ETF Market Rally, Celestia Airdrop Woes, and Polygon's POL Migration | Analyst Round Table

Transcript

I think polygon's dead if they don't you know somehow develop some sort of ecosystem fund like you just can't compete with arbitrum optimism Etc being able to hand out token incentives and bring users over to your chain I just I can't get over that point like even if you look at gains Network that was a polygon native protocol that migrated over to uh arbitrum as well they have two versions live every single day it's 85% of volum on arbitrum they literally just got a stip worth I can't even remember it's in the5 to10 million range like if you're not getting that on polygon like why wouldn't you be on arbitr hey everyone Sam and Dan here and before we dive into today's episode I wanted to shout out metamask portfolio

are you always constantly stressed like us managing your portfolio across different chains wallets LP positions per positions I'm excited to tell you about metamask portfolio which lets you manage all of your crypto assets across different networks wallets all in one place do more with web 3 your way with metamask portfolio you'll hear a little bit more about it later in the show what's up everyone welcome back to another episode of zerx research before we dive into today's episode a quick word from our sponsor hexin the most hardcore security team in web 3 pioneering in ZK and novel cryptography hexin is trusted by tier one projects like polygon mantle risk zero Lio 1-inch new bank and more check them out on the ground at defc connect and be sure to mention ZX research when requesting a quote and you'll get a free webtube pen

test with the purchase of your audit what's up everyone welcome back to another episode of zerox research we got a great analyst episode queued up for you today we're joined by zerx pibbles and ren from the blockworks research team we're recording this on today October 23d uh and so we this episode will drop in two days on the following Wednesday on October 25th and again we're joined by xerx pibbles and ren to kind of bring all the latest Market happenings to you and we're all part of the blockworks research team and if you're interested in checking out some of the cool work we've been doing be sure to use code 0x research10 all caps uh for a 10% 10% discount at checkout uh we just launched a new analytics tab

we'll get into a bit of that a little later on in the episode we're going through some of our governance updates but do be sure to check it out if at the very least scroll through our Twitter we got a lot of our good stuff going through that pipeline uh but to kick things off today we'll do a little top mover Biggest Loser so Sam I'll kick it over to you to get us moving yeah for the Mover this one felt like a pretty easy one this week Bitcoin dominance definitely in the driver seat it feels like we're nearing up to like 53% which is the highest level we've seen in a while as people who have been here in previous Cycles are familiar with usually Bitcoin dominance goes up and then altcoins uh kind of rally towards the more frothier part of the market so

it's always encouraging to see that price action we saw Black Rock made uh an amendment to their S1 not sure what the hell an S1 is so don't ask me but basically to seeed the ETF with some cash so it looks closer to approval not sure if that has much legs or not but nonetheless people on Twitter were talking about it so seemed important plus uh CME Futures open interest which in my opinion is the best gauge at I guess us institutional demand more on the trafy side is at highest levels since early 2022 and you've got Bitcoin Supply on exchanges at a fiveyear low which I found super uh interesting uh so yeah Bitcoin dominance definitely the top mover this week but we've also got movers out of link and soul both uh kind

of moving pretty hard uh I don't know if you guys have any thoughts on this this here so you just mentioned the amount of Bitcoin on exchanges and you know with Bitcoin there's only so much onchain analytics you can really do uh but people try to to get every inch of like really squeeze every drop of water out of that and so the Bitcoin on Exchange is one I find quite interesting because I get the idea behind it right if you're sending a bit if you're sending tokens to an exchange you're you're one step closer to selling them uh so that's kind of like a a fear metric but how much Credence do you guys give to that metric of being like Oh if there's a ton of Bitcoin on Exchange like Look Out Below or if there's like little to no Bitcoin on exchanges well

that means that nobody's going to sell be honest not really uh I would even go so far to say all of like those like fancy metrics that they have for Bitcoin and like coin glass or that like one website with like a ton of like fancy like minor or like whatever metrics like I don't really look at that I feel like it's kind of like overthinking it even like coin holder days and like theyve now multiplied that by like something else like I think it's just too complex you just have to like left it at this point of the market with like a spot Bitcoin ETF coming up right we had the whole like coin Telegraph like fake Bitcoin ETF news uh last Monday and I think this weekend's move was sort of like an after effect of that

right I'm not sure if this move would have happened without that coin tgraph move because that thing got announced the market pump 7.5% and then everyone's like oh like what if the real like spot Bitcoin ETF gets announced I don't want to bes lined off like a 10 15% pment so like the market people start deploying people start buying because they don't want to miss out the view thing and it just results in the price like slowly going up yeah on the um on the the Black Rock ETF thing so Sam said that S1 filing had an amendment about seeding the initial product with cash so I think it's specified like it said like October blank which kind of implies that they're going to use cash to buy a ton

of Bitcoin potentially in October which makes sense like if you're going to start this product first you got to get the actual asset that you're offering exposure to but I'm I'm curious to see like what the custody situation is for that because we're all kind of assuming coinbase and hopefully that's the case yeah another interesting thing that I noticed here was uh you know the holiday season's right around the corner so I got to start prepping my uh my responses to wow do you still have a job and that started with pulling up the uh the S&P versus Bitcoin year-to dat performance the S&P is up 11% uh and Bitcoin is up 86% that was like like I I knew we've been performing well since the a lot of

the Fallout from last year but damn that's a big margin that that one feels good and I will absolutely be using that chart and and that doesn't quite look the same for eth as well by the way I don't have the the eth chart pulled up in front of me but Bitcoin has had a great year and so it's no surprise that dominance is really kind of kicking kicking us forward here yeah absolutely plus I was writing the newsletter earlier this morning which by the way everyone should subscribed to if they haven't already it's very good uh but uh basically the share of uh hash rate owned by public miners is at like an all-time high right now because they're kind of buying like the distressed less well financed miners assets so I think they're going to perform Super well and they already have they're actually

outperforming Bitcoin pretty much by double so I'm sure that's definitely catching some like traditional Financial Market players ey kind of thinking man this is like really high beta to an already like really volatile asset so maybe adding a 05% allocation there would make a lot of sense um but I think that's a good spot to head over to the big I want to I want to add some more context there so I just quickly pulled it up and eth is actually up 40% so it's kind of straddling the 11% of the S&P and the 86% of Bitcoin and so interestingly the NASDAQ is also right around 40% at 35 so that's kind of ether is kind of trading more like tech stocks whereas Bitcoin just beat to its own drum very interesting that is interesting actually I wouldn't have guessed uh eth to be on par with kind of

the mega caps and the stock market but that's a that's a good call out Dan but for losers I've got just sideline folks that's pretty much the only loser I could think of because everything else is up today and I'm sure when this drops Wednesday a wrench will be thrown in this commentary but nonetheless on Monday that's definitely the way things are panning out I'm curious uh just based on the sentiment you guys see on CT does anyone have any I guess projections or predictions on like what percent of crypto Twitter participants are sidelined on this move I just don't know how you can be sidelined when you sit here and like if you're posting tweets all day like you got to be exposed or like you get way too much enjoyment out of Just sh talking online I've been saying

life is a lot easier when you're already all in for you know six months now seven months so I mean I got to imagine that it's a majority of people just based on the sentiment we're seeing uh on CT I don't know I feel like for I don't know maybe it's about half and half I take it back because I feel like for every one bull post I see I get another one that's just like pure depression and I'm like all right like just just allocate why are you waiting if you think something's going to 10x you have no business waiting for like a 10% move lower like just get in not Financial advice at all I'm a horrible Trader yeah I'd agree with that to some extent but I also think like when you're sitting there looking at this stuff day in and day out

you can kind of drive yourself absolutely insane looking at Price action and the industry moves so fast that I could definitely see yourself like overthinking it and waiting for you know lower prices but um any other uh thoughts on this here I just think from experience watching everything rip and not having any exposure to it is probably more painful than actually losing money on something which is why I got in the fomo is real I definitely agree all right everyone let's take a moment to hear about metamask portfolio if you're like me and Sam managing your crypto assets across different wallets and networks can be so overwhelmingly complicated that's why we're excited about metamask portfolio all you have to

do is connect your metamask wallet to get a bird's eyye view of all your coins tokens and nfts in one place you can easily Buy sell swap bridge and state crypto assets at competitive rates all within the app and you get to choose for embedded list of providers there's no more jumping between dozens of sites and apps metam Mass portfolio lets you do more in web 3 your way giving you secure and convenient access to a wide range an of features and services all within one place manage your portfolio your way with metamask portfolio peep the link in the description of today's episode to get started now Dan you got some uh governance updates for us this week yeah yeah for sure so we can uh start things off Adam Adam always has pretty crazy toonomic discussions or honestly just

governance forms on the whole but uh right now they're discussing a proposal to lower the hard cap inflation uh so they want to lower the max bound of the dynamic inflation from 20% to 10% and the current inflation is sitting around 14% so this would uh basically right if it were to be implemented it would immediately reduce atom's inflation by about 30% and so compared to other proof of stake chains The Hub is like vastly overplaying for security by about two to three times um because most chains are somewhere between the range of like five to s% of inflation and so you know obviously this is a very heated discussion because it directly impacts the bottom line for valid ERS um and so like they're obviously going to be a

little bit reluctant to just like reduce their you know net income that's a pretty understandable position for them but the reality is you know if the Hub is just like throwing tokens out the window for no particular reason probably some reason to uh kind of throttle that back and maybe reduce uh the amount of security that they need to be the reduce the security budget essentially um so you know we'll wait for eer Capital to come back on and give us his full thoughts next week but you that is definitely worth something pointing out if you're going to see a 30% reduction in the inflation rate of atom uh then we also have uh ibuk which is the leading deck on Stark net by volume they had a recent proposal to kind of uh make a$ three million or three million token

contribution from the Dow to collect uh uni tokens themselves so basically they're saying all right we'll take on three million uni tokens and provide you 20% of the our protocol's future governance token which is a really really interesting proposition and so I I personally don't feel too strongly about this but Sam and and pibbles I know you guys both kind of have two different perspectives on here so I'd love to get the breakdown yeah I can start first here to be honest I've never used ibuk so I can't say I have like a super strong yes opinion but I see all this drama going on in the Unis swap Dow and they have so many uni tokens in that Treasury and token holders just have virtually zero rights so like I don't know a treasury swap kind of makes sense to me plus you'd imagine in the next

year or two Stark net will pick up a lot of steam as one of the few differentiated l2s um and a potential air drob coming as well so I kind of like it but then again like token holders really don't have that great of Rights so even if they do do like a treasury swap for like a future allocation thing I don't know how much benefit it actually has but the way I'm seeing this right now is just like just try something and if this if this uh can can AC some value to the uni token sometime down the line I think that's a win so there's a couple things to unpack here one is the founder of abuko used to be a devb at Unis swap back in the day and then he was an adviser to labs for a little while so that's like the the

background of like why he popped up in the Forum to ask for this but I think it's a pretty bad deal for uni holders and just like the Dow in general because it's basically just like they're getting or iuk is getting like 3 million seed funding to fund operations for their decks on starkk net that is not going to really benefit uni at all um another thing is itco wants to be considered kind of like a core contributor to Unis swap which is weird because although they're using like their own version of the Singleton contract on starkware like it's written in Cairo so it's going to

be kind of hard for them to like contribute as a core contributor to Unis swap if everything they did is in a different language like I just don't really see the point of this and then like further like all right he wants 3 million uni tokens he's going to use that to fund his operations but like that's all going to be up to his discretion like there's nothing clarified of like what's he actually going to spend it on what's his projected spend like what a timeline is for a budget or anything so I think there's just like a lot of red flags with the initial proposal so it definitely needs to be hashed out more also come in and chime here it's not like stet has like a thriving D5 ecosystem just looking at D llama right

now they currently have 33 million in TBL the top six Protocols are Jedi swap my swap ZK lend 10K swap IO and Si swap I guess they have a really like strong hard on for like Star War memes um but yeah I feel like unof is at the stage where they're big enough that they have sort of like dominance of the market in ter of spot Dees at least in like the vast majority of ecosystems and they're at the stage where like even if someone else does something like Innovative unisoft can just like copy it take it in house and sort of like just price other people out of the competition kind of the same thing where like Amazon will like see like a popular product they'll

manufacture it themselves and then they'll sell it themselves rather than letting like a third party uh Merchant like sell it on Amazon and I feel like like this steal makes no sense for you in a especially given their scale they don't benefit a lot from it I wonder if like some of the rationale though is like hey like Unis swap like you want some exposure to the Stark net ecosystem I don't even know if Unis swap is actually live on Stark net so if they are then this is an old point but nonetheless I feel like to not have to devote resources to building out something in a completely separate language and just having another team do it that already has 70% of deck volume on that chain it's kind of a good way to gain exposure but definitely hear your guys' concerns with like yeah like

you're just going to give us these tokens and we have no idea what you're doing with them you're probably just going to sell them and then fund yourself to sit on the couch for a while like definitely a real risk yeah for sure for sure those are some good points there just a really interesting development though I haven't seen a lot of like these token swaps go through especially for you know larger Dows like uni swap so I don't know this could started a new pres precedent if it is a executed and B goes well so definitely something you keep an eye on another governance update we have is a f uh proposing to further increase the borrow rate from Two and a half% to 3% a lot to think about here because so go launched in uh I think July June or July time

frame roughly earlier this summer and it has greatly strugg struggled from a peg perspective so right now it's trading at about 966 and has just really been down only since launch they used an artificially low uh borrow rate when they launched I think it was around one one and a half percent and what that did was create some great initial demand but everybody what they did was you know let's say you borrowed against ether whatever your asset was you'd uh take out your debt position and go and then immediately sell that on the open market and just either like Loop the strategy or um just get rid of your tokens and go execute some other thing like like if I wanted to you know take some leverage out and go long eth I would open a position borrow some go against my eth

collateral and then sell the go for more eth and now I'm holding an an increased amount of eth and I have more exposure and so what this did was just destroy the Peg and so they've already raised the interest rate once and now they've are have another proposal to go from 2 and a half to 3% they also launch without a PSM and so the PSM is great for upside Peg protection but honestly it like doesn't have a huge impact on the downside Peg protection really how you solve downside Peg protection is like having a robust ecosystem for your token that creates demand for the token like you need people to want to hold the token and not just dump it into a liquidity pool it's kind of like this really hard problem you're trying to solve but that is is ultimately kind of the goal here uh and so the question

here is like what went wrong for a like how did they really slip up because if you look at somebody like curv who also recently launched a stable coin earlier this summer The Curve Peg has like never dropped below like 995 is so a whole three cents higher than what C uh excuse me what go is trading at today uh and if you look at like what they're doing well they have a robust ecosystem of incentives to create that exterior demand and say hey like you know go put your assets in this liquidity pool don't just go dump them or something like that um you know pair them with another stable coin and earn and earn yield and things like conic that sit on top of the curve ecosystem really help promote that they launched with uh their OS so their what they call Peg Keepers so yes that's much better

for upside Peg protection but you're like launching with a more Complete product um and then lastly they have a much more uh robust interest rate mechanism that relies on on no governance and it's just based on Market Market forces and certain select parameters based on some of like initial risk parameters about the asset that you're boring against um and things like the the curve price the CRV USD price actually plays plays a role in the interest rate that the user pays so you see like these two different perspectives and ultimately it's like all right well what does go like how do how do you fix go and a is doing a ton of work going into this like they've created uh a liquidity committee with

basically like a multisig of some Community participants around like all right you know we're closely closely integrated with both curve and balancer how do we use V curve or vbal or some of the yield aggregators like convex or aura that sit on top of those to like really kind of create the deepest liquidity we can to help promote Peg strength and things like that they're now they're talking about increasing the interest rate again for an additional time right because if you have an artificially low interest rate people are going to like Loop s die or srax yields from you and again that's just going to all get sold back and and negatively impact the peg so they're they're kind of going about the right steps but uh so far like really really lacking in demand if we look at you know total demand for again comparing curve

in a uh curve USD is at about 125 million uh of borrowing and we see about 25 million for for go itself so definitely need to see some uh increase in in the peg stability before you're going to see a lot of traction there but so far rough start for a yeah I think S and S FR as you said just completely like flipped the stable coin landscape on its head as we knew it before those those two products like kind of came to Market and I expect that to continue honestly as a side note I just think it's so interesting that the US government is basically indirectly injecting like hundreds of thousands of dollars a day into defi like that is so cool and and like so bullish on a longer term time frame especially as that scales and yeah I'd put myself in the

hot seat for what I expected go to do I thought that was going to be a really successful product and it's pretty much completely flopped front on its face their only hope is to be a third mover and launch ES go just try to do what everyone else is doing that's a good point though I mean they're gonna have to do some sort of offchain asset strategy or rwa strategy whatever you want to call it yeah I mean Kanto rolled out a rwa strategy before a did and they're moving to the polygon cdk baby does anyone know it's good with a Arc I haven't heard anything about that wasn't that supposed to be like their institutional grade like bar I don't think a Arc gain like any traction at all even though they launched it I want

to say like more than a year ago like I think it got barely got any like assets or TVO in it um I'm not sure if it's entirely shut down um but it seems like more or less dead right now and I feel like compound also launched like an Institutional like borrowing solution probably one year ago to and yeah that also got shut down like pretty early on this year at the end of last year so all of these like institutions only like B lending bwing protocols like I don't think they gave any traction and I want to say that most of these institutions or like hedge funds are still doing their lending and bwing with just like normal like desks such as like Amber group Falcon X Etc they're not doing it onchain yeah I'm confused as to

why compound is still even operating like I don't know a soul Who's using it but there's there's money in there and they're mining the token but I mean now that superstate is a thing like they should just deprecate the whole thing go start something new that might be like a um Justin Sun place of activity I think that might be a lot of the TV I'm totally like making that up off the top of my head but I'm pretty sure that's where most of the tvl comes from I wouldn't be surprised but uh continuing on on the idea of stable coins protocol specific stable coins and and their power in defi uh srax is up to 40 million in tvl just a week or so after launch and S die is last I looked

about 1.6 billion uh which is insane like to see your point Sam like that is there's material demand in the middle of a bar market for a product that will get you uh you know that that treasury rate yield so that's that's pretty cool to see and a little bit of alpha something to watch out for in the governance forums is curve is looking to add uh SD and srax collateral to their lending market so you'll be able to execute that looping strategy um there's actually a vote to basically they're going to use a curve pool as the Oracle for that and so they're deepening liquidity in the SD CRV USD pool right now and then that will become the liquidity or excuse me the Oracle for the SDI collateral um and so right now there's a vote up to uh add

a gauge to that pool for curve and then you'll see the incentives roll through liquidity deepen and then likely the asset will get listed uh as collateral so definitely something to keep an eye out there from a governance perspective but lastly on the governance front we have uh polygon actually migrating from madic to pole I think the launch is slated for October 25th which is the Wednesday of this week when the episode will go live so trying to do a little bit of foresight here and see into the future so uh you know don't come after us with the pitchforks if that doesn't end up happening but that looks like what the game plan will be uh it's pip 26 that suggests increasing the validat rewards by 70 million from 130 to 200 million between now and July 2024 uh so that 50 million increase to 101 million

uh the following year excuse me 50 another 50 million increase the following year from 101 to 150 million um so Sam I know you've been paying a lot of attention to the polygon and their recent uh development with the zkm and their interop layer and all that so how do you think this is going to impact the the future of the polygon ecosystem yeah I don't I mean I think it's bullish I think this is like a necessary migration just to kind of like get a new narrative going for for madak and the polygon ecosystem just to kind of clarify pip 26 is actually increasing the scheduled validator rewards slash like incentives from now until July 2024 by 70 million because I think a while

back they had reduced it and now they're trying to like kind of get it back up to like where it was because they want to make sure to incentivize the proper behavior and then another 50 million the following year is this part of that like original Five-Year Plan that maddo had for like when because madic was a hardap token and now Paul's not but are they going to keep the original Five-Year Plan for validator incentives and then like this is the schedule that you're talking about them them altering yeah yeah exactly that so I think they just want to make sure that they can incentivize you know enough validators to want to join but unfortunately that does come at the detriment of of token holders through extra delution I don't think it's necessarily like the worst thing I mean you're you know we just talked about Adam trying to get get from

20% to 10% annual inflation so when we're talking like these numbers on a 10 billion token Supply it's a lot a lot less uh so you know the problems could be bigger but it's just cool in general to see this migration occur considering like how much of a Pioneer polygon was in scaling the evm like yes it's a side chain they get a bunch of crap for how they Market it but I do think had polygon not been there a lot of other all l1s would have picked up like a lot more traction back in the last bull run so I do think polygon's extremely ethereum aligned uh and also like they just started taking governance a lot more seriously so they just launched a security Council basically giving them the ability to do emergency upgrades with no time lock assuming they have 10 of 13 signers and the list of 13 signers

is like pretty much like some of the top security people in all of web 3 so I don't know I think they've uh you know they're on the right track and I'm excited to see where polygon goes from here especially once they migrate that uh side chain over to a validium I think there's two things that I want to see p poon hasn't had like the most thriving def ecosystem um in the grand scheme of things and I'm not sure if this like interop or aggregator layer will sort of enable like novel use cases such as like distributed amm but I think there's a potential chance for them to sort of stand out with cool like D5 protocols that are only possible on PO uh polygon so I was gonna say Solana just because salana sort of like uh made that their

narrative um and another thing I want to see is obviously the token pole itself is meant to be like a multiutility token right you can use it for like um s just like to secure the polygon Network you can use it for like the sequencer Network the Prov Network whatever I I'm really curious as to see how much adoption that gets from day one or if it's even actually ready I'm not really sure um but I think that may be indicated for like how successful I layer may be like how much people want to use like one token as collateral for like multiple use cases it's like a test bid guess for like restake de that's pretty interesting actually I haven't thought about it from that lens before but yeah I I like briefly mentioned this so I want to expand on it and one of like the

key differences from the token migration from madic to Paul is uh the fact that they removed the hard cap so it's now can be used as a staking incentive driver uh sort of into perpetuity I think there's a there's an inflation cap on it so it can't just like you know one year elect to just admit you know 100% inflation but uh they did get rid of the hard cap which is kind kind of interesting because you know it is a on toone token swap just with like some minor tweaks to tokenomics and honestly like I I'm sure that there's some hate out there on them changing some things like this but you know they launched that token in what 2017 I would guess like things have changed there's been a lot of research done on what a token should look like and you know the team

has been building for the last five or so years yeah I I would want them to be able to kind of modify what that token looks like and what it can do and what it can be used for to kind of build out the most robust EOS system that they can and that's ultimately what I believe they're trying to do so I'm pretty excited about their Vision um I'm excited about honestly the ZK ecosystems as a whole I think there's there's a lot there I don't know when we'll get it as I think the tech still needs some some improvements to really scale like we haven't seen any hyper chains really come into the ZK sync ecosystem yet that are like you know really blow your socks off by any means um and even the early campaigns for who polygon is going after to kind of build out on the polygon SE

cdk is is kind of in the same boat right like Kanto is coming over uh they were uh kind of like campaigning to get cell over which is like a smaller L2 and it's like all right you know like those definitely aren't the most attractive Chain by any means but what's interesting is because of how the interop layer works like everybody that's opting into the same interop layer is going to help reduce the cost of of proving for each other and so like ultimately that comes back and benefits the polygon ZK evm so you kind of have this like little flywheel effect of like hey well if we're all in this ecosystem it's cheaper for us and so it's going to be like this race to see like all right who can like actually get the uh the most attractive set of l2s to kind of come join their

Network so it' be fun to watch yeah I agree I just add one more thing that I think polygon's dead if they don't you know somehow develop some sort of ecosystem fund like you just can't compete with arbitrum optimism Etc being able to hand out token incentives and bring users over to your chain just I can't get over that point like even if you look at gains Network that was a polygon native protocol that migrated over to uh arbitrum as well they have two versions live every single day it's 85% of volume on arbitrum they literally just got a stip worth I can't even remember it's in the five to1 million dollar range like if you're not getting that on polygon like why wouldn't you be on arbitrum you know what I mean so that's the one other the one other

caveat I would disagree I think um polygon kind of served as a test Testament is like don't blow up and just keep going on and you'll be fine like being so old and still being in the game and having processed a lot more like settlement than something like Stellar or like Neo like those kinds of tokens like polygon is still here and like even though defi appetite is pretty bad right now it doesn't even have to be defied for like polygon to succeed I mean they've got like the Starbucks Odyssey thing going on um there's just like plenty of other I guess they kind of have like a brand even if like Crypton

native people don't think so like they do have a recognizable brand and people know they can go to polygon to like try something out in crypto yeah I guess another Counterpoint there would be the interop layer as a whole right like if they can get some Mo liquidity Moe around the interop player then there may be some external drivers for like why you'd want to be within this ecosystem which like yeah maybe you can go to arbitrum get a stip get some free money and get some short-term usage but maybe I need to be in this app with everybody else that has you know this like this Hub of liquidity around it to really get traction I don't know I'm spitballing here but it'll be that's why I'm just like really excited about the idea of this like interop player I think that like you blocker research needs to

do like an in-depth analysis on that because a I want to read it but be it would be really cool yeah I know sand deep as well just as another Point has tweeted on Twitter like as a reply to someone else saying like what do you mean we're not going to do an airdrop who said that so like I I think I who knows if he's just hyping this up but nonetheless he's aware that like he needs to get people farming what's up everyone as we explore today's blockchain landscape let's take a moment to recognize hexin the premier cyber security provider in web 3 hexin is trusted by tier one projects like polygon including a Security review of the new polygon ZK evm mantle risk zero Lio 1in new bank and more get a deep dive into your technology stack with the

most comprehensive analysis in cyber security Consulting with over $55 billion secured they cover everything from Smart contracts to blockchain to web two pentests there has been nearly s billion dollar of total value hacked in crypto's nent history so it's safe to say that your team has a lot on the line don't skip out take your security seriously and choose hexans don't forget to mention zerox research for a free web Tu pen test with your partnership and you can reach out to hex at hex.io or find them on the ground at devc connect without further Ado let's get back to today's episode time for a little hot seat cool Throne what do we say let's do it all right uh pibbles why don't you kick us off yeah I'll come in with the hot seat and it's a name that we seldom talk

about on here but it's uh polka dot they have a little over $400 Million worth of dot unlocking tomorrow and like the 25th and then I think like there's another wave in January and um so basically two years ago people were locking up dot in the pair of chain auctions which was like the ultimate hype machine and um so they locked them for like two years and probably like the average cost basis of someone who locked dot back then was around like $25 and like now it's at like $4 it's kind of been moving the past few days but um so I think it's like five Bill circulating market cap you got like 400

Mill about to unlock I don't really think there's enough liquidity to like handle a Mass dump of like 400 Mil Dot um open interest is sitting around like 30 mil so not even 10% of this upcoming unlock and I'm just expecting like a lot of volatility on dot for the next few days and so like uh at surface level It's Hot Seat like oh no Dot's going to go to zero but then if you look further like probably the most entertaining outcome is going to be some sort of massive short squeeze where dot rallies like a Time NFA but uh we'll see it's going to be really interesting to see what

happens with this I was uh scrolling Su through just looking at activity on some of these pair of chains and like man T it's like the the apps deployed over there is no different than like the shittiest l2s it's just like Dex Dex Dex protocol nothing else and I don't know I mean yeah I know there was some contention around like I don't know I guess this takes me I'm totally derailing the conversation now but when uh compound was talking about like building out uh in the pokka do ecosystem and then like it never came to fruition but they were playing around with like the app chain idea it's like what if they like decided you know what screw it we're going to execute on that

anyways like I wonder if that would have changed the game at all like would there be more people who would have said oh comp doing it so like let's go try to do it and go go play with it uh and then one of the things that I always see touted about polka dot is the you know there's so many developers going on like there's so much development activity so many developers uh so I went over to to token Turnal and pulled up their core developers chart and like sure enough you know polka dots in the top five but I've never put a lot of credence into that metric because I mean cardono sitting at the at number one by a wide margin and like you're not going to tell me that there's more development work going on on cardano than like ethereum mainnet or ethereum in its l2s like it's

just not true so I don't know I I just that's like the number one metric I always see touted for poly or excuse me for polka dot it's just like a hard metric for me to get behind it's just really easy to fake and you know if some dude's just pushing a read me update on the on the GitHub like that's not development yeah it's probably really someone just like going in there and changing the font size different code and they're just like doing in it multiple times a day I I'd also add that like the real nail in the coffin for polka dot was ever was it called The Nomad Bridge whenever that got hacked um moon beam Moon River whatever it was called was like the number one successful par chain and like

supposed to kind of be like the prodigal child of the entire dot ecosystem and that bridge hack just like killed it like completely massacred any chance of poker. defi so it's it's just been real bad since then they also took forever on their I think they call it xcm cross chain messaging protocol they were like building that forever and I I haven't even gotten an update on that so I'm not sure if that's live but I feel like that kind of hurt too with Cosmos having native IBC but as you were talking pibbles I did pull up leas and saw that the funding rate is like negative 33% annualized and open interest is like doubled over the last 24 hours so that is kind of an interesting setup this is

going to be one to watch over the the coming days for sure I think my reaction with all the facts La out was that like holy crap like how many billions of dollars in like dot were like locked up for the par chain auctions and I think my first reaction when I learned about parach chain auctions I was like why would you only have like one month you're like fundamentally limiting how much your business or your network can make and it just made zero sense to me when I first like learned about FKA Dot and like the entire like architecture it it still doesn't really make sense today yeah I think the idea behind that was basically let's try and lock up as much Supply as we can for two years so that way our bags vest when everyone else can't sell if I had to guess hey Supply sinks

were hot I mean eth Burn Baby Gotta Get a narrative going for your token I guess Counterpoint to my developers comment was you know let's let's take that number at face value and assume it to be true then that just takes me back to crypto as a whole is problem of distribution matters and like even if you have great Tech you got to get people to use it and you got to be building things that actually like are useful so I don't know I'll also add that for like active developers count there's probably like a I don't know if this is the correct term but like a power law distribution like your top like 0.01 developer probably has like a thousand times more impact on your ecosystem than like the other like 99.99% combined and that's definitely

like very true in crypto like for example like arbitrum and GMX like sure maybe they have like 10,000 developers but if they didn't have like the five Developers for GMX would arbitrum be like anywhere as close to like how big they are today I don't think so that's a great point I think it's even more true for protocols rather than like uh like applications rather than you know base layers right so something like curve you know Mitch and fitty are like how what percentage of activity on that GitHub like you know I'd take them over a team of a hundred random devs any day of the week and most Engineers would agree with that they're like yeah I'd rather have one or two a small team of like Powerhouse Engineers than a large team of average Engineers the small team or

the single person will always out compete uh the the larger group there's just you introduce inefficiencies and I don't know if you talk to some Engineers you start to learn that like those dudes just like to operate it's just it's a different brain it's a different brain Sam who you got in the hot seeder cool Throne this week I've got scroll main at launch uh in the cool Throne you probably could have put in the hot seat as well it's only got a little bit over 10 million at TBL I checked out some of the daps on defi Lama that are that are live and it's once again just a list of 10 different dexes so people are just swapping coins on scroll with nothing else to do uh they also previously raised at a $ 1.8 billion uh valuation I don't know man I mean I'm

happy that they finally you know launched everyone I think their team is legitimate I think they care about scaling ethereum I think they care a lot and deeply about crypto so very happy for the team but just right now like between polygon zkm ZK sync and scroll like they're all lagging like you can combine the TBL of all of those and they don't even equal base and that doesn't even have a token and ZK sync and scroll are obviously going to be farmed so I don't know I guess I'm kind of curious to see when ZK EVMS actually kind of find their product Market fit Niche and and start to get in the narrative because everyone was talking about this for over a year now they're all alive and no one's using them like have only bridged over to one of them personally

I'm curious if you guys have even bridged to one of them I think um the sole utility of any sort of like CK evm is to raise a ton of money so that you can get things like uh scroll sauce this hot sauce that's branded as scroll like I think that's ultimate use case how did you have that ready my oh that's great that's incredible uh I mean yeah I got I got like okay so arbitr and optimism are obviously crushing all the ZK rollups in activity metrics right now but they also had a they got to latch on to some of the bull market growth right so like they had

developers come in like holy like we can build on a cheaper version of ethereum like that's awesome let's get in there and do it whereas you know some of the ZK Rob set launched within the last 12 anything that launch within the last 12 months like you're not getting any love from any new wave users or Builders so you kind of like trudging through the dirt so to me it's not about now but it's about what will what will happen in the next you know 12 12 to 24 months and that's really where I think there is the potential for something more interesting to happen again because you create these ecosystems that can benefit off of other chains in a way that like bass cannot impact like can't be useful there's no interupt between bass and optimism I guess is what I'm trying to say or arbitrum is really just

this one L2 that's like kind of siloed within its own uh canister where yes it can have some l3s that live on top of it but that's still a bit different whereas ZK RBS can have like this hyper bridging or this interop layer that's just allows for like richer Communications between uh l2s that utilize the same smart contract bridge and the same proving circuits so I'm really excited to kind of see where that direction goes but like there's no there's no sugar coating in that's not here today and like we haven't seen any of that usage today I want to add a few more things here first of I think that valuation that I previously raised that is like completely ridiculous like there it doesn't justify the valuation by any means um second thing is I think scroll has done like a pretty poor job at like

BD or like just getting their like narrative out there they're just hiring for a head of growth now and it kind of feels like it's way too late to be hiring a head of growth and every other ecosystem has like a very prominent researcher or like head of grow head of defi CEO that like everyone just kind of knows on Twitter like if you think about who that is for scroll it's not that obvious I guess like togu but like he's just debating semantics of people on Twitter for like 365 days a year I'm not sure that counts as like getting your narrative and being like a spokesperson for the entire ecosystem so yeah I mean like not not an impossible task um but definitely like a lot a lot of work for whoever they hire to fi their head of

grow row is Ren looking for jobs I just saw like Sandy P post on Twitter I don't think I even follow her I'm just messing I take that job though many such cases many such cases of Great Tech and questionable like a question mark on distribution I think what's really going to happen over like the next 12 months is how all the money flocked from all l1s to all these l2s in private rounds and fundraising I think the all l1s are all going to have their day and like see major applications that are successful that aren't Finance related at all and

then like once everyone starts flooding back into the all L1 trade then maybe the l2s see something but um I'm way more bullish all l1s right now which all l1s definitely like obviously salana um near is really cool I just published a report about that but they're doing some really good stuff fixing the distribution problem and they have like actual apps that are using it without the actual end users knowing they're doing anything with crypto I also think like Aptos just launched like some game that's apparently picking up traction right now so Aptos activity is up and then sui is also going to be a really good one um I don't think I'm a fan of

SE I will say that but I think there's a lot of upside in all these other ones just curious too while we're on the topic how do you think the I guess the alt lir ones from last cycle perform outside of solo so like avac on I'm blanking actually right now to think of another but I don't know there just seems to be so little going on over there and like they they're like screaming into the echo chamber and just no one cares well I think like I'm definitely team near because near con's coming up soon and like you really can't fade the founders of N and like how much money they're sitting on like they can do whatever they want um Avalanche like they really tried with Stars Arena and then it got exploited like three

times um but like apparently there's like that um that like private defi subnet or whatever that Wisdom Tree is allegedly using so like maybe they have something each there Fair take Fair take all right Ren who you got in the hot seater cool thr on this week all right I actually got two I got one in the hot seat I'm going to get uh to the Kone one later so I have Celestia in the hot see they recently concluded their air job I think last Thursday um pretty shocking numbers actually for what has me to be hyped as one of like the most exciting like infrastructure projects SL air jobs in the past few months only 32.8% of uh people claim their Celestia tokens and I like to clarify that

there's like three buckets that they are dropped to so one are um early adopters of rup so that's probably like normies like you and me and they got two % of the total token Supply another 2% went to stakers and IBC Rel layers on Cosmos and Osmos so they probably all went to and everyone claimed there and the last two were basically devs that have been contributing to various ecosystems um if you have a like super big GitHub refo if you're big like a big modular guy um you probably got part of the 2% allocated but yeah 32.8% claim is a pretty shocking number it's a good thing that they distributed all of the unclaimed tokens to all of those that claim game so people probably got two to three ex their initial allocation but that muted

demand to me kind of signify two things right either the first being that Krypto still has a lot a lot of us users and none of them managed to bypass one of like the VPN restriction and apparently it was like a quite a bit harder to do so than like bypassing your normal like VPN restriction from claiming an air job um so I guess that's probably one thing to take note of um the other thing is that maybe there's just like not that much excitement for the airdrop especially considering that I think most people only got like A1 to $200 like that doesn't move the mark and especially like if you're just like a normally being a Deion on L2 like you you really could not care less about like modular blockchains like modular

like data availability execution you're going to be like what is this $200 like I'm not going to bother right um so pre-launch Futures have been trading at two billion you can trade on AO there's probably another perfect change that I'm blanking on and it previous raise was at $1 billion um in October 2022 my take is that I don't think it justifies that valuation right now um I'm not that excited about Mario blockchains to be honest especially with like the proliferation of app chains within volup Stacks like I I I I just don't see it yet perhaps I'm missing something but yeah that's my takeaway for now I'm

gonna feel so Vindicated when Celestia launches and it's like a complete let down in all the threads over the past two years have all been for nothing if you want to know how to get zerox PES to hate you it's it's right a threat it's it's actually that simple hey I'm the writer of some of those threads but it's from the blockworks research account so I feel like I get a pass no I agree though here Ren I feel like one billion seems pretty ridiculous but I do think that the fdv of the token will be two to three billion best guess I don't know what's it trading at on AO right now if you happen to recall yeah so ao's at two billion dolls um double it last race at one

billion okay yeah I definitely attribute it to just making it super hard to claim for VPN people and the fact that 33% of people claimed I bet 20% of that is people who are witty enough to get around the VPN wall through some you know Niche method that people were sharing in telegram chat so I don't know kind of depressing that 90% of crypto usage in my opinion is probably us users it's going to be really exciting to see if uh Eclipse does really well as a an L an L2 on ethereum using the svm and using Celestia for da because if they pull that off and like let's just say they absolutely crush it and for one reason or another that gets attributed to using Celestia for da that'll get really really interesting right because

if you are an L2 today and you can c cut your cost by 95% by switching from ethereum da to Celestia da at what point does your Dow start pressing you into to do this or what at what point does the you know maybe it's a more centralized chain like and maybe what at what point does the centralized team start pushing for this or do investors start pushing for this like when does it make sense to say maybe I break some eth alignment and actually go use Celestia for da and so I don't know it's going to be interesting to see who else is gets gets over there to kind of like prove the celestial use case but Eclipse has definitely got you know a very interesting shot at it for sure I'll chime in here on Dance point of like pressuring your Dow protocol to

like move over to over to celesia for da so last Friday um Celesta themselves launched this thing called blob stream I haven't looked in it too much but it basically allows you to stream Your da in like a modular fashion to ethereum mainnet um I'm I'm just just going to read the Tweet here um snc Labs also announced blob stream X right it's a ZK light client based implementation of blob stream which streams Celestia's High through verifiable da layer to rollups settled on ethereum Main net um so it seems like there may be some like Middle Ground you may not have to choose like either or and maybe there's like the best of both votes that you better person can tap

into but as like a standalone solution just off the top of a minute it's like it's hard to see it gain like a huge amount like outsize adoption you've also got to get enough people running light nodes right because that's the whole scalability model of of a DA layer is that like the more light nodes you have it kind of logarithmically scales so I don't know I'm a little bit bearish on the idea of people actually wanting to to do that but um the Celestia team like Nick white have been doing a really good job marketing it at the very least taking all the pictures of running a a light note on random places on random devices like a Game Boy or something which has been cool yeah yeah all right um for the co drone this week I have cirle I feel like cirle has been like launching a lot of

like cool exciting stuff just last month they launched like Circle research and they launched their perimeter protocol which is sort of their like real world asset protocol securitization blah blah blah um but last week they launched Circle gas station so this is basically circle's really strong move into account abstraction what it is is that Circle has a gas station that handles sourcing and transferring gas token so developers can focus on building their apps right basically a developer can Define gas policies to manage sponsorship rules the number of transactions that they want to sponsor and circle will basically pay for you right um so whatever users pay Circle will pay for you through the account of traction and like a pay Master contract but interestingly Ciro

is charging a 5% convenience fee onto that um and it's buil at the end of the month you don't need to like stream it on like a pro transaction basis which I thought was was a very interesting model um and yeah Circle also recently launched programmable wallets I think probably three or four months ago so I'm I'm not sure how much adoption wallet as a service has gotten but I think account abstraction has definitely gotten like a lot more adoption than people think if you go check out some like Dune dashboards like pay Marshal contracts actually have like a surprising amount of activity um ever since like URC 4237 launched and so I think circles one is really exciting one outlier sort of way

that I think I see this contributing a lot to circles like Topline is if usdc obviously is like a multi-chain token especially with cctp chances are you're going to be using usdc on multiple blockchains and so in the future if you launch a wallet and you want to sort of have give your users the option to transfer usdc to multiple chains to cctp can Circle basically use the gas station for that and charge Itt extra 5% on that right and so 5% of gas fees may not seem like much but I would bet over time especially if stuff such as like sap sap like using uscc that kind of stuff really takes off and if you're like an

Institutional like Logistics client right you're you're not going to be wanting to use like USC in a wallet you want all of that abstracted away like 5% on all of those like transfer and gas fees could probably make a lot of money for Circle in the long term just imagine being sap though and like getting your monthly bills saying they integrated this this month and you're like okay nice it's only like a few thousand and then in the middle of a bull run it's like 30 grand and they're like what the hell's going on here like I don't know this seems like more of a headline in my opinion and something that won't get that much traction to be completely honest but hopefully I'm wrong because I definitely commend Circle for trying their best to make the ux a little bit better yeah I'm all for

abstracting away crypto from crypto apps like I think that's definitely net bullish and uh it's interesting though like this is running on polygon actually which is I don't know I found that pretty interesting I wonder I wonder if they're going to keep it there or move it somewhere else once it rolls into a validium like I don't know they cirle does a an interesting job of like building out developments across many different chains which I find quite interesting like they're not just like all in on building on eth mayet or 1 L2 or salana like they're kind of a little bit of everywhere yeah I'll add on to that salana sorry Circle recently announced cctp on salana test net um so it seems like that's coming live soon I think cctp is also coming to

noo like really really soon so like circle's definitely leaning leaning in very heavily into like a multi-chain future and like supporting developers so to say um with that I think the 5% convenience fee ties pretty well into a unisoft interface fee so I'm going to pass it over to you Dan I was just getting ready to use use the same segue there that's beautiful but yeah egregious how dare Circle charge 5% for their interface um no I'm kidding I uh I've got Unis swap Labs on the hot seat this week for the community's reaction to their interface fee so quick tldr and some statistics around this uh there's a 0.15% fee on all swaps that go through the official interface so that's going

to be Unis swap x uh the Unis swap frontend that You' go to like the traditional frontend that you're used to using um and I believe the mobile app as well and so in about 6ish days they've done 280k in fees which annualize to roughly about $15 million of total fee revenue and that's in the middle of a bare Market folks so like you could easily see double that uh once things start heating up and there's more transaction activity that's really just happening on chain and people were really really fired up about this about like hey like you're charging your users for the benefit of uni swap labs and none of this goes back to token holders uh but the reality is like the person that is using a Unis

swap front end is like provably price insensitive they do not care the price that they're getting on their execution because if they did care they would not be using the Unis swap front end you'd be using an aggregator and it's important to note that the fee only applies to a certain subset of tokens right so this is going to be like a couple stable coins and eth and rap eth and it doesn't like wrapping from eth to wrapped eth doesn't cost anything or stable coin to stable coin swaps doesn't cost anything so like the large driver here is definitely the eth and usdc pair um and if you're going to swap eth usdc and you're hitting the Unis swap front end like you literally do not care the price you're going to get like if if you're paying an extra

0.15% you don't even know it you never even cared uh and so the where that activity is kind of coming from on it because it's across all chains where un need swap front ends are deployed 230 of the 280k is from ethereum and then another 35 of that is from arbitrum and some of the other l2s kind of are quite small actually in comparison to those two and so the Unis swap Universal router which is what the front end will hit uh is the vast majority of this volume with uni swap X coming in second and there's an interesting case for the the the single largest fee a user paid was $4,000 a little little over $4,000 on what was a $2.7 million swap from eth to usdt and I think that is absolutely

wild that somebody was making this transaction and just pulled up the Unis swap front end with 2.7 million of eth and was like boom I'm gonna make this swap so they ended up paying an extra $4,000 in fees and they got sandwiched so absolutely brutal like if you're moving that kind of uh that kind of size like a you need to be using an aggregator and B you need to be using something that'll protect you from me uh like a flash bot endpoint so another thing to think about there but the large uproar was really centered around the fact that most people felt that there was a huge Chasm between Unis swap Labs Equity holders and then youi token holders and that's definitely true the incentives aren't aligned one to one but I don't think that they're as far off as

people really make them seem and like they make Labs out to be this like really ill-intentioned group that is really only extracting value from uni toen holders and giving it to equity holders that said there is no doubt that the Unis swap lab's team has a duty to their shareholders to maximize the shareholder value like that's what they need to do however I think Unis swap the protocol plays a very pivotal role in achieving that goal that Unis swap Labs has and sure they could be successful if Unis swap protocol died tomorrow but their likelihood of being successful probably drops by about 97% and so because of that like yes I do think that they need to create the best protocol that can ultimately return value to token holders I just don't think that's today because the debate is

like you know the Community has been talking about turning on the Unis swap protocol level fee switch forever but all that does is take Revenue away from LPS who are already getting kicked into teeth like lping is a wildly negative EV experience for a vast majority of users and a lot of this liquidity comes from you know what 10 15 different LPS I promise you that uniso Labs is talking to these LPS and those LPS don't want to give up their fees so do you really want to go piss off the seven to 10 people that are supplying liquidity to your produ and if you do and they leave then you don't have a protocol anymore so you don't have future fee Revenue to get and there's been some good studies done around like hypothesizing how you'd go about turning on the Fe switch and which

pools you would use and like which chains you'd start on and like really kind of testing the waters but that's all you're doing is testing the waters like you it doesn't make sense to me at all to say hey we know lping you're going to lose 5% while you do this but us the Dow we want to get a couple more percent out of you and we actually want to turn on our own fee switch so instead of losing 5% now you're going to lose 9% like that doesn't make any sense so if you want to be returning fee Revenue to your token you got to be like there need to be excess cash to distribute because even if you diverted this you know 15 or so million dollar uh front-end fee switch to the Token holders instead of the Unis swap Labs team that' equate to

like a roughly half percent dividend rate basically so what's like what's more valuable to the protocol itself a half% dividend or reinvesting in Labs who is incentivized to make the best protocol possible and to me it's like very very clear that you should be reinvesting in the developers rather than in kind of like building towards future growth and like there's a lot of things that the future growth can look like it can be you know enhancing an existing product or building a new service line or funding more research into LP profitability for example literally anything and so to me it's very clear but the rest of the community does not feel this way it's kind of a controversial take to say you should reinvest in growth rather than distribute to the Token holders so I

mean yes I see the chasm here and I see why people are upset that there's this difference like Unis swap lab is not really maximally aligned with the token holders because of the equity and I see how that's like a fundamentally flawed model but I don't think it's like the be all end all it's like oh well Unis swaps done like they could go build some anciliary product that's funded by this $15 billion of revenue from the interface fee switch that feeds more value to the Unis swap protocol and then that's how the fee switch gets turned on like that's a very probable outcome and everybody seems kind of like blind to that acknowledgement so I don't know rant over but I just don't think it's the end of the world that people are making it out to be yeah I definitely agree I mean if you think about like

before the interface fee switch to date unisoft Labs has literally made like zero dollars a company needs to make money eventually you can't just fund it with VC funding and not make any Revenue into per fatuity um it just like doesn't work um so I don't really blame unisoft for turning on their interface Fe and I think like making it just for unisoft fund ends is like a very very fair way for them to do so and I also agree with everything you said about sort of like reinvesting protocol like profits right like even if you think unisoft has won like the Dex competition even if you think say like dydx has like dominated the propose market right even if you think like ethereum is like the best

blockchain on planet Earth the truth is like with the current users on chain today like no one has won yet like the market can very drastically change in the next like two three five 10 years right you should be like building up that war chest and deploying it in order to like think of new product lines like increase your mode whether that's like liquidity mode or like a branding mode um sort of like differentiate your product better and just build a overall like more valuable product you shouldn't be giving that out to sort of like governance token holders and I think that's another thing right um we've always I think a lot of people like know that like governance tokens are meant to be just governance tokens but they

always see it as Equity um and so they always like price and value it as equity and also expect things that like equity and like Securities get easy like dividends but if you think about like governance tokens they're like literally me to be governance tokens right if it's truly a governance token should unisa be trading at like a$3 billion valuation probably not to be honest it was truly can only be used to like vot on Snapshot votes and yeah I think my final point is that I do have some gripes with like a token plus Equity Duo structure just because for like the same revenue generated you know like you kind of disperse it to both parties right it can only be either or and I think that definitely is a problem for sort of like

incentive alignment and value acurel probably the best case outcome of this whole like token plus Equity dual structure debate is that in 10 years we get um tokens that are essentially programmable Equity they get officially like listed as like Securities and like they're well regulated and whatnot I think that's the best case outcome because with token plus Equity dual structures there's always going to be this debate about like value of Creo and incentive alignment and it's just like a fundamental like fact of nature that you cannot change yeah I like that you brought up the uh the point about tokenomy design here because the irony is curve has returned about 100 but somewhere between

100 and 120 million dollar of Revenue to the token and it can do this because the token plays a very important role within the ecosystem and you know that like it uses ve tokenomics it needs locks so to incentivize locks it distributes these like dividend like uh returns to the lockers and that's why it can it can afford to do this and it's being it's not just like wasting money like it's playing the token plays a very dedicated role within the ecosystem which is in complete contrast to a pure governance token so I appreciate that you brought that up because like that's the ultimate Point here is if if you want early if you want dividends at a very very early stage protocol like it the

token must play a role within the ecosystem or else you're like you're definitely better off reinvesting that capital and growth because there like you're reinvesting in the most high growth industry that there is which what I believe to be the most high growth industry in crypto and so yes like you have to beat the you know you have to beat the uh cost of capital in order to reinvest that instead of distribute it and I very much so believe that you can achieve that within crypto and that's just a better outcome than Distributing Revenue to token holders yeah last thought on this point too I just see a lot of bad takes on Twitter right now comparing like like the Unis swap people going oh well look at what dox is doing it's like they raked in like a 100 million plus in fees

over the last few years from V3 and they pretty much have enough Capital to last for six and a half years into the future so Unis swap didn't have that luxury as you mentioned Dan and ren they had to actually pay out LPS couldn't hurt them by turning on a fee switch so it accured to you know Unis swap Labs so I think it's just a very apples and oranges comparison and you really can't even draw parallels between the way the two are kind of going forward yeah if I had to make like a web to comparison where unisoft is today is probably like uber in the first few years they're probably like dominating like half of the US cities and then imagine if like Travis kenck went to Bill Gertie and said all right we're in a good spot I'm gonna start sort of like

giving out profits to equity holders and then the next five years they get completely shafted in the Asian markets in every single Asian market that they try to expand and dominate and like it would just make zero sense yeah I completely agree Ren but that's probably a good place to leave it so thank you all for tuning into this week's episode pibbles Ren thanks for hopping on it was a pleasure to have you and we'll see you next [Music] week