly with a

etc I think in terms of terms of the moat that these D5 protocols do have is that like liquidity base um so but I I think these large like financial institutions would be able to seed their own liquidity pretty fast um and there's also this mechanism of these D5 teams are constantly iterating on their products in the mode is actually the team that can come up with new novel U mechanisms like you're betting on the Unis swap team to come up with Unis swap V4 and eventually maybe V5 versus just having someone Fork code being able to utilize it so there are some Moes um and

I'm sure a good resource on like def5 Moes would be Felipe at the uh he's he's had some good thoughts on like how D5 protocols can create Moes um and so there's sort of that lens to look look at things and we'll come back to Robin Hood because I think they're going to be the perfect example of CI coming in potentially strong arming defi but you brought up the Morpho and coin base example and I think this is an interesting one because coinbase is sort of losing value in a sense like if they were perfectly rational and trying to um I guess better their own revenue and interest they just Fork Moro and then have their own basically lending

protocol that they're taking the fees from instead they're just incorporating Morpho into their back ends I mean and and the way Moro is designed is like you have like individual pools with their own individual siloed risk and so coinbase could very easily sort of create their own pool and generate Revenue that way they are dog fooding again like you said their investment but also in their eyes they're trying to create more applications on base that then create a sort of a flywheel um and synergies across these protocols that like one increase the value of Base itself but then also if there's more stuff to do on chain crypto itself becomes more valuable and there's

going to be more assets to trade and so coinbase as a whole is going to benefit from that and I see that sort of point of view in that trajectory but I also see the opposite view which is sort of the the Robin Hood point of view which we're starting to see now is they just launched their own prediction markets like they sort of teased it with the election last October but they've now like officially launched their own basically polym Market competitor and they're going to be a great example of rather than teaming up with protocols to launch on like their chain and these third parties like maybe they've invested in or they think

because they enable them that the value is going to crew back to them rather than going that route they're going to have their own products that they can sell to their users and that they acrew all that revenue and to me I actually I like this approach more in terms of value capture and I'll tell you why I think the point of view in particular that basis taking of like we'll just build this platform we'll allow developer third party developers to come we'll eventually get value from this I think I always think back to uh I think is John chb has this where it's like application Launches on generalized chain application gets product Market

fit then application becomes their own app chain and like they leave and then oh the app chain wants to become generalized and there's like this like constant cycle and so if you're building this generalized chain for third party apps and the apps take off what's to stop them from trying to like verticalized capture all the value for themselves and all of a sudden you're left with nothing versus the incubated route which Robin Hood is taking you're seeing arbitrum with like their onchain Labs start to do this like you start dog fooding your own product that way and because you own it not only do you capture all the value but there's no risk of leaving like that is your product it's going to stay it's going to

continue to to provide value and the synergies would still exist if someone did if a third party did want to come they now have access to these like infrastructure to these Primitives and they don't have to worry about them leaving either like they know it's there they know it's part of sort of this curated uh platform of projects and to me Robin Hood is like going to be I think the biggest giant in the room that has a chance of the being successful in building you know they're starting with prediction markets they're probably going to build their own decks they're going to build their own lending protocol like you can already see it coming and I I think if there's any

hedge if let let's say you're heavily invested in defi to me Robin Hood is like the obvious hedge in that future um that like if if defi doesn't make it and it's actually centralized parties capturing all the defi like Robin Hood is is poised to take that market um so I know that's a long rant overall but I think there's a lot of like different trade-offs being made and that Robin Hood's the big elephant in the room when it comes to D5 value capture yeah I think that's a great point it's interesting because I think this is how people think about coinbase today as well um just you know the growth of their exchange but then also

the the growth of Base um there's sort of like a multi-layered bet there of like you you can maybe get the growth of D and the growth of like just generalized C5 fintech platform um all via coinbase binance is maybe the other one that like kind of got left in the wayside it at least in the west not looked at so much but like cycle over cycle or guess like when we look back a few years it seemed that for a while like maybe binance smart chain like the sort of binance exchange and then binance smart chain relationship was like maybe more of a focus for a time um but it kind of it seemed to have fallen by the wayside over the past few years it seems maybe recently they're changing that and I don't know if that's because

they are seeing the if you want to call it success that coinbase is maybe having with Bas or just like the maybe they're starting to see the possibility of that flywheel effect um really like kicking into gear and they want to like ramp up that activity again but either way I think it's interesting to see that and and I'd agree with you that like I do think that these types of businesses if it's binance if it's coinbase if it's Robin Hood what have you like they're in a really really strong position um to like vad tf's point from Robin Hood of like the open source Tech is out there like we can hire crack de like we can hire crack devs and Engineers um to build this stuff and ship fast and we know they're willing to ship fast right

like these are these are the teams that are sort of they're already on the Leading Edge right they're like known for being the like at the head of Finance in the sort of like traditional um kind of Finance World um and so it's it's not surprising that like they can sit here in this middle spot with a ton of existing customers a ton of capital that those customers you know have on their platform and say you know hey maybe we do want to try this like defi thing let's just let's spin one up we'll you know offer an incentive or a bonus or like let people know it's there and uh if our customers want to put a bunch of capital on it like that's great we can see that real quick versus like defi teams that have to kind of struggle to find pmf and like build up build up

their mode over time it it does when I think about Moro the thing that I do find interesting is that their particular design was in this like was in favor of this future specifically like their goal and their like idea of building was like yeah like let's totally change up the way that the lending protocol is built we'll have all these like isolated pools and then we'll build vaults on top of that and then if anyone wants to build a vault like they can coinbase could build a vault you know maker can build their own vaults um and then they can charge like their own performance fees on top of those vaults and if at some point in the future we want to charge like a small fee on the markets underneath we can capture that and like I think the the idea there is

like maybe that's enough incentive for these other like if it's D5 businesses if it's C5 businesses like hey maybe they'll just adopt that they'll like eat the little fee on the on the bottom for us offering the service um but they get this like ease of just like hey we get access to the markets we can drop a vault in we can take the performance fee on that Vault like that's a pretty good deal we don't even have to build anything um and I think that's the that's the bet that they're making um and it's interesting I I I wouldn't be surprised to see that like do well here or like you know maybe see some some adoption here as teams are like maybe weighing the value of getting into this space of like you know we're not sure we want to spin up a whole defi team just

to build some apps that we don't know are going to be successful or not so I think the moro approach makes sense from that lens um and it's interesting to see other Lending protocols like try to spin up their own um kind of similar designs here I'm just curious how that model can be adapted to other products um because like a Dax like a Launchpad like those are really easy I don't know how you like prevent uh a coinbase or a binance or a Robin Hood from just coming in and and spinning up a fork of like the most common decks because those are pretty simple um but the Morpho one is interesting 100% cool well we are we're over an hour here

I think we've uh spilled our spilled our thoughts thoughts and guts out for enough time while the boys have been partying boys and girls have been partying at Das um so we can call it there I guess any any major thoughts any key takeaways that you have wesy right now like if it's for this week if it's for the next six months the next five years like how are you feeling what are you thinking about heavily right now yeah since I'm the resident bear and this is probably last time on this pod for a month or so like touch some grass people like especially Us in crypto we can spend way too much time on Twitter on our laptops um we've been given a gift in the market of just like sideways chop if

this is not a market you thrive in like definitely do some things to better your mental health to yeah like I said touch grass um but overall like the space is not going away despite my bearish sentiment it's very clear that we're in extremely positive Administration when it comes to crypto that institutions nation states around the world are now coming to grips with the the impact this industry is going to have um despite some of the crazy crime going on crazy speculation there continues to be um people chugging away a quality products

use cases um and so don't get jaded even if prices continue to fall pay attention be patient touch grass and we'll be back in no time um but yeah I'll leave those as the takeaways Fair takes I think uh you're pointing out that the market has actually been pretty favorable um to those of us affected by seasonality you know if you locked in for the winter and you made some gains like maybe go touch some grass for spring and summer enjoy the nice weather go play outside um do your thing do whatever you do go for some walks take your dogs out Etc um and have some fun and uh yeah we'll we'll keep chugging along the industry will

keep chugging along I think uh longer term we're expecting good things but uh yeah it's uh if you haven't been outside in three months maybe it's a good time to like open the door and and like we say like we always say touch some grass but uh for all for those of you that are maybe at D or or got to go to D hope it was fun hope you met and chatted with a bunch of the research Chads and data guys um and advisory folks and all the other block works and people from around the industry um ton of great speakers there um hope you have fun and we will see you guys next week thanks for watching thanks for having me peace [Music]