Dissecting Noble's Revenue Share Prop, L2 Price Wars, and Fee Switch Economics | Analyst Round Table

Transcript

More than 70% of LPS are generated from orot and for altcoin pairs that's more than 90% so they are in like a pretty good spot as far as dex's go but if you look at like the past seven days and run the numbers they would have made roughly 440,000 in revenue and if you look at the past 30 days and if you look at the numbers they would have generated a theoretical like 2.32 million in free Revenue I know Dan's laughing because I nobody loves annualizing numbers more than Ren not a single human on this Earth what's up everyone welcome back to another episode of zerx research March is just around the corner and I want to

make sure to give you a quick reminder to not top tick your prices of your D London tickets if you use codes 0x10 at checkout you can lock in a 10% discount on your ticket don't miss out on your chance to get ahead of the curve I'll see you in London all right everyone welcome back to another episode of ZX research we are joined today by renan brick to bring you guys another analyst Round Table uh the blockworks research team is back at it again we're recording this episode on January the 22nd so this Tuesday should be going out the following Thursday uh and we are excited to jam on the latest Market happening so Sam maybe I can toss things over to you to kick us off on the news and governance updates of the week yeah absolutely so over in the cosmos

ecosystem we have a signaling proposal up on the cosmos Hub Forum to on board Noble as a cosmos Hub consumer chain with the idea of uh you know sharing some of that Revenue back with the Hub although that exact percentage of Revenue share is still TBD this is just basically a signaling proposal to make sure that there's validator buying and that there's General support to add Noble as a as a consumer chain of the cosmos Hub and to leverage atomy asset for security and tangentially to that osmosis is looking to add support for Noble usdc as a gas token uh on its platform as well so that's that's pretty neat too uh does anyone have any thoughts on these two governance props I think Noble generates fees every

time an asset passes through the chain if I'm not wrong and anytime like someone makes a transfer between like two chains as long as it's a noble asset it has to go through Noble so pretty much a guarantee that like noble generator fee regardless of like where the noble asset is sent from and too so I think that over time they do generate like a significant amount of Revenue but if you think of Novo as like kind of something similar to cctp on let's say like the evm chains where you can Bridge uh usdc for free to be honest other than the gas cost I'm not sure if that

like Dynamic stays long term right like there might be something where like the fees have to go lower over time because you're looking at like the evm where you can Bridge usdc using cctp for free whereas on noo you might be paying uh I want to say it's 10 bips but definitely double check me on that so that fee might have to go down over time but overall I think like noble will generate a sizable amount of Revenue especially as like Cosmos and all of the consumer chains take off especially with like for example liquid stake dyx U which I know you're going to talk about in a bit later Sam um I don't have huge shots on Osos just looking to add support for

Nova usdc as a gas token to be honest yeah I'm on that latter point I think it's exciting that they're thinking about this I know you can already use like atom as well as osmo um and anybody who's interacted with the cosmos ecosystem has landed on a chain that they want to use without gas it's it's inevitable in that ecosystem right now so the idea to add token other tokens as gas I think is a no-brainer especially Osmos is in a great position to do that uh because they built that fee abstraction model and of course they are a deck so they do have the liquidity to make the swap transaction um yeah I think all around that just works towards building a

better ux which is an absolute necessity and if you really want to bring more users on chain yeah big plus one on the uh landing on a cosmos chain without the native token that's used for gas that is a huge pain in the ass and I think also to your point on cctp Ren like if you go to cctp money there's only like you know a finite number of chains that you can move between I think by Noble doing this with the cosmos Hub maybe it can kind of be a better a better Avenue to move more quickly I suppose to integrate new chains versus you know Circle as the maintainer of that centralized UI is potentially maybe a little bit slower moving to add new chain so I think maybe that's a good alternative but uh you did

mention that I was going to bring up dydx so will do that right now there's a couple things in the Forum uh from P Stak stride Quicksilver basically everyone battling to launch a dydx LST and chatting about different designs on the Forum uh some of the differentiating factors are supporting minority validators because the top two validators have a pretty significant market share over there um dual governance structures similar to how Li was talking about giving steth holders veto rights over Li of Voters in the case of like an existential threat to ethereum itself um or compounding the rewards back into dydx tokens from usdc to increase your stake weight pra for that uh I guess for for more uh greater

usdc staking rewards and stride even hinted at a St dydx holder uh token air drop uh for people who uh buy that LST over others in the early days so definitely a lot of competition heating up over here as I'm sure everyone can imagine how nice it would be to hold a uh a per St token that actually generates real yield in usdc I know we've been talking about that for what feels like about a year on this show now but I don't know if anyone has any thoughts there either one of the things you mentioned actually was the idea of supporting minority clients or sorry validators and I think that's something that the community probably needs to think pretty hard about because if you look at most Cosmos chains generally some around about 100 validators um and

that's about the same for DX I think there's 60 if I have that right uh but the concentration of voting power is is very very concentrated towards the top half so it only takes two validators to hit that 33% threshold that is needed to Halt the chain uh to hit that 66% which is that more dangerous threshold you actually hit that at seven validators um so ideally you know you could kind of add another zero behind both of those numbers to get in a better spot uh so I I would like to see that being prioritized as the chain matures I think on the note of um minority batas this is probably a bit more important for dydx than your

standard like proof of stake Network because on dydx V4 validators do have an inmemory order book and so you kind of have to deal with a lot of these challenges of me how do you sort of distinguish between Network Jitter and like a Valor actually extracting MV and that's why you really need a equal distribution of the akake to make it so that like it's it's not like just two market makers uh sort of validating all of the blocks that would lead to a pretty centralizing Dynamic over time given the amount of like volume and MV potentially available on dydx V4 and it's worth noting why they move to an app chain right the V4 announcement blog

post was literally titled dydx V4 full decentralization so that was the goal of of the whole thing was circled around we're going to an app chain because we can decentralize um so it's it's not something you can just you know have out of the Starting Gate right I don't think I'm not faulting them for being in this position by any means but it is something that needs to be continually built towards um and so because of that is why I say I think it's important for the community to kind of think about uh some programs to get some stake towards the bottom half of the validator set for sure yeah the main part of there that stuck out to me personally was just the stride token air drop to their LST holders I just find it super interesting that you know that people saw Li's

Playbook and those Network effects they happened very very very quickly in the early life of an LSD and I think we're going to see this continue to play out over the next month or so so definitely looking forward to watching that one Ren did you have something to say yeah I have a quick question for you all so obviously like for liquid staking providers for like one token say like e lsds there's obviously like a network effect in terms of like liquidity volume Etc right and that's kind of why like ID has such a dominance uh for like e LST for a sort of like generic LST issuer like stride right if one of the lscs does really well say like stake that right do you think that has a

positive effect on like them de facto having like a head start and gaining market share above other people for say Stak dydx just cause they're completely separate LST that has nothing to do with st dydx is like doing really well and they're like the largest spy market share by a wide margin or do you think there's no like correlation there I'd say there's a big correlation because as the market dominance of a particular asset increases the value of the Native token is likely increasing as well and therefore the incentives that they can pay out that being said I mean Lio has a massive treasury of native tokens and we're seeing them go the completely opposite direction and saying no like we

don't want to do any new markets all we want to do is eth and so you got to wonder if the overhead and the headache of adding all of these new markets became kind of too much to manage in a decentralized manner and like kind of Drew them away from their North Star so it'll be interesting to see if Shri kind of faces the same fate if one market becomes dominant and then it's like all right we're just gonna focus on this I have a crystal ball Tino SL tinfoil hat theory on why Lio cut the salon of ties and the other chain ties and I think it's really because they were taking so much heat uh for having 33% of stake that they needed to kind of prove if you will their alignment to the ethereum community and saying hey like we're just going to go all in only focus on you

know making ethereum our home and like we need it to be successful because it's the only uh you know chain we're working with that's my tinfoil hat theory on that piece but I also think the to Ren's original question I think the other side of that is it's really just brand right like if you have a very successful brand at having staked atom you know when you add these new chains people are be like oh yeah like I've heard stride you know they have a like a structurally sound product a strong team like I'm comfortable with holding this asset um because ultimately that's going to matter a lot right so I do think it's really the the big win there is on the brand side yeah I think that makes sense too Dan once you get used to going to one place to Min to certain LST you

probably just go back there you see support for a new asset and you're like all right I trust these guys I've held this for a while so um definitely agree but uh onto the next uh news item I guess this one's kind of funny GameStop said goodbye to their nft Marketplace citing regulatory uncertainty but my take on this is just it's because of zero volume if you look at their their website over the past seven days they've had like less than 40K of 7-Day volume so I personally just think we're seeing the end of the era of every single web two brand saying all right we're doing this thing with nfts and they're starting to realize all right this doesn't exactly work you got to need a a bigger plan than just launching something and it's hard to maintain volume and generate fees to actually

sustain the marketplace but I don't know if anyone has something to add here but pretty pretty straightforward honestly it's because they didn't have points I think that's where they missed the market to be honest and once to once all of the web two companies find out about points I think that would legitimately change everything um but on a more serious note I do think like everything you saw like the last cycle will probably happen again this cycle you know like all of the city like Coca-Cola like we're coming to the metaverse like all the McDonald tweets and everyone launching like random nft loyalty programs I do think that'll eventually happen and like kind of similar to how like at the start it's hard to distinguish between like what like real

adoption and what something that's like really City looks like and over time like those lines blur and eventually one day you're like you know this is what genuine adoption looks like I think we're just in the early Innings you know um not every company should like have an nft Marketplace I don't want like McDonald's to launch like a tokenized nft Marketplace for you to trade like your Happy Meal toys or whatever you know um but there is certainly a place for like some of these companies to incorporate blockchain technology into their sort of like everyday basis but please just no no meterse stuff please but having said that maybe the Apple Vision Pro will change everything yeah that's just kind of an

huge for them as well because I guess the NFD Market is kind of starting to rebound right now and maybe they could have gotten some volume back if they let it ride for a bit longer but I guess just time to cut the losses and move on um and it's also a good example of that maybe the nftd market right now is just for super onchain people or there aren't really like regular persons who trying to trade some nfts it's just the agents on chain and of course they're not going to to go to like GameStop platform to trade these things unless you're buying pudgy Penguins because who I mean I'm pulling

up a price chart here started 2024 floor price is about 10 10.8 eth and we're already up to 18 eth so who's buying pudgy pen Penguins that's my question for you brick smart people are Matt called that out too like what at the beginning of the year I think or even earlier than that he was saying that man I missed my opportunity to get my forever pangu and that was when they were at like nine or 10 eth I remember because Dan you were trying to figure out where to check nft floor prices and you're like I probably just totally Ed myself as a newbie I know I know and that's funny you say that because I just quickly Googled and that uh that link that I pulled up did come up as a hot

link so that's further evidence that episode's out there somewhere we need to go find it because Matt's going to be pissed when he uh he sees what that price was yeah and back to breaks Point too I definitely agree with uh what you were saying there I mean I've I've asked three Starbucks Baristas about their nft program and they literally have looked at me like I am absolutely crazy like they have no idea what I'm talking about so I definitely don't don't think many people who aren't just fully onchain Deens are are evening in loyalty programs but hopefully that changes we'll see maybe the Sago phone is the answer there but uh on to the next one we had the Manta airdrop last week but no one could really claim their airdrop because of AD dos attack allegedly is what the the team was saying it's really

unclear actually I personally didn't even try using it at all so not sure I also saw some people on Twitter saying like oh I tried to bridge back from mana and wasn't able to so not a great look there probably could have gone on the hot seat but regardless the token is trading at a $600 million market cap in $2 A5 billion do fdv um I can rattle through these last few unless you say so you guys just jump in if you hear anything that you want to chime in on but nether mind as well uh their execution client experienced a bug the other day which has people asking on CT whether client diversity is a good or a bad thing because I mean on the one hand it kind of slows down things you can't move as nimbly uh if you do have client

diversity but it also adds kind of extra lers of Defense if something in one client were to go horri horribly wrong so I kind of see both sides here I personally don't have a strong opinion so if either are you two do definitely hop in um but then lastly we had the Ono token launch uh real world asset type uh protocol that's basically bringing treasury yields on chain as well as some other real world asset yields on chain so if you guys have anything you can add there that would be great but they launched a $2.6 billion fdv which notably is greater than maker two2 billion FDB and only 14% of the token Supply is allotted to the team team and early investors with a 12mon cliff and

four-year vest which to be honest I saw that and I was like damn that's that's pretty solid but caveat 33% is to protocol core contributors so like it says like future contributors so maybe that gets added to the 14% or maybe it doesn't I don't really know but it also has a pretty long V so seems somewhat reasonable and then the remaining 52% of the supply is for ecosystem growth and they have about $200 million of TBL as of uh January 22nd today as we're talking um I'm going to put on my mid curve head here I'm not sure how attractive Ando is right because their core product is I'm going to forget the

ticker here but like basically tokenize like USC treasuries um and that's kind of like the only thing they have right and say they have like a take rate on the yield generated whereas you compare that to maker da right and I think the common argument for something like maker dos that they have this like seesaw Dynamic if there's like a high rate environment then they're printing a lot from the rwas but if the rates go down then the demand for leverage goes up and they also like print cash that way whereas like Ando doesn't have like the other side of the seaa right all they have is something that would be beneficial in a high rate environment sure you can make the argument that like you know like eventually Ando owns like 500 billion worth of like token Trey on

chain and they have like a certain like take rate on the you from that then it could be a good value proposition but I think I like the Dynamics of like the maker token just a lot more just because they have that like sort of like hedge against like various fated environments it's kind of similar to say Robin Hood right like Robin Hood has like five billion dollars on their balance sheet so in a high rate environment they're printing like a stupid amount of interest income but in a low rate environment like probably dents come back people start like going on washing bets and like day trading options in crypto and so they benefit from like a higher amount of revenue from the payment of autow so they have this natural hedge which I just don't think Ando has right now just to give you a little more

context there to The Listener um Randy mentioned their products they have usdy which has about 66 million in tvl and that is a US dollar yield basket uh and they have ug which is comprised of us treasuries and that's about 117 million in TVO I also forgot to mention they have a points program so if you held usdc between yeah I know another freaking points program I can see all you guys laughing but if you held usdc or usdt from like January 23rd 2023 to the end of the year do you have like a claim on some points so yeah be sure to do that we or maybe don't do that I don't know I

don't want to tell people to go click on some link but we'll put it in the share notes for yourself I'm just imagining on those like head of institutional sales going to like a 300 billion pension fund and say like hey we've managed to tokenize treasuries but that's not the big unlock here we have points and he just sits there waiting for a response I think he has something to say yeah I was just going to say that maybe the maker comparison isn't quite appos to appos since isn't this platform kyc it as well and it's more of like a I guess a Normy SL institutional play on rwa so it has a certain or I do understand

why the market is excited about it because at the moment you really can't take any other or there aren't any other liquid plays uh you can take on this sector so I do understand what pumped and wasn't there also some kind of a I don't know if this was a rumor or confirmed or what whatever but wasn't there some structure that for the first two weeks you could take the token or something and then receive more Ando for that so I think that created some by pressure as well I think you're right I'm not 100% sure but I actually do think I recall people saying like 800% APR for like two weeks or something like that so I think yeah that that might be what you're

leading to Brick but uh I think that's a good place to head over to um our hot seat cool Throne segment always a fun time but before we do that we do have a quick word from Kepler one of the best wallets in my personal opinion in the cosmos ecosystem thanks to our fantastic sponsor dydx so we will see you in just a minute all right so today we're joined by Josh the co-founder of Kepler and so we're super excited to have you on Josh kind of get the the daily dydx dose of information of what's going on in the cosmos ecosystem do you mind giving us the quick uh I guess elevator pitch for for Kepler which is one of the leading wallets in the cosmos ecosystem yeah uh Kepler wallet is a wallet that's built specifically for the

interchain ecosystem we started about uh late 2019 uh basically with the goal of uh we feel like the puck is going towards multi-chain cross-chain environments uh which we basically call the interchain uh as as a whole and felt like wallet experiences at the time and even even largely today are still very focused on being single chain so uh we have uh various product lines that focus on um anything from account management Key Management uh extension staking governance Etc uh and yeah that's kept laring a bullet point nice I appreciate this super quick intro um so one part of the cosmos

ecosystem is that there's new app Chains new consumer chains coming on every month right how do you prioritize adding new features and chain Integrations because that has got to be a bit of a headache with new versions of assets chains tokens coming online just every other week yeah uh it is definitely one of the bigger challenges that we Face uh so far and you know to be completely honest I do think that one of the drawbacks of like this you know heterogeneous app chain ecosystem is the overhead for a wallet provider or these kind of like offchain info providers are much higher because there's a you know there's not really standardization which

could be a benefit for chains where it's like oh I get to change everything and and optimize everything about the chain for my specific applications but you know from a wallet provider standpoint let's say you have 32 chains who have a different take on let's say how to send a token right like it gets pretty tough so uh we do have to pick and choose uh some of it is just like economic viability from our standpoint um you know the amount of users uh and strategic importance of that application is also pretty significant uh and then you know there's obviously different levels of overhead in terms of the integration from a technical standpoint but also just operational and maintenance uh but largely you know to

be completely honest I think it's largely driven by like the Strategic value of um a given chain for for us in the long term okay now I was looking at uh the dydx validator set the other day and I noticed that so we spoke with chorus one last week and they're the third largest on that chain and Kepler is actually the fifth largest but I noticed that Kepler has the largest number of unique delegators by quite a quite a large margin so I guess could you explain embedded staking and and what exactly that is and why you think it's a you know a net positive for the decentralization of validator sets yeah uh I don't know if like embedded staking is right term but uh at least just you

know some sort of like vertical integration of the staking dashboard with the extension uh is kind of a key thing for us just because um yeah staking is such a core part of uh the cosmos ecosystem and the cosmo stack at large uh I think you know traditionally in ethereum you start off as a proof of work Network and recently have trans you know transitioned into proof of stake so I think there's a lot of uh initi user base who are primarily focused on proof of uh you know coming from this proof of work background of seeing eore as an asset less familiar with staking whereas cos was basically was bootstrapped with a a proof of State Network so staking is

such a core part of that so you know the staking dashboard was something that we launched even on day one of all of our products and yeah in terms of the unique delegator account uh that's actually very surprising for us as well because I don't think we necessarily track every single one of them I wonder if some of that is like for airdrop hunting purposes uh it could be uh I'm not sure uh but yeah but at the same time you know the the way we build products so far you know we haven't kind of given any specific favoritism for the validators that we run inhouse uh it's more you know we build these products uh we feel like we did a great job of running infra and hopefully that resonates with a lot of users who

delegate to us the other thing was maybe it was very helpful that we also provided a builtin dyx migration tool right so you didn't have to kind of search around different websites you know there's a lot of kind of dangerous fishing websites that you know that are out there uh could be slightly sketchy but uh you know from a user standpoint it's like this this official Kepler dashboard allows me to basically uh take my um e dyx uh and then transfer these into the uh newer d X tokens on the DX chain and yeah from from our standpoint you know this the core reason why they moved to this app chain was not just like the performance benefits and the

benefits of an app chain but also you know decentralization right and and for that to happen uh this decentralized way of staking uh the chain being run by delegators is such a big uh factor and the fact that Kepler was uh and is the largest kind of staking dashboard that dydx token holders use to uh stake secure the chain uh vote on kind of key governance proposals and set the direction is is yeah that's really amazing to see yeah that was a really good move actually because I know what you mean with the fishing links and and kind of the headaches associated with migrating a token so I'm sure that really really helped for the user experience but uh anyways Josh thanks so much for coming on we really appreciate

it uh I will be sure to drop links to your socials Kepler socials and uh we definitely recommend people try out Kepler wallet especially if you plan on using dydx uh Josh thanks so much awesome thank you guys all right now moving on to our segment of Hot Seat cool Throne all right welcome back everybody I will kick things off with a cool Throne this week I'm putting arbitrum uh in the cool tone for the announcement of their orbit expansion program which allows anyone to have a self-service path to launching a custom orbit chain uh that settles to ethereum so an orbit chain real quick it's just an L2 or an L3 that's built using the uh like arbitrum role framework called

orbit uh the big announcement here is really around their fee for this which is a 10% uh take on the profit share including me strategies uh that for arbitrum orbit trains that settle specifically to anything other than arbitrum one or arbitrum Nova so if you had like a L3 rollup that settled down to like again anything other than arbit from one I I guess in theory you could build this on top of anything uh then that is where this 10% profit share would come in I think the more realistic outcome here is that you see orbit chains that are l2s settling down directly to ethereum um and so this is kind of an interesting thing I think one

takeaway I had was that they mentioned this the profit share will include M strategies and they left that fairly open-ended you know no one's really figured out how to capture me occurring on l who yet uh but that's obviously this huge point of conversation and so they I kind of like how they just you know put a blanket statement on that and like kind of like all right when we get to when we when the time comes we will also be including your MV strategies in this profit share the and the other thing to point out here I think before we get into some of the takeaways is that any l3s that settle onto arbitrum 1 or arbitrum Nova are still free and permissionless so the the fee does not impact those chains um I think like the the kind of goal of why you'd build one

in the build an uh a rollup with using this framework is really just to get the dedicated block space custom gas token native account abstraction uh you can plug into any da layer you want and you get some of this governance sovereignty so they you know we're seeing a rise of competing rollup Frameworks I think the mo biggest and most popular today is probably the op stack buil Pier by the optimism team but we're also seeing you know ZK Sync has their hyper chains uh polygon has the polygon cdk we're really seeing this tug of war between who can attract this developer talent and one of the interesting things that arbitrum is doing is re reinvesting some of this Revenue into growth by creating a arbitrum developer Guild uh where the

proportion of the profits from this program will actually go to that Guild again working to kind of uh bootstrap some of those developer attention and really bring Builders into the space there's a decent number of arbit orb Orit chains today though most of them are like smaller projects that you likely haven't heard of I think a recent one that got a lot of attention was Z games um they recently just did an airdrop round and launched an nft and and a few other things um and so they're beginning to kind of get ahead of steam I know they just announced a partnership with uh crypto unicorn so that one hits near and dear to to Sam's heart for any of our early episodes of early if anyone listened to the early episodes of zerox

research I think we talked a bit about unicorns back in the day and hopefully you didn't buy it h too funny and so comparing their 10% fee to the market you know it's relatively normal so right now base is paying their agreement is to pay 2.5% of sequencer revenue or 15% of sequencer profit so arbitrum the orbit fee of 10% of profit is fairly in line with market price I think the overarching question that responds out of this is how does pricing work for these role Frameworks in terms of like a competitive landscape you will it be a race to the bottom is

there more of this branding ecosystem type Mo uh Ren I know you spent some time thinking about this exact question so I want to toss it over to you to get your thoughts yeah I think other than the slightly more like uh IM material things such as like branding um there's also sort of like technical things to consider when you're using various rup Stacks like for example there's like a developer experience developer support there's definitely like a difference in the proof systems between optimism and arbitrum if you want to a good Deep dive into that our research analyst Matt recently put out a great report on the differences between those two but I think the two key things here for why you would want to be part of these like

ecosystems for optimism that would be the optimism super chain and for arbitrum that would be the arbitrum expansion program would be share sequencers and interoperability right uh with both of those two even though there's still an active development or like not really figured out yet especially on the interoperability front you get seamless bridging you get unified liquidity you get access to the large number of existing users that both of these ecosystems have and you also have interoperability between all of the rups right um so if you are a ro of Stack today if you are optimism Foundation or the Foundation you're basically saying hey if you don't want to pay this like 10% fee on your profit then you can

just struggle and have a much harder time or you could just pay it get access to like our 10 billion dollar in tvl our like 500,000 users you can get like uh cross chain abstraction blah blah all of that good stuff right none of that is a reality today but I think probably in 5 years or so we'll figur that all out and those Network effects will be pretty hard to beat in my opinion I think one interesting questions I have is that you mentioned that the sequence or profit share includes Meb strategies right um and I just thought of this what happens if I am an arbit from orbit chain I'm using a Shir sequencer with two other chains one of them is like a op stack

chain one of them is a polygon CD cdk chain right and the sh sequencer is running like cross Shane M strategies first of all like who does that sh sequen like belong to it's not like this arbitrum orbit chain can say like okay everything that this share sequencer makes um counts as like profits for my RO up even though a share sequencer is kind of just sequencing it's not like actually executing so like the individual Ro ofs like sequencers will actually execute and still retain The Profit but I saying like the M thing will be really really hard to quantify and I would not be surprised to see that when M capture gets figured out for l2s it's a relatively sizable

number just looking at the Dynamics on like ethereum mayet today and I think the second thing I think about is with EIP 4 for for coming up and you're already seeing like all of these op stack rollups using celesia right for example uh Lyra recently announc that they're going to PIV it to celesia today AO put out a tweet saying the futurist mod or something like that which I'm presuming is that they're going to use year for data availability how many of these rollups will decrease like the transaction fees so that eventually like they take the same amount of money because if I was a rollup and I move from like it mainnet to Celestia right I would not decrease my transaction fees

by 99% I would probably only decrease it by 50% and like there's surely some quantitative analis you can run and hope that that's cheap enough for the users but you would generate a lot more Revenue just because you didn't decrease it like all the way down by 99% compared to some other Roos and so I think like these type of Dynamics between like the daer and the sequencer profit share eventually or even now you really have to start thinking about how that would affect the role of token value AC especially for tokens such as like AR and op because I think by now the future is kind of clear like there just going to be like hundreds and hundreds of rollups everywhere and how rooll up

tokens will will be able to capture the value based on someone using their quote unquote rollup stack will be pretty important to their longterm like valuations yeah you make great points there R and um one of the things that I think is interesting is how much savings should the rooll pass back to the user and in the case of like an evm roll up I think that's a really really good question cuz if I don't know if you can really if you'll be able to enable the unique and new use cases that you see on say salana um like I I don't know if you just have cheaper fees boom you can run an order book and that's going to work perfectly fine uh or if there'll still be other problems you run into so the I

guess it depends on like the mission of the rup right if you're trying to enable uh like a g onchain gaming or something of this nature then maybe you do need those subs scent fees but if not like yeah you have a great Point like why not just uh have a Subs scent cost and then the users are transacting for 10 cents a pop like I personally as a user wouldn't I don't care if it's less than 20 cents there's really no difference between a 20 cent transaction for me and a 5-cent transaction uh because even if I execute hundreds of transactions it's still such a small number that it just not going to bother me um but if I'm an order book and I'm a market maker like hell yeah I'm going to care if it's uh you know a tenth of a cent or one cent that's a

massive difference for me so I think it really just comes down to what you're trying to build as a rollup but like let's say arbitrum pivoted to Celestia like yeah I you could almost argue don't change it at all I actually said something similar to this on Twitter the other day and funny enough because we're talking about orbit soie uh who's a contributor to Z he was saying no way that is absolutely crazy and I was like why and he just like that's price gouging users that's totally wrong and I was just like okay well when you put it like that it's kind of true but it's kind of not so I see where he's coming from but I totally agree you might as well increase revenue for your Dow in the early stages like today so that way you have a longer Runway and initiatives to fund in the

future but way you you mentioned something too R there that I find really interesting you're like all right if everyone is using Celestia and then you've got e for settlement like what does the actual token of this rollup in the modular stack do you know because you even have like external sequencer networks that you're plugging into to that have their own native token like everything's got a token and there's only so much value that can be returned to those token holders so I think that's going to be one of the big questions people need to think about if this modular future of thousands of rollups actually is the way things play out you got be really thinking like is that price gouging like I I tend to think not you're just increasing your margins and

it's like I think price gouging I think of being a uh hand sanitizer producer right when covid set starts and instead of charging $10 per uh you know dispenser of hand sanitizer now I'm charging a 100 for no reason at all other than I know there's impending demand whereas if I'm just increasing the if I'm just reducing my costs and not even changing the costs to the end user right I'm just making myself a more efficient business and the user is not paying more I don't think you could argue that as price scouching but I would need to think through through that more I I had this like realization the other day too so I know like uber gets f up a lot in like crypto

discussions and there are like some versions of onchain uber right um teleport I uh and like you know like uber like sure like there's a middleman which is Uber and tort like kind of removes the middle man like to some extent but if I'm not wrong they still utilize like um right Shar like companies or like maybe like sort of like more local like my sharing companies but basically like if I was like a VC and I was looking at like uber and teleport right I wouldn't say like teleport is probably scalling users less I think if I put my VC hat on I'll be like congratulations you've made like a less profitable version of uber like why

would I want that right I hate to say it but I think like people should still be building businesses businesses are here to make money and you have a fiary duty to like your shareholder and I guess in crypto case probably token holders and so I I really don't think it's like price scalling not everything should be like as cheap as possible where like you are pricing whatever you are offering at the same as like your cost basis yeah for added context too that was I was saying like why not just increase like kind of the scaler so charging user fees more on arbitrum when they start these incentive programs is an idea I brought up on zerox Research

last week because I was just like could bring in more Revenue at least rescal some of that value dishing out because D you actually might have missed it he was gone for a week or so so basically arbitrum funded a new long-term incentives program worth like about aund million so we were just kind of walking through that and how it's pretty wild how big these incentive programs are getting but uh with that being said that was a little bit of extra that one does feel maybe like price couching it's kind of kind of similar right cranking up the uh the cost to the end user because I know there's demand coming but um broadly I think I I get where you're coming from it's like price gouging with subsid so well you know it's it's a

middle ground it's a middle ground but what's up everyone March is approaching fast and I want to give you another reminder not to miss out on D London it is coming it's right around the corner and it's going to march from the 18th to the 20th we have three full days of content this is your chance to bump shoulders with some of the world's top Executives and have open dialogue with both attendees and speakers we're going to be focusing on a range of topics that I'll let Ren discuss for you first on the list we have Bitcoin Catalyst the Haring and spot ETF next we have a view from the buy side from investors on things like strategy portfolio allocation and more we also have a topic on artas tokenization and stable coins which I think we can all agree are going to pay a large vote in crypto's future

we'll also talk about global regulatory Frameworks like compliance best practices and the evolution of global standards that are shaping the global investment landscape we also have someone from the institutional fund to talk about infrastructure such as Banking and payments with financial giants like visa and JP Morgan and last on the list the macro case for digital assets so don't miss out on this Monumental event seats are limited so be sure to register today by hitting the link in the description and using the promo code 0x10 to save 10% on tickets see you in London BR King you got the hot seater qu yeah I got um actually the near devs in the cool Throne I know um they've been quite busy lately uh n

already released some super cool stuff last year most notably the blockchain operating system uh kind of standard if you want to call it them but it basically allows uh users on near to interact with other chains um and the whole process kind of gets abstracted away or you wouldn't even know that you're doing something on another chain which I think is super cool and then now they' recently announced that their face two of their sharding road map is going to go on test net and that's expected to go live in Q2 this year um and in short it lowers

validated requirements and improves the performance of each of near Shard and in the long term also enables more shards to be introduce to the network uh and then also n is working on two components which are or I believe that are going to be big narratives this year or I guess da layers are already a big narrative but I think that uh trend is going to continue new so basically other rops can use near as a DA layer and there are some pretty cool price uh benefits to that so according

to some estimations and Analysis done by the like project contributors um posting data through near should be around 30 times cheaper than when doing it through Celestia and then up to 80 7,000 times cheaper than like ethereum's current implementation uh and also near data throughput or the way near Scales its tra data throughput is a bit different from this other implementations where n can just add more shards uh to increase the number and now currently at four shards uh the trut is around 60

megabytes per second and then lastly uh which I personally think is the coolest thing that they've been like working on is uh in partnership with I layer they are looking to introduce this fast finality layer which will basically leverage ENT layer rakers um and enable rollups to first settle on near and after that to ethereum and that should decrease the time to finality to around 4 seconds which is a pretty notable uh Improvement if you look at current

implementations uh and hopefully like more Market participants will start paying more attention to near uh as these things start to mat materialize more and I think a somewhat of a problem for near has uh historically being that like defi activity never really took off off on the chain uh and now they're kind of pivoting to being more of take enable if you can say that and also trying to EMB board more uh just basic consumer facing deps and it's really noticeable because like okay I I know we've talked about this

before on uh on the podcast but like maybe active addresses isn't the best uh metric to look at but any way the chain has been in the top three across like all the notable chains in terms of active addresses for like a year now or maybe not a year but like anyway for a long time um and I think that's just a testament of like them starting to execute on their strategy uh and going kind of a different and interesting route when compared to these other chains that are mostly competing on the D5 front still although dpin and all this stuff is

getting introduced as well uh but it's a cool way to or cool to see um kind of a blockchain getting implemented more and more into everyday life if you can put it that way but yeah that's the stuff I've been thinking about lately I want to say that Kai is probably like one of the Premier like crypto consumer apps today and there's not a lot of like good consumer apps that have an actual use case are widely adopted and do a pretty good job of abstracting away the sort of like crypto component of the experience and I think K has done that really well in sort of

providing this like shopping experience um enable by crypto right um another thing is the fast finality ler I may be getting some technical things wrong but I think that would be become increasingly important in the future as roll up block times probably get shorter and shorter and maybe even as the entire crypto space Trends towards shorter block times and also with the Advent of Shir sequences I would think that there are probably benefits to a fast finality layer when integrated with a sh sequencer this is just like the beginning of a very random thought so I'm not super sure but in my head I think there are probably benefits um

to having a fast ftic there for RO UPS or like these different networks with like a Shar sequencer yeah near is really cool zerox pibbles has been hammering that to us for months now um I believe he just recorded an episode with Yano uh with I think one of the new co-founders I'm not sure which one and that's going to come out on Empire within the next week or so so definitely excited to tune into that that one uh I mean they've been doing a lot of great Innovations with the boss um and they're still pioneering that sharding road map that was the original you know ethereum road map so it's cool to see some of these ideas really get taken to completion I really like how they're I

don't know I go back and forth It's like pick your lane and like dominate at it or try to do a little bit of everything to you know whether it be Stay The Narrative or just have a more diverse product offering uh because brick you mentioned that they're they do have the capability to be a da which obviously it's a very hot narrative right now uh Celestia is proving that the data gets more and more available while markets prices go down um no I'm kidding but it's interesting because I haven't se it's gonna be interesting if people actually use it right I don't know if it's going to get any meaningful adoption or attraction at all but it's interesting to see that it's a possibility right I I think that's probably pretty important for a general purpose L1 is to be a multifaceted uh foundation for things to

be built on top of yeah I just think a big problem for them has been the inability to communicate clearly what they're trying to accomplish exactly as you said it seems that they're going into like 100 different directions but when you really start thinking about it it's uh pretty well thought out um like way to provide value add products in a way like you're trying to abstract away Way stuff from the end user to make it simpler also onboard like this real world use case apps as well as then

provide some info on the back end yeah that's a lot to like do but at the same time I don't know I feel that if we're GNA say a single layer can do it all we should mention near there as well yeah I'm with you Sam who you got in the hot seater cool Throne this week uh I've got gbtc in the hot seat um so there's a good thread that we can link in the show notes from zerox zergs talking about the Widowmaker trade that everyone was talking about in 2021 uh basically Bitcoin was pretty hard to get exposure over or to get exposure to within a brokerage account so there was often a premium to gbtc

relative to nav or the net ass value uh under management so basically every one share of gbtc was worth the equivalent dollar amount of like one and a half time let's say so there's you know you buy a gbtc share and theoretically once Shar is vest in 12 months you're able to redeem it for more than1 of Bitcoin so basically the trade was you have let's say $10 million in cash you borrow $30 million in Bitcoin against it often times from lenders like blockfi which obviously this story doesn't end well but but they deposit that Bitcoin into gbtc and then they wait 12 months until their share is best to actually capture that spread and the problem was is that the interest expense uh was denominated

in Bitcoin and as you'll recall the loan was levered so the interest expense is also lever uh so when Bitcoin kept running uh the interest expense also kept growing and then on top of that people figured out new ways to get exposure to bitcoin whether it be you know micro strategy minor stocks coinbase Bitcoin if you want to go actual get get actual Bitcoin so flows kind of slowed into gbtc uh and so that premium to net asset value actually turned into a discount so then when those shares vested those investors who had that trade on who thought they were delta neutral actually wind up taking it on the chin so fast forward to that um and basically we lost 3ac we lost Celsius blockfi a lot of market makers honestly in the industry uh Chad five

players and of course FTX and alamia and now we are seeing uh you you know 10,000 Bitcoin get sent to coinbase Prime every single day from none other than the FTX bankruptcy estate so that is why I have gbtc in this uh this hot seat this week over a billion dollars of sell pressure of uh the gbtc outflows that we've seen have been ftxs according to cornes and uh Bloomberg I believe it was who posted that and they still have 22 billion do uh of AUM and they have a 1 and a half% fee versus you know 30 bips for pretty much every other product available on the market so it's it's a little bit tough to assume that these flows will stop even though that's what a lot of people are hoping for I think you know

those High fees hopefully uh push any of the outflows out into cheaper products but I also think it's likely we see some Market participants also exit after getting just absolutely ringed on that on that trade um but gbtc in the H might be a little bit harsh but more so maybe it should be the SEC uh or maybe Trad five players playing games uh you know with this premium and discount to net asset value and the gbtc trust so honestly like we really just needed to spot ETF sooner and it's unfortunate that it didn't happen but we are certainly dealing with the repercussions of that today with Bitcoin under 40K after you know pretty much the most Monumental moment in bitcoin's history

since it was created and launched in the spot UTF in the US so I thought that warranted a hot seat I want to go ahead and share screen real quick uh this is by Apollo um they are I generally have no idea what they are I saw the the Bloomberg ETF guys tweet this out this source and it's it's a really cool chart so it's the amount of Bitcoin held by what are now ETFs over time and so this huge uh light blue bar is obviously gbtc the grayscale product and then with the ETFs launch you can see kind of how those funds the F flow of funds has changed through time uh so weord this on the 22nd here so Monday and it hasn't update updated for

the current day uh which definitely is some irony about how we can get data on blockchains in real time and yet when we're trying to track these ETF flows it's like oh the data is on like t plus one which is hilarious but side note um it is cool to kind of see that the we are actually above the net slows right so we started with around maybe 600 and uh 600 or so thousand Bitcoin uh maybe 625 is and now we're closer to 650 as of last Friday um but you can see that you know C scale is clearly losing uh some of its market share in this space um and it's you know rightfully so I think the the fees are probably going to push

people out as well as the trade that Sam had discussed but I do think it's a really cool chart to see that in a visual format I take away from this was just that like how can you say you are an Institutional Investor and then blow up your funds on one trade like it seems that all of the big guys did that last cycle that's just amazing to me hey you got to put some respect on the legend Bill Hong's name all right I think over time most people come to realize that like whatever like portfolio managers risk management that people in Chad five T they have like I feel like most like guys and portfolio

managers are probably D just that hard and Bill Hong is like a perfect example of that right like every three months I look at like the gr skill salana trust and ask myself like who's buying this at a 600% premium but it just always stays at a 600% premium and so like first the demand is obviously there and second of all you know like I think a famous example in the world of Trav would be like a carry trade right where you borrow in one currency and then you um sort of like put it in the treasuries of like another currency and you just like do that forever and hope it doesn't blow up but very often or not very often like it does blow up like maybe like every 10 years and when it does blow up it blows

up like pretty darn spectacularly but everyone just sees he like oh my God I can like borrow this at like a lower interest rate I can put it into this at like a higher interest rate If this just keeps on like turning along like it's going to be perfectly fine and I'm going to make like whatever percentage like every year and I'm going to walk away with a nice payd but it's fine when it works and when it unwinds it's just the ugliest thing ever right and I think you kind of just saw the same example of that happening in crypto this is probably a dumb question but I'm thinking through this live but I get it like if you borrow the Bitcoin deposit in gbtc obviously you're short Bitcoin but if like why not sell the

shares short of gbtc in order to remain remain Del neutral and just capture the spread from when you want to like like if you saw the the premium closing in at par and you're worried about it going negative like I I don't understand why you wouldn't hedge that position there and why everyone blew up like I guess yes you need margin against that short position on gbtc but I feel like a lot of this is poor risk management but there must just be something I'm missing here I would guess that it was pretty darn expensive to short gbtc which is why that trade doesn't work okay yeah because then you're getting blown out on interest expense on both sides yeah

similar to like when all of the funds were like shorting gme I bet you that was like ridiculously expensive okay that makes sense okay yeah well anyways glad gbtc is kind of in its closing stages and hopefully that uh hopefully that uh some of the players we lost as a result of that incident can uh f recover and make it back into the industry but Dan or Ren I don't think you've given your hot seater gold thr yet yep uh this week I have Orca in the Crone so in November of last year they passed their fee switch and they finally got around to implementing it roughly one week ago their fee switches 12% of the fees going to the Dow on any poo

with a fee of 0.3% or higher um and so Orca has a relative dominance I would say in terms of like salana or like liquidity within the salana ecosystem More than 70% of LP fees are generated from orad and for altcoin pairs that's more than 90% so they are in like a pretty good spot as far as dex's go um and yeah they finally managed to implement this fee switch there are like a lot of numbers to work off but if you look at like the past seven days and run the numbers they would have made roughly 440,000 in Revenue and if you look at the past 30 days and if you look at the numbers they would

have generated a theoretical like 2.32 million in free Revenue I know D's laughing because I nobody loves annualizing numbers more than Ren not a single human on this Earth I feel like I do this way too much on ZX but if you analyze those numbers that's roughly around like 30 million a year for or and big disclaimer here that's like not going to happen like just cuz December like end of November was like Peak salana like me coin Mania with Whi um but I also know I say this line a lot but if my conne activity picks up it's

possible to see those numbers again okay either way um feech potentially 30 million in Revenue we look at the past 30 days which probably isn't going to be the Norm for the next few months or so and if you look at orca's current market cap of 260 million or so that gives it like a pretty nice PE ratio of 9.3 which is like pretty attractive in like crypto terms I that's comparable of like the fundamentals King maker and so you know I'm not telling you to like ape Ora right now but I would say like pay really close attention to like salana de volume and activity especially for those uh PO on Oka that have like a higher than 0.3% feature um and I feel like it could add up really really quickly

especially because unisoft which has like struggled to turn on its research for a really really long time still hasn't turned it on you know and unisoft is trading at a probably four plus billion market cap while Orchestra sitting at like 12th of that and it's got like the salana narrative it has a feish narrative and you're seeing a lot of other like decks is for example cop recently passed the about to test different researches there's like a few different models that they're exploring given their sort of like slightly unique different they're slightly different from like a standard decks but overall I think like a fee switch is beneficial for a token's price and

obviously value of crew um gaet put out this great study for unisa protocol fee switch and there's sort of this like negative reflexive cycle that could potentially occur this sort of like Doom spir right you introduce a protocol fee switch LPS get less fee Revenue um so they put out liquidity and because there's less liquidity on that deck then that deck sees less volume and that Dynamic just kind of keeps on spiring um and that Dex eventually dies um so gaet numbers that theyand for a potential unisoft research said that if a 10% protocol fee was implemented unisoft will see a 10.7% decrease in liquidity and

5.25% decrease in total volume and the bulk of that decrease in total volume is due to a decrease in M volume not normal user like retail user volume uh similarly if unob had a 15% protocol fee they would see a negative or a 16.25% decrease in liquidity and an 8% decrease in total volume and so basically the analysis is that core volume is relatively insensitive to fees partially because unisoft has such a large liquidity advantage over other decks which I think Orca also has a similar Dynamic on salana but M volume is really sensitive to a decrease in liquidity

which is why unisoft total volume would decrease by still like a relatively substantial amount whereas MV is not as established on salana yet I would say say just why looking at the GTO dashboard that's definitely picking up for example that one Dow that like aped $3 million worth of with and like someone paid like a I think it was like a 1,000 so tip or maybe 10,000 I could be off fire order of magude but like it's definitely starting to become a parent um but I just think like if you're going to turn on the Fe you might as well turn it on like right before bu market and like that those cash flows could potentially become like pretty crazy for a few protocols

are they directly giving it back to the Token no they are not um they're holding it in a dow Treasury and so yeah I did ask this question in our analyst stack the other day for fundamental perspective if a protocal turns on a fee switch should there be a difference if number one they hold all of those fees from the fee switch in the Dow treasury versus option two they distri 100% of the fees from the Fe switch to token holders and you can claim it like every week you can set it up like however you want and the question was should there be a difference in the valuation of those two my good feeling

is no but I think you could also lean towards that the one that gets distributed like automatically should have a slightly higher valuation because there is like a potential Ro block to number one right it's possible that governance does not vote to distribute 100% of whatever accured fees from the fees s there's definitely like a time delay there um but for Ora all of the fees are held in usdc so it's like not that big of an issue yeah I guess this gets kind of theoretical but I think you could argue that if they hold everything in the treasury and they have good investment opportunities then the Tok should get the higher valuation if they're manag to

invest the capital successfully but I don't know like what th does good treasury management or what th invests well into opportunities so that's kind of out there uh and based on what you said yeah I definitely age agree that like if the cash really flows into or the value really flows into uh token holders hands then I think that should barent a higher valuation yeah I mean I feel like you can't necessarily pull from trafi analoges here just because this piece is a bit different but I mean if you're like distributions of token holders are

probably fairly similar to dividends and if you run like a DCF I'm a bit Rusty on this but I'm I'm pretty sure you're implicitly assuming that the cash flows are distributed back to the shareholders um so that would kind of be like you know if you ran a p&l and and for the Dow um you know you you could run a DCF on that and you're you're making the assumption that the shareholders or the token holders in this case are getting the getting the earnings and that flows back to them uh so from a valuation standpoint I think you're probably going to treat them equally however if a dow had a long history of just like acre a treasury and doing nothing with it I think you can

make the argument to like discount that maybe to some uh put apply some disc account to that because it you know if it's decreases a likelihood that you're ever going to see that cash as a token holder then maybe it's just not as valuable to you um but I also agree with to Brick's point there like in a lot of using this like very analogous Trad fight mindset you know these are just startups and there aren't many startups if any that distribute value to shareholders until they have grown and matured um because the opportunity cost of not reinvesting in future growth is so high um um and so generally I think it makes more sense I mean I know I get some push back on this one quite often

when we bring it up but like if you're a small deck today especially on salana where order books are probably going to start winning you know wouldn't you want to be investing in like building your own order book that can compete with these other big guys that are doing the same right now is kind of like the mindset I would have the other question I have for you Ren is or brick go ahead yeah before I change the subject N I was just going to go in a rent about how protocols uh distribute their own cash flow way too early and like destroy their growth opportunities on top of that too I just got to say like I don't think any decks

outside of Jupiter on SL Lana has any type of network effect to be completely honest like and on top of that I don't think I can think of a single example of a deck that's really been to retain its token value outside of Unis Swap and I would attribute that to their brand and I think Jupiter definitely has the best shot there so I think hurting its liquidity base is the absolute worst thing Orca could do because that volume naturally because the main deck's destination on salana is an aggregator if those price fills get worse which they will then that volume is going elsewhere so I think that's an absolutely terrible idea forz personally Ren did did the uh Team mention anywhere like well I'd love to read this if there's

like a a postmortem or it's probably the wrong verbiage here just like an explanation of how they implemented this um just because I know from the going through the curve data in depth that like implementing a fee switch for a decentralized exchange with hundreds if not thousands of pools is a very non-trivial event right because every pool has say at at least two assets in it and the fee is commonly collected in either the buying token or the selling token and then those those tokens stay in the pool so when you get if I uh you know go to a curve pool and swap one eth for 2,000 usdc um then I will get back say 1,990 usdc and the those 10 usdc will be

retained in the pool then to collect those um C has what they call like burners which just are I think of like a fee collector so it goes to every pool and withdraws the the fees that are sitting in that pool still so in the case of my trade it would pull out that 10 usdc um and then again in the case of curve fees are collected and distributed to token holders in the in a singular asset right and so there's hundreds if not thousands of pools all with various Assets in them the fees are collected in different assets uh so now when you burn all these fees they get sent to a collector address in you know tens or hundreds of of different assets and so you have to bur swap those all back in to one asset and then distribute that one asset to the Token holder so that is

a a very complex process where you're making many trades and pulling and removing liquidity from pools um and on the making the trade size some of those trades are very large right you can imagine that some of the larger assets or the more popular assets that collecting fees over and over over again from many trades you when you have to swap that into a different asset that's a meaningful trade therefore you're exposing yourself to getting front run or any other kind of me um so I say all that because I want to set the scene that like collecting fees is not as simp as it sounds on paper uh so I was curious if the Orca team had kind of discussed their challenges or if they've walked through their process or maybe they're only doing a subset of pools from the

onset yeah um this is directly from the Discord and someone from the team state it was a process requiring lots of engineering time so there wasn't like a specific like date where they implemented it it sounded like that it was quite a grind um just quickly scanning through the Discord message they have they collect protocol fees Authority address for orus World FS which are basically like their liquidity Po and then they have a PO where the fees are received from the PO themselves before being sent to the next wallet right and then the next wallet is where all of the tokens get swapped and shared into the separate allocations whether that's like the

climate fund or like this sort of Dow Treasury and so it is like the tldr said I it does sound like it's pretty hard it was pretty hard to implement for Ora 2 um and then definitely agree with like everyone's points here that like protocols should not be turning on a fe switch that early uh especially when you don't have like any network effects or you don't have like a very natural mode right and dexus liquidity are so important for dexus and once like it's is very it's fairly reflexive in nature and I do think that reflexivity becomes I want to say even more apparent uh in like the current market conditions maybe

in like a blue Market you can like kind of hide some of the reflexivity just because of like increased activity but definitely like in more muted market conditions it becomes a lot more obvious I would say like maybe one Catalyst on the road map for the Fe would be salana aird drops I think Jupiter's airdrop is coming on the 31st of January I wouldn't be surprised to see I think Cino say that there's just going to be before the end of q1 there's probably a few more out there that will occur before q1 I don't know maybe tenser or Medora or maybe um i.net so I I would presume all of those add a pretty sizable amount of volume to Salan Dees uh following the trend of what happened

during jetto air job so that could probably be a boost too yeah I I it's interesting that they're collecting but not uh like Distributing to token holders because again then you can be you could have created this useful product now you implement a fee switch where that goes back to the Dow and then use those funds as a community to like build new initiatives or reinvest in growth I mean to Brick's point you know what Dow has done a good job of that is a fair a fair point and a fair question but um I think the big thing is really it's just like it's probably almost always in crypto at this point still too early to be Distributing to token holders now I think there are some edge cases right like for example we used just I was just talking about curve curve has

distributed over $100 million to token holders and for them it they did it in a way that it made sense like the token plays a very core role in the ecosystem with the ve tokenomics um and that the distributions to token holders are used to incentivize the Locking of curve and that's like a very important piece of the puzzle for them so they kind of devised a token system uh or token design around this like distribution mechanism as so they kind of like intertwined it and made it it honestly made it make make sense so that's much different in my mind than saying like having a you know random dap that just has a great product and they collect revenue and they just like

funnel off a portion of that Revenue to a governance token like that is a much different uh like a much different setup and that's where I mostly have grievances with that that's mindboggling to me that stat over 100 million and I think that answers the question of does it get a premium if it goes to the treasury or does it get a premium if it gets returned and I think the answer to that question is it's better off going to the treasury for sure because people investing in crypto today do not care about 10 20 30 40% yield they care about 10 20 30 40 ex's um but I think that day will come I just think that day is not today I also just want to briefly emphasize what Sam say just now there is a really really big difference between

the volume of origination Dynamics between ethereum and salana on ethereum like a lot of people actually go to like unops front end um just soft their tokens whereas on salana all of them basically go through Jupiter right the equivalent of that on ethereum would be everyone going to one inch and no one swapping through unisoft and that has really implic really important implications for the return on the Fage because if unisoft turned on a fewi I think that's relatively okay because you still have like control or sort of like volume that's routed through your protocol and that's like relatively stickier whereas for Orca you know it's just like Jupiter's routing algorithm going through all of these dexes and

whoever has like the better feel you get like a portion of that trade routed to that deck so probably a equivalent fee switch for unisoft and orca has a disproportionately larger impact on oras liquidity than for unisoft given those like sort of order for Dynamics and the presence of order books I think right like maybe there's a day where amms can outperform order books I think most people probably would disagree with that but maybe that day comes but that day is C certainly not today and I think you're seeing Phoenix for example do some pretty crazy volume with a small amount of liquidity um and so I think that even further exacerbates

what you're talking about Ren yeah I'll follow up there that if you actually look into the data of which poos generate the most fees for the fees which they are like mostly still like so or like usdc kind of like the large like all coins or stable F rather than like the M Points really even more so than Bon I would have guess Bon was number one and it wasn't even close over the last two months I need to double check that but actually I could be wrong I'm not sure if I sorted it by actually I I'll double check it I'll get to everyone in the show just something yeah I I mean maybe I'm wrong too though because now that I think about it if Bon was surpassing soul in

usdc pair on salana that would be that'd be pretty remarkable especially I mean I know Bon had a pretty crazy run there's no doubt about it but you know soul is a much larger cap asset that also hit you know a 10x in the last three months so okay I I got the data um total feast generated over the lifetime I don't have like 7day or 30-day fees but salana with has generated 4.6 million so usdc has generated 4.3 million so Bon has generated 3.7 million and then there's like another so usdc pool but it's like

a 0.05% fee which has generated 3.6 million so like I would say like both are equally important between like mem coins and like sort of like so usdc or like LST like usdc Pairs and both play like a equally important role in generating free Revenue interesting huh that's crazy Whiff's on the top of that list I mean I would guess that looking at my timeline but given the how much higher in terms of market cap Bon why that's that's pretty it's CA the main so whu has a 1% free rate but the sole bong Fu has a 0.3% free rate okay wow that's yeah that's a D Fe but you guys ready to call it now we're

just rambling about random Statics somebody mentioned the Unis swap V switch and I just pulled up our board five million in revenue for the front end V switch that goes to Unis swap Labs pretty insane that that makes sense though right like I feel like yeah it does Unis swaps brand like they made that brand in that front and and I operated to this day like I feel like that's a totally fair place to put Fe switch TR agree I went on my rant already all right let's get out of here thanks brick and ren for coming on we will see you guys here next week cheers hey everyone thanks for watching today's zerox research episode I wanted to take a second and remind you about the

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