Ethena Founder: The Next Chapter For Ethena | Guy Young

Transcript

When capital can move around the world at the speed of information and these things can scale at like the marginal cost of software. It's like the first time that finance can actually scale at the cost of software. You get outcomes like this or you know the hyperlquids or or the pumps where you've got you know 10 20 people sitting in there and they're generating billions of dollars uh without needing more people to to sort of get there. So I think that's actually one of the really interesting things about like onchain businesses where when you hit real like escape velocity they don't really scale like linearly at all in terms of of the cost. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only and the views expressed by anyone on the show are solely their opinions not financial

advice or necessarily the views of Blockworks. Our hosts, guests, and the Block Works team may hold positions in the company's funds or projects discussed. All right, everyone. Welcome back to Empire. Very excited about this one. We got Guy from Athena back on the show. Guy, what's happening, man? Not too much. Thanks. Good, good, good. Guy, I there's a ton to talk about. Um, including Stripes Chain and Hyperlid and Pers and uh but we should start with Athena first, right? Because I was I was going through the numbers before this. Um you I think most people on the who are listening will be very familiar with Athena but maybe unfamiliar with just how quickly you guys have grown. So let me just call out a couple of the numbers. USD just crossed 12 billion market cap. It's the

fastest stable coin in history to reach that. USD outpaced all USD assets in notional supply growth. Athena crossed 500 million in cumulative gross interest revenue. 30 million of USD of rewards distributed in the last 30 days. Athena is currently the largest the third largest uh stablecoin issuer behind Tether and Circle, fastest USD asset to reach 5 billion in history, second fastest crypto startup to reach a hundred million in revenue behind only Pump Fund. Um what do you think is like just as you look back in the you know we had never spent too much time together.

We got to spend some time together this summer. Like it's fun hearing about the early stories and the journey and stuff like what what do you attribute just this like massive parabolic growth to? Yeah, I think um uh two two pieces. I think one was actually just luck because I think when we first came out uh I remember when we had the first pod maybe back in March of 24. Yeah. Like two weeks after Athena had just launched. If you remember back then funding rates or like rates in crypto were kind of like 50 60% annualized at that period of time. And so there there was literally not a better period in time in the last sort of five years for us to come out. And we were very fortunate I think just with the timing.

Um so I think that obviously helps the growth because it's very it's not very difficult to sell a product when it's got like 50% APY basically to people and then some of the cash numbers that you're describing now obviously helped uh by by that fact as well. Uh I think the other pieces um feel very fortunate I think with the team that I have around me who kind of even uh you know despite how much we sort of achieved in the last 18 months uh still kind of work as if uh you know it's day one within the startup in terms of motivation and like urgency. Uh, I think we try to have like a pretty urgent mindset within Athena, which is like every day you're going to battle and trying to do things um, you know, as quickly and aggressively as you can. And

so I think we've never really slowed down in terms of um, you know, motivation, ambition to keep pushing at the same pace that we did in the beginning. So I think it was kind of a confluence of of you know, luck and then I think just the attitude that we have within the within the business to just be aggressive and and motivated even at this stage. Yeah. Yeah. How do you think about the business today and just the the sweet if you're maybe explaining this to a non-crypto person, right? Because you guys launched with um the synthetic dollar, right? USD um you now have I'm going to try to remember these SU susd um converge chain. I'm sure I'm missing some stuff, but how do you think about the business model today?

Yeah, I'd say the core business is still fundamentally driven by USD. And I think um even though we sort of put ancillary products that sit around it or different distribution channels whether it's a chain exchanges all these different pieces uh the core piece that still drives the business is just the size of USD. Um I think one piece that people don't fully appreciate is just uh you know because of the gross interest income that's actually produced on the USD balances i.e. in 2024 produced around 18% uh APY on on USD. You don't actually need USD to be 50 70 80 billion in size to be producing basically the same cash flow figures that you're seeing coming out of a business like Circle. Uh so for us if you even take simple maths it's sitting at just under 13 bill now uh rough you know annualized

uh APY in terms of gross interest income around 10%. Uh before you sort of taken a take rate there's like already $1.3 billion of gross uh interest revenue that's being produced there and that's with like an interest rate that's below what we saw last year. Uh so these numbers can get pretty big pretty quickly especially when you're growing at the speed that we are and I think the view that we have is that um pretty consistent with I think uh where the world has actually arrived in terms of their views of like dollar assets now I'm pretty convinced that this space is going to two to three trillion in the next like three to four years and actually the subsector that we operate in i.e. like yield bearing or reward bearing uh pieces of this are actually going to grow quicker than the rest of

the market. Uh so like internal view of where we're wanting to take this in the next sort of year or two is like 30 to50 billion dollars in supply and when you're producing like 10% interest on that size of balance sheet uh the numbers obviously start to get uh pretty attractive there. So I think the other business lines can never really get to that scale um except for potentially what's going on with a few of the exchanges that are building on top of Athena where I think perpetual swaps are kind of the only thing that are more profitable than um dollar issuance if you can do it at scale. Yeah. Yeah. And you guys I'm going to ask a bunch of dumb questions in this podcast. This will be the first dumb one. You guys are taking 20% of the interest.

It's changed quite a bit through time. So, uh yeah, it's been anywhere between like actually zero to 50%. Um you know, there's been discussions around like a fee switcher and how that's going to be formalized around Athena that's uh uh you know, basically just waiting for a few more milestones to be hit. Uh but I think in the beginning that number is actually going to be a bit lower, probably closer to 10%. I think it's it's something that makes sense because I think fundamentally if you believe what I've described here that we should be growing to 30 to 50 billion in the next couple of years, I don't think you want to be trying to capture as much value as you can right now. You actually just want to go and grow and become more dominant within the market segment. So I think uh it's maybe a piece that I've

disagreed with the market a little bit uh to date which is there's a massive obsession around u you know buybacks and that kind of stuff when it's a startup that didn't exist 18 months ago and I just think that the market opportunity to go and become a big get business than circle is a far more interesting one than kind of capturing a bit more at this stage if that makes sense. So you guys get to 30 billion, 10% interest on that, that's three billion. You guys are taking 10% that's 300 million in revenue. Uh 10 to 20%. Yeah. So call it like 300 to 600ish like range. And circle was at like 150 last year basically.

And then you take like 10 bips I think 10 bips I think it is on on mint. Yeah. Correct. Uh that does add up a fair bit, but it's uh Yeah. It's not going to add like nine figures. Yeah. Yeah. Yeah. Yeah. Um all right, man. Bunch of top. So with that as the context, bunch of topics I want to get into. The first is um you guys just announced the second round on this digital asset treasury, right? Stable coin X. Um I'm going to get these numbers a little wrong uh because I don't have it in front of me, but roughly a $500 million raise. There's like couple hundred million in buybacks. Um I thought the best place to actually start would be before we go into the the actual second raise and stuff like that, tell me about the structural. you had this interesting tweet back in end of

July which is about the uh significant challenges with VC unlocks and I think I I liked seeing you say this because I think a lot of founders are facing this but rarely anybody actually confronts it publicly. Tell me about the structural challenge that you were trying to solve with with the digital asset treasuries. Yeah. So I think uh the first thing to say is that like I've made many mistakes when it came to fundraising in the last uh two years. I think, you know, this is the f first time that I've ever started a business, uh, raised capital for what I'm doing. And, uh, I think naturally you make mistakes when it is your first time. Uh, I think the summary of that is that we raise too much at too low of a price. Uh, which should be pretty obvious to most people. Um, and

you raised you raised too much money at too low of a valuation. Yeah. Exactly. Um, yeah. Uh, and but isn't that a isn't that a circumstance of like you you're a startup so you couldn't get a high valuation? Yeah. No, I think that's fair. just we actually didn't need as much money as we did raise. I think that there was raising was kind of at the bottom of the bare market and it was a question of like is there even a VC market that's left here in like 18 months and so kind of overraised at at the wrong time. Um so I think like I'll admit that we basically made mistakes but uh you try and you can sort of like course correct these things obviously through time. I think the big issue though is that uh and it's something that's been spoken about quite a bit is that there's just

not enough capital on liquid markets to actually carry these tokens from TGE and through their life cycle after that. So there's a ton of VC capital that's willing to get in in private markets but actually like the gross aggregate liquid fund uh you know uh cash that's sitting around I think is anywhere between 10 to 15 billion. So that covers like two alts basically in terms of their emission schedule for like some of these big bigger alts that exist in the market now. Um, and so I think the fundamental thing is that if even if you look at like total old notional market cap, where did it peak in 2021 and then 2024, it was basically the same number, which is $1.2 trillion. And to me, that was an indication of like maybe that's how much money there is in the world to for people to just be punting, you know,

retail money, just punting like what is 95% vaporware. Um, and the view I have is that basically you need to mature at some point where these things become investable by trady where there's real pools of capital that are willing to sort of carry these things further through their life cycle. And I think we could see that in a very, you know, powerful way when we looked at the way that Circle traded. You know, everyone was pretty negative actually when Circle was coming out on their IPO within crypto. You know, you had people saying this thing was overvalued at 5 bill and it ripped in everyone's faces, you know, 10x to 300 times earnings. And to me it was a very strong indication that there's excessive demand within Trady for this narrative, but we haven't found connective tissue to sort of, you know, connect what we're doing within crypto

uh to those markets and and the pools of capital that sit there. And so to me, it was a very obvious like we have a problem. There's not enough capital that's actually bidding these things within crypto. And then you have another problem in Trafy, which is like we don't have other ways to express a long view on the growth of stable coins and and digital dollars. So why don't we put those two things together? And that's sort of where we arrived at the the logic wise made um very uh you know I would say like uniquely this was uniquely interesting to you know just based on on where we're sitting a few months ago before the dats came how did you think because you obviously saw these I mean basically from from now until sometime in 2028 you have these like big you have a bunch of unlocks right and the where

the VCs are unlocking they can sell the tokens how did you think you were going to solve that problem yeah I don't actually have like a proper answer to that I think uh if you spend too much of your thinking about that you don't actually build a product that can actually like grow into your valuation. So yeah, it's not something that I spend a lot of time thinking about. It's one of those things I sort of hoped would work itself out. Uh but I think we just got presented was a very interesting opportunity which was you now had the opportunity to try and fix that problem yourself and that's when I think we focused in on um on you know trying to get these uh supporting these deities to market. Yeah. Yeah. Yeah. for right well let's get into the in a second but for founders

listening to this who are fun there's because this this is kind of the time of the cycle where everyone's fundraising right um what advice would you have for founders who are out in the market fundraising right now yeah I think just think very carefully about how much cash you actually need and how much of your token you want to sell um I think if you're selling more than 15ish% of your supply you're gonna have a pretty tough time going forward after that uh it's easier said than done because you know important things take money to And then I also just think about think about like the DNA of who's sitting on your capable because there's a lot of people within crypto who masquerade as a venture but they're really just like hedge funds uh who are who are trying to make a quick trade. So

I think we made some mistakes with uh you know certain market making uh trading entities which just ultimately are not they do not have the DNA of like venture funds who are actually willing to sit on this for 10 years. And I think if you can get, you know, one or two partners who aren't um as aggressive in terms of trying to find liquidity early on in the life cycle, I think that can be very meaningful for for people that you're bringing. That's also like, you know, when we speak about who people perceive to be the best VCs in the space, that's why people fundamentally want to raise from them. It's not only just their own brand, but it's actually the best VCs are actually the guys who hold it the longest because that's how they they actually make money over 10 years. Um, so, uh, generally I think

people who have the best reputation are those VCs who who act less like, uh, you know, liquid hedge funds. Yeah. Yeah. All right, let's get into the debt. So, you guys had this, um, so you guys have stable coin X, did a big raise over the summer, started the buybacks. Um, you guys just completed the second raise, got announced on I think it was Friday. Um, raised 500 million, started buying back a couple hundred million. Walk me through this the second second raise for the debt. Yeah, it's really just rerunning the same structure that we had in place there in the first one. Um, so just so people are aware, uh, this this looked quite unique, I think, in terms of its structure in terms of what was built together with TLGY and stable coin X. Um, so essentially what's happening is like investors are buying

lock tokens and then the proceeds of the lock tokens that are going into the vehicle are recycled in as spot purchases on the open market. Um, I think the market responded uh extremely well to that structure and it was actually a new one that we brought to market that didn't really exist in the same format before we came out with the first raise. And I think the reason for that is that a lot of these vehicles are being set up in a way where they're kind of just extra liquidity for either you know VCs to put in um tokens and then uh or the cash that's actually coming in just goes to the foundation as an OTC and sort of sits in a side pocket on on the side. So I think a lot of the time you see these raises and then people are

like why should I care that the foundation just raised 200 million and sitting with them and nothing's happening afterwards. So I think the the piece that the market responded to reasonably well was actually the foundation saying we're getting alongside you and sort of uh bidding in the open market alongside you. Um so yeah that that was sort of like the the basic structure. Uh it was just uh you know a repeat of the same structure at a larger size in terms of what was completed now. And then I think the other thing that looks structurally quite different in this vehicle um is actually it was actually a spec rather than some of the shells that you're seeing coming to market now. Uh the the fundamental difference here is actually the time to liquidity or the timing in the market um is is much longer for a

spack. So it's it's typically somewhere between a three to four months process until uh the the shares are actually trading in liquid. Um there are a bunch of different reasons for why we thought that was the right thing to do. And I think you've seen some news come out this week. You might have seen uh the NASDAQ was getting a bit upset with some of the inind contributions without shareholder votes and that kind of stuff. I think we're starting to see a bit of the cracks now of people taking shortcuts with a few of these things. And I think the view that we took was that it's it's harder to raise money when the liquidity profile is is longer obviously. Uh but we wanted to set it up for something that we thought was built for the for the long term. Um and so yeah, we didn't take the same path that

everyone else did with a a vehicle that could get to market with a much shorter liquidity profile. Yeah. Yeah. How much the the big difference from the first this your first DAT to the second DAT I guess same same DAT but different raise is that the MNAVs have like drastically compressed. How big of an impact did that have on the second raise? I'd say a little bit of an uh impact but not an enormous one. I think uh if people were trading this to you know get in and out within a month. I think they would be a bit more um you know uh sensitive to to what's happening like week to week in terms of the markets. I think fundamentally here a lot of people were actually just using this as a good way to get an entry onto Athena with a longerterm view of we want to be long

Athena and like the growth of like the secular growth of of the narrative that it sits within for a longer period of time. So I'd actually say like the capital that's sitting within our DATs is like 80% extremely long-term venture capital rather than some of the guys uh who are playing extremely short like flip games uh around the end now you know within a month. Um so I'd say yeah obviously people are looking at these things in the market and I think this week was particularly weak for um some of the the e some of the ETH vehicles in terms of how they're trading but I think ultimately people are getting in here with a longerterm view than like a month um so it didn't have that large of an impact. Yeah.

Yeah. I was talking to these guys who uh the team of another DAT that's been um a pretty pretty big one that's coming to market, but the MNAV's compressing of a bunch of these ETH debts has basically like probably 50% of the funding has been ripped from this debt. And uh the thing I was telling the found this team is like you probably just saved yourself a bunch of headache that was going to come in, you know, 90 to 120 days because yeah, you know, so what's what's your guess on how these things evolve? Uh yeah, it might be surprising to hear, but I'm uh I'm pretty skeptical, I think, on a lot of them. And I think the long-term like viability of why a bunch of these should exist. Like I don't think, you know, the seventh alt1 vehicle of the same token kind of has a

reason to exist. And I think a lot of these things are going to pretty quickly trade uh below nav. Um I think for us, it's something I've spoken about before. Uh for us, it's really just a distribution play. I I would encourage anyone who's listening to this um don't buy uh any of the DATs associated with Athena if they're above one times NAV. That's not um something I think that that makes sense in the way that they're designed now. Uh what we want is just easy access to people in the markets to be able to get in maybe at onetimes nav in terms of getting their hands on the underlying and for us it's really just there's big pools of capital within Drafi that we haven't had access to and we just want to open up uh to those people. So I think for us it's a

slightly different story which is like uh people want something else except for circle to express a long view on the growth of of you know the stable coin sector and this is a very uniquely interesting catch-up play because uh we're growing faster. It's like the first legitimate competitor that's actually come up to the big two i.e. crossing $10 billion. Um and then I think the most interesting piece about this is that the rate the responsiveness of Athena to rate cuts is very different to circle. So like when rates go down uh circle's business model is actually quite challenged right where you just you know immediately lose all the revenue that will be coming through there we tend to see actually like funding rates and the rates on Athena's product go up at the same period of time when rates going down in the real world

and that's a very powerful impact right because people will look at that and say right we're going into an easing environment is there a rotation from these businesses that are like negatively geared towards uh falling rates to something that's actually going to benefit from it um so yeah I think ours almost looks like a pseudo equity story rather rather than something that's like a pure DAT where you're just buying, you know, BTC or ETH at a at some sort of um yeah, premium to have. Yeah. Um I want to get into other aspects of Athena's business, but anything else on DATs that you think is interesting or relevant? Yeah. Yeah, I think one thing we haven't spoken about a bunch which is actually a pretty interesting tailwind for DeFi in general if it can be done in the right way is um really thinking about like

connective tissue between capital markets in in the real world and like onchain finance in terms of like deployment in DeFi. So you've seen a few of these start to deploy like ETH into some of the staking uh um products that you see on chain. Uh one idea that I think is pretty interesting to explore with something like Athena, right? is that so you can raise debt financing within the vehicle at 5 to 6% within trady and then deploy that into USD at like 10. Now you've actually created like a very interesting like trady to defy carry trade where you can do that at mega scale. Obviously like fixed income markets are huge in the real world and then actually push you know the TVL and like growth of your own products on chain and then monetize that spread that you're actually creating between uh tradi and and defi. So I

think we're going to see a lot of very interesting structures that actually find uh you know uh compliant pathways for capital to come at scale from traders that actually provide like leverage yield uh all of these different pieces could be enormous beneficiaries of of those flows uh because this is slightly different to ETFs right where the mandates of some of these DATs is much broader than uh an ETH staking ETF for example because it's almost like an open-ended hedge fund to basically take the ETH and just say maximize the return that you can make on the to the side. So I think that there's an interesting tailwind that might sort of evolve with like D5 TVL that falls out of this.

Guy, can we go a little deeper on just like what you think will actually happen here with this carry trade? Can we just let's let's follow this a little bit. So yeah, I think uh as rates fall uh your ability to like raise leverage from trady obviously becomes cheaper and I think what we've generally seen in the last cycles and even at the beginning of this one in 24 was like when rates start to fall in trfy people speculate more on the longer tale of assets crypto demand for leverage picks up within D5 within CFI and actually as rates are falling in trady we tend to see actually crypto rates go up in the opposite direction so that becomes like a very powerful impact when you have access to borrowing within trad. So let's say you set up a DAT, it's got $5 billion of ETH and you can

go raise $10 billion uh in dollars to go and deploy uh in DeFi after that. One of the most this is going to be a very compelling way that people can actually argue why should you pay more than one times NAV for the underlying uh because if you listen to some of the ways that like Tom Lee describes like why a premium to NAV is justified. He talks about like the ET staking yield, right? Which I don't think that's like a a very that doesn't stand up on its own two feet in my in my view. um because I don't think it's like fundamentally uh inaccessible unless you sort of went through the vehicle. But let's say you put a capital structure in place where they were monetizing that spread of like borrowing $10 billion from Trady, deploying that into DeFi and then earning, you know, three, four, five% on

the 10 billion that's just been borrowed. That income stream you cannot replicate yourself, right? When you're holding ETH, that can only be like done or put put in in a package when it's sitting within one of these vehicles. And so I think it's a way that people are going to start to want to differentiate themselves, which is like how how large of a scale can we do what I've just described there and how effectively can we do it in terms of monetizing that spread. And that's actually the way that these DATs can compete with one another to say you should be paying two times now for this because I can I can construct the capital structure that no one else can. And that is fundamentally why why is it that Sailor is different to everyone else. It's because he can raise leverage and a capital structure that you and I

do not have access to. we cannot get access to non-callable non-liquidatable debt or leverage on BTC and that's why it actually makes sense to pay more than one times uh now for Bitcoin in in strategy. Yeah. Yeah. That's interesting. You probably end up having an evolution of these DATs where instead of just putting like a one to one token in it, DATs basically become this vehicle through which capital ends up getting mobilized in Tradfi world and then deployed onchain at scale. Yeah. Yeah. did this for people who were, you know, kind of saw the the leverage the leverage runup of 2021 and then the leverage blow up right at the end of 21 and into 20 really in 2022. Does that scare you at all?

Yeah, I I don't think it's actually the same because uh let's say you're raising $5 billion of debt to put it like $5 billion into USD as some example. You're not actually levering the underlying crypto asset, right? Like your ETH is not actually encumbered by that trade. you're encumbering it by the USD that you're putting it into on the other side. So I think that sort of carry trade that I described there doesn't actually necessarily increase risk a whole ton because it's kind of like collateralized onetoone with what you're deploying it into. I think the risk obviously becomes like if you start to lever up all the underlying assets and you're you know 2x long ETH within the vehicle itself and then these things start getting liquidated obviously that becomes a bit more challenging. I think the one thing that's good is that they're all much more transparent

vehicles, right? Like we couldn't really see into the balance sheets of all of the um entities that blew up last cycle. Well, here it's like you actually have disclosure requirements to to be sharing to the market. So, anyone who's kind of reading those documents will be well aware of how much leverage there actually is uh when it is sort of building up. Yeah. Yeah. Who as you think about it uh so other than Athena, who ends up benefiting the most from this? Like who what uh onchain protocols? Yeah. Yeah, I think it could be stuff like uh syrup, Sky, Spark, A. Um, basically anything that facilitates leverage always providing like a dollar with a yield type product. Um, I had a tweet on this actually describing I quoted the the video that you did with uh with Michael when he was talking

about the spreads and I think yeah, those names I described there are basically the biggest beneficiaries of of uh that rate shift dynamic. Yeah. Yeah. May maybe we can get a little more into um this relationship between uh Athena A and Pendle a little bit. So Athena assets on A crossed uh I don't have the live numbers in front of me but in my notes I have 6 and a half billion in total deposits. Um since launch liquid leverage on A has grown to two billion across USDT deposits. Athena assets now comprise over 70% of Pendle's $10 billion TVL. Um so you've got so there's a really interesting dynamic that has played out where that I don't think people are maybe people who are really close to DeFi have seen it play out but I think probably broader empire

audience doesn't realize this where you have Athen Pendle and A basically have this like very highly mut uh mutually beneficial relationship where each offering of each business is kind of growing the top line of of the other one right Athena is the fastest growing and largest yield bearing stable coin issuer Pendle is the yield market and the kind of bond platform form and a is the money market. Can you just expand on uh both what what is this dynamic? What is this relationship and how did this come to be? Yeah, I think it's well I think it's actually the best example of like DeFi money Lego composibility.

I agree. I agree. That we've seen the cycle. Um that was kind of what drew me to the space in 2020 was kind of doing that kind of stuff but at much much smaller scale. Um yeah, I think at a very basic level all that's happening here is that you have two disperate interest rate markets between DeFi and CFI. So uh funding rates just in general tend to have uh higher rates than where you can borrow money from uh Ray. Actually uh what we're describing with the trady to uh to defy carry trade that we just spoke about um in those DOTs. That's actually exactly what's happening here within this construct. It's just you can borrow money cheaper from D5 i.e. from Ave then you can earn uh from from providing leverage into CFI and all that Ave is doing is essentially saying you're

getting paid uh 10% to uh to provide dollars into CFI and you can borrow at five within DeFi someone's going to just le level that up basically until those interest rate differentials converge and the cool thing that Pendle's really bringing to the market is that funding rates tend to be extremely volatile so you know one day they can be plus 60% and the next day they can be minus five and on average they sort of uh you know come out near 10 to 15 on an annualized basis. Um what they're trying to do is basically just reduce the volatility of those interest rates so that you know when you're entering these extremely leveraged trades where you're where you sort of trying to close these uh the borrow rate within D5 and what you can earn within CFI down uh Pendle basically just turns what is a floating rate of

interest into a fixed rate for you to do the same trade. So I think it's just a pretty amazing thing I think seeing the sort of uh all come together at the scale that it is between these three projects where you're basically just taking a floating rate of interest fixing it and then levering up the differentials between the two which I'm not sure if there is like an analog within drive yeah how do you pick who to partner with so why a instead of oiler and morpho why pendle instead of someone else like how how did these come to be yeah so we work with all of them actually like we haven't got any exclusivity with anyone it's uh these like liquidity network effect type things tend to compound in a pretty aggressive way where if someone does it first at scale uh it tends to just

compound uh you know and and all of the volume and stuff tends to go into one place um so yeah Pendle was kind of the first to the market they created the market niche that they're in and so naturally we sort of use them and funny enough was actually pretty slow to work with Athena I think that they were a bit more wary than like Sky and Maker if you remember the big ar um but I think they, you know, eventually did their work, got comfortable, and then actually committed to it at at huge scale. Um, so yeah, I think there's also something that's unique about Alve, which is like the Morpho markets and Oiler and all those different ones tend to run like isolated markets uh for some of their offerings, which is like we want to isolate the risk for a very specific use case. But

actually, Athena benefits Athena benefits from a poolled model because people view Ave as like the risk-free rate for dollars in DeFi, right? Which is I'm just going to leave dollars there. I don't care that I'm getting paid like 500 basis points because I consider it extremely uh safe. Well, Athena is actually tapping into that because you've got a lot of like inertia of dollars just lying around going like I'm not really watching what's uh you know uh where they're actually being deployed and used. And so from that perspective uh Athena actually benefits massively from like a poolled model there because people aren't trying to like price the risk individually basically within the isolated markets that you see on war.

Yeah. for I think everyone listening will be familiar with a maybe some less familiar with Pendle. Can you explain Pendle's relationship in this dynamic and like what what they're providing here? Yeah. All they're doing is basically just saying like USD's rate is fluctuating quite consistently between like 5 10 15 20 and it's always jumping around. All they're doing is essentially saying where do you want to uh provide a fixed rate across like the forward curve of expectations for the yield on USD. So you're basically just saying I'll trade the upside of someone else making more money on a floating rate, but I want to fix fix in 12. Even though, you know, on average we think it's going to be 14, I want to get a fixed rate at 12 and I'll I'll pay the for the convenience of that basically. So that's all they're doing

is kind of reducing the interest rate volatility around the USD collateral. Yeah. Yeah. How much of this growth do you think is uh what's the right word here? Like organic verse um like incentive speculization specul speculation. there is uh definitely still like incentives that that are involved but I think um at at a certain scale like incentives can't move the needle right so like at $13 billion for Athena uh you literally can't afford with any FTP uh to be like sustaining that there has to be like a core product that's making a return that actually uh interest people. Um, so yeah, there's a light bit of incentives that still sit around it, but like fundamentally you'd never be able to sustain the size. You

can't even really sustain like two or three billion if you're uh, you know, primarily doing it with token incentives. Die very quickly when you're doing that. Do you do you have any concern that the the large the uh, USD growth is recursive to the price of uh, ENA? Um I think there's some of that but I think uh that like reflexivity within DeFi and a lot of these products uh is kind of inherent because like why is it that USD even grows like pretend that EN doesn't exist is because funding rates and like demand for leverage is going up and that that tends to be like autocorrelated to um uh to the price of BTC and ETH i.e. when BTC and ETH are going up people are chasing it up with more leverage and paying higher interest rates to sort of chase it. And so I

don't know if the correlation is like necessarily just ENA itself but actually like Bitcoin and ETH are going up and so naturally like USD follows the same uh sort of correlation there because uh the interest rates sort of follow the prices. One other question I forgot to ask on on a so um there's about two or two and a half billion in supplied capital. No, is this right? I'm trying to look at the numbers in real time right now. basically you guys have increased the risk parameters of how of how much you've deployed on a um how do you think about like where to cap that out? Yeah, I think um yeah fundamentally this is actually a decision for um us on like the lab side to make. So we've got this risk committee obviously where um I think works actually as a um and so a lot of these decisions we

basically just given a framework to the risk committee to actually you know draw up what they think is sensible and everyone debates and we come forward. So um I think ballpark that number kind of makes sense to me. I think if you're like more than 50% of the market that feels slightly too large versus some of these uh money markets. Um but I think we're kind of guided by the professionals on that side in terms of like you know exposure to some of these things. It's like roughly 20% today. Does that feel right to you or would you push it higher? Yeah. Know I think ballpark around that area. Yeah. It doesn't seem um yeah corporate and protocol treasuries face a major challenge today. Cash and traditional instruments are losing ground to inflation. A new industry report from liquid collective and iigen cloud lays out the next evolution of the

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One thing that if you talk to like up andcoming founders, I think in crypto that one of the questions people ask is like how much time should I spend on partnerships? And so I would say like a a pendle perfect example of it working very well. You guys have had other partnerships like uh I was on the uh Coinbase like Coinbase Inst. You can now get I saw you can get um direct access to USD on coin on Coinbase now. Um there's another one that I was looking at. Uh Telegram you guys you guys had a big announcement with Telegram. There's a bunch of other stuff I'm sure I'm missing. I would guess like I think Telegram the TVL was only like 100 million or 200 million maybe. I'm not sure how many people are accessing USD via Coinbase Inst, but how impactful are these partnerships?

Yeah, huge. Uh, but I think what I've learned through time, uh, is that there's just such an insane power law in terms of like outcomes being driven by three to five entities basically. And I think what we found is like if you divide what we're doing between D5, CFI and trady, uh if you stripped it down to like three entities that are sitting within D5, CFI and trady, we'd still have like 95% of of the balances that we have within USD. So I think the u when you're asking the question around if there's advice for founders in this space I think the advice is actually just try to be um try to be very honest and uh surgical when it comes to thinking about who are the three to five entities that are actually going to move my business at scale and make sure that

those conversations go well and don't get distracted by the noise. I think you sometimes get tempted into trying to do too much with everyone and be you know everything to everyone when we found that actually just focusing in on like the three to five things that move the needle the most uh has a has a massive impact. Uh I think it's also different by business, right? So like Hyperlquid's a good example where they don't need to partner with anyone because it lives on its own island and it's like if you want to come trade here, great. But I I don't need to go, you know, uh BD with Coinbase or Binance to get anything done. Uh you either want to use the product or you don't. I think the nature of what we do as a product is, you know, the fabric of it requires you to be very

good at actually distributing with BD because you need all these platforms to actually say, I want to support Athena and I want to push USD to my users. Uh so I think it is also dependent on the type of product that you're offering to the market. Um how much you need to think about uh the importance of of those type of things. Yeah. Yeah. Um where do you see USC in terms of like in the in the broader stable coin landscape? So one thing that's been interested kind of reading between the lines of you know our conversations and looking at tweets and things like that it it does feel like you see uh USDC as a competitor that you want to eat into their market share. Uh Tether that so that's USDC. Tether maybe a little different right? Tether is like both a competitor because you're you you also

have a big stable coin but also maybe a partner. So, how do you think about these relationships? Yeah, I think that's fair. I think um one thing that people don't appreciate is that we hold a ton of Tether. Um because to to put on the pair positions on uh centralized, you need to hold Tether to do that. So, I think during different periods of our, you know, Athena's lifetime, it's top 10 for sure. Top five uh Tether holders in the world. You're you're one of the top five Tether holders in the world. Yeah, definitely during periods of Athena's life cycle. Yeah, for sure. Um and uh yeah, I think so. Is Paulo a fan of Athena or not? Or or does he see you guys as competitive?

Speak on his behalf. But uh I think when I explained that what I just said to you to him, he definitely seemed uh more friendly. Okay. Okay. Um but no, yeah, we have a good relationship with them. Obviously, the USDT are guys who are doing all the crosschain work and stuff on chain. We very frequently sort of partner with them on new chain deployments. So uh we also fundamentally I think have quite different products like Tether is never ever sharing any of the yield with anyone and uh it's uh you know found a niche where where it can sort of get away with that. Um I think you know uh I see Athena's product as more of a saving piece of savings technology rather than like a payment stable coin which is like ultimately where I think tether and circle are sort of going when it comes

to uh definitions under under the um genius act. And so yeah, I think the if you think about where circle is going right now, uh they are doing a lot more of the yield distribution to uh you know, users and platforms. So when you're holding, you know, USDC on Coinbase, you're collecting, you know, close to the T- bill yield by by just doing that. And I think we're like Circle and Athena are actually sort of crossing over in in middle ground where it's more competitive now than it used to be. But I think Tether have kind of just uh defined it as part of their strategy that they're never going to be doing the same sort of stuff when it comes to income sharing. And I think we have like different segments of use cases for stable coins where Athena has like no interest in you know competing

on payments like type use cases for example with like a PayPal or a Visa or a Stripe on their blockchain. That's just something that we'll never win. But there are very specific use cases where I think actually Athena's product is like 10 times better and that's all we need to focus in on on winning. So I think there's like sub use cases that uh that uh we can win and we sort of leave the rest to to everyone else. Yeah. Do you where so Tether's uh net profit margin is somewhere between like 80 85% I think it is circles is somewhere between like 9 to 10%. Where do you think Athena's as you guys hit scale where is where does your net profit margin end up? I I was thinking somewhere more in the middle 50 60 70%.

Yeah I think that's fair. Uh the like you know opex base at Athena is pretty slim. There's like sub 30 people roughly 27 at the moment. Um, and so yeah, maintaining what Athena does or even tripling the size of where we are, we don't need to add any headcount to to be able to do that. And I think it circles employees were sort of sitting somewhere around 600ish I think the last time I looked. I might be wrong. So it's a very different sort of like opex base and it scales extremely aggressively. And I think to me this is actually like probably one of the most interesting things when I thought about like why was it that DeFi protocols were interesting in the beginning. kind of like when capital can move around the world at the speed of information and these things can scale at like the marginal cost of

software. It's like the first time that finance can actually scale at the cost of software. You get outcomes like this or you know the hyperlquids or or the pumps where you've got you know 10 20 people sitting in there and they're generating billions of dollars uh without needing more people to to sort of get there. So I think that's actually one of the really interesting things about like onchain businesses where when you hit real like escape velocity um they don't really scale like linearly at all in terms of of the cost. Yeah. Yeah. What is the niche that USC is? Okay. So like if you break down stable coins you said you don't want to be a payments competitor. There's also there's store value. There's like a savings mechanism.

There's basically just like an exchange instrument. What what I'm guessing you want to win the exchange instrument game, but how how do you think about that? Yeah. So, I think like collateral trading derives is like a huge market. People don't appreciate how big that is, but like $80 billion basically of Tether supply is sitting there in centralized exchanges for trading derivatives and spot assets. So, I think the very basic use case here, and we've kind of seen it with a few of the sex integrations we've had, is your collateral paying you while you're trading per is a pretty killer like feature. it kind of brings together what I kind of view as the most two killer products of crypto in one spot which is like dollar with a yield and then per trading. Um so I think that's one use case where we have a pretty

interesting like edge versus the others. Uh I think basic like defy collateral or use cases within uh like savings technology I think is another area that a dollar with a yield is just structurally better than than one without. Um I think it's more of the payments use cases as I mentioned. Uh and then sort of I'd say like deep integrations and like remittances and those different pieces. we just haven't been around for 10 years to sort of put in the BD work to to do what these guys have done in the last 10 years to be there on the ground, you know, with Tron integrations with merchants and all these different pieces. So, I think that that's just a a much like steeper hill to climb in a short period of time to get that kind of stuff done. So, I think it's basically trading collateral and then savings

technology use cases where where we can where we can compete harder. Yeah. Speaking of perks, how much of the open interest for the at any given point in time for let's call it the let's call it BTC and ETH do you does Athena make up? Yeah, at the absolute max I think we're like eight or 10% of the eight or 10. I was thinking maybe it was higher. Interesting. It's a it's a big market. I think people don't understand how big the RI OI is. It's like you know include the CMA it's like 120 to 150 bill and it's producing. Oh, I was I wasn't thinking CMA too. I was thinking like cryptonative OI like basically crypto per.

Yeah. So like at the moment we're like nineish% of just crypto pers basically. Are you limited by the by the OI of cryp you're you're I guess you are limited by the OI of crypto per but I I think you and I would both say that the per market will grow massively. Yeah. And it tends to grow quicker than market caps as well. So like the per market tripled in size when BTC doubled in the last uh year. So like it's growing at a nonlinear rate with with respect to like market caps. Uh I think the other thing that people uh I'd maybe just leave as like something to think about is like uh I think perhaps and equities are going to become an enormous thing uh pretty soon. And if you 33 times the asset base of what is going into linear instruments like per um that

does sort of like open up the design space of what else could fit into something like USD. Um, so I think this is something that we're watching pretty closely and it's something that I'm incredibly bullish on which is I think we're going to see hundreds of billions of dollars in equity perhaps in the next three years of open interest and that's something else that actually Athena can can um access as well. Uh, okay. You mentioned CME. So one uh one way you guys could scale is by leveraging just more more capacity through both CME and ETF options. How do you what's your what's your plan for that market or do you already do you already do that? We do actually have access to it. We just haven't done it at meaningful scale. Um it's just slightly lower returns and the reason for that is that Trifi can access CME and so they

tend to push it down a bit and that's kind of like what is the alpha that Athena is actually providing. It's like the rates in crypto are kind of too wide versus where we think they should be. You can do that. It's just uh you're doing it at a marginally less interesting um sort of return. Um but yeah, I think the growth of that is obviously um healthy. I think it also gives people infat like a bit more comfort around what's going on with the market. So being able to demonstrate to them that they're actually using venues that they're used to and comfortable the whole time I think helps sell the product uh to them uh in a cleaner way. Uh but yeah, I think aside from the CME, it's really that like pubs and equities uh piece which I think represents the most uh uh the largest upside from where

we stand right now. And I think uh to me if I wasn't building Athena, I think doing something within building um perhaps would be the place that I'm focusing my time now. I think actually Athena will be the biggest beneficiary of that. uh except for the exchanges who are are providing uh perhaps an equities. Yeah. Say what say more about what you would build as in just literally like I don't hyper liquid for equities. I just think uh the form factor of using options to express leverage directional views on Robin Hood is not the right form factor for retail. Uh all all retail want right when they're buying an option is saying I want leverage exposure to the underlying. They're not sitting there going like I'm pricing, you know, Greeks and the volatility and stuff like that which you actually have to be pricing when you're buying an an option. And so

all that's doing is like leaking an enormous amount of value to like Citadel on the other side who kind of takes that flow. I think if if given the choice uh between like going long on a per or choosing an option, I think uh retail users would prefer perhaps and I think they've shown like uh you know explicit preference for that in crypto as you can see with options versus perhaps. I just think that there's a huge shift that's going to go on within equities where if retail are given the option to touch per options. I think that that like dynamic shifts pretty aggressively in the next two three years. Yeah.

Yeah. I agree with that. I've been using some of these products that are I mean they're like seed stage that are built on top of Hyperlid. It's it's basically just like a Robin Hood for per um I USD this is going to be another one of my dumb questions. Is that live? It's not live yet. It's not live. Okay, cool. Um, so my understanding is so you guys announced it earlier this year. It's a permissioned it's basically like an institutionally focused KYC institutional version of SUSD. Yeah. Yeah. Correct. Um, you can sort of think about it as a putting a fund structure on top of USD where essentially you set up an SBV um that takes in money from like any type of fund. It could be an

asset manager, it could be a credit fund, it could be a hedge fund, whoever it is. And all they're essentially doing is actually putting an SBV on top of uh uh you know wrapping around a pool of of assets that include USD and then you can essentially just open that up to your LP base and say if you want exposure to the underlying over here just send me send me feed and you can basically buy the shares within this SPV to get like replicate exposure to the underlying and I think the view that we have here is that um you know the demand for this type of product within like doubledigit returns with zero volatility uh is not $10 billion. It's like many hundreds of billions basically and we just haven't been able to put it in a format where it's digestible to these people to get

easy access. So I think this is going to be the beginning of a bunch of different things that sort of come outside of this where why don't we have these things in ETSs for example like you have bond indexes uh and ETFs in in uh uh that are you know easily accessible by institutions and retail on public markets. Why can't you find something that actually looks quite similar to USD to sit in a vehicle like that uh to give easy access? I think there's a bunch of different like private and public formats where actually USD for quick and easy access and trady um probably represents a opportunity that's bigger than the size that we are like right now in total.

Yeah. If um on the SPV is niche question, but if do you create an SPV per fund? Yeah. Or Yeah. Okay. Um or or give them the option to come into one that's like out of the box and has like unified liquidity across them. Um the issue obviously is that you're breaking like liquidity every single time you let them do each of these things. It's just the um uh the question is like why do you want that token in an end state? Is it just to get like exposure to the underlying or is it to use it as collateral in a bunch of different places like levered up you know maybe on a prime broker or something within uh and I think if you want that use case of being able to deploy it and use it as collateral elsewhere then you'd want to not be

setting up your own basically and just using one that's out of the box. Yeah. All right. So USD right now is 12.6 billion in let's call it like two to three years. What is the um what or actually forgetting the nominal numbers what is the ratio of uh IUSD to to just USD? That's a good question. Um I I would guess more than 50% sitting in uh uh in IUSD. Yeah. Really? Yeah. Have you talked to funds about it already?

Yep. uh just waiting to bring it out with a bigger announcement in terms of who's involved with it, but uh yeah, we've been Oh, so people have you you you have folks who have deployed already. No, I haven't deployed into it, but uh waiting to come out when the product comes out. Nice. That's great. That's exciting. What about the Coinbase partnership? Coinbase institutional. Has that has that driven anything? Uh it was only released like last week. Uh that's just basically like Prime Holdings. Uh where again a lot of the institutional users want to be able to hold and custody within Coinbase Prime. I think that's like the default option that all go to. Uh but yeah, it was kind of released just last week. Um I haven't actually checked where it's um all right. Two two announcements this this week that I thought were interesting that I want toh cover with

you were the Stripe and Paradigm launched a chain obviously called Tempo that we just talked about on the roundup. Uh and also Hyperlid is launching a stable coin or there's a team haven't dug into it too much. USD USDH I think USDH I think it's called. Um I I I haven't dug into it, so I don't know if it's actually the Hyperlid team building it or someone else building it. I think it's someone else building it. Um what do you Let's start with the Hyperlid stablecoin. Curious to get your thoughts. Yeah, I think it's super interesting. So what they've done is uh basically just open up like a process where anyone can come and pitch to be the like canonical stable coin provider for Hypquid. So, uh I think a bunch of different teams are going to be submitting over the next five days uh to just pitch why they

should basically sit in the back end for uh what is going to be like a foundation uh you know endorsed uh stable coin for the chain. I think one of the interesting things is that well two pieces one is uh obviously none of the hyperlquid users or the protocol itself has sort of benefited from all the USDC that sits on the on the exchange. So I think it generates roughly $220 million for circle right now. the circle the USDC that's sitting um on hyper liquid it's roughly 7% of the total supply um that's obviously interesting because I think uh there's a question right which is like how much should the exchange itself be able to monetize from all the balances that are sitting on there and uh this to me seems like a pretty interesting way for them to pivot away from something that they're earning like

0% interest on at the moment to potentially like supporting something else that actually shares it with users or the exchange um there is interesting like downstream effects I think of this entire thing though which It's not easy to click your fingers and basically change from USDC to USDH because you have to actually rebuild liquidity on every single one of the pair pairs. It's not just like a um you know you flick a switch and that's actually done. And so there is a risk actually when you start to break down liquidity on some of these pairs and then try to rebuild them somewhere else that they never actually get back to the same scale that they did before. And I think this has always been a you know a question that exchanges have gone through which is you know you you want to capture the economics that actually

come from the dollars that are sitting in your venue but you're always running the existential risk that if you push that too far you kind of lose the liquidity that that was already formed around the stable coin that everyone's using and then your like golden egg of the business is actually lost in the process. So I think there's like a bit of a tight rope that you know everyone has to walk when you're sort of thinking about these things within exchanges. Um but I think it's like generally pretty healthy that there's a bit more competition for Circle sitting on Hyperlid now. Um and I think also diversifying the risk because um having all of the you know Circle that was sitting there within the the bridge contract that's there with Hyperlid I think was one of the risks that people pointed to uh quite a bit for the last

well why don't they just go to Circle and demand a higher percent of revenue? I presume they have and maybe this is a negotiating tactic for that. So yeah. Yeah, that's what I was thinking when I saw this was like maybe this is just a big negotiating tactic, but um Okay, so Hyperlid launches this stable coin. Why don't why don't you vibe for that business? I mean, it probably will. Yeah. Okay. All right. I Yeah, I figure makes sense. Um what else do you want to do with Hyperlid? Um yeah, I mean we're not actually like actively trading there right now in terms of like the hedge positions that are sitting on there. Um I think there's an interesting opportunity to build basically like a fork of USD which is actually just purely exposed on

hyperlquid. So uh you know just carrying across the cash and carry but only doing it specifically on hyperlquid to isolate both the risk and return um of of that. And then uh I think one of the interesting like byproducts that might come out of this hip 3 thing. So the hip 3 is sort of like permissionless ability to launch from the per markets going forward. Um we've had a few teams externally who've approached us wanting to build versions of hyperlquid which are USD denominated um on hip and again the pitch here is like have all of your collateral natively yield your bearing whenever you're trading the exchange the entire time. Um I think that could be a pretty interesting upside in terms of the opportunity because when they take off they're like multi-billion dollars in scale in terms of the supply that they suck up and then the other

interesting thing is that they're through Hip 3 they're sharing 50% of the income that are generated on these markets. So uh 50% of you know some of the flows coming across is a pretty interesting like potential upside hype for whoever's going and taking to to build that exchange as well. So yeah there's a few moving pieces and I think it's one of the most uh exciting like genuinely new interesting ecosystems that are out there at the moment. Yeah. Yeah. Do you buy do you buy token like just sit and spot and hold like go long tokens like you're like yeah a will probably benefit from this stuff and pendle and like talking about hyper I have a disclosure page on my Twitter which has like what I'm holding at the moment. Uh there's uh it's pretty boring but I I do try update that and just keep

all keep people um uh up to date so I'm you know disclosing everything. Yeah. What do you hold? Oh I can read it. significant token holdings BTC Hype, Pump Athena USD. Nice. Nice. Um, why do you like Pump? Uh, I put a tweet out about this this week. I um I had a personal relationship with both of the co-founders there for um a while. And then uh I think just when they were going through the troubles or like teething pains in the first week when it came out um I had a phone call with them and just had like a bit of a heartto-he heart and I could just tell that he was extremely motivated to run it back. I think the big concern on everyone's mind was kind

of like had these guys made too much money uh before the token was even like out there and um I just got the vibes that he was uh extremely motivated to run it back and sort of had an ego to protect and that's uh that that I immediately just thought I just need to get along because he he still cared. Yeah, that's most of the game, isn't it? Just game is protect the ego. Yeah. Um, what do you think about Stripe's chain? I think it's super interesting. Uh, I think a lot of these chain announcements I think uh people getting quite tired of, but I think this is actually very uniquely um interesting. I think in my mind I sort of see it as like what XRP wanted to be or like what Libra wanted to be, but like for real. And I think

the people that they're bringing around the table and I guess their expertise in actually delivering things in the last few years at Stripe um is obviously like absolutely top tier. So I I have uh extremely high expectations for the whole thing and I think um it's pretty exciting. Yeah. If there's one if there's one person that's going to make that work uh I think it's them. Yeah. Because of Stripe or because of Paradigm. Um yeah, sorry I meant like more bringing together like you know real payment businesses in the real world. that obviously comes with the the um the background that Stripe had. But obviously, you know, Paradigm, we have a huge amount of respect for them as a firm and I think uh blending the sort of like existing web tier business with uh their expertise, I think is a pretty

interesting match. Yeah. Yeah. Having operated in crypto so deeply, have what do you do you think these external like web 2 corporates can will be able to successfully operate in crypto? I think if they're doing what Stripe does, which is you get very close to a true crypto native firm. I think you can, but I think a lot of these guys, I think you can do it all from the outside and that your brand and reputation and stuff uh will sort of carry you through. Uh but I think you do need a lot of native experience. Um especially when it comes to things like chains because a lot of that is like ecosystem building, you know, getting your arms around people and getting them behind you and you can't really do that behind, you know, like sitting in an office in New York and sort of feeling

like you're above everyone else. Um, so I think you need to have that blend I think if you're coming in to to try it. Yeah. Yeah. Tell me about uh converge the plans there. Yeah. There hasn't I think since we last spoke there hasn't been major updates on that side. I think the focus recently has been a lot on the on the DAT stuff and the core growth of product. I think we're going to have some uh updates that are coming out basic key for this year which are more material around that. Yeah. Do you seeing all these other chains launching does it make you more or less excited for converge? I think still uh so yeah I think the ones that are coming out now don't like directly compete I think with the same sort of like target audience of what's being you know targeted in terms of

who who competes who's like the main converge competitor um well I think it's like activity that take takes place on existing changes right now so like institutional assets and kind of like proliferating everywhere and I think the use cases that like securityize and different um I'd say like RWA is kind of doing that on every chain so I wouldn't say it's like there doesn't exist a chain that says we're doing this specifically for this purpose. Um, I think the ones that you've seen come to market now have been much more focused on like the payment side, stable coin focus chains, which I think we've seen like three or four come out recently. And then I think the other big one uh was uh obviously arbitrum with um with uh Robin Hood. Um so yeah, I don't think there's very clear like this is exactly the same.

Maybe the Robin Hood and Arbitum one is probably the closest comparable because I think they're trying to do a lot on the tokenized stocks, real world assets and that kind of stuff sitting on there. Yeah. Yeah. How do you think about we're moving into this world where I think uh trad regulation and tradi will probably favor tradi friendly stable coins. Um like if you're a it feels like someone would pick a very heavily regulated stable coin or a non-yield bearing stable coin. You're I feel like Athena is more of a cryptonative stable coin is how I've kind of thought of it. I mean may maybe IUSD will IUSD will change that but how do you think about that?

Yeah. Yeah. So we've also got a different product as well called USDTV which is um um we're working with Anchorage on that uh to be um genius compliant and we came out with something around the partnership with Anchorage on that side. Uh so that's sitting at like roughly 1.6 bill build I think in supply right now. So it's not um you know insignificant. Um and really the approach that we have here is that it's like a dual track which is USDTB is supposed to be that very clean payment stable coin um under the Genius Act and then USD is more of like an offshore product for different use cases. I think ultimately though like the big learning from Tether was actually you don't want to compete in the US uh in the US system basically and I uh you know I think it's amazing what's going on with the genius

in terms of like the signaling and like direction of where the space is going but I think it's like a business opportunity you're not going to make that much money competing with Stripe and Visa and Bridge and PayPal and all these different people in the US on their home tab when people have access to money market funds right um and so I think the view that we've always had is Yes, we want to have access to that market. We want to be able to provide a product for those users, but ultimately like the real growth and profit opportunity sits offshore and actually providing the USD does outside of the US. Yeah, it's kind of like you have so USD USDTB is the Treasury's product, right? So, it competes with like Bidd and Wisdom Tree and Franklin Templeton and things like that, but those are all very US focused

products. Yes, exactly. Yeah. Let's talk 26. Harry, what uh what do you think about so we've like with Converge IUSD? I'm guessing some of those things will become the focus in 26. Is it more? Yeah, I mean broadly tell me about 26. Don't even know what country I'm going to be in next week. I don't know. Yeah. No, I think uh I we tend to try plan maybe like three to six months ahead because I think a lot of the time in crypto you can't. You just can't. Yeah. And you know, honestly, where I'm spending 80% of my time now wasn't even a thing like six months ago. Like if you said to me, I would be spending all my time focusing on the DAT and and the different pieces that are going on there. Um, yeah, I think a lot of the

time you need to be quite flexible to be responsive to what's going on in the market to to jump on them. So, and I think the position that we're in now is actually just like the core product is working. There's a huge market opportunity ahead of you to go and grow into a much larger size. So, I think it's just like executing on an existing product and actually just taking that to the next level. Um, and then I'm sure there's going to be new and interesting things that pop up along the way, but I don't we have like a huge pivot or different direction or anything like that that we're planning for next year. I just want to um, yeah, survive and get get there. Yeah, you and me both. I have a weird founder to founder question, which is as we go into like the end of the year, how

do you think about budgeting and forecasting and creating the plan for the year in in a world where we have no idea what this like? Are we in a end of a cycle? Are we just starting because of rate cutting? Are we what does that look like? It's crypto. It's very volatile. How do you think about like yeah just creating forecasts and budgets and 2026 plan? Yeah, I think for us um the team hasn't actually grown much since uh 12 months ago. We kind of we went from 10ish when we first launched to 25ish uh within six months. And then we've had you know few people come in and out but actually like we're not looking at this saying if USD went to $50 billion we need to hire 28 people in the next year and if USD harved in size we wouldn't be firing

half of the team. it's basically just at a very um I think comfortable level in terms of where the business is sitting now uh in terms of like the actual individuals. Uh so I don't think there's like you know I'm not going to be sitting here trying to second guess where directionally where we think the market is going. I think the sort of size and budget of where we're sitting right now is in a pretty um steady state uh for the foreseeable basically. Yeah. Yeah. Guy man, anything we didn't talk about that you want to cover? Nope. I think it was uh good chat. Happy to go. Cool. Congrats man. Congrats on everything. Always good chatting.

Appreciate it. [Music]